LAS VEGAS, Jan. 3, 2019 /PRNewswire/ -- MGM Resorts
International (NYSE: MGM) ("MGM Resorts" or the "Company") today
announced a plan to further reduce costs, improve efficiencies and
position the Company for growth. The Company expects to deliver
annualized Adjusted EBITDA uplift of $300
million in aggregate, consisting of $200 million by the end of 2020 and an additional
$100 million by the end of 2021.
The program, known as 'MGM 2020', will be a company-wide,
business-optimization initiative aimed to leverage a more
centralized organization to maximize profitability and, through key
investments in technology, lay the groundwork for the Company's
digital transformation to drive revenue growth. The plan expands
upon themes that were outlined at the Company's 2018 Investor Day
and also builds on MGM's highly successful Profit Growth Plan that
was implemented in 2015.
"Today, we are taking the next step in our evolution as an
organization. We are building on the strong foundation that we have
solidified over the past few years, to deepen our efficiencies and
achieve sustained growth and margin enhancement," said Jim Murren, Chairman and CEO of MGM Resorts
International. "MGM 2020 is intended to further transform the way
we operate and leverage the most effective operational architecture
for our company."
Mr. Murren continued, "When we launched our Profit Growth Plan a
few years ago, we transformed our culture to embrace a 'One
Company' approach to operations, create best practices and
efficiencies, and drive significant Adjusted EBITDA growth and
margin expansion. Importantly, during this time, we established key
centralized strategic functions and developed crucial operational
expertise to enable best practices and efficiencies. These
cornerstone strengths allowed us to exceed our initial expectations
on our Profit Growth Plan, as we currently operate many of the most
profitable destinations in Las
Vegas and across our regional markets."
This new program will be driven by:
i)
Organizational changes to improve operating
efficiencies
Over the past two years, MGM Resorts has
centralized key company-wide functions and invested strategically
in resources to create centers of excellence. The Company is now in
a position to leverage these centers of excellence to create
additional efficiencies and realize $200
million of annualized Adjusted EBITDA uplift by year end
2020, half of which will be driven by labor savings, 25% by
sourcing and the remaining 25% by revenue optimization.
ii)
Investing in the Company's digital transformation to drive
revenue growth
With the conclusion of its development cycle,
MGM Resorts is generating significant free cash flow. Over the next
few years, the Company expects to reallocate a portion of its
annual capital expenditure budget to specific technology
advancements that will increase revenues and grow market share by
innovating and elevating the guest experience through data,
pricing, digital and loyalty capabilities and optimizing business
mix. Through the Company's digital transformation, the Company
expects to realize $100 million of
annualized Adjusted EBITDA uplift by year end 2021.
Mr. Murren concluded, "We had a solid finish to the year in
2018, and as we look to 2019 and beyond, we remain confident in the
ramp of our newly opened properties MGM COTAI, MGM Springfield,
Park MGM and NoMad Las Vegas. We will enter two attractive markets
in New York and Ohio. We will continue to work toward
cementing MGM Resorts as the leader in sports, following the
milestones achieved in 2018 with GVC and the professional sports
leagues. We remain focused on pursuing an integrated resort
opportunity in Japan. MGM 2020
reinforces our commitment to increasing margins and maximizing
profitability."
About MGM Resorts International
MGM Resorts International (NYSE: MGM) is an S&P 500® global
entertainment company with national and international locations
featuring best-in-class hotels and casinos, state-of-the-art
meetings and conference spaces, incredible live and theatrical
entertainment experiences, and an extensive array of restaurant,
nightlife and retail offerings. MGM Resorts creates immersive,
iconic experiences through its suite of Las Vegas-inspired
brands. The MGM Resorts portfolio encompasses 28 unique hotel
offerings including some of the most recognizable resort brands in
the industry. Expanding throughout the U.S. and around the world,
the company in 2018 opened MGM Springfield in Massachusetts, MGM COTAI in Macau, and the first Bellagio-branded hotel in
Shanghai. The 81,000 global
employees of MGM Resorts are proud of their company for being
recognized as one of FORTUNE® Magazine's World's Most Admired
Companies®. For more information visit us
at www.mgmresorts.com.
Statements in this release that are not historical facts are
forward-looking statements, within the meaning of the Private
Securities Litigation Reform Act of 1995 and involve risks and/or
uncertainties, including those described in the Company's public
filings with the Securities and Exchange Commission. The Company
has based forward-looking statements on management's current
expectations and assumptions and not on historical facts. Examples
of these statements include, but are not limited to, the Company's
expectations regarding future results and the Company's financial
outlook, the Company's ability to generate future cash flow growth,
the Company's ability to execute its strategic plan and capital
allocation strategy, and deliver on its 2020 goals. These
forward-looking statements involve a number of risks and
uncertainties. Among the important factors that could cause actual
results to differ materially from those indicated in such
forward-looking statements include effects of economic conditions
and market conditions in the markets in which the Company operates
and competition with other destination travel locations throughout
the United States and the world,
the design, timing and costs of expansion projects, risks relating
to international operations, permits, licenses, financings,
approvals and other contingencies in connection with growth in new
or existing jurisdictions and additional risks and uncertainties
described in the Company's Form 10-K, Form 10-Q and Form 8-K
reports (including all amendments to those reports). In providing
forward-looking statements, the Company is not undertaking any duty
or obligation to update these statements publicly as a result of
new information, future events or otherwise, except as required by
law. If the Company updates one or more forward-looking statements,
no inference should be drawn that it will make additional updates
with respect to those other forward-looking statements.
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SOURCE MGM Resorts International