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13 November 2017 Client Market Services NZX Limited Level 1, NZX Centre 11 Cable Street WELLINGTON Copy to: ASX Market Announcements Australian Stock Exchange Exchange Centre Level 6 20 Bridge Street Sydney NSW 2000 AUSTRALIA RE: SKYCITY ENTERTAINMENT GROUP LIMITED (SKC) INVESTOR PRESENTATION FOR UBS INVESTOR CONFERENCE Please find attached a copy of the investor presentation to be delivered by the company at the UBS Investor Conference in Sydney, Australia, today. The investor presentation includes a trading update for the 4 month period to 31 October 2017 on page 6. For any further information concerning the investor presentation, please contact: Ben Kay GM Corporate Development & Investor Relations Email: [email protected] Phone: + 64 (9) 363 6067 Yours faithfully
Jo Wong Company Secretary
SKYCITY Entertainment Group Limited
SKYCITY Entertainment Group Limited
Investor Presentation UBS Investor Conference 13 November 2017
2
SKYCITY Overview
Owner and operator of casino and entertainment facilities in NZ and Australia
Key activities – gaming, hotels, convention facilities, F&B, entertainment and out-catering services
Long-term exclusive casino licences
Diversified revenue and earnings base by geography and business activity
Two major growth projects – NZICC & Hobson St hotel and Adelaide expansion
Primary listing on NZX (secondary listing on ASX), with current market capitalisation of ~$2.6bn
Investment grade BBB- credit rating from S&P
Leading employer with around 5,500 employees across the group
Strong focus on corporate social responsibility
3
Property Summary
Exclusive casino licence to 2031 (for top 700kms of NT) 600 gaming machines, 30 tables, 152 hotel rooms / suites, ~800 employees
Exclusive casino licence to 2035 (for entire state of SA) 900 gaming machines (allowance for 1,500), 70 tables (allowance for 200), ~1,200 employees. A$330m casino and hotel expansion to be completed by Q3 2020
Exclusive casino licence to 2048(1)
1,877 gaming machines, 150 tables, 240 ATGs, ~630 hotel rooms / suites, ~3,000 employees. $700m NZICC & Hobson St hotel project to be completed by mid- 2019
Exclusive casino licence to 2027(1)
339 gaming machines, 23 tables, ~400 employees
Exclusive casino licences to 2024 (Wharf)(1) and 2025 (Queenstown)(1)
156 gaming machines, 18 tables, ~100 employees
(1) 15 year right of renewal / legislative cap on number of casino licences in NZ
4
Recent Financial Performance: FY15-FY17
Record normalised NPAT achieved in FY17
Policy of distributing at least 80% of normalised NPAT in dividends to shareholders per annum (subject to a minimum of 20.0 cps)
FY15-FY17: Normalised EBITDA and NPAT (NZ$m) FY15-FY17: Dividend Per Share (NZ$cps)
304.9
330.1 321.5
134.1152.7 154.6
0
50
100
150
200
250
300
350
FY15 FY16 FY17
Normalised EBITDA Normalised NPAT
20.0
21.0
20.0
10
12
14
16
18
20
22
FY15 FY16 FY17
Dividend Per Share
5
Recent Financial Performance: Geographic Mix
FY17 EBITDA (pre corporate costs) (NZ$m unless stated otherwise)
FY17 Normalised Revenue (incl Gaming GST) (NZ$m) (% of total)
SKYCITY Auckland (NZ) represented 81% (1) of FY17 group normalised EBITDA
Group-wide IB represented 6% (2) of FY17 group normalised EBITDA (10% for FY16)
Properties predominately service customers from local populations and communities
277
60
33
288
48
20
0
50
100
150
200
250
300
350
NZ (excl IB) Australia (A$m) (excl IB) Normalised IB
FY16 FY17 FY17 FY16FY17FY16
3.9% 18.6% 41.6%
638 (62%) 89
(9%)
276 (27%)
28 (3%)
NZ (excl IB)
NZ IB
Australia (excl IB)
Australia IB
(1) Auckland EBITDA (excl IB) / Group normalised EBITDA for FY17 (2) Group IB normalised EBITDA / Group normalised EBITDA for FY17
6
YTD Trading Update
Group In the four months to 31 October 2017, group normalised revenue was up 1.7% on the pcp, with domestic revenue
(which excludes IB) up 3.1% on the pcp
International Business Momentum is building in the business with particularly strong activity levels over the Golden Week holiday period
in October. However, IB turnover was slightly weaker on the pcp which largely pre-dated the Crown arrests in China
YTD win rate of 1.47%, slightly above the theoretical of 1.35%
New Zealand NZ properties are performing well, particularly in Auckland due to successful marketing and promotional initiatives
which have helped counter the impact of disruption in the CBD Hamilton continuing to benefit from a strong macroeconomic environment in the Waikato region, but growth
rates have moderated slightly due to stronger comparable periods
Outlook Based on YTD performance, remain on-track to achieve modest growth in group EBITDA in FY18, in-line with
previous guidance
Australia Improved premium gaming activity in Adelaide following implementation of new gaming concessions helping to
offset impact of construction disruption from early works Impact of increased competitive pressures in Darwin stabilising, but trading environment remains soft overall
7
Update On Key Initiatives – NZICC & Hobson St Hotel
SKYCITY is investing ~$700m in Auckland to deliver the NZICC, a 300 room 5 star hotel, a retail laneway, and 1,327
additional car parks
Car park and hotel basement construction well advanced, and steel structures being erected on site
