Skycity Entertainment Group Limited · NZX:SKC
Skycity Entertainment — Investor Day (May 2016)
120 slides from Skycity Entertainment's investor day presentation, May 18, 2016
Slide 1: ASX announcement cover letter
18 May 2016 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 DA
Slide 2: SKYCITY Entertainment Group Limited Investor Day
SKYCITY Entertainment Group Limited For personal use only Investor Day Investor Presentation 18 May 2016
Slide 3: Important Notice
For personal use only Important Notice All information included in this presentation is provided as at 18 May 2016 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 unc
Slide 4: Agenda
For personal use only Agenda Time Event Speaker / coordinator 9.30am- Registration at NZ Room 2, SKYCITY Convention - 10.00am Centre 10.00am Welcome John Mortensen 10.05am Property tour Ben Kay (and others) 11.00am Board perspectives Chris Moller 11.30am Update on group performance & outlook John Mo
Slide 5: Welcome & Property Tour
For personal use only Welcome & Property Tour John Mortensen Interim CEO
Slide 6: Welcome & Property Tour
For personal use only Welcome & Property Tour Aspirations for the Investor Day 1 Update on progress of group strategy and performance of each of our businesses 2 Confirm details of our funding plan for major growth projects 3 Update on recent group financial performance 4 Update on progress of our
Slide 7: Today's Presenters
For personal use only Today’s Presenters Chris Moller, Chairman John Mortensen, Interim CEO Rob Hamilton, CFO Simon Jamieson, Group GM - Matt Ballesty, Acting GM, Ejaaz Dean, President IB NZICC Development SKYCITY Auckland Michelle Baillie, GM SKYCITY Tony McNamara, Acting GM, Callum Mallett, GM SKY
Slide 8: Board Perspectives
For personal use only Board Perspectives Chris Moller Chairman
Slide 9: Welcome From The Chairman
For personal use only Welcome From The Chairman Welcome to today’s Investor Day Thank you for your: • Attendance here today • On-going support of the company • Overwhelming participation in our recent capital raising The Board and management are committed to: • Rewarding your loyalty • Leaving
Slide 10: Delivering Returns By Investing In Growth
For personal use only Delivering Returns By Investing In Growth Our strategy has been successful and is built on a strong foundation: • Exclusive long-term casino licences in all jurisdictions • Properties that are major entertainment destinations in their markets • Two major growth projects • Str
Slide 11: Commitment To Best Practice Corporate Governance
Commitment To “Best Practice” Corporate Governance For personal use only Board Corporate Governance Charter includes: • Establishing a clear framework for oversight and management of the company’s operations • Effective discharging of responsibilities and duties • Encouraging Board and management
Slide 12: Earn And Protect Our Social Licence To Operate
For personal use only Earn And Protect Our Social Licence To Operate Be a responsible member of every community in which we operate Governance-led Corporate Social Responsibility (“CSR”) Committee oversees our CSR strategy, policies and performance Five pillars of excellence: • Responsible gam
Slide 13: Recent Board Matters
For personal use only Recent Board Matters Management changes: • Nigel Morrison left with the Board’s best wishes and thanks after 8 years of dedicated service • Appointment of John Mortensen as Interim CEO • Strong management team in place • Business-as-usual – “not a cup of tea time” • Spencer S
Slide 14: Key Messages From The Board
For personal use only Key Messages From The Board 1 Our strategy has been successful over recent times and is built on a strong foundation 2 Exciting opportunities ahead to continue to generate sustainable shareholder returns 3 Board committed to best practice corporate governance standards 4 Busine
Slide 15: Group Performance & Outlook
For personal use only Group Performance & Outlook John Mortensen Interim CEO
Slide 16: Focus As Interim CEO
For personal use only Focus As Interim CEO Work in partnership with the Board Sustain financial performance and maximise returns for shareholders Senior leadership team Support major growth projects Mitigate key financial risks across the group New General Manager in Adelaide 15
Slide 17: Strategy & Vision
For personal use only Strategy & Vision Primary objective is to drive earnings growth in order to maximise total shareholder return Key tenets to deliver growth and maximise shareholder value: • Maximising the value of our existing casino licences • Properties are world-class integrated entertai
