Tabcorp Holdings Limited · ASX:TAH
Tabcorp — Investor Day (October 2011)
97 slides from Tabcorp's investor day presentation, Oct 12, 2011
Slide 1: Tabcorp Holdings Limited Investor Day
For personal use only Tabcorp Holdings Limited ACN 66 063 780 709 Investor Day 12 October 2011
Slide 2: Disclaimer
Disclaimer > This Presentation contains summary information about the current activities of Tabcorp Holdings Limited and its subsidiaries For personal use only (Tabcorp Group). It should be read in conjunction with Tabcorp Group’s other periodic and continuous disclosure announcements lodged with th
Slide 3: Tabcorp investor day: Agenda
Tabcorp investor day: Agenda For personal use only 1 Overview of Tabcorp David Attenborough 22 Wagering Doug Freeman, Craig Nugent and Adam Rytenskild 3 Media & International Brendan Parnell 4 Keno Mohan Jesudason 5 Gaming Mohan Jesudason 6 Capital structure Damien Johnston 7 Key messages David Atte
Slide 4: Market leading businesses
Market leading businesses For personal use only Media & Wagering Gaming Keno International Profile • 43.3% share of turnover • 2.35m homes have • 1.2m EGM customers • 1.3m customers (estimated) access to Sky Racing • 53.9% share of revenue • New 10 year Victorian Keno • 1.2m regular customers • Expo
Slide 5: Investment highlights
Investment highlights For personal use only Tabcorp has an attractive investment case – defensive earnings, strong cashflow and growth from new investments > Quality portfolio of businesses with market leading positions Geographic diversification Operational diversification Long dated licences
Slide 6: Financial performance
Financial performance For personal use only Tabcorp delivered earnings growth across all four businesses in FY11 $m FY11 FY10 > Each business delivered growth in Revenues 2,942 2.9% 2,860 1.7% revenues and earnings Variable 1,080 4.4% 1,035 1.6% > Wagering growth underpinned by 31.7% contribution in
Slide 7: 1Q12 trading update
1Q12 trading update For personal use only Positive revenue trends continued into the first quarter with all businesses growing > Wagering Revenue ($m) 1Q12 1Q11 Change Allowing for Soccer World Cup in 1Q11, growth was 4% Wagering 394.1 386.3 2.0% Strong growth in fixed odds Media & International
Slide 8: Executing on our growth opportunities
Executing on our growth opportunities For personal use only Tabcorp has completed a year of significant transformation and is executing a number of valuable growth opportunities > Fixed Odds betting on racing in retail NSW (launched January 2011) > Trackside product in NSW (launched January 2011) >
Slide 9: Key strategies
Key strategies Strategies to continue leadership in retail and online gaming and wagering are in place For personal use only > Expand footprint with new formats e.g. kiosks Build on strength > Deliver full suite of products in retail > Lead with world-class self-service technology > Expand Trackside
Slide 10: Tabcorp investor day: Agenda
Tabcorp investor day: Agenda For personal use only 1 Overview of Tabcorp David Attenborough 2 Wagering Doug Freeman, Craig Nugent and Adam Rytenskild 3 Media & International Brendan Parnell 4 Keno Mohan Jesudason 5 Gaming Mohan Jesudason 6 Capital structure Damien Johnston 7 Key messages David Atten
Slide 11: Wagering: Agenda
Wagering: Agenda For personal use only i Business overview ii Investment highlights iii Financial performance and trading update iv New Victorian Wagering and Betting Licence v Fixed odds vi Distribution Tabcorp Investor Day, 12 October 2011 11
Slide 12: Business overview
Business overview For personal use only > Operates exclusive tote wagering in Victoria and New South Wales > Operates fixed odds betting on sports and racing under the TAB Sportsbet and Luxbet brands > Conducts betting at 267 race courses, 2,627 TAB retail outlets and via internet and telephone > 1.
