Skycity Entertainment Group Limited · NZX:SKC
Skycity Entertainment — FY2022 Earnings Presentation
45 slides from Skycity Entertainment's earnings presentation, Aug 25, 2022
Slide 1: SkyCity Entertainment Group Limited FY22 Result
SkyCity Entertainment Group Limited FY22 Result Investor Presentation 25 August 2022 o* e sherry
Slide 2: Important Information
Important Information = Average NZ$ vs. A$ cross-rate for FY22 = 0.9362 and FY21 = 0.9323 = Weighted average number of shares (excl treasury stock) for FY22 = 757,507,871 and FY21 = 756,293,136 = Normalised revenue (incl gaming GST), calculated as gaming win (incl GST) plus non-gaming revenue (excl
Slide 3: Contents
01 02 03 04 Contents FY22 Key Features FY22 Results Business Resilience & Balance Sheet CEO Update & Group Strategy OS 06 Trading Update & FY23 Outlook Appendices shve ITY 3
Slide 4: FY22 Key Features
FY22 Key Features 1. Material impact from Covid-19 disruptions, but strong local gaming activity when Sana open and effective cost control — result in-line with guidance provided during June 2022") 2. 4Q22 performance exceeded expectations, with pre-Covid-l9 Group EBITDA levels achieved, underpinned
Slide 5: Management Priorities
Management Priorities Respond to regulatory reviews in Adelaide Sustained focus on cost control whilst retaining high standards of customer experience across the business Progress NZICC/Horizon Hotel reinstatement (with Fletcher Construction) and manage related complexities Implement refreshed capit
Slide 6: FY22 Results
FY22 Results sherry
Slide 7: FY22 Results Overview
FY22 Results Overview FY22 Fy210 Movement $m $m Reported Revenue 639.0 952.0 (313.0) (32.9%) Reported EBITDA 96.9 313.9 (217.0) (69.1%) Reported NPAT (33.6) 155.8 (189.4) (121.6%) Reported EPS (4.4cps) 20.6cps (25.0cps) (121.6%) FY22 Fy210 Movement $m $m Normalised Revenue (incl Gaming GST)(?) 631.5
Slide 8: FY22 Revenue by Business
FY22 Revenue by Business FY22 FY21 Movement $m $m % Properties (excl IB) Auckland 330.6 488.2 (32.3%) Hamilton 56.2 735 (23.5%) Queenstown 10.2 12.3 (16.9%) NZ Other") 38 i 246.0% Adelaide (A$) 184.5 196.9 (6.3%) Total Property Revenue (excl IB)() EEK) 786.3 (23.9%) Normalised |B Revenue 16.5 221 (2
Slide 9: FY22 EBITDA by Business
FY22 EBITDA by Business FY22 Fy21(4) Movement $m $m % Properties (excl IB) Auckland") 100.9 203.4 (50.4%) Hamilton” 24.5 35.2 (30.5%) Queenstown"! 3.0 32 (6.3%) Adelaide (A$)(2) 20.5 41.4 (50.6%) Total Property EBITDA (excl 1B)((2) 150.3 286.3 (47.5%) Normalised 1B EBITDA" (0.1) (1.8) 93.0% Corporat
Slide 10: FY22 Result Commentary (1 of 2)
FY22 Result Commentary (1 of 2) Group NZ Properties Group normalised EBITDA ($137.9m) and NPAT ($9.7m)" in-line with guidance provided during June 2022 2H22 Group normalised EBITDA of $101.7m and 4Q22 Group normalised EBITDA of $72m (NZ in “Red” setting for 13 days during 4Q22) Corporate costs (arou
Slide 11: FY22 Result Commentary (2 of 2)
FY22 Result Commentary (2 of 2) Adelaide o £0 ec c= O8 NO z Revenue comparable to pcp despite being closed for 8 days and majority of period operating under significant operating restrictions Strong cost focus - operating efficiencies partially offset by costs arising from regulatory responses/AML p
Slide 12: Business Resilience & Balance Sheet
Business Resilience & Balance Sheet sherry
Slide 13: Business Resilience
Business Resilience * * (2) = id- 4 . . ) 700 140% Covi 19 NZ at “Orange’ setting | NZ at Alert Level] «oo | 20% y I | yoox NRA =| Omicron outbreak - NZ at “Red” setting NZ property closures ay “ail |: - 40% voc 0% Jul-21 Aug-21 Sep-21 Oct-21 Nov-21 Dec-21 Jan-22 Feb-22 Mar-22 Apr-22 May-22Jun-22 Ju
Slide 14: Balance Sheet/Funding (1 of 2)
Balance Sheet/Funding (1 of 2) Balance Sheet & Funding 2 i o c © > ° Oo & Ye < @ £ a Balance sheet well positioned and compliant with restrictions required by waivers +» Net hedged debt" as at 30 June 2022 of $634m (increase of $44m from 30 June 2021) * Nosignificant capex requirements with Adelaide
Slide 15: Balance Sheet/Funding (2 of 2)
Balance Sheet/Funding (2 of 2) Pro-forma hedged debt maturity profile as at 30 June 2022 ($m) « Pro-forma committed debt facilities (at hedged exchange rates) of around $954m (incl lease-related liabilities) as at 30 June 2022 + $642m in drawn facilities ($472m excl lease-related liabilities) -$564m
Slide 16: Capital Expenditure