Slide 18: Progress Towards Delivery Of Our Vision
For personal use only Progress Towards Delivery Of Our Vision Only part-way through the journey of maximising the value of future opportunities Focus on what customers value and is most important to them Major growth projects in Auckland and Adelaide: • Both projects expected to deliver a sign
Slide 19: Confirmation Of Funding Plan
For personal use only Confirmation Of Funding Plan Finalised the key elements of funding plan out to FY20 after: • Increased certainty on the expected timing and cost of major growth projects • Conclusion of the sale process for the Hobson St hotel and the decision to retain the asset SKYCITY is
Slide 20: Recent Financial Performance
For personal use only Recent Financial Performance Record group revenue and earnings being achieved underpinned by: • Continued strong growth in Auckland, across all business units • Significantly improved performance in Adelaide • Sustained revenue and EBITDA growth in Hamilton • Record results f
Slide 21: Trading Update for YTD to April 2016 (1 of 6)
For personal use only Trading Update for YTD to 30 April 2016 (1 of 6) SKYCITY has delivered improved financial performance for the YTD to 30 April 2016: • Normalised group revenue (including Gaming GST) up 10.6% on the pcp to NZ$916.9m • Normalised group EBITDA up 12.1% for the YTD to NZ$281.3m •
Slide 22: Trading Update for YTD to April 2016 (2 of 6)
For personal use only Trading Update for YTD to 30 April 2016 (2 of 6) Adelaide Casino’s performance has continued to improve, underpinned by a significant increase in IB activity and improving operating margins, despite local gaming revenue declining slightly Darwin’s performance has declined d
Slide 23: Trading Update For YTD to April 2016 (3 of 6)
For personal use only Trading Update For YTD to 30 April 2016 (3 of 6) Group revenue (including Gaming GST) for YTD to 30 April FY16 FY15 Movement Including International Business YTD YTD $m $m $m % New Zealand Casinos ■ Auckland 541.7 500.3 41.4 8.3% ■ Hamilton 46.1 41.7 4.4 10.5% ■ Queenstown / Ot
Slide 24: Trading Update For YTD to April 2016 (4 of 6)
For personal use only Trading Update For YTD to 30 April 2016 (4 of 6) Group revenue (including Gaming GST) for YTD to 30 April FY16 FY15 Movement Excluding International Business YTD YTD $m $m $m % New Zealand Casinos (ex IB) ■ Auckland 466.0 433.7 32.3 7.5% ■ Hamilton 46.0 41.5 4.5 10.8% ■ Queenst
Slide 25: Trading Update For YTD to April 2016 (5 of 6)
For personal use only Trading Update For YTD to 30 April 2016 (5 of 6) Group EBITDA for YTD to 30 April FY16 FY15 Movement Including International Business YTD YTD $m $m $m % New Zealand Casinos ■ Auckland 224.4 205.5 18.9 9.2% ■ Hamilton 18.9 16.2 2.7 16.9% ■ Queenstown / Other 5.3 2.3 3.0 128.2% T
Slide 26: Trading Update For YTD to April 2016 (6 of 6)
For personal use only Trading Update For YTD to 30 April 2016 (6 of 6) Group EBITDA for YTD to 30 April FY16 FY15 Movement Excluding International Business YTD YTD $m $m $m % New Zealand Casinos (ex IB) ■ Auckland 209.2 189.3 19.9 10.5% ■ Hamilton 18.9 16.1 2.8 17.3% ■ Queenstown / Other 2.6 1.4 1.2
Slide 27: Key Events Since 1H16 Result
For personal use only Key Events Since 1H16 Result Nigel Morrison’s departure as CEO Funding plan progressed for major growth projects NZICC project progressing well Timing and quantum of Adelaide expansion becoming more certain Capital development projects in Auckland progressing well 26
Slide 28: Key Priorities For Remainder Of 2016
For personal use only Key Priorities For Remainder Of 2016 Complete equity raising by mid-June Finalise activation of NZICC gaming concessions in Auckland Complete Auckland atrium project and new IB salons in the Grand hotel Finalise planning for Adelaide expansion Secure Adelaide General
Slide 29: Medium-Term Opportunities
For personal use only Medium-Term Opportunities Successfully execute major growth projects in Auckland and Adelaide Continue to maximise value of core gaming licences Continue to invest prudently in the underlying business, reflecting customer needs Pursue value-adding growth opportunities i
Slide 30: Key Messages From Interim CEO
For personal use only Key Messages From Interim CEO 1 Properties are major entertainment destinations in all key markets 2 Imperative to successfully deliver major growth projects, with funding plan now confirmed 3 Resolute focus on driving improved financial performance across the group 4 Continue
Slide 31: Questions?