Slide 13: Australian wagering market
Australian wagering market For personal use only National FY10 Northern Territory TAB turnover1 $16.0b TAB $180m Market turnover2 $22.6b Market $5,380m Retail outlets 4,125 % national 24% Queensland TAB $2,364m Western Australia Market $2,542m % national 11% TAB $1,677m Market $1,755m % national 8%
Slide 14: Forms of betting in Australia
Forms of betting in Australia For personal use only Betting Description Operators Comments Type Pari-mutuel Pool betting – bets are accumulated in a NSW/Vic – Tabcorp > Key funding source for racing industry (the Tote) pool with dividends paid based on a set % Qld/SA/NT – Tatts > The dividends paid
Slide 15: Participants in the Australian wagering market for racing
Participants in the Australian wagering market for racing For personal use only Tabcorp is an integral part of the Australian wagering market, accounting for approximately 38% of funding to the racing industry and approximately 66% to NSW and Victorian racing Broadcasting rights Vision Media broadca
Slide 16: Wagering: Agenda
Wagering: Agenda For personal use only i Business overview ii Investment highlights iii Financial performance and trading update iv New Victorian Wagering and Betting Licence v Fixed odds vi Distribution Tabcorp Investor Day, 12 October 2011 16
Slide 17: Investment highlights
Investment highlights For personal use only Tabcorp is the leader in an expanding wagering market and is successfully executing on a multi-channel distribution strategy across retail and online > Consistent wagering market growth Racing turnover is growing steadily Sports turnover is growing str
Slide 18: Consistent wagering market growth
Consistent wagering market growth The wagering market has demonstrated consistent growth, driven by steady growth in racing For personal use only and strong growth in sports betting Australian wagering market 24 22 Annual Turnover ($b) 20 18 16 14 CAGR FY01 - FY06 FY06 - FY11 Total 6.0% 5.4% 12 FY01
Slide 19: Product offering – a leader in fixed odds racing
Product offering – a leader in fixed odds racing For personal use only TAB Sportsbet has a competitive fixed odds racing offer TAB Sportsbet fixed odds racing turnover 1 800 700 CAGR = 24% Wagering Fixed Odds Racing Turnover share 600 FY11 FY10 Turnover ($m) 500 TAB Sportsbet 10.4% 5.4% 400 Luxbet 7
Slide 20: Product offering – TAB Sportsbet clear leader in sports betting
Product offering – TAB Sportsbet clear leader in sports betting For personal use only Sports betting is growing strongly TAB Sportsbet fixed odds sport turnover 1 1.3 CAGR = 22% 1.2 Wagering Sports Turnover share 1.1 Turnover ($b) FY11 FY10 1.0 Decrease due TAB Sportsbet 37.4% 36.8% to Soccer World
Slide 21: Product offering – Trackside turnover continues to grow
Product offering – Trackside turnover continues to grow Trackside is growing consistently in Victoria and is on track to meet our targets in NSW For personal use only Victoria 1 NSW 2 5.0 235 225 CAGR = 14% Business case 4.0 target in FY13 Weekly Turnover ($m) 215 Turnover ($m) 3.0 205 195 2.0 185 1
Slide 22: Wagering channels – strong online wagering turnover growth
Wagering channels – strong online wagering turnover growth Wagering is shifting online and Tabcorp is capturing its share, with online growing rapidly For personal use only Tabcorp’s online turnover 1 Tabcorp’s initiatives 1,930 CAGR = 19% > Introduced market leading loyalty program 1,830 > New “wor
Slide 23: Wagering channels – retail initiatives are driving growth
Wagering channels – retail initiatives are driving growth For personal use only Tabcorp’s retail turnover is growing, driven by initiatives Tabcorp’s initiatives Retail turnover 1,2 > More self-service terminals 6.80 > Consolidated distribution CAGR = 1.3% New retail strategy 6.75 launched including
Slide 24: Wagering: Agenda
Wagering: Agenda For personal use only i Business overview ii Investment highlights iii Financial performance and trading update iv New Victorian Wagering and Betting Licence v Fixed odds vi Distribution Tabcorp Investor Day, 12 October 2011 24
