Skycity Entertainment Group Limited · NZX:SKC
Skycity Entertainment — Debt Investor Presentation (September 2005)
38 slides from Skycity Entertainment's debt investor presentation, Sep 19, 2005
Slide 1: Cover letter to ASX: SKYCITY ACES issue
19 September 2005 Company Announcements Office Australian Stock Exchange Exchange Centre Level 6 20 Bridge Street Sydney NSW 2000 AUSTRALIA Dear Sir/Madam RE: SKYCITY ACES ISSUE SsKYCITY ENTERTAINMENT GROUP SKYCITY Entertainment Group Limited Federal Howse iG Fedora! Strout PO Bax 44.3 Wellesiey Sir
Slide 2: Issue of up to A$150 million SKYCITY ACES
PRinminy caGur Issue of up to A$150 million SKYCITY ACES (Adjustable Coupon Exchangeable Securities) in SKYCITY Investments Australia Limited Evan Davies, Managing Director David Lilly, General Manager Group Finance 19-21 September 2005 Lead Manager and Bookrunner és UBS se"
Slide 3: Disclaimer
Disclaimer af, * This presentation has been authorised by SKYCITY Investments Australia Limited (ARBN 116 187 305) (Issuer), a wholly owned subsidiary of SKYCITY Entertainment Group Limited (ARBN 098 775 047) (SKYCITY}, in connection with a proposed offering (Offer) of up to A$150 million SKYCITY AC
Slide 4: Overview of presentation
Overview of presentation Offer summary Overview of the SKYCITY Entertainment Group Effect of issue on the SKYCITY Entertainment Group Overview of SKYCITY ACES Syndicate and bookbuild process a 2, se yverTY
Slide 5: Offer summary
a 2, se yverTY Section 1 Offer summary
Slide 6: Key terms of the Offer
Key terms of the Offer ony e Security: SKYCITY ACES are perpetual reset exchangeable debt securities e Issuer: SKYCITY Investments Australia Limited ¢ Guarantor: SKYCITY Entertainment Group Limited on a subordinated basis « Maximum issue amount: A$150 million « Coupons: Preferred, quarterly, floatin
Slide 7: Rationale for the Offer
Rationale for the Offer J” se yverTY « The issue of SKYCITY ACES forms part of SKYCITY’s ongoing financing strategy « The Issuer will use the gross proceeds of the Offer to purchase Preferred Ordinary Shares in SKYCITY Australia Pty Limited, the holding company of SKYCITY’s Australian businesses « U
Slide 8: Overview of the SKYCITY Entertainment Group
a 2, se yverTY Section 2 Overview of the SKYCITY Entertainment Group
Slide 9: Overview of the SKYCITY Entertainment Group
Overview of the SKYCITY Entertainment Group « Leading diversified trans-Tasman entertainment business * Owns and operates five gaming/entertainment properties, 777 hotel rooms and 93 cinema screens and has 5,000 full and part-time staff « Revenue split (30 June 2005): New Zealand 71%, Australia 29%
Slide 10: SKYCITY Entertainment Group structure
SKYCITY Entertainment Group a. se yverTY structure nnn ” — SKYCITY Entertainment Group Limited (SKYCITY) Other New Zealand operations SKYCITY SKYCITY SKYCITY SKYCITY SKYCITY | (Christchurch|| SKYCITY Auckland Adelaide Darwin Hamilton | Queenstown Casino? Leisure 100% 100% 100% 106% 60% 40.5% 100% Hi
Slide 11: Summary consolidated financial performance
Summary consolidated financial performance 4». se yverTY Year Ended 30 Jun e 2005 2005 2004! NZ$m NZ$m » Revenue $684.2 $594.2 » EBITDA $285.8 $259.7 » EBIT $223.1 $212.0 » Financing costs $81.0 $48.6 » Tax $37.0 $40.4 « Canbet write-off - $20.9 » Net surplus after tax (NSAT) $104.0 $100.2 « Earning
Slide 12: Key consolidated financial statistics
Key consolidated financial statistics 4. FYO5 v FY04) Revenues i 15% (+NZ$90m) EBITDA dis, 10% (+NZ$26m) EBIT iis, 5% (+NZ$11m) NSAT (D wa, 4% (+NZ$3.8m) EPS Aili, 4% (+NZO.9cps) a The NSAT increase of NZ$3.8m compares FYOS NSAT of NZ$104.0m against FYO4 NSAT (after Canbet write-off} of NZ$100.2m. T
Slide 13: Key elements of the FY05 result
