Lottery Corporation Limited · ASX:TLC
Lottery — FY2022 Earnings Presentation
38 slides from Lottery's earnings presentation, Aug 24, 2022
Slide 1: 2022 Full Year Results Presentation Slides (ASX announcement)
24 August 2022 ASX Market Announcements Office ASX Limited 20 Bridge Street Sydney NSW 2000 2022 FULL YEAR RESULTS PRESENTATION SLIDES Attached is a copy of the slides that will be presented at The Lottery Corporation Limited’s full-year 2022 results briefing today. The briefing commences at 10:30am
Slide 2: FY22 Full Year Results Presentation
® FY22 Full Year Results Presentation Year ended 30 June 2022 24 AUGUST 2022 The Lottery Corporation Limited - ABN 21 081 925 706
Slide 3: The Lottery Corporation
The Lottery Corporation The demerger of The Lottery Corporation from Tabcorp Holdings Limited was implemented on 1 June 2022 2
Slide 4: Leader in Australia's lotteries and Keno market
The Lottery Corporation is the leader in Australia’s lotteries and Keno market and one of the highest performing lotteries businesses globally1 Exclusive Diversified and Significant and Infrastructure- Low capital and/or long balanced diverse retail like and intensity dated licences portfolio of dis
Slide 5: Significant scale and reach
The Lottery Corporation has significant scale and reach 7,200+ retail Fast growing points of digital channels distribution1 Lotteries 37.7%; Keno 18.8% Lotteries has one of Australia's (digital share of FY22 turnover) largest retail franchise networks 8.3 million2 total active Over 660 million custo
Slide 6: The Lottery Corporation's positive impacts
The Lottery Corporation’s positive impacts $1.7 billion $4.9 billion Lottery and Keno taxes Total prizes won by generated for governments customers in FY22 (on a in FY22 (on a Comparable Comparable basis)1 basis)1, contributing to Australian communities $500+ million Responsible Commissions to Play
Slide 7: Table of Contents
Table of Contents 07 - 10 Group Overview 12 - 19 Business Results 21 - 22 Capital 24 - 25 Strategy 27 Conclusion 29 - 35 Appendices
Slide 8: Executive Summary
Executive Summary Record result, following a strong FY21, shows the value of the balanced game portfolio Lotteries • Revenue growth from the lotteries game portfolio Result shows the business’ resilience, defensive qualities and benefits • Powerball® - successful management of jackpot sequences of o
Slide 9: FY22 Key Initiatives Delivered
FY22 Key Initiatives Delivered Demerger from Tabcorp Holdings Limited created The Lottery Corporation as a standalone, listed entity Continued investment to deliver compelling offers, enhanced customer experiences and to enable customers to buy when, where and how they wish Innovate Game Portfolio •
Slide 10: FY22 Group Results
FY22 Group Results Reported Comparable3 Reported results reflect: $M • 12 months of Lotteries in both periods Change Change FY22 FY21 FY22 FY21 • Keno for one month in FY22 as part of the demerger $ % $ % (FY21: nil) Revenues 3,279 2,951 328 11.1% 3,507 3,206 301 9.4% • Transfer of debt to The Lotte
Slide 11: Group Comparable EBITDA Growth 11.9%
Group Comparable1 EBITDA Growth 11.9% Increased Advertising & Promotions Lotteries revenue increase driven by Increased technology spend Powerball® (jackpot sequence Continued lift in digital share management, favourable jackpots) One-off costs in 2H22 largely related to separation ($8m) Keno revenu
Slide 12: Table of Contents
Table of Contents 07 - 10 Group Overview 12 - 19 Business Results 21 - 22 Capital 24 - 25 Strategy 27 Conclusion 29 - 35 Appendices
Slide 13: Comparable Group & Business Results
Comparable Group & Business Results1 Lotteries Keno Group $M FY22 FY21 FY22 FY21 FY22 FY21 % % % Comparable Comparable Comparable Comparable Comparable Comparable Revenues 3,255 2,951 10.3% 252 255 (1.2%) 3,507 3,206 9.4% Variable contribution 817 719 13.6% 133 139 (4.3%) 950 858 10.7% Operating exp
Slide 14: Lotteries: Result Highlights (Comparable)
$M FY22 FY21 Change Lotteries: Result Highlights (Comparable)1 Revenues 3,255 2,951 10.3% Variable contribution 817 719 13.6% Strong revenue growth underpinned by active portfolio and jackpot sequence management, Operating expenses (217) (197) 10.2% EBITDA 600 522 14.9% and continuing growth in digi
Slide 15: Lotteries: KPIs – Product
Lotteries: KPIs – Product Turnover by Product Type ($M) Turnover Growth Strong Powerball® result; good performance from base games FY22 cycling the strong COVID tailwind from FY21; 2 year CAGR growth a following a particularly strong FY21 better indicator of underlying business performance and momen
Slide 16: Lotteries: KPIs – Jackpot Games