Slide 25: Wagering: Financial performance
Wagering: Financial performance For personal use only $m FY11 FY10 Change > Strong growth in Fixed Odds Totalisator - Vic 481 496 (3.0%) offsetting decline in pari-mutuel Totalisator - NSW 768 809 (5.0%) revenues Fixed Odds 219 164 33.7% > Soccer World Cup revenues Trackside 40 27 47.4% (Fixed Odds)
Slide 26: 1Q12 trading update – Wagering KPIs
1Q12 trading update – Wagering KPIs Solid performance showing benefits from investments and improved regulatory conditions For personal use only $m 1Q12 1Q11 Change > 1Q11 included $7.5m Fixed Odds revenues Revenue by product from Soccer World Cup. Allowing for this, growth was 4% Totalisator Vic 14
Slide 27: Wagering: Agenda
Wagering: Agenda For personal use only i Business overview ii Investment highlights iii Financial performance and trading update iv New Victorian Wagering and Betting Licence v Fixed odds vi Distribution Tabcorp Investor Day, 12 October 2011 27
Slide 28: New Victorian Wagering and Betting Licence
New Victorian Wagering and Betting Licence For personal use only > Sole retail licence > 50/50 joint venture with Victorian Racing Industry (previously 75/25) > Minimum performance obligation: Overview FY13 $337m and FY14 $342m $1bn in aggregate for FY13 through FY15 > Discussions in respect of
Slide 29: Wagering: Agenda
Wagering: Agenda For personal use only 1i Business overview ii Investment highlights iii Financial performance and trading update iv New Victorian Wagering and Betting Licence v 2 Fixed odds vi Distribution Tabcorp Investor Day, 12 October 2011 29
Slide 30: Fixed Odds is a growing segment
Fixed Odds is a growing segment Fixed Odds is the fastest growing segment of the wagering market, and Tabcorp has For personal use only increased its share of Fixed Odds turnover significantly > Fixed Odds products now comprise 43% of wagering turnover, up from 33% in 2007 FY07 Wagering Turnover FY1
Slide 31: TAB Sportsbet: Fixed Odds overview
TAB Sportsbet: Fixed Odds overview TAB Sportsbet has doubled its revenue in the last two years and maintained attractive yields For personal use only FY11 FY10 FY09 Total Turnover $1.91b $1.38b $886m Total Revenue $221m $169m $109m > In FY12, TAB Sportsbet will offer more than 260,000 different bett
Slide 32: TAB Sportsbet: Fixed Odds key metrics
TAB Sportsbet: Fixed Odds key metrics For personal use only 71% of fixed odds revenue was generated in retail, 66% of fixed odds revenue was derived from bets <$100 and multi bets drove 63% of sports revenue Revenue by Distribution Revenue by Bet Value Channel $1-$100 66% Retail 71% $101-$1,000 29%
Slide 33: TAB Sportsbet: Fixed Odds racing growth
TAB Sportsbet: Fixed Odds racing growth Fixed Odds racing is the primary driver of growth in Fixed Odds revenue For personal use only FY12 Projected Sources of Fixed Odds > The progressive removal of regulatory Revenue Growth restrictions over the past two years has seen TAB Sportsbet Fixed Odds tur
Slide 34: TAB Sportsbet: Fixed Odds sport
TAB Sportsbet: Fixed Odds sport Fixed odds sports betting continues to grow, with catalysts from live betting and multis For personal use only > The key areas for growth in sport are Increased product Increased live betting Expansion of the multi product, where the maximum number of legs was r
Slide 35: TAB Sportsbet: Comparison of margins
TAB Sportsbet: Comparison of margins For personal use only Fixed Odds returns to Tabcorp are attractive due to lower tax rates and fees NSW Parimutuel Fixed Odds Racing Fixed Odds Sport Turnover 100 100 100 Revenue 15.7 12.0 11.5 Variable Contribution 3.9 3.4 5.7 New licence VIC Parimutuel Fixed Odd
Slide 36: Luxbet financials
Luxbet financials For personal use only In FY11, Luxbet improved its yield and achieved positive EBITDA FY11 FY10 FY09 Turnover $559m $477m $194m Revenue $20.7m $11.6m $3.8m EBITDA $40k ($6.3m) ($10.6m) > The majority of revenue is Racing Tote Odds, with the balance evenly split over Racing Fixed Od
Slide 37: Luxbet overview
