Tabcorp Holdings Limited · ASX:TAH
Tabcorp — H1 FY2003 Earnings Presentation
37 slides from Tabcorp's earnings presentation, Feb 19, 2003
Slide 1: TABCORP Half Year Results Presentation cover letter
TABCORP Holdings Limited TABCORP AN 06 76008 5 Bowen Crescent eN Melbourne Australia 3004 GPO Box 1943R, Melbourne Australia 3004 Telephone 61 3 9868 2100 Facsimite 61 3 9868 2300 19 February 2003 Website — www.tabcorp.com.au To: Australian Stock Exchange Companies Announcements Platform 20 Bridge S
Slide 2: TABCORP Holdings Limited Half Year Results
TABCORP Holdings Limited Half Year Results 19 February 2003 @atg TABCORP ls,
Slide 3: Agenda
Agenda ¢ Matthew Slatter — Key Features « David Elmslie — Financial Performance ¢ Matthew Slatter — Performance in Current Half — Outlook as, TABCORP pyaar | | ierin Results 2003
Slide 4: Key Features
Key Features ¢ Increased profits in a challenging period * Increased dividend ¢ Strong performance from wagering * Star City — Main gaming floor table revenue improved after slow start — Solid performance from electronic gaming — Private gaming room revenue down against PCP due to below historic win
Slide 5: Financial Performance
Financial Performance 6 months to 6 months to % Dec 2007 Dec 2002 change Net operating revenue ($m) 977.0 980.2 0.3 Net profit after tax - Before goodwill amort" and 137.2 143.2 44 non-recurring items ($m) - Before non-recurring items ($m) 128.4 134.1 47 - Basic ($m) 128.1 131.2 2.4 Earnings per sha
Slide 6: Summary divisional results
Summary divisional results 6 months to 6 months to % $m 31 Dec 2001 31 Dec 2002 Change Net operating revenue Wagering 208.3 220.6 5.9 Gaming 459.3 449.2 (2.2) Star City 309.4 310.4 0.4 PBITA' Wagering 33.6 37.5 11.4 Gaming? 118.2 115.3 (2.4) Star City? 78.6 83.6 6.3 Notes * Before goodwill amortisat
Slide 7: Wagering — Key features
Wagering — Key features ¢ Revenue growth in all racing codes ¢ Sportsbet revenue growth in excess of 12% * 38% increase in Trackside revenue ¢ Ongoing program of agency refurbishment and rationalisation ¢ Introduction of self service betting terminals in TAB outlets and racecourses ¢ Sky Channel res
Slide 8: Gaming — Key features
Gaming — Key features ¢ Performance post 1 September adversely impacted by smoking bans ¢ Three new venues and top ups in several venues, partly offset by impact of regional caps ¢ Ongoing venue refurbishment ¢ New products have been popular « Venue Performance Standards at record levels of complian
Slide 9: Gaming — Impact of smoking bans
Gaming — Impact of smoking bans lative to PCP Gaming monthly revenue growth Gaming revenue has now been re-based after smoking ban introduction Interim Results 2003
Slide 10: Gaming - Venue facilities for smokers are being upgraded
Gaming - Venue facilities for smokers are being upgraded Grade 4 — Smoking area solution criteria ¢ Adjacent to gaming room ¢ Gaming machines must be visible ¢ Ambience and theming the same as gaming room ¢ Air conditioning first rate ¢ TVs, lounges, magazines, sweets provided ¢ Appropriate signage
Slide 11: Gaming - Venue facilities for smokers are being upgraded
