Skycity Entertainment Group Limited · NZX:SKC
Skycity Entertainment — FY2024 Earnings Presentation
38 slides from Skycity Entertainment's earnings presentation, Aug 22, 2024
Slide 1: FY24 Results Investor Presentation
ENTERTAINMENT “GROUP FY24 RESULTS INVESTOR PRESENTATION Wado weet | 22 AdgURLaO24 =
Slide 2: Executive Leadership Changes
Executive Leadership Changes sliveciry Jason Walbridge Peter Fredricson Chief Executive Officer Chief Financial Officer (from 23 August 2024)
Slide 3: Important Notice
Important Notice All information included in this presentation is provided as at 22 August 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, howe
Slide 4: Contents
Contents Executive Leadership 1 P2 Changes 2 = FY24 Results Summary P5 %3 FY24 Group Performance Pll 4 Outlook P20 5 Appendix P27
Slide 5: FY24 Results Summary
FY24 Results Summary Solid underlying earnings performance with reported results impacted by significant adjustments REVENUE $928.5m Box Reported $959.6m Underlying! EBITDA $138.2m Reported $277.8m Underlying! » 3% YoY (16.7%) voy (8.0%) yoy NPAT ($143.3)m (897.4%) Yov Reported $123.2m (7.2%) Yov Un
Slide 6: FY24 Key Messages
FY24 Key Messages iV ITY Significant progress made during the year Solid Underlying Earnings Performance Group delivered underlying EBITDA of $277.8m ina challenging operating environment AUSTRAC and DIA matters resolved’; CBS independent : review recommenced; Kroll programme of work submitted = | f
Slide 7: Key Projects
Key Projects sherry Good progress made with future earnings growth opportunities oan Auckland Car Park Buyback * Agreement reached to buy back the SkyCity Auckland car park concession in December 2023 at a cost of $204m * Management of the car park reintegrated back into SkyCity from end January 202
Slide 8: Regulation
Regulation Progress made to resolve key regulatory matters DIA AUSTRAC CBS Independent Review Agreement reached with the DIA to resolve the civil penalty proceedings relating to historical non-compliance with the New Zealand AML/CFT laws. Remains subject to High Court approval with a hearing set dow
Slide 9: People
People slWeiry A substantial employer of over 4,500 people in New Zealand and South Australia Staff vacancy levels have now returned to more normal levels as constraints in the labour market have significantly reduced SkyCity’s employee engagement survey (MyVoice) is now undertaken twice a year with
Slide 10: Contributing Positively in the Community
Contributing Positively in the Community Over $7m contributed during the year * $4.6m contributed in FY24 via the NZ Community Trusts, enabling $5.9m of grants to be distributed to 130 community organisations - a total of $77.4m has been awarded via more than 5,230 grants since 1996 * Fundraising ef
Slide 11: we a Pa —
we a Pa — Te al - Ys NGS Julie Amey & Call
Slide 12: FY24 Group Underlying Profit
FY24 Group Underlying Profit Challenging economic environment impacted underlying earnings performance * Visitation trends remain positive across the Group, with noticeable recovery of international tourism in Auckland - particularly during the summer months * Local gaming machine revenue impacted b
Slide 13: FY24 Significant Accounting Items
FY24 Significant Accounting items SkyCity has reported a number of significant items in FY24: SkyCity Adelaide Valuation - A$86.2m (NZ$94.3m) impairment Key assumptions included in the valuation: — MCP implemented in early 2026 — Additional legal and compliance costs associated SkyCity Adelaide’s AM
Slide 14: Net debt to EBITDA ratio
• Total Group Borrowings Total Liquidity Headroom Debt leverage ratio 1,200 4.5 • 4.0 1,000 3.5 Net debt to EBITDA ratio • 800 3.0 2.5 $m 600 • 2.0 400 1.5 1.0 200 0.5 0 0.0 FY19 FY20 FY21 FY22 FY23 FY24 • •
Slide 15: Capital Expenditure
Capital Expenditure Pro-active management of capital spend continued in FY24 FY24 core capex of $64.2m included the following major projects: — Gaming equipment investment as part of normal replacement cycle programme — Property maintenance, including lift replacement and commencement of Auckland pr
Slide 16: SkyCity Auckland
SkyCity Auckland Economic conditions impacting gaming, tourism growth supportive to non-gaming * Visitation marginally ahead of the prior period, with over 4.5m people visiting the precinct, including ongoing recovery in international tourism visitation * Gaming machine revenue reflects challenging
Slide 17: SkyCity Hamilton & Queenstown
SkyCity Hamilton & Queenstown sliveiry Encouraging signs with a stabilisation of revenue in 2H24 Hamilton Queenstown Hamilton 2 2 * Impact from economic environment $m [veers | Gees | Mtezamar [veers | Gees | Mtezamar stabilised in 2H24 after difficult 1H24 Gaming Machine Revenue 52.6 541 (2.8%) 75
Slide 18: SkyCity Adelaide
SkyCity Adelaide shiv YCITY Underlying EBITDA improved in FY24 with the focus oan on resolving the remaining challenges A$m Movement * Visitation marginally lower on the prior period, with interstate and Gaming Machine Revenue 99.7 100.5 (0.8%) international tourism in South Australia slower to reco
Slide 19: SkyCity Online
SkyCity Online New Zealand Government has announced a high-level approach to regu online gaming * New Zealand online gaming market has continued to grow over 2024 and to attract offshore operators ahead of potential regulation * Gaming revenue impacted by lower bet sizes and player numbers * Gaming
Slide 20: Jason Walbridge
Jason Walbridge
Slide 21: Group Transformation Programme
Group Transformation Programme stn Step change in initial uplift programme Governance Refresh New Risk and Compliance Framework Culture Shift Leadership Step Change in Transformation e cITY Board refresh completed Recruitment of directors with specialist risk expertise Creation of a dedicated Board
Slide 22: Our Transformation Programme Overview
Our Transformation Programme Overview s{iv SKYCITY ENTE KY PILLARS COMPLETE: FY2024 UNDERWAY: 2025-2026 + Strengthened Board capability Established Board Transformation Sub-Committee GOVERNANCE + Increased risk capability and visibility Enhanced reporting, monitoring and oversight - + Transformation
Slide 23: Mandatory Carded Play (MCP)
Mandatory Carded Play (MCP) MCP will be implemented across all casinos in FY26 Expected implementation: New Zealand July 2025 Adelaide early 2026 No card, no play which will enable SkyCity to manage customer's duration of play and identify when breaks are needed Automates a current manual process, w
Slide 24: Risk & Compliance Investment
Risk & Compliance Investment Skerry * Further investment included in FY25 guidance primarily to support the move to MCP and the other Transformation Programme initiatives Group Risk and Compliance Investment AML, Compliance & Host Responsibility Trend Employees MOngoing BAU costs m One-off costs FY2
Slide 25: FY25 Outlook
FY25 Outlook * Confirming previous FY25 earnings guidance provided on 18 July 2024 of: — Underlying Group EBITDA of between $245m and $265m — No dividend expected for FY25 * Approximately $20m to $30m of costs within the above guidance relate to the following: — Further risk and compliance uplift ac
Slide 26: CEO Initial Thoughts
CEO Initial Thoughts shin Medium term outlook positive with the potential to deliver an uplift in underlying earnings Gaming Licences are a Privilege Our People Business Transformation Core Business Future Opportunities e cITY Rightfully being held to account for our historical failings Transparent
Slide 27: Appendix
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Slide 28: Important Information
e CITY Important Information . sh Average NZ$ vs. A$ cross-rate for FY24 = 0.9232 and FY23 = 0.9143 Weighted average number of shares excludes executives’ shares held on trust under the Group's executive incentive schemes: - FY24 = 758,733,593 - FY23 = 758,117,231 GST rates: NZ15%; AU 10% EBITDA mar
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 by p
Slide 30: Reconciliation of Group Results FY24 FY23
FY24 FY23* $m Revenue EBITDA EBIT NPAT Revenue EBITDA EBIT NPAT Reported Results 928.5 138.2 46.2 (143.3) 926.2 165.9 75.2 8.0 Reclassify Premium Revenue Rebates 3.2 - - - 7.0 - - - Reclassify Gaming GST 85.8 - - - 87.5 - - - Remove impact of NZICC Fire Accounting (48.4) 9.2 9.2 8.4 (63.6) 22.8 22.8
Slide 31: Group Underlying Profit and Loss FY24
Group Underlying Profit and Loss FY24 sliver ry June 2024 Underlying results NZ$m Aucklan NZICC Queenstown Adelai Corporate Total Gaming Machines 265.1 0.0 75 108.0 0.0 453.2 Table Games 146.5 0.0 37 63.9 a0 225.6 Premium Tables 25.0 0.0 09 3.3 0.0 39.5 Online Gaming 0.0 0.0 0.0 0.0 ao 93 Keno 0.0 0
Slide 32: Group Underlying Profit and Loss FY23
Group Underlying Profit and Loss FY23 sliver ry [30 June 2023 Underlying results NZ$ Auckland NZICC Hamilton Queenstown Adela IB Corporate Total Gaming Machines 305.3 0.0 54.1 8.0 110.0 0.0 0.0 ATTA Table Games 139.6 0.0 1S 3.0 77.2 0.0 0.0 0.0 231.3 Premium Tables 15.2 0.0 0.0 0.8 9.7 0.0 0.0 0.0 2
Slide 33: Regulatory Environment & Compliance: Host Responsibility
Regulatory Environment & Compliance sliver ry HOST RESPONSIBILITY: SkyCity progressing key regulatory enhancements Regulatory Environment Host Responsibility Enhancement Programmes DIA/Gambling Commission: * Ongoing interaction with the DIA, including frequent inspections of New Zealand properties *
Slide 34: Regulatory Environment & Compliance: Financial Crime
Regulatory Environment & Compliance sliver ry FINANCIAL CRIME: SkyCity progressing key regulatory enhancements Regulatory Environment Financial Crime Enhancement Programmes DIA: * Regular audits and meetings with the regulator, including onsite inspections. * Agreement reached with DIA to resolve th
Slide 35: Adelaide: Building A Better Business
Adelaide: Building A Better Business Progress of Programme of Work to deliver sustainable uplift in core capabilities Australian Regulatory Environment shveciry SkyCity Building a Better Business Programme cBS: * Kroll appointed as independent monitor in August 2023 in relation to SkyCity Adelaide's
Slide 36: NZ Host Responsibility Programmes
NZ Host Responsibility Programmes sliver ry SkyCity's continuous improvement 2024 + future ITY ENTERTAINMENT GR' + 2019: 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 identif
Slide 37: NZ Anti-Money Laundering
NZ Anti-Money Laundering skr YCITY SkyCity's continuous improvement + 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 account and third-party ac
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SkyCity Entertainment Group — FY2024 Earnings Presentation on 6ix