Luxbet overview Tabcorp’s objective for Luxbet is to move the business to sustained profitability For personal use only > Customer experience and retention Active customers 21k in FY11 Frequent customers 14k in FY11 > Customer acquisition New depositing customers 13k in FY11 High focus on ‘n
Slide 38: Wagering: Agenda
Wagering: Agenda For personal use only i Business overview ii2 Investment highlights iii Financial performance and trading update iv New Victorian Wagering and Betting Licence v Fixed odds vi Distribution Tabcorp Investor Day, 12 October 2011 38
Slide 39: Distribution: Broadest range of channels and products
Distribution: Broadest range of channels and products For personal use only Tabcorp’s distribution capability delivers key competitive advantages Retail > 2,627 wagering venues: Vic 627, NSW 2,000 64% of wagering > 2,012 venues now have Trackside > 3,570 self service Easy Betting Terminals (EBTs) On
Slide 40: Distribution: Strong retail partnerships
Distribution: Strong retail partnerships Tabcorp is proud of its strong partnerships with retail industry groups; with the aim of For personal use only delivering sustainable benefits for licensed venues and for Tabcorp National Victoria > Australian Hotels Association (AHA) > AHA VIC National 59%
Slide 41: Distribution Strategy: Driving growth for Retail & Online
Distribution Strategy: Driving growth for Retail & Online For personal use only 1. Create an integrated shopfront, providing a seamless and consistent experience: everywhere, every time 2. Penetrate new customer markets through technology, innovative design and targeted product expansion 3. Attract,
Slide 42: Distribution: Customers responding to investment
Distribution: Customers responding to investment For personal use only > Targeted investment drove our Retail & Mobile business in 2H11 Retail site expansion: an additional (net) 60 wagering venues NSW Trackside expansion: over 1,400 sites installed to 30 September 2011 Targeted Agency upgrade
Slide 43: Retail: Investment in the network
Retail: Investment in the network Tabcorp is targeting investment in initiatives that improve customer experience For personal use only > Hotels & Clubs - a focus on self-service and enhancing the entertainment experience in a social environment > Pubs are an important channel to connect to our youn
Slide 44: Retail: Customers have responded positively to self-service
Retail: Customers have responded positively to self-service Self-service terminals have driven revenue growth and incremental margin improvement For personal use only NSW EBT share of tickets and turnover Victoria EBT share of tickets and turnover 22% 51% 20% 49% Sales Tickets Sales Tickets % of Tot
Slide 45: Live Betting
Live Betting For personal use only Live betting is a key growth area > Live betting on sport complements the entertainment experience in pubs, clubs and agencies > “In the game” in sport Live betting turnover grew 50% in FY11 Is only available in retail and phone > An entry point for sport lover
Slide 46: Sky interactive form
Sky interactive form The new interactive form is part of Tabcorp’s strategy to improve the customer experience For personal use only through innovation and reduce operating costs > Individual interactive racing displays are being trialed to enhance customer information, improve consistency and are p
Slide 47: Online: New wagering website
Online: New wagering website The new website will improve customer experience and help maintain TAB Sportbet’s For personal use only strong competitive position > To be delivered in FY12 A leading online offer, meeting our future growth requirements Substantial customer engagement through develo
Slide 48: Mobile: Innovative betting technologies
Mobile: Innovative betting technologies Applications have been developed to maximise the mobile wagering experience on For personal use only mass-market devices, which is driving revenue growth > Applications TAB Sportsbet iPhone application launched in April 2010 – first wagering app in the Apple
Slide 49: Online: Convergence
