Star Entertainment : Presentation at Morgans Conference

THE STAR ENTERTAINMENT GROUP

PRESENTATION AT MORGANS CONFERENCE

WEDNESDAY

9 OCTOBER 2019

THE STAR ENTERTAINMENT GROUP

THE STAR ENTERTAINMENT GROUP LIMITED (ASX: SGR)

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 The Star
  Entertainment Group Limited's financial reports and other disclosures made via the Australian Securities Exchange
• The Star Entertainment Group results are reported under International Financial Reporting Standards (IFRS). This presentation may include certain non-IFRS measures including normalised results, which are used internally by management to assess the performance of the business
• Non-IFRSmeasures have not been subject to audit or review
• Normalised results reflect the underlying performance of the business as they remove the inherent win rate volatility of the International VIP Rebate business. Until FY2018, normalised results were adjusted using an average rate of 1.35% on actual turnover and taxes. From 1H FY2019 onwards, normalised results are adjusted using an average win rate of 1.35% on actual turnover, taxes and revenue share commissions
• Normalised EBIT and Normalised EBITDA are calculated based on normalised gross revenue, commissions and normalised taxes. Significant items are excluded from the normalised results
• Queensland results referred to in this presentation relate to The Star Gold Coast and Treasury Brisbane segments as reported in the Financial Report
• The presentation of net revenue after player rebates and commissions also includes the restatement of FY2018 results for comparative purposes following the adoption of AASB 15 from 1 July 2018. Complimentary revenue is included within domestic gaming revenue

DISCLAIMER

• This presentation is prepared for information purposes only and does not take into consideration any individual investor's circumstances. The Star Entertainment Group recommends investors make their own assessments and seek independent professional advice before making investment decisions
• This presentation may include forward looking statements and references which, by their very nature, involve inherent risks and uncertainties. These risks and uncertainties may be matters beyond The Star Entertainment Group's control and could cause actual results to vary (including materially) from those predicted. Forward looking statements are not guarantees of future performance. Past performance information in this presentation is provided for illustration purposes only. It is not indicative of future performance and should not be relied upon as such
• This presentation has been prepared by The Star Entertainment Group (unless otherwise indicated). Information may be reproduced provided it is reproduced accurately and not in a misleading context. Where the material is being published or issued to others, the sources and copyright status should be acknowledged. Some information included in this presentation has been provided by third parties with their consent. The Star Entertainment Group does not accept any responsibility for the accuracy or completeness of that information

2

INTRODUCTION

GROWTH ASSETS PORTFOLIO

Today	Sydney and Gold Coast - recently upgraded, expanded
	3 properties	1,389	4,783	Unlimited
	Sydney, GC, Brisbane	Premium Hotel Keys	Slots cap	Tables and MTGMs

• Sheraton Grand Mirage Gold Coast (50% share)
• GCCEC (management rights)

Projects Underway	Queen's Wharf Brisbane	The Star	The Star Sydney
Gold Coast

Concept image only

• New integrated resort

		Concept image only		Concept image only
		♦ Sovereign Resorts
JV mixed use towers*:
♦	1st under construction
♦	2nd in presales

Capital Efficient Approach	♦ Partners with complementary skills, assets
♦ Mixed use developments
Customers	Domestic focus
International diversification
* Master plan for up to 5 towers, subject to market and regulatory conditions and all approvals

3

EARNINGS

DOMESTIC FOCUS, LONG-TERM GROWTH

FY2019 Earnings Mix

• 88% of earnings is domestic (FY2019 normalised EBITDA)

12%

88%

Domestic ($491m) International VIP ($66m)

Long-term Domestic Growth

	Domestic Revenue
2,000	1,917

		1,859	Total 5.1% CAGR
	1,7521,783
		Slots 4.5% CAGR
1,657
			Tables 6.8% CAGR
1,492			Non-Gaming 1.6%
			CAGR

1,000

FY14 FY15 FY16 FY17 FY18 FY19

Domestic EBITDA

500		491
468	460	466
417		6.8% CAGR
354

250

FY14 FY15 FY16 FY17 FY18 FY19

Diversifying VIP

• 12% of earnings (FY2019
  EBITDA)
• High ROIC business
• Continued shift to higher margin International Premium Mass

				Group EBITDA
600									102	66
		77		83		40
41
354	417		468	460	466	491
0
FY14	FY15	FY16	FY17	FY18	FY19
			Domestic			International VIP

4

STRATEGY

FOCUS ON RETURNS

Large Attractive Markets	$24bn	$42bn
	Domestic Gambling	Domestic F&B
	Market	Market
Growth Assets	Assets

• Sydney and Gold Coast recently upgraded, expanded
• Valuable long-term licences
• Properties in desirable locations
• Large catchments (locals, tourism)

$44bn	$35bn
Inbound Tourism	International VIP

Growth Projects

• Sydney - Sovereign Resorts (FY2020)
• Gold Coast - Masterplan
• Brisbane - Queen's Wharf
• Enhanced gaming and traffic drivers
• Further growth identified

Competitive Capabilities		Domestic
	♦ Gaming and Marketing leadership
	♦	Loyalty
	♦	Hospitality

Inbound/ Tourism

• Asian partners
• Third party hotel brands
• Hospitality

Execution Focus: Operational, Development, Commissioning

Complementary Partners	♦ Development	♦	Hospitality
♦ Retail/ distribution	♦	Capital
Source: Australian Gaming Statistics, Eating Out in Australia, Tourism Research Australia, broker reports

5