2013 Annual Report

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2013 Annual Report 2013 Sands Macao The Venetian Macao The Plaza Macao Sands Cotai Central The Parisian Macao Sands Macao The Venetian Macao The Plaza Macao Sands Cotai Central The Parisian Macao May, 2004 August, 2007 August, 2008 April, 2012 2015 May, 2004 August, 2007 August, 2008 April, 2012 2015 Annual Report ANNUAL REPORT 2013 www.sandschinaltd.com This annual report is printed on recycled paper using soy ink FROM FABULOUS RESTAURANTS AND LUXURIOUS HOTEL SUITES TO WORLD-CLASS MICE AND ENTERTAINMENT, COME AND DISCOVER EVERYTHING SANDS CHINA LTD. CONTENTS 1. Overview 4 1.1 Financial Highlights 4 1.2 Highlights of 2013 4 1.3 Chairman’s Statement 12 1.4 Directors and Senior Management 14 1.5 Business Overview 20 1.6 Our Properties 24 Management 2. Discussion and 31 Analysis Stakeholder 3. Information 45 3.1 Our Shareholders 45 3.2 Our Lenders 46 3.3 Our Customers 48 3.4 Our Employees 49 3.5 Our Commitment to the Community 52 3.6 Preserving Environment 55 Corporate 4. Governance Report 59 4.1 Chairman’s Introduction 59 4.2 Good Governance 60 4.3 The Board 60 4.4 Key Roles 63 4.5 Activity 65 4.6 The Committees 66 4.7 Risk and Internal Control 70 4.8 Shareholders 71 4.9 Compliance Disclosures and 73 Other Matters 4.10 Directors’ Report 75 5. Financial Statements 93 5.1 Independent Auditor’s Report 93 5.2 Financial Statements 95 5.3 Notes to the Consolidated Financial 102 Statements 5.4 Financial Summary 183 6. Corporate Information 184 7. Contact Us 185 8. Glossary 186 This Annual Report is prepared in English and Chinese. In case of inconsistency, please refer to the English version as it shall prevail. OUR LUXURIOUS HOTEL ROOMS AND SUITES AWAIT YOU. 002 SANDS CHINA LTD. Annual Report 2013 INTRODUCTION Sands China operates the largest collection of integrated resorts in Macao. As at December 31, 2013, we had 9,277 hotel rooms and suites, 121 restaurants, 1.4 million square feet of retail, 1.5 million square feet of meeting space, permanent theaters, a 15,000-seat arena and some of the world’s largest casinos. With the completion of the second Sheraton tower of Sands Cotai Central in January 2013, along with our other development plans on Cotai, Sands China is uniquely positioned to be a major driver of Macao’s economic diversifi cation for years to come. 003 1. OVERVIEW 1.1 FINANCIAL HIGHLIGHTS • Net revenues were US$8,907.9 million (HK$69,079.9 million) for the year ended December 31, 2013, an increase of US$2,396.5 million (HK$18,613.3 million), or 36.8%, compared to US$6,511.4 million (HK$50,466.6 million) for the year ended December 31, 2012. • Operating expenses were US$6,617.7 million (HK$51,319.6 million) for the year ended December 31, 2013, an increase of US$1,387.5 million (HK$10,782.9 million), or 26.5%, compared to US$5,230.2 million (HK$40,536.7 million) for the year ended December 31, 2012. • Adjusted EBITDA for the year ended December 31, 2013 was US$2,900.5 million (HK$22,493.1 million), an increase of US$922.8 million (HK$7,164.9 million), or 46.7%, compared to US$1,977.7 million (HK$15,328.2 million) for the year ended December 31, 2012. • Profi t for the year ended December 31, 2013 was US$2,214.9 million (HK$17,176.3 million), an increase of US$979.2 million (HK$7,599.0 million), or 79.2%, compared to US$1,235.7 million (HK$9,577.3 million) for the year ended December 31, 2012. Excluding pre-opening expenses of Sands Cotai Central and the impairment losses related to Parcels 7 and 8 and the closure of the ZAiA show at The Venetian Macao for the year ended December 31, 2012, adjusted profi t increased 46.4% to US$2,220.7 million (HK$17,221.3 million) for the year ended December 31, 2013, compared to US$1,516.5 million (HK$11,753.6 million) for the year ended December 31, 2012. Note: The translation of US$ amounts into HK$ amounts has been made at the rate of US$1.00 to HK$7.7549 (2012: US$1.00 to HK$7.7505) for the purposes of illustration only. 1.2 HIGHLIGHTS OF 2013 Business • We successfully opened the second Sheraton tower of Sands Cotai Central, which is the largest integrated resort development in the Company’s history. • Our CotaiJet services carried 7.4 million passengers in 2013 — an average of 20,300 per day. We provided an average of approximately 39 daily round trip sailings in 2013. • We entered into a multiyear franchise agreement with DreamWorks Animation SKG, Inc. to open Asia’s fi rst DreamWorks Experience creating a new level of family entertainment at Sands Cotai Central. 