6 th May, 2015 Client Market Services NZX Limited Level 1, NZX - - PDF document

SKYCI TY Entertainm ent Group Lim ited 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

6th May, 2015 Client Market Services NZX Limited Level 1, NZX Centre 11 Cable Street W ELLI NGTON RE: SKYCITY ENTERTAINMENT GROUP LIMITED (SKC) Please find attached our presentation for the Australian Investor Conference and Asian Roadshow. Yours faithfully Peter Treacy Company Secretary

SKYCITY Entertainment Group Limited Presentation for Australian Investor Conference and Asian Roadshow May 2015

Overview of SKYCITY

SKYCITY Group Overview

 Owner/operator of casino and other entertainment facilities in New Zealand and Australia  Key activities – casinos, restaurants and bars, hotels, convention facilities and out- catering services  Two major growth projects – NZICC and Adelaide transformation  Employ approximately 5,900 people  Listed on NZX and ASX with current market cap of approximately A$2.4 billion  Investment grade corporate rating of BBB- (stable outlook) from Standard & Poor’s

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New Zealand Properties

4

Auckland Hamilton Queenstown/Wharf

Business Activities

• Gaming
• Hotels
• Restaurants & bars
• Convention facilities
• Out-catering
• Sky Tower
• Gaming
• Restaurants & bars
• Convention facilities
• Bowling alley
• Gaming
• Restaurant & bars

Employees (2014 average) 3,300 400 100 Normalised Revenue* (FY14) $533 million $49 million $14 million Normalised EBITDA* (FY14) $218 million $17 million $2 million Electronic Gaming Machines and Tables (at 31 December 2014) 1,647 EGMs 110 Tables 339 EGMs 23 Tables SKYCITY Queenstown: 86 EGMs, 12 Tables SKYCITY Wharf: 70 EGMs, 6 Tables Casino License Term Expires 2021 (extended to 2048 under NZICC agreement if conditions satisfied) Expires 2027 Expires 2025 (Queenstown) and 2024 (Wharf)

* Normalised results adjust the VIP business win rate to a theoretical win rate of 1.35% and adjust for certain one-off revenue and expense

• items. Normalised revenue is grossed up for GST for comparison purposes to other casinos.

Australian Properties

5

Adelaide Darwin

Business Activities

• Gaming
• Restaurants & bars
• Gaming
• Hotels
• Restaurants & bars

Employees (2014 average) 1,200 900 Normalised Revenue* (FY14) A$166 million A$133 million Normalised EBITDA* (FY14) A$34 million A$36 million Gaming Machines at Tables (at 31 December 2014) 996 EGMs 70 Tables 633 EGMs 65 Tables Casino License Term Expires 2085 Exclusivity in South Australia until 2035 Exclusivity in northern half

• f Northern Territory until

2031

* Normalised results adjust the VIP business win rate to a theoretical win rate of 1.35% and adjust for certain one-off revenue and expense

• items. Normalised revenue is grossed up for GST for comparison purposes to other casinos.

Historical Financial Performance

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(NZ$ million) FY14 1H15 Reported Revenue (including Gaming GST) 902.5 495.5 Reported EBITDA 256.4 140.8 Reported NPAT 98.5 54.6 Normalised Revenue* (including Gaming GST) 927.3 510.0 Normalised EBITDA* 287.6 154.4 Normalised NPAT* 123.2 66.6 Reported EPS 17.0¢ 9.3¢ Normalised EPS* 21.3¢ 11.4¢ DPS 20.0¢ 10.0¢ Total Debt 657.1 703.4 Total Debt/Normalised EBITDA* 2.3x 2.3x Normalised EBITDA/Normalised Interest Expense* 6.5x 7.0x

* Normalised results adjust the VIP business win rate to a theoretical win rate of 1.35% and adjust for certain one-off revenue and expense

• items. Normalised revenue is grossed up for GST for comparison purposes to other casinos.

