MCK 2023 ASM Presentation Slides and Remarks to Meeting

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2023 Annual
2023 Annual 2023 Annual
2023 Annual
Shareholders’
Shareholders’ Shareholders’
Shareholders’
Meeting
MeetingMeeting
Meeting
23 May 2023
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Our
Our Our
Our
Board
BoardBoard
Board
Colin Sim
Independent Chair
Appointed July 2017
Re-elected 2021
Graham McKenzie
Independent Director
Appointed Aug 2006
Re-elected 2022
Leslie Preston
Independent Director
Appointed Mar 2021
Elected 2021
Kevin Hangchi
Non-Executive Director
Appointed Jan 2016
Re-elected 2021
Eik Sheng Kwek
Non-Executive Director
Appointed Jan 2020
Elected 2020
Stuart Harrison
Managing Director
Appointed June 2022

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Agenda
Agenda Agenda
Agenda
•Chair and Managing
Director’s Addresses
•Resolutions
•Shareholder Discussion
•Other Business
•Close of the Meeting
Our business
Our businessOur business
Our business
NZ Hotel brands:
•Leng’s Collection – M Social
•Millennium Collection
•Copthorne Collection – incl Kingsgate
CDL Investments New Zealand:
•Land developments
•Projects in progress across New Zealand
Australia:
•Zenith Residences – Exit Strategy
•Conditional JV - Sofitel Brisbane Central
•Own and operate hotels across New
Zealand; building beachhead in Australia
•Experienced executive team with new
leadership
•~880 team members across New Zealand
and Australia
•Own 66% shareholding in CDL
Investments NZ – residential and
commercial land development
•NZX-listed. Board with independent
Chairman, as well as representation from
majority shareholder
•MCK is 71% owned by CDL Hotels
Holdings, a 100% subsidiary of Hong
Leong Group

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Our Hotel Networks
Our Hotel NetworksOur Hotel Networks
Our Hotel Networks
18hotels in NZ
Opportunity to fill in the network
2,250 rooms per night owned and
managed
1hotel in Australia
*
Beachhead being established.
Significant opportunity to build
footprint
*Conditional acquisition of Brisbane Central Hotel
CDL Investments NZ (NZX: CDI)
CDL Investments NZ (NZX: CDI)CDL Investments NZ (NZX: CDI)
CDL Investments NZ (NZX: CDI)
66% shareholding
66% shareholding66% shareholding
66% shareholding
Residential & commercial land
development
4x Commercial properties -
2x Warehouses (NLA 16,402 m2 WALE 6.68 years )
2x Retail (NLA 3,411 m2 WALE 5.52 years)
Projects across New Zealand
Provides MCK with a diversified property
portfolio and revenue stream

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Lookback: Three year impact of Covid
Lookback: Three year impact of CovidLookback: Three year impact of Covid
Lookback: Three year impact of Covid-
--
-19
1919
19
0
50
100
150
200
250
FY19FY20FY21FY22
$m
Revenue
Hotel RevenueRental Income
Property Sales
NZ Hotel Operations
•Significantly impacted 2020 to 2022
•Pivoted to MIQ and reduced services
to match demand
•Early stages of recovery from late
2022 as borders re-opened
•Inflationary and labour market
challenges from 2022
CDL Investments
•Benefitted from rising property values
•Macro-trends - Robust demand for
land underpinned by undersupply
Prior to Covid, MCK’s hotel operations
were providing over 50% of revenue
0
20
40
60
80
FY19FY20FY21FY22
$m
Profit After Tax
Source: Stats NZ
Median Housing Price
NZ Total
Market Peak
Nov 2021
$920,000
Apr 2023
$780,000
-15.6%
-
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
Million
Annual International Visitor Arrivals
YE March 2023
FY22 Snapshot
FY22 SnapshotFY22 Snapshot
FY22 Snapshot
Financial year ended 31 December 2022
Financial year ended 31 December 2022Financial year ended 31 December 2022
Financial year ended 31 December 2022
FINANCIAL PERFORMANCE -ActualActual
CONSOLIDATEDFY2022FY2021ChangeChange
$000's$000's$%
Hotel revenue65,24555,2479,99818.1%
Rental income3,0021,9421,06054.6%
Property sales75,951107,583(31,632)(29.4%)
REVENUE144,198164,772(20,574)(12.5%)
One-Off land Sale-15,870
Operating Profit43,24264,406(21,164)(32.9%)
Net Finance income1,5391871,352723.0%
Profit before income Tax44,78164,593(19,812)(30.7%)
Profit for the year21,71340,049(18,336)(45.8%)
Earnings per share (cents)13.7225.31
NZ Hotel Operations
•Reflect continuing Covid
restrictions in 2022, and early
recovery as borders started to
re-open
•Loss Before Tax of $4.0m
CDL Investments
•Long term macro trends - strong
property market and demand for
residential sections
•Rapid cooldown in late 2022 and
into 2023 due to increasing
interest rates
•Positive FY22 contribution - PBT
$31.2m
Australia
•Apartment sales muted with
ongoing rental income

