Tabcorp Holdings Limited · ASX:TAH
Tabcorp — H1 2009 Earnings Presentation
30 slides from Tabcorp's earnings presentation, Jan 29, 2009
Slide 1: ASX cover letter: Tabcorp half year results presentation
Tabcorp Holdings Limited ACN 063 780 709 5 Bowen Crescent Melbourne Australia 3004 GPO Box 1943R Melbourne Australia 3001 Telephone 61 3 9868 2100 Facsimile 61 3 9868 2300 For personal use only Website www.tabcorp.com.au 29 January 2009 To: Australian Securities Exchange Companies Announcements Plat
Slide 2: Tabcorp Holdings Limited Half Year Results Presentation
For personal use only 2008/09 Tabcorp Holdings Limited Half Year Results Presentation 29 January 2009 1
Slide 3: 1H09 financial results
1H09 financial results ¾ Normalised NPAT of $262.0m, in line with prior year after absorbing Victorian licence amortisation For personal use only Normalised NPAT up 5.4% if pcp is adjusted for Victorian licence amortisation Normalised EPS 49.4 cents, up 4.3% if pcp is adjusted for Victorian lice
Slide 4: Group results
Group results Actual Change Normalised Change For personal use only $m 1H09 on pcp 1 1H09 2 on pcp 1 Operating revenue 2,114.5 5.5% 2,112.6 6.4% Net operating expenses (529.3) 4.9% (529.3) 4.9% EBITDA 548.8 (0.5%) 547.2 2.3% EBIT 461.0 (3.5%) 459.4 (0.4%) NPAT 263.2 (3.7%) 262.0 0.1% Non-recurring i
Slide 5: Key drivers of 1H09 result
Key drivers of 1H09 result $m For personal use only 11.2 (9.3) (8.1) 261.9 17.7 (13.2) 4.7 262.0 248.7 (2.9) 1H08 Vic Licence 1H08 Casinos Wagering Gaming Operating IRB Bad Other 1H09 Normalised Amortisation Adjusted Revenues Revenues Revenues Expenses Debt Normalised NPAT NPAT NPAT 4
Slide 6: Divisional results
Divisional results For personal use only Casinos Change Wagering Change Gaming Change $m 1 Normalised on pcp on pcp 2 on pcp 2 Operating revenue 672.0 0.2% 828.1 13.0% 615.6 5.3% Revenue 674.7 0.2% 834.0 13.0% 628.8 5.7% Variable contribution 545.8 (0.8%) 327.7 8.4% 204.2 8.5% Net operating expenses
Slide 7: Casinos: KPIs
Casinos: KPIs NSW Qld Total ¾ Visitation stable, spend down For personal use only Change Change Change Operating Revenue 1H09 1H09 1H09 ¾ EGMs stable in difficult market on pcp on pcp on pcp ¾ MGF mixed EGMs 90.6 (1.5%) 143.9 (1.0%) 234.5 (1.2%) Strong in Poker at Star City, up 24% MTGMs showing
Slide 8: Casinos: Star City expansion update
Casinos: Star City expansion update ¾ Project scope For personal use only New 250 room 5 star hotel Sydney Harbour orientation 30 restaurants and bars Expanded and refurbished ballroom Over 30% increase in gaming product ¾ Conditional planning approvals obtained ¾ Construction Selection
Slide 9: Wagering: KPIs
Wagering: KPIs Change For personal use only Revenues product ($m) 1H09 1H08 on pcp ¾ Operational performance Racing Vic 353.4 324.4 8.9% Equine Influenza recovery; solid Racing NSW 414.7 363.4 14.1% underlying growth Sportsbetting 62.9 50.1 25.5% Trackside 16.5 14.9 10.7% Record operational perf
Slide 10: Wagering: A changing environment
Wagering: A changing environment Market Changes Response For personal use only ¾ New race fields fees ¾ Tabcorp’s market response Imposition of product fees on wagering Product/distribution leadership operators by each state racing industry Pari-mutuel price promotions announced last year Ex
