Caesars Entertainment executives outline growth opportunities
May 19, 2017
Caesars Entertainment Chief Executive Officer Mark Frissora and other senior executives will discussed May 18 the Company’s strong historical performance and its prospects and strategy for growth. At its 2017 Analyst Day in Las Vegas, Frissora and his management team provided an update on the company’s financial and operational improvements as well as current and planned initiatives to enhance shareholder value.
Since 2014, Caesars Entertainment, which is the parent company of Harrah’s Reno and Harrah’s Lake Tahoe, has invested more than $2 billion in property and room renovations, developments, technology upgrades and new amenities. Combined with the implementation of business process improvement initiatives, Caesars Entertainment has improved adjusted EBITDA by $756 million and adjusted EBITDA margins by more than 800 basis points.
“We have made meaningful financial and operational progress, and set aggressive, achievable goals for the future,” Frissora said. “Ultimately, we believe our success will be the result of expert management, engaged employees and a relentless focus on customer satisfaction.”
Caesars Entertainment is preparing for the conclusion of Caesars Entertainment Operating Company’s (CEOC) restructuring process, expected in the second half of the third quarter. Frissora and the management team intend to address critical areas the Company believes will generate new growth and value creation opportunities. These areas include:
- Strongest Loyalty Program in the Gaming Industry – With more than 50 million Total Rewards members, the program demonstrates a significant impact on property performance that Caesars Entertainment expects to improve as the Company applies machine learning to customer behavioral data.
- Strong Revenue Position in Las Vegas – While diversified across the U.S. Caesars Entertainment garners more than 50 percent of gaming revenue in Las Vegas, a city with a positive, long-term outlook. In addition, renovations and remodeling of the company’s Las Vegas properties are expected to create substantial runway for pricing growth.
- Network Expansion Opportunities – Caesars Entertainment anticipates the emergence of CEOC is expected to reduce debt by approximately $16 billion and to unlock new opportunities for organic and inorganic growth across global markets.
- Proven Management Execution – Improving enterprise-wide performance is expected to continue as a result of disciplined capital allocation and a more efficient operating model.
The successful execution of these revenue initiatives and continued focus on operating efficiency has driven an improvement in cash flow. Cash flow is expected to continue to improve as a result of potential debt refinancing and the elimination, in 2018, of costs associated with CEOC’s restructuring.
The company’s continued commitment to investment in its assets is evidenced by its announcement today that it plans to begin the $89 million renovation of more than 1,250 rooms at the Flamingo Las Vegas. These upgrades are part of a plan to renovate more than 7,000 rooms across the enterprise by year end 2017.
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Later this year, the Company expects CEOC’s restructuring to be completed as well as the merger of Caesars Entertainment and Caesars Acquisition Company. Upon completion, management believes it will have more opportunities to invest in and grow the business.