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Looking Forward: Revive and Thrive Strategy
Looking Forward: Revive and Thrive StrategyLooking Forward: Revive and Thrive Strategy
Looking Forward: Revive and Thrive Strategy
Be the preferred hotel choice for travellers in our region, grow our footprint and
Be the preferred hotel choice for travellers in our region, grow our footprint and Be the preferred hotel choice for travellers in our region, grow our footprint and
Be the preferred hotel choice for travellers in our region, grow our footprint and
deliver value for our guests, our team and our shareholders
deliver value for our guests, our team and our shareholdersdeliver value for our guests, our team and our shareholders
deliver value for our guests, our team and our shareholders
People
Deliver memorable
experiences for our guests
Build careers that our
people love to talk about
Product
Protect and expand our
hotel presence in New
Zealand & Australia
Invest in a portfolio of real
estate or development
projects - and manage our
investment in CDL
Investments
Profit
Drive improving revenue
and profit
Leverage our strong balance
sheet to achieve growth
Deliver long term value to
our shareholders
Short term: Reviving our business for tourism market momentum post-Covid
Medium to long term: Growth of our hotel network in New Zealand and Australia
Building a beachhead in Australia
Building a beachhead in AustraliaBuilding a beachhead in Australia
Building a beachhead in Australia
Sofitel Brisbane Central
Sofitel Brisbane CentralSofitel Brisbane Central
Sofitel Brisbane Central
•Unique opportunity, landmark property
•Acquired via 50/50 ownership with M&C
(UK)
•Competitive acquisition process with a
number of bidders
•Independent due diligence by MCK NZ
on both property and transaction
structure
•Funded via cash reserves (mostly held in
AUD post Sydney apartment sales)

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Strong platform to build shareholder value
Strong platform to build shareholder valueStrong platform to build shareholder value
Strong platform to build shareholder value
•Positive macro trends supporting tourism sector recovery
•Well positioned to revive and grow our hotel network
•Strong balance sheet to support strategic investments
•Optimistic outlook for FY23, with some caution around economic
trends including skills shortages and cost inflation
•Expect continued solid performance from CDI and Australia
•Focus on creating shareholder value
Managing
Managing Managing
Managing
Director’s
Director’s Director’s
Director’s
Address
AddressAddress
Address
Stuart Harrison
Stuart HarrisonStuart Harrison
Stuart Harrison

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Looking Forward
Looking ForwardLooking Forward
Looking Forward
Revive and Thrive
Revive and Thrive Revive and Thrive
Revive and Thrive
Strategy
StrategyStrategy
Strategy
FY23 to FY26
FY23 to FY26FY23 to FY26
FY23 to FY26
People
PeoplePeople
People
Deliver memorable experiences for our guests
•Prioritise our guests’ needs
•Provide exceptional service that exceeds
expectations
•Make it easy
•Ensure guests are comfortable and relaxed
during their stay
Build careers that our people love to talk about
•Recruit, retain and develop the best talent
•Create career pathways that unlock potential
•Empower and engage our team
•Ensure a rewarding and safe workplace

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Product
ProductProduct
Product
Protect and expand our hotel networks in New
Zealand & Australia
•Buy and/or partner to identify and secure new
hotel opportunities in key markets
•Enhance our brand value proposition
•Invest in our properties to improve the physical
infrastructure and enhance the guest experience
•Emphasise sustainability and responsible tourism
practices in all aspects of our business
Support and manage our investment in CDL
Investments
Key hotel property projects underway
Key hotel property projects underwayKey hotel property projects underway
Key hotel property projects underway
Refurbishment Millennium
Hotel Queenstown
Upcoming refurbishment
Copthorne Hotel & Resort
Bay of Islands
Soft refurbishment M Social
Auckland

