Slide 1: ASX cover letter: Tabcorp Half Year Results Presentation
Tabcorp Holdings Limited 4 T: ; ACN 063 780 708 a co ir p § Bowen Crescent a Melbourne Australia 3004 GPO Box 1943R, Melbourne Australia 3004 Telephone 61 3 9868 2100 Facsimile 61 3 9868 2300 Website www.tabcorp.com.au 24 February 2005 To: Australian Stock Exchange Companies Announcements Platform 2
Slide 2: 2005 Interim Results Presentation
2005 Interim 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 2005 and conclusion &* Tabcorp | : ‘ : : : 4 Half Year Results
Slide 4: Highlights
Highlights * > Results! « Net profit after tax pre goodwill up 46.9% " EBITA up 61.9% > Returns to shareholders! « Dividends Per Share up 14.3% « EPS pre goodwill up 9.8% « EPS pre goodwill (normalised) up 18.8% > Business growth’ « Operating revenue up 68.5% * Normalised Margins (EBITA / Op Rev) up
Slide 5: Treaty of vision and simple tea
eaty of vision and simple “tea x * x * &* Tabcorp | : ‘ 4 : ‘ 4 Half Year Results
Slide 6: Strong DPS & EPS growth
Strong DPS & EPS growth Ee Dividend per share Earnings per share’ 45.0 60.6 40.0 40.0 49.7 50.8 35.0 30.0 40.0 s = o — 5 25.0 g ° G 30.0 é 20.0 & 5 S se} & 2 15.0 E 200 Fa a 40.0 10.6 5.0 00 co LAE i Ue) 2002 = 2002 2003 «2003 «2004 «= 2004 2008 2002 2002 2003 2003 2004 2004 2005 Interim Final inter
Slide 7: Effective execution — 1st half achievements
Effective execution — 1st half achievements % e ca *%. ae * s > TAB acquisition completed and integration well underway >» Established management control of Gold Coast and Brisbane properties in November > Integration of Jupiters ahead of target and nearing completion > EBITA growth across all divis
Slide 8: EBITA contribution by business
EBITA contribution by business * EBITA by division’ % Contribution” EBITA growth! Wagering 25% Wagering P| 0 50 100 4160 200 250 O% 5% 10% 15% 20% 972003 EBITA pro forma $m 2004 EBITA $m Notes: 1. EBITA pre non-recurring items and includes normalisation adjusiments for above / below theoretical win
Slide 9: Casinos performance
Casinos performance * * * * » Assumed management control “sm 4HO5'2) 1HO423) _% Chg of Conrad Jupiters and Treasury from Caesars Operating revenue Entertainment - Table games 273.9 269.9 5.4 ; . io. - EGM and other 258.2 236.6 9.1 >» Reorganised Casinos division Total gaming 532.1 496.5 7.2 » Operat
Slide 10: Jupiters integration
Jupiters integration % * * x >» Implementation of strategies i 4 ahead of target Net synergies captured/forecast 60 - » Overall synergy target now 5.9 53.4 $53.4m - $25.5mabove the —_, | 30 ia : estimate at 2003/04 years = j end & 40. 2 Forecast » The incremental synergy S 20 4 target for 2004/5 is
Slide 11: Jupiters integration
Jupiters integration % x es % » Margin improvement achieved at all Queensland Casino properties through Jupiters integration Normalised EBITA Margin’ 1HO5% 1HO4% Variance Conrad Jupiters 44.6 44.4 0.5 Conrad Treasury 51.7 45.6 6.1 Jupiters Townsville 30.8 25.6 5.2 Notes: 1 Fre gaming tax, management
Slide 12: Gaming & Network Games performance
Gaming & Network Games performance * * * x x >» Overall growth in gaming $m 1HO5' 1HO425) -% Chg market Operating revenue » Market share improvement - Vic hotels 303.6 282.5 75 » Very strong Victorian Clubs - Vic clubs 156.8 141.9 10.5 EGM performance Total Vie Gaming 460.4 424.4 85 >» Success in at
Slide 13: Wagering performance
