Slide 1: Tabcorp Full Year Results Presentation ASX cover letter
Tabcorp Holdings Limited vic T: t ACN 083 780 708 a co r Pp § Bowen Crescent * Melbourne Australia 3004 GPO Box 1943R, Melbourne Australia 3004 Telephone 61 3 9868 2100 Facsimile 61 3 9868 2300 Website www.tabcorp.com.au 30 August 2005 To: Australian Stock Exchange Companies Announcements Platform 2
Slide 2: 2005 Full Year Results Presentation
2005 Full Year Results Presentation Matthew Slatter, Chief Executive Officer , ‘ ‘ * » & Tabcorp the bigger better game
Slide 3: Agenda
>» Matthew Slatter =» Overview > David Elmslie # Financial performance >» Matthew Slatter = Focus for 2006, revenue update and conclusions & Tabcorp + & * x * » « » Full Year Results
Slide 4: Financial year 2005 — Scorecard
Financial year 2005 — Scorecard > Strong performance with NPAT pre goodwill up 40.8% to $513.8m due to acquisitions and solid underlying growth >» EPS pre goodwill and non-recurring items growth of 9.2% to 99.4 cents. Up 17.1% on a normalised basis > DPS up 14.1% to 81.0 cents per share >» Jupiters
Slide 5: Dividend per share and Earnings per share
* Dividend per share’ Earnings per share’ CAGR - 9.7% CAGR —- 12.4% 90.0 5 110.0 5 99.4 81.5% 80.0 5 % ql 78.0% i 4 88.0% wp 7007) PAYOUT 84.7% sara, = ooo | | S 2 i 2 s 92.2% | : a % 50.0 4 eee ' | 6 S § { 5 2. j i q f=% we = i fa oe i 5 E g 20.0 5 g y § yD 10.0 4 A 0.0 +4 i = y 2001 2002 2003 2004
Slide 6: Operating revenue summary by division
Operating revenue! summary by division Underlying growth 3.5% or 4.8% on a normalised basis 43.2 (0.1) 3,742.4 (6.1)% Normalised growth 68.0 3,700 Underlying growth 23.4 5.6% 3,650 iJ 2 € A 3,600 3,550 3,500 1 FY04 Div Casinos Gaming Wagering Media FY05 Actual (3) Notes: Proforma (2) 4 Pre non-recur
Slide 7: EBITA underlying growth by division
EBITA’ underlying growth by division ¥* Underlying growth 7.0% or 11.3% on a normalised basis 19.7 (0.4) 911.4 Normalised growth 51.9 Underlying growth 15.3 (4.4)% 900 15.4% 875 Fd 2 = a 852.1 850 825 800 . T FY04 Div Casinos Gaming Wagering Media FYO5 Actual Proforma (2) Notes: 4, Pre non-recurring
Slide 8: EBITA growth by P&L category
* EBITA‘ growth by P&L category Underlying growth 7.0% or 11.3% on a normalised basis 14.2 4,000 a8 {87.2} ms ws, 911.4 900 2524 : ”" : [aq & € a T fo sf we ne) % & & J o? & * e RNa ve @ af R Notes: x? et 1 Pre non-recurring items which are disclosed separately in Appendix 1 o 2 Divisional EBITA con
Slide 9: Casinos key features
Casinos key features x ¥ x x > Normalised revenue growth 5.7% to $1,278.9m >» EBITA pre non-recurring items increased 4.1% to $386.9m. Normalised EBITA pre non-recurring items increased 15.4% » Renegotiated management agreements for Brisbane and Gold Coast properties working well > EGM revenue growt
Slide 10: Casinos performance — Gold Coast extension
Casinos performance — Gold Coast extension EXTENSION AREA: MOU SOM, BALCONY AREA: 580 8088, (AREAS ARE APPROXIMATE)
Slide 11: Jupiters integration
Jupiters integration . . Synergies by Year ' » Formal integration process ynergies bY ended 30 June 2005 60.0 > Synergies booked to P&L: 50.0 ~ * Cost related - $35.0m » Revenue related - $15.7m 5 400 = Total - $50.7m 3 ® 30.0 ) > Overall synergy forecast is 3 I now $56.6m, $14.8m above °,,, origina
