Bally's (US:BALY)2023-02-24 00:37Financial Data and Key Metrics Changes - Bally's Corporation reported revenues expected to be between $2.5 billion to $2.6 billion for 2023, with adjusted EBITDA projected at $660 million to $700 million, including $40 million to $50 million in losses from North America Interactive [14][15] - The company closed the Tiverton Biloxi sale, resulting in over $400 million in cash on the balance sheet and $3 billion in net debt, indicating ample liquidity for announced projects [15] Business Line Data and Key Metrics Changes - Casinos & Resorts reported $96 million of EBITDAR in the quarter, with a core portfolio EBITDA margin exceeding 36% [13] - International Interactive achieved approximately $89 million of EBITDA at a 39% margin, with the UK business growing 12% year-over-year [13] - North America Interactive reported $6 million of negative EBITDA, with expectations for significant cost savings from restructuring [14] Market Data and Key Metrics Changes - The UK market is experiencing consolidation, with Bally's gaining market share due to effective targeting and a high-quality tech stack [18] - In Asia, Bally's is seeing positive year-on-year growth, with a strong player base and improving margins [9][49] Company Strategy and Development Direction - The company aims to focus on profitable growth in North America Interactive and expand its omni-channel data capabilities [12] - Bally's plans to invest in growth opportunities in Europe, Latin America, and Asia, with a particular emphasis on iCasino and sports betting [9][10] - The company is pursuing a two-site approach for new casino bids, leveraging its recent Chicago bid experience [20] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the growth trajectory in Asia and the UK, while acknowledging potential consumer pullback starting in the second quarter of 2023 [52][49] - The company is preparing for upward pressure on wages due to a tight labor market but is focused on controlling costs [45][47] Other Important Information - Bally's is restructuring its Interactive segment to streamline operations and improve profitability [9] - The company is committed to maintaining a debt-to-EBITDA ratio below five times, expected to be achieved by mid-2024 [15] Q&A Session Summary Question: Success in the UK market - Management attributed success to market consolidation and effective targeting with a high-quality tech stack, leading to robust revenues [18] Question: Update on new casino bids - Management confirmed participation in the RFA process, seeing significant potential in the market and considering a two-site approach [20] Question: Headwinds in Japan - Management noted improved sentiment and market share in Japan, with positive margin control [22] Question: Differences in customer demographics - Management observed growth in unique customers and a shift towards younger demographics, particularly in table games [25] Question: Future consumer expectations - Management expects to exceed guidance if current consumer trends hold, but anticipates potential weakness starting in Q2 [52] Question: Temporary facility opening - Management confirmed the temporary facility is on track to open in summer 2023, with all necessary approvals accelerated [54] Question: Expansion into South America - Management expressed interest in the Brazilian market, viewing it as a significant opportunity for the Bally's brand [57] Question: Cross-marketing opportunities - Management confirmed cross-marketing benefits between regional and Las Vegas properties, enhancing customer engagement [59]