Crown Limited Annual General Meeting · Crown Limited Annual General Meeting ... Recent Trading...
Transcript of Crown Limited Annual General Meeting · Crown Limited Annual General Meeting ... Recent Trading...
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Crown Limited Annual General Meeting 30 October 2013
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1. F13 Year in Review
2. Recent Trading Update
3. Investment in Large Scale Tourist Attractions
4. Crown’s Employment Contribution
5. The Rising Asian Middle Class
6. Crown’s International Expansion
7. Corporate Social Responsibility
8. Conclusion
Presentation Outline
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1. F13 Year in Review
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Crown Limited Group Result
F13
Normalised
$m
F12
Normalised
$m
Variance
F/(U)
F13
Actual
$m
F12
Actual
$m
EBITDA 758.3 722.0 5.0% 751.9 801.3
Depreciation and amortisation (238.1) (218.3) (9.1%) (238.1) (218.3)
EBIT 520.2 503.7 3.3% 513.8 583.0
Net interest (120.4) (102.1) (17.9%) (120.4) (102.1)
Income tax (77.4) (81.8) 5.4% (75.9) (106.5)
Equity accounted - Melco Crown Entertainment 152.3 92.1 65.4% 175.0 135.8
- Betfair (1.5) 3.1 (148.4%) (1.5) 3.1
Net Profit before significant items 473.2 415.0 14.0% 491.0 513.3
Significant items
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Net Profit after significant items 473.2 415.0 14.0% 395.8 513.3
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Crown Melbourne and Crown Perth Results Normalised F13
Australian
Resorts
$m
Variance
F/(U)
Main floor gaming 1,484.3 3.6%
VIP program play 684.6 7.8%
Non-gaming 607.4 8.1%
Total Revenue (Normalised) 2,776.3 5.6%
Gaming taxes & commissions (809.9) (4.2%)
Operating expenses (1,178.9) (5.6%)
EBITDA 787.5 6.9%
Depreciation & amortisation (234.2) (9.2%)
EBIT 553.3 5.9%
EBITDA / revenue % 28.4% 0.3%
Total revenue (actual) 2,775.4 1.3%
VIP turnover $ billion 50.7 7.8%
VIP win rate (1.35% theoretical) 1.35%
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Crown Melbourne - Normalised Revenue and EBITDA Performance
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Crown Melbourne Normalised Revenue and EBITDA Performance
Normalised EBITDA Normalised Revenue
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Crown Perth - Normalised Revenue and EBITDA Performance
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Crown Melbourne and Crown Perth VIP Turnover
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Crown Aspinall’s Results Normalised F13
$m Variance
F/(U)
Total revenue 114.8 23.7%
Total expenses (81.5) (13.0%)
EBITDA 33.3 61.7%
Depreciation & amortisation (1.1) 10.2%
EBIT 32.2 65.8%
EBITDA / revenue % 29.0% 6.8%
VIP turnover (billion) 8.6 53.4%
VIP win rate1 1.33%
1. Crown Aspinall’s normalised VIP win rate based on the mix of play during the period.
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• Crown’s share of MCE’s normalised NPAT result for the full year to June 2013 was $152.3
million
• Crown’s share of MCE’s reported NPAT result for the period, before significant items, was
an equity accounted profit of $175.0 million
• The growth in MCE’s EBITDA was achieved despite an overall subdued performance in
the Macau VIP market and was attributable to strong growth in the mass market table
games segment at City of Dreams, improved group-wide rolling chip volume, together
with MCE’s committed cost control culture
Melco Crown Entertainment (MCE)
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• Paid a final dividend of 19 cps, franked to 50%
• Total full year dividend of 37 cps
• Dividend policy is to pay the higher of 37cps or 65% of normalised NPAT
(excluding non-cash profits from associates) for the full year
Dividend
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2. Recent Trading Update
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• Main floor gaming revenue in line with pcp
• Non gaming revenue up 10% on pcp
• Trading impacted by:
• Refurbishment in Melbourne
• Temporary loss of car parking spaces in Perth
• General softness in consumer sentiment
• The level of VIP program play activity improved from the levels seen in the
second half of F13
• Margin improvement program continues to deliver benefits
Recent Trading Update – Australian Resorts
1 July to 27 October 2013 (17 weeks)
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3. Investment in Large Scale Tourist Attractions
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Investment in Australia’s Premier Integrated Resorts
From F09 to F16 Crown will have undertaken over $2.7 billion of capital expenditure projects
324 290
231 231
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66 140
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91 65 63
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Crown Melbourne (Actuals) Crown Perth (Actuals)
Crown Melbourne (Forecast) Crown Perth (Forecast)
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Crown Melbourne – Australia’s Premier Integrated Resort
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Crown Melbourne – Australia’s Premier Integrated Resort
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Crown Perth – A World-Class Integrated Resort
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Crown Towers Perth
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4. Crown’s Employment Contribution
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Crown’s Australian Resorts are Significant Employers
5,000
6,000
