8 August 2011 Listed Company Relations NZX Limited Level 2, NZX Centre 11 Cable Street WELLINGTON Re: Investor Presentation Please see attached a copy of the presentation given to SKYCITY Investors on Saturday 6 August. Yours faithfully Peter Treacy Company Secretary SKYCITY Entertainment Group Limited Federal House 86 Federal Street PO Box 6443 Wellesley Street Auckland New Zealand Telephone +64 (0)9 363 6141 Facsimile +64 (0)9 363 6140 www.skycitygroup.co.nz
Auckland Property Developments Update 6 August 2011
SKYCITY Auckland New Zealand s leading integrated gaming, entertainment and tourism destination: Casino (1,647 machines and 110 tables) Sky Tower major NZ tourism attraction Grand Hotel, 5 star luxury hotel 316 rooms SKYCITY Hotel, 4.5 star hotel 344 rooms 700 seat theatre Convention Centre approx 5,500 sqm Approx 2,000 car parks 20 restaurants and bars Most significant asset in SKYCITY Group contributes more than 50% of group earnings 1
Auckland Developments Significant property developments underway Positioning property to benefit from the expected increase in visitation over the Rugby World Cup ( RWC ) RWC) Recently completed: Platinum room renovations completed May 3 year refurbishment of all rooms at SKYCITY Hotel completed July 4 new international VIP salons and suites opened mid July Coming soon new Diamond Room (250 EGMs ) relocated and upgraded core gaming buffet restaurant new enlarged local VIP tables area with additional facilities Federal Street phase one 3 new exciting restaurants and bars two new Presidential Suites at the Grand Hotel new sports bar Nation s Clubrooms and Poker Zone exciting temporary F&B venues for Rugby World Cup 2
New Facility Launch Schedule 2011 Depot Red Hummingbird Transmission Under the Grill Fortuna Diamond Room Chivas at the Deck Mumm Champagne Bar at SKY Lounge Eight Media Eight Patrons Family of 12 Bar The Grill Nation s Clubrooms RWC Opening Celebrations 9 12 August 13 August 16 August 17 August 19 August 24 August 24 August 29 August 30 August 30 August 1 September 9 September 9 September 3
Platinum Room Finalised Platinum Room upgrades total capex approx $2.5m Upgrade of all customer facing areas while the room continued operating (through 9 stages of development) Most valuable tier of customers in the EGM business Significant ifi increase in quality of product, amenities and service levelsl Platinum Room has delivered strong growth since upgrades began Driving increased visitation frequency, length of stay and yield per customer 4
Platinum Room 5
Diamond Room Purpose built room with 250 EGMs for local mid tier EGM customers Diamond tier action loyalty (~ 6,000 current members mainly EGM) Extension of licensed gaming area Conversion of former non gaming space (old family buffet restaurant) into higher yielding gaming space Direct access off main gaming floor Dedicated machine product, jackpots, hosts, food and beverage offers Capitalising on recent customer segmentation success Decongest s the main gaming floor and secures important group of customers away from busy crowds over the RWC period Opening 19 th August capex approx $6.5m 6
Diamond Room 7
Diamond Room 8
Outdoor Gaming Opportunity On 22 June, SKYCITY received approval from the Gambling Commission to construct an outdoor gaming area which would allow guests to smoke while gaming Located at the northern end of the new Diamond Room Up to 60 EGMs Scheduled opening end of September Area framed by glass louvres allowing open air flow in conformance with Smoke free Environments Act 1990 Gambling must not be visible from outside the casino in accordance with the requirements of the Commission We will assess the popularity of the new area before determining whether to seek approval for further similar facilities in the casino venue 9
Outdoor Gaming Opportunity 10
New Fortuna Buffet Restaurant Relocated to level 3 new destinational gaming offering R20 focused on supporting gaming, g, not families Occupies what was previously lowest earning gaming floor area Previous buffet low earning space is converted into high value gaming space Multiple live cooking stations, contemporary interior fit out and kitchen areas Approx 250 seats Opens mid August 2011 Capex approx $3.5m 11
New Fortuna Buffet Restaurant 12