« SKYCITY Group operating earnings (EBITDA) increased by NZ$26m (+10%) during FYOS5 with the addition of SKYCITY Darwin, 41% share in Christchurch Casino, Auckland Convention Centre, and increased ownership of SKYCITY Leisure (100%) and SKYCITY Hamilton (moving from 70% to 100% on 30 June 2005) « Ne
Slide 14: Key elements of the FY05 result (continued)
Key elements of the FY05 result (continued) * Despite the various pressures confronting the New Zealand business operations, New Zealand operating earnings (EBITDA) were 1% ahead of prior year « EBITDA from Australian operations increased from A$25m to A$48m with the addition of SKYCITY Darwin * Del
Slide 15: Revenues: +15%
Revenues: +15% ae, . FYOS SKYCITY Darwin | Other New Zealand Operations Note: Revenues are stated net of complimentaries. Afi figures are stated im NZ$ unless otherwise indicated Other New Zealand Operations inchide SKYCITY Hamilton, SKYCITY Queenstown, SKYCITY Leisure and Christchurch Casiro SKYCIT
Slide 16: Operating earnings (EBITDA): +10%
Operating earnings (EBITDA): +10% (a, NZgm 300 250 200 150 160 50 FY99 FY00 FYO1 FY02 FY03 FYo4 FYO5 _ SKYCITY Auckland |. SKYCITY Adelaide | SKYCITY Darwin Other New Zealand Operations & FYO4: Hamilton NZ$13.8m, Leisure NZ$1 1.4m, Queenstown NZ$0.8m we FYOS: Hamilton NZ$13.6m, Leisure NZ$11.4m, Que
Slide 17: SKYCITY Group revenues and EBITDA FY05
SKYCITY Group revenues and EBITDA FY05 Revenues NZ$684m (+15%) EBITDA NZ$286m (+10%) <DEL TODS NZ$402m 59% Auckland NZ$201m 70% NZ$83m 12% Other NZ NZ$33m 12% A$i08m 17% | Adelaide A$ism 7% AS77m 12% 2 Darwin A$30m 11% NZ$684m NZ$286m Gaming/Non-Gaming! Revenues Non-Gaming* $180m Gaming $525m Note,
Slide 18: Regulatory environment: casino licence terms
Regulatory environment— RE casino licence terms wERNEITY, New Zealand? Auckland 2021 Hamilton 2027 Christchurch 2019 Queenstown 2025 Australia Adelaide 2085 Darwin 2015 Note: i New Zealand casino licences issued for initial terms of 25 years with successive 15 year renewals 17
Slide 19: Regulatory environment: legislative intent
Regulatory environment— RE legislative intent e Gaming regulations in terms of harm minimisation and community restraint in New Zealand and South Australia. Economic development a key theme in Northern Territory ¢ A range of current issues to be worked through—mainly regulatory clarification of new
Slide 20: FY06 objectives
FY06 objectives Auckland - Hamilton - Queenstown - Christchurch - Leisure Adelaide - Darwin - a 2, Achieve revenue growth in all sectors Capitalise on 660 hotel rooms and convention facilities Continue to develop and enhance SKYCITY as an entertainment and tourism destination Achieve growth from exi
Slide 21: FY06 objectives (continued)
a 2, se yverTY FY0O6 objectives (continued) LILLIE LITLE ¢ Continue to evaluate new gaming/entertainment opportunities e Maintain capital management focus ¢ Be engaged with regulators in all jurisdictions to facilitate optimum outcomes in terms of new programmes and initiatives ¢ Continue leadership
Slide 22: Effect of issue on the SKYCITY Entertainment Group
Section 3 Effect of issue on the SKYCITY Entertainment Group a 2, se yverTY al
Slide 23: Pro-forma statement of financial position
Pro-forma statement of financial a 2, =, skyerTy position corer aoe - SAID Set) aune 2005 callie adjustmente alti Total equity 193 - 193 LIABILITIES Non-current liabilities 1,114 (4) 1,110 SKYCITY ACES - 158 158 Current liabilities 198 (100) 98 Total liabilities 1,312 54 1,366 Total equity and liabi
Slide 24: Pro-forma statement of financial performance
Pro-forma statement of financial performance % LK DIED (NZ$m) Consolidated Pro-forma Pro-forma For the year ended 30 June 2005 Group Adjustments Group Total operating revenue! 684 3 687 Total operating expenses (398) - (398) EBITDA 286 3 289 Total depreciation & amortisation (63) - (63) EBIT 223 3 2
Slide 25: Selected financial ratios