Wagering performance >» Integration of Tab Limited on $m 4HO5' = 1HO4?.-% Chg track Operating revenue » Record Spring Racing Carnival _ recing 6446 6178 43 for Victorian Thoroughbreds - Sportsbetting 23.3 21.1 10.4 > Continued strong growth in Trackside 70 54 304 Sportsbetting turnover - Other 13.6
Slide 14: Tab integration
Tab integration » Tab Limited operations now fully integrated into Tabcorp >» Divestment of Tab Limited’s gaming business and Tabcorp’s Queensland monitoring business completed on 31 December >» Integration now focussed on product standardisation and systems integration > Current overall estimate of
Slide 15: Tab integration
Tab integration * x x » Product Standardisation and System Integration Timeline # March 2005 * Alignment of betting rules for Win, Place, Quinella and Exacta bet types in NSW, Victoria, Western Australia, Tasmania and the ACT *« Commence pooling (subject to regulatory approvals) # Mid-2005 « Alignme
Slide 16: Media performance
Media performance % x x >» Operating revenue increased $m 4HO5' = 1HO4?.-% Chg 2.1% to $65.8 million >» Restructure of operations Operating revenue . - Sky Channel 52.6 51.5 24 undertaken with benefits yitanne expected to flow during the - Sky international 7.2 6.5 10.8 second half Racing - 2KY & ot
Slide 17: Media — NSW broadcast rights
Media — NSW broadcast rights as * » Sky’s rights to broadcast STC and AJC races has lapsed > Racing NSW has issued a direction to that State’s thoroughbred clubs preventing them from dealing with broadcasting rights without Racing NSW consent. This includes entering into broadcasting arrangements wi
Slide 18: Focus for 2005 and Conclusion
Focus for 2005 and Conclusion &* Tabcorp | : ‘ 4 : ‘ 4 Half Year Results
Slide 19: Focus for FY2005
Focus for FY2005 * >» Maintaining track record of consistent, solid earnings growth > Continue to maximise synergies/efficiencies through the integration of Jupiters and Tab Limited >» Cultural integration and investing in our people to build capability > Exploring growth opportunities in internatio
Slide 20: Performance for half to 19 February 2005 and outlook
h Febru es Performance for half to 19! ary 2005 and outlook > Solid start to second half Pro forma net revenue ($m) of 2004/5 for net ne revenue >» Commencement of Media ies pooling March 2005 Casinos > Full impact of new Gaming venues » Finalise NSW Gaming thoroughbred racing rights Wagering Jan1-F
Slide 21: Conclusion
Conclusion x x > Solid performance in business growth and shareholder returns in 1H 05 » All divisions contributed to earnings growth > Trend of solid EPS growth expected to continue in FYO5 >» Acquisitions have created a new platform for growth — we are a diversified leisure, gambling and entertain
Slide 22: Financial Performance
Financial Performance &* Tabcorp | : ‘ 4 : ‘ 4 Half Year Results
Slide 23: Financial performance
Financial performance * x * x * x x x x Actual $m! 6 months to on 31 Dec 041 Normalised 6 months to on 31 Dec 0412 Net operating revenue 1,884.5 68.5% 1,898.8 71.9% Other revenue? 27.7 75.3% 277 75.3% Taxes on gambling (505.0) 56.5% (506.6) 57.8% Operator commissions (213.2) 47.1% (213.2) 47.1% Raci
Slide 24: Financial performance
Financial performance * x * x * x x x x Actual Normalised Change 6 months to on 6 months to on 31 Dec 042 31 Dec 0412 _ Net profit after tax ($m) ~Before goodwill amortisation & non 254.4 46.9% 262.6 58.8% recurring items -Before non-recurring items 161.7 A1% 169.9 15.2% ~Basic 167.9 8.0% 176.1 18.8