The Nation s Clubrooms Redevelopment of level 3 casino into a destinational sports bar and themed gaming zone Targeting a new and underserved d customer demographic Positions SKYCITY as the home of sports in Auckland Leverage major sponsorships of the Auckland Blues and the NZ Warriors. Currently assessing other sponsorship opportunities Featuring timber floors, multiple large sports screens, memorabilia, food and beverage and some gaming Replaces old Pacific Room Adjacent to new poker and tables area in old International Room Open for start t of RWC exciting venue for non ticketed t RWC crowd Approx capex of $1.5m 13
The Nation s Clubrooms 14
Eight Two new floors (levels 8/9) added to the top of the SKYCITY Hotel building Views over Auckland harbour and CBD Conversion of non yielding outdoor hotel swimming pool into highest yielding gaming space Brand new internationally competitive gaming facility primarily for local VIP premium tables tier formerly Pacific Room Gaming area will be 3 times larger than current Pacific Room Qualified members only Opportunity to grow the tier in number of players and value of play Opening 30 August 2011 capex of approx $25m 15
Eight Initially featuring 16 high limit table games and 16 EGMs Designed to allow for potential future expansion Luxurious fit out high ceilings, chandeliers, leather, gold and Grand Staircase Significant increase in service levels dedicated hosts, dedicated car park lifts, high quality food and entertainment offerings Level 9 both indoor and outdoor hospitality components indoors premium food and beverage buffet, bar and lounge private dining outdoors extensive covered deck and balconies smoking compliant, heated break out area or for VIP events and functions 16
Eight 17
Eight 18
Eight 19
Eight Rooftop Deck 20
Horizon Suites SKYCITY has only ever had one international salon uncompetitive and tired Horizon delivers four new world class international gaming g salons (12 tables) co located with four new luxurious hotel suites with interconnecting rooms High tech, layered luxury, globally competitive Individual id and groups configurations Dedicated VIP hosting and reception facilities Significant improvement in service levels Increased capacity provides greater ability to yield manage to meet demand Opened 18 th July 2011, capex approx $7m Strong performance to date FY12 first 38 days turnover ~$400m (20 days) vs F11 ~$70m 21
Horizon Suites 22
Horizon Suites 23
Horizon Suites 24
Horizon Suites 25
International VIP Fastest growing business segment despite lack of competitive facilities to date Key requirements: competitive tax rate competitive player programs appropriate risk management practices access direct flights, first / business class, travel visas luxurious dedicated VIP facilities available on demand private salons private and luxurious accommodation world class food and beverage highest service standards events and attractions 26
International VIP Continue to drive growth from this segment Auckland Darwin Leverage new world class Auckland facilities Upgrade VIP facilities at Darwin property close proximity to Asia Additional sales presence in Australia and South East Asia Marketing and events calendar Alliances and partnerships to leverage tourism efforts and recent increases in airlift from key inbound market Strong Government support for development of international VIP business export income, high net worth tourism, job creation, significant on spend 27
Federal Street Creation of a new premier destinational entertainment strip for Auckland More reasons to visit the precinct and increase length of stay Transformation of Federal Street involves multiple stages: 1 st stage 3 new restaurants/bars and reconfiguration of Grand Hotel lobby by August 2011 approx $8m capex subsequent stages under consideration include: further restaurants, bars and retail outlets (e.g. 3 4 outlets = ~ $10m) conversion of street into a pedestrian shared space after RWC extension of current convention centre over the street creating an artistic and functional protective canopy 28
Federal Street Concept current view looking South 29
Federal Street Concept potential view looking South 30
Federal Street Concept current view looking North 31
Federal Street Concept potential view looking North 32
Red Hummingbird by Luke Dallow Operated by Auckland s leading bar operator Designed by Luke Dallow and Jasmax Architecture Gastro pub with eclectic quirky fit out for up to 250pax Large bar with plenty of standing area, outside smoking areas 150,000 additional visits to site annually Open 13 August Approx capex $2m 33
Red Hummingbird by Luke Dallow 34
Red Hummingbird by Luke Dallow 35
