13 November 2017 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 PRESENTATION FOR UBS INVESTOR CONFERENCE Please find attached a copy of the investor presentation to be delivered by the company at the UBS Investor Conference in Sydney, Australia, today. The investor presentation includes a trading update for the 4 month period to 31 October 2017 on page 6. For any further information concerning the investor presentation, please contact: Ben Kay GM Corporate Development & Investor Relations Email: ben.kay@skycity.co.nz Phone: + 64 (9) 363 6067 Yours faithfully Jo Wong Company Secretary
SKYCITY Entertainment Group Limited Investor Presentation UBS Investor Conference 13 November 2017
SKYCITY Overview Owner and operator of casino and entertainment facilities in NZ and Australia Key activities gaming, hotels, convention facilities, F&B, entertainment and out-catering services Long-term exclusive casino licences Diversified revenue and earnings base by geography and business activity Two major growth projects NZICC & Hobson St hotel and Adelaide expansion Primary listing on NZX (secondary listing on ASX), with current market capitalisation of ~$2.6bn Investment grade BBB- credit rating from S&P Leading employer with around 5,500 employees across the group Strong focus on corporate social responsibility 2
Property Summary Exclusive casino licence to 2031 (for top 700kms of NT) 600 gaming machines, 30 tables, 152 hotel rooms / suites, ~800 employees Exclusive casino licence to 2048 (1) 1,877 gaming machines, 150 tables, 240 ATGs, ~630 hotel rooms / suites, ~3,000 employees. $700m NZICC & Hobson St hotel project to be completed by mid- 2019 Exclusive casino licence to 2027 (1) 339 gaming machines, 23 tables, ~400 employees Exclusive casino licence to 2035 (for entire state of SA) 900 gaming machines (allowance for 1,500), 70 tables (allowance for 200), ~1,200 employees. A$330m casino and hotel expansion to be completed by Q3 2020 Exclusive casino licences to 2024 (Wharf) (1) and 2025 (Queenstown) (1) 156 gaming machines, 18 tables, ~100 employees (1) 15 year right of renewal / legislative cap on number of casino licences in NZ 3
Recent Financial Performance: FY15-FY17 Record normalised NPAT achieved in FY17 Policy of distributing at least 80% of normalised NPAT in dividends to shareholders per annum (subject to a minimum of 20.0 cps) FY15-FY17: Normalised EBITDA and NPAT (NZ$m) 350 330.1 321.5 304.9 300 FY15-FY17: Dividend Per Share (NZ$cps) 22 21.0 20.0 20.0 20 250 18 200 150 134.1 152.7 154.6 16 100 14 50 12 0 FY15 FY16 FY17 Normalised EBITDA Normalised NPAT 10 FY15 FY16 FY17 Dividend Per Share 4
Recent Financial Performance: Geographic Mix SKYCITY Auckland (NZ) represented 81% (1) of FY17 group normalised EBITDA Group-wide IB represented 6% (2) of FY17 group normalised EBITDA (10% for FY16) Properties predominately service customers from local populations and communities FY17 EBITDA (pre corporate costs) (NZ$m unless stated otherwise) FY17 Normalised Revenue (incl Gaming GST) (NZ$m) (% of total) 350 300 250 200 277 288 276 (27%) 28 (3%) NZ (excl IB) 150 100 50 0 60 48 33 20 FY16 FY17 FY16 FY17 FY16 FY17 NZ (excl IB) Australia (A$m) (excl IB) Normalised IB 89 (9%) 638 (62%) NZ IB Australia (excl IB) Australia IB 3.9% 18.6% 41.6% (1) Auckland EBITDA (excl IB) / Group normalised EBITDA for FY17 (2) Group IB normalised EBITDA / Group normalised EBITDA for FY17 5
YTD Trading Update Group In the four months to 31 October 2017, group normalised revenue was up 1.7% on the pcp, with domestic revenue (which excludes IB) up 3.1% on the pcp New Zealand NZ properties are performing well, particularly in Auckland due to successful marketing and promotional initiatives which have helped counter the impact of disruption in the CBD Hamilton continuing to benefit from a strong macroeconomic environment in the Waikato region, but growth rates have moderated slightly due to stronger comparable periods Australia Improved premium gaming activity in Adelaide following implementation of new gaming concessions helping to offset impact of construction disruption from early works Impact of increased competitive pressures in Darwin stabilising, but trading environment remains soft overall International Business Momentum is building in the business with particularly strong activity levels over the Golden Week holiday period in October. However, IB turnover was slightly weaker on the pcp which largely pre-dated the Crown arrests in China YTD win rate of 1.47%, slightly above the theoretical of 1.35% Outlook Based on YTD performance, remain on-track to achieve modest growth in group EBITDA in FY18, in-line with previous guidance 6
