Event Hospitality & Entertainment : 2019 Chairman's Address to Shareholders

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CHAIRMAN'S ADDRESS

TO THE ANNUAL GENERAL MEETING OF SHAREHOLDERS

FRIDAY 18 OCTOBER 2019

It is a pleasure to welcome all shareholders and visitors back to Event Cinemas George Street for this Annual General Meeting of Event Hospitality & Entertainment Limited.

The 2019 Annual Report, which includes the financial statements for the year ended 30 June 2019, was released to shareholders in September 2019. The Group's total net profit after tax for the year was $111.9 million, consistent with the prior year, whilst the normalised result after tax decreased 7% to $104.3 million.

The Board was pleased to approve a final fully franked dividend for the year of 31 cents per share. The total fully franked dividend was 52 cents per share, consistent with the prior year. Shareholders will note that, since 2001, the total dividend has increased from 10 cents to the current 52 cents per share. The Board has chosen to maintain a dividend policy that is mindful of the needs and expectations of shareholders, and also provides for expansion opportunities for the businesses and continuity of earnings for both shareholders and the Group.

The Group's total cash balance excluding discontinued operations at 30 June 2019 was $72 million with total debt of $377 million which positions us with a modest gearing level and with significant headroom in terms of available facilities, which at 30 June 2019 was $168 million. The Board continues to review, assess and monitor appropriate capital management initiatives and strategies. This program is managed within the context of maintaining a strong balance sheet and maximising sustainable and long-term total return to shareholders.

In line with this strategy the Group has lodged development applications for major redevelopments of the properties located at 458-472 George Street and 525 George Street in Sydney. Subject to Council approval, the planned redevelopment of 458-472 George Street will integrate with the State Theatre and Gowings buildings and include ground floor retail, an extension of the QT Sydney hotel, and a new commercial office tower. The planned redevelopment of 525 George Street will include ground floor retail, a seven-screen cinema, a new 450-room Atura hotel and conference centre, and 72 residential apartments.

In addition to the Group's major property developments, a number of upgrades and improvements are planned at the Group's Thredbo Alpine Resort and other identified cinema and hotel properties. The Group continues the process previously outlined in regard to the disposal of the German cinema business and Jane will have more to say about these matters later in the meeting.

The Group has been guided by the third edition of the ASX Corporate Governance Council's Principles and Recommendations, and the Corporate Governance Statement has been published on the Group's website. This statement sets out the corporate governance practices and procedures and should assist shareholders in understanding and appreciating the importance placed by the Board upon good corporate governance.

EVENT HOSPITALITY & ENTERTAINMENT LIMITED | ACN 000 005 103

478 GEORGE STREET SYDNEY NSW 2000 | GPO BOX 1609 SYDNEY NSW 2001 | [phone]

CINEMAS | EVENT | BCC | GU FILM HOUSE | CINESTAR | MOONLIGHT

HOTELS & RESORTS | RYDGES | QT | ATURA | THREDBO

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The Board, and committees of the Board, remain committed to ensuring that the Group's corporate governance practices are consistent with the Principles and Recommendations.

The Board also focuses on maintaining an appropriate approach to remuneration, and details of this approach are dealt with in the Annual Report. In particular, the Group's policies are designed to, as far as possible, ensure that the remuneration package is reflective of an employee's duties and responsibilities and enable the Group to attract, motivate and retain high calibre executives.

As mentioned in previous years, the business segments in which the Group operates are at times volatile and always subject to varying degrees of change. Your Board and management continue to focus on optimising the Group's position so it can take advantage of appropriate opportunities as they arise. I should mention that, as the Company continues its growth through a significant pipeline of property initiatives, the returns on these investments will be longer coming by virtue of the nature of the developments. The Company may also be undertaking some of these activities in partnerships where we believe such an approach brings benefits both financial and in access to industry experience. The Group has always prided itself on the strength of its balance sheet which is underpinned by premium property holdings. Our upcoming developments will further enhance this key attribute of our Company.

I and the Board acknowledge the considerable efforts of the CEO since her appointment in July 2017 and the many exciting developments that have been implemented over the last two years and the further opportunities for future growth identified by Jane. To the rest of the executive team and all Group employees I extend our thanks for their collective and personal efforts. We are proud to have such a depth of experience and recognise the contribution you have made which has enabled our growth. This growth would not have been possible without your contribution.

I would also like to thank my co-directors for their efforts during the year and particularly thank Ken Chapman for his contribution to the Board over the last 9 years. In particular to our 6,800 shareholders, thank you for your on-going support.

I will now ask Jane to present her address. Thank you.

