SkyCity Entertainment Group Limited · NZX:SKC
SkyCity Entertainment — H1 FY2012 Earnings Presentation
45 slides from SkyCity Entertainment's earnings presentation, Feb 15, 2012
Slide 1: Half Year Result Presentation
Half Year Result Presentation SKYCITY Six month period ended 31 December 2011 Entertainment Group Limited 15 February 2012
Slide 2: SKYCITY Interim Result 1H12
SKYCITY Interim Result 1H12 1H12 Result Presentation 2 Appendices and Financial Summaries 21 www.skycityentertainmentgroup.com 1
Slide 3: 1H12 Result Presentation
ENTERTAINMENT GROUP 1H12 Result Presentation
Slide 4: 1H12 Result Highlights
1H12 Result Highlights 1H12 1H11 Movement $m $m $m % Reported Revenue (incl Gaming GST) 494.0 447.7 46.3 10.3% Reported EBITDA 168.2 150.9 17.3 11.5% Reported NPAT 78.8 67.1 11.7 17.4% Reported EPS 13.7cps 11.7cps 2.0cps 17.1% Dividend 9.0cps 8.0cps 1.0cps 12.5% Normalised Revenue (incl Gaming GST)
Slide 5: 1H12 Result Highlights
1H12 Result Highlights Record first half financial results, with Reported NPAT of $78.8m +17.4% on 1H11 − Reported Revenue and EBITDA of $494.0m (+10.3%) and $168.2m (+11.5%) − Flagship Auckland Revenues $268.9m, up $33.8m (+14.4%) − Rugby World Cup 2011 was a one-off boost to Revenue of $11.5m, E
Slide 6: 1H12 Group Result Reported Revenues and Earnings
1H12 Group Result Reported Revenues and Earnings 1H12 1H11 Movement Reported $m $m $m % Revenue (including Gaming GST) 494.0 447.7 46.3 10.3% Gaming GST 42.7 37.1 (5.6) (15.1%) Revenue 451.3 410.6 40.7 9.9% Expenses 283.1 259.7 (23.4) (9.0%) EBITDA 168.2 150.9 17.3 11.5% Depreciation and Amortisatio
Slide 7: 1H12 Revenue Summary by Business Unit
1H12 Revenue Summary by Business Unit (incl Gaming GST) 1H12 1H11 Movement $m $m $m % New Zealand Casinos Auckland 268.9 235.1 33.8 14.4% Hamilton 26.5 23.3 3.2 13.7% Christchurch 2.5 3.3 (0.8) (24.2%) Queenstown, Other 4.1 4.1 0.0 0.0% Total New Zealand 302.0 265.8 36.2 13.6% Australian Cas
Slide 8: 1H12 EBITDA Summary by Business Unit
1H12 EBITDA Summary by Business Unit 1H12 1H11 Movement $m $m $m % New Zealand Casinos Auckland 114.4 101.0 13.4 13.3% Hamilton 11.0 10.0 1.0 10.0% Christchurch 2.5 3.3 (0.8) (24.2%) Queenstown, Other 0.5 0.4 0.1 25.0% Total New Zealand 128.4 114.7 13.7 11.9% Australian Casinos Adelaide (A
Slide 9: Auckland Highlights
Auckland Highlights Strong fundamentals in our core Auckland gaming businesses, in particular: − over the four month period since ‘EIGHT’ opened on 31 August 2011 to 31 December, total table games drop increased by over 20% and revenues by 11% − momentum continues in 2H12, with table games drop co
Slide 10: Auckland Highlights
Auckland Highlights Non-gaming revenues grew by $13 million, up 23%, largely due to the successful opening of new bars and restaurants on Federal Street and solid Hotels performance over RWC 2011 Annualised post tax return on capital of the $50m Capex is forecast to be in excess of 15% One-off
Slide 11: New Zealand International Convention Centre
New Zealand International Convention Centre Negotiations continue with the New Zealand Government on the development of New Zealand’s International Convention Centre in Auckland − since the re-election of the National Government in November 2011, discussions have been progressing − we remain focus
Slide 12: New Zealand International Convention Centre
New Zealand International Convention Centre Preliminary Concept Drawing 11
Slide 13: New Zealand International Convention Centre