Online: Convergence Tabcorp is positioning its wagering offering for future changes in media and technology For personal use only > Internet over your TV In FY12 the TAB Sportsbet IPTV application is planned to be launched offering customers our full suite of wagering products > Mobile wallet A
Slide 50: On-course: Investment at the track
On-course: Investment at the track For personal use only > Refurbishment of on-course tote facilities > Dedicated lounges for No.1 Club members at Rosehill racecourse > Sponsorship of racing clubs & codes > Sponsorship of Tabcorp Park Melton and Tabcorp Park Menangle > VRC - Strongest membership bas
Slide 51: Distribution summary
Distribution summary For personal use only > Tabcorp has a number of key competitive advantages in the distribution of wagering services to customers The broadest range of customer channels and products Strong retail industry partnerships Our retail network • Cash • Differentiated product offe
Slide 52: Tabcorp investor day: Agenda
Tabcorp investor day: Agenda For personal use only 1 Overview of Tabcorp David Attenborough 2 Wagering Doug Freeman, Craig Nugent and Adam Rytenskild 3 Media & International Brendan Parnell 4 Keno Mohan Jesudason 5 Gaming Mohan Jesudason 6 Capital structure Damien Johnston 7 Key messages David Atten
Slide 53: Business overview
Business overview For personal use only > Sky Racing broadcasts thoroughbred, harness and greyhound racing on three channels plus digital media Pay TV subscribers in 2.35m homes 5,100 hotels, clubs and TAB outlets, across Australia Coverage of more than 82,000 races per year > Sky Sports Radio
Slide 54: Investment highlights
Investment highlights For personal use only Media and International investments underpin Wagering growth strategies > Media is a core part of the Wagering business > Distribution expands reach and audience demographics > Sky Racing’s extensions typically enhance wagering profitability > Programming
Slide 55: Media is a core part of the Wagering business
Media is a core part of the Wagering business For personal use only Sky Racing’s Synergies with Wagering > Co-ordinated vision and commentary drives wagering > Sky Racing promotes wagering by integrating wagering data and prompts into its vision > The import of international races allows 24/7 wageri
Slide 56: Sky Racing value chain: cost base delivers operational scale
Sky Racing value chain: cost base delivers operational scale For personal use only Subscription Communications 88% of costs are and Broadcast rights and technology Production and fixed or output international fees expense $40m costs $21m critical revenues employee costs $179m $35m Up Link/ Channels
Slide 57: Multi-channel distribution network expands reach
Multi-channel distribution network expands reach For personal use only Sky is expected to increase audiences and improve customer demographics RETAIL > 5,100+ venues Sky Racing viewership > 2.35m homes Pay TV > Virgin live2air > Sky is the most watched PayTV channel > Tab.active weekends 12-3pm for
Slide 58: Sky Racing's extensions typically enhance wagering profitability
Sky Racing’s extensions typically enhance wagering profitability For personal use only Retail presentation Sky Racing media centre > Dual screen displays in TABs – Sky > Single or Dual screen options Racing1 and Sky Racing2 > User elects experience, channel and audio > Synchronised single audio serv
Slide 59: Programming initiatives are likely to increase the customer pool and grow wagering
Programming initiatives are likely to increase the customer pool and grow wagering For personal use only Sky Racing Sky Racing programming strategy programming initiatives Racing Retro > Target the younger > Number 1 racing show generation (predominately – review/ panel format Generation Y) as well
Slide 60: Broadcasting rights
Broadcasting rights For personal use only Domestic Type Race Meets New Media NSW (non Metro) 468 3 QLD/NT 487 3 > Sky provides Tabcorp with direct relationships with all WA 241 3 thoroughbred, harness and Thoroughbred SA 178 3 greyhound racing ACT 31 3 TAS 66 3 > Rights to UK, NZ, South Africa and S
