SkyCity Entertainment Group Limited · NZX:SKC
SkyCity Entertainment — FY2012 Earnings Presentation
63 slides from SkyCity Entertainment's earnings presentation, Aug 15, 2012
Slide 1: Full Year Result Presentation
Full Year Result Presentation SKYCITY Twelve month period ended 30 June 2012 Entertainment Group Limited 15 August 2012
Slide 2: SKYCITY Result FY12
SKYCITY Result FY12 FY12 Result Summary 2 FY12 Highlights 14 Strategic Growth Projects 29 Focus for FY13 36 Appendices 38 www.skycityentertainmentgroup.com 1
Slide 3: FY12 Result Summary
ENTERTAINMENT GROUP FY12 Result Summary
Slide 4: FY12 Result Highlights
FY12 Result Highlights FY12 FY11 Movement $m $m $m % Normalised Revenue (incl Gaming GST) 950.7 877.0 73.7 8.4% Normalised EBITDA 310.6 290.9 19.7 6.8% Normalised NPAT 141.4 130.9 10.5 8.0% Normalised EPS 24.5 cps 22.7 cps 1.8 cps 8.0% Reported Revenue (incl Gaming GST) 941.1 887.1 54.0 6.1% Reporte
Slide 5: FY12 Result Highlights
FY12 Result Highlights Strong result, with Normalised NPAT of $141.4m +8.0% on FY11 − Group Normalised Revenue and EBITDA of $950.7m (+8.4%) and $310.6m (+6.8%) respectively − Rugby World Cup 2011 a one-off boost to Revenue of $11.5m, EBITDA of $6.5m and NPAT of $4.7m − excluding RWC, FY12 Group N
Slide 6: FY12 Result Highlights
FY12 Result Highlights Strong balance sheet with Net Debt : EBITDA of 2.1 times and $340m committed, undrawn facilities − Repaid $250m USPP in March 2012 from existing bank facilities − No debt repayments due until 2H15. Ample headroom on banking covenants − In May 2012, Standard & Poor’s reaffirm
Slide 7: FY12 Group Result Normalised Revenues and Earnings
FY12 Group Result NORMALISED Revenues and Earnings FY12 FY11 Movement Normalised $m $m $m % Revenue (including Gaming GST) 950.7 877.0 73.7 8.4% Gaming GST 83.5 75.2 (8.3) (11.0%) Revenue 867.2 801.8 65.4 8.2% Expenses 556.6 510.9 (45.7) (8.9%) EBITDA 310.6 290.9 19.7 6.8% Depreciation and Amortisat
Slide 8: FY12 Group Result Reported Revenues and Earnings
FY12 Group Result REPORTED Revenues and Earnings FY12 FY11 Movement Reported $m $m $m % Revenue (including Gaming GST) 941.1 887.1 54.0 6.1% Gaming GST 82.2 76.7 (5.5) (7.2%) Revenue 858.9 810.4 48.5 6.0% Expenses 558.4 516.1 (42.3) (8.2%) EBITDA 300.5 294.3 6.2 2.1% Depreciation and Amortisation 72
Slide 9: FY12 Revenue Summary by Business Unit
FY12 Revenue Summary by Business Unit (incl Gaming GST) FY12 FY11 Movement $m $m $m % New Zealand Casinos Auckland 527.4 461.2 66.2 14.4% Hamilton 52.1 47.9 4.2 8.8% Christchurch 5.6 6.2 (0.6) (9.7%) Queenstown, Other 8.7 8.4 0.3 3.6% Total New Zealand 593.8 523.7 70.1 13.4% Australian Casin
Slide 10: FY12 EBITDA Summary by Business Unit
FY12 EBITDA Summary by Business Unit FY12 FY11 Movement $m $m $m % New Zealand Casinos Auckland 217.9 196.9 21.0 10.7% Hamilton 21.8 20.2 1.6 7.9% Christchurch 5.6 6.2 (0.6) (9.7%) Queenstown, Other 1.3 1.1 0.2 18.2% Total New Zealand 246.6 224.4 22.2 9.9% Australian Casinos Adelaide (A$)
Slide 11: 2H12 Result Highlights
2H12 Result Highlights Growth in 2H12, with Normalised EBITDA of $145.1m on 2H11 (+4.0%) − Group Normalised 2H12 Revenue and EBITDA of $461.7m (+7.4%) and $145.1m (+4.0%) respectively − Reported Revenues of $447.1m reflect a low hold of only 0.81% in IB in 2H12 (Revenue impact of -$15m) Momentum
Slide 12: 2H12 Revenue Summary by Business Unit
2H12 Revenue Summary by Business Unit (incl Gaming GST) 2H12 2H11 Movement $m $m $m % New Zealand Casinos Auckland 258.5 226.1 32.4 14.3% Hamilton 25.6 24.6 1.0 4.1% Christchurch 3.1 2.9 0.2 6.9% Queenstown, Other 4.6 4.3 0.3 7.0% Total New Zealand 291.8 257.9 33.9 13.1% Australian Casinos
Slide 13: 2H12 EBITDA Summary by Business Unit
2H12 EBITDA Summary by Business Unit 2H12 2H11 Movement $m $m $m % New Zealand Casinos Auckland 103.5 95.9 7.6 7.9% Hamilton 10.8 10.2 0.6 5.9% Christchurch 3.1 2.9 0.2 6.9% Queenstown, Other 0.8 0.7 0.1 14.3% Total New Zealand 118.2 109.7 8.5 7.7% Australian Casinos Adelaide (A$) 17.5 19.
