Skycity Entertainment Group Limited · NZX:SKC
Skycity Entertainment — Macquarie Investor Conference 2018
23 slides from Skycity Entertainment's conference presentation, May 1, 2018
Slide 1: Cover letter to NZX and ASX
1 May 2018 For personal use only 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 DAY
Slide 2: Macquarie Investor Conference – SKYCITY Investor Presentation
Macquarie Investor SKYCITY Conference Entertainment For personal use only Group Limited Investor Presentation 1 May 2018
Slide 3: Our business
Our business Location Opened / Acquired Activities Summary For personal use only Auckland, NZ Opened in 1996 1,877 EGMs, 150 tables, 240 ATGs ~630 hotel rooms ~20 restaurants and bars ~3,000 employees Hamilton, NZ Opened in 2002 339 EGMs, 23 tables Acquired 100% ownership in 2005 ~400 employees Quee
Slide 4: Our licences
Our licences Exclusive casino licence to 2036 Exclusive casino licence to 2048 For personal use only (for top 700kms of NT) Exclusive casino licence to 2027 Exclusive casino licence to 2035 (for entire state Exclusive casino licences to of SA) – full licence term to 2085 2024 (Wharf) and 2025 (Queen
Slide 5: Where do we generate value for shareholders? (by property)
Where do we generate value for shareholders? FY17 group revenue by property (%): FY17 group EBITDA by property (%): For personal use only Group normalised revenue = $1,029m Group normalised EBITDA = $320m(1) IB (11%) IB (6%) Darwin (8%) Adelaide (6%) Darwin (12%) Queenstown (1%) Auckland Hamilton (7
Slide 6: Where do we generate value for shareholders? (by activity)
Where do we generate value for shareholders? FY17 group revenue by business activity (%): FY17 group EBITDA by business activity (%): For personal use only Group normalised revenue = $1,029m Group normalised EBITDA = $320m(1) F&B / Other F&B / Other (8%) (14%) Hotels (10%) Hotels (8%) Keno (1%) Keno
Slide 7: Industry trends
Industry trends 1 Traditional land-based casinos typically exhibiting modest growth (outside of Asia) For personal use only 2 Requirement to continually diversify offering to compete and capture broader customer base 3 Capital investment required to sustain / grow business – need to consider alterna
Slide 8: Strategic overview
Strategic overview Key value drivers We are good at operating land-based casinos, hotels, F&B, conventions and broader entertainment, but only only casinos and hotels deliver meaningful earnings and value Complementary activities (i.e. F&B, conventions) contribute to overall success of casinos a
Slide 9: Strategic overview
Strategic overview Important to provide entertainment which appeals to existing and new customers entertainment New forms of For personal use only Intention to broaden emphasis on entertainment beyond traditional gaming (i.e. All Blacks experience, e-sports, AR / VR, online gaming, skill-based g
Slide 10: Portfolio review – NZ
Portfolio review – NZ Casino licence extension to 2048 underpins long-term value for key property For personal use only NZICC and Hobson St hotel project – important to execute well and leverage benefits Master planning – incorporates opportunities for further accommodation, F&B, new gaming sp
Slide 11: Portfolio review – Australia & International Business
Portfolio review – Australia & International Business Expansion should significantly increase revenue and earnings at the property and deliver For personal use only acceptable return Upgrades to existing property important to ensure integration between old and new buildings and maximise overall
Slide 12: Project update − NZICC & Hobson St hotel
Project update − NZICC & Hobson St hotel Now expect completion December 2019 For personal use only Expect SKYCITY’s investment in the projects to be in-line with original budget (~$703m) Remain comfortable with contractual arrangements Construction contracts provide for liquidated damages wh
Slide 13: Project update – Adelaide Expansion
Project update – Adelaide Expansion Letter of intent signed with preferred construction firm − For personal use only expect to sign construction contract during May • Contract to be largely fixed-price, lump-sum – build only • Total project budget remains ~A$330m (including appropriate contingency
Slide 14: Project update – Auckland master plan
Project update – Auckland master plan For personal use only Multi-year vision for the precinct Opportunities for further accommodation, F&B, new gaming spaces, and entertainment (including broader emphasis on non-gaming entertainment) Critical property acquisitions complete Investment partly
Slide 15: Group financial profile
Group financial profile Near-term growth to be achieved by improving operating performance of existing assets For personal use only Medium-term earnings profile largely driven by major projects Earnings from NZICC and Hobson St hotel project unlikely to offset higher depreciation and net inter
Slide 16: Financial settings
Financial settings only Committed to maintaining BBB- S&P credit rating Gearing Maximum gearing of 3x Net Debt / EBITDA (including capitalised leases) Expect total debt to peak at around $1bn in FY20, with S&P gearing peaking at slightly above 2.5x personal use Committed to maintaining exist
Slide 17: Adjustment to historical turnover for IB
Adjustment to historical turnover for IB Recently uncovered an error in the calculation of turnover in IB over the past three years For personal use only • Related to one infrequently used junket programme • Arose from incorrect coding of the programme resulting in it being treated as “non-neg” ra
Slide 18: Trading update
Trading update Group For personal use only YTD to 28 April 2018 group normalised revenue up 4.6% vs. pcp, with domestic revenue (ex IB) up 2.6% 1 January to 28 April 2018 (2H18 YTD) group normalised revenue up 7.2%, with domestic revenue (ex IB) up 2.1% New Zealand Auckland performed well in 3
Slide 19: Key investment themes
Key investment themes 1 Significant opportunity to unlock value leveraging strong platform For personal use only 2 Opportunities to improve performance of existing businesses 3 On-going focus on effective capital allocation and improving returns on capital – intention to go “asset-lighter” 4 Focus o
Slide 20: Appendix
For personal use only Appendix
Slide 21: Appendix: Adjustment to historical turnover for IB
Appendix: Adjustment to historical turnover for IB FY15 FY16 FY17 1H18 For personal use only Previously Previously Previously International Business No change Revised Change Revised Change Revised Change Disclosed Disclosed Disclosed Turnover ($bn) 9.3 12.4 12.3 -0.1 8.7 8.6 -0.1 4.8 4.4 -0.4 Normal
Slide 22: Disclaimer
Disclaimer All information included in this presentation is provided as at 1 May 2018 For personal use only 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 uncertaint
Slide 23: SKYCITY Entertainment Group Limited
SKYCITY Entertainment For personal use only Group Limited
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