Aristocrat Leisure Limited · ASX:ALL
Aristocrat Leisure — H1 2008 Earnings Presentation
28 slides from Aristocrat Leisure's earnings presentation, Aug 28, 2008
Slide 1: Results for the 6 months ended 30 June 2008
For personal use only Aristocrat Leisure Limited Results for the 6 months ended 30 June 2008 Chief Executive Officer Chief Financial Officer & Managing Director & Finance Director Paul Oneile Simon Kelly
Slide 2: Disclaimer
Disclaimer For personal use only This document and any oral presentation accompanying it has been prepared in good faith. However, no express or implied warranty is given as to the accuracy or completeness of the information in this document or the accompanying presentation. All statutory representa
Slide 3: Paul Oneile, Chief Executive Officer and Managing Director
For personal use only Paul Oneile Chief Executive Officer and Managing Director
Slide 4: Unfavourable impacts on results
Unfavourable impacts on results For personal use only Internal factors • Viridian™ Gen7™ approval delays, perceptions of content library and operator reluctance to acquire Mk6 product underestimated • Gap in innovation pipeline and delivery • Lack of viable stepper External factors • Replacement dem
Slide 5: Simon Kelly, Chief Financial Officer and Finance Director
For personal use only Simon Kelly Chief Financial Officer and Finance Director
Slide 6: Profit and Loss
Profit and Loss Constant For personal use only Currency Reported Reported H1 2008 H1 2008 H1 2007 $Million $Million $Million Total Revenue 510.7 466.3 558.1 Gross Margin 54.6% 54.8% 59.0% SMG&A 107.3 101.0 117.1 EBIT before R&D 177.2 160.1 222.1 R&D 60.4 57.4 53.9 Profit before Tax 109.9 96.7 166.2
Slide 7: H1 2008 vs H1 2007 profit after tax bridge
H1 2008 vs H1 2007 For personal use only $M 2007 H1 Reported PAT 126.1 Asia Pac- New venue timing (26.0) Interest - capital management (2.0) FX impact (10.0) Effective tax rate differential (3.4) 2007 H1 Rebased PAT 84.7 2008 H1 Reported PAT 71.4 Variance (13.3) (15.7%)
Slide 8: H1 2008 vs H1 2007 EBIT
For personal use only EBIT$Million H 1 20 0.0 50.0 100.0 150.0 200.0 250.0 300.0 07 EB IT $168.2 Ja pa n Sh ar 25.1 e A of CE El 6.3 ek t ro nc e k 6.9 Vo lu m e A Pr 82.4 us ic t ra e /M li a ix n 4.5 Li c en si ng 1.3 C R os R t 0.9 of Sa le s 5.8 SM G & A 17.1 O R& ne O D 5.2 ff s & O th H1 2008
Slide 9: Year Trend Analysis
5 Year Trend Analysis WEIGHTED AVERAGE GLOBAL PRICING GROWTH (1) (2) - CAGR 7.6% For personal use only 15% 10.2% 10% 8.6% 6.2% 5% 5.1% 7.0% 0% -0.8% -5% 2003 2004 2005 2006 2007 H1 2008 GROSS MARGIN NET EXPENSES (3) / REVENUE 70% 30% 27.4% 59.8% 60% 25% 58.0% 23.2% 54.8% 48.5% 51.6% 19.7% 50% 20% 19
Slide 10: Segment Revenue Split
Segment Revenue Split For personal use only 2008 Half Year Segment Revenue by Region 2007 Half Year Segment Revenue by Region Japan "Unique" Japan Australia/ 7% Australia/ NZ "Unique" NZ "Mature" 20% "Mature" Emerging 22% 21% Markets "Growth" $480.0 25% $579.4 Emerging Markets million million "Growt
Slide 11: Cash Flow
Cash Flow For personal use only H1 2008 H1 2007 $Million $Million Net debt - opening balance (111.8) (40.8) Operating cash flow 64.5 65.5 Investing cash flow (6.1) (28.1) 58.4 37.4 Financing cash flow 1.9 2.1 Capital management initiatives (226.1) (182.0) Movement in net debt (165.8) (142.5) Effect
Slide 12: Operating Cash Flow
Operating Cash Flow 140 30% For personal use only 120 25% Percentage of LTM Revenue 100 20% 80 $Million 15% 60 10% 40 5% 20 - 0% Jun 03 Jun 04 Jun 05 Jun 06 Jun 07 Jun-08 Operating Cash Flow LTM Operating Cash Flow % LTM Revenue
Slide 13: Capital Management
Capital Management For personal use only Continue to execute in accordance with capital management strategy announced August 2007: • Ongoing flow of fully franked dividends to maintain a payout ratio of 60% – 70% over the medium term, subject to the Company’s franking ability • Ongoing supplementary
Slide 14: Capital Management: H1 2008 Actions
Capital Management For personal use only H1 2008 Actions • Supplementary unfranked dividends of 10 cps paid January and July 2008 • Interim dividend declared of 14 cps fully franked – unchanged • Dividend Reinvestment Plan to operate with shares acquired on market • On-market share buyback program c