New Zealand International Convention Centre Preliminary Concept Drawing 12
Slide 14: Other New Zealand Highlights
Other New Zealand Highlights Our Hamilton property continues to perform well, with revenues of $26.5 million up $3.2 million (+13.7%) on pcp − of this, we estimate revenue of circa $0.8 million is due to Rugby World Cup visitors who were present during the early stages of the tournament − excludin
Slide 15: Adelaide Highlights
Adelaide Highlights Adelaide has continued the strong momentum experienced since 2H11 − revenue of A$83 million is up 6.9% and EBITDA of A$19 million is up 12.9% on pcp − strong volume growth in table games increased revenue by more than 7% to A$41 million − gaming machines delivered nearly 9% rev
Slide 16: Adelaide Riverbank Development Concept
Adelaide Riverbank Development Concept Preliminary Concept Drawing 15
Slide 17: Adelaide Riverbank Development Concept
Adelaide Riverbank Development Concept Preliminary Concept Drawing 16
Slide 18: Darwin Highlights
Darwin Highlights Darwin gaming revenues are now returning to growth and after several periods of decline EBITDA has now also returned to modest growth − local table games in particular had a strong first half, with revenue growth +12% Our Lagoon Resort is on budget (A$40m) and is scheduled to o
Slide 19: Well Funded for Future Growth
Well Funded for Future Growth Net Debt : EBITDA of 2.0 times and $585m committed undrawn facilities. Total cash of $104m at 1H12 Debt position was enhanced in 1H12 by a new attractively priced $185m 7-year commitment from our local bank syndicate − this is the first such 7-year bank funding prov
Slide 20: Interim Dividend of 9.0 cents per share
Interim Dividend of 9.0 cents per share Interim dividend of 9.0 cps is up 1.0 cent (+12.5%) on 1H 11 − represents 66% of Group Reported NPAT, in line with policy range of 60%-70% − includes upside from the additional RWC 2011 earnings 60% imputed at the company’s 28% tax rate in New Zealand 60
Slide 21: Momentum Continuing – Strong Outlook for FY12
Momentum Continuing – Strong Outlook for FY12 Group results in January and February 2012, have continued the momentum of the first six months − we continue to capitalise on the investments made and strategies put in place Total group revenues, in the year to date to 12 February 2012 including no
Slide 22: Appendix
Appendix Half Year Period Ended 31 December 2011
Slide 23: SKYCITY Auckland – including Normalised IB
SKYCITY Auckland – including Normalised IB 1H12 1H11 Movement $m $m $m % Revenues Machines 117.9 101.0 16.9 16.7% Tables – Local 60.5 60.8 (0.3) (0.5%) Tables – International (Normalised) 18.6 14.8 3.8 25.7% Gross Gaming Revenue (incl GST) 197.0 176.6 20.4 11.6% Food and Beverage 23.1 18.8 4.3 22.9%
Slide 24: SKYCITY Auckland
SKYCITY Auckland Revenues (inclusive of GST) up $33.8m or 14.4% on pcp Revenue, EBITDA and Margin Gaming machines continues strong revenue growth, 43.0% +16.7%, reflecting our investment in new VIP gaming 42.5% rooms $268.9m $235.1m 1H12 local table games revenue was flat, reflecting high hold
Slide 25: SKYCITY Auckland – International Business
SKYCITY Auckland – International Business Table Games – International Business (IB) in Auckland Horizon, our new $10m investment in private gaming salons and hotel suites for International VIP players, was successfully opened in July, in time for RWC 1H12 Turnover was $1.4bn, +26% on pcp − highe
