Tabcorp Holdings Limited · ASX:TAH
Tabcorp — H1 FY2021 Earnings Presentation
33 slides from Tabcorp's earnings presentation, Feb 17, 2021
Slide 1: Tabcorp Half Year Results Presentation (ASX announcement)
For personal use only 17 February 2021 Australian Securities Exchange Companies Announcements Platform 20 Bridge Street Sydney NSW 2000 TABCORP HALF YEAR RESULTS PRESENTATION Attached is the presentation regarding Tabcorp Holdings Limited’s (Tabcorp) results for the half year ended 31 December 2020
Slide 2: Tabcorp 2020-21 First Half Results Presentation
For personal use only TABCORP HOLDINGS LIMITED 2020-21 FIRST HALF RESULTS PRESENTATION for the six months ended 31 December 2020 17 FEBRUARY 2021 ABN 66 063 780 709
Slide 3: Table of Contents
For personal use only 03 - 06 Group Overview TA B L E O F 08 - 18 Business Results CONTENTS 20 Capital 22 Conclusion 24 - 30 Appendices
Slide 4: Strong recovery in progress following COVID-19 challenges
EBITDA CONTRIBUTION2 STRONG RECOVERY IN PROGRESS 4% FOLLOWING COVID-19 CHALLENGES For personal use only o Group revenue down 1.5% and EBITDA1 down 6.2% vs pcp, primarily due to COVID-19 impacts: 41% • Lotteries & Keno – strong digital growth and excellent game portfolio 55% performance • Wagering &
Slide 5: Group Result
1 H 2 1 G R O U P R E S U LT For personal use only Change $m 1H21 1H20 $ % Revenues 2,870 2,914 (44) (1.5%) Variable contribution 957 1,030 (73) (7.1%) Operating expenses (397) (433) 36 (8.3%) EBITDA before significant items 560 597 (37) (6.2%) D&A (188) (193) 5 (2.6%) EBIT before significant items
Slide 6: Earnings materially impacted by COVID-19
E A R N I N G S M AT E R I A L LY I M PA C T E D B Y C O V I D - 1 9 For personal use only COVID-19 RETAIL RESTRICTIONS CONTINUED TO IMPACT RESULTS, DESPITE COST CONTROL MEASURES 1H21 EBITDA ($M) Digital growth and excellent underlying game Impacted by COVID-19, portfolio performance whilst cycling
Slide 7: Optimisation program to drive operational improvements and accelerate savings
O P T I M I S AT I O N P R O G R A M ( 3 S ) T O D R I V E O P E R AT I O N A L I M P R O V E M E N T S A N D A C C E L E R AT E S AV I N G S For personal use only Tabcorp-Tatts Merger Integration Optimisation December 2017 January 2018 to FY21 FY21 to FY23 INTEGRATION EBITDA – COST SYNERGIES ($M) o
Slide 8: Table of Contents
For personal use only 03 - 06 Group Overview TA B L E O F 08 - 18 Business Results CONTENTS 20 Capital 22 Conclusion 24 - 30 Appendices
Slide 9: Group & Business Results
G R O U P & B U S I N E S S R E S U LT S 1 For personal use only Lotteries & Keno Wagering & Media Gaming Services Group $m 1H21 1H20 Change 1H21 1H20 Change 1H21 1H20 Change 1H21 1H20 Change Revenues 1,609 1,584 1.6% 1,189 1,180 0.8% 73 149 (51.0%) 2,870 2,914 (1.5%) Variable contribution 433 413 4
Slide 10: Lotteries & Keno
LOTTERIES & KENO For personal use only EXCELLENT GAME PORTFOLIO PERFORMANCE, UNDERPINNED $m 1H21 1H20 Change BY BASE GAMES AND STRONG DIGITAL GROWTH Revenues 1,609 1,584 1.6% Variable contribution 433 413 4.8% o Continuing benefits from game development and active portfolio management: Operating exp
Slide 11: Powerball & Oz Lotto Major Jackpots; Lotteries & Keno KPIs
POWERBALL & OZ LOTTO MAJOR JACKPOTS 26 23 23 LOTTERIES & KENO KPIs 6 8 8 16 15 3 4 17 18 15 13 11 BALANCED PORTFOLIO AND STRATEGIC INITIATIVES DELIVERED For personal use only GROWTH IN A PERIOD OF LOW JACKPOTS 1H19 2H19 1H20 2H20 1H21 Number of jackpots $15M - $49M Number of jackpots $50M or more LO