Slide 25: Casinos — financial data
Casinos — financial data x x * x Actual Pro forma $m 6 months to 6 months to Change 31 Dec 2004! 31 Dec 2003? Revenue from ordinary activities 636.2 622.8 2.2% Taxes (119.6) (114.3) 4.7% Other operating expenses* (293.8) (288.5) 1.8% Depreciation & amortisation (36.8) (37.2) (1.1)% EBITA 186.0 182.8
Slide 26: Casinos — financial data
Casinos — financial data x x * x Normalised? Pro forma $m 6 months to 6 months to Change 31 Dec 2004! 31 Dec 2003? Revenue from ordinary activities 650.4 608.2 6.9% Taxes (121.2) (112.7) 75% Other operating expenses* (294.7) (287.6) 2.5% Depreciation & amortisation (36.8) (37.2) (1.1)% EBITA 197.7 1
Slide 27: Casinos — financial data
Casinos — financial data os x a * Actual Pro forma $m 6 months to 6 months to Change 31 Dec 2004 31 Dec 2003 Net operating revenue Table games Rebate play at theoretical 9.2 16.2 (39.5)% Above/below theoretical (14.2) 14.6 na Other 264.7 244.6 8.2% Total tables 259.7 274.4 (5.4)% EGMs & other 258.2
Slide 28: Casinos — financial data
Casinos — financial data os x * x Actual Pro forma $m 6 months to 6 months to Change 31 Dec 2004 31 Dec 2003! Star City Table games PGR 56.0 50.6 10.7% MGF 131.4 121.5 7.9% EGMs & other gaming 108.5 102.2 6.2% Non-gaming 48.6 475 2.3% Total Star City 344.2 321.8 7.0% Jupiters casinos Rebate play At
Slide 29: Gaming and network games — financial data
Gaming and network games — financial data % * Me * Ee * Ee Actual Pro forma $m 6 months to 6 months to Change 31 Dec 2004 31 Dec 20032 Revenue from ordinary activities 527.3 491.1 TAN Taxes & operator commissions (344.2) (315.7) 9.0% Other operating expenses (36.0) (39.1) (7.9)% Depreciation & amort
Slide 30: Gaming and network games — financial data
Gaming and network games — financial data * * x x x x Actual Pro forma $m 6 months to 6 months to Change 31 Dec 2004! 31 Dec 200324 Net operating revenue Victorian network Hotels 303.6 282.5 7.5% Clubs 156.8 141.9 10.5% Total Victorian gaming 460.4 424.4 8.5% Keno 54.2 48.2 12.4% Other 47 9.4 (51.0)
Slide 31: Wagering — financial data
Wagering — financial data os x a * NSW Change Vic Change Total Change $m 41HO5 1HO5 HOS Net operating revenue Racing Thoroughbred 286.4 3.2% | 162.8 5.2% 449.2 3.9% Harness 54.4 3.8% 33.6 9.0% 88.0 5.8% Greyhound 71.8 3.1% 35.6 9.2% 107.4 5.0% Total racing 412.6 3.3% | 232.0 6.3% 644.6 4.3% Sporisbe
Slide 32: Wagering — financial data
Wagering — financial data os x a * Actual Pro forma $m 6 months to 6 months to Change 31 Dec 20047 31 Dec 200324 Operating revenue — Vic 249.5 234.1 6.5% Operating revenue — NSW 439.1 424.7 3.4% Other revenue 47 8.5 (42.4)% Revenue from ordinary activities 693.3 667.3 3.9% R.L, taxes & op. commissio
Slide 33: Wagering — financial data
Wagering — financial data os x a * NSW Change Vic Change Total Change $m 41HO5 1HO5 HOS Net operating revenue Racing Thoroughbred 286.4 3.2% | 162.8 5.2% 449.2 3.9% Harness 54.4 3.8% 33.6 9.0% 88.0 5.8% Greyhound 71.8 3.1% 35.6 9.2% 107.4 5.0% Total racing 412.6 3.3% | 232.0 6.3% 644.6 4.3% Sporisbe
Slide 34: Media — financial data
Media — financial data os x a * Actual Pro forma $m 6 months to 6 months to Change 31 Dec 20041 31 Dec 20037 Revenue from ordinary activities Sky Channel 52.6 51.5 2.1% Sky International Racing 7.2 6.5 10.8% 2KY & other 6.0 6.4 (6.3)% Total 65.8 64.4 2.2% R.L., taxes & op. commissions (2.8) (2.6) 7.