Slide 26: Adelaide Casino – including Normalised Adelaide IB
Adelaide Casino – including Normalised Adelaide IB 1H12 1H11 Movement A$m A$m A$m % Revenues Machines 32.5 29.9 2.6 8.7% Tables – Local 38.4 35.5 2.9 8.2% Tables – International (Normalised) 2.8 2.9 (0.1) (3.4%) Gross Gaming Revenue (incl GST) 73.7 68.3 5.4 7.9% Food and Beverage, Other 8.9 9.0 (0.1
Slide 27: Adelaide Casino
Adelaide Casino Another strong performance with solid revenue, Revenue, EBITDA and Margin (A$) EBITDA and margin growth 23.2% 22.0% Total revenue up 6.9% in a challenging retail $82.6m environment; $77.3m − pleasing EGM performance driven by strong volume growth in VIP − strong table gaming perf
Slide 28: SKYCITY Darwin – including Normalised Darwin IB
SKYCITY Darwin – including Normalised Darwin IB 1H12 1H11 Movement A$m A$m A$m % Revenues Machines 32.4 32.7 (0.3) (0.9%) Tables – Local 9.4 8.4 1.0 11.9% Tables – International (Normalised) 0.0 1.0 (1.0) (100%) Keno 7.2 6.5 0.7 10.8% Gross Gaming Revenue (incl GST) 49.0 48.6 0.4 0.8% Food and Bever
Slide 29: SKYCITY Darwin
SKYCITY Darwin 1H12 comparison to 1H11 is a like for like basis post smoking bans introduced January 2010 Revenue, EBITDA and Margin (A$) Overall revenues up 0.2% despite a slow start to 1H12 32.6% 32.7% Gaming machines revenue down 0.9% in a weak Darwin economy with softer tourism visitation
Slide 30: SKYCITY Hamilton – including Normalised Hamilton IB
SKYCITY Hamilton – including Normalised Hamilton IB 1H12 1H11 Movement $m $m $m % Revenues Machines 17.1 14.6 2.5 17.1% Tables – Local 4.6 5.0 (0.4) (8.0%) Tables – International (Normalised) 0.4 0.1 0.3 300.0% Gross Gaming Revenue (incl GST) 22.1 19.7 2.4 12.2% Food and Beverage, Other 4.4 3.6 0.8
Slide 31: SKYCITY Hamilton
SKYCITY Hamilton Hamilton continues to perform well with EBITDA up Revenue, EBITDA and Margin 10% on pcp 42.9% 41.5% Hamilton’s performance reflects successful growth initiatives, together with the stronger rural-based economy of the Waikato region $23.3m $26.5m Machine and non-gaming revenues
Slide 32: Capex, Depreciation, Interest, Tax
Capex, Depreciation, Interest, Tax Capex and Depreciation Debt & Interest: $25.5m, up $2.3m (9.9%) 1H12 Capex shown below, totalling $88m Higher interest cost in 1H12 reflects 2H12 capex will include Bally gaming system in refinancing of historically cheaper SKYCITY New Zealand and Adelaide (c
Slide 33: 1H12 Group Result Normalised Revenues and Earnings
1H12 Group Result Normalised Revenues and Earnings 1H12 1H11 Movement Normalised $m $m $m % Revenue (including Gaming GST) 489.0 447.1 41.9 9.4% Gaming GST 42.1 37.1 (5.0) (13.5%) Revenue 446.9 410.0 36.9 9.0% Expenses 281.4 258.6 (22.8) (8.8%) EBITDA 165.5 151.4 14.1 9.3% Depreciation and Amortisat
Slide 34: Normalised P&L Summary by Business Unit
Normalised P&L Summary by Business Unit • Other NZ Operations includes Queenstown and other minor operations. Minority Interests relate to SKYCITY Queenstown • EBITDA margin is calculated as a % of GST-inclusive gaming revenues and GST-exclusive non-gaming revenues to facilitate Australasian compari
Slide 35: Reported and Normalised Earnings
Reported and Normalised Earnings 1H12 1H11 Revenue EBITDA EBIT NPAT Revenue EBITDA EBIT NPAT $m $m $m $m $m $m $m $m Reported 494.0 168.2 132.0 78.8 447.7 150.9 116.3 67.1 Restructuring Costs 0.3 0.3 0.2 - 0.6 0.6 0.4 Canterbury Earthquake Charity - 0.3 0.3 0.2 Other NRI 0.5 0.6 0.5 Total NRI 0.8 0.