Capital Expenditure FY22 group cash capex!/(2)($m) 400 350 300 250 150 100 = Growth capex m Stay-in-business capex = Growth capex primarily related to NZICC/Horizon Hotel project * Significant reduction to stay-in-business capex Future major projects capex ($mjJ2) Spent to FY22 FY23 FY24 FY25+ BNZIC
Slide 17: CEO Update & Group Strategy
is) CEO Update & Group Strategy sherry
Slide 18: Group Strategic Plan
Group Strategic Plan = No material changes to Group strategic plan * Framework strengthened to reflect enhanced integration of ESG priorities Purpose: we are trusted to provide vibrant places for gaming, entertainment and hospitality in NZ and Australia * Corporate purpose provides foundation for st
Slide 19: NZICC/Horizon Hotel Project
NZICC/Horizon Hotel Project 25 £6 LN Zs rt E90 £8 2 o ¢ ‘A Significant investment in future of Auckland and NZ - strong forward demand for NZICC from international convention market Construction fire caused significant additional project delays Positive momentum on project - reinstatement works prog
Slide 20: Online Strategy
Online Strategy Optimising NZ online casino Expanded strategic partnership with GiG — 11% shareholding and Board seat (CEO) Support future regulation in NZ Emphasis on protecting harm and community benefits Minister of Internal Affairs has publicly supported regulation Significant omnichannel opport
Slide 21: Regulatory Environment
Regulatory Environment = AUSTRAC — Australian federal regulator of AML/CTFM = Department of Internal Affairs (DIA) — regulates gambling activities * Investigation of Adelaide initiated during June 2021 - timetable to and AML/CTF in NZ completion remains unclear * Responded to number of s167 and othe
Slide 22: NZ: Compliance Programme Enhancements (FY22)
NZ: Compliance Programme Enhancements (FY22) Anti-Money Laundering Host Responsibility Significant increase in dedicated AML resource Detailed KYC process delivered for local VIP customers Refreshed staff training programmes — online modules and awareness raising campaigns Enhancement of AML assuran
Slide 23: Adelaide: Compliance Programme Enhancements (FY22)
Adelaide: Compliance Programme Enhancements (FY22) Anti-Money Laundering Host Responsibility = 8 new FTEs appointed in FY22 with further recruitment in progress} |" Harm Minimisation Community Stakeholder Committee and significant external resources/ICT support established = cA$4m increase in spend
Slide 24: Board Renewal & Governance Structures
Board Renewal & Governance Structures = Board renewal progressed during FY22 = Successful transition of Board Chair to Julian Cook and appointment of Chad Barton and Silvana Schenone = Intend to appoint Kate Hughes and Glenn Davis to Board subject to regulatory approvals * Ms Hughes has significant
Slide 25: Trading Update & FY23 Outlook
is) Trading Update & FY23 Outlook sherry
Slide 26: Trading Update (1 July to August 2022)
Trading Update (1 July to 21 August 2022) 2 Strong performance FY23 YTD —- Group normalised revenue (incl IB) comparable to pre-Covid-19 levels (local revenue up 14%) re} 1) Domestic consumer environment remains positive — properties benefiting from extended period without operating restrictions = C
Slide 27: FY23 Outlook (1 of 2)
FY23 Outlook (1 of 2) is WH | = Assuming no significant changes to operating environment/settings, expect 450 FY23 Group normalised EBITDA to be consistent with pre-Covid-19 levels = Expect earnings predominantly from resilient, cash-generative, domestic 200 businesses, but leveraged to recovery of
Slide 28: FY23 Outlook (2 of 2)
FY23 Outlook (2 of 2) Q x o Q i [s) Corporate Expect stay-in-business capex of around $60m and growth capex of around $35m (net of reinstatement costs on NZICC/Horizon Hotel project funded by insurance)" * Required to maintain and refurbish existing properties * No meaningful growth projects in pipe
Slide 29: Appendices
Appendices sherry
Slide 30: Reported and Normalised Results (1 of 3)
Reported and Normalised Results (1 of 3) * SkyCity's objective of producing normalised financial information is to provide data that is useful to the investment community in understanding the underlying operations of the Group - the intention is to provide information which: * Is representative of S
Slide 31: Reported and Normalised Results (2 of 3)
Reported and Normalised Results (2 of 3) " The differences between FY22 reported and normalised financial information are summarised overleaf * FY22 adjustments (from reported to normalised) Treat IB commissions as an expense rather than a reduction in revenue which reduces both reported revenue and