Slide 12: Gaming & Network Games key features
Gaming & Network Games key features > Victorian Gaming revenue increased 6.8% to $902.3m >» EBITA pre non-recurring items increased 10.6% to $258.8m >» Keno and Tabcorp International business transferred from Wagering division effective 1 July 2004 >» Monthly marketing cycle initiated >» Development
Slide 13: Gaming & Network Games new venues
Gaming & Network Games new venues * ¥ k ¥ * ¥ * >» Zagame’s Brunswick hotel — July 2004 (45 EGMs) >» Roxburgh Park Hotel - December 2004 (80 EGMs) >» Racecourse Hotel (Malvern) — April 2005 (40 EGMs) >» Hopper’s Crossing — May 2005 (70 EGMs) > Mildura Workingman’s Club — May 2005 (67 EGMs) & Tabcorp
Slide 14: Wagering key features
Wagering key features * * * >» Vic revenue growth 6.2% to $475.4m >» NSW revenue growth 1.8% to $844.3m > EBITA pre non-recurring items increased 9.6% to $225.1m >» Split racing vision impacted 2HO5 revenues > Tab Limited operational integration ahead of schedule, pooling behind >» Common betting ru
Slide 15: Wagering performance — NSW v Vic growth rates
Wagering performance — NSW v Vic growth rates NSW Vic 01/07 04/05 01/07 04/05 % growth - 03/05 - 30/06 FY05 -03/05 - 30/06 FY05 Turnover % % % % Racing : | Thoroughbred 2.2 4.3 Harness 0.3 6.2 Greyhound 2.7 9.3 Total racing 2.0 5.3 >» Factors affecting relative performance: * Split racing vision had
Slide 16: Tab integration
Tab integration * * x » FYO5 synergies booked to P&L Synergies by Year 12 $18.8m 500 » Overall synergy forecast of 450 $43.4m still on target 40.0 » Pooling significantly delayed . =~ 35.0 >» Major achievements to date & include: g 00 = Development of national B 250 Wagering organisational S 20.0 /
Slide 17: Media key features
Media key features * * * * >» EBITA pre non-recurring items decreased 1.1% to $40.6m primarily due to weaker advertising sales and exit from Sky Racing Productions business » Rights to NSW metropolitan and Victorian thoroughbred racing lost from 4 May 2005 >» Rights fees savings of $17 million passe
Slide 18: Media — Split vision issues
Media — Split vision issues ¥ * ¥ ¥ * > TVN was created 2002 and is owned by Victorian and Sydney thoroughbred racing clubs >» TVN broadcasts all Victorian and Sydney metropolitan thoroughbred races, totalling 1-2 meetings per day >» Other key racing content secured by Sky into next decade, represen
Slide 19: International - Singapore
International - Singapore > Submitted RFC for integrated resort on 28 February 2005 >» Tabcorp short-listed with 11 bidders from original 14 submissions >» Final Request For Proposal (RFP) expected to be released during third quarter 2005 >» Integrated resort will include hotels, casino, food and be
Slide 20: International - Singapore
International - Singapore * * Moab ayes Urban, South Marina Site 9.4 hectares with the opportunity to add an additional 4.1 hectares. easel” LAHO PARCEL A LAND PARCEL Proposed IR Sits Optional Site far Leste / Emanainnnnt | Racveation Faciiies Singapore 8 Capertee
Slide 21: International - China