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Building a beachhead in Australia
Building a beachhead in AustraliaBuilding a beachhead in Australia
Building a beachhead in Australia
Australian tourism industry supported by a large domestic
Australian tourism industry supported by a large domestic Australian tourism industry supported by a large domestic
Australian tourism industry supported by a large domestic
market (~70%)
market (~70%)market (~70%)
market (~70%)
Resilient economy that
enjoyed 28 consecutive
years of GDP growth
prior to the pandemic
Population growth of
33% over the past two
decades - crossed the
26 million mark in 2022
(2.5m in Brisbane
metro area)
Brisbane
Brisbane Brisbane
Brisbane -
--
- a world class tourism,
a world class tourism, a world class tourism,
a world class tourism,
entertainment and events destination
entertainment and events destinationentertainment and events destination
entertainment and events destination
Pipeline of over A$20
bn in infrastructure
projects will enhance
Brisbane’s position as
a world class tourism
entertainment and
events destination
Hotel pipeline under
construction ~1,049
rooms focused on
A$3.6 bn Queens
Wharf
Hotel Submarket of
Brisbane Central
•Occupancy ~ 66%
•ADR A$230

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Brisbane Central: 5
Brisbane Central: 5Brisbane Central: 5
Brisbane Central: 5-
--
-Star Hotel
Star HotelStar Hotel
Star Hotel
Room Count
416 comprising 379 rooms and
37 suites
Facilities
2 restaurants, bistro,
patisserie, bar and club lounge
Grand Ballroom (798sqm) and
8 meeting rooms
220 undercover parking lots
Outdoor swimming pool
(heated) and 2 gyms (guest &
high performance)
3x retail tenants
Rooftop helicopter pad
Strategically located in
Brisbane CBD with direct
access to Central Railway
Station
Brisbane Central Hotel
Brisbane Central Hotel Brisbane Central Hotel
Brisbane Central Hotel
Proposed acquisition
Proposed acquisitionProposed acquisition
Proposed acquisition
Location249 Turbot Street, Brisbane City, QLD 4000, Australia
Tenure99-year leasehold (~97 years remaining)
Acquisition PriceA$177.7m plus acquisition costs
Interest50% ownership alongside Millennium & Copthorne Hotels Ltd (UK)
SettlementSecond half of 2023 (subject to FIRB and landlord consents)
A 5-star hotel opened in 1984, prominently located in the heart of Brisbane CBD, overlooking ANZAC square and
Post Office Square, with direct access to Central Railway Station, a major transport hub.

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CDL Investments
CDL InvestmentsCDL Investments
CDL Investments
STRATEGIC FOCUS
•Maximise sales in areas with
strong demand
•Develop section inventory &
pipeline of developments
•Continuing to look for acquisition
opportunities
•Additional diversification using
CDI’s existing land portfolio
•Increased focus on commercial
areas to add value
Kewa Rd Subdivision
Tram Valley Rd Subdivision
Prestons Park, Christchurch
Profit
ProfitProfit
Profit
Drive improving revenue and profit
•Provide exceptional hospitality services and
experience
•Increase the number of stays at a MCK hotel, in
each guest’s trip
Leverage our strong balance sheet to achieve
growth
•Utilise our strong balance sheet to grow our
business and invest in our strategy
Deliver long term value to our shareholders
•Goal to deliver

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1H22 (Jan to June):
•Impact of Covid –Omicron lockdowns in Feb &
Mar
•Revenue underpinned by MIQ operations at
M Social Auckland until June 2022
1H22 (June to Dec):
•Borders re-opened June 2022
•Resurgence of leisure and conference business
– Bay of Islands, Rotorua, Queenstown, Te Anau
•Re-opening of M Social Auckland
1Q23 (Jan to Mar 23):
•Moving to ‘business as usual’ environment,
albeit impacted by staffing shortages
•Still below 2019 base line levels
1Q23 Update
1Q23 Update1Q23 Update
1Q23 Update
Positive momentum, moving closer to 2019 baseline
Positive momentum, moving closer to 2019 baselinePositive momentum, moving closer to 2019 baseline
Positive momentum, moving closer to 2019 baseline
Jan-22 Feb-22 Mar-22 Apr-22 May-22 Jun-22 Jul-22 Aug-22 Sep-22 Oct-22 Nov-22 Dec-22 Jan-23 Feb-23 Mar-23
Rooms Revenue
Jan 2022 to March 2023
Auckland HotelsCorporate HotelsLeisure Hotels
Revive and Thrive FY23 to FY26
Revive and Thrive FY23 to FY26Revive and Thrive FY23 to FY26
Revive and Thrive FY23 to FY26
Key initiatives
Key initiativesKey initiatives
Key initiatives
FY23
Revival
•Bring all rooms back online
•Build occupancy back to
former levels
•Attract and retain full
complement of staff
•Marketing and sales activity to
drive guest visits
•Continued investment in
refurbishment and upgrades
FY23 - 24
Early Stage Growth
•Identify opportunities to fill
the gaps in the New Zealand
hotel network
•Build beachhead in Australia
•Formalise strategy for
sustainable operations
•Continued investment in
refurbishment and upgrades
FY25 - 26
Accelerate Growth
•Optimise hotel network and
under-utilised land and
buildings
•Expand footprint in Australia
•Continued investment in
refurbishment and upgrades