Slide 32: Reported and Normalised Results (3 of 3)
Reported and Normalised Results (3 of 3) Reported 639.0 96.9 2.3 (33.6) 952.0 313.9 225.5 155.8 IB revenue adjustment 3.8 - - - 73 - - - Gaming GST 57.1 - - - 78.6 - - - IB at theoretical win rate (5.2) (3.8) (3.8) (2.7) (5.3) (4.9) (4.9) (3.6) NZICC fire impacts (63.2) 32.1 32.1 33.3 (170.7) (22.4)
Slide 33: Presentation of FY22 Results
Presentation of FY22 Results = Comparability of underlying (or “like-for-like”) normalised earnings of the Group in FY22 vs. pcp significantly impacted by: Closure of SkyCity Auckland during August to December 2021 due to Covid-19 Closure of SkyCity Hamilton during August/September 2021 and October/
Slide 34: FY22 Result - Reported
FY22 Result —- Reported FY22 FY21 Movement $m $m Reported Revenue 639.0 952.0 (313.0) (32.9%) Expenses (542.1) (638.1) 96.0 15.0% Reported EBITDA 96.9 313.9 (217.0) (69.1%) Depreciation & Amortisation (94.7) (88.5) (6.2) (7.0%) Reported EBIT 23 225.5 (223.2) (99.0%) Net Interest (35.0) (32.5) (2.6)
Slide 35: FY22 Result - Normalised
FY22 Result — Normalised FY22 FY21 Movement $m $m Normalised Revenue (incl Gaming GST) 631.5 822.5 (191.0) (23.2%) Gaming GST (56.5) (78.0) 215 27.5% Normalised Revenue 575.0 744.5 (169.5) (22.8%) Expenses (437.1) (495.9) 58.9 11.9% Normalised EBITDA 137.9 248.6 (110.6) (44.5%) Depreciation & Amorti
Slide 36: SkyCity Auckland
SkyCity Auckland FY22 Movement % Revenue Gaming Machines 185.5 264.3 (29.8%) Tables 75.0 133.1 (43.6%) Gaming Revenue (incl GST) 260.5 397.4 (34.5%) Non-Gaming Revenue (22.8%) Total Normalised Revenue (incl gaming GST) (excl 1B) (32.3%) Gaming GST 34.4% jTotal Normalised Revenue (excl gaming GST) (e
Slide 37: SkyCity Hamilton
SkyCity Hamilton = Property significantly impacted by Covid-19 disruptions FY22 FY21 Movement over the period $m $m % * Property closed for 65 days (42 days at Alert Level 2) and Revenue 80 days at “Red” setting during January to April 2022 Gaming Machines 408 53.0 (23.1%) * Strong performance prior
Slide 38: SkyCity Queenstown/Wharf Casino
SkyCity Queenstown/Wharf Casino = Property significantly impacted by Covid-19 disruptions Movement over the period * Property closed for 22 days (86 days at Alert Level 2) and Revenue 80 days at “Red” setting during January to April 2022 Gaming Machines 72 85 (15.0%) = Local gaming revenue consisten
Slide 39: SkyCity Adelaide
SkyCity Adelaide FY22 Fy21 Movement A$m A$m Revenue Gaming Machines 74.9 65.2 14.8% Tables 64.9 82.4 (21.2%) Gaming Revenue (incl GST) 139.8 147.6 (5.3%) ‘otal Normalised Revenue incl gaming GST) (excl 1B) Gaming GST ‘otal Revenue (excl gaming GST) (excl 1B) (6.3%) 5.8% (6.3%) Expenses (151.4 142.0
Slide 40: International Business
International Business FY22 FY21 Movement . Pn | is | 16.5 221 urnover ($bn) Normalised Revenue!!! Reported Revenue 17.8 Normalised EBITDA” Total Reported EBITDA 37 31 19.4% Actual Win (%) 1.77% 1.67% - Margin (%) (0.8%) (8.3%) : Significantly impacted by Covid-19 disruptions (including internationa
Slide 41: NZ Online Casino (1 of 2)
NZ Online Casino (1 of 2) Operating KPIs Customer registrations 51,008 48,958 42% First time depositors (FTDs) 30,076 28,4 7.0% Deposit conversion (%) 59% 57% : Total bets ($m) 1,039.3 792.5 31.2% Gaming revenue Bonusing 5.6) (4.2 (34.5% INet gaming revenu GiG costs (10.9) (75) (45.1%) NZ GST (34.7%
Slide 42: NZ Online Casino (2 of 2)
NZ Online Casino (2 of 2) Monthly gr ming revenue”; FY21-FY23 YTD ($m, Weekl. ive mers(?); FY21-FY23 YTD 70 a sc 6 0 | | 00 ° 3 Consistent performance, despite operational constraints - significant (and growing) customer base S rR CITY and/or bonusing + August 2022 data is an estimate for the full m
Slide 43: Net Debt (as at June 2022)
Net Debt (as at 30 June 2022) Movement in net hedged debt ($m) 00 n 684 (on wou 590 38 ais) 3a 500 400 + 300 200 100 ° ‘Opening net Reported EBITDA Cash funding NZICC fire related Dividends MBA, ‘Capex(cash) Closing net debt debt (lune 2071) costafeash tax. income (GIG invesment, (Qune 2029) (net, p
Slide 44: Disclaimer
Disclaimer = Allinformation included in this presentation is provided as at 25 August 2022 = 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 whi
Slide 45: sherry
sherry
SkyCity Entertainment Group — FY2022 Earnings Presentation on 6ix