Skycity Entertainment Group Limited · NZX:SKC
Skycity Entertainment — Investor Presentation (May 2023)
72 slides from Skycity Entertainment's investor presentation, May 24, 2023
Slide 1: Trading update and normalised EBITDA
For personal use only • • • • • 1 Normalised EBITDA is EBITDA adjusted for International Business theoretical win rate, New Zealand International Convention Centre fire impact, asset impairment and property valuation - refer to page 23 of SkyCity’s 1H23 results investor presentation for further deta
Slide 2: Contact information
For personal use only For further information concerning the trading update or the investor presentation, please contact: Rodney Deacon General Manager Group Strategy & Capital Markets Email: rodney.deacon@skycity.co.nz Phone: +64 21 631 074 Authorised by: Comer, Jo Wong Company Secretary Phone: +64
Slide 3: SkyCity 2023 Investor Day
SKYCITY 2023 INVESTOR + Auckland, New Zealand; 24 May 2023 aa a peal te j
Slide 4: Important Notice
($) IMPORTANT NOTICE All information included in this presentation is provided as at 24 May 2023. This disclaimer applies to this document and the verbal or Swritten comments of any person presenting it re information in this presentation has been prepared by SkyCity with due care and attention, how
Slide 5: Investor Day 2023 - Agenda
SKYCI 24 May 2023, Atickla iN 2 DAY 2023 - AGENDA . Zealand eet Our Group Michael Ahearne, CEO Our Value Proposition Julie Amey, CFO Group Risk Carolyn Kidd, CRO Q&A Pigs al Our Businesses ‘ em, - Showcase Property: Auckland Property, NZICC, Callum Mallett, COO New Zealand & Pas 13.00-16.00 Horizon
Slide 6: Welcome: Today's presenters
($) WELCOME Today's presenters a) Cc je) oO Yn =) (qe) Michael Ahearne, CEO Julie Amey, CFO Callum Mallett, COO NZ David Christian, COO Cc Australia (virtually) je) Y — oO jos — je) LL R.A David Allott, GM Michelle Baillie, GM Joy Rigby, Online Carolyn Kidd, CRO. Hospitality Auckland Hamilton Gaming
Slide 7: Our Group
| OUR GROUP Michael Ahearne CEO SkyCity Entertainment Group
Slide 8: Aspirations for the day
WELCOME Aspirations for the day Experience SkyCity Auckland's integrated precinct and future activations Interact with SkyCity's Senior Leadership
Slide 9: Who we are and what we do
($) WHO WE ARE AND WHAT WE DO New Zealand's largest tourism, leisure and entertainment company PURPOSE We are trusted to create vibrant places for gaming, entertainment and hospitality in New Zealand and Australia r Operational Complete major Pursue the excellence at our projects and omnichannel ce
Slide 10: Who we are and what we do
WHO WE ARE AND WHAT WE DO SkyCity Auckland > and Group Head Office SkyCity Hamilton SkyCity Online Casino Malta SkyCity Adelaide SkyCity Queenstown Nn ,500 EMPLOYEES 1 For personal use only ~34,000'sqm CONVENTION SPACE ~4,300' CUSTOMER CARPARKS INVESTMENT PROPERTIES THEATRES H TOWER EXPERIENCES 1. I
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Slide 13: Partnerships and sponsorships in our communities
S WHO WE ARE AND WHAT WE DO Many valued partnerships and sponsorships in the communities we operate in COMMUNITY TRUSTS OUR PARTNERSHIPS OUR SPONSORSHIPS a Cc [e) , $69.7m , Aligning with our partners to improve | Asponsor of sports teams, local events, o paid to over 5,000 groups since our communit
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Slide 15: FY23 Update
j SP _ FY23 UPDATE ‘er ag, Michael Ahearne q CEO SkyCity Entertainment Group
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Slide 19: Strategic focus areas
For personal use only (s) STRATEGIC FOCUS AREAS Maximising value from our exclusive casino licences 1 Continuous improvement in Monetise omnichannel to operational performance and consolidate NZ leadership efficiency position in gaming Reliable and consistent free cash . . : Protect and enhance soci
Slide 20: Our Value Proposition
OUR VALUE PROPOSITION Julie Amey CFO SkyCity Entertainment Group
Slide 21: Long-term value proposition
or personal USE ap LONG-TERM VALUE PROPOSITION Exclusive long-term casino licences, with high quality properties in attractive markets Proven earnings resilience to disrupters, safeguarding existing, and supporting future, earnings growth Earnings growth with diversification Agile business model, fa
Slide 22: Group revenue versus pre-Covid-19
For personal use only 140% 120% 100% 80% 60% 40% 20% 0% Jul-21 Aug-21 Sep-21 Oct-21 Nov-21 Dec-21 Jan-22 Feb-22 Mar-22 Apr-22 May-22 Jun-22 Jul-22 Aug-22 Sep-22 Oct-22 Nov-22 Dec-22 Group revenue (excl IB) Pre-Covid-19 (monthly ave.)