Revenue and Earnings Mix (FY14)

7 Auckland 58% Hamilton 5% Qtwn 1% Adelaide 20% Darwin 16%

FY14 Normalised Revenue*

Auckland 69% Hamilton 5% Qtwn 1% Adelaide 12% Darwin 13%

FY14 Normalised EBITDA* (excl. Corporate Costs)

* Normalised results adjust the VIP business win rate to a theoretical win rate of 1.35% and adjust for certain one-off revenue and expense

• items. Normalised revenue is grossed up for GST for comparison purposes to other casinos.

Share Ownership and Research Coverage

 Member of ASX 200 and NZX10 indices  Open register with largest shareholder around 7%  Consistently within top 5 most liquid stocks traded on NZX  Covered by 14 brokers – 5 from NZ, 9 from Australia

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SKYCITY share register: geographic mix as at February 2015 SKYCITY broker coverage

(Asia), 4% (UK/Europe), 11% (North Amercia), 14% (Australia), 32% (NZ retail), 29% (NZ insto), 10%

Key Investment Features

 Exclusive long-term casino licences in all jurisdictions  Properties are major entertainment destinations in all key markets  Diversified revenue and earnings base – by both geography and business activity  Favourable macroeconomic environment in Auckland, our key market  Achieving organic growth following recent capital investment – especially Auckland, Adelaide and IB  Significant earnings growth potential from two major projects – NZICC and Adelaide expansion  Strong cash flow generation and attractive cash flow yield  Robust balance sheet and stable BBB- credit rating

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1H15 Results Summary

1H15 Results Summary

 Normalised revenue (including gaming GST) up 9.2% to NZ$510.0 million  Normalised EBITDA up 3.1% to NZ$154.4 million and normalised NPAT up only marginally to NZ$66.6 million  Strong results from Auckland and IB were curtailed by a poor result from Adelaide  Auckland was the standout performer and has delivered four consecutive quarter of EBITDA growth  IB experienced record activity, with turnover up 83.6% to NZ$4.7 billion and normalised EBITDA up 134% to NZ$14.5 million  Hamilton returned to revenue and EBITDA growth after changes to the management team  Adelaide experienced ongoing disruptions from the now-completed redevelopment works  Darwin achieved modest EBITDA growth despite flat revenues in a challenging local market

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1H15 Results Summary – Normalised

12 Normalised 1H15 $m 1H14 $m Movement $m % Normalised Revenue (including Gaming GST) 510.0 467.0 43.0 9.2% Gaming GST (46.1) (41.7) (4.4) (10.6%) Normalised Revenue 463.9 425.3 38.6 9.1% Expenses (309.5) (275.5) (34.0) (12.3%) Normalised EBITDA 154.4 149.8 4.6 3.1% Depreciation and Amortisation (43.2) (38.2) (5.0) (13.1%) Normalised EBIT 111.2 111.6 (0.4) (0.3%) Interest Cost (22.0) (22.6) 0.6 2.7% Normalised NPBT 89.2 89.0 0.2 0.2% Tax (22.6) (22.6) (0.0) (0.0%) Normalised NPAT 66.6 66.4 0.2 0.3% Normalised EPS 11.4 cps 11.5 cps (0.1 cps) (0.9%)

• Revenue (including Gaming GST) is shown above to facilitate Australasian comparisons
• Normalised NPAT adjusts for certain items and International Business (IB) at theoretical win rate of 1.35% versus actual 1.04% in 1H15 (1H14: 1.28%)
• Average NZD/AUD cross-rate during 1H15 0.9147 and 1H14 0.8820

