Q4 2019 Earnings Call

January 29, 2020

Ladies and gentlemen.

Operator: Ladies and gentlemen, today's conference is scheduled to begin shortly. Please continue to stand by. Thank you for your patience. Once again, today's conference is scheduled to begin shortly. Please continue to stand by. Thank you for your patience. Ladies and gentlemen, thank you for standing by and welcome to the Las Vegas Sands Q4 2019 Earnings Conference Call. At this time, all participants' lines are in a listen-only mode. After the speaker's presentation, there will be a question-and-answer session. To ask a question during the session, you'll need to press star 1 on your telephone. Please be advised that today's conference is being recorded. If you require any further assistance, please press star 0. I would now like to hand the conference over to your speaker today, Daniel Briggs. Thank you. Please go ahead, sir.

It is concerned scheduled to begin shortly.

We continue to stand by thank you for your patience.

Once again todays conference scheduled to begin shortly.

We continue to standby.

Thank you for your patience.

Ladies and gentlemen.

Thank you for standing by and welcome to the Las Vegas Sands fourth quarter 2019 earnings Conference call I, just time, all participants' lines are in the listen only mode. After the speakers presentation. There will be a question answer session to ask a question doing especially you'll need to pressing star one on your telephone please.

during the session, you'll need to press star one on your telephone. Please be advised that today's conference is being recorded. If you require any further assistance, please press star 0. I would now like to hand the conference over to your speaker today, Daniel Briggs. Thank you. Please go ahead, sir.

Be advised that today's conference is being recorded.

You pretty quiet any further assistance please press star zero.

I'd now like to have the conference over to your speaker today, because they know break. Thank you. Please go ahead, sorry [laughter]. Thank you operator, joining me on the call today are shown Madison, our chairman and Chief Executive Officer, Rob Goldstein, Our President and Chief operating Officer, Dr. do mater, Executive Vice President and Chief Financial Officer, before I turn the call Mr. Adam.

Daniel J. Briggs: Thank you, operator. Joining me on the call today are Sheldon Adelson, our Chairman and Chief Executive Officer, Rob Goldstein, our President and Chief Operating Officer, and Patrick Dumont, our Executive Vice President and Chief Financial Officer. Before I turn the call over to Mr. Adelson, please let me remind you that today's conference call will contain forward-looking statements that we are making under the Safe Harbor provision of federal securities laws. The company's actual results could differ materially from the anticipated results in those forward-looking statements. In addition, we may discuss non-GAAP measures, a definition, and a reconciliation of each of these measures to the most comparable GAAP financial measures as included in the press release. Please note that we have posted supplementary earnings slides on our investor relations website. We may refer to those slides during the Q&A portion of the call.

Daniel Briggs: Thank you, operator. Joining me on the call today are Sheldon Adelson, our Chairman and Chief Executive Officer, Rob Goldstein, our President and Chief Operating Officer, and Patrick Dumont, our Executive Vice President and Chief Financial Officer. Before I turn the call over to Mr. Adelson, please let me remind you that today's conference call will contain forward-looking statements that we are making under the Safe Harbor provision of federal securities laws. The company's actual results could differ materially from the anticipated

Let me remind you that today's conference call will contain forward looking statements, making under the safe Harbor provision of Federal Securities law. The company's actual results could differ materially from anticipated results and those forward looking statements. In addition, we may discuss non-GAAP measures [noise].

results in those forward-looking statements. In addition, we may discuss non-GAAP measures, a definition, and a reconciliation of each of these measures to the most comparable GAAP financial measures as included in the press release. Please note that we have posted supplementary earnings slides on our investor relations website. We may refer to those slides during the Q&A portion of the call.

Definition turned a reconciliation of each of these measures to the most comparable GAAP financial measures is included in the press release.

Please note that we have posted supplementary earnings slides on our Investor Relations website, we may refer to this like [noise].

The call finally for those who would like to participate in a question answer session. We ask that you believe receptor request to limit yourself to one question. One follow up question. So we might allow everyone with interest of the opportunity to participate. Please note that this presentation is being recorded with that let me. Please turn the call over to Mr. Allison.

Daniel J. Briggs: Finally, for those who would like to participate in a question-and-answer session, we ask that you please respect our request to limit yourself to one question and one follow-up question so we might allow everyone with interest the opportunity to participate. Please note that this presentation is being recorded. With that, let me please turn the call over to Mr. Adelson.