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Slide 24: Earnings growth and diversification
a Cc re , fo) Optimisation of core operations w through continuous improvement Yn 5) ps © cS eae . je) Benefiting from foot traffic ” activations across the precincts fc) ios — ° EARNINGS GROWTH AND DIVERSIFICATION (s) Key initiatives and focus areas Margin protection Data analytics to improve custo
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Slide 26: Efficient capital allocation: capex
EFFICIENT CAPITAL ALLOCATION Group capex requirements reducing post completion of in-progress projects Group: Capex ($m) Group: Major Projects ($m) To ij rec Wai 700 wpnviccniesuon ona rae O 350 | 842m $848 FY21 Spent to FY22 FY23 FY24 FY25+ * Circa $150m NZICC/Horizon Hotel development spend remain
Slide 27: Efficient capital allocation: balance sheet
For personal use only EFFICIENT CAPITAL ALLOCATION Balance sheet strength & flexibility to support business requirements Existing Group Debt Facilities ($m) Existing Group Debt Facilities Maturation ($m) 1,200 450 1000.0 my 4,00 9000 1,000 ro 800.0 tot 350 € ma 9 7000 8 800 ew 300 & 3 as | a 6000 Gr
Slide 28: Our value proposition summary
OUR VALUE PROPOSITION Summary Credible earnings growth potential, leveraging current properties and adjacencies Robust framework to sustain capital allocation priorities 26
Slide 29: Group Risk
SKYCITY GROUP RISK Carolyn Kidd CRO SkyCity Entertainment Group
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Slide 32: Group Risk summary
Group Risk Summary We take our responsibilities to our stakeholders, including our customers and community, seriously 30
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Slide 34: Our Businesses
OUR BUSINESSES Michael Ahearne CEO SkyCity Entertainment Group
Slide 35: SkyCity Auckland
SKYCITY AUCKLAND Callum Mallett COO New Zealand SkyCity Entertainment Group
Slide 36: SkyCity Auckland - it's all here
($) SKYCITY AUCKLAND - IT’S ALL HERE GAMING FOOD & BEVERAGE = r mo Fetatinum SkyCity Investor Day 2023 34
Slide 37: SkyCity Auckland masterplan
SKYCITY AUCKLAND MASTERPLAN Connecting 3 city blocks into a world class entertainment precinct HORIZON ITALIAN LEVEL 3 LINK / HOTEL TRATTORIA BAR TWENTYONE RESTAURANT ks oe: ti LOBBY BAR MAIN GAMING PRODUCTION & CAFE FLOOR KITCHEN HORIZON BY NZICC SKYCITY
Slide 38: Auckland region demographics
AUCKLAND REGION DEMOGRAPHICS Strong population growth expected to drive patronage Ethnic groups for people in For personal use only Auckland region population Auckland region and New Zealand POPULATION (million) PROJECTION 28 2.6 o Gili European 24 - ° » Medium Maori 22 2 - - © Low Pacific peoples 1
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For personal use only 1,200 92% 92% 100% 1,060 90% 1,024 1,004 1,000 76% 963 970 971 928 954 811 80% 69% 824 70% 800 775 667 60% 579 583 598 600 50% 37% 40% 358 386 400 30% 16% 297 198 20% 200 10% 0 0% Mar-19 Apr-22 Jun-22 Aug-22 Oct-22 Dec-22 Feb-23 Apr-23 Jun-23 Aug-23 Australia Pacific Islands As
Slide 40: SkyCity Auckland - business mix
(8) SKYCITY AUCKLAND - BUSINESS MIX Strong earnings growth with greater non-gaming diversification Da 1H23 Revenue S CO 1% 3% * Earnings across all segments expected to grow @h) Ssiuernas OTHER over the long-term = 1% cAMINGMACne * Non-gaming contribution is expected to increase BE coms BEVERAGE ~ b
Slide 41: SkyCity Auckland - gaming machines
(8) SKYCITY AUCKLAND - GAMING MACHINES Important foundation for the Auckland business : . . Customer Revenue Mix Product Unit Mix ° Expect continued growth in EGMs driven by 1H23 1H23 > product strategy and investment in VIP rooms and 14% © main gaming floor (MGF) ny A coar 17% uch? BLACK ‘WONDER :