1H15 Results Summary – Reported

13 Reported 1H15 $m 1H14 $m Movement $m % Reported Revenue (including Gaming GST) 495.5 465.1 30.4 6.5% Gaming GST (44.0) (41.6) (2.4) (5.8%) Reported Revenue 451.5 423.5 28.0 6.6% Expenses (310.7) (279.9) (30.8) (11.0%) Reported EBITDA 140.8 143.6 (2.8) (1.9%) Depreciation and Amortisation (43.2) (39.2) (4.0) (10.2%) Reported EBIT 97.6 104.4 (6.8) (6.5%) Interest Cost (24.9) (24.2) (0.7) (2.9%) Profit from disposal of Christchurch Casino 0.0 0.9 (0.9) (100.%) Reported NPBT 72.7 81.1 (8.4) (10.4%) Tax (18.1) (20.0) 1.9 9.5% Reported NPAT 54.6 61.1 (6.5) (10.6%) Reported EPS 9.3 cps 10.6 cps (1.3 cps) (12.3%) Interim Dividend NZ$ cps 10.0 cps 10.0 cps

• Revenue (including Gaming GST) is shown above to facilitate Australasian comparisons

1H15 Results Summary – Revenues by Property

14 1H15

$m

1H14

$m

Movement $m %

New Zealand Casinos

• Auckland

302.5 258.0 44.5 17.2%

• Hamilton

25.2 24.9 0.3 1.2%

• Queenstown, Other

7.0 7.1 (0.1) (1.4%) Total New Zealand 334.7 290.0 44.7 15.4% Australian Casinos

• Adelaide

(A$) 87.3 83.4 3.9 4.7%

• Darwin

(A$) 73.1 72.9 0.2 0.3% Total Australia (A$) 160.4 156.3 4.1 2.6% Total Australia at LY fx rate 0.8820 (NZ$) 181.9 177.0 4.9 2.6% Normalised Revenues at constant currency 516.6 467.0 49.6 10.6% Exchange rate impact at CY fx rate 0.9147 (6.6)

• Normalised Revenues at actual currency

510.0 467.0 43.0 9.2% Adjust International Business to actual win rate (14.5) (1.9) (12.6) Reported Revenue at actual currency 495.5 465.1 30.4 6.5%

• Revenue (including Gaming GST) is shown above to facilitate Australasian comparisons
• Normalised Revenue is adjusted for IB at theoretical win rate of 1.35%, versus actual 1.04% in 1H15 (1H14: 1.28%)
• Average NZD/AUD cross-rate during 1H15 0.9147 and 1H14 0.8820

1H15 Results Summary – EBITDA by Property

15 1H15

$m

1H14

$m

Movement $m %

New Zealand Casinos

• Auckland

124.3 108.1 16.2 15.0%

• Hamilton

9.8 9.2 0.6 6.5%

• Queenstown, Other

0.5 1.2 (0.7) (58.3%) Total New Zealand 134.6 118.5 16.1 13.6% Australian Casinos

• Adelaide

(A$) 13.5 18.6 (5.1) (27.4%)

• Darwin

(A$) 21.6 21.0 0.6 2.9% Total Australia (A$) 35.1 39.6 (4.5) (11.4%) Total Australia at LY fx rate 0.8820 (NZ$) 39.7 44.7 (5.0) (11.4%) Corporate Costs (16.4) (13.4) (3.0) (22.3%) Branding Project Costs (2.1) 0.0 (2.1) Normalised EBITDA at constant currency 155.8 149.8 6.0 4.0% Exchange rate impact at CY fx rate 0.9147 (1.4)

• Normalised EBITDA at actual currency

154.4 149.8 4.6 3.1% Adjustments (Note 1) International Business adjustments (Note 1) (2.5) (11.1) (3.6) (2.6) 1.1 (8.5) Reported EBITDA at actual currency 140.8 143.6 (2.8) (1.9%)

• Normalised EBITDA is adjusted for certain items and IB at theoretical
• Average NZD/AUD cross-rate during 1H15 0.9147 and 1H14 0.8820

