Star Entertainment Group Limited · ASX:SGR
Star Entertainment — Echo Entertainment Group — FY2015 Earnings Presentation
32 slides from Star Entertainment's earnings presentation, Aug 12, 2015
Slide 1: Full Year Results Presentation 12 August 2015
12 August 2015 FULL YEAR RESULTS PRESENTATION Attached is the presentation regarding the financial results of Echo Entertainment Group Limited (Echo) for the year ended 30 June 2015, to be presented by Matt Bekier, Managing Director and Chief Executive Officer, and Chad Barton, Chief Financial Offic
Slide 2: Echo Full Year 2015 Results Presentation
ECHO FULL YEAR 2015 RESULTS PRESENTATION 12 AUGUST2015 ECHOENTERTAINMENT GROUP
Slide 3: Basis of Preparation and Non-IFRS Information
ECHO ENTERTAINMENT GROUP ECHO ENTERTAINMENT GROUP LIMITED (ASX: EGP) BASIS OF PREPARATION AND NON-IFRS INFORMATION > Information in this presentation is provided as at the date of the presentation unless specified otherwise. It should be read in conjunction with Echo Entertainment Group Limited's fi
Slide 4: Agenda
ECHO ENTERTAINMENT GROUP AGENDA 1. OVERVIEW MATT BEKIER - CEO 2. FINANCIALS CHAD BARTON - CFO 3. OUTLOOK AND PRIORITIES MATT BEKIER - CEO ECHO ENTERTAINMENT GROUP
Slide 5: Highlights: Full Year FY2015 Results
HIGHLIGHTS FULL YEAR FY2015 RESULTS >» Actual gross revenue for FY2015 of $2,258m up 19.0% (FY2015 normalised gross revenue of $2,331m up 20.6%) on pcp driven by good domestic gaming and strong International VIP Rebate business revenues >» Actual EBITDA (excluding significant items) of $455m up 17.4
Slide 6: Key Drivers of Full Year FY2015 Results
OVERVIEW KEY DRIVERS OF FULL YEAR FY2015 RESULTS EBITDA $m! +24.1% 600 on pcp 18.6 6.0 iveeeon 660 | ——— 500 72.3 | 454.6 32.3 419.4 «00 | 3371 Ul 300 200 100 FY2014 International FY2014 Sydney Gold Coast Brisbane Townsville” FY2015 International FY2015 Reported VIP Rebate Normalised Normalised VIP
Slide 7: Key Drivers - The Star Sydney
OVERVIEW KEY DRIVERS - THE STAR SYDNEY Normalised gross revenue of $1,639m up 25.7% versus pcp (actual gross revenue of $1,541m up 20.7% versus pcp). Normalised EBITDA of $356m up 25.5% versus pcp (actual EBITDA up 2.9% versus pcp) >» Strong revenue growth across all key gaming products - Slots +13.
Slide 8: Key Drivers - Queensland
OVERVIEW KEY DRIVERS - QUEENSLAND Normalised gross revenue of $692m up 9.9% versus pcp! (actual gross revenue of $716m up 15.5%). Normalised EBITDA up 21.5% versus pcp (actual EBITDA up 471%) >» Strong revenue growth across all key gaming products - Slots +7.3%, Domestic Tables (including MTGMs) +13
Slide 9: EGM Market Share
OVERVIEW EGM MARKET SHARE > EGM market share for the FY2015 period increased versus pcp at all properties > The Star market share of 9.2% for QI-Q3 FY2015 , versus 8.5% in QI-Q3 FY2014 (Q4 FY2015 market o% data not yet available) The Star Sydney! 10% 8% > Queensland properties market share of 28.9%
Slide 10: International VIP Rebate Business Performance
OVERVIEW INTERNATIONAL VIP REBATE BUSINESS PERFORMANCE > Normalised gross revenue of $662m up 53.0% (actual gross revenue of $588m up 48.4%) versus pcp > International VIP Rebate business customer front money of $3,668m up 64.3% versus pcp. Junket business share 77% of actual front money in FY2015 (
Slide 11: Good Progress - Delivering to Plan