Finally, for those who would like to participate in a question-and-answer session, we ask that you please respect our request to limit yourself to one question and one follow-up question so we might allow everyone with interest the opportunity to participate. Please note that this presentation is being recorded. With that, let me please turn the call over to Mr. Adelson.

[noise]. Thank you Dan.

Sheldon Adelson: Thank you, Dan. Good afternoon, everyone, and thank you for joining us today. We had a great quarter and a great year across all our markets. Company-wide adjusted property EBITDA for the fourth quarter was $1.39 billion, an increase of 9% over the prior year. Our cash flow generation is unmatched in our industry with full-year 2019 EBITDA of $5.39 billion. Nobody's ever earned that before in this industry. Our capital investment programs in both Macau and Singapore are exceptionally exciting, with over $5 billion of capital projects which will be completed over the course of the next few years. These investments will further strengthen our leadership position in the premium mass and non-gaming segments in Asia. Let's now turn to our financial results by the region. In Macau, adjusted property EBITDA was $811 million in the quarter, an increase of 3% over the prior year.

Good afternoon, everyone and thank you for joining us today.

We had a great quarter and a great year.

Across all markets.

Companywide adjusted property EBITDA for the fourth quarter was 1.39 billion U.S. dollars, an increase of 9% over the play here.

Okay flow generation is unmatched in a industry with full year 29, Jane neighborhood of 5.39.

We're still with us.

It was ever that before in this industry.

A capital investment programs in both Kmetko in Singapore.

Exceptionally challenging.

Well the five the newest dollars of capital projects, which will be completed.

will be completed over the course of the next few years. These investments will further strengthen our leadership position in the premium mass and non-gaming segments in Asia. Let's now turn to our financial results by the region. In Macau, adjusted property EBITDA was $811 million in the quarter, an increase of 3% over the prior year.

Of course over the next two years.

These investments will further strengthen our leadership position in a premium mass mass and non gaming segments.

[noise] [noise], let's sell children, all up and actual results by region.

MCO adjusted property EBITDA was 811 million.

811 million, new as though is in the quarter.

An increase of 3% over the play you in contrast.

Sheldon Adelson: In contrast to the 8% decline, that's a 3% increase for us in contrast to an 8% decline in Gross Gaming Revenue in the Macau market overall. Pretty good. We grew our mass gaming revenues by 3% over the prior year with growth in both mass tables and slots. Retail sales remained strong, growing by 11% over the prior year. Most importantly, our profitability continues to lead the industry, with EBITDA margin reaching 36.2%, up another 140 basis points compared to the prior year. We couldn't be more excited about our investment of $2.2 billion to expand our critical mass of non-gaming offerings in Macau. We believe there is no better market in the world than Macau with regard to the continued deployment of our capital.

In contrast to the 8% decline, that's a 3% increase for us in contrast to an 8% decline in Gross Gaming Revenue in the Macau market overall. Pretty good. We grew our mass gaming revenues by 3% over the prior year with growth in both mass tables and slots. Retail sales remained strong, growing by 11% over the prior year. Most importantly, our profitability continues to lead the industry, with EBITDA margin reaching 36.2%, up another 140 basis points compared to the prior year. We couldn't be more excited about our investment of $2.2

So the 8% decline.

It's a 3% increase for us in contrast to an 8% decline gross gaming revenue and Oh market overall.

Pretty good.

Well, a mass gaming revenues by 2% over the player with growth in both from but and love mess with growth in both mass tables and slots.

Retail sales remained strong golf growing by 11% over the play.

Most importantly, I profitability continues to lead the industry, where they put a much in reaching 36.2%.

Up another good at 40 basis points compared to the play yes.

We couldn't be more shut it about a restaurant.

billion to expand our critical mass of non-gaming offerings in Macau. We believe there is no better market in the world than Macau with regard to the continued deployment of our capital.

$2.2 billion dollars to expand a critical mass of non gaming offerings in would go.

I believe there was no, but I'm not going in the world and Linco [noise].

With regard to they continue to poor Midwood capital.

[laughter] initial trial results that book of London, a hotel and the great switch it full shoes.

Sheldon Adelson: The initial trial results at both The Londoner Hotel and the Grand Suites at Four Seasons have been very promising, and we will update you on our progress in the future. We look forward to making additional investments in Macau as we contribute to Macau's diversification and evolution into Asia's leading leisure and business tourism destination. I would welcome the opportunity to invest billions of dollars to expand our hotel, entertainment, retail, and mice facilities in Macau. I believe Macau has the opportunity to become the greatest business and leisure tourism destination in the world and the mice capital of Asia. We stand ready to make substantial additional investments to contribute to Macau's future success. In 2019, over 900 mice events were held in Sands China's properties in Macau with participation from over 800,000 attendees.