Slide 42: SkyCity Auckland - table games
For personal use only. SKYCITY AUCKLAND - TABLE GAMES Focus on return to pre-COVID-19 earnings All of our VIP customers have been through the ongoing KYC process Table game open hours still recovering post-COVID-19, aiming to grow to above 6,000 open hours per week Local VIP rooms’ revenue still bel
Slide 43: Gaming technology transformation
Gaming Technology Transformation Ensuring the customer journey is seamless * High incidence of carded play with over 60% usage across the property and 90% in VIP areas! * QuickPay customer wallet available for gaming machines customers with 15% uptake to date and over 50% in VIP areas * Work is unde
Slide 44: SkyCity Auckland - hotels
For personal use only SKYCITY AUCKLAND - HOTELS Leveraging our strong precinct offering Hotel Customer Revenue - 1H23 . 19% 12% EREE INDEPENDENT GROUPS TRAVELLERS DIRECT 10% . AIR CREW 22% 8% ONLINE ° WHOLESALE TRAVEL AGENCY ° 14% GAMING 15% CORPORATE SkyCity’s hotels’ unique selling point is the pr
Slide 45: Horizon Hotel
For personal use only . HORIZON HOTEL A driver of precinct growth 5-star Qualmark rated Planned opening in 2024 303 guest rooms, 12 storeys, and great views to harbour from upper floors Ground floor retail and food & beverage, with connection to laneway Bridges linking NZICC to hotel and across Hobs
Slide 46: SkyCity Auckland - food & beverage
(8) SKYCITY AUCKLAND - FOOD & BEVERAGE . . For personal use only Refreshing the portfolio to support the precinct expansion Gusto FEDERAL. Yaoi} rons on 0] ecole FESRUDENS DEPOT ORBIT ‘ HUAMI 2 FOOD REPUBLIC cas mo QO si:00R Su SUGAR CASSIA 8 4 _ SIGNATURE FUNCTION ENG Aladys RESTAURANTS BRANES FORT
Slide 47: Efficiency & automation initiatives
&) For personal use only EFFICIENCY & AUTOMATION INITIATIVES Leveraging technology to grow productivity ROBOT WAITERS QR TABLE COCKTAIL DIGITAL KITCHEN PASTRY MAKER SHOPFRONT KETTLES CUTTER mixglogiq COMPLETE COMPLETE COMPLETE COMPLETE COMPLETE COMPLETE 3units deployed QR code ordering at table | Au
Slide 48: SkyCity Auckland - Sky Tower
(8) SKYCITY AUCKLAND - SKY TOWER A key driver of Auckland precinct visitation => #1 visitor attraction in New Zealand S Sky Jump and Sky Walk operated by AJ Hackett Bungy New Zealand oO New Sky Slide experience introduced on the main observation deck = Unique driver of visitation to precinct C Reven
Slide 49: SkyCity Auckland key takeaways
SKYCITY AUCKLAND Key takeaways Completion of major projects, including Horizon Hotel and the NZICC, expected to further drive customer visitation 47
Slide 50: New Zealand International Convention Centre
NEW ZEALAND INTERNATIONAL, CONVENTION CENTRE SkyCity Investor Day 2023 48
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SkyCity Investor Day 2023
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Slide 54: NZICC economic impact
For personal use only NZICC Economic impact Estimated to bring 33,000 international delegates to Auckland, New Zealand per ye: contributing $90 of new economic spend ECONOMIC per year IMPACT MEASURABLE ROI Estimated Visitors Estimated Visitor The outputs from business events are measurable with soph
Slide 55: SkyCity Hamilton
SKYCITY HAMILTON Michelle Baillie GM SkyCity Hamilton
Slide 56: SkyCity Hamilton
i) For personal use only SKYCITY HAMILTON In the heart of the Waikato region 90 minutes from New Zealand's largest international gateway and central to over 50% of the country’s population Fast growing city with population expected to grow >200,000 by 2028 from estimated 181,500 in 2023) Over the 5