Note 1: Adjustments are outlined on page 46

Subsequent Events After Interim Results

 Trading performance in 2H15  Continuation of trends exhibited in 1H15  Strong growth in Auckland and improving performance in Hamilton  Gradual recovery starting in Adelaide and Darwin earnings flat in tough economy  IB turnover of NZ$5.7 billion at end of January 2015, up 88% on pcp with 1.50% win rate  IB activity quieter than expected during Chinese New Year but forward bookings positive  NZICC project  NZ Government confirmed no financial contribution to NZICC  SKYCITY and NZ Government agreed to extend deadline for approval of preliminary design (now 31 May)  Making good progress on agreeing revised preliminary design  Adelaide car park  SA Govt and Walker Corp agreed A$610 million transformation of Festival Plaza precinct  Includes 1,560 space underground car park adjacent to Adelaide Casino  Agreed lease of 750 spaces for exclusive use by Adelaide Casino (out to 2035)  A$4.7 million annual lease cost increasing at CPI inflation + 0.5%

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Subsequent Events After Interim Results (cont.)

 Darwin community benefit levy

 NT Government imposed community benefit levy on casinos  10% of gaming machine revenue from 1 July 2015  Annual cost of NZ$6 million and NPAT impact of NZ$4 million  Gaming tax review scheduled for July/August – required to take account of new levy

 Bank facilities

 Completed extension and re-pricing of bank facilities in March  4, 5 and 6 year maturities  Annual interest savings of NZ$2 million

 Debt maturities

 USPP tranches matured in March: US$47 million and NZ$28 million  Capital notes being redeemed in May: NZ$76 million

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Building a Platform for Growth

Strategic Focus

 Primary objective is to drive growth in order to maximise total shareholder return  Deliver growth and maximise shareholder value by:  Maximising the potential of our existing casino licences  Ensuring our properties are world-class integrated entertainment destinations  Focusing on our customers and exceeding their expectations  Successfully planning and executing our two major growth projects  Having constructive partnerships with governments, regulators and other key stakeholders  Being a pro-active and supportive member of our local communities  Being a responsible corporate citizen, especially regarding harm minimisation

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Step-Change Growth in Earnings and Dividends

 NZICC and Adelaide expansion projects should deliver significant lift in both earnings and dividends

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FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 Step-change in earnings delivered via NZICC and Adelaide expansion projects Yield stock with

• rganic growth

Higher earnings base and dividend yield Earnings Organic growth ex NZICC and Adelaide expansion projects

NZICC Project

 SKYCITY agreed to designing and building the NZICC  In return, various regulatory concessions provided for SKYCITY Auckland: ‒ Extension of casino venue license to 2048 ‒ Additional EGMs, tables and ATGs (~30% increase in gaming capacity) ‒ TITO and cashless gaming ‒ Expansion of casino venue description and area ‒ Compensation if increase in casino duty within seven years of signing building works contract ‒ Compensation if NZICC Act is repealed  Further plans to expand NZICC car park and develop five-star 300-room hotel and laneway  Making good progress on reviewing preliminary design to reduce total cost, following Crown’s decision not to make any financial contribution  Awaiting decision from Auckland Council for resource consent  Targeting to sign binding works contract and trigger concessions by end of 2015

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NZICC Master Plan (Old Preliminary Design)

Adelaide Casino Transformation

 Two-phase transformation of Adelaide Casino  Significant opportunity to grow market share locally and with international customers and to turnaround a long-term underperforming casino  New ALA and CDA effective from February 2014 (following A$20 million payment): ‒ 20 year extension of exclusivity to 2035 ‒ Additional EGMs, tables and ATGs (~80% increase in gaming capacity) ‒ TITO and cashless gaming ‒ Lower tax rates for VIP gaming  A$50 million spent on first phase: ‒ Major refurbishment and reconfiguration of existing property ‒ Completed in January 2015  Evaluating options for second phase: ‒ Expanded casino and six-star hotel required to be completed by June 2019 ‒ Total cost of second phase expected to be around A$350 million  Also agreed with Walker Corporation to lease 750 of 1,560 total car park spaces in proposed Festival Plaza development

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Riverbank Precinct Development

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Adelaide Casino Expansion Concept