004 SANDS CHINA LTD. Annual Report 2013 Net Revenues Adjusted EBITDA Profit (US$Million) (US$Million) (US$Million) 36.8% 46.7% 79.2% 32.5% 24.9% 30.4% 19.0% $8,908 $2,900 $2,215 $6,511 $1,978 $1,236 2012 2013 2012 2013 2012 2013 Adjusted EBITDA Profit as a % of as a % of Net Revenues Net Revenues • We participated in tradeshows and launched roadshow product seminars to educate the Travel Trade and Meetings sectors about our Cotai Strip Resorts Macao and new developments, visiting 9 cities in China including Changsha, Wuhan, Shanghai, Beijing, Xiamen, Chengdu, Guangzhou, Hangzhou and Shenzhen. These seminars introduced the new brand positioning of Cotai Strip Resorts Macao and our integrated product offerings of The Venetian Macao, Sands Cotai Central, The Plaza Macao and Sands Macao, highlighting the retail and entertainment offerings of our integrated resorts. There was also a strong emphasis on the new DreamWorks Experience at Cotai Strip Resorts Macao featuring live entertainment with characters from various DreamWorks animated feature fi lms including Kung Fu Panda, Madagascar, Shrek and How to Train your Dragon. • Destination events continue to drive increased visitation with some 500,000 visitors experiencing the diversified events across our integrated resorts. These events included Chinese New Year celebrations, Carnevale, Macau Wine & Dine Festival, The Human Bodies Exhibition, Titanic The Exhibition, Ice World Exhibition, Cotai Jazz & Blues Festival, DreamWorks Experience, character dining, regional movie premiers and the return of Winter at Cotai Strip celebrations for the second year. 005 1. OVERVIEW • The Venetian Macao hosted for the second time the International Indian Film Academy (IIFA) Awards with the event broadcasted in 110 countries to 880 million viewers worldwide. • Cotai Strip Resorts Macao hosted 574 travel industry and meeting planner familiarization events in order to showcase the integrated resorts under a common destination umbrella. Such events took place with buyers from Asia, Australia, India, Europe and North America highlighting the increased demand for Macao as an ideal meetings and leisure tourism destination. • Sales converted 3,416 group enquires in 2013 to 922 bookings (27%). Enquiry demand increased from South East Asia Pacifi c to 26%, followed by China 21%, Hong Kong 14% and India 12%. • The Venetian Macao and Sands Cotai Central together hosted 668 events including exhibitions, tradeshows, conferences, social and government events as well as incentive groups, attracting 1,717,000 visitors. • The Company hosted 81 live international entertainment events attracting more than 396,000 visitors including the single largest ticket revenue event ever held in the Cotai Arena with “Pacquiao-Rios: The Clash in Cotai”, which was heralded as the biggest boxing event in Asia since Ali-Frazier, and “Rihanna-Diamonds World Tour”, which achieved the highest total ticket sales ever for a two-day event. Across 12 broadcast events, our total audience footprint in China alone was over 900 million viewers. 006 SANDS CHINA LTD. Annual Report 2013 Attendance Sands China’s properties are among the most visited destinations in Macao, attracting families, business visitors and entertainment seekers from around the world. More than 30% of our hotel guests are families with children and business travelers attending corporate meetings, conventions, and exhibitions. In 2013, all four of our properties, The Venetian Macao, Sands Cotai Central, The Plaza Macao and Sands Macao, attracted a combined total of 62.9 million visitors (2012: 46.4 million) or approximately 172,400 (2012: 126,800) visitors per day. Entertainment Entertainment is at the heart of our business. Since opening in 2007, our 15,000-seat Cotai Arena has established itself as one of the top live-entertainment venues in Southern China. It is the only venue in Asia ranked in Pollstar’s Top 100 Arena Venues worldwide, based on ticket sales. The live entertainment program at our properties, from concerts to sporting events to awards ceremonies, is a key traffi c and revenue driver, and has established the Company as the leader in the fi eld of tourism and leisure activities. The diversity of entertainment offered by the Company sets it apart from other gaming destinations. Our entertainment offerings include lounge acts, dancers, singers, gondoliers and street performers, all of whom contribute to the overall customer experience at our properties. The Cotai Arena, Venetian Theatre, Sands Theatre and Venetian and Sands Cotai Central ballrooms hosted a total of 81 different live entertainment events over 140 event days in 2013, which attracted more than 396,000 visitors. The Cotai Arena hosted major entertainment events during the year including concerts by top stars such as Rihanna, Justin Bieber and Super Junior, as well as hosting the Voice of China and the Clash in Cotai event.
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