1Q-2012 results and strategy update

Transcription

1 1Q-2012 results and strategy update June

2 2 This presentation includes forward-looking statements. These forward-looking statements can be identified by the use of forward-looking terminology, including the terms "believes," "estimates," "anticipates," "expects," "intends", "may," "will" or "should" or, in each case, their negative, or other variations or comparable terminology. These forward-looking statements include all matters that are not historical facts. They appear in a number of places throughout this interim report and include statements regarding our intentions, beliefs or current expectations concerning, among other things, our results of operations, financial condition, liquidity, prospects, growth, strategies and the industry in which we operate. We urge you to read the sections of our Annual Report dated April 27, 2012 entitled "Risk Factors," "Operating and Financial Review and Prospects" and "Business" for a more complete discussion of the factors that could affect our future performance and the industry in which we operate. In light of these risks, uncertainties and assumptions, the forward-looking events described in this interim report may not occur. We undertake no obligation to publicly update or publicly revise any forward-looking statement, whether as a result of new information, future events or otherwise. All subsequent written and oral forward-looking statements attributable to us or to persons acting on our behalf are expressly qualified in their entirety by the cautionary statements referred to above and contained elsewhere in this interim report and the Annual Report.

3 3 Executive summary Since 2Q-06, 23 consecutive quarters delivering financial commitments Strategy delivering positive results despite an adverse economic environment in Spain: EBITDA ( m) 2.5x V (%) -7% +26% +15% +17% +8% +25% +11.5% +8/11% Guidance 2012 Strategy presented in September 2006 for paying off; remains valid Focus on profitable growth and consolidation of existing businesses New strategic plan developed for under same strategic pillars: (i) continuous EBITDA improvement / leverage reduction, (ii) efficiency & productivity, and (iii) investment focus and rigour Detailed action plans and roadmaps for 2012 in place strategic plan expected to deliver significant improvement in profitability and leverage reduction, from 5x 2005 to 3x and 2x by Q12 results 77.4m, +11% vs. 1Q11 supports FY guidance Since 2Q-06 growing Ebitda at +17% CAGR

4 4 Cirsa at a glance (as of March, 31st 2012) Mexico Dominican Rep. Our portfolio is based on four business units: B2B (slots design & manufacturing), Slots route operations, Casinos, and Bingo halls Panamá Colombia Perú Spain Italy Operates 65,500 machines, 116 casinos, 79 bingo halls, 190 betting shops and 110 arcades #1 gaming operator in Spain. #1 AWP supplier, >50% m.s. #1 AWP route operator #1 Bingo operator #1 Arcades operator #1 Sports betting operator Argentina #1 gaming operator in Panama, Argentina and Colombia Achieving a leading positioning in Italy and Mexico Spain Italy Panama Colombia Mexico Argentina Others Total Slot Machines (1) 25,949 11,937 7,363 6,012 6,426 6,401 1,412 65,500 Casinos Bingo Halls Betting Locations Arcades (1) Includes machines seats from different businesses in each country Market leadership across core markets and business segments

5 5 Strategy delivering positive results in a complex environment EBITDA ( m) & EBITDA margin (%) 2.5x % 15.8% 17.7% 19.0% 12.4% % 20.9% 5.0x Leverage (Net Debt / EBITDA) 4.3x 4.0x -2.0x As of December x 3.7x 3.2x 3.0x Financial evolution highlights Net operating revenues growth: +5.4% yoy Steady EBITDA growth: 290m in from 114m in 2005 (2.5x), +17% yoy EBITDA +11.5% vs (guidance +10/13%) EBITDA margin improved bps to 23.1% in from 12.4% in 2005 Leverage improved to current 3.0x in from 5.0x in EBITDA growth guidance: +8/11%; 1Q m, +11% vs. 1Q11 Consistently achieved business and financial commitments

6 6 Diversification: Ebitda mix by business segment & geography EBITDA by business unit ( m) EBITDA by geography % 18 6% 21 (21) 7% (7%) % Spain 24% 4% 3% Mexico Other Argentina 22% Colombia 99 34% Slots Casinos Bingos B2B Structure TOTAL Italy 17% 15% Panama 15% EBITDA mix showing business segment diversification Casino EBITDA highly geo diversified, adding quality to overall results EBITDA mix shows high geographical diversification Europe 41% of Ebitda while Latam 59% 71% of EBITDA generated in hard currencies (Spain, Italy, Panama and Colombia)

7 7 1Q-2012 results on track 2012 EBITDA growth guidance: +8/11% ( 313m / 322m) ( Million) Slots +7.2% Casinos +12.7% Structure Bingos 2012 B2B +12.5% Total Ebitda +19.6% +6.2% % % +110bp 23.5% Financial evolution highlights Ebitda vs. 1Q-11, improvement across all business segments Ebitda 1Q-12 growth (+11% V) in line with guidance 2012 (+8/11%) Ebitda margin grows by 110bp: 23.5% in 1Q-12 from 22.4% in 1Q-11 On track for 2012

8 8 Strategy basics remain the same (1/2) Coming from a complete company reorganization started in H2 06, together with focus in business consolidation & profitability plus selective acquisitions, key to significantly improve EBITDA and reduce leverage 3 key strategic levers 3 strategic objectives Comments / Facts Focus on core businesses and geographies Efficiency and organisation Reduce leverage Continuous EBITDA improvement through revenue mix management and cost optimization Productivity programs across businesses and geographies Selective investments with focus and rigour - EBITDA improvement: quality & growth - Product and geo diversification - +17% CAGR since Discontinuation of non-peforming businesses / markets - Excluding growth, significant headcount reduction (>4,400 since 2Q-06) - Investments focus in core markets (Spain, Italy & Latam) - B2B R&D focus: AWP machines for Spanish market (m.s.> 50%) and interconnectivity systems development to increase revenue and cost productivity (jackpots, operations efficiency) Existing management team proven track record, now ready to deliver commitments