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2023 Key Trends
2023 Key Trends2023 Key Trends
2023 Key Trends
•Positive recovery in hotel occupancy – approaching pre-pandemic levels. Room rates have
surged
•International passenger numbers increasing; return of Chinese visitors will push up demand;
new carriers, routes and capacity coming on stream from US and India
•New Zealand continues to rate highly as an international and domestic travel destination
Economic headwinds:
•Guests - High inflation, mortgage rates and cost of living impacting on travel plans
•Operational – increase in food and operating costs
•Staff - tight labour market and skills shortage, expected to ease as more foreign workers enter
the country
Strongly positioned to Revive and Thrive
Strongly positioned to Revive and ThriveStrongly positioned to Revive and Thrive
Strongly positioned to Revive and Thrive
•Favourable economic and industry trends
•MCK strongly positioned to execute on strategy and drive growth
•Focus on delivering shareholder value
Four year pathway:
•2023 and 24 – Reviving the network, beachhead in Australia
•2024 to 2026 – Focus moving to growth – filling in the gaps in the NZ
network, building a footprint in Australia

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Business of the Meeting
Business of the MeetingBusiness of the Meeting
Business of the MeetingBusiness of the Meeting
Business of the MeetingBusiness of the Meeting
Business of the Meeting
Resolutions
ResolutionsResolutions
Resolutions
Resolution 1: Re-election of Eik Sheng Kwek
That Eik Sheng Kwek, who retires by rotation and is eligible for re-election, be re-
elected as a Director of the Company.
Resolution 2: Election of Stuart Harrison
That Stuart Harrison, who was appointed as a Director by the Board during the
year, be elected as a Director of the Company.
Resolution 3: Auditor’s Remuneration
That the Directors be authorised to fix the fees and expenses of KPMG as the
company’s auditor.

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Shareholder discussion
Shareholder discussionShareholder discussion
Shareholder discussion
Other business
Other businessOther business
Other business
Close of the Meeting
Close of the MeetingClose of the Meeting
Close of the Meeting

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DISCLAIMER
DISCLAIMERDISCLAIMER
DISCLAIMER
This announcement has been prepared by Millennium & Copthorne Hotels New Zealand Limited ("M&C Hotels"). The details in this announcement provide general information only. It is
not intended as investment, legal, tax or financial advice or recommendation to any person and must not be relied on as such. You should obtain independent professional advice prior
to making any decision relating to your investment or financial needs.
All references to $ are to New Zealand dollars unless otherwise indicated. Percentages may be subject to rounding.
This announcement may contain forward-looking statements. Forward-looking statements can include words such as “expect”, “intend”, “plan”, “believe”, “continue” or similar words in
connection with discussions of future operating or financial performance or conditions. The forward-looking statements are based on management's and directors’ current expectations
and assumptions regarding the M&C Hotels business, assets and performance and other future conditions, circumstances and results. As with any projection or forecast, forward-looking
statements are inherently susceptible to uncertainty and to any changes in circumstances. M&C Hotels actual results may vary materially from those expressed or implied in the forward-
looking statements. M&C Hotels and its directors, employees and/or shareholders have no liability whatsoever to any person for any loss arising from this announcement or any
information supplied in connection with it. M&C Hotels are under no obligation to update this announcement or the information contained in it after it has been released. Past
performance is no indication of future performance.

---

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MILLENNIUM & COPTHORNE HOTELS NEW ZEALAND LIMITED
STOCK EXCHANGE ANNOUNCEMENT
2023 ANNUAL SHAREHOLDER MEETING – REMARKS BY MCK’S CHAIRMAN

MCK Today
Our business can be categorised into three areas – our New Zealand hotel network, a small presence in Australia
which we are looking to grow, and our 66% shareholding in CDL Investments NZ.

Our Hotels Business
MCK is one of New Zealand’s largest hotel owner / operators, with 18 hotels and 2,250 rooms. Our hotels
operate under three global brands – Leng’s Collection –incorporating the M Social Hotels; Millennium Collection;
and Copthorne Collection - which includes the Kingsgate branded hotels. These brands are well known and
trusted by travellers, who are more likely to choose a familiar and quality name.

