Caesars Entertainment(US:CZR)2023-02-22 01:19Financial Data and Key Metrics Changes - For the full year, the Las Vegas segment generated over 25% growth in both revenues and EBITDA, achieving approximately $4.3 billion in revenue and $2 billion in adjusted EBITDA [7] - Quarterly net revenue results grew by over 100% year-over-year, marking the smallest adjusted EBITDA loss since rebranding to Caesars Sportsbook [10] - The company reduced debt by over $200 million in Q4, totaling $1.2 billion for the year, with leverage now standing at just under 4.5x on a traditional debt-to-EBITDA basis [49][49] Business Line Data and Key Metrics Changes - The Las Vegas segment achieved record cash hotel revenues and food and beverage results, with occupancy during Q4 at 95.5%, returning to pre-COVID levels [17] - The Regional segment delivered $443 million of EBITDA in Q4, up 3% year-over-year, with adjusted EBITDA growing 21% versus 2019 [45] - The Digital segment reported a year-over-year volume increase of 7%, with promotional expenses down 43%, leading to improved net revenue [20] Market Data and Key Metrics Changes - The company launched sports betting online in Ohio and retail, expanding to 29 North American jurisdictions, with plans to launch a mobile sports app in Massachusetts [11] - Group and convention paid for 2023 is up to 2019 levels, driven by strong average daily rates (ADRs) and higher room nights [7] - Forward bookings in Las Vegas are strong, with expectations for March to be one of the best months ever [28] Company Strategy and Development Direction - The company plans to benefit from several capital investment projects in 2023, including the opening of new properties and renovations [8] - Digital growth strategy remains critical, with a focus on improving product experience and segmented marketing capabilities [21][48] - The company aims to achieve a leverage target of sub-4x by the end of 2024, continuing to generate significant free cash flow [61][125] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism for 2023 and beyond, citing strong forward occupancy and a robust event calendar in Las Vegas [7] - The company anticipates that Digital will become EBITDA positive in 2023, with expectations for significant growth in iGaming [52][124] - Management noted that consumer spending remains strong, with no signs of weakness in the destination business [36][126] Other Important Information - The company refinanced $4.5 billion of debt at attractive rates, reducing exposure to short-term rate hikes [12] - The new Horseshoe Lake Charles property opened to strong demand, exceeding initial expectations [8] - The company expects to see a significant change in trailing credit statistics due to improved performance in Digital [26] Q&A Session Summary Question: What is the expected impact of the Super Bowl on business? - Management expects Super Bowl level activity, with a strong weekend anticipated regardless of the event [32] Question: How is the company thinking about leverage and debt reduction? - The company aims to maintain a leverage target of sub-4x and expects to repeat the $1.2 billion debt reduction in 2023 [61][119] Question: What are the expectations for group business in 2023? - Management is optimistic about group business, expecting it to exceed 2019 levels [58] Question: How does the company view the digital versus land-based player in terms of recession resistance? - Management believes both segments will be impacted, but the digital player may lean more towards money constraints [126] Question: Can you provide insights on the iCasino ramp and upcoming improvements? - The company plans to enhance game content and introduce a standalone casino app, with significant improvements expected in the second half of 2023 [92][124]