9 9 Slots: Ebitda ( m) and key actions % 1Q % Q12 Highlights: Higher revenues per machine improving Spain s result while Italy s performance impacted by unexpected VLT s tax increase (+100 bp on drop) Spain Negatively impacted by macroeconomics and smoking ban since January-11 Focus profitability, efficiency and cash generation through: Keep m.s., selective machines replacement with top machine models, discontinue underperforming machines and temporary tax savings Efficiency programs implementation: improving commercial terms (46% bars in 55/45% split) and reorganization of operational processes and structure (logistics, headcount). On going market access investment reduction New regulations to facilitate new products introduction and channels to increase customer base Harvest on concentration opportunities through selective M&A Sportium betting JV: market leadership in Madrid (125 corners) and Aragon (65 corners), and deployment in new recently approved regions (Navarra, Valencia). Reached positive EBITDA in egaming: launch on June 5th 2012; strategy based on on-offline synergies Italy Successful launching of VLTs improving Italy s contribution to overall Company EBITDA (9% 10 to 17% 11) YTD VLT deployment: 2,050, 79% of total concession AWP: maintain market share through best performing machines and POS strategy. Selective M&A Consolidating market leadership with best-in-class slot machines in optimal POS; implementation of efficiency programs, key to improve margins

10 Casinos: Ebitda ( m) and key actions % Q % Q12 Highlights: Overall growth in revenues (+9.4%) and EBITDA (+12.7%) despite discontinuation of Venezuela Maintain market leadership in Spain and Latam Key initiatives across all markets: Our growth strategy of machines and m2 in existing halls paying off Tables and games mix optimization to maximize margins Development of a full entertainment offer concept (gaming, shows, F&B) Strong processes in place & Best Practices across markets Colombia: # 1, strong performance including integration synergies (Ebitda +26% V), extend best-performing halls Argentina: Buenos Aires riverboats: access facilities driving growth, increased slot machines offer Rosario: leverage a huge customer base, adding new games and machines Mendoza: extension of existing halls Polvorines: acquired 33,3% for a total consideration of 5.9m (580 machs. and bingo pos.), 3.8x Ebitda Panama: halls extension (machines and m2), relocations to higher demand areas and selective openings Spain: Casino de Valencia achieved #3 ranking position (revenues +20% vs 2010) Growth priorities: (i) increase machines portfolio in existing halls (ii) extend existing locations (iii) new halls Market leadership in Spain & Latam through a complete entertainment offer 10 10

11 11 Bingos: Ebitda ( m) and key actions % 18 1Q % Q12 Highlights: EBITDA growth driven by good performance in Mexico, Italy and efficiency plans in Spain Spain Macroeconomics and smoking ban since January-11 negatively impacting overall results Continue portfolio review, to assess bottom 10% viability. 7 closures last 12 months Regulatory initiatives focus: to improve product offer, marketing activities and margins (tax shifts to prizes) Product offer: ebingo now in all regions and launching of new Bingo to retain customers and develop new ones (dynamic game with better margin) Italy Bingo s VLT s performing significantly above rest of channels Traditional Bingo & AWP not heavily impacted by VLT deployment Mexico Growth through existing halls extension Becoming a significant EBITDA contributor, 12.4m (4% of Group Ebitda) Selective investments: (i) increase machines portfolio in existing halls (ii) extension of existing locations (iii) new halls Keeping overall EBITDA contribution

12 12 B2B: Ebitda ( m) and key actions (8) (5) % Q + 6.2% Q12 Highlights: EBITDA improvement driven by a better sales mix despite market shrinking Spain s AWP market leadership: achieved consistent market share above 50% Since 2008 Cirsa consistently covers 7 of top 10 models in rev/machine ranking, 58% m.s. in AWP focus: productivity programs driving bottom line results in a recessionary market Cost efficiency programs (260 bps margin improvement vs 2010) Working capital turns improvement (51% improvement vs 2010) R&D focus in profitable segments, key to sustain future market leadership and profitability AWP R&D funnel designed to provide 2-4 new hits per year in Spain TiTO, player tracking and WAP technologies marketed proactively All R&D programs developed to impact P&L B2B profitability driven by Spanish market leadership and interconnectivity technologies

13 13 Summary Commitment and credibility Since 2006 management team has consistently delivered, quarter after quarter, business and financial commitments 2012 Ebitda guidance of +8/11% vs., 1Q12 +11% V Current strategy, based on profitable growth, business consolidation & selective acquisitions, delivering excellent results Strategy resulted in a significant EBITDA improvement ( 114m 05 to 290m 11, x2.5) EBITDA +11.5%, fuelled by consolidation of existing businesses and investments execution EBITDA margin on revenues: 12.4% in 05 to 23.1% in 11, +1,070 bp Leverage ratio reduction from 5.0x (2005) to 3.0x (Dec-) strategic plan to remain focused on core business segments and geographies to continue improving profitability Improve EBITDA / reduce leverage Cost and investment rigour through efficiency and productivity programs Keep B2B focus on AWP Spanish market Management team ready to execute solid plans to keep delivering stakeholder commitments