Slide 15: Key Financials and Ratios
Key Financials and Ratios For personal use only H1 2008 H1 2007 FY 2007 $Million $Million $Million EBIT before R&D 160.1 222.1 436.5 EBIT 102.7 168.2 332.3 Working Capital/Revenue (%) 14.6% 13.8% 12.1% Operating Cash Flow 64.5 65.5 222.2 Operating Cash Flow/Revenue (%)** 21.5% 21.6% 19.8% Net Debt 2
Slide 16: Segment Review
For personal use only Segment Review
Slide 17: Australia/New Zealand
Australia/New Zealand For personal use only Constant Currency^ H1 2008 H1 2007 Variance $Million $Million % Revenue 102.2 127.7 (20.0)% Profit 29.8 43.1 (30.9)% Margin 29.2% 33.8% (4.6)pts ^ Adjusted for translational exchange rates using rates applying in H1 2007 Australia • Significant deteriorati
Slide 18: H2 2008 and Outlook: Australia/New Zealand
H2 2008 and Outlook Australia/New Zealand For personal use only KEY DRIVERS IN H2 • Viridian™ Gen 7™ in NSW – full half contribution, performance and increasing game library to drive sales • Improving sentiment following anniversary of smoking restrictions • PID upgrade requirements to drive sales i
Slide 19: North America
North America For personal use only Constant Currency^ H1 2008 H1 2007 Variance $Million $Million % Revenue 223.3 264.5 (15.6)% Profit 90.0 112.3 (19.9)% Margin 40.3% 42.5% (2.2)pts ^ Adjusted for translational exchange rates using rates applying in H1 2007 • 31% reduction in unit sales to 5,252, so
Slide 20: H2 2008 and Outlook: North America
H2 2008 and Outlook For personal use only North America KEY DRIVERS IN H2 • Viridian™ Gen 7™ to drive sales based on unrestricted approval across all key jurisdictions, performance and game library • Replacement demand and new venue openings/expansions • Lease/rental contracts • Pricing – ongoing be
Slide 21: Japan
Japan For personal use only Constant Currency^ H1 2008 H1 2007 Variance $Million $Million % Revenue 97.5 39.9 +144.4% Profit 28.1 3.0 +836.7% Margin 28.8% 7.5% +21.3pts ^ Adjusted for translational exchange rates using rates applying in H1 2007 • Overall size of pachislot market and demand continues
Slide 22: H2 2008 and Outlook: Japan
H2 2008 and Outlook Japan For personal use only KEY DRIVERS IN H2 • Success of key game release • 2 support game releases • Leverage of Regulation 5 track record • Gross margin expansion • Introduction of OEM supply capability OUTLOOK 2009+ • Gradual improvement in market sentiment towards pachislot
Slide 23: Consolidated Other Markets
Consolidated Other Markets For personal use only Constant Currency^ H1 2008 H1 2007 Variance $Million $Million % Revenue 101.2 147.3 (31.3)% Profit 29.8 50.2 (40.6)% Margin 29.4% 34.1% (4.6)pts ^ Adjusted for translational exchange rates using rates applying in H1 2007 • Macau results impacted by ti
Slide 24: H2 2008 and Outlook: Consolidated Other Markets
H2 2008 and Outlook For personal use only Consolidated Other Markets KEY DRIVERS IN H2 • Viridian™ Gen 7™ rollout across Europe • Successful launch of Spanish arcade style games • South American pipeline conversion • Elektroncek Asia/Europe demand • Norsk Tipping “go live” and rollout OUTLOOK 2009+
Slide 25: Slim line cabinet – Designed to Perform
For personal use only Slim line cabinet – Designed to Perform Smart modular design Operator and Player Focused Design Technology for Today and Tomorrow Downloadable & Server based ready Environmentally Responsible Design
Slide 26: Viridian Gen7 Performance
Viridian™ Gen7™ Performance AVERAGE PERFORMANCE IMPROVEMENT For personal use only 80% 67% Current Games approved: Win / Day Improvement 70% 60% Australia > 20 50% 40% 25% US > 60 30% 15% 16% 20% 10% 0% Current Units in field: Australia North America Australia 1,000 vs MkVI vs Floor Average US 3,000
Slide 27: Key Short Term Priorities
Key Short Term Priorities For personal use only -Viridian™ Gen7™ – approvals, content, performance in key markets - Improvement in North American business performance - Successful launch of key game in Japan - Delivery of key innovation projects to support 2009+ growth - Launch of Viridian™ RFX™ ste
Slide 28: Questions
For personal use only Questions