In 2019, around 15% of international visitors to New Zealand, also visited Australia, providing us with the
opportunity to expand our footprint and be their hotel of choice in both countries. We are continuing to sell down
our interest in the Zenith Residences in Sydney, which, as a mixed use commercial and residential building, is
not within our core strategy.

CDL Investments NZ (NZX: CDI)
We also have a majority shareholding in CDL Investments NZ, an NZX-listed investment company focused on
residential and commercial land development. CDI has provided us with a diversified property portfolio and
revenue stream, which has proved invaluable over the last three years.

Lookback: Three year impact of Covid
As we have said many times before, the pandemic has had a significant impact on the hotel industry, with the
closure of borders to international visitors resulting in a dramatic decrease in demand for hotel rooms and lost
revenue. Average occupancy rates in New Zealand hotels dropped to 47% in 2020, compared to 80% in 2019.

We learnt that we needed to react and adapt quickly and, while many other hospitality businesses closed up
shop, Millennium & Copthorne survived and is now well positioned for the sector recovery.

While the sector overall still faces challenges including rising costs and workforce shortages, we are optimistic
about the future as we look to revive and grow our business. Hotel occupancy is recovering quickly and reached
80% in March 2023, for the first time in three years.

Meanwhile, CDI performed strongly, benefitting from rising property values over the past three years and long
term demand for housing, underpinned by undersupply. CDI also completed the development of commercial
warehouses located in Auckland which are now fully tenanted.

FY22 performance
As we said in our annual report, 2022 was a ‘tough year’. That was not unexpected.
The Covid lockdowns in the North Island which started the year are now a distant memory but they impacted on
our high season and hindered our earning ability for 2022.

Ongoing staff shortages throughout the year created additional challenges and while this was a problem which
affected the whole industry, finding ways to address that satisfactorily was difficult.

If that was not already enough, cost inflation pressures added to what were already slim margins for our hotel
operations. Unsurprisingly, our year end result for our hotels was a loss of $4 million which was disappointing
given the amount of work it took to get to this point.

Our results were once again boosted by the returns from our majority-owned subsidiary CDL Investments NZ
which had a good 2022 and posted a profit which matched its 2021 results. In addition, our Australian operations
contributed apartment sales and ongoing rental income from the remaining owned apartments.
For MCK shareholders, the reviving of our hotel operations along with CDL Investments’ and our Australian
results over this year will continue to be key for our results as we make the journey to recovery.

Looking Forward: Revive and Thrive
This has been an opportune time to revisit and affirm our strategy.

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Our goals are to be the preferred hotel choice for travellers in our region, to grow our footprint and to deliver
value for our guests, our team and our shareholders.

We have formulated our strategy around three core pillars – People, Product and Profit. Stuart will talk more on
each of these shortly.

In the short term, our focus is on reviving our business for the positive momentum expected in the tourism market
post-Covid.

Over the medium to longer term, our focus will increasingly move towards growth of our hotel network in New
Zealand and Australia.

Building a beachhead in Australia
Australia has always been of interest and we have evaluated a number of opportunities over the years as we
sought the right property from which to create a beachhead for our hotel group into this country. Previous
opportunities were either priced too high or did not meet our criteria of having a landmark property in a gateway
city.

We were delighted to recently announce the conditional acquisition of Sofitel Brisbane Central hotel, for
AUD$177.7 million. This is being done through a 50:50 joint venture with our parent company, Millennium &
Copthorne Hotels. Their support was an important factor in our ability to acquire this highly desirable landmark
property.

The conditional acquisition followed a competitive process with a number of bidders.

Both MCK and M&C Hotels had separate deal teams and the Board formed a Due Diligence Committee
comprising independent directors, Graham McKenzie and Leslie Preston.

From the outset, truly independent consideration of the transaction was paramount – with independent legal and
tax experts engaged - and the Committee was very careful to ensure that this was done at all stages of the due
diligence process. Graham and Leslie put in enormous hours as did the senior management team to complete
the due diligence work and to recommend this transaction to the Board after very careful consideration.

We sought a waiver from the NZX because the transaction was initially likely to be entered into in late January
when it would be practically very difficult to obtain reports and convene meetings and have dialogue.

Normally when NZX considers related party transactions it involves an acquisition from one related party by
another related party. That is not the case here.

In entering into this acquisition, we are doing so alongside our parent company Millennium & Copthorne Hotels
based in the UK on a 50-50 basis and to acquire the hotel from Brookfield Asset Management.

The key requirement in considering this acquisition has been to ensure that it is in the best interests of the
company and all shareholders. The Independent Directors considered and signed off to NZX that they had
considered the acquisition without influence from the majority shareholder. We can assure you that we took this
responsibility very seriously and provided a certificate confirming this.