International - China * * * % >» 10 year joint venture to provide software, equipment and technical services for Keno in China » First foreign company to participate in China Lottery ata nationwide level > Terminal roll out planned to begin in third quarter FY06 > 60,000 terminals expected over 5 ye
Slide 22: Financial Performance
Financial Performance &* Tabcorp «+ ‘ x . ; : » Full Year Results
Slide 23: Financial performance
Financial performance Actual Change Normalised Change $m 12 months to on pep 12 months to on 30 June 05' 30 June 05'? pep Net operating revenue 3,702.4 50.3% 3,706.4 53.0% Other revenue® 43.7 80.9% 43.7 80.9% Taxes on gambling (988.2) 45.6% (988.6) 46.6% Operating commissions (416.1) 40.4% (416.1) 4
Slide 24: Financial performance
Financial performance Actual Change Normalised Change 12 months to on pep 12 months to on 30 June 05? 30 June 05"? pep efore non-recurring items - Basic Earnings per share (cents) ~ (4.0)% (0.1)% “(11.7)% (8.1)% - Basic asi iii iii iii bili idbdlidlbdlddldddlddd Notes 1. Nornaiised results exclude t
Slide 25: Casinos — financial data
Casinos — financial data * Eo * * Actual Pro Forma $m 12 months to 12 months to Change 30 June 05' 30 June 04‘? Revenue frorn ordinary activities 1,284.4 1,257.0 2.2% Taxes & operator commissions (240.8) (231.5) 4.0% Other expenses® (656.6) (653.9) 0.4% EBITA 386.9 371.6 4.1% EBITA/Net operating rev
Slide 26: Casinos — financial data (normalised)
Casinos — financial data Normalised* Pro Forma $m 12 months to 12 months to Change 30 June 05" 30 June 04'” Revenue from ordinary activities 1,288.4 1,216.0 6.0% Taxes & operator commissions (241.3) (227.0) 6.3% 4 Other expenses (657.6) (651.3) 1.0% EBITA 389.6 337.7 15.4% EBITA/Net operating revenu
Slide 27: Casinos — financial data
Casinos — financial data * * ¥ x Actual Pro Forma $m 12 months to 12 months to Change 30 Jun 05' 30 June 04'7 Net operating revenue Rebate tables 12.8 71.4 (82.2)% Non rebate tables 526.0 494.4 6.4% Total tables 538.8 565.8 (4.8)% EGMs & other 514.7 479.3 7.4% Total gaming 1,053.5 1,045.1 0.8% Accom
Slide 28: Casinos — financial data
Casinos — financial data Actual Pro Forma $m 12 months to 12 months to Change 30 Jun 05 30 June 04’ NSW Table games PGR 123.0 106.6 15.3% MGF 248.4 239.7 3.6% EGMs & other gaming 212.5 204.9 3.7% Non-gaming 92.1 88.5 4.1% Total NSW operating revenue 676.0 639.7 5.7% QLD Rebate play Gross rebate play
Slide 29: Gaming and network games — financial data
Gaming and network games — financial data $m 12 months to 12 months to Change 30 June 05' 30 June 04'?° Revenue from ordinary activities 1,037.7 975.6 6.4% Taxes & operator commissions (675.4) (630.6) 7.1% 4 Other expenses (103.5) (111.0) (6.7)% EBITA 258.8 234.0 10.6% EBITA/Net operating revenue (%
Slide 30: Gaming and network games — financial data
Gaming and network games — financial data Actual Pro Forma $m 12 months to 12 months to Change 30 June 05" 30 June 0417 Net operating revenue Victorian network Hotels 591.8 558.7 5.9% Clubs 310.5 285.9 8.6% Total Victorian gaming 902.3 844.6 6.8% Keno 107.8 98.8 9.1% Tabcorp International 10.0 15.2
Slide 31: Wagering — financial data