The initial trial results at both The Londoner Hotel and the Grand Suites at Four Seasons have been very promising, and we will update you on our progress in the future. We look forward to making additional investments in Macau as we contribute to Macau's diversification and evolution into Asia's leading leisure and business tourism destination. I would welcome the opportunity to invest billions of dollars to expand our hotel, entertainment, retail, and mice facilities in Macau. I believe Macau has the opportunity to become the greatest business and

Very clever, saying it will update you on purpose in the future.

We look forward to making additional investments in but go it's really contribute to lakos diversification and evolution into a leading leisure.

This tourism destination.

I would welcome the opportunity to invest billions of dollars to screw though too.

Entertainment.

Okay and most facilities the go.

I believe that go out the opportunity to become the greatest business and leisure tourism destination in the world.

leisure tourism destination in the world and the mice capital of Asia. We stand ready to make substantial additional investments to contribute to Macau's future success. In 2019, over 900 mice events were held in Sands China's properties in Macau with participation from over 800,000 attendees.

And the mice capital.

Sure.

We stand ready to make substantial additional investments to contribute to look a future success.

2019 over 900, and most of its well then shoes churn is properties in Morocco.

With that good disagree shouldn't come up with nine I'd do it doesn't.

Totaling 800000 attendees.

Sheldon Adelson: This is by far the highest number of MICE events and attendees that are hosted by any operator in Macau, and indeed we estimate that we represent as much as 90% of the MICE market. Entertainment is another area in which we contribute to Macau's growth and diversification. We continue to lead the Macau market in this respect as it continues its development as the premier entertainment center in Asia. In 2019, we brought 45 different events to Macau in our Cotai Arena featuring top Asian and Western artists. Our leadership in MICE and entertainment are just two examples of our firm commitment to supporting the government's objective to diversify the economy in Macau. Our market-leading investments in non-gaming facilities, including hotel capacity, large-scale retail malls, and our themed tourism attractions, are designed to attract the widest possible range of visitors to Macau.

This is by far the highest number of MICE events and attendees that are hosted by any operator in Macau, and indeed we estimate that we represent as much as 90% of the MICE market. Entertainment is another area in which we contribute to Macau's growth and diversification. We continue to lead the Macau market in this respect as it continues its development as the premier entertainment center in Asia. In 2019, we brought 45 different events to Macau in our Cotai Arena featuring top Asian and Western artists. Our leadership in

This is bugs or [noise].

Science number of most of its at attendees that owes its by any operator, medco and indeed, we estimate that we represent as much as 90% or the much [laughter] entertainment is another area in which will contribute to the go spoke a diverse sort of good.

Yes.

We continue to lead the become working in this respect.

As it continues its development as the Premier Entertainment Center in Asia.

The 2019, we brought.

45 different a bunch of that go in a co tell your reader.

Featuring job Beijing and wish to daughters.

A leadership in motion Entertainment I, just two examples of upfront commitment to supported the government's objective.

MICE and entertainment are just two examples of our firm commitment to supporting the government's objective to diversify the economy in Macau. Our market-leading investments in non-gaming facilities, including hotel capacity, large-scale retail malls, and our themed tourism attractions, are designed to attract the widest possible range of visitors to Macau.

Diversified the economy of ASCO.

[noise] our market leading investment.

Non gaming facilities, including OTO capacity large scale retail malls and on the tourism attractions.

Designed to attract the why there's flexible wage visitors to Macau.

Having made the largest it doesn't matter. This economic diversification, we will continue to those tend to work to support the vision form of go into future.

Sheldon Adelson: Having made the largest investment in this economic diversification, we will continue to invest and to work to support the vision for Macau in the future. Excuse me, I got a cold today. With the opening of the Hong Kong-Zhuhai-Macau Bridge and the progress of the Greater Bay Initiatives, we truly believe Macau has the potential to become the MICE and leisure capital of Asia. We fully intend to contribute to that objective through both our existing assets and potential future investments. Let me also address another topic, the evolving situation with the coronavirus. The current situation is unique and serious. Our top priority is the health and safety of our employees and guests, and we are doing everything we can to support the government both in Macau and China.

Having made the largest investment in this economic diversification, we will continue to invest and to work to support the vision for Macau in the future. Excuse me, I got a cold today. With the opening of the Hong Kong-Zhuhai-Macau Bridge and the progress of the Greater Bay Initiatives, we truly believe Macau has the potential to become the MICE and leisure capital of Asia. We fully intend to contribute to that objective through both our existing assets and potential future investments. Let me also address another topic, the evolving situation

[noise] excuse me I get a cool today.