Slide 12: Lotteries & Keno – Active Portfolio Management
LOTTERIES & KENO – ACTIVE PORTFOLIO MANAGEMENT For personal use only MATERIAL LIFT IN TURNOVER POST WELL RESEARCHED AND PROMOTED GAME CHANGES TURNOVER ($M) SET FOR LIFE o Launch: Late March 2020 +52% o Division 2 prize: $5k/month for 1 year +22% 6.7 = $60k +25% 5.5 o Matrix change increased number o
Slide 13: Lotteries & Keno: FY21 Key Focus Areas
LOTTERIES & KENO: FY21 KEY FOCUS AREAS For personal use only GAME PORTFOLIO o Oz Lotto game change being explored; research and development to be completed in FY21 o Initiatives across the Instant Scratch-Its category to build on strong FY20 momentum o Monitor and manage accelerated jackpot offers i
Slide 14: Wagering & Media
WAGERING & MEDIA For personal use only SOLID UNDERLYING PERFORMANCE IN A DISRUPTED OPERATING $m 1H21 1H20 Change ENVIRONMENT Revenues 1,189 1,180 0.8% o Significant shifts from retail to digital during COVID-19 Variable contribution 458 473 (3.2%) • Strong digital growth in turnover (+43%) and reven
Slide 15: Wagering & Media KPIs
Turnover2 Revenue2 Change on pcp % Digital3 Retail Digital3 Retail WAGER IN G & MED IA KPIs 1 Wagering (1H21) 43% (28%) 34% (29%) QUARTERLY ACTIVE USERS4 (‘000) BUSINESS RESILIENT THROUGH COVID-19; STRONG DIGITAL For personal use only 634 GROWTH BUT FURTHER IMPROVEMENT NEEDED 547 484 o Our business
Slide 16: Wagering & Media: FY21 Key Focus Areas
WAG ERI NG & MEDI A: F Y21 KEY F O CUS AREAS For personal use only CUSTOMER EXPERIENCE ENHANCEMENTS BEING ACCELERATED POST INTEGRATION BROADEN CUSTOMER BASE, TRANSFORM STRENGTHEN DIGITAL & REINVENT MEDIA & GROW SPORT RETAIL EXPERIENCE EXPAND PRODUCT Launched new Racing content hub Venue mode app
Slide 17: Wagering & Media: A Better Business Post Integration and Transformation
WAG ERI NG & MEDI A: A BET T ER BUSI NESS PO ST I N T E G R AT I O N A N D T R A N S F O R M AT I O N For personal use only WAGERING & MEDIA BUSINESS IS NOW WELL POSITIONED TO PERFORM AND GROW o Integrated digital and retail customer experience o New data capability and Adobe driven personalisation
Slide 18: Gaming Services
GAMING SERVICES For personal use only BUSINESS EXECUTING AGAINST TURNAROUND PLANS AS HOTELS $m 1H21 1H20 Change AND CLUBS RETURN TO OPERATION ACROSS THE COUNTRY MAX Venue Services 33 102 (67.6%) o Revenue decline predominantly COVID-19 related MAX Regulatory Services 40 47 (14.9%) • Venues re-opened
Slide 19: Gaming Services: FY21 Key Focus Areas
GAMING SERVICES: FY21 KEY FOCUS AREAS For personal use only O P E R AT I O N A L R E V I E W Operational Review / turnaround plan execution is well underway o Leaner management and simplified operating structure • Initial phase of restructuring complete o Further extension of EGM contracts o Develop
Slide 20: Table of Contents
For personal use only 03 - 06 Group Overview TA B L E O F 08 - 18 Business Results CONTENTS 20 Capital 22 Conclusion 24 - 30 Appendices
Slide 21: Capital Management
C A P I TA L M A N A G E M E N T For personal use only STRONGER FINANCIAL POSITION WITH GEARING NOW WITHIN TARGET RANGE; DIVIDENDS RESUMED GEARING1 DEBT PROFILE2 CREDIT RATING o Undrawn bank facilities: $1,510m at 31 December 2020 Gross debt / EBITDA TARGET Minimise cost of borrowing Maintain invest
Slide 22: Table of Contents