Update On Key Initiatives NZICC & Hobson St Hotel SKYCITY is investing ~$700m in Auckland to deliver the NZICC, a 300 room 5 star hotel, a retail laneway, and 1,327 additional car parks Car park and hotel basement construction well advanced, and steel structures being erected on site Remain comfortable with contractual position with Fletcher Construction, with 90% of project costs fixed or capped under a GMP Fletcher Construction now has an experienced team in place, resulting in a positive shift in programme momentum over the past 3 months Project remains on-budget, with completion targeting mid-2019 and first major NZICC bookings in early 2020 The NZICC will be a landmark and iconic building for Auckland and NZ, and is expected to be a significant demand driver for the Auckland precinct The Hobson St hotel will provide much needed hotel infrastructure for Auckland and complement the NZICC and broader Auckland business 7
Update On Key Initiatives NZICC & Hobson St Hotel NZICC & Hobson St hotel (Artist impression) 8
Update On Key Initiatives NZICC & Hobson St Hotel NZICC & Hobson St hotel site (as at November 2017) 9
Update On Key Initiatives Adelaide Expansion Vision to transform the Adelaide Casino into a world-class casino and entertainment complex Expansion includes additional gaming capacity (~30% increase post opening), IB gaming suites and villas, a 123 room all-suite hotel, and signature restaurants and bars Total project costs expected to be ~A$330m (including an appropriate contingency) Tender process for the construction contract has commenced seeking a fixed price, lump sum contract Main works expected to commence in Q1 2018 following completion of early works by the SA Government, with final completion expected in Q3 2020 Confident in the investment thesis for Adelaide, supported by regulatory concessions agreed with the SA Government Riverbank precinct will be the entertainment centre of Adelaide and a significant demand driver for the property post expansion 10
Update On Key Initiatives Adelaide Expansion Existing heritage building Adelaide Casino & Hotel expansion New Adelaide Convention Centre Upgraded Adelaide Festival Centre New 20-storey office tower 1,500 space car park below ground Festival Plaza with retail / F&B precinct Adelaide Oval, via bridge across the Torrens Adelaide Riverbank Precinct 11
Update On Key Initiatives Adelaide Expansion Early works progress (as at November 2017) Grade separation 12
Update On Key Initiatives Adelaide Expansion Early works progress (as at November 2017) Station Road works 13
Innovation Auckland Master Plan Update On Key Initiatives Other Recent Achievements Acquired NPT s interest in the AA Centre for $47m on 12 October 2017 (settlement: July 2018) Acquisition consistent with intention to consolidate control over the Auckland precinct as part of the Auckland master planning being undertaken Acquisition expected to be marginally earnings accretive from FY19, and funded from existing bank debt Potential for additional investment in the Auckland precinct over the remainder of FY18 Acquired an interest in Let s Play Live Media, NZ s leading e-sports entertainment and broadcasting company during October 2017 Investment will support the development of NZ s first purpose-built e-sports broadcasting studio and provide an exposure to a new, exciting form of entertainment which complements our core business e-sports is one of the fastest growing forms of entertainment globally, which has strong appeal with both millennials and Asian audiences 14
Funding Recent Management Appointments Update On Key Initiatives Other Recent Achievements Michael Ahearne appointed group COO effective from 1 January 2018, to replace John Mortensen who intends to retire to Australia Mr Ahearne joins from Paddy Power Betfair, and was previously COO of Star Sydney and COO of Aristocrat s Australian & NZ operations Reached agreement on US$150m issue of USPP debt on 1 November 2017 USPP issue priced at an attractive margin and extends average debt maturity out to 4.6 years Transaction remains subject to execution of final documentation with drawdown in March 2018 to coincide with the maturity of existing USPP debt of US$75m 15
Key Focus For Remainder Of FY18 Improve operating performance of all business segments Monitor progress on NZICC & Hobson St hotel project in coordination with Fletcher Construction Complete tender process for Adelaide expansion construction contract and commence main works Finalise and commence implementation of medium-term group strategy to further leverage existing assets, pursue new opportunities and enhance technology and digital capability 16
Disclaimer All information included in this presentation is provided as at 13 November 2017 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 which are beyond SKYCITY s control and could cause actual results to differ from those predicted. Variations could either be materially positive or materially negative This presentation has not taken into account any particular investors investment objectives or other circumstances. Investors are encouraged to make an independent assessment of SKYCITY 17
SKYCITY Entertainment Group Limited