Remain comfortable with contractual position with Fletcher Construction, with 90% of project costs fixed or
capped under a GMP
Fletcher Construction now has an experienced team in place, resulting in a positive shift in programme
momentum over the past 3 months
Project remains on-budget, with completion targeting mid-2019 and first major NZICC bookings in early 2020
The NZICC will be a landmark and iconic building for Auckland and NZ, and is expected to be a significant demand
driver for the Auckland precinct
The Hobson St hotel will provide much needed hotel infrastructure for Auckland and complement the NZICC and
broader Auckland business
8
Update On Key Initiatives – NZICC & Hobson St Hotel
NZICC & Hobson St hotel (Artist impression)
9 NZICC & Hobson St hotel site (as at November 2017)
Update On Key Initiatives – NZICC & Hobson St Hotel
10
Update On Key Initiatives – Adelaide Expansion
Vision to transform the Adelaide Casino into a world-class casino and entertainment complex
Expansion includes additional gaming capacity (~30% increase post opening), IB gaming suites and villas, a 123 room
all-suite hotel, and signature restaurants and bars
Total project costs expected to be ~A$330m (including an appropriate contingency)
Tender process for the construction contract has commenced – seeking a fixed price, lump sum contract
Main works expected to commence in Q1 2018 following completion of early works by the SA Government, with
final completion expected in Q3 2020
Confident in the investment thesis for Adelaide, supported by regulatory concessions agreed with the SA
Government
Riverbank precinct will be the entertainment centre of Adelaide and a significant demand driver for the property
post expansion
11
Update On Key Initiatives – Adelaide Expansion
Adelaide Riverbank Precinct
New Adelaide Convention Centre
Upgraded Adelaide Festival Centre
Festival Plaza with retail / F&B precinct
Adelaide Oval, via bridge across the
Torrens
Adelaide Casino & Hotel expansion
New 20-storey office tower
Existing heritage building
1,500 space car park below ground
12
Update On Key Initiatives – Adelaide Expansion
Early works progress (as at November 2017) – Grade separation
13
Update On Key Initiatives – Adelaide Expansion
Early works progress (as at November 2017) – Station Road works
14
Update On Key Initiatives – Other Recent Achievements
Acquired NPT’s interest in the AA Centre for $47m on 12 October 2017 (settlement: July 2018)
Acquisition consistent with intention to consolidate control over the Auckland precinct as part of the
Auckland master planning being undertaken
Acquisition expected to be marginally earnings accretive from FY19, and funded from existing bank
debt
Potential for additional investment in the Auckland precinct over the remainder of FY18
Au
ckla
nd
Mas
ter
Pla
n
Inn
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Acquired an interest in Let’s Play Live Media, NZ’s leading e-sports entertainment and broadcasting
company during October 2017
Investment will support the development of NZ’s first purpose-built e-sports broadcasting studio and
provide an exposure to a new, exciting form of entertainment which complements our core business
e-sports is one of the fastest growing forms of entertainment globally, which has strong appeal with
both millennials and Asian audiences
15
Update On Key Initiatives – Other Recent Achievements
Michael Ahearne appointed group COO effective from 1 January 2018, to replace John Mortensen who
intends to retire to Australia
Mr Ahearne joins from Paddy Power Betfair, and was previously COO of Star Sydney and COO of
Aristocrat’s Australian & NZ operations
Re
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anag
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pp
oin
tme
nts
Fu
nd
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Reached agreement on US$150m issue of USPP debt on 1 November 2017
USPP issue priced at an attractive margin and extends average debt maturity out to 4.6 years
Transaction remains subject to execution of final documentation with drawdown in March 2018 to
coincide with the maturity of existing USPP debt of US$75m
16
Key Focus For Remainder Of FY18
Improve operating performance of all business segments
Finalise and commence implementation of medium-term group strategy to further leverage existing assets, pursue new opportunities and enhance technology and digital capability
Monitor progress on NZICC & Hobson St hotel project in coordination with Fletcher Construction
Complete tender process for Adelaide expansion construction contract and commence main works
17
Disclaimer
All information included in this presentation is provided as at 13 November 2017
This presentation includes a number of forward-looking statements
Forward-looking statements, by their nature, involve inherent risks and uncertainties. Many of those risks and
uncertainties are matters which are beyond SKYCITY’s control and could cause actual results to differ from
those predicted. Variations could either be materially positive or materially negative
This presentation has not taken into account any particular investors investment objectives or other
circumstances. Investors are encouraged to make an independent assessment of SKYCITY
SKYCITY Entertainment Group Limited
SKYCITY Entertainment Group Limited
