FYE 2009 RESULTS
Safe Harbor Statement These presentations contain forward-looking statements (including, without limitation, statements regarding the enhancement of shareholder value, and information and future guidance on our goals, priorities, orders, revenues, demand, growth opportunities, customer service and innovation plans, new product introductions, financial condition, earnings, liquidity, capital structure, operating performance, cost structure, cyclicality, the continued strengths and expected growth of the markets we sell into, operations, operating earnings, balance sheet models and our ability to be free cash flow positive under any normal economic environment) that involve risks and uncertainties that could cause results of Dreamgate to differ materially from management's current expectations. Factors that could cause demand to be different from Dreamgate’s expectations include customer acceptance of Dreamgate and competitors’ products; changes in customer order patterns, including order cancellations; changes in the level of inventory at customers; and changes in business and economic conditions and the timing of award exercises by employees. Dreamgate results could be impacted by unexpected economic, social, political and physical/infrastructure conditions in the countries in which Dreamgate, its customers or its suppliers operate, including military conflict and other security risks, natural disasters, infrastructure disruptions, health concerns and fluctuations in currency exchange rates. 2
Contents Highlights Financial Overview Teh Mun Hui, FD Corporate Development Teh Mun Hui, FD Business Segment Update Steven Lim, COO Outlook, Target & Strategies Steven Lim, COO Q&A 3
Highlights 4
HIGHLIGHTS Financial Prudent measure of providing RM25 mil for impairment loss for machines yet to be in operations, affected pre-tax loss to RM60 mil Net cash from operating activities remains healthy SSM - Exceeded 10% of internal target machine sales Business TSM - Focus for 2009 on mobilization plan. - Penetrated the concession market in Macau for first time, partner the SJM Group, managing 6 slots operations for the SJM Group of casinos. SSM - CRA, Singapore approved gaming equipment supplier - Chateau de Bavet Hotel & Casino on 1 st August 2009 L&E R&D - Successfully launched 4 progressive jackpot linked games with more than 8 based games under RGBGames Corporate 279 mil shares (with total gross proceeds of RM46.2 mil) were placed out to raise funds primarily for capex purpose 5
Financial Review 6
PERFORMANCE OF 2009 Q-o-Q Revenue Increases As More Machines Sold in 4Q09, High Impairment Cost Factored In 2009 4Q09 3Q09 Q-o-Q 2009 2008 Y-o-Y RM mil RM mil % RM mil RM mil % Revenue 65.39 34.81 87.85 170.20 227.81 (25.29) Operating (Loss) / Profit (31.12) (5.18) 500.77 (51.77) 6.61 (883.21) (Loss) / Profit Before Tax (33.67) (6.69) 403.29 (60.51) (3.29) 1,739.21 (Loss) / Profit Attributable to Equity (32.72) (5. 35) 511.59 (57.85) (2.87) 1,915.68 Holders Net (Loss)/Earnings Per Share attributable to equity holders (sen) • Basic (3.22) (0.57) 464.91 (6.26) (0.33) 1,796.97 • Diluted N/A (0.57) N/A N/A (0.33) N/A NTA Per Share (sen) 14 17 (17.65) 14 20 (30.00) 7
KEY RATIOS Ratios Reflect The Effects of the Forced Closure 3 months ended 12 months ended 31.12.2009 31.12.2008 31.12.2009 31.12.2008 GP margin (%) 15 28 16 35 Current Ratio (times) 0.54 0.81 0.54 0.81 Quick Ratio (Excluding (times) 0.48 0.75 0.48 0.75 inventory) Gearing Ratio Borrowings - Gross (times) 1.00 0.83 1.00 0.83 - Net (times) 0.86 0.66 0.86 0.66 8
REVENUE BY BUSINESS SEGMENTS SSM increased revenue with opening of new casinos, main contributor for 2009 RM mil SSM 11% Due to sales to casinos in 140 Singapore and Philippines 57% 120 • Closure of slot clubs TSM 48% 2009 - RM170 • New concession areas yet to 100 mil 52% yield optimum results 35% 2008 - RM228 80 mil • Solely from Chateau, started L&E 12% 40% operations only in Aug 09 60 • High promotional cost, training cost, junket 40 commission 20 6% 5% 3% 2% 0 SSM TSM L&E Others Notes: L&E : Consist of revenue from companies involved in gaming and leisure activities Others : Consist of revenue from manufacturing activities, research & development activities and inter-segment 9 transaction
MAJOR COST COMPONENTS Effective Internal Control Measures 10