Slide 57: SkyCity Hamilton - new operating model post COVID-19
(8) SKYCITY HAMILTON New operating model post COVID-19 >y Trading above pre COVID-19 levels C- Uplift reflects new products, diverse local economy and © operational efficiencies D> Opportunity to grow visitation from activation of adjacencies, = including strategy to lease vacant spaces to increase
Slide 58: SkyCity Hamilton key value drivers
rsonal use only r pe For SKYCITY HAMILTON Key value drivers Benefiting from a growing local economy with a strategy underpinned by great service and offerings, responsible gaming and effective marketing Focus on gaming growth, with EGM product investments and increased table open hours expected to m
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Slide 60: SkyCity Queenstown
SKYCITY QUEENSTOWN Located in New Zealand's adventure capital Single site strategy delivering improved financial ee performance Casino licence renewal preparations underway with an expected extension of 15 years to 6 December 2040 Staff accommodation options sourced to attract and retain talent Astr
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Slide 62: SkyCity Adelaide
SKYCITY ADELAIDE David Christian COO Australia SkyCity Entertainment Group
Slide 63: SkyCity Adelaide
SKYCITY ADELAIDE In the heart of the Riverbank Precinct > *C Situated in the heart of the ORiverbank Precinct, surrounded by major attractions: Adelaide Oval, adelaide Convention Centre, Festival Theatre and Walker Tower «__ Strong economic growth over (past few years, currently with Crecord low une
Slide 64: SkyCity Adelaide - new operating model post COVID-19
S) For personal use only SKYCITY ADELAIDE New operating model post COVID-19 Expansion opened December 2020, adding a new gaming floor, VIP room and IB suites, luxury hotel, conference facilities, spa and bars/restaurants Reduced casino operating hours from 24/7 to 9am-Sam daily ~750 leased carparks
Slide 65: SkyCity Adelaide key value drivers
SKYCITY ADELAIDE Key value drivers * Regulatory environment in Australia providing challenging and changing operating >conditions. AUSTRAC Statement of Claim currently being assessed, and the South “]} Australian gaming regulator's (CBS) independent review is on hold pending ro) resolution of AUSTRA
Slide 66: SkyCity Online
SKYCITY ONLINE Joy Rigby Online Gaming Strategy Lead SkyCity Entertainment Group
Slide 67: Online casino - journey from launch
For personal use only ONLINE CASINO Journey from launch SkyCity Online Casino launch The Online Club launch The SkyShop launch Charity Partnerships Al sentiment tracking SkyCity Investor Day 2023 65
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Slide 70: NZ offshore online casino market growth
ONLINE CASINO NZ offshore online casino market growth NZ Offshore Online Casino Gaming Market! D> The NZ offshore online casino market has seen Cc accelerated growth over the past three years fo} 800 ro) 700 In 2018 the market was estimated WY £600 to be worth $200m 5 4 — S 500 By 2022 this estimate
Slide 71: Online casino opportunity summary
(8) ONLINE CASINO Opportunity summary Strong earnings performance, despite an unequal playing field in a very competitive grey market N Valuable partnership with our platform and service provider Gaming Innovation Group (GiG), solidified with an ~11% shareholding W NZ online casino market forecast t
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SkyCity Entertainment Group — Investor Presentation (May 2023) on 6ix