Slide 14: Full Year Dividend of 8.0 cents per share
Full Year Dividend of 8.0 cents per share Final dividend of 8.0 cents per share, taking full year dividend to 17.0 cents per share Payout at the top end of policy range of 60% - 70% of NPAT 60% imputed at the company’s 28% tax rate in New Zealand 60% franked for Australian purposes Payment d
Slide 15: FY12 Highlights
SKYCITY ENTE ROUP RTAINMENT G V—) Pd < A < 08 FY12 H
Slide 16: SKYCITY Auckland FY12
SKYCITY Auckland FY12 Revenues (inclusive of GST) up $66.2m or 14.4% on pcp Revenue, EBITDA and Margin Gaming machines continues strong revenue growth, +10.0%, reflecting our investment in new VIP rooms 42.7% 41.3% FY12 local table games revenue showed growth of 2.7% $527.4m $461.2m − due larg
Slide 17: NZ Restaurant of the Year – The Grill
NZ Restaurant of the Year – The Grill 16
Slide 18: Supreme Winner - Depot
Supreme Winner - Depot Metro Magazine May 2012 DEPOT EATERY & OYSTER BAR Cuisine Magazine August 2012 17
Slide 19: Federal St welcomes Nic Watt
Federal St welcomes Nic Watt 18
Slide 20: New gaming openings in 2012
New gaming openings in 2012 "Horizon" Suites "Horizon" VIP Gaming Diamond Gaming Lounge "Eight" VIP Gaming Lounge 19
Slide 21: Auckland Highlights - International Business
Auckland Highlights - International Business Following the successful launch of “Horizon”, IB has increased significantly since FY10: − Turnover has increased from $1.2bn to $3.8bn − Normalised Revenue has trebled from $16m to $51m The four “Horizon” private gaming salons and seven suites have p
Slide 22: Adelaide Casino FY12
Adelaide Casino FY12 EGMs achieved growth in Win and Market Share results Revenue, EBITDA and Margin (A$) − Revenue growth of 8.5% was pleasing, given the market environment 23.0% − growth in share to 8%+ of total SA EGM market 22.8% Local Table Gaming − despite growth in 1H12, domestic consumer
Slide 23: SKYCITY Darwin FY12
SKYCITY Darwin FY12 Total FY12 Revenue up 3.8%, reflecting an improved performance in 2H12 Revenue, EBITDA and Margin (A$) Gaming Machine revenues up 1.2% on FY11 with solid 2H12 30.2% 29.4% revenues that eliminated the flat 1H12 result − new product and marketing promotions have influenced the
Slide 24: Darwin Highlights – Lagoon Resort open
Darwin Highlights – Lagoon Resort open The exciting new Lagoon Resort, comprising 32 rooms, two international VIP Villas and gaming salons, day spa, bar and restaurant has now opened on time and on budget This complements the existing 120 room hotel and underpins SKYCITY Darwin’s position as the
Slide 25: Darwin Highlights – Lagoon Resort open
Darwin Highlights – Lagoon Resort open Mindil Bay / Beach 32 Lagoon View Suites (over 2 levels) Day Spa (Endota) VIP Villas and Gaming Cove Restaurant and Bar 24
Slide 26: SKYCITY Hamilton FY12
SKYCITY Hamilton FY12 Strong overall revenue growth of 8.8% in FY12, driven Revenue, EBITDA and Margin by EGM performance and improvement in F&B 42.2% 41.8% Hamilton’s ongoing successful growth is a product of focused marketing, capital investment and $52.1m strengthening community relationships
Slide 27: SKYCITY Queenstown & Christchurch Casino
SKYCITY Queenstown & Christchurch Casino Christchurch Casino Queenstown Casino Our Christchurch Casino Joint Venture Strong performance was shown in FY12, with with Skyline continues to be challenged Revenue up 12% to $9m and EBITDA up 50% to by a difficult operating environment $1.5m Followin
Slide 28: Well Funded for Future Growth