Slide 61: Sky Racing has effective strategies in place
Sky Racing has effective strategies in place For personal use only Broadcast rights recently secured Key pillars of premium rights > Greyhound Racing Victoria 2011 > Transparency – Alignment to Sky revenue performance > NSW harness 2011 > Presentation controls – Programme > Western Australia thoroug
Slide 62: Media & International: Financial performance
Media & International: Financial performance For personal use only $m FY11 FY10 Change > Steady growth in subscribers Revenues 179 164 9.3% Variable contribution 168 155 8.3% > Revenue growth from international export and new channels Operating expenses (108) (99) 9.1% > Growth in expenses attributa
Slide 63: Sky Racing is a leader in race broadcasting internationally
Sky Racing is a leader in race broadcasting internationally For personal use only Top International Racing Media Broadcasters1, 2011 Race Broadcaster South Country Australia Australia UK UK UK USA USA USA France Africa Races/ 65,000 10,000 3,800 2,500 11,000 (60 tracks) (53 tracks) (124 tracks) 18,0
Slide 64: Tabcorp is well positioned on the international stage
Tabcorp is well positioned on the international stage For personal use only International Objectives Share of Share of Export Import Reciprocal Country Revenue, Revenue, Rights > To be an international leader in FY11 FY11 gambling entertainment > Increase wagering opportunities New Zealand 51% 59% 3
Slide 65: Summary
Summary For personal use only Media is a core part of the Wagering business > Multi-channel distribution strategy delivering important exposure for Tabcorp and racing > Extensive racing industry relationships and effective strategies to grow the business > Well positioned for potential international
Slide 66: Tabcorp investor day: Agenda
Tabcorp investor day: Agenda For personal use only 1 Overview of Tabcorp David Attenborough 2 Wagering Doug Freeman, Craig Nugent and Adam Rytenskild 3 Media & International Brendan Parnell 4 Keno Mohan Jesudason 5 Gaming Mohan Jesudason 6 Capital structure Damien Johnston 7 Key messages David Atten
Slide 67: Business overview
Business overview Tabcorp is Australia’s leading Keno operator with Keno licences in NSW, QLD and Victoria For personal use only (commencing April 2012) > Tabcorp has recently expanded the game in NSW and Queensland and successfully operates across 2,876 venues (including Victoria) > Keno is a numbe
Slide 68: Investment highlights
Investment highlights Keno is a fast growing business that is scalable For personal use only Keno is a fun, easy to play numbers game where customers play to win every three minutes 1. Attractive 2. Strong 3. Keno terminal 4. Strategic growth licences customer base and rollout track record platform
Slide 69: Attractive licences
Attractive licences For personal use only Keno has attractive licences and the terms and structure of the new Victorian Keno licence is better than the current licence QLD NSW NEW VIC OLD VIC Long term licences 2022 2022 2022 2012 (expiry) (25 year licence) (15 year licence) (10 year licence) Flexib
Slide 70: Strong customer base and distribution network
Strong customer base and distribution network Keno has a large, loyal customer base that is accessed by its distribution network across the For personal use only Eastern seaboard Customer base > Over 1.3m customers > 96.5m tickets sold per annum 13,252 tickets per hour sold Average bet of $9.64
Slide 71: Keno terminal rollout track record
Keno terminal rollout track record Keno has successfully been rolled out and driven turnover growth of 7.3% CAGR (FY07–FY11) For personal use only Rollout is a core capability. In the last 12 months: > 600 Keno Touch (self service) units successfully deployed into NSW Clubs and Pubs > 102 new Hotels
Slide 72: Strategic growth platform
Strategic growth platform For personal use only Keno is well positioned for further growth Brand Self Service Retail Standards Product pipeline and Investment Terminals customer knowledge Updates Plus NEW KENO VENUES OVER THE NEXT 12 MONTHS Tabcorp Investor Day, 12 October 2011 72