Slide 11: Gaming: KPIs
Gaming: KPIs Change Vic Gaming 1H09 1H08 on pcp Vic Gaming For personal use only Revenue ($m) 548.4 522.1 5.0% ¾ Revenues up 5.0% ¾ Market share up at 52.3% EBIT 119.2 109.6 8.7% ¾ Exploring potential models post 2012 Venues (period end) 263 266 (1.1%) EGMs (average) 13,376 13,579 (1.5%) Jackpots EG
Slide 12: Gaming: Market share
Gaming: Market share Tabcorp vs Tatts Group For personal use only 53.0% Gaming Revenue Market Share December 2004 to December 2008 TABCRP 52.0% 51.0% Tabcorp Market Share % 50.0% 49.0% Tatts Group 48.0% 47.0% TATTS Sep-05 Sep-06 Sep-07 Sep-08 Dec-04 Mar-05 Jun-05 Dec-05 Mar-06 Jun-06 Dec-06 Mar-07 J
Slide 13: Group: Expense and operational controls
Group: Expense and operational controls For personal use only Operating expense growth Comments ¾ Underlying expense growth within CPI IRB bad debt 9.2% ¾ IRB bad debt $11.5m Tightened credit controls Recovery actions ¾ Absorbed new initiatives 4.9% Keno hotels rollout Luxbet 2.3% ¾ Group IT
Slide 14: Group: Capital expenditure
Group: Capital expenditure For personal use only Capex trend (excluding Project Star) Capital program $m ¾ Short term capital expenditure profile adjusted for economic conditions 160 FY09 spend capped at $200m (ex. Project Star) FY10 spend to be cut by 30% to 93 approximately $140m (ex. Project
Slide 15: Group: Key capital features
Group: Key capital features Debt structure and maturity profile Debt For personal use only ¾ Average debt maturity is 4.3 years 700 ¾ No maturities due in 2009 600 ¾ 2H10 maturities: $200m March, $260m April 500 ¾ BBB+ credit rating $ millions 400 300 ¾ Dividend reinvestment plan maintained 200 100
Slide 16: Group priorities
Group priorities ¾ Casinos Grow domestic and international revenues and market share For personal use only Drive significant improvement in customer service Progress Star City expansion program ¾ Wagering Adjust wagering business to national market Continue to drive growth in fixed odds be
Slide 17: Outlook
Outlook ¾ Operational disciplines supported 1H09 performance For personal use only ¾ Positive start to 2H09 ¾ Economy slowing and significant uncertainty for FY09 and FY10 ¾ FY10 regulatory and gaming tax impacts Full year impact of race fields fees - $7m absorbed in 1H09 Qld gaming tax increase
Slide 18: Summary
Summary ¾ Earnings up 5.4% on a like for like basis – in line with guidance For personal use only ¾ Positive revenue performance in tough economy ¾ Expense performance in line with targets ¾ Revised dividend policy, distributing 70% - 80% of earnings ¾ Group priorities unchanged – short term adjustm
Slide 19: Appendices
Appendices For personal use only 1. Group results 2. Reconciliation of 1H08 comparative results 3. Earnings per share and dividends per share 4. Casinos: Financial data 5. Casinos: Revenues by state and product 6. Wagering: Financial data 7. Wagering: Revenues by state and product 8. Gaming: Financi
Slide 20: 1. Group results
1. Group results Actual Change Normalised Change $m 1H09 on pcp 1H09 on pcp For personal use only Total operating revenues 2,114.5 5.5% 2,112.6 6.4% Other revenue1 21.9 19.3% 21.9 19.3% Revenue 2,136.4 5.7% 2,134.5 6.5% Government taxes & levies (580.4) 6.4% (580.1) 6.7% Operating commissions (253.1