Alan Rydge

Chairman

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CHIEF EXECUTIVE OFFICER'S ADDRESS

TO THE ANNUAL GENERAL MEETING OF SHAREHOLDERS

FRIDAY 18 OCTOBER 2019

Thanks Alan and good morning.

Elaborating further on the results for the 2019 year, Group revenue from our continuing operations was up 2% year on year to $998 million and Group EBITDA was down 3% to $229 million. Normalised profit from continuing operations before interest, tax, and individually significant items was down 6.7% year on year to $159 million and total reported profit was flat with prior year. A very pleasing result compared to a record year in 2017/18, and in a more competitive market.

The Group delivered earnings growth across our Hotels and Resorts, Entertainment New Zealand, and Thredbo divisions, whilst Entertainment Australia was impacted by the genre mix of films, less screen advertising, new sites yet to mature and the impact of the new revenue accounting standard on gift voucher breakage revenue.

The results of our German cinema exhibition business Cinestar were reclassified to discontinued operations following the announcement of the sale of this business to Vue in October 2018. I will provide an update on the sale process later in my address.

In Entertainment Australia, revenue was relatively flat, a result that was achieved despite a less desirable genre mix of films for our audiences. Within the top 50 films, there was a lack of blockbuster and action adventure films and the line-up skewed more towards adult dramas and family films. Pleasingly, we grew our market share on both blockbuster and family films.

Average admission price increased 3% as a result of targeted demand pricing, and more customers choosing to see a film in one of our premium cinemas. Food and beverage spend per head increased as a result of new innovative merchandising layouts, the introduction of our premium brand Parlour Lane popcorn and choc tops, eCommerce enhancements, and new family targeted offers. The Group achieved five record months of spend during the second half of the year.

We also achieved strong growth in online revenue, up 16%, and importantly the power of our direct customer relationships continues to grow with almost 2.2 million active Cinebuzz members. Cinebuzz members accounted for 67% of total admissions for the year.

EBITDA for the Entertainment Australia division was $89 million, 6.6% below the prior year. Earnings were impacted by a decrease in screen advertising revenue, a change in the accounting standard relating to loyalty points and gift vouchers and an increase in rent and depreciation. The impact of increased rent largely relates to certain cinemas opened in the past five years that are yet to reach their optimal trading potential, and strategies to address the performance of these sites are being deployed. As a result, normalised profit was down 12.2% year on year.

EVENT HOSPITALITY & ENTERTAINMENT LIMITED | ACN 000 005 103

478 GEORGE STREET SYDNEY NSW 2000 | GPO BOX 1609 SYDNEY NSW 2001 | [phone]

CINEMAS | EVENT | BCC | GU FILM HOUSE | CINESTAR | MOONLIGHT

HOTELS & RESORTS | RYDGES | QT | ATURA | THREDBO

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During the year we opened two new cinemas, Coomera on the Gold Coast and Kawana on the Sunshine Coast. Both sites included some of our new concepts, the three-seat Vmax experience and our enhanced marketplace food and beverage layout that has helped to drive an increase in spend per head. These new concepts, which we shared with you at the last Annual General Meeting, have achieved an average admission price, occupancy and merchandising spend per head materially above the circuit average. Kawana, in particular, has performed well and delivered a positive result in the first month of trading. This gives us confidence that our new concepts are right.

A record box office result was achieved for Entertainment New Zealand. Revenue from our Entertainment New Zealand circuit grew 5.3% year on year, with nationwide box office up 1.4% and the Group outperforming the market. The increase in market share was driven in part by growth across existing sites from new initiatives and was also assisted by the opening of a new site in Tauranga in April 2019, which included our new three-seat concepts and has delivered a positive result since opening.

Average admission price for New Zealand increased by 4.8%, driven by the same focus on targeted demand-based variable pricing that was successful in Australia, whilst merchandising spend per head increased by 3.8% with new food and beverage initiatives in place.

After adjusting for insurance proceeds in the prior year relating to the Queensgate cinema impacted by the Wellington earthquake, the EBITDA for the New Zealand circuit was up 3.8% whilst normalised profit increased 9.6%.

The Hotels and Resorts division delivered a record earnings result within a more competitive market, with revenue up 5% to $353 million driven by new hotel openings (QT Perth and Atura Adelaide Airport), growth in conference and events, and growth in food and beverage revenues. Group like-for-like growth was achieved across all key metrics; occupancy, average room rate and revpar. This result was achieved despite closing the Rydges Queenstown wings late in February 2019 due to seismic rating issues which impacted the result by an estimated $1.7 million.