Well Funded for Future Growth Following repayment of $250m USPP debt in March 2012, net debt at 30 June 2012 is $659m There is no debt maturing until 2H15 Current facilities offer a combination of flexible, lower cost bank debt, with longer term USPP SKYCITY Capital Notes comprise $56m issue
Slide 29: Capex, Depreciation, Interest, Tax
Capex, Depreciation, Interest, Tax Capex Depreciation: $72.4m, up $3.9m (5.7%) FY12 capex below, totalling $165m FY12 depreciation increase of $3.9m reflects FY13 project capex will include completing the recent significant capex spend, largely in Bally roll-out, completion of the Darwin Resor
Slide 30: Strategic Growth Projects
ENTERTAINMENT GROUP Strategic Growth Projects
Slide 31: New Zealand International Convention Centre
New Zealand International Convention Centre SKYCITY remains focused upon successfully negotiating an outcome which would see it invest up to $350 million to develop, deliver, own and operate an iconic International Convention Centre for New Zealand, on a site directly adjacent to the Auckland prop
Slide 32: New Zealand International Convention Centre
New Zealand International Convention Centre Artists impression 31
Slide 33: Adelaide Redevelopment
Adelaide Redevelopment SKYCITY is continuing its discussions with the South Australian Government‘s Casino Task Force regarding the future taxation and regulatory framework for the Adelaide Casino − once this has been determined, SKYCITY can then decide how to best progress its plans for the redev
Slide 34: Torrens Footbridge
Torrens Footbridge Adelaide Casino Artists impression of Torrens Footbridge 33
Slide 35: Adelaide Riverbank Development Concept
Adelaide Riverbank Development Concept 34
Slide 36: Hamilton Hotel
Hamilton Hotel We have approved the development of a 4+ star Artists impression hotel with 135 rooms above our Hamilton property We anticipate the total cost to be around $35m We believe the hotel development brings much needed quality hotel accommodation to central Hamilton It will signific
Slide 37: Focus for FY13
ENTERTAINMENT GROUP Focus for FY13
Slide 38: Focus for FY13
Focus for FY13 New Zealand − To further capitalise on returns from the investments made in Auckland in FY12, particularly “Horizon” and "Eight" − To position “Federal Street” as the leading restaurant and entertainment precinct in Auckland, with the introduction of additional great restaurants − T
Slide 39: Appendix
Appendix Full Year Period Ended 30 June 2012
Slide 40: Normalised P&L Summary by Business Unit
Normalised P&L Summary by Business Unit • Other NZ Operations includes Queenstown and other minor operations. Minority Interests relate to SKYCITY Queenstown • EBITDA margin is calculated as a % of GST-inclusive gaming revenues and GST-exclusive non-gaming revenues to facilitate Australasian compari
Slide 41: Reported and Normalised Earnings
Reported and Normalised Earnings FY12 FY11 Revenue EBITDA EBIT NPAT Revenue EBITDA EBIT NPAT $m $m $m $m $m $m $m $m Reported 941.1 300.5 227.7 138.5 887.1 294.3 224.6 123.0 Restructuring Costs 2.2 2.2 1.6 - 2.5 2.5 1.7 Canterbury Earthquake Charity - 1.0 1.0 0.7 One-Off Costs for Capital Projects 0
Slide 42: FY12 Notes re Reported and Normalised Earnings
FY12 Notes re Reported and Normalised Earnings Other NRI includes one-off costs associated with opening the new Auckland facilities, launching Bally and Premier Rewards and other miscellaneous items IB win rate at 1.13% for FY12. Adjustment to theoretical win rate of 1.35% increases IB (normalis
Slide 43: SKYCITY Auckland FY12 – including Normalised IB