Slide 73: Keno: Financial performance
Keno: Financial performance For personal use only Keno has grown earnings as a result of expansion in distribution and self service terminals $m FY11 FY10 Change > Reliable earnings stream in Revenues 170 157 7.9% NSW and Qld where game Variable contribution 95 89 7.1% is entrenched Operating expens
Slide 74: 1Q12 trading update
1Q12 trading update Keno continues to perform strongly as both the number of customers and the average spend For personal use only are increasing $m 1Q12 1Q11 Change Revenue > Strong growth in NSW reflecting benefits from: Keno 45.8 42.9 6.9% Further expansion in hotels KPIs Self service termina
Slide 75: New Victorian Keno licence is on track to deliver earnings
New Victorian Keno licence is on track to deliver earnings The Victorian Keno licence is expected to generate EBITDA of approximately $20m in FY15 For personal use only Key Metrics VIC QLD NSW (Target FY15) (Actual FY11) (Actual FY11) Average weekly $5,000 $7,700 $6,000 turnover per venue Venues Up
Slide 76: Keno Touch on display
Keno Touch on display For personal use only Tabcorp Investor Day, 12 October 2011 76
Slide 77: Tabcorp investor day: Agenda
Tabcorp investor day: Agenda For personal use only 1 Overview of Tabcorp David Attenborough 2 Wagering Doug Freeman, Craig Nugent and Adam Rytenskild 3 Media & International Brendan Parnell 4 Keno Mohan Jesudason 5 Gaming Mohan Jesudason 6 Capital structure Damien Johnston 7 Key messages David Atten
Slide 78: Business overview
Business overview The Victorian Gaming business is expected to generate strong cashflows until August 2012. For personal use only Following the expiry of the licence, TGS will commence operations and has already signed up over 7,500 EGMs Victorian Gaming > Owns and operates electronic gaming machine
Slide 79: Gaming: Financial performance
Gaming: Financial performance For personal use only Gaming is highly cash generative and continues to deliver earnings growth $m FY11 FY10 Change Revenues 1,077 1,037 3.9% > Market share up to 53.9% Variable contribution 317 301 5.0% > Opex savings as the business Operating expenses (37) (39) (6.3%)
Slide 80: 1Q12 trading update
1Q12 trading update For personal use only Gaming’s trend of revenue growth continued into the first quarter of FY12 $m 1Q12 1Q11 Growth Revenue Gaming 285.2 279.7 2.0% > Solid performance taking into account strong prior period Gaming KPIs and tough retail conditions Venues 261 261 0.0% EGMs (avg) 1
Slide 81: Investment highlights
Investment highlights For personal use only TGS is an attractive business which utilises Tabcorp’s core capabilities. Tabcorp is confident in relation to future earnings as most of the revenues are contracted > Competitor differentiation > Substantial contracted revenues based on a fixed fee per day
Slide 82: Competitor differentiation
Competitor differentiation Tabcorp is the leading gaming operator in Victoria, which is a key advantage for the services For personal use only TGS can offer its customers Proven ability Tabcorp v Tatts Group Vic Gaming Revenue Share > Tabaret has outperformed the Victorian market Jun 2006 to Jun 201
Slide 83: TGS key metrics
TGS key metrics For personal use only Tabcorp is confident in TGS earnings expectations as approximately 75% of sign ups are contracted for a 10 year term Sign ups > Over 7,500 EGMs currently contracted to TGS > Approx 75% of signed EGMs are contracted for a 10 year term, with no termination option
Slide 84: Substantial contracted revenues
Substantial contracted revenues TGS has signed up more than 7,500 EGMs, which are already performing strongly For personal use only Sign Up Profile – TGS EGM Contracts TGS vs Non TGS relative performance comparison 1,2 5,000 July/Aug July/Aug % change 4,500 2011 2010 4,000 3,500 Hotels $m $m 3,000 T
Slide 85: Compelling full service offering