The proposed acquisition is priced attractively and as we have outlined will be funded from our existing cash
reserves, which are mostly held in Australian dollars from the sale of the Zenith apartments, in Sydney.
We believe that the Brisbane Central Hotel acquisition is a great opportunity for our company. It provides a
beachhead for our hotel network into Australia, will support our goal of delivering sustainable, long term
shareholder value and, strategically, is the best use of our funds in Australia. The price was attractive and the
hotel’s strong reputation in the Queensland market made it compelling.

Strong platform to build shareholder value
While there are still challenges in the sector, we have a cautious but positive outlook as we revive and grow our
business in an improving market. The Board feels optimistic that MCK and the New Zealand tourism industry as a
whole will see better days ahead.

We are positioning ourselves to maintain our competitive advantages which we had pre-pandemic and, with
Stuart at the helm, our focus is now very much on the revival and growth of the business, both in terms of
revenue and profit.
We have a strong balance sheet to support our strategic initiatives. We have trusted and internationally
recognised brands and a well positioned hotel network across New Zealand. We expect CDI and our Australian
operations to continue their solid performance, providing a valuable diversified income stream for our group.

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We are moving forward with a growth strategy, a strong leadership team and a great business foundation – and
look forward to creating value for our shareholders.

Thank you for listening. I will now hand over to MCK’s managing director, Stuart Harrison.



2023 ANNUAL SHAREHOLDER MEETING – REMARKS BY MCK’S MANAGING DIRECTOR

E ngā mana, E ngā waka, E ngā reo,
Ko Stuart Harrison ahau E rau Rangitira ma
Tēnā koutou Tēnā koutou Tēnā koutou katoa

Thank you Colin and thank you to all those attending today. [I have sat at the front table for 39 Annual Meetings
and] I’m pleased to be speaking to you for the first time as MCK’s managing director.

I am now almost 12 months into the role and thought it might be useful to provide you some insights about what
I’ve seen over that time and also expand on some of what I said in our most recent annual report.

Firstly, the positives are many and wide ranging. It has been great to work with people I have worked with before
both within our management and operational teams and some of the directors on the Board.

We have teams with a deep knowledge of our operations and business.

Tapping into this knowledge base has been absolutely critical in being able to articulate the strategic vision I
would like to share with you shortly.

Shareholders can take comfort in knowing that we all share an absolute determination to do the best we can to
maximise our returns.

On the other hand, the challenges are many given where the industry is at and I have looked to make new
appointments in areas which are critical to our business.

I am pleased to welcome our new Director of Information Technology Nathan Kruger who brings to MCK
extensive industry experience in IT systems and networks.

Our IT systems are critical to our service experience and marketing and Nathan has commenced a wide ranging
review of our technology and how we can use our existing tools more effectively, as well as looking at what other
tech we can bring on board to make our operations more efficient.


Looking Forward: Revive and Thrive
The work that all our senior leadership team are doing feeds into the vision and focus we have for MCK. Put
simply, our very clear focus is on People, Product and Profit. I would like to take you through each of those
topics and outline what we are doing now and some of our future projects as well.

People
Firstly People. This encompasses two key groups – firstly our guests and secondly, our team.

We know how important the people element is in hospitality and the expectations our guests have when they
arrive and stay at our hotels. Those expectations have only increased as we return to normal operations without
restrictions.

Service excellence has been key to our success and even during the pandemic with social distancing
requirements, we did what we could to provide the warmest of welcomes and a memorable stay.

We know that service excellence comes from within and we need to deliver the same service excellence element
for our team as we do to our guests.

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Colin touched on the difficulties we have had in relation to the recruitment and retaining of people in this difficult
environment and I echo that concern.

Staff challenges are still our biggest headache and ensuring that we have sufficient people to handle the
increased level of business we are seeing now and into the future will remain the top focus for our Hotel General
Managers and HR teams this year.

I am pleased to welcome our new Director of Human Resources Lisa Maclean who has hit the ground running
and is working on re-energising our HR teams and setting new priorities and plans for recruitment and retention.

Lisa is looking to develop training and awareness to benefit service standards for both our external and internal
customers. That will also be reflected in how we recruit, train and develop our teams going forward.

One important aspect of our team focus has been the shift of our corporate / support office from the Queen Street
address which we occupied for about thirty years to a new, modern open plan workspace in Custom Street East.
Our new workspace has been designed to encourage collaboration and we are already seeing the benefits in
more productive and energized teams. [A new coffee machine has also helped !]