SKYCITY Auckland FY12 – including Normalised IB FY12 FY11 Movement $m $m $m % Revenues Machines 226.8 206.2 20.6 10.0% Tables – Local 119.9 116.7 3.2 2.7% Tables – International (Normalised) 50.7 26.0 24.7 95.0% Gross Gaming Revenue (incl GST) 397.4 348.9 48.5 13.9% Food and Beverage 45.1 36.3 8.8 2
Slide 44: SKYCITY Auckland 2H12 – including Normalised IB
SKYCITY Auckland 2H12 – including Normalised IB 2H12 2H11 Movement $m $m $m % Revenues Machines 108.9 105.2 3.7 3.5% Tables – Local 59.4 55.9 3.5 6.3% Tables – International (Normalised) 32.1 11.2 20.9 186.6% Gross Gaming Revenue (incl GST) 200.4 172.3 28.1 16.3% Food and Beverage 22.0 17.5 4.5 25.7
Slide 45: SKYCITY Auckland 2H12
SKYCITY Auckland 2H12 2H12 Revenues up $32.4m (+14.3%) on 2H11 Revenue, EBITDA and Margin Gaming machines growth of 3.5% on a strong pcp. Bally implementation, while successful, impacted visitation, 42.4% 40.0% customer experience and availability of machines in Q4-12 $258.5m 2H12 local table
Slide 46: NZICC – Expected Returns
NZICC – Expected Returns The returns to SKYCITY from investing in the NZICC are anticipated to be derived from: The contribution from operating the NZICC and parking The on-spend from the significant additional expected visitation − expect around 350k business event visitor days, plus additional
Slide 47: Significant Benefits for New Zealand
Significant Benefits for New Zealand Significant Economic Benefits − Experts predict the NZICC will bring >180,000 business event delegates to Auckland, generating over 350,000 delegate days per annum − This includes over 30,000 international visitors who wouldn’t come to New Zealand, but for thes
Slide 48: SKYCITY Auckland – International Business
SKYCITY Auckland – International Business Table Games – International Business (IB) in Auckland "Horizon", our new investment in private gaming salons and hotel suites for International VIP players, was successfully opened in July 2011 Players have reacted extremely positively to the enhanced fa
Slide 49: International Business - Consolidated Result
International Business - Consolidated Result FY12 FY11 Movement FY12 FY11 NZ$m NZ$m NZ$m % Win % Win % Turnover (NZ$b) Auckland 3.8 1.9 1.9 95.0% Other 0.6 0.9 (0.3) (22.1%) Total Actual Turnover 4.4 2.8 1.6 59.5% Actual Revenue (incl Gaming GST) Auckland 38.6 38.0 0.6 1.6% 1.03% 1.98% Other 11.3 9.
Slide 50: Adelaide Casino FY12 – including Normalised Adelaide IB
Adelaide Casino FY12 – including Normalised Adelaide IB FY12 FY11 Movement A$m A$m A$m % Revenues Machines 65.0 59.9 5.1 8.5% Tables – Local 73.1 73.4 (0.3) (0.4%) Tables – International (Normalised) 6.1 6.8 (0.7) (10.3%) Gross Gaming Revenue (incl GST) 144.2 140.1 4.1 2.9% Food and Beverage, Other
Slide 51: Adelaide Casino 2H12 – including Normalised Adelaide IB
Adelaide Casino 2H12 – including Normalised Adelaide IB 2H12 2H11 Movement A$m A$m A$m % Revenues Machines 32.5 30.0 2.5 8.3% Tables – Local 34.7 37.9 (3.2) (8.4%) Tables – International (Normalised) 3.3 3.9 (0.6) (15.4%) Gross Gaming Revenue (incl GST) 70.5 71.8 (1.3) (1.8%) Food and Beverage, Othe
Slide 52: Adelaide Casino 2H12
Adelaide Casino 2H12 Visitation and revenue strengthened in May and June Revenue, EBITDA and Margin (A$) across the board 23.9% 22.4% Solid EGMs Win and Market Share growth Local Table Gaming $79.5m $78.2m − whilst table games drop volumes grew 5% in 2H12, hold of only 19% disappointed compare
Slide 53: SKYCITY Darwin FY12 – including Normalised Darwin IB