Across our key markets in Australia and New Zealand, the year was characterised by new supply and less key events. Despite these challenges, it was pleasing to see that whilst there were fewer constrained nights, there was still a high level of demand for hotel rooms particularly in major markets such as Sydney, Melbourne and Queenstown.

Despite a more competitive market, the business performed well. Occupancy in our owned hotels was in line with the record prior year result at 79.4%, whilst average room rate experienced a marginal decline to $184. As a result, revenue per available room was $146, down 0.8%. However, on a like-for-like basis, revenue per available room was up 0.5%.

Atura Adelaide Airport opened in September 2018 and is trading strongly with a positive contribution to earnings in its first 10 months of operation. QT Perth opened in August 2018 in a challenging market, and whilst it is trading ahead of expectations, it has negatively contributed to the result for the year.

In addition, six new hotels under management and licence agreements joined the Group during the year, including Rydges Darwin Central, The Ultimo Sydney, All Suites Perth, Pensione Perth, Rydges Norwest (formerly Novotel Norwest) and Rydges Wellington Airport.

Conference and events revenue increased by 9.6% as a direct result of new strategies and programs whilst total food and beverage revenue increased by 6.3% across the Group.

We launched new eCommerce websites for Rydges and Atura in April 2019, achieving improvements in conversion within the first few weeks, and we implemented new operating systems to enhance revenue management. A new rostering system was also implemented, resulting in payroll as a percentage of revenue remaining in line with the prior year despite annual pay increases for the award in both Australia and New Zealand.

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EBITDA for the Hotels and Resorts division was up 2% to $98 million whilst normalised profit was up 0.3% to $69.5 million. After adjusting for the closure of the wings at Rydges Queenstown, normalised profit was up 2.8%. This record earnings result in a more competitive market reflects the strength of the Group's locations, the successful brand differentiation strategy, eCommerce enhancements and investment in operating systems.

Thredbo achieved another record result, with revenue up 12% to $81.8 million, EBITDA up 12.5% to $28.9 million and normalised profit up 14.6% to $25 million. The result reflected a strong 2018 snow season with consistent snowfall and snowmaking driving increased visitation, and improved yield. Strong food and beverage revenues also contributed to overall growth.

In the Group's Property division, whilst rental income for the year was up 6%, earnings were impacted by a comparatively lower fair value adjustment of $1.9 million in relation to the investment properties, compared to $5.7 million in the prior year.

Looking ahead, as Alan mentioned we have lodged concept development applications with the City of Sydney Council for two major property developments in Sydney's CBD including:

• 458-472George Street, Sydney, which will include retail with 340m2, an extension of the QT hotel incorporating 72 additional rooms and new conference and events facilities, and a commercial office tower; and
• 525 George Street, Sydney, which currently forms part of this George Street cinema complex. The concept development application includes a podium with 830m2 prime ground floor retail space, cinema screens in the podium level, and a tower including a new Atura hotel with up to 450 rooms, a conference centre, and 72 residential apartments.

Funding options for these major developments are under review and at this stage we anticipate we will seek an appropriate partner for the commercial office tower at 458-472 George Street whilst retaining full ownership of the retail and hotel components of the development. Subject to market conditions, it is expected that these developments may take between four to six years to complete.

Looking ahead in our cinema business, over the next three years we will upgrade our best locations incorporating the new and innovative cinema concepts developed as part of our 'Future of Cinema' strategy. These concepts include:

• new premium cinema experiences founded on the principle of 'Your Cinema, Your Way' enabling customers to choose their experience and price point, including the new three-seat format of daybeds, reclining seats and premium fixed back seating; Boutique Cinemas, the next level of Gold Class with premium designer recliners and configurable spaces for events; 4DX, the first and leading 4D movie technology in the world; and the launch of our new Event Junior, designed by kids for kids;
• enhanced food and beverage marketplaces designed to increase customer spend via optimised flows, proprietary premium brands and driving an increase in impulse purchases; and
• new eCommerce functionality and technology to capture customer data, grow eCommerce revenue and streamline operations.

In Australia, screen upgrades to commence at priority locations in this financial year will include George Street, Macquarie, Chermside, Robina, Tuggerah, Shellharbour and Toowoomba Central.

In New Zealand, we will open a new cinema complex in Newmarket, Auckland, in early 2020, incorporating the Group's new Boutique premium cinema concept and multi-seating Vmax and traditional auditoria. Upgrades are underway at Event Cinemas Queen Street and Westgate in Auckland, and in Albany and Manukau, with all these due to be completed during the 2020 financial year.