Gaming - Venue facilities for smokers are being upgraded Venues with Grade 4 smoking solution Ge Way we La Ly 7) ip ai i y = ys i le ny ay a Me MarEst Jun Est Sep Nov % of Network 10.3% 16.2% 22.5% 26.2% 33.6% 46.1% 55.4% Grade 4 solutions to be implemented progressively Interim Results 2003
Slide 12: Gaming - Grade smoking solutions
Gaming - Grade 4 smoking solutions NMR per day % of 1 Jan to 15 Feb 03 Venues Network c.f. PCP Grade 4 solution (Dec) 71} 34 (9.3%) Grade 4 solution (Jan) 20 } (11.1%) Other 180 66 (15.3%) Demonstrable benefit to smokers, venue operators and TABCORP from implementing Grade 4 solutions Cenk TABCORP e
Slide 13: Grade - Yarraville Footscray Bowling Club
Grade 4 - Yarraville Footscray Bowling Club enc, TABCORP geyqmesspeammunos Interim Results 2003
Slide 14: Grade — Yarraville Footscray Bowling Club (2)
Grade 4 — Yarraville Footscray Bowling Club (2) atc, TABCORP pypupcunssucmnnpns Interim Results 2003
Slide 15: Grade - Kooringal Golf Club
Grade 4 - Kooringal Golf Club enc, TABCORP seueemnmnnnn tt ————————————_, \verim Results 2003
Slide 16: Grade - Zagames at Reservoir
Grade 4 - Zagames at Reservoir iI NN as, TABCORP woneumeupmmne tn, \terim Results 2003
Slide 17: Grade — Gladstone Park Hotel
Grade 4 — Gladstone Park Hotel ii on yous COMFORT A An 5 AYAUARLE WHERE i) TABCOR Ri Interim Results 2003
Slide 18: Gaming - EGM reservation system introduced
Gaming - EGM reservation system introduced ¢ Reservation host must be identifiable ¢ EGM reservation register provided * Reservation signs (screen size) readily available ¢ 7 minute reservation policy * House reservation policy clearly displayed * 55 venues have adopted the full reservation system.
Slide 19: Star City —- Key features
Star City —- Key features ¢ Electronic gaming performed solidly ¢ MGF table games improved after slow start ¢ PGR revenue down against PCP reflecting below historic win rate ¢ Non-gaming very good improvement over PCP ¢ Discussions commenced with Leightons over their 15% interest in the management c
Slide 20: Star City - Net operating revenue growth over PCP
Star City - Net operating revenue growth over PCP Qi Q2 6 months to 2002 v 2003 2002 v 2003 31 Dec 2002 PGR (0.6%) (26.0%) (13.8%) MGF (4.6%) 3.7% (0.5%) Total tables (3.3%) (6.4%) (4.9%) Electronic gaming 5.7% 4.7% 5.2% Non-gaming 0.9% 20.6% 10.8% Total operating revenue 0.0% 0.7% 0.4% Achievement
Slide 21: Star City - Actions taken
Star City - Actions taken * PGR — Revised complimentary system — New sales team — Enhancements to Endeavour Room ¢ Main gaming floor tables — Revised product mix — Customer service focus ¢ Non gaming — Renovations / repositioning — Theatre crossover as, TABCORP woneumeupmmne tn, \terim Results 2003
Slide 22: Financial Performance
FINANCIAL PERFORMANCE enc, TABCORP tyme Ts | erin: Results 2003
Slide 23: Financial performance
Financial performance G months to 6 months to % $m 34 Bec 2007 31 Dec 2002 Change Net operating revenue 977.6 980.2 0.3 Other revenue 14.2 13.2 (6.9) Taxes on gambling 308.5 306.1 (0.8) Operator commissions 148.4 146.0 (1.7) Racing industry fees 62.5 66.0 5.7 Other operating expenses 198.5 197.0 (0.