SKYCITY Darwin FY12 – including Normalised Darwin IB FY12 FY11 Movement A$m A$m A$m % Revenues Machines 60.2 59.5 0.7 1.2% Tables – Local 16.6 15.2 1.4 9.2% Tables – International (Normalised) 0.3 1.1 (0.8) (72.7%) Keno 14.6 12.3 2.3 18.7% Gross Gaming Revenue (incl GST) 91.7 88.1 3.6 4.1% Food and
Slide 54: SKYCITY Darwin 2H12 – including Normalised Darwin IB
SKYCITY Darwin 2H12 – including Normalised Darwin IB 2H12 2H11 Movement A$m A$m A$m % Revenues Machines 27.8 26.8 1.0 3.7% Tables – Local 7.2 6.8 0.4 5.9% Tables – International (Normalised) 0.3 0.1 0.2 200.0% Keno 7.4 5.8 1.6 27.6% Gross Gaming Revenue (incl GST) 42.7 39.5 3.2 8.1% Food and Beverag
Slide 55: SKYCITY Darwin 2H12
SKYCITY Darwin 2H12 Overall revenue growth in 2H12 of 8.4% was very Revenue, EBITDA and Margin (A$) encouraging and shows the momentum returning in Darwin 27.1% 25.6% Gaming machines revenue up 3.7%, from roll out of new product and strategic marketing initiatives directed at key $54.3m player d
Slide 56: SKYCITY Hamilton FY12 – including Normalised Hamilton IB
SKYCITY Hamilton FY12 – including Normalised Hamilton IB FY12 FY11 Movement $m $m $m % Revenues Machines 33.7 29.6 4.1 13.9% Tables – Local 9.6 10.2 (0.6) (5.9%) Tables – International (Normalised) 0.4 0.9 (0.5) (55.6%) Gross Gaming Revenue (incl GST) 43.7 40.7 3.0 7.4% Food and Beverage, Other 8.4
Slide 57: SKYCITY Hamilton 2H12 – including Normalised Hamilton IB
SKYCITY Hamilton 2H12 – including Normalised Hamilton IB 2H12 2H11 Movement $m $m $m % Revenues Machines 16.6 15.0 1.6 10.7% Tables – Local 5.0 5.2 (0.2) (3.8%) Tables – International (Normalised) 0.0 0.8 (0.8) (100.0%) Gross Gaming Revenue (incl GST) 21.6 21.0 0.6 2.9% Food and Beverage, Other 4.0
Slide 58: SKYCITY Hamilton 2H12
SKYCITY Hamilton 2H12 Hamilton’s 2H12 growth on a strong pcp is a result of Revenue, EBITDA and Margin successful main gaming floor initiatives combined 42.2% 41.5% with a focus on improving customer experiences across the property $24.6m $25.6m Machine and non-gaming revenues were both up in 2H
Slide 59: Cash Flows
Cash Flows Consistent and reliable cash flows Cashflow summary FY12 FY11 Reported EBITDA 300.5 294.3 − SKYCITY continues to generate strong cash Tax paid (49.3) (62.5) flows Working capital/other 10.5 (22.4) Operating cash flow 261.7 209.4 − cash flows from operating activities were $262m and $209
Slide 60: Consolidated Balance Sheet
Consolidated Balance Sheet SKYCITY Entertainment Group Limited Equity As at 30/06/12 As at 30/06/11 Movement Equity NZ$m NZ$m NZ$m ⁻ Movements in share capital relate to the Share Capital 727.6 728.6 (1.0) employee long-term incentive plan and Retained profits 41.1 the dividend reinvestment plan 8
Slide 61: Consolidated Balance Sheet (continued)
Consolidated Balance Sheet (continued) SKYCITY Entertainment Group Limited As at 30/06/12 As at 30/06/11 Movement Non-Current Assets NZ$m NZ$m NZ$m Total Assets (carried forward) 1,716.2 1,682.7 33.5 ⁻ $73.1m increase in Property, Plant and Equipment relates primarily to additions Current Liabilit
Slide 62: Australian Dollar Earnings Adelaide and Darwin
Australian Dollar Earnings Adelaide and Darwin FY12 NPAT result comparison to FY11 is impacted by NZD/AUD exchange rate Average NZD/AUD cross-rate during FY12 0.7813 Average NZD/AUD cross-rate during FY11 0.7668 Restating FY11 prior period at 0.7813 to remove the FX differential would have t
Slide 63: Disclaimer
Disclaimer All information included in this presentation is provided as at 15 August 2012. The 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 wh
SKYCITY Entertainment Group — FY2012 Earnings Presentation on 6ix