Product
We have two core products in our business – firstly, our hotel network, and secondly, our investment in CDI.
We are looking to exit our apartment investment in Sydney and aim to accelerate apartment sales, which will
release cash resources for the purchase of the Brisbane Central Hotel. Our target is to complete the sale of the
majority of our units [within the next twelve to twenty four months] depending on market circumstances.

Covid had an interesting effect on our hotel properties, both good and bad. On the upside, the reduced
occupancy demand provided an opportunity to catch up on maintenance and put together plans for
refurbishments which were frankly overdue and needed to be done to ensure we maintained our guest
experience expectations.

On the other hand, the hotels which handled the managed isolation work got more of a workout across two years
than they might otherwise have seen over four or five normal years. This has meant accelerating refurbishment
and maintenance plans to ensure that they remain competitive and functional.

Key hotel property projects
Our Property Management teams have recently been augmented and tasked to look at a number of key projects,
some of which I would like to speak about now.

The refurbishment of Millennium Hotel Queenstown is progressing well and largely on schedule. As you will have
seen in the 2022 Annual Report, the public areas and some of the guestrooms have been extensively redone
and now reflect a contemporary look and feel. We have completed level 4, and are on track to complete levels 1
and 2 shortly with the aim that all floors and rooms are completed for the 2024 high season.

Soft refurbishment works were also completed during the last year at M Social Auckland. You might not have
noticed some of the subtle, but key changes to some of our public area furnishings and design changes within
our Beast & Butterflies restaurant area. [– and don’t forget to look out for HARI – the ButlerBot].
You will also have seen in the annual report our concept rooms for an upcoming refurbishment at our property in
the Bay of Islands. The concept designs reflect the beauty of the local environment and will ensure that
Copthorne Hotel & Resort Bay of Islands remains as the preferred choice for accommodation around the Bay of
Islands for both tourists and conference and meeting guests. We are seeking building consents for this and
expect to commence shortly with refurbished rooms becoming available before the end of this year.

We are also looking at work at some of our other hotels. This regular updating and refurbishments of our hotels
is vital to our future success and strategy.

Building a beachhead in Australia
The conditional Brisbane Central Hotel acquisition is a great example of our growth strategy in action and
provides us with a footprint from which to grow our presence in Australia.
The Australian population has grown by 33% over the past two decades and has crossed over the 26 million
mark. The importance of that population size is that ~70% of the Australian tourism industry spend is from that
large domestic market.


Brisbane – world class tourism
Within the Brisbane CBD there is over A$20.0 billion of infrastructure projects taking place which will enhance
Brisbane’s position as a world class tourism and events destination. This will include hosting major sporting
events such as the 2023 FIFA Women’s World Cup, the 2027 Men’s and 2029 Women’s Rugby World Cup and
the 2032 Summer Olympics and Paralympic Games. Business events include the likes of the 2025 Baptist World

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Congress –with ~6,000 delegates and the 2025 International Population Conference –with ~2,000 delegates
expected.


Brisbane Central 5-star Hotel
So let me walk you through some of the key details of this proposed acquisition.

This is a 5-star hotel consisting of 416 rooms comprising of 379 room and 37 suites.

Facilities include restaurants, bar and club lounge, a 798 sqm Grand Ballroom, outdoor swimming pool and 2
gyms – note that one of the gyms is a high performance gym with the hotel having hosted national and
international rugby, cricket and football teams.

It is strategically located in the Brisbane CBD overlooking Anzac Square and with direct access to the Central
Railway Station – providing access to/from the airport and local business precincts, the Convention Centre and
sports grounds.


Brisbane Central Hotel acquisition
The hotel is on a 99 year lease with 97 years remaining and the pending settlement is due to our need to obtain
landlord consents and FIRB approval – which we expect will allow for settlement to be completed in the second
half of 2023. At settlement date all of the existing hotel employees will transfer to being employees of the joint
venture and will continue to be managed as a Sofitel Hotel.

After assessing a number of opportunities over the years, we believe this is a great opportunity to establish a
hotel presence in Australia – a key part of our growth strategy.


CDL Investments NZ
As Colin mentioned, our 2022 results were boosted by the profit contribution from CDL Investments with CDI’s
2022 result underpinned by the sale of a commercial landholding in Wiri, South Auckland.

As said in their presentations earlier today, they were pleased with the results achieved, especially given the
rapidly changing market circumstances in the later part of the year.

High housing costs, mortgage rates and high cost of living is challenging for families and businesses alike and
increased housing supply is providing greater choice.

CDI has completed developments at Kewa Road and Tram Valley Road subdivisions within the Auckland region,
as well as two further stages at Prestons Park in Christchurch.