Slide 24: Segmented earnings
Segmented earnings $m Wagering Gaming Star Unallocated Total 6 months to 31 Dec 2002 Operating revenue 220.6 449.2 310.4 - 980.2 Other revenue 6.6 1.4 2.8 2.4 13.2 Total revenue 227.2 450.6 313.2 2.4 993.4 PBIT pre goodwill! 37.5 1153 836 (3.3) 233.1 Goodwill 0.1 - 9.0 - 9.4 PBIT 37.4 1153 746 (3.3)
Slide 25: Wagering financial data
Wagering financial data & months to 6 months to % $m 31 Dec 2001 31 Dec 2002 change Operating revenue 208.3 220.6 5.9 Other revenue 7.8 6.6 (15.6) Revenue from ordinary activities 216.4 227.2 5.1 RI fees, taxes & operator commissions 440.8 148.3 5.3 Other operating expenses 36.3 35.9 (2.4) Depreciat
Slide 26: Wagering financial data
Wagering financial data 6 months to 6 months to % $m 31 Dee 2001 31 Dec 2002 change Operating revenue Racing Thoroughbred 144.5 150.9 4.4 Harness 27.8 29.3 5.3 Greyhound 27.7 30.1 8.7 Total racing 200.0 210.3 5.1 Sportsbet 3.9 4.4 12.7 Other 44 5.9 28.4 Total operating revenue 208.3 220.6 5.9 Change
Slide 27: Gaming financial data
Gaming financial data 6 rionths to 6 months to % $m 31 Dec 2001 31 Dec 2002 change Total operating revenue (59.3 449.2 (2.2) Other revenue 4.1 1.4 26.3 Revenue from ordinary activities 460.4 450.6 (2.1) Taxes & operator commissions 313.3 306.7 (2.1) Other operating expenses 16.1 15.8! (1.8) Deprecia
Slide 28: Gaming financial data
Gaming financial data 6 months to 6 months to % $m 31 Dec 2001 31. Dec 2002 change Operating revenue Hotels 304.0 301.8 (0.7) Clubs 154.3 146.4 (5.1) Other 1.0 1.0 - Total operating revenue 459.3 449.2 (2.2) Change EGMs (period end) 13,602 13,749 147 Venues 266 271 3 S$NMR/EGM (daily average) 246 23
Slide 29: Star City financial data
Star City financial data 6 months to 6 months to % $m 31 Dec 2001 31 Dec 2002 change Total operating revenue 309.4 310.4 0.4 Other revenue 2.9 2.8 (2.9) Revenue from ordinary activities 312.3 313.2 0.3 Taxes 65.3 63.1 (3.2) Other operating expenses 141.0 140.21 (0.6) Depreciation & amortisation 27.4
Slide 30: Star City financial data
Star City financial data $m 6 morths to 6 months to % 31 Dee 2001 31 Dec 2002 change Net operating revenue Table games PGR 57.0 49.2 (13.8) MGF 114.7 114.1 (0.5) Total tables vane 163.3 (4.9) EGMs & other 96.2 101.2 5.2 Total gaming 267.9 264.5 (1.3) Accommodation 11.3 12.1 7.2 Food & Beverage and o
Slide 31: Financial position
Financial position Ags at As at As at $m 34 Bec 2001 30 June 2002 34 Dec 2002 Current Assets 167.4 162.4 155.3 Licences/management agreement 4,036.4 1,033.7 1,031.3 Goodwill 320.8 311.1 301.8 Property, plant & equipment 625.3 802.3 783.2 Other non current assets V7 104.2 107.7 Total assets 2,460.4 2
Slide 32: Performance in 2H and Outlook
Performance in 2H 03 & Outlook enc, TABCORP seueemnmnnnn tt ————————————_, \verim Results 2003
Slide 33: 2012 update
2012 update ¢ While formal discussions with the Government have not yet begun, the Bracks Government has indicated that it wishes to resolve licensing arrangements within its current term (within the next four years) ¢ The Minister for Gaming and Racing, John Pandazopoulos, has stated that the Gover
Slide 34: Jupiters update
Jupiters update ¢ Currently in discussions ¢ Within core competencies and believe can create shareholder value ¢ Creates an Australian gambling and entertainment company with greater scale * Key parameters of transaction — EPS (pre-goodwill) accretive — Retain investment grade credit rating ¢ Divide
Slide 35: Revenue performance in current half year
Revenue performance in current half year 1 Jan — 15 Feb 03 Comments c.f PCP Wagering 6.1% Continued growth Gaming (12.3)% Impact of smoking solutions starting to take effect. Star City 5.2% Chinese New Year earlier in current year, win rates below prior year but above historical, continued growth To
Slide 36: TABCORP 2H03 outlook
TABCORP 2H03 outlook ¢ Continued strong performance from wagering * Gaming now at a new baseline in terms of revenue ¢ Star City private gaming room recovery in 2H ¢ Continued solid performance from Star City main gaming, electronic games and non gaming FY profit outlook of flat to marginally down o
Slide 37: Australia's Premier Gambling and Entertainment Group
Australia’s Premier Gambling and Entertainment Group @atg TABCORP ll,