[noise] with the opening of the Hong Kong July Bucko bridge, and the progress of the greater being initiatives. We truly believe MCO has the potential to become the money should leave your capital of Asia.

We fully intend to contribute to that objective to a bulk of existing it's just the potential future but [noise].

[noise], let me also address what other topic.

Evolving situation with the Corona virus.

with the coronavirus. The current situation is unique and serious. Our top priority is the health and safety of our employees and guests, and we are doing everything we can to support the government both in Macau and China.

The current situation is unique in serious.

A tough play up but he is the health and safety over employers and guess.

And we're doing everything we can to support the government bolt of ago in China.

Sure as China Chambers in close consultation with the relevant health care public safety at the readership ago.

Sheldon Adelson: Our Sands China team is in close consultation with the relevant healthcare and public safety authorities in Macau, and we have implemented significant procedures and safeguards. We will continue to implement measures in line with government direction and hope for a swift containment of the virus. Now turning to Singapore. Marina Bay Sands adjusted EBITDA was $457 million. Rolling volumes were strong and were 16% higher than the prior year. Mass win per day remained solid. The hotel continued to enjoy strong average daily rate and occupancy. At the same time, annualized retail sales per square foot increased to more than $2,000 per square foot. Singapore's leading tourism infrastructure continues to receive significant investment, and we are excited to be a part of Singapore's continued growth as a leading business and leisure tourism destination as we develop the Marina Bay Sands expansion.

Our Sands China team is in close consultation with the relevant healthcare and public safety authorities in Macau, and we have implemented significant procedures and safeguards. We will continue to implement measures in line with government direction and hope for a swift containment of the virus. Now turning to Singapore. Marina Bay Sands adjusted EBITDA was $457 million. Rolling volumes were strong and were 16% higher than the prior year. Mass win per day remained solid. The hotel continued to enjoy strong average daily rate and

And we have implemented significant procedures and she is good.

We will continue to implement managers in line with government direction.

And hope for Swift containment the voters.

Now turning to Singapore.

Marina Bay Sands, adjusted EBITDA was 457 million viewers stowers, well lead volumes were strong and were 60% or the player.

Mashed would put a day remains solid.

The OTO continue to do it George really strong average daily rate and occupancy.

occupancy. At the same time, annualized retail sales per square foot increased to more than $2,000 per square foot. Singapore's leading tourism infrastructure continues to receive significant investment, and we are excited to be a part of Singapore's continued growth as a leading business and leisure tourism destination as we develop the Marina Bay Sands expansion.

At the same time annualize retail sales per square foot increased to more than two thousands you want us dollars per square foot.

[noise], Singapore's leading tourism infrastructure continues to receive significant investment.

And we were excited to be part of Singapores continued growth, there's a leading business didn't lose your tourism destination.

As we develop the Marina Bay Sands expansion.

Sheldon Adelson: The expansion will include a 15,000-seat state-of-the-art arena for live entertainment events, a hotel tower designed to set a new standard of luxury in the region, as well as additional MICE offerings. We continue to make progress on the MBS expansion and will provide additional updates in the future. We will continue to reinvest in Marina Bay Sands to enhance the customer experience in advance of the expansion. Now turning to Las Vegas. Our Las Vegas operations had another great quarter with Adjusted EBITDA of $120 million, an increase of 20% over the prior year. The hotel, convention, and slot segments all set yearly revenue records, leading to a record adjusted property EBITDA performance in 2019 of $503 million on a wholly normalized basis. Regarding US-China trade relations, phase one of the trade deal between China and the United States has been completed.

The expansion will include a 15,000-seat state-of-the-art arena for live entertainment events, a hotel tower designed to set a new standard of luxury in the region, as well as additional MICE offerings. We continue to make progress on the MBS expansion and will provide additional updates in the future. We will continue to reinvest in Marina Bay Sands to enhance the customer experience in advance of the expansion. Now turning to Las Vegas. Our Las Vegas operations had another great quarter with Adjusted EBITDA of $120 million, an

The expansion will include a 50000 cheech state or the auto arena.

For live entertainment events.

Oh Toto are designed to set a new standard of luxury in the region.

As well as a additional myself rigs.

We continue to make progress on the ambience expansion.

It will provide additional updates in the future.

We will continue to reinvest in Marina Bay Sands too it is to customer experience in advance of the expansion.