The company continues to lay the groundwork for its future with acquisitions of land within the Hawkes Bay,
Waikato and Auckland. Master planning is underway in Hawkes Bay and Hamilton so as to as ensure the future
demand for residential sections can be met.

With the success of commercial spaces and warehouses in its residential developments, CDI has increased its
focus on this part of its portfolio and completed the development of commercial premises in South Auckland and
Christchurch with four of these retained and now fully tenanted. This assists in providing diversification and is a
logical extension for the company.

While the property market has continued to soften, the long term outlook is positive, with robust demand and
undersupply. CDI is well positioned with long term horizons and a diversified property portfolio.


Profit
Our final strategic priority is Profit. While the last three years have been extremely challenging, our business has
continued to deliver a profit at a time when many others have closed their doors.

Our goals now are to drive improvement in our revenue and profit, invest in growth and deliver long term value to
our shareholders.

We are also in the process of looking to develop our path to carbon reduction as part of the requirements to
report on climate impact within our financial statements. We’ll have more to say about that in due course but the
Audit Committee and Senior Management teams have participated in workshops to look at how to address some
of these issues and to develop our strategies in what is a very important area for us to address.

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Trading Update Q1 FY23
With the New Zealand borders starting to re-open in June last year, there was a refreshing resurgence of
business into the leisure locations of Bay of Islands, Rotorua, Queenstown and Te Anau.

To put it into context, this chart includes the Rooms Revenue for the 2022 year, as well as trading performance
for the first quarter of 2023. This shows the impact on our business and the positive momentum we are now
seeing.

Pleasingly, our rooms revenue in March 2023 was close to the average monthly revenue we were generating in
2019, pre-Covid.

We are optimistic that our New Zealand hotel operations will be profitable in their own right for 2023. Events
such as the FIFA Women’s World Cup in July and August this year will see a timely influx of overseas visitors
across the country and the addition of new air services to key destinations in North America and Asia should help
boost occupancies in locations where we have hotels.

However, for this financial year, we draw your attention to CDI’s comments at their meeting earlier today where
they signalled that 2023 will be particularly challenging as higher interest rates and the cost of living crisis affects
us all. Put simply, based on the current market circumstances, maintaining a level of profit in 2023 that is
consistent with the last two years will be difficult.

The effects of the rapid downward change in the market since late last year is reflected in the low number of
sales they have been able to achieve over the last few months. We still expect that CDL Investments will make a
positive contribution and our Zenith Apartments rental income and sales will further contributor to our profit, as
the hotels journey to sustainable profitability continues.


Revive and Thrive FY23 to FY26
Our priority over the next four years is simple – to profitably grow our business.

We have an ambitious work plan focused on maximising opportunities for growth and will be looking at how we
can improve our own operations and also identifying where and how we can grow, both in New Zealand and
Australia.

We intend to leverage and use the strength of our balance sheet, which we have built up over many years, to
support that growth and deliver the best possible results for all of you.

The Brisbane Central Hotel acquisition is the first step in our Revive and Thrive strategy that will see us pursue
opportunities in Australia, while building out our New Zealand network. Those opportunities may be in hotel
management, franchising, joint ventures or owning outright and we intend to keep an open mind as to how best
to grow and strengthen our network and operations.

In an environment which is changing so rapidly and looking to move on from the pandemic, there will be unique
opportunities which will not come again for a long time. We are well positioned to take advantage of those.


2023 Outlook
With the relaxing of pandemic restrictions and the reopening of the international borders we have seen a steady,
but cautious response with room rates surging but occupancies still lagging from pre-pandemic levels.

Staff shortages have been a key limiting factor on occupancy, rather than the physical capacity of the property.
We expect the staffing constraints to continue to ease and to resolve itself over the course of this year as we
traverse through the winter months and brace for reviving with the summer influx.

New Zealand continues to rate highly as an international and domestic travel destination.

International visitor arrivals are increasing with added flight capacity now coming from new carriers and new
routes out of the US, indications that India has placed new plane orders to meet their outbound demand, and
expectations of a ramp up in demand as Chinese visitors return.
These increased room demands are tempered slightly by increasing costs – with indicators such as Food prices
increasing 12% annually and pressure on additional key costs of energy, rates and insurance.

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Well positioned to Revive and Thrive
It is an exciting time to be in the industries we are in. There is a lot of positive change happening and our team is
ready and geared up for the challenges ahead.

We are strongly positioned to execute on our Revive and Thrive strategy and to drive growth.

Thank you for listening today. I hope that this gives you some insights in where we are looking to take the
business and makes you as excited as I am about the prospects for our future.