Skycity Entertainment Group Limited · NZX:SKC
Skycity Entertainment — 1H24 Earnings Presentation
30 slides from Skycity Entertainment's earnings presentation, Feb 22, 2024
Slide 1: 1H24 Results Investor Presentation
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Slide 2: Important Notice
Important Notice * Allinformation included in this presentation is provided as at 22 February 2024. This disclaimer applies to this document and the verbal or written comments of any person presenting it * The information in this presentation has been prepared by SkyCity with due care and attention,
Slide 3: Contents
Contents 1. Results Summary P4 2 Key Messages PS 3 Regulation & Compliance P6 4 Group Financial Performance & Capital p9 Allocation 5 Operational Performance P13, 6 FY24 Outlook P20 7 Appendix P23 1H24 RESULTS INVESTOR PRESENTATION
Slide 4: 1H24 Results Summary
REVENUE NPAT DIVIDENDS? PER SHARE . (13%) YoY $445.2 milion we $22.5 million : 5.25 cents per share Reported Reported $ My 06% YoY $ (8.5%) YoY 490.2 million 66.5 million DEBT GEARING? Underlying! Underlying! 1.75x EBITDA EARNINGS PER SHARE $ (5.0%) YoY 3 O No change YoY 101 .O million e cents per s
Slide 5: Key Messages
EARNINGS PERFORMANCE RESILIENT - 1H24 underlying EBITDA of $146.3m despite the challenging economic environment, with a declaration of a 5.25cps interim dividend SOLID PROGRESS ON AML/FINANCIAL CRIME AND HOST RESPONSIBILITY UPLIFT — continued investment in compliance capability with new enterprise r
Slide 6: Regulation & Compliance
1H24 RESULTS INVESTOR PRESENTATION
Slide 7: Regulatory Environment and Compliance - Adelaide
Regulatory Environment and Compliance SkyCity Adelaide progressing key regulatory enhancements Australian Regulatory Environment SkyCity Adelaide Compliance and Enhancement Programmes * The Australian casino sector remains under heavy regulatory scrutiny AUSTRAC: * SkyCity Adelaide and AUSTRAC infor
Slide 8: Regulatory Environment and Compliance - New Zealand
Regulatory Environment and Compliance SkyCity New Zealand progressing key regulatory enhancements New Zealand Regulatory Environment SkyCity New Zealand Compliance and Enhancement Programmes DIA/Gambling Commission: * Ongoing interaction with the DIA, including frequent inspections and regular audit
Slide 9: Group Financial Performance & Capital Allocation
a Group Financial Perfor & Capital Allocation 1H24 RESULTS INVESTOR PRESENTATION
Slide 10: 1H24 Group Underlying Profit
1H24 Group Underlying Profit Challenging economic environment impacted underlying performance + Visitation trends positive across the Group, with noticeable recovery of $m : Une 1H2?°_ | Movement international tourism in Auckland neers * Local gaming machine revenue impacted by economic uncertainty
Slide 11: NZICC and Horizon Hotel
NZICC and Horizon Hotel 1H24 Capital Projects Construction Project Conservative management of capital spend continued into IH24 * 1H24 BAU CAPEX of $33.5m reflects prioritisation of spend to gaming product, property maintenance and technology investment » Amodest increase expected in 2H24 BAU CAPEX,
Slide 12: Financial Resilience
Financial Resilience Balance sheet strength maintained, with greater certainty emerging * Group net debt of $500m at 31 December 2023, Group Liquidity Headroom & Debt Gearing representing borrowings ($521m) and leases ($167m), tees) Group Boronings MMT Liuiity Headroom —= Debt Gearing Ratio offset b
Slide 13: Operational Performance
Slide 14: Seeeeney
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Slide 15: 1H24 SkyCity Auckland Result
1H24 SkyCity Auckland Result Local economic conditions impacting gaming, with tourism uplift across non-gaming * Visitation up 8.2% on prior period, with over 2.5m people visiting the precinct, including international tourism recovery * Gaming machines revenue impacted by challenging economic enviro
Slide 16: SkyCity Auckland - Gaming Revenue Trends
SkyCity Auckland - Gaming Revenue Trends Strong revenue recovery post COVID continues Auckland Gaming Machines Revenue Trends Auckland Table Games Revenue Trends ve0900 99000 vo000 | e000 | sooo | «0000 | vooe00 | so000 | 8 8 © so000 | © 4000 | a a coo00 | 0000 | 7000 | y000 | ob TD ae TED oe Ta aa)