Now to take Las Vegas.

Las Vegas operations had another great quarter with adjusted EBITDA of 120 billion, new installers and increased to 20% over there right.

increase of 20% over the prior year. The hotel, convention, and slot segments all set yearly revenue records, leading to a record adjusted property EBITDA performance in 2019 of $503 million on a wholly normalized basis. Regarding US-China trade relations, phase one of the trade deal between China and the United States has been completed.

The whole joke, eventually that sludge segments, Oh straight yearly revenue wreckage.

Leading to a record adjusted property EBITDA for <unk> and told you know gene of 503 million a newer stores on a whole normalized basis [noise].

We got to you as China trade relations.

Phase one of the trade deal between China, and the United States has been completed.

Sheldon Adelson: The United States and China coming together to work collaboratively on the future of global trade is good for the US, it's good for China, and it's good for the rest of the global economy. Finally, we continue to increase the return of capital to shareholders. The dividend remains the cornerstone of our strategy for the return of capital, and that dividend has continued to grow. For 2020, the board of directors has increased the dividend by 8 cents per share to $3.16 per share. At the same time, we repurchased $300 million of stock during the quarter. Yay dividends, yay buybacks. Thanks again for joining us on the call today. Now we'll take questions.

The United States and China coming together to work collaboratively on the future of global trade is good for the US, it's good for China, and it's good for the rest of the global economy. Finally, we continue to increase the return of capital to shareholders. The dividend remains the cornerstone of our strategy for the return of capital, and that dividend has continued to grow. For 2020, the board of directors has increased the dividend by 8 cents per share to $3.16 per share. At the same time, we repurchased $300 million of stock during the quarter.

The United States, ensuring a company together to work collaboratively.

Oh, the future global trade is good for the U.S.

It's good for China, and it's good for the rest of the global economy.

Finally, we continue to increase the return of capital to shareholders.

The dividend remains the cornerstone of our strategy for the return of capital.

That dividend has continued to grow.

The 2020, the board of directors has increased the dividend by eight cents for sure to $3.16 per share.

At the same time, we repurchased 300 million to do as those of stuff could do the quota.

Yay dividends, yay buybacks. Thanks again for joining us on the call today. Now we'll take questions.

Hey, dividends gay buybacks.

Thanks, again for joining us or the goal today, though we'll take questions.

[noise]. He reminder, that's a question you're only depressing far one on your telephone if he'd like often press the pound key me I'm buying while the compiled the kidney roster.

Operator: As a reminder, to ask a question, you'll need to press star 1 on your telephone. And to withdraw your question, press the pound key. Please stand by while we compile the Q&A roster. Your first question comes from the line of Joseph Greff of J.P. Morgan. Your line is open.

Your first question comes from the line until graph from JP Morgan Your line is something.

Good afternoon, everybody feels good to hear you again.

Daniel J. Briggs: Good afternoon, everybody. Sheldon, good to hear you again. My first question's going to be probably an obvious topic and to the extent you can talk about it, but just with regard to the coronavirus, if there was going to be a lengthy impact at the Sands' visitation and spend both in Macau and Singapore, how do you manage to fix the operating expense there? How much flex is there in both respective markets? And then my follow-up question is looking backwards relating to Macau in the fourth quarter, if you were to parse through maybe you look at it because you have monthly numbers that we don't have access to, but how much of an impact do you think Hong Kong protests had versus the travel disruption?

Joe Greff: Good afternoon, everybody. Sheldon, good to hear you again. My first question's going to be probably an obvious topic and to the extent you can talk about it, but just with regard to the coronavirus, if there was going to be a lengthy impact at the Sands' visitation and spend both in Macau and Singapore, how do you manage to fix the operating expense there? How much flex is there in both respective markets? And then my follow-up question is looking backwards relating to Macau in the fourth quarter, if you were to parse through maybe you

My first question is gonna be probably be an obvious topic and he said you can talk about it but just with regard to the krona virus.

If there is gonna be allay the impact that sweet visitation.

Then both in Macau in Singapore, how do you managed to fixed operating expense there how much flex is there in both respective markets.

And then my follow up question.

Relating looking backwards relating to Macau in the fourth quarter. If you would have parts through maybe you'll get it because yet but the number that we don't have access to.

look at it because you have monthly numbers that we don't have access to, but how much of an impact do you think Hong Kong protests had versus the travel disruption?

But how much of an impact you didn't contemplate that had versus the travel.

Q4 2019 Earnings Call

Request a DemoDemo

LVS

Las Vegas Sands

Earnings