For personal use only 03 - 06 Group Overview TA B L E O F 08 - 18 Business Results CONTENTS 20 Capital 22 Conclusion 24 - 30 Appendices
Slide 23: Conclusion: The Trusted Gambling Entertainment Company
LOTTERIES & KENO CONCLUSION: THE TRUSTED G A M B L I N G E N T E R T A I N M E N T C O M PA N Y For personal use only IMPROVED FINANCIAL POSITION AND OUTLOOK AS WE EMERGE FROM COVID-19 o Tabcorp has taken action to improve its financial position • Strengthened balance sheet post capital raising • Di
Slide 24: Table of Contents
For personal use only 03 - 06 Group Overview TA B L E O F 08 - 18 Business Results CONTENTS 20 Capital 22 Conclusion 24 - 30 Appendices
Slide 25: Significant Items (After Tax)
1 . S I G N I F I C A N T I T E M S ( A F T E R TA X ) For personal use only JUMBO PROFIT ON SALE $m 1H21 o Tabcorp sold its shareholding in Jumbo Interactive for gross proceeds of Jumbo profit on sale (69) approximately $98m and recognised a profit after tax on the sale of $69m Amended tax assessme
Slide 26: Cash Flow and Balance Sheet
2. CASH FLOW AND BALANCE SHEET For personal use only CASH FLOW BALANCE SHEET $m 1H21 1H20 Change $m Dec-20 Jun-20 Change Net operating cash flows1 811 433 87.3% Total current assets 862 727 18.6% Net interest paid (91) (98) (7.1%) Licences 2,094 2,148 (2.5%) Income tax paid (138) (98) 40.8% Other in
Slide 27: Debt Structure and Capital Expenditure
3 . D E B T S T R U C T U R E A N D C A P I TA L E X P E N D I T U R E For personal use only DEBT STRUCTURE1 ($M) CAPITAL EXPENDITURE ($M) 800 152 700 30 600 500 38 400 70 300 122 92 11 65 200 39 61 100 19 - 11 FY21 FY22 FY23 FY24 FY25 FY26 FY27 FY28 FY29 FY30 FY31 FY32 FY33 FY34 FY35 FY36 1H20 1H21
Slide 28: Group Operating Expenses
4 . G R O U P O P E R AT I N G E X P E N S E S ( $ M ) For personal use only REPORTED -8.3% UNDERLYING INCL 3S -0.2% UNDERLYING EXCL 3S +0.7% 3 1 2 Notes: 1. 1H21 3S opex savings of $4m (Wagering & Media $1m, Gaming Services $3m) 2. 1H21 COVID-19 cost mitigations of $24m (Lotteries & Keno $3m, Wager
Slide 29: Lotteries & Keno Results
5 . L O T T E R I E S & K E N O R E S U LT S For personal use only $m 1H21 1H20 Change Lotteries Revenue 1,477 1,467 0.7% Keno Revenue 132 117 12.8% Revenues 1,609 1,584 1.6% Lotteries Variable contribution 360 347 3.7% Keno Variable contribution 73 66 10.6% Variable contribution 433 413 4.8% Operat
Slide 30: Wagering & Media KPIs
6. WAGER IN G & MED IA KPIs For personal use only 1H21 1H20 Change 1 Turnover by distribution ($m) Retail 2,595 3,612 (28.2%) Digital 4,956 3,408 45.4% Call Centre 211 208 1.4% Other2 640 768 (16.7%) Total 8,402 7,996 5.1% 1 Revenue by product ($m) Totalisator 543 587 (7.5%) Fixed Odds 526 491 7.1%
Slide 31: Glossary
7. GLOSSARY For personal use only TERM DEFINITION TERM DEFINITION Lotteries and The Group’s business that operates lotteries and Keno, which are 1H/2H Six months ended 31 December/30 June of the relevant financial year Keno (L&K) games of chance Three months ended 30 September/31 December/31 March/3
Slide 32: Disclaimer
DISCLAIMER For personal use only This Presentation contains summary information about the current activities of Tabcorp Holdings Limited (Tabcorp) and its subsidiaries (Tabcorp Group). It should be read in conjunction with the Tabcorp Group’s other periodic and continuous disclosure announcements lo
Slide 33: For personal use only
@) Op) —) ‘@ = (©) 2 Tabcorp or 6 LIL,