Slide 35: Tabcorp Group — financial position
Tabcorp Group — financial position * x * * * % As at As at As at $m 31 Dec 2004 30 Jun 2004 34 Dec 2003 Current assets 358.3 361.0 303.0 Licenses/management agreement 1,114.7 1,118.6 1122.5 Goodwill 3,453.6 1,280.6 1,320.8 Property, plant & equipment 1577.7 1,412.3 "48S.F Other non current assets 16
Slide 36: Group cash flow
Group cash flow * x * Actual Actual $m 6 months to 6months to Change 31 Dec 2004 31 Dec 2003 Net operating flows excl interest/tax 546.9 329.0 66.2% Net interest payments (91.3) (36.8) 148.1% Income tax paid (117.2) (63.4) 84.9% Payments for PP&E (50.3) (51.2) (1.8)% Net Operating Cash flows 288.1 1
Slide 37: Tabcorp Group — debt key features
Tabcorp Group — debt key features 600 J 500 5 400 + § millions 300 +, * Debt structure & maturity profile 200 78g 100 +o) 2905 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2617 2018 2019 2020 mmBank Debt @:Mediutmn Term Notes @puUS Private Placement + $1,400 million Tab bridge facility ref
Slide 38: Tabcorp Group — debt key features
* Tabcorp Group — debt key features 2,500 7 2,000 +--- ME ------- m= ------- 1,500 1--- ------- c =] € ? 4,000 +--- 7 ------- RR ------- RR 500 -+--- aM ------- -------- A i - T T T T T 1 Jun-07 Jun-08 Jun-09 Amounts at period end * 83% gross debt at fixed interest rates at Dec’04 + Average cost of
Slide 39: Appendices
Appendices &* Tabcorp | : ‘ 4 : ‘ 4 Half Year Results
Slide 40: Appendices
Appendices a 1. Non-recurring items 2. Segmented earnings 3. Tab Limited acquisition accounting ~ goodwill 4. Tab Limited acquisition accounting — accounting changes &* Tabcorp | : ‘ 4 : ‘ 4 Half Year Results
Slide 41: Non-recurring items
Non-recurring items * * * x $m Wagering G&NG 6 months to 31 December 2004 Casinos Media Unallocated Total Restructure/integration costs 16.8 Depreciation on Jupiters FV adj (0.2) Divested business profits - Asset sale profits (0.7) Other (0.1) Total pre-tax 415. Tax effect Total post-tax 6 months to
Slide 42: Tabcorp — segmented earnings
Tabcorp — segment x x ed earnings * $m Wagering G&NG Casinos Media Unallocated Total 6 months to 31 Dec 2664 Operating revenue 688.5 519.3 633.1 65.8 (22.2) 1,884.5 Other revenue? 48 8.1 3.4 0.0 11.7 277 Total revenue 693.3 527.3 636.2 65.8 (10.4) 1,912.2 EBITA! 119.0 135.0 186.0 20.8 (0.0) 460.9 Go
Slide 43: Tab Limited acquisition accounting — goodwill
Tab Limited acquisition accounting — goodwill % * * * ee * * Equity consideration (90.2m TAH shares @ $13.04/share) 1,176 Cash consideration (451m TAB shares @ $2.10/share, options, costs) 960 Total consideration paid for Tab equity 2,136 Tab net debt acquired (fair value) (bank debt, less cash) 304
Slide 44: Accounting changes — Tab Limited and Jupiters Limited
Accounting changes — Tab Limited and Jupiters Limited * x * x * x x x x Actual 6 months to $m 31 December 2004 Statement of Financial Performance - Tab Limited wagering licence amortisation’ 1.6 - Jupiters Limited depreciation expense? 2.5 Notes: 1 The process of fair valuing Tab Limited’s net asset
Slide 45: Tabcorp
& Tabcorp piters the bigger better gare {row ayis: 1a conention ard TA B exhibition conte &* Tabcorp | ' ‘ : : ‘ 4 Half Year Results