Skycity Entertainment Group Limited · NZX:SKC
Skycity Entertainment — FY2018 Earnings Presentation
36 slides from Skycity Entertainment's earnings presentation, Aug 8, 2018
Slide 1: FY18 Results – Investor Presentation
FY18 Results – Investor SKYCITY Entertainment Presentation Group Limited 8 August 2018
Slide 2: Important Information
Important Information Average NZ$ vs. A$ cross-rate for FY18 = 0.9199 and FY17 = 0.9433 Weighted average number of shares(1) for FY18 = 669,112,499 and FY17= 656,691,523 Revenue (incl Gaming GST), calculated as gaming win (incl GST) plus non gaming revenue (excl GST), is shown to facilitate Au
Slide 3: Contents
Contents FY18 Key Achievements 4 FY18 Results 5 FY19 Outlook 13 Group Strategy Update 14 Appendices 24 3
Slide 4: FY18 Key Achievements
FY18 Key Achievements Record financial performance − Improved operational Normalised NPAT up 10.4% performance at all properties Completed refresh of Successfully progressed group strategy key strategic initiatives New Chairman / management team Increased focus on CSR on-board and focused on initiat
Slide 5: FY18 Results
FY18 Results
Slide 6: Results Overview
Results Overview FY18 FY17 Movement $m $m $m % Normalised Revenue (incl Gaming GST) 1,100.8 1,028.9 71.9 7.0% Normalised EBITDA 338.2 320.4 17.8 5.5% Normalised NPAT(1) 169.9 153.8 16.1 10.4% Normalised EPS 25.4cps 23.4cps 2.0cps 8.5% ) Final Dividend NZ$ DPS 10.0cps 10.0cps 0.0cps 0.0% FY18 FY17 Mo
Slide 7: FY18 Revenue by Business
FY18 Revenue by Business(1) FY18 FY17 Movement $m $m % New Zealand Casinos (excl IB) ▪ Auckland 584.7 566.7 3.2% ▪ Hamilton 60.6 59.4 2.1% ▪ Queenstown / other 12.7 11.8 7.2% Total New Zealand Revenue 658.0 637.8 3.2% Australian Casinos (excl IB) ▪ Adelaide (A$) 149.0 148.0 0.6% ▪ Darwin (A$) 110.8
Slide 8: FY18 EBITDA by Business
FY18 EBITDA by Business FY18 FY17 Movement $m $m % New Zealand Casinos (excl IB) ▪ Auckland 260.7 251.3 3.7% ▪ Hamilton 26.9 25.8 4.3% ▪ Queenstown / other 2.1 1.3 56.5% Total New Zealand EBITDA 289.7 278.5 4.0% Australian Casinos (excl IB) ▪ Adelaide (A$) 22.5 20.0 12.5% ▪ Darwin (A$) 25.1 26.5 (5.
Slide 9: Results Commentary
Results Commentary Group ▪ Record annual normalised and reported EBITDA and NPAT ▪ Normalised EBITDA growth of 5.5% vs. pcp (+9.5% in 2H18 vs. pcp), ahead of previous guidance ▪ Key drivers were strong growth in IB, continued growth in Auckland, improved performance in Adelaide and effective cost ma
Slide 10: Results Commentary
Results Commentary International Business ▪ Strong growth achieved with full-year turnover of $11.9bn and actual win rate of 1.32% ▪ Record normalised EBITDA with increased margins due to operating efficiencies and low bad debts Corporate Costs and Other Expenses ▪ Higher corporate costs due to incr
Slide 11: Capital Expenditure
Capital Expenditure FY18 capital expenditure (NZ$m)(1) Projected capex for major projects ($m) 300 450 $261m 398 400 250 350 200 300 253 $159m 250 196 150 200 165 104 150 100 100 72 50 56 42 50 37 55 64 9 0 0 FY17 FY18 Spent to FY18 FY19 FY20 FY21+ Growth projects Maintenance capex NZICC & Horizon h
Slide 12: Funding and Capital Management
Funding and Capital Management Movement in net hedged debt (NZ$m) Gross hedged debt of $474m at 500 year-end, with no bank debt drawn 254 447 450 Cash at bank of $27m at year-end 400 349 (339) Net hedged debt up ~$100m 350 reflecting increased capex from 300 major projects and Auckland propert
Slide 13: FY19 Outlook
FY19 Outlook ▪ Expect to achieve modest growth in normalised group EBITDA in FY19 vs. pcp ▪ Trading YTD in-line with expectations following positive finish to FY18 ▪ Key drivers of FY19 performance expected to be further growth in Auckland and IB, offset by higher Group corporate costs ▪ After incre
Slide 14: Group Strategy Update
Group Strategy Update
Slide 15: Refreshed Group Strategic Plan
Refreshed Group Strategic Plan 15
Slide 16: Improve Our Operating Performance
Improve Our Operating Performance New events and more effective marketing driving visitation growth at all properties − greater focus on data analytics Invested in new EGM product across the group − focus on floor mix, layout and bonusing Focus on growing IB and premium gaming (both tables and
Slide 17: Optimise Our Existing Portfolio
Optimise Our Existing Portfolio Pursuing ‘capital-lighter’ approach to enhance returns on capital • Sold Federal St car park for $40m • Commenced marketing process for potential sale of Auckland main site car parks Process for potential sale of Darwin nearing conclusion − indicative bids above b
Slide 18: NZICC and Horizon Hotel Project
NZICC and Horizon Hotel Project Positive momentum on project over recent months Strong alignment with Fletcher Construction to complete by December 2019 Remain comfortable with contractual arrangements Expect SKYCITY’s investment in the project to be in-line with original budget Additional
Slide 19: Adelaide Expansion
Adelaide Expansion Hansen Yuncken appointed as building contractor • Largely fixed price, lump sum, build-only contract • Commercial terms provide significant risk protection Total project costs remain at A$330m (including contingency) Main construction works commenced in June Expect car par
Slide 20: Grow and Diversify Our Business
Grow and Diversify Our Business Progressing strategy to grow hotels business • Second largest EBITDA contributor after gaming • Capitalises on existing hotel portfolio and operational expertise • Potential to be highly scalable asset class – positive hotel outlook in key NZ market • Actively seeki
Slide 21: Character and Culture Goals
Character and Culture Goals Offer a great and safe place to Be responsible leaders in our Always put customers first work communities Committed to minimum Continued investment in host Recognised as industry leader wage in NZ of $20 by 2020 responsibility programme in sustainability practices(1
Slide 22: Creating Long-Term Value
Creating Long-Term Value RA SKYCITY Increase casino, entertainment Achieve operating leverage and efficiencies across the group Allocate capital to higher returning assets and businesses Maintain efficient capital structure and distribution policy Introduce investment partners to drive growth and en
Slide 23: Maintaining Social Licence To Operate
Maintaining Social Licence To Operate 23
Slide 24: Appendices
Appendices
Slide 25: FY18 Results Overview – Normalised
FY18 Results Overview – Normalised FY18 FY17 Movement Normalised $m $m $m % Normalised Revenue (including Gaming GST) 1,100.8 1,028.9 71.9 7.0% Gaming GST (102.2) (94.4) (7.9) (8.3%) Normalised Revenue 998.6 934.5 64.0 6.9% Expenses (660.4) (614.1) (46.3) (7.5%) Normalised EBITDA 338.2 320.4 17.8 5.
Slide 26: FY18 Results Overview – Reported
FY18 Results Overview – Reported FY18 FY17 Movement Reported $m $m $m % Reported Revenue (including Gaming GST) 1,096.8 1,022.0 74.8 7.3% Gaming GST (100.0) (93.9) (6.1) (6.5%) Reported Revenue 996.8 928.1 68.8 7.4% Expenses (658.1) (621.1) (37.1) (6.0%) Reported EBITDA 338.7 307.0 31.7 10.3% Impair
Slide 27: Reported and Normalised Earnings
Reported and Normalised Earnings 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. Application of the group’s non-GAAP financial information policy is consistent w
Slide 28: SKYCITY Auckland
SKYCITY Auckland FY18 FY17 Movement $m $m % Record EBITDA performance Revenue Gaming Machines 252.2 244.5 3.2% Improved 2H18 performance from EGMs with revenue up 5.4% vs. pcp Tables 161.9 159.2 1.7% Gaming Revenue (incl GST) 414.2 403.7 2.6% Flat 2H18 performance from tables due to lower Non-
Slide 29: SKYCITY Hamilton
SKYCITY Hamilton FY18 FY17 Movement $m $m % Record EBITDA performance Revenue Growth rates moderating following consecutive Gaming Machines 42.9 42.1 1.8% years of record performances Tables 9.4 9.7 (3.8%) Gaming Revenue (incl GST) 52.2 51.8 0.8% Modest growth in EGMs, but maintaining Non-Gami
Slide 30: SKYCITY Queenstown / Wharf Casino
SKYCITY Queenstown / Wharf Casino FY18 FY17 Movement $m $m % Improved performance driven by higher Revenue visitation, especially from premium customers and tourists Gaming Machines 6.7 5.9 12.0% Tables 4.8 4.7 3.4% TITO and cashless technology introduced in 1H18 Gaming Revenue (incl GST) 11.5 1
Slide 31: Adelaide Casino
Adelaide Casino FY18 FY17 Movement EBITDA growth achieved despite disruption from A$m A$m % Riverbank precinct works Revenue Gaming Machines 51.5 51.4 0.3% Improved 2H18 performance from EGMs with revenue up 4.5% vs. pcp Tables 75.7 74.5 1.6% Gaming Revenue (incl GST) 127.2 125.9 1.1% EGM mark
Slide 32: SKYCITY Darwin
SKYCITY Darwin FY18 FY17 Movement Recent competitive pressures stabilised with A$m A$m % 2H18 EGMs revenue up 3.9% vs. pcp Revenue Gaming Machines 53.2 52.7 1.1% Visitation up with positive response to Tables 17.6 17.6 (0.3%) broadening on-site entertainment Keno 12.6 15.9 (20.2%) Keno 10-spot
Slide 33: Group International Business
Group International Business FY18 FY17 Movement FY18 FY17 Record EBITDA performance Turnover $bn $bn % Actual Win % Record six month turnover in 2H18 ($7.5bn − Auckland 8.2 6.0 36.9% +76% vs. pcp) Other NZ 1.1 0.5 125.3% Increased use of junkets and repeat visits from Adelaide (A$) 1.8 1.6 18.
Slide 34: Debt Maturity Profile
Debt Maturity Profile Hedged debt maturity profile as at 30 June 2018 (NZ$m) Committed debt facilities (at hedged exchange rates) of $1.1bn at year-end, with $474m currently drawn Net hedged debt / FY18 normalised EBITDA of 1.3x at year-end $120 $305 Average debt maturity of 4.0 years $200 $14
Slide 35: Disclaimer
Disclaimer All information included in this presentation is provided as at 8 August 2018 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 36: SKYCITY Entertainment Group Limited
SKYCITY Entertainment Group Limited
SKYCITY Entertainment Group — FY2018 Earnings Presentation on 6ix