Lotteries: KPIs – Jackpot Games Powerball® and Oz Lotto® Major Jackpots Cumulative Jackpot Value Offered ($M) 13 x Powerball® $50m+ jackpots in FY22 (vs 7 in pcp) Increase driven by more Powerball® jackpots at $60m, $80m and $120m Powerball® (65th percentile), Oz Lotto® (35th percentile) vs 100-year
Slide 17: Lotteries: KPIs – Channel
Lotteries: KPIs – Channel Turnover by Channel ($M) Number of Active1 Registered Customers (000’s) Continued strong digital growth; retail has remained resilient 4.1m active registered customers accounted for c.60% of turnover Mix continues to move in line with changing customer preferences Estimated
Slide 18: Case study: Record Powerball Draw Turnover
Case study: Record Powerball Draw Turnover1 ® Active portfolio and sequence management to optimise returns Well researched and positioned game change Secondary benefits to Powerball® and other games • Demand still strong four years post change • Use of prizes for subsequent purchases • 2½ years sinc
Slide 19: Keno: Result Highlights (Comparable)
$M FY22 FY21 Change Keno: Result Highlights (Comparable)1 Revenues 252 255 (1.2%) Variable contribution 133 139 4.3% Operating expenses (39) (41) (4.9%) Flat revenue despite COVID-related retail closures (especially in NSW in 1H22) with some offset from EBITDA 94 98 (4.1%) digital growth D&A (32) (3
Slide 20: Keno: KPIs
Keno: KPIs Keno Turnover by Product ($M) Keno Turnover by Channel ($M) Mega Millions has been the greatest contributor to growth in FY22, benefiting Mix change reflects increased take-up by customers of the emerging digital from increased jackpot offers offer, particularly during COVID Retail perfor
Slide 21: Table of Contents
Table of Contents 07 - 10 Group Overview 12 - 19 Business Results 21 - 22 Capital 24 - 25 Strategy 27 Conclusion 29 - 35 Appendices
Slide 22: Capital Metrics
Capital Metrics Strong and flexible financial position to support existing business and fund future growth Gearing Debt Profile 3.1X Avg Maturity2: 7.2 Years Net Debt / EBITDA1 Avg Interest Rate3: 5.4% 3.5x - 4.0x Minimise cost of borrowings Credit Rating Capex (Comparable)4 BBB+ /Stable FY22 $50M F
Slide 23: Capital Management
Capital Management Disciplined approach to capital management Dividends Facilities • Tabcorp today announced a final FY22 dividend with reference to • Long-dated USPP debt provides core long-term funding the five months of The Lottery Corporation earnings prior to the • Bank debt provides short-to-m
Slide 24: Table of Contents
Table of Contents 07 - 10 Group Overview 12 - 19 Business Results 21 - 22 Capital 24 - 25 Strategy 27 Conclusion 29 - 35 Appendices
Slide 25: Group Strategy
Group Strategy The management team and Board are continuing to refine the company growth strategy. Executing against a proven strategy underpinned by a customer-led focus on product innovation, deepened engagement across all channels and digital expansion Increase Digital Penetration Pursue New Lice
Slide 26: FY23 Key Focus Areas and Priorities
FY23 Key Focus Areas and Priorities1 We will continue to invest in a customer-led focus on product innovation, deepened engagement across all channels and digital expansion Significant ongoing implementation activity post-demerger including continued people, systems and vendor separation • Draw game
Slide 27: Table of Contents
Table of Contents 07 - 10 Group Overview 12 - 19 Business Results 21 - 22 Capital 24 - 25 Strategy 27 Conclusion 29 - 35 Appendices
Slide 28: Conclusion
Conclusion • The Lottery Corporation is the driving force behind Australia’s largest lottery games and one of the best-performing lottery businesses in the world • Record result in FY22 shows the strength of the game portfolio • Clear focus on investing in games, the customer experience and channels
Slide 29: Table of Contents
Table of Contents 07 - 10 Group Overview 12 - 19 Business Results 21 - 22 Capital 24 - 25 Strategy 27 Conclusion 29 - 35 Appendices
Slide 30: Appendix 1: Significant Items
Appendix 1: Significant Items FY22 Significant items $M FY22 FY21 Ann Street Impairment Ann Street Impairment (6) - • Impairment in respect of surplus lease space at Ann Street office (first time ACA Tax expense (20) - recognition on demerger) Sale of Jumbo - 74 ACA Tax Expense Total significant ite
Slide 31: Appendix 2A: Group results (Comparable)
Appendix 2A: Group results (Comparable)1 $M 1H22 1H21 Change 2H22 2H21 Change FY22 FY21 Change Revenues 1,784 1,609 10.9% 1,723 1,597 7.9% 3,507 3,206 9.4% Variable contribution 475 427 11.2% 475 431 10.2% 950 858 10.7% Operating expenses (117) (116) 0.9% (139) (122) 13.9% (256) (238) 7.6% EBITDA 35
Slide 32: Appendix 2B: Lotteries results (Comparable)
Appendix 2B: Lotteries results (Comparable)1 $M 1H22 1H21 Change 2H22 2H21 Change FY22 FY21 Change Revenues 1,665 1,477 12.7% 1,590 1,474 7.9% 3,255 2,951 10.3% Variable contribution 416 354 17.5% 401 365 9.9% 817 719 13