Compelling full service offering For personal use only TGS’ value proposition is underpinning substantial sign-ups Market Leading Knowledge & Systems Provision of Machines & Upgrades > Promoting Tabaret’s leading > Currently own 14,000 Victorian performance, knowledge, systems regulator approved EGM
Slide 86: Market leading capabilities
Market leading capabilities For personal use only Tabcorp’s leading position in the Victorian gaming market gives it an advantage in understanding the requirements of EGM operators (post August 2012) Loyalty POS Integration + Membership management functionality for clubs Customer extranet providing
Slide 87: Growth opportunities
Growth opportunities For personal use only TGS has identified achievable opportunities to expand its business > Use Victorian capability to facilitate Interstate geographic expansion expansion Diversify existing > Additional value added service business opportunities > CPI indexed fee base Sustain a
Slide 88: Tabcorp investor day: Agenda
Tabcorp investor day: Agenda For personal use only 1 Overview of Tabcorp David Attenborough 2 Wagering Doug Freeman, Craig Nugent and Adam Rytenskild 3 Media & International Brendan Parnell 4 Keno Mohan Jesudason 5 Gaming Mohan Jesudason 6 Capital structure Damien Johnston 7 Key messages David Atten
Slide 89: Balance sheet
Balance sheet Tabcorp has a strong balance sheet For personal use only As at As at Change $m 30 Jun 11 30 Jun 10 on pcp Total current assets 251 381 (34.1%) Licences 430 653 (34.1%) Other intangible assets 1,806 3,627 (50.2%) Property, plant and equipment 281 1,763 (84.1%) Other non current assets 7
Slide 90: Capital structure
Capital structure For personal use only Tabcorp has diversified sources of funding and an attractive maturity profile Debt structure and maturity profile 1,000 800 600 450 $m 400 284 200 450 400 400 150 0 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 Bank Debt Medium term notes Tabcorp Bonds 1 year d
Slide 91: Capex
Capex Tabcorp’s businesses are low in capital intensity For personal use only Capex D&A Outlook 139 121 > FY12 D&A expense ~ $130 – $140m 119 108 Includes current Vic Wagering and Gaming licence amortisation of $27m > FY13 D&A expense ~ $150 – $160m Vic Wagering licence $34m p.a. FY08 FY09 FY10
Slide 92: Entitlement to refund in relation to the Victorian Gaming Licence and Wagering Licence
Entitlement to refund in relation to the Victorian Gaming Licence and the Victorian Wagering Licence For personal use only > The Gaming and Betting Act 1994 (Vic) provided for payment by the State of Victoria to Tabcorp on the grant of new licences of an amount equal to the ‘licence value’ of Tabcor
Slide 93: Federal Court decision on internet betting terminals
Federal Court decision on internet betting terminals For personal use only Victoria > A single judge in the Federal Court of Australia recently handed down a judgement affecting the deployment of a Sportsbet “Betbox” internet terminal in a Victorian hotel > The judge found that the Victorian legisla
Slide 94: Tabcorp investor day: Agenda
Tabcorp investor day: Agenda For personal use only 1 Overview of Tabcorp David Attenborough 2 Wagering Doug Freeman, Craig Nugent and Adam Rytenskild 3 Media & International Brendan Parnell 4 Keno Mohan Jesudason 5 Gaming Mohan Jesudason 6 Capital structure Damien Johnston 7 Key messages David Atten
Slide 95: Key messages
Key messages Wagering For personal use only > Tabcorp is aiming to continue to lead the Australian wagering market > Developments in the overall wagering market are such that it is expected to continue to grow strongly > Fixed odds is attractive for Tabcorp, delivering strong yields in racing & spor
Slide 96: Glossary
Glossary Agencies: Agencies are stand-alone TAB retail outlets, not attached to a pub or club. For personal use only Betbox: A touch-screen self-serve Internet kiosk that allows customers to connect to the website of Sportsbet Pty Ltd (owned by Irish betting company Paddy Power). Bookmakers: Bookmak
Slide 97: For personal use only
For personal use only Tabcorp Investor Day, 12 October 2011 97