Slide 36: 1H12 Notes re Reported and Normalised Earnings
1H12 Notes re Reported and Normalised Earnings Other NRI includes one-off costs associated with opening the new Auckland facilities and other miscellaneous items IB win rate at 1.64% for 1H12. Adjustment to theoretical win rate of 1.35% reduces IB (normalised) EBITDA by $3.5m from $8.6m to $5.1m
Slide 37: International Business Consolidated Result
International Business Consolidated Result 1H12 1H11 Movement NZ$m NZ$m NZ$m % Actual Revenue (incl Gaming GST) Auckland 20.3 15.5 4.8 31.0% Other 7.5 5.1 2.4 47.1% Total Actual Revenue 27.8 20.6 7.2 35.0% Actual EBITDA Auckland 5.6 4.8 0.8 16.7% Other 3.0 1.2 1.8 150.0% Total Actual EBITDA 8.6 6.0
Slide 38: Cash Flows
Cash Flows Consistent and reliable cash flows Cashflow summary 1H12 1H11 − SKYCITY continues to generate strong cash Reported EBITDA 168.2 150.9 flows Tax paid (11.8) (19.2) − cash flows from operating activities were $164m Working capital/other 7.1 (9.4) Operating cash flow 163.5 122.3 and $122m
Slide 39: Consolidated Balance Sheet
Consolidated Balance Sheet SKYCITY Entertainment Group Limited As at 31/12/11 As at 30/06/11 Movement Equity NZ$m NZ$m NZ$m Share Capital 726.6 728.6 (2.0) Retained profits 73.9 41.1 32.8 Reserves 9.7 3.7 6.0 Minority interests 1.5 1.4 0.1 Total Equity 811.7 774.8 36.9 Current Assets Cash and bank 1
Slide 40: Consolidated Balance Sheet (continued)
Consolidated Balance Sheet (continued) SKYCITY Entertainment Group Limited As at 31/12/11 As at 30/06/11 Movement NZ$m NZ$m NZ$m Total Assets (carried forward) 1,736.4 1,682.7 53.7 Current Liabilities Payables 98.7 110.9 12.2 Current tax liabilities 9.4 5.3 (4.1) USPP - Current 256.1 247.3 (8.8) Der
Slide 41: Balance Sheet Notes
Balance Sheet Notes Equity ⁻ Movements in share capital relate to the employee long-term incentive plan and the dividend reinvestment plan ⁻ Movement in retained profits records the current period’s net profit after tax less the FY11 final dividend ⁻ Reserves ⁻ the movement in foreign currency tra
Slide 42: Balance Sheet Notes continued
Balance Sheet Notes continued Non-Current Assets ⁻ $40.3m increase in Property, Plant and Equipment relates primarily to additions (Horizon/Eight, Diamond Room, Fortuna Buffet, Federal Street, Darwin Tropical Resort and gaming machines) and the impact of movement in the NZD/AUD exchange rate (+$4.
Slide 43: Debt Profile
Debt Profile Following obtaining the additional $185m bank facility our debt profile is now: Debt Maturity Profile as at 31 December 2011 USPP (2005) USPP (2011) C/Notes Bank - Undrawn $200 $256 $56 $200 $185 $130 $89 $97 $35 $21 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 42
Slide 44: Australian Dollar Earnings Adelaide and Darwin
Australian Dollar Earnings Adelaide and Darwin 1H12 NPAT result comparison to 1H11 is impacted by NZD/AUD exchange rate Average NZD/AUD cross-rate during 1H12 0.7835 Average NZD/AUD cross-rate during 1H11 0.7795 Restating 1H11 prior period at 0.7835 to remove the FX differential would have t
Slide 45: Disclaimer
Disclaimer All information included in this presentation is provided as at 15 February 2012. The 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
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