OVERVIEW GOOD PROGRESS - DELIVERING TO PLAN > Progress made during FY2015 on all priorities: Improved operational performance at all properties Selected as preferred proponent in Queen’s Wharf Brisbane bid process Executed the first stages of the Jupiters Gold Coast expansion project - Redeveloped p
Slide 12: Queen's Wharf Brisbane
QUEEN'S WHARF BRISBANE > Echo, along with partners in the Destination Brisbane Consortium (DBC), Chow Tai Fook Enterprises and Far East Consortium, selected as preferred proponent for the Queen’s Wharf Development on 20 July 2015 DBC working with the Queensland Government to finalise range of agreem
Slide 13: Agenda
ECHO ENTERTAINMENT GROUP AGENDA 1. OVERVIEW MATT BEKIER - CEO 2. FINANCIALS CHAD BARTON - CFO 3. OUTLOOK AND PRIORITIES MATT BEKIER - CEO ECHO ENTERTAINMENT GROUP
Slide 14: Echo Group Profit and Loss
FINANCIALS ECHO GROUP PROFIT AND LOSS ($m) FY2014 FY2015 Grow 4 FY2015 Growth Actual Actual % rmalised rmalised % Domestic Gaming Revenue 1,237.3 1,418.1 14.6% 1,237.3 1,418.1 14.6% International VIP Rebate (Gross) 396.5 588.4 48.4% 432.5 661.8 53.0% Non-gaming & Other Revenue 263.7 251.1 (4.8%) 263
Slide 15: Balance Sheet and Dividend
FINANCIALS BALANCE SHEET AND DIVIDEND ASSETS Current Assets Cash and cash equivalents 144.9 196.6 Trade and other receivables 87.1 110.5 Inventories 65 73 Income tax receivable NZ - Derivative financial instruments 2.9 12.1 Other assets 217 26.2 Assets classified as held for sale 69.7 - Total curren
Slide 16: Echo Funding
FINANCIALS ECHO FUNDING > FY2015 net debt of $400m (June 2014 $635m)! > Undrawn bank facilities of $500m and average drawn debt maturity of 4.3 years » FY2015 statutory net finance costs of $50m > FY2016 statutory net finance costs expected to be around $50m on consistent interest rates > Tenors of
Slide 17: Capital Expenditure
FINANCIALS CAPITAL EXPENDITURE > FY2015 capital expenditure of $226m up $114m (102.8%) on pcp. Investments in expansion and refurbishment of F&B at Jupiters Gold Coast and The Star, the 3“ aircraft and maintenance > FY2015 D&A of $164m up $18m (12.4%) on pcp. Impacted by the accelerated depreciation
Slide 18: Metrics
FINANCIALS METRICS Actual Gross Revenue ($m) Dividend Per Share (cents) 2,500 2,258 2 11.0 1,897 10 8.0 2,000 1,847 8 6.0 6 1,500 4 2 1,000 + - : : 1 FY2013 FY2014 FY2015 FY2013 FY2014 FY2015 Statutory NPAT ($m) EBIT / Net Interest Expense Ratio (times) ! . 7. 200 169 58 6 4 150 + 106 5 4 37 44 4 84
Slide 19: Agenda
ECHO ENTERTAINMENT GROUP AGENDA 1. OVERVIEW MATT BEKIER - CEO 2. FINANCIALS CHAD BARTON - CFO 3. OUTLOOK AND PRIORITIES MATT BEKIER - CEO ECHO ENTERTAINMENT GROUP
Slide 20: 2016 Priorities and Trading Update
OUTLOOK AND PRIORITIES 2016 PRIORITIES AND TRADING UPDATE > Priorities for FY2016 are a continuation of the plan advanced in FY2015: * Continue to improve earnings across the group through a focus on operations and improved efficiency * Deliver on the next stage of the Jupiters Gold Coast redevelopm
Slide 21: Jupiters Gold Coast Development
FY2016 PRIORITIES JUPITERS GOLD COAST DEVELOPMENT » Jupiters Gold Coast expansion and refresh to progress in FY2016 > Estimated capex for the year of $100m - $125m including: * Level 21 VIP gaming salons (expected completion Q2 FY2016) —= : | - * Main gaming floor refresh (expected ep nek: aril wo c
Slide 22: The Star Sydney Masterplan
FY2016 PRIORITIES THE STAR SYDNEY MASTERPLAN > Approximately $500m to be invested in The Star over the next 5 years > Works to span expansion of F&B and gaming offers, upgrade of private gaming rooms, upgrade of hotel rooms and improvements to access and customer flow > Estimated capex for FY2016 of