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Summary

Key Investment Features

 Exclusive long-term casino licences in all jurisdictions  Properties are major entertainment destinations in all key markets  Diversified revenue and earnings base – by both geography and business activity  Favourable macroeconomic environment in Auckland, our key market  Achieving organic growth following recent capital investment – especially Auckland, Adelaide and IB  Significant earnings growth potential from two major projects – NZICC and Adelaide expansion  Strong cash flow generation and attractive cash flow yield  Robust balance sheet and stable BBB- credit rating

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Upcoming Investor Day

 SKYCITY Investor Day planned for investors and analysts  27 May in Auckland  Group overview and trading update  Auckland site tour and business update  Hamilton business update  IB business update  NZICC project  Lunch with CEO and management  28 May in Adelaide  Adelaide site tour and business update  Adelaide expansion plans  Darwin business update  Dinner with management

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Questions?

Disclaimer

 All information included in this presentation is provided by SKYCITY Entertainment Group Limited (“SKYCITY”) as at 6 May 2015.  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 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 investor’s investment

• bjectives or other circumstances. Investors are encouraged to make an independent

assessment of SKYCITY.  This presentation does not purport to be comprehensive or contain all information than an investor may need or desire. No representation or warranty (either express or implied) as to the currency, accuracy, fairness or completeness of this presentation is made by SKYCITY.

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Reported and Normalised Earnings

31 1H15 1H14 Revenue $m EBITDA $m EBIT $m NPAT $m Revenue $m EBITDA $m EBIT $m NPAT $m Normalised 510.0 154.4 111.2 66.6 467.0 149.8 111.6 66.4 Adelaide redevelopment costs

• (1.5)

(1.5) (1.0)

• (1.6)

(1.6) (1.1) NZICC interest and other costs

• (0.3)

(0.3) (2.3)

• (1.1)

Strategic projects

• (0.3)

(0.3) (0.2) Restructuring costs

• (0.5)

(0.5) (0.4)

• (1.1)

(1.1) (0.8) Auckland project costs

• (0.2)

(0.2) (0.1)

• (0.6)

(1.6) (1.2) Profit from sale of Christchurch

• 1.0

Total Adjustments

• (2.5)

(2.5) (3.8)

• (3.6)

(4.6) (3.4) Adjusted 510.0 151.9 108.7 62.8 467.0 146.2 107.0 63.0 International Business at Theoretical (14.5) (11.1) (11.1) (8.2) (1.9) (2.6) (2.6) (1.9) Reported 495.5 140.8 97.6 54.6 465.1 143.6 104.4 61.1

• Revenue includes GST inclusive gaming revenue and GST exclusive non-gaming revenue
• Normalised (underlying) earnings eliminates certain items and adjusts international VIP commission business win rate to theoretical

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 SKYCITY’s objective of producing normalised financial information is to provide data

that is useful to the investment community in understanding the underlying

• perations of the Group

 Gaming Revenue figures reflect gaming win (inclusive of gaming GST). This facilitates

Australasian comparisons and is consistent with the treatment adopted by major Australian casinos

 Non-gaming Revenues are net of GST  Total Revenues are gaming win plus Non-gaming Revenues  EBITDA margin is calculated as a % of gaming win (GST inclusive) plus Non-gaming

Revenue – to facilitate Australasian and period on period comparisons

Reported and Normalised Earnings

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Reported and Normalised Earnings

 Key Adjustments are:

– Adelaide redevelopment costs – Structural redundancies and launch costs for new facilities (Sean’s Kitchen, Black Room) – NZICC – Interest on purchase of New Zealand International Convention Centre (NZICC) land bank (calculated using the Group’s average cost of debt of 6.7% on an average balance of $83m) and

• ther costs specific to this project

– Strategic project costs - Brisbane, Gold Coast and other miscellaneous items – Restructuring costs – Costs associated with changing the staffing structures under an approved restructuring plan – Auckland project costs – Project, pre-opening and launch costs related to Auckland facilities such as the Federal Street launch. 1H14 includes Sugar Club, Fed Deli, Masu and the new gaming rooms

 IB win rate at 1.04% for 1H15 (1H14: 1.28%)  Normalisation adjustments have been calculated in a consistent manner in 1H15 and 1H14