NET CASH FROM OPERATING ACTIVITIES Net Cash from Operating Activities Remains Healthy Despite Challenging Year Net Operating Cashflow (RM mil) 105 89.2 67.2 48.1 37.42 2005 2006 2007 2008 2009 11
IMPAIRMENT ON MACHINES Affected Machines Expected to be Operational By 1H2010 Mobilization Plan (as at 31 December 2009) No. of machines not in operations 1,470 units Impairment loss for 2009 RM25.66 mil NBV before impairment RM72.75 mil NBV after impairment RM47.75 mil Best Case Scenario Worst Case Scenario Machines to placed out - Timeline End 1H2010 All not placed out at end of 2010 Provision of impairment loss Nil At maximum RM25 mil (as per 2009) 12
CAPEX AND SOURCE OF FUNDING Capex in 2010 Expected to be Substantially Lower 2009 : Capex increase as certain new concession venues 160 Capex Incurred For Past 5 especially in Philippines and Macau require new Years (RM mil) machines to be placed. 140 2010 : Focus on improving yield, expect to place out 2,000 120 machines (out of which 1,470 expected from mobilization plan). 100 80 Pre-2009 2009 2010 136 122 60 • Internally • Internally • Internally Source of 99 funding generated generated generated 40 funds funds funds 78 62 • Banking • Banking • Banking 20 facilities facilities facilities 36 • Private placements 0 – issuance 2005 2006 2007 2008 2009 2010 of 169.5 mil Note : Capex refers to purchase of property, machines shares and equipment 13
Corporate Development 14
CORPORATE DEVELOPMENTS IN 2009 1 st Public Fund Raising Exercise Since Listing Proposal Announcement Tranches Issue Price Listing date (‘000 shares) Date (sen) of shares 1 st Private Placement 30/09/08 - 72,160 15.7 20/07/09 2 nd - 15,000 16.9 13/08/09 1 st Private Placement 01/09/09 - 82,300 18 30/10/09 Sub-Total 169,460 - 2 nd In 2010 - 38,540 16 20/01/10 3 rd - 62,800 16 25/01/10 4 th - 8,200 16 25/01/10 Sub-Total 109,540 Grand Total 279,000 15
SUMMARY OF PLACEES Able to complete the placements despite challenging conditions 2 nd Placement 1 st Placement 11% 37% Institutions 87.16 mil 191.841 mil shares Individuals shares 63% 89% 16
Business Segment Review 17
SSM – MACHINES SALES IN 2009 Sales of machines exceeded target by 10% Target Country machines to be Actual 2009 sold machines sold Target vs. Machines vs. FY2009 FY2009 Actual sold in 2008 2008 (units) (units) (%) (units) (%) Malaysia 100 70 (30) 87 (20) Philippines 600 736 23 550 34 Vietnam 200 38 (81) 120 (68) Singapore 50 220 340 22 900 Macau 150 *40 73 217 (82) Others - 109 N/A 25 336 Total 1,100 1,213 10 1,145 6% Note : * Instead of outright sales, operators of casinos in Macau considered concession programmes to reduce their investment cost. Hence, lower machine sales were recorded. 18
TSM – CONCESSION VENUES Able to penetrate into new concession market/venues Summary of Concession Venues As at December 2009 No. of Venues No. of Machines As at Dec 2009 At at Dec 2008 As at Dec 2009 Outcome Country (%) Philippines 11 17 55 2,016 Macau - 6 - 888 Cambodia* 37 11 (70) 2,038 Vietnam 3 3 - - 154 Laos 1 #2 100 59 Others - 1 - 193 52 40 (23) 5,348 Notes: * Refers to casinos in Bavet and Poipet # Includes a casino where the Group manages 110 machines at the venue 19
TSM – MOBILIZATION PLAN Affected Machines to be Fully Operational By 1H2010 130 204 57% of affected machines - In operations; - Sold; or - Source of spare parts 500 Total 43% expected to be in operations 1,470 machines by end 1H2010 80 3,424 120 Concession venues have been identified : 500 for Laos, remaining to Philippines 920 Yet to be in operations Cambodia Laos Macau Philippines Singapore (Cruise ship) Spare Parts 20
L&E – CHATEAU DE BAVET : AN UPDATE Started Operations : 1 August 2009 Chateau Gestation period around 6 to 9 months Monthly Gross Gaming Revenue Per Unit Facilities are expected to be fully completed by (USD) 900 800 2010 800 As at end Dec 2009: - Slots : 109 machines 700 630 - Table games : 38 600 By 1H2010, another additional 30 tables for junket operations 500 400 380 400 Performance - Daily Gross Revenue 250 Our target (per day): 300 - Table games : USD600/table 200 - Slots : USD50/machine 15 15 20 30 30 100 Note: 0 As at Dec 2009, yield for table games exceeded our AUG '09 SEPT '09 OCT '09 NOV '09 DEC'09 target. Slots falls a little short. We are continuously re-looking into our strategies to improve the yield to SLOT MACHINES TABLE GAMES attract players to the slot and also table games. 21
Outlook, Target and Strategies 22
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