Slide 23: Loyalty Program Improvements
FY2016 PRIORITIES LOYALTY PROGRAM IMPROVEMENTS » Absolute Rewards program continues to gain traction following the relaunch in 2013 with increased tier migration and complimentary rewards redemptions > Significant revenue growth being seen at the higher tiers of the program - less growth at the midd
Slide 24: Agenda
ECHO ENTERTAINMENT GROUP AGENDA 1. OVERVIEW MATT BEKIER - CEO 2. FINANCIALS CHAD BARTON - CFO 3. OUTLOOK AND PRIORITIES MATT BEKIER - CEO ECHO ENTERTAINMENT GROUP
Slide 25: Appendix
ECHO ENTERTAINMENT GROUP APPENDIX THE STAR AND QUEENSLAND RESULTS - ACTUAL THE STAR AND QUEENSLAND RESULTS - NORMALISED OPERATIONAL BENCHMARKS JUPITERS TOWNSVILLE CASH COLLECTION RATIO INTERNATIONAL VIP REBATE BUSINESS RECEIVABLES GLOSSARY ECHO ENTERTAINMENT GROUP PAGE 25 PAGE 26 PAGE 27 PAGE 28 PAG
Slide 26: The Star and Queensland Results - Actual
APPENDIX THE STAR AND QUEENSLAND RESULTS-ACTUAL The Star QLD Total FY2014. FY2015 can) FY2014 FY2015 cat) FY2014. FY2015 cat) Slots 255.6 289.0 13.0% 289.2 310.3 7.3% 544.9 599.3 10.0% Domestic Tables 491.5 590.5 20.1% 201.0 228.3 13.6% 692.4 818.8 18.2% Non-Gaming 138.3 137.9 (0.3%) 118.4 103.4 (12
Slide 27: The Star and Queensland Results - Normalised
APPENDIX THE STAR AND QUEENSLAND RESULTS-NORMALISED Normalised ' The Star QLD Total $m FY2014 FY2015 fav/ — Fy2014- FY2015 fav/ — Fy2014- FY2015 Cee) (unfav) (unfav) (unfav) Slots 255.6 289.0 13.0% 289.2 310.3 7.3% 544.9 599.3 10.0% Domestic Tables 491.5 590.5 20.1% 201.0 228.3 13.6% 692.4 818.8 18.
Slide 28: Operational Benchmarks
APPENDIX OPERATIONAL BENCHMARKS marks Slots Revenue ($m) NMR/machine/day MTGMs Revenue ($m) NMR/machine/day Domestic tables (Excl MTGMs) Revenue ($m) Hold % International VIP Rebate business (Actual) Front Money ($m) Turnover ($m) Turns Win rate Hotels Occupancy Cash Revenue ($m) Average Cash Rate R
Slide 29: Jupiters Townsville
APPENDIX JUPITERS TOWNSVILLE Jupiters Townsville sale was completed on 1 October 2014. FY2015 group earnings include Jupiters Townsville contribution from 1 July 2014 to 30 September 2014 only (FY2014 including a full twelve months of Jupiters Townsville contribution) Townsville FY2014 FY2015 Slots
Slide 30: Cash Collection Ratio
APPENDIX CASH COLLECTION RATIO Category Jun-13 Jun-14 $m Cash flows from operating activities before interest and income tax Net cash receipts in the course of operations 1,757.4 1,800.0 2174.5 Payments to suppliers, service providers and employees (982.2) (1,057.8) (1,202.4) Payment of government l
Slide 31: International VIP Rebate Business Receivables
APPENDIX INTERNATIONAL VIP REBATE BUSINESS RECEIVABLES International VIP Rebate Business 0 - 30 days 30 days J- Byears Byers 2 Receivables (Before provisions) - 1 year FY 2015 ($m) Not yet due 82.0 - - - 82.0 Past due not impaired - 10.5 5.7 0.0 16.2 Considered impaired - 5.3 4] 0.0 9.4 Total 82.0 1
Slide 32: Glossary
APPENDIX GLOSSARY CAGR Capital expenditure (capex) D&A Domestic tables EGM F&B International VIP Rebate business customer front money MTGM NMR Normalised revenue pcp Rebate Significant items Compound Annual Growth Rate Unless otherwise stated, capital expenditure is presented on an accruals basis an
Echo Entertainment Group — FY2015 Earnings Presentation on 6ix