Slide 17: 1H24 SkyCity Hamilton & Queenstown Results
1H24 SkyCity Hamilton & Queenstown Results Impact of local economic environment reflected in lower earnings Hamilton Hamilton Queenstown * Impact from economic environment on 5 RD customer spend levels evident across $m TH24 | 1H23? | Movement TH24 | 1H23? | Movement both gaming and non-gaming areas
Slide 18: 1H24 SkyCity Adelaide Result
1H24 SkyCity Adelaide Result Challenging operating environment continues to impact earnings and margin performance * Visitation marginally lower on the prior period, with interstate and international tourism in South Australia slower to recover * Gaming machines revenue impacted by a lower win-rate
Slide 19: 1H24 SkyCity Online Result
1H24 SkyCity Online Result Longer term opportunity remains very attractive for SkyCity * New Zealand online gaming market continues to grow and is being heavily targeted by offshore operators * SkyCity not operating in a level playing field hence lower market share * SkyCity continues to actively en
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Slide 21: FY24 Outlook
FY24 Outlook Expect the challenging economic and operating environment to continue in 2H2 _ SkyCity remains cautious about the FY24 outlook Operating performance for 2H24 will reflect a ~ continuation of the challenging economic environment Horizon Hotel planned to a in April 2024 - expect a small p
Slide 22: CEO Transition Update
CEO Transition Update Continue to progress the CEO recruitment process — relatively well advanced Callum Mallett will commence as interim CEO on 9 March 2024 Julian Cook will act as Executive Chair ona part-time basis from 26 February 2024 until new CEO confirmed 1H24 RESULTS INVESTOR PRESENTATION 2
Slide 23: Appendix
- — 1H24 RESULTS INVESTOR PRESENT, —)
Slide 24: Compliance/AML Costs
Compliance/AML Costs SkyCity continues to invest significantly in its AML, financial crime and host responsibility enhancements Group Compliance Investment Trend AML, Compliance and Host Responsibility m Ongoing BAU ™One Off Besdcounutrend Headcount 100 : FY20 FY2I FY22 FY23 1H 24 FY20 FY2I FY22 FY2
Slide 25: NZ Host Responsibility Programmes
NZ Host Responsibility Programmes SkyCity’s continuous improvement + NOVEMBER - Stage 1 of Facial Recognition (FR) technology was implemented at all SkyCity NZ sites to ensure that banned or excluded patrons could not access gaming areas without being identified + — JANUARY - SkyCity expanded its us
Slide 26: NZ Host Responsibility Programmes cont.
NZ Host Responsibility Programmes cont. SkyCity’s continuous improvement * | MARCH - Official opening of a designated Host Responsibility “Welcome Room” at SkyCity Auckland + JUNE-Stage 4 of FR technology implemented at SkyCity Auckland to monitor repeat ATM visits (excl car park ATMs) + JULY- Intro
Slide 27: NZ Anti-Money Laundering Programmes
NZ Anti-Money Laundering sepsis SkyCity's continuous improvement eve = know yourcustorser + Ceased dealing with junkets * Prevented the depositing of cash into SkyCity’s player accounts at New Zealand bank branches * Restricted customer's ability to transfer money between their personal SkyCity acco
Slide 28: Important Information
Important Information Average NZ$ vs. A$ cross-rate for 1H24 = 0.9246 and 1H23 = 0.9061 Weighted average number of shares excludes executives shares held on trust under the Group’s executive incentive schemes: MT Le — 1H24 = 758,733,593 7 — 1H23 = 758,117,231 Wy GST rates: NZ 15%; AU 10% EBITDA marg
Slide 29: Reconciliation of Group Results
Reconciliation of Group Results Guide to understanding the basis of underlying earnings * The Group's objective in preparing underlying financial information is to enable the investment community to better understand the Group's underlying operational performance * The Group achieves this objective
Slide 30: Reconciliation of Group Results
Reconciliation of Group Results sm Revenue EBITDA EBIT NPAT Revenue EBITDA EBIT NPAT Reported 445.2 101.0 56.7 22.5 462.6 106.3 60.9 22.8 Premium Table Commissions 1.4 > > > 32 > > > Gaming GST 44.0 - - - 45.2 - - - NZICC Fire Impact (2.4) 55 55 42 (23.7) 43.4 43.4 391 Asset Impairment 2.0 2.0 2.0 2
SkyCity Entertainment Group — 1H24 Earnings Presentation on 6ix