Tabcorp Holdings Limited · ASX:TAH
Tabcorp — Macquarie Securities Group Australian Conference 2010
19 slides from Tabcorp's conference presentation, May 5, 2010
Slide 1: Macquarie Securities Group Australian Conference 2010
For personal use only Macquarie Securities Group Australian Conference 2010 5 May 2010 Elmer Funke Kupper 1
Slide 2: Summary
Summary ¾ Tabcorp is Australia’s largest Gambling Entertainment company Leading positions in the most attractive markets in Australia For personal use only ¾ Tabcorp is currently in the second phase of its transformation journey First phase: Focus on operational improvement to ‘bring the house i
Slide 3: Leading Australian market positions
Leading Australian market positions Casinos For personal use only Four properties: ¾ 421 tables ¾ 4,508 EGMs ¾ 268 MTGMs ¾ 1,398 hotel rooms + restaurants/bars Market Share 38% Wagering Leading operator: ¾ 2,567 retail outlets ¾ Sky in 2.3m homes + 5,035 outlets ¾ $1.8b internet sales Market Share 4
Slide 4: 1H10 financial results – normalised
For personal use only 1H10 financial results – normalised1 $m 1H10 Change Net revenues 2,190.5 2.6% Variable contribution 1,088.3 1.1% Operating expenses (547.2) 2.9% EBITDA 540.5 (1.2%) EBIT 441.0 (4.0%) NPAT 264.0 0.8% 1. Normalised for theoretical win rate in the VIP Rebate Business 4
Slide 5: Key themes of transformation
Key themes of transformation 2008 2009 2010 2011 2012 2013 For personal use only 1 Improve Group performance 2 Invest in core businesses 3 Transition to post 2012 environment 5
Slide 6: Gaming – strategy focuses on 2012 change in licence
For personal use only Gaming – strategy focuses on 2012 change in licence Transition Vic Gaming Grow Keno Optimise earnings to 2012 Innovate the product ¾ Reduce expenses ¾ Keno Racing ¾ Focus on revenue and market share ¾ Rapid Keno ¾ Maintain capex in EGMs Expand distribution ¾ Retail footprint ¾
Slide 7: Gaming – strong performance track record
Gaming – strong performance track record Tabcorp Vic Gaming Tatts Gaming1 For personal use only 1H10 Change 1H10 Change Revenue ($m) 542.4 ( 1.1% ) 639.4 ( 4.6% ) EBIT ($m) 119.4 0.2% 101.4 (13.2%) Market Share2 53.2% 0.9% 46.8% ( 0.9% ) EGMs3 13,369 0.3% 13,243 ( 0.7% ) Keno NMR / EGM / Day ($) 294
Slide 8: Wagering – strategy focuses on changes in the market
For personal use only Wagering – strategy focuses on changes in the market Market environment Response ¾ Market deregulation ¾ Influence / leverage regulation ¾ Tax and product fee arbitrage ¾ Develop leading fixed odds offering ¾ Fixed odds betting growth ¾ Build customer loyalty ¾ Sportsbetting gr
Slide 9: Wagering – investments improve competitive position
For personal use only Wagering – investments improve competitive position Examples of investment Turnover growth – 1H10 Racing: 90%+ of growth comes Fixed odds expansion from initiatives Additional Sky channels New products – Big 6 2.6% 8.4% International export/import Retail refurbs and s
Slide 10: Wagering – initiatives drive performance
For personal use only Wagering – initiatives drive performance Tabcorp Wagering UNiTAB Wagering1 1H10 Change 1H10 Change Revenue ($m) 872.0 4.6% 312.0 0.8% EBIT ($m) 147.5 1.4% 69.6 ( 2.5% ) Tote Turnover ($m) 4,610.6 2.3% Fixed odds turnover ($m) 855.7 60.1% 1. Tatts Wagering results sourced from T
Slide 11: Casinos – strategy focuses on rebuilding customer offer
Casinos – strategy focuses on rebuilding customer offer Grow our gaming business Create entertainment brand For personal use only Grow electronic gaming Employee engagement Leverage database marketing strategies Re-create service culture Lift the bar for performance Implement world-class loy
Slide 12: Investment lagged the market until Project Star
Investment lagged the market until Project Star Capex as % of EBITDA For personal use only 63% 41% 34% 33% 31% 31% 29% 27% 24% 18% 18% 19% FY07 FY08 FY09 Crown Skycity TAH Casinos TAH Casinos ex Project Star Source: Crown Limited 30 June 2009 and 2008 Full Year Results; Skycity Entertainment Group L
Slide 13: Casinos – investment in Star City is on track
For personal use only Casinos – investment in Star City is on track 13
Slide 14: Casinos – 1H10 performance driven by investment
For personal use only Casinos – 1H10 performance driven by investment1 NSW Qld Total Operating Revenue 1H10 Change 1H10 Change 1H10 Change EGMs 101.6 12.3% 139.9 (2.8%) 241.5 3.0% Main Gaming Floor 148.2 4.9% 66.7 3.4% 214.9 4.5% Private Gaming Rooms 62.8 6.9% 31.4 (1.8%) 94.2 3.8% VIP Rebate 21.8 9
Slide 15: Balance sheet capacity supports investment strategy
Balance sheet capacity supports investment strategy Debt Maturities ($m) For personal use only $m 700 500 300 100 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 Drawn Bank Debt Undrawn Bank Debt Medium Term Notes Tabcorp Retail Bonds US Private Placement 15
Slide 16: Tough trading conditions in EGM markets
Tough trading conditions in EGM markets Queensland – Change over pcp Victoria – Change over pcp For personal use only 10% 20.0% 15.0% 5% Dec-08 10.0% Sep-08 Nov-08 Feb-09 May-09 Feb-10 0% Jan-09 Jun-09 Dec-09 Nov-09 Sep-09 Aug-08 Oct-08 Aug-09 Mar-09 Apr-09 Jan-10 Jul-09 Oct-09 Jul-08 5.0% 30/11/08
Slide 17: Trading is mixed – revenue growth year to end April 2010
For personal use only Trading is mixed – revenue growth year to end April 2010 Division Turnover Revenue Comments NSW – Star City 6.7% 4.3% EGMs and MGF up despite disruption PGR activity up, win rate below theoretical VIP and non gaming activity down Qld casinos (7.2%) (3.7%) EGM market con
Slide 18: Summary
Summary ¾ Tabcorp is Australia’s largest Gambling Entertainment company For personal use only ¾ Increasing evidence that investments under way are generating value Casinos: Redevelopment and expansion of Star City in Sydney Queensland casinos are in need of investment Wagering: Investments to im
Slide 19: For personal use only
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Tabcorp Holdings — Macquarie Securities Group Australian Conference 2010 on 6ix