Wagering — financial data Actual Pro Forma $m 12 months to 12 months to Change 30 June 05'* _30 June 04'?* Operating revenue - Vic 475.4 447.5 6.2% Operating revenue - NSW 844.3 829.1 1.8% 4 Other revenue 9.4 12.3 (23.8)% Revenue from ordinary activities 1,329.1 1,288.9 3.1% R.L, taxes & op. commiss
Slide 32: Wagering — financial data
Wagering -— financial data NSW Change Vic Change _ Tota! Change $m 2004/05" 2004/05" FY05 Net operating revenue Racing Thoroughbred 543.8 2.3% 303.8 4.3% 847.5 3.0% Harness 107.1 0.0% 67.3 5.9% 174.4 2.2% Greyhound 136.4 2.5% 68.5 9.5% 204.9 4.7% Total racing 7874 2.0% 439.6 5.3% | 1,226.9 3.2% Spor
Slide 33: Media — financial data
Media — financial data Actual Pro Forma $m 12 months to 12 months to Change 30 June 05" 30 June 04'? Revenue from ordinary activities Sky Channel 102.7 103.8 (1.1)% Sky International Racing 13.4 12.4 8.2% 2KY & Others 11.4 11.9 (4.2)% Revenue from ordinary activities 127.5 128.1 (0.5)% R.L., taxes &
Slide 34: Tabcorp Group — financial position
Tabcorp Group — financial position ¥ * ¥ As at As at As at $m 30 Jun 2005 31 Dec 2004 30 June 2004 Current assets 328.4 358.3 355.5 Licenses/management agreement 1,201.3 1,114.7 870.6 Goodwill 3,167.6 3,453.6 1,280.5 Property, plant & equipment 1,505.6 1,577.7 1,412.3 Other non current assets 281.6
Slide 35: Group cash flow
Group cash flow * ¥ ¥ Actual Actual $m 12 months to 12 months to Change 30 Jun 2005 30 Jun 2004 Net operating cash flows 1,061.3 711.1 49.2% Net interest payments (174.7) (98.7) 77.0% Income tax paid (224.1) (171.8) 30.4% Payments for PP&E (119.5) (101.2) 18.1% Net Operating cash flows 543.0 339.4 6
Slide 36: Focus for 2006, revenue update and conclusions
Focus for 2006, revenue update and conclusions « Tabcorp + « * . : x « Full Year Results
Slide 37: Focus for FY2006
Focus for FY2006 % * * >» Successfully complete Tab integration >» Invest in smoking solutions in Casinos and work with pubs and clubs on solutions in Gaming and Wagering > Implement medium term strategy for Media >» Continue the drive for increased customer focus across the Group > Continue to buil
Slide 38: Performance to 27th August
Performance to 27th August ¥ ¥ x ¥ * > Overall solid start to Net revenue ($m) Actual Normalised beginning of 2005/06 Group 575.0 _600.0 F432 FR > Qld Casinos impacted 16.9 by below theoretical in 20.0 2004/05 Media > Gaming continuing Casinos strong growth from 2004/05 . 7 | 82 , > Wagering revenue
Slide 39: Conclusions
Conclusions * *% * >» Continued delivery of growth in shareholder returns in FY05 >» Strong growth in core businesses >» Development of international opportunities to add to business growth >» Jupiters integration completed, Tab integration very well advanced >» Trend of solid EPS growth expected to
Slide 40: Appendices
Appendices & Tabcorp « ‘ x . : : « Full Year Results
Slide 41: Appendices
Appendices * . Non-recurring items Segmented earnings Reconciliation of prior year comparatives . Tab Limited acquisition accounting — goodwill . Tab Limited acquisition accounting — accounting changes . AIFRS impacts — P&L . AIFRS impacts — balance sheet . Tabcorp Group — debt key features . Tabcor
Slide 42: Appendix - Non-recurring items