a 2, Selected financial ratios _severty Year ended 30 June 2005 Consolidated Pro-forma Group Group EBITDA/financing costs 3.53x 3.49x Net debt/EBITDA 3.91x 3.87x Net debt/enterprise value 37.3% 37.3% 24
Slide 26: Overview of SKYCITY ACES
a 2, se yverTY Section 4 Overview of SKYCITY ACES
Slide 27: Floating rate Coupons
Floating rate Coupons ¢ SKYCITY ACES are perpetual reset exchangeable debt securities « Issue price of A$100 per SKYCITY ACES « Coupons — preferred, non-cumulative, payable quarterly in arrears - based on Market Rate (90 day Bank Bill Rate) + Margin — expected to be fully franked - Coupon Rate for f
Slide 28: Discretion to not pay Coupons
Discretion to not pay Coupons e Directors of the Issuer have a discretion to not pay Coupons — dividend stopper will apply — if a Coupon is not paid within 20 business days, a Trigger Event will occur and Holders will be able to make an Exchange Request « Dividend stopper — prevents SKYCITY from pay
Slide 29: Subordinated Guarantee
Subordinated Guarantee e Subordinated Guarantee from SKYCITY -— SKYCITY guarantees on a subordinated basis the payment of Coupons which become due and payable, and the payment of other amounts payable upon Exchange, Redemption or Resale — claims under the Subordinated Guarantee rank behind claims of
Slide 30: Reset / Issuer Exchange or Redemption
Reset / Issuer Exchange or Redemption « Reset of terms — first Reset Date is 15 December 2010 — the Market Rate and the Margin and certain other terms may be changed — before any new terms take effect, Holders will be able to make an Exchange Request e Issuer Exchange or Redemption ~— Issuer can dec
Slide 31: Holder Exchange Request
Holder Exchange Request « Holder Exchange Request — a Holder can make an Exchange Request relating to all or some of the Holder's SKYCITY ACES in relation to a Reset Date or Trigger Event - a Holder can also make an Exchange Request at any time for the Minimum Exchange Number — Issuer can decide to
Slide 32: Exchange Numbers
Exchange Numbers « Automatic Redemption — if there is a Winding-up Event in relation to the Issuer or SKYCITY « Number of Ordinary Shares in SKYCITY — Exchange Ratio = Face Value of A$100 VWAP x (1 - Exchange Discount of 2.5%) subject to Minimum and Maximum Exchange Numbers ¢ Minimum Exchange Number
Slide 33: Exchange Numbers (continued)
Exchange Numbers continued) ¢ Minimum Exchange Number may change if a Change in Control Event occurs — Minimum Exchange Number will be increased to take into account the number of days from (and including) the date the Change in Control Event occurred to (but excluding) the next Reset Date — this al
Slide 34: Syndicate and bookbuild process
Section 5 Syndicate and bookbuild process a 2, se yverTY 33
Slide 35: Syndicate and bookbuild process
Syndicate and bookbuild process a e Lead Manager and Bookrunner: UBS AG, Australia Branch e Co-Managers ~ Bell Potter Securities Limited ~ Commonwealth Securities Limited ~ Grange Securities Limited ~ UBS Private Clients Australia Limited e Bookbuild will be conducted by the Lead Manager and Bookrun
Slide 36: Indicative timetable
Indicative timetable ee Key dates for Offer Date Record date for Eligible Shareholders _. 7:00pm 15 September 2005 Announcement of Offer and lodgement of ‘Prospectus with ASIC 16 September 2005 Bookbuild _ Annou nent, of Margin n ard Oper ing Date F Closing Date for Shareholder Offer _— . 3 HOpm 20
Slide 37: Questions?
Section 6 Questions? a 2, se yverTY 36
Slide 38: Important Information
Important Information (a, The information in this presentation is an overview and does not contain ail the information necessary to make an investment decision. It is intended to constitute a summary of certain information relating to the Issuer, SKYCITY Entertainment Group Limited (SKYCITY) and doe
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