A new strategy to reduce costs and drive up efficiency has been launched by MGM Resorts.
The group anticipates an adjusted annual increase in EBITDA of $300m, consisting of $200m by the end of 2020 and another $100m by the end of the following year. MGM has announced a programme entitled MGM 2020, an initiative that it says will "leverage a more centralised organisation to maximise profitability through key investments in technology." It will also lay the foundation of MGM’s digital transformation to drive up revenues.
"Today, we are taking the next step in our evolution as an organisation. 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."
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 centralised 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."
The plan is to reallocate some of its annual capital expenditure budget to specific technology advancements to increase revenues. Murren added: "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 maximising profitability."