Appendix 1 - Non-recurring items [DUPLICATE SLIDE] $m Wagering G&NG Casinos Media Unallocated Total 12 months to 30 June 2005 Restructure/integration costs' 26.2 2.7 1.3 3.4 - 33.6 Depreciation on Jupiters FV Adjustments’ - (1.8) (3.0) - - (4.8) Divested Businesses® - (2.8) - - (11.9) (14.7) Asset S
Slide 43: Appendix - Tabcorp — segmented earnings
Appendix 2 - Tabcorp — segmented earnings $m Wagering G&NG Casinos Media Unallocated Total 12 months to 30 June 2005 Operating revenue 1,319.8 1,020.1 1,274.9 127.4 (39.7) 3,702.4 Other revenue® 9.4 17.6 96 0.4 7.0 43.7 Total revenue 1,329.1 1,037.7 1,284.4 127.5 (32.7) 3,746.1 EBITA’ 225.1 258.8 38
Slide 44: Appendix - Reconciliation of prior year comparatives
Appendix 3 - Reconciliation of prior year comparatives $m Wagering G&NG Casinos Media Unallocated Total EBITA' to 30 June 2004 . 23 Prior year presentation 102.2 221.4 381.3 - (20.5) 684.4 Tab Limited acquisition 130.2 - - 41.0 - 171.2 Reclass of network games (24.9) 24.9 - - - - Reallocation of cor
Slide 45: Appendix - Tab Limited acquisition — goodwill
Appendix 4 - Tab Limited acquisition — goodwill * $m Equity consideration (90.2m TAH shares @ $13.04/share) 1,176 Cash consideration (451m TAB shares @ $2.10/share, options, costs) 960 Other non-cash consideration 2 Total consideration paid for Tab equity 2,138 Tab net debt acquired (fair value) (ba
Slide 46: Appendix - Accounting changes — Tab and Jupiters
Appendix 5 - Accounting changes — Tab and Jupiters Actual 12 months to $m 30 June 2005 Statement of Financial Performance - Tab Limited wagering licence amortisation’ (0.6) - Jupiters Limited depreciation expense? 7.1 - Tab Limited depreciation expense® 2.6 Notes: 4 The process of fair valuing Tab L
Slide 47: Appendix - AIFRS adjustments — P&L
Appendix 6 - AIFRS adjustments — P&L x Actual AIFRS AIFRS adj $m 12 months to adj 12 months to 30 June 05" 30 June 05° Net operating revenue 3,702.4 - 3,702.4 Other revenue” 43.7 0.4 44.1 Other operating expenses (2,686.1) (3.2) (2,689.3) Depreciation & amortisation (148.6) (0.6) (149.2) EBITA 911.4
Slide 48: Appendix - AIFRS adjustments — balance sheet
Appendix 7 - AIFRS adjustments — balance sheet x * As at AIFRS AIFRS adj as at $m 30 Jun 2005 adj 30-Jun-05 Current assets 337.8 5.4 343.1 Licenses/management agreement 1,201.3 38.7 1,240.0 Goodwill 3,167.7 275.9 3,443.6 Property, plant & equipment 1,505.5 - 1,505.5 Other non current assets 271.5 3.
Slide 49: Appendix - Tabcorp Group — debt key features
* Appendix 8 - Tabcorp Group — debt key features Debt structure & maturity profile 700 ~------------------------------------------------------------------ 600 4 500 4 400 4 $ millions 300 4 200 1 406 4 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 w Bank Debt » Medium Te
Slide 50: Appendix - Tabcorp Group — debt key features
* Appendix 9 - Tabcorp Group — debt key features Fixed rate swaps & fixed interest medium term notes 2,800 7 -------------- 2-2-2222 2222222 nnn nn nn nn nn nn nn nn nn nn nn nnn en nnn enn nnne- 2,000 +-- MN ------ MB --------------------------------------------------- 1,500 ~~ ------ RR ------ RR
Slide 51: tab sprtsber BKY
tab sprtsber BKY CONRAD T RY Sip aiey Qty Tabcorp ees Smanwee the bigger better game “= TABARET fire exhibition centre « Tabcorp + « * . : x « Full Year Results