Depot by Al Brown Celebrated Wellington chef, TV personality New Zealand tapas bar, New Zealand wines Bach styled design with a funky industrial feel 80 seats 65,000 additional visits to site annually Designed by Al Brown and Charlie Nott, Architect Opening 12 August Approx capex $2m 36
Depot by Al Brown 37
The Grill by Sean Connolly Sean Connolly is a 5 hat Sydney chef formerly operated Astral at Star City Casino Sydney Premium steak offering best in Auckland, internationally competitive Conveniently located off the 5 star Grand Hotel lobby 120 seats 55,000 additional visits to site annually Designed by Sean Connolly and Andrew Lister (designer of Bellota) Opening 1 September Approx capex $4m 38
The Grill by Sean Connolly 39
Hotels SKYCITY Hotel Soft refurbishment of all rooms and suites completed Q4 F11 New carpets, furniture and wall and ceiling coatings and light fittings High occupancy (low 90s) maintained at a higher average room rate Grand Hotel Two additional Presidential Suites, for VIPs who want the Grand Hotel experience, e Head of State visits stsand dcelebrity eb business Completed for high yielding RWC period (approx capex $1m) Significant reconfiguration of Grand Hotel lobby Upgraded d lobby bar lounge, new retail til outlet, t new offices and a premium restaurant (The Grill) 40
Rugby World Cup 9 th September 23 rd October 2011 Expected Group EBITDA uplift difficult to predict given this is the largest event of its kind ever hosted in New Zealand Hotels holding high / full occupancy and high average rates Gaming expected to have uplift in revenues similar to 2005 Lions tour Food and beverage, conventions and Sky Tower will enjoy peak visitation Auckland will benefit from relocation of Christchurch matches Creating a range of temporary hospitality venues around the property to capitalise on peak visitation Weta Cave, Mumm Champagne Bar, Chivas Bar, Twelve Bar Auckland property ready for expected visitation Benefits also in Hamilton, Christchurch, Queenstown 41
Rugby World Cup Temporary New Venues Mumm Champagne at Sky Lounge 42
Rugby World Cup Temporary New Venues Chivas Bar at the Deck 43
Rugby World Cup Temporary New Venues Family of 12 NZ Wine Bar Atrium WETA Cave SkyTower Retail Kumeu River The Milton Vineyard Ata Rangi Neudorf Vineyards Villa Maria Winery Craggy Range Palliser Estate Nautilus Estate Fromm Winery Lawson s Dry Hills Pegasus Bay Felton Road 44
New Zealand International Convention Centre (NZICC) On 12 June 2011 the New Zealand Government announced SKYCITY as its preferred developer to build a new international standard convention centre in Auckland Best operating credentials Central CBD site surrounded by Hotels and other entertainment infrastructure No funding required by tax or rate payers NZICC is a major component of national tourism infrastructure and central to Government s long term business tourism plans Significant opportunities for SKYCITY to capture visitation and on spend from NZICC visitors: casino, bars and restaurants, Sky Tower, parking, hotels 45
New Zealand International Convention Centre (NZICC) Large site 3.5 acres Up to 70,000sqm GFA similar in size / scale to existing complex up to 4,500 delegates exhibition style flexible plenary capacity up to 3,500 ~ 750 car parks connected to main site by pedestrian bridge over Hobson Street Exploring other potential ti complementary development opportunities e. g. hotel, major year round tourism and leisure attractions Completion of build could be mid 2015 No construction until agreement reached with Government and certainty around reforms and legislative change 46
New Zealand International Convention Centre (NZICC) Government is considering some alterations to gambling regulations and legislation. Broad areas of negotiation include an extension of SKYCITY s casino license beyond its current expiry date of 2021 an increase in the number of gaming tables, multi terminal gaming machines and electronic gaming machines other changes to increase the scale and efficiency of the Auckland casino facilities and operations SKYCITY is prepared to fund up to $350m Subject to reaching a satisfactory outcome which achieves an overall acceptable return on investment for its shareholders Negotiations are ongoing and are commercially sensitive 47
New Zealand International Convention Centre (NZICC) 48
New Zealand International Convention Centre (NZICC) 49
New Zealand International Convention Centre (NZICC) 50
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