Slide 21: 2. Reconciliation of 1H08 comparative results
2. Reconciliation of 1H08 comparative results Casinos Wagering Gaming Other Group For personal use only 1H08 Normalised EBIT 190.0 130.8 138.7 2.0 461.5 1H08 Licence Amortisation (4.2) (9.1) (13.2) 1H08 Normalised EBIT Comparative 190.0 126.7 129.7 2.0 448.3 1H08 1H08 Actual Amortisation Normalised
Slide 22: 3. Earnings per share and dividends per share
3. Earnings per share and dividends per share Normalised earnings per share Dividends per share For personal use only 53.5 53.5 47 47 51.5 44 49.4 47.4 40 35 Growth Growth on pcp: on pcp: 5.5% 0.0% (3.7%) (8.0%) 4.3% 14.3% 10.0% 6.8% 0% (25.5%) 1H05 1H06 1H07 1H08 1H09 1H05 1H06 1H07 1H08 1H09 Payou
Slide 23: 4. Casinos: Financial data
4. Casinos: Financial data For personal use only Actual Change Normalised Change $m 1H09 1H08 on pcp 1H09 1H08 on pcp Revenue 676.6 691.7 (2.2%) 674.7 673.3 0.2% Taxes, levies, commissions and fees (129.1) (125.2) 3.1% (128.9) (123.3) 4.5% Net operating expenses (345.8) (325.4) 6.3% (345.8) (325.4)
Slide 24: 5. Casinos: Revenue by state and product
5. Casinos: Revenue by state and product NSW Change Qld Change Total Change For personal use only $m 1H09 on pcp 1H09 on pcp 1H09 on pcp EGMs 90.6 (1.5%) 143.9 (1.0%) 234.5 (1.2%) Main Gaming Floor 141.2 4.6% 64.4 3.3% 205.7 4.2% Private Gaming Rooms 58.4 (8.6%) 31.4 7.5% 89.9 (3.6%) Non-gaming 51.3
Slide 25: 6. Wagering: Financial data
6. Wagering: Financial data Change $m 1H09 1H08 on pcp For personal use only Operating revenues Racing - Victoria1 268.8 246.7 9.0% Racing - NSW 2 414.7 363.4 14.1% Sportsbetting 56.6 45.1 25.5% Trackside 13.2 12.0 10.4% Media 55.9 50.3 11.3% Other 18.8 15.2 23.3% Total operating revenues 828.1 732.
Slide 26: 7. Wagering: Revenue by state and product
7. Wagering: Revenue by state and product NSW1 Change Vic1 Change Total Change For personal use only $m 1H09 on pcp 1H09 on pcp 1H09 on pcp Operating revenues Thoroughbred 288.6 18.7% 186.0 12.9% 474.6 16.4% Harness 52.2 28.5% 37.9 16.9% 90.1 23.4% Greyhound 73.9 (7.4%) 44.9 (9.2%) 118.8 (8.1%) Tota
Slide 27: 8. Gaming: Financial data
8. Gaming: Financial data Change $m 1H09 1H08 on pcp For personal use only Operating revenues Victorian network - Hotel 353.8 337.6 4.8% - Clubs 194.6 184.5 5.5% Total Victorian gaming 548.4 522.1 5.0% Keno 64.3 59.6 7.9% Other 2.8 2.7 6.2% Total operating revenues 615.6 584.4 5.3% Other revenue 13.
Slide 28: 9. Balance sheet
9. Balance sheet As at As at Change $m 31 Dec 08 30 Jun 08 on pcp For personal use only Total current assets 324.7 278.2 16.7% Licences 706.0 723.9 (2.5%) Other intangible assets 3,521.6 3,506.8 0.4% Property, plant and equipment 1,520.9 1,499.3 1.4% Other non current assets 240.8 113.5 112.2% Total
Slide 29: 10. Cashflow
10. Cashflow Actual Change For personal use only $m 1H09 1H08 on pcp Net operating flows 527.6 470.2 12.2% Net interest payments (83.4) (79.2) 5.3% Income tax paid (98.8) (73.4) 34.6% Payments for PP&E (144.6) (76.8) 88.3% Net operating cash flows 200.8 240.8 (16.6%) Proceeds from sale of assets/bus
Slide 30: For personal use only
For personal use only Front cover: Images from Tabcorp's Casino, Wagering and Gaming businesses.The Phantom of the Opera photograph is courtesy of Jeff Busby. 29