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2005 2006 2007 2008 2009 2010 2011 2012 2013
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Employees Tenancy Contractors
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Crown’s Contribution to Employee Development and Training
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2013 Victorian Employer of the Year
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Crown Melbourne – Australia’s Premier Integrated Resort
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5. The Rising Asian Middle Class
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The Opportunity is Asia
• Over 300 million in China alone - equal to the entire population of the USA
• By 2030 China is expected to have 1.4 billion middle class consumers compared to
365 million in the USA and 414 million in Western Europe
Source: Forbes: 2011
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Growing Chinese Middle Class - Increasing Propensity to Travel
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• Outbound travel is one of the preferred leisure activities for China’s middle class with
rising spending power
10.5m 12.1 16.6
20.2
28.9 31.0 34.5
41.0 45.8 47.7
57.4
70.0
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Source: China National Tourism Administration CNTA & 2015 prediction by China National Tourism Association
Size of China's outbound tourism market: 2000-2015
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Understanding What China’s Rising Middle Class Want
• 2011 McKinsey study found that the rapid
increases in wealth, and the shifting social
conventions that sanction the display of that
wealth, are driving a growing infatuation for luxury
goods
• By 2015 China will account for 20% of the
global luxury market
• They want luxury travel, hotels, world class
restaurants, high end retail and the opportunity to
gamble
Source: McKinsey & Co Mar 2011
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Understanding What China’s Rising Middle Class Want
• 83% of their nights in Sydney, Melbourne, Brisbane and Adelaide
• This all helps explain why they are attracted to luxury Integrated Resorts
• “80% of Chinese travelling outside the country for the first time head for a casino and 90% of Chinese who travel to the US visit Las Vegas”
Dr Marc Faber (Investment Analyst)
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Crown Perth – World-Class Integrated Resort
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Crown Sydney Proposal
• In July 2013, the New South Wales Government
invited Crown to move to Stage Three of the
Unsolicited Proposal process for Crown’s proposed
development and operation of a six-star hotel resort
including VIP gaming facilities at Barangaroo South
on Sydney Harbour
• The proposed Crown Sydney Hotel Resort will be
Sydney’s first six-star hotel resort
• Crown’s proposal includes 350 hotel rooms and
suites, luxury apartments, signature restaurants,
bars, luxury retail outlets, pool and spa facilities,
conference rooms and VIP gaming facilities
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6. Crown’s International Expansion
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• Crown Limited has a 33.7% interest in MCE which owns and operates City of
Dreams, one of the leading integrated resorts in the world’s largest gaming market
• MCE is one of only six licensed concessionaires or sub-concessionaires in Macau
• The cost of Crown’s investment in MCE was US$0.6 billion and the market value
of Crown’s investment in MCE as at 29 October 2013 was US$6.2 billion
Melco Crown Entertainment
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Visitors To Macau Visitors to Australia
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Growth in Macau Visitation
Source: Macau: actual visitor arrivals Macau DSEC, estimate 2013 to 2015 HSBC research Australia: Forecast 2012 Issue 2,
Tourism Research Australia, October 2012
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VIP Mass
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Macau Gross Gaming Revenue (GGR)
Source: Actual revenue DSEC Macau, estimates Credit Suisse research
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10m
Cities within 1 hour:
• Shenzhen
• Guangzhou
• Taipei
Cities within 3 hours:
• Shanghai
• Beijing
• Seoul
• Ho Chi Minh City
• Bangkok
• Manila
Cities within 4 hours:
• Singapore
• Kuala Lumpur
• Tokyo
3 hours
1 hour
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Three Billion People Live Within a 3-4 Hour Flight Radius of Macau
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• Significant transport initiatives are substantially
improving the access to Macau by decreasing
travel times :
• Wuhan, Central China, to Macau (2009):
from 14 hours down to 4 hours
• Beijing, Northern China, to Macau (2012):
from 20 hours down to 8 hours
• Guangzhou, Southern China, to Macau
(2012):
from 2.5 hours down to 1.2 hours
High Speed Rail Network Significantly Decreasing Travel Time
Source: Deutsche Bank and Credit Suisse Research
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MCE Development Pipeline – Studio City
• MCE has a 60% equity interest in Studio City – a
new integrated resort project located on Cotai in
Macau
• The project will be financed through a US$1.4 billion
senior secured facility and an US$825 million senior
note offering, as well as committed equity from
Studio City shareholders
• Studio City will be a cinematically-themed integrated
entertainment, retail and gaming resort in Cotai,
Macau.
• Studio City remains on track to open in mid-2015
[IMAGE TO BE
PROVIDED BY NAT]
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MCE Development Pipeline – City of Dreams Manila
• MCE, through a 69.3% owned subsidiary, has an
interest in a consortium to develop and operate a
casino resort in Manila, the Philippines
• City of Dreams Manila will feature six hotel towers,
including an approximately 260 room Crown Towers
hotel and other hotels with VIP and five-star luxury
rooms and high-end boutique hotel rooms, numerous
specialty restaurants and bars, gaming facilities, a
multi-level car park, as well as three separate
entertainment venues.
• The project will be financed by both debt financing
and the capital generated by the Melco Crown
Philippines public equity raising undertaken in April
2013, which raised approximately US$335 million
• The project is expected to open mid-2014
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Proposed Integrated Resort in Sri Lanka
• Crown is in detailed discussions with the Sri
Lankan Government and potential joint venture
partners regarding the development of a five-star
integrated resort in Colombo, Sri Lanka
• It is intended that the integrated resort, to be
branded “Crown Sri Lanka”, will be a “must-see”
landmark resort located on Beira Lake in the
Colombo resort district
• It is anticipated that, should it proceed, the total
project cost to the joint venture would be
approximately US$400 million
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7. Corporate Social Responsibility
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Crown’s Corporate Social Responsibility Approach
• Crown seeks to act responsibly in all of our activities
• To oversee Crown’s commitment, the Board has this
year established a Corporate Social Responsibility
(CSR) Board Committee, chaired by The Honorable
Helen Coonan
• The Board Committee will continue Crown’s efforts in
promoting CSR initiatives across the business
• Crown next month will release its first CSR report
that outlines the business-wide initiatives and
projects that are contributing to Crown’s more
sustainable path for future growth
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Crown’s Commitment to Indigenous Employment
• Crown was the first company to sign the Australian
Employment Covenant (AEC) in 2009, initially committing to
creating 300 job opportunities for Indigenous Australians
• In 2012, Crown revised its AEC commitment and increased
the number of opportunities to be provided to 2,000 by 2020
• Crown has partnered with Reconciliation Australia to help
reach the AEC goal and to create a Reconciliation Action Plan
(RAP)
• Crown’s RAP will build on the successful Indigenous
employment and mentoring programs currently in place. The
RAP will enable these programs to be more focussed on
individual support and cultural awareness
• Crown is also now a corporate partner of the National Centre
of Indigenous Excellence in Redfern, Sydney – looking to
create future career training and employment opportunities for
Crown Sydney Hotel Resort
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Crown Resorts Foundation
• The Crown Resorts Foundation, announced in September this year, will formalise Crown’s community
involvement program and aggregate the range of community initiatives already being undertaken at
Crown Melbourne and Crown Perth
• As the philanthropic arm of Crown, the Foundation will provide engaged financial support to programs
with demonstrated success in the areas of community welfare, education, health care and research,
the arts and the environment
• The Foundation is focussed on creating effective local partnerships by facilitating cooperation
between our community partners and our targeted not-for-profit organisations to deliver
unprecedented outcomes in Indigenous education and employment by utilising the strengths of all
groups involved
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Crown’s Community and Project Partners
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8. Conclusion
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Crown Limited Annual General Meeting 30 October 2013
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• All information provided in this presentation is provided as of the date stated or otherwise as
of the date of the presentation.
• This presentation may include forward looking statements. Forward looking statements, by
their nature, involve inherent risks and uncertainties. Many of those risks and uncertainties
are matters which are beyond Crown’s control and could cause actual results to differ from
those predicted. Variations could either be materially positive or materially negative.
• Some information which has been included in this presentation has been provided by a third
party and Crown does not assume responsibility for the correctness or accuracy of the
information.
• This presentation has not taken into account any particular investor’s investment objectives
or other circumstances. Investors are encouraged to make an independent assessment of
Crown.
Disclaimer
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