For personal use only Questions?
Slide 32: Update On Major Growth Projects
For personal use only Update On Major Growth Projects
Slide 33: NZICC & Hobson St Hotel
For personal use only NZICC & Hobson St Hotel Simon Jamieson Group GM - NZICC Development
Slide 34: Project Update
For personal use only Project Update NZICC and Hobson St hotel developments are progressing well Demolition and clearance of site near completion Remain on-target for Q1 2019 completion of the NZICC and Hobson St hotel Total expected project costs remain in-line with previous market guidance
Slide 35: Hobson St Hotel & NZICC Car Park
For personal use only Hobson St Hotel & NZICC Car Park Hobson St hotel is expected to deliver significant revenue and earnings for SKYCITY Auckland post opening: • Auckland hotel market continues to perform strongly • Further demand growth expected from increased international and domestic visitat
Slide 36: Commercial Terms Provide Risk Protection
For personal use only Commercial Terms Provide Risk Protection Fletcher Construction was appointed in November 2015 as main contractor for the NZICC and Hobson St hotel projects following a competitive tender process Agreed commercial terms provide significant risk protection for SKYCITY NZICC B
Slide 37: Project Timetable
For personal use only Project Timetable NZICC and Hobson St hotel building works contracts signed, and gaming Nov 2015 concessions activated Dec 2015 Construction of NZICC commenced H2 2017 Commence construction of Hobson St hotel (above ground) Q1 2018 Targeted completion of 600 NZICC car parks Tar
Slide 38: Demolition & Excavation (1 of 2)
For personal use only Demolition & Excavation (1 of 2) Bird’s-eye-view of site, May 2016 37
Slide 39: Demolition & Excavation (2 of 2)
For personal use only Demolition & Excavation (2 of 2) Site preparation 38
Slide 40: Economic Benefits For Auckland & NZ
For personal use only Economic Benefits For Auckland & NZ NZ$700m investment in Auckland tourism infrastructure Significant investment in the future of Auckland and commitment to economic growth in New Zealand One of the most significant building projects in Auckland in a generation Project
Slide 41: Next Steps
For personal use only Next Steps 1 Complete demolition and preparation of site 2 Commence site excavation 3 Continue to deliver project on-time and on-budget 4 Start preparing the NZICC and Hobson St hotel businesses for opening 40
Slide 42: Questions?
For personal use only Questions?
Slide 43: Adelaide Expansion
For personal use only Adelaide Expansion Rob Hamilton CFO
Slide 44: Project Update
For personal use only Project Update SKYCITY remains committed to the expansion of Adelaide Casino: • Making good progress toward finalising all legal and regulatory agreements with the SA Government • Concept design completed and detailed design to commence shortly • Continue to believe in the fu
Slide 45: Total Project Costs
For personal use only Total Project Costs A$70m spent to-date to activate and secure the improved gaming concessions under the ALA and CDA with the SA Government and to revitalize the existing property Total project costs for the expansion remain around A$300m: • ~A$260m for core construction •
Slide 46: Project Timetable
For personal use only Project Timetable Complete detailed design work and finalise legal and regulatory agreements with Q3 2016 SA Government 2H 2016 Joint early works programme commences 2H 2017 Core construction commences Q3 2019 Expected completion of Festival Plaza development (including car par
Slide 47: Concept Design
For personal use only Concept Design Festival plaza looking west 46
Slide 48: Riverbank Precinct (1 of 2)
For personal use only Riverbank Precinct (1 of 2) 47
Slide 49: Riverbank Precinct (2 of 2)
For personal use only Riverbank Precinct (2 of 2) 48
Slide 50: Funding Plan & Key Value Drivers
For personal use only Funding Plan & Key Value Drivers Rob Hamilton CFO
Slide 51: Equity Offer
For personal use only Equity Offer Equity offer announced on 11 May to raise NZ$263m: • 1-for-10 entitlement offer at NZ$4.40 per share • Accelerated institutional offer • Fully underwritten NZ$180m (69%) raised in institutional offer – settles on 19 May Remaining NZ$83m to be raised in retail
Slide 52: Funding Plan
For personal use only Funding Plan Committed to maintaining BBB- investment grade credit rating (maximum gearing of 3.0x net debt to EBITDA, including capitalised leases) Based on expected capex profile for major growth projects, expect debt and gearing to peak in FY19 with S&P gearing ratio of
Slide 53: Expected Capex Outlook
For personal use only Expected Capex Outlook ~NZ$850m of future capex (FY17 onwards) expected on two major growth projects On-going annual maintenance capex (approximately NZ$60-65m for FY16) and smaller growth project capex (e.g. new bars & restaurants, new IB salons, Bowlevard upgrade in Hamil
Slide 54: Future Debt Funding (1 of 2)
For personal use only Future Debt Funding (1 of 2) Current debt facilities of $996m ($655m drawn) as at 30 April 2016 (on a hedged basis) NZ$640m of debt facilities (on a hedged basis) mature between now and end of FY20 Following the equity offer, existing debt facilities should be sufficient
Slide 55: Future Debt Funding (2 of 2)
For personal use only Future Debt Funding (2 of 2) Currently intend to secure additional debt funding through one or more of: • Extension of, and potential increase in, existing bank facilities • Further NZ bond issues • Replacement of existing USPP notes with further USPP note issues Expect to
Slide 56: Ownership & Research Coverage
For personal use only Ownership & Research Coverage Open register with largest shareholder around 5% Diversified share register, with increasing offshore representation. Broad international participation and interest in equity offer Consistently within top 5 most liquid stocks traded on NZX
Slide 57: Key TSR Drivers For SKYCITY
For personal use only Key TSR Drivers For SKYCITY 1 Organic revenue, EBITDA and EBIT growth from existing businesses 2 Efficient capital usage and allocations within existing businesses 3 New growth projects with expected returns above cost of capital 4 Mitigating key business risks – e.g. casino li
Slide 58: Total Shareholder Return (NZX)
For personal use only TSR Index (Set to 100 at May 2016) 100 140 60 80 40 120 160 May-12 Jul-12 Sep-12 Nov-12 Jan-13 8.9% Mar-13 SKC (NZ$) May-13 Jul-13 Sep-13 Nov-13 6.6% Jan-14 SGR (A$) 57 Mar-14 May-14 Jul-14 Total Shareholder Return (NZX) 9.1% Sep-14 Average Annual TSR Over 4 Years Nov-14 CWN (A
Slide 59: Total Shareholder Return (ASX)
For personal use only TSR Index (Set to 100 at May 2016) 100 140 60 80 40 120 160 May-12 Jul-12 Sep-12 Nov-12 Jan-13 15.0% Mar-13 SKC (A$) May-13 Jul-13 Sep-13 Nov-13 6.6% Jan-14 SGR (A$) 58 Mar-14 May-14 Jul-14 Total Shareholder Return (ASX) 9.1% Sep-14 Average Annual TSR Over 4 Years Nov-14 CWN (A
Slide 60: Key Drivers Of TSR Performance
For personal use only Key Drivers Of TSR Performance Key drivers of historical TSR have been growth in Auckland EBITDA (primarily local gaming) and growth in IB turnover Same factors will drive future TSR, as well as EBITDA uplift from Adelaide expansion Normalised Normalised EBITDA EBITDA exclu
Slide 61: Key External Factors Influencing NZ Businesses
For personal use only Key External Factors Influencing NZ Businesses Auckland Hamilton Real GDP growth +3.5% in year to Sep 2015 +3.6% in year to Dec 2015 Employment +1.5% in year to Sep 2015 +2.8% in year to Mar 2015 Unemployment 6.2% at Sep 2015 7.1% at Dec 2015 Population 1.57m (est.) at Jun 2015
Slide 62: Key External Factors Influencing Australian Businesses
Key External Factors Influencing Australian Businesses For personal use only Adelaide, SA Darwin, NT Real GSP growth Forecast ~2% in year to Jun 2016 Forecast ~2.5% in year to Jun 2016 Employment +1.0% in year to Mar 2016 -2.5% in year to Mar 2016 Unemployment 7.2% at Mar 2016 4.5% at Mar 2016 State
Slide 63: Key Messages From CFO
For personal use only Key Messages From CFO 1 Finalised key elements of funding plan out to FY20 for our major growth projects 2 Key value drivers continue to be growth in Auckland EBITDA (primarily local gaming), growth in IB turnover and the Adelaide expansion project 3 Management maintains a clea
Slide 64: Questions?
For personal use only Questions?
Slide 65: Auckland Operations
For personal use only Auckland Operations Matt Ballesty Acting General Manager, SKYCITY Auckland
Slide 66: Introduction To Management
For personal use only Introduction To Management Matt Ballesty, Acting General Manager 65
Slide 67: Brief Overview Of Business & Key Value Drivers
For personal use only Brief Overview Of Business & Key Value Drivers Leading NZ tourism and entertainment destination Represents ~70%+ of group EBITDA World-class offering, which appeals to a broad range of customer segments NZICC agreement to underpin long-term growth of the property: • Cas
Slide 68: Recent Financial Performance (1 of 2)
For personal use only Recent Financial Performance (1 of 2) 350.0 50% 48% 300.0 46% 250.0 44% NZ$ million 42% 200.0 40% 150.0 38% 100.0 36% 34% 50.0 32% 0.0 30% 1H11 2H11 1H12 2H12 1H13 2H13 1H14 2H14 1H15 2H15 1H16 EBITDA margin (ex-IB) (% RHS) Revenue (incl Gaming GST) Revenue (ex-IB) EBITDA EBITD
Slide 69: Recent Financial Performance (2 of 2)
For personal use only Recent Financial Performance (2 of 2) Strategic initiatives over past 24 months delivering sustained organic growth Strong recent performance underpinned by: • Favourable macroeconomic drivers • Chinese and Asian demographic thematics prevailing in Auckland (~23% of local p
Slide 70: Activation Of NZICC Gaming Concessions
For personal use only Activation Of NZICC Gaming Concessions Gaming concessions under the NZICC agreement were activated during November 2015 Majority of the new product has been accommodated on the existing gaming floor (257 new EGMs, 25 new tables and 52 new ATGs) Rollout of the remaining pr
Slide 71: Capital Development Projects (1 of 4)
For personal use only Capital Development Projects (1 of 4) Continue to invest in Auckland property to enhance customer experience Refurbishment of main site atrium and expansion of gaming podium progressing well: • New main escalators now provide more direct access to the main gaming floor • Ne
Slide 72: Capital Development Projects (2 of 4)
For personal use only Capital Development Projects (2 of 4) Main floor casino entry then (Dec-15) Main floor casino entry now (May-16) 71
Slide 73: Capital Development Projects (3 of 4)
For personal use only Capital Development Projects (3 of 4) Atrium then (Dec-15) Atrium now (May-16) 72
Slide 74: Capital Development Projects (4 of 4)
For personal use only Capital Development Projects (4 of 4) Our vision for the main entrance 73
Slide 75: Strategic Initiatives Driving Growth
For personal use only Strategic Initiatives Driving Growth Continued investment in gaming facilities: • Atrium infill, expansion of main gaming floor • New IB salons on Level 7 of the Grand hotel • Premium gaming spaces – expansion of Baccarat room, Eight, and Platinum Investment in world-class
Slide 76: Challenges & Opportunities Over Medium-Term
For personal use only Challenges & Opportunities Over Medium-Term Opportunities Challenges / Risks Continued activation and optimisation of Increased competition in gaming machine NZICC regulatory concessions space, particularly in premium gaming (offshore) Successfully leverage brand Change
Slide 77: Conclusions & Outlook
For personal use only Conclusions & Outlook NZ’s leading entertainment destination Strong and focused management team Strategic initiatives delivering sustained growth Operating in strong macroeconomic environment, with favourable tourism and demographic thematics NZICC to underpin multi-y
Slide 78: Questions?
For personal use only Questions?
Slide 79: Hamilton Operations
For personal use only Hamilton Operations Michelle Baillie General Manager, SKYCITY Hamilton
Slide 80: Introduction To Management
For personal use only Introduction To Management Michelle Baillie, General Manager 79
Slide 81: Brief Overview Of Business & Key Value Drivers
For personal use only Brief Overview Of Business & Key Value Drivers Waikato’s leading gaming and entertainment destination, situated on the banks of the Waikato River Heart of NZ dairy country, but with increasingly diversified economy Currently operating in favourable macroeconomic environme
Slide 82: Recent Financial Performance (1 of 2)
For personal use only Recent Financial Performance (1 of 2) 30.0 44% 25.0 42% 20.0 40% NZ$ million 38% 15.0 36% 10.0 34% 5.0 32% 0.0 30% 1H11 2H11 1H12 2H12 1H13 2H13 1H14 2H14 1H15 2H15 1H16 EBITDA margin (ex-IB) (% RHS) Revenue (incl Gaming GST) Revenue (ex-IB) EBITDA EBITDA (ex-IB) 81
Slide 83: Recent Financial Performance (2 of 2)
For personal use only Recent Financial Performance (2 of 2) Hamilton has delivered a strong performance YTD Hamilton’s strong performance largely driven by: • Solid local gaming growth • On-going focus on customer experience and loyalty programmes • Opening of new F&B outlets during the period •
Slide 84: Capital Development Projects (1 of 4)
For personal use only Capital Development Projects (1 of 4) The Marble Room 83
Slide 85: Capital Development Projects (2 of 4)
For personal use only Capital Development Projects (2 of 4) Refresh to building entrance 84
Slide 86: Capital Development Projects (3 of 4)
For personal use only Capital Development Projects (3 of 4) La Parrilla 85
Slide 87: Capital Development Projects (4 of 4)
For personal use only Capital Development Projects (4 of 4) The Local Taphouse 86
Slide 88: Strategic Initiatives Driving Growth
For personal use only Strategic Initiatives Driving Growth Investment in and repositioning of the gaming offering Targeted marketing and promotion campaigns Customer stratification and identification Focus on cost control Investment in brand, reconnecting with the community through sponsor
Slide 89: Challenges & Opportunities Over Medium-Term
For personal use only Challenges & Opportunities Over Medium-Term Opportunities Challenges / Risks Continue to invest prudently in the business, Ability to deliver sustained growth in a mature reflecting customer needs market Continue to grow local gaming market share Changes to laws / regul
Slide 90: Conclusions & Outlook
For personal use only Conclusions & Outlook Property delivering significant growth following recent investment in facilities and focus on cost control Strong management team in place Property leveraged to robust macroeconomic environment and proximity to Auckland Clear vision for the busines
Slide 91: Questions?
For personal use only Questions?
Slide 92: Adelaide Operations
For personal use only Adelaide Operations Tony McNamara Acting General Manager, SKYCITY Adelaide
Slide 93: Introduction To Management
For personal use only Introduction To Management Tony McNamara, Acting General Manager 92
Slide 94: Brief Overview Of Business & Key Value Drivers
For personal use only Brief Overview Of Business & Key Value Drivers Acquired in 2000 from SA Government Situated in heritage-listed historic Adelaide Railway Station building Major redevelopment and expansion project planned following new ALA and CDA with SA Government in 2013 Vision is to
Slide 95: New Regulatory Environment
For personal use only New Regulatory Environment New ALA and CDA address many of the historic disadvantages experienced by the Adelaide Casino: • Modern, contemporary gaming product and systems • 20 year extension of exclusivity to 2035 • Additional EGMs, tables and ATGs (~80% increase in gaming c
Slide 96: Recent Financial Performance (1 of 2)
For personal use only Recent Financial Performance (1 of 2) 120.0 24% 100.0 22% 80.0 20% A$ million 18% 60.0 16% 40.0 14% 20.0 12% 0.0 10% 1H11 2H11 1H12 2H12 1H13 2H13 1H14 2H14 1H15 2H15 1H16 EBITDA margin (ex-IB) (% RHS) Revenue (incl Gaming GST) Revenue (ex-IB) EBITDA EBITDA (ex-IB) 95
Slide 97: Recent Financial Performance (2 of 2)
For personal use only Recent Financial Performance (2 of 2) Improving trends in FY16 YTD underpinned by: • Completion of physical transformation of existing Adelaide property • Significantly improved performance of the F&B business • Significant growth in IB, reflecting the benefit of successfully
Slide 98: Strategic Initiatives Driving Growth
For personal use only Strategic Initiatives Driving Growth Management team restructure Strong focus on cost control driving margin improvements Investment in IB product and offering Delivering improved regulatory environment for IB in Adelaide, promoting increased junket play Strong commun
Slide 99: Challenges & Opportunities Over Medium-Term
For personal use only Challenges & Opportunities Over Medium-Term Opportunities Challenges / Risks Take greater share of local gaming revenue Delivering meaningful local growth until car through: park is available and expansion completed • Understanding and connecting with our Mitigating effec
Slide 100: Conclusions & Outlook
For personal use only Conclusions & Outlook World-class facilities now available, with contemporary gaming product Improved financial performance being achieved Key value driver for the business is to significantly grow local gaming revenue and earnings SKYCITY is committed to expanding and
Slide 101: Questions?
For personal use only Questions?
Slide 102: Darwin Operations
For personal use only Darwin Operations Callum Mallett General Manager, SKYCITY Darwin
Slide 103: Introduction To Management
For personal use only Introduction To Management Callum Mallett, General Manager 102
Slide 104: Brief Overview Of Business & Key Value Drivers
For personal use only Brief Overview Of Business & Key Value Drivers Leading entertainment facility in Northern Territory Situated 2km from the CBD, directly on Mindil Beach Home of Darwin major events including the annual Gala Ball (up to 3,000 pax) Casino licence exclusivity in northern ha
Slide 105: Recent Financial Performance (1 of 2)
For personal use only Recent Financial Performance (1 of 2) 80.0 40% 35% 60.0 30% A$ million 40.0 25% 20% 20.0 15% 0.0 10% 1H11 2H11 1H12 2H12 1H13 2H13 1H14 2H14 1H15 2H15 1H16 EBITDA margin (ex-IB) (% RHS) Revenue (incl Gaming GST) Revenue (ex-IB) EBITDA EBITDA (ex-IB) 104
Slide 106: Recent Financial Performance (2 of 2)
For personal use only Recent Financial Performance (2 of 2) Darwin achieving satisfactory results YTD despite challenging trading conditions Despite soft local revenue, Darwin has achieved stable EBITDA YTD, underpinned by significant growth in IB play and cost control Local revenue declining
Slide 107: Strategic Initiatives Driving Growth
For personal use only Strategic Initiatives Driving Growth Investment in and repositioning of gaming facilities Investment in world-class accommodation / dining offerings Introduction of TiTo across the gaming floor Customer stratification and identification Focus on cost control and subsi
Slide 108: Challenges & Opportunities Over Medium-Term
For personal use only Challenges & Opportunities Over Medium-Term Opportunities Challenges / Risks Leverage strategic location close to Asia Sluggish economy, with lack of near-term positive catalysts Capitalise on significant IB opportunity Small, itinerant population, with modest Further
Slide 109: Conclusions & Outlook
For personal use only Conclusions & Outlook Stable EBITDA being achieved despite difficult trading conditions Long-dated casino licence (to be extended to 2036) secured, with gaming tax rate certainty to 2025 Core asset for SKYCITY, following recent strategic review Positive longer-term grow
Slide 110: Questions?
For personal use only Questions?
Slide 111: International Business
For personal use only International Business Ejaaz Dean President International Business
Slide 112: Introduction To Management
Introduction To Management For personal use only Ejaaz Dean, President International Business 111
Slide 113: Brief Overview Of Business & Key Value Drivers
For personal use only Brief Overview Of Business & Key Value Drivers IB targets high-worth international players and groups who visit casinos as part of their leisure activities Key factors for success of IB that we are focused on: • Attractive destinations with broad range of activities • Premi
Slide 114: Recent Financial Performance (1 of 2)
For personal use only Turnover ($m) - 3,500 2,500 4,500 3,000 2,000 500 1,500 4,000 1,000 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 113 1Q14 2Q14 3Q14 4Q14 1Q15 Recent Financial Performance (1 of 2) 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16
Slide 115: Recent Financial Performance (2 of 2)
For personal use only Recent Financial Performance (2 of 2) SKYCITY continues to deliver record activity with turnover exceeding NZ$10bn for the first time during FY16 YTD Strong growth continues to be underpinned by: • Increased recognition of our brand and offering amongst Asian VIP customers
Slide 116: State Of Play In Macau & Broader Casino Industry Affecting IB
State Of Play In Macau & Broader Casino Industry Affecting IB For personal use only Austerity drive in Macau has continued into 2016: • Significant fall in VIP revenues in Macau over last two years • Continued evidence of a transition of Macanese VIP revenues into regional and Australasian casinos
Slide 117: Outlook For The Business
For personal use only Outlook For The Business Expect sustained double-digit growth over medium-term Significant opportunities for IB going forward: • Step change in Adelaide given the expansion, and its location and attractiveness as an IB location • Upside in Darwin, if airlift issues are alle
Slide 118: Conclusions & Closing Remarks
For personal use only Conclusions & Closing Remarks John Mortensen Interim CEO
Slide 119: Conclusions & Closing Remarks
Conclusions & Closing Remarks For personal use only Our strategy has been successful over recent times and is built on a strong foundation Strong platform to leverage growth opportunities Exciting opportunities ahead to continue to generate sustainable shareholder returns Record revenue and
Slide 120: For personal use only
For personal use only e s) ry Nr SKYCITY
SKYCITY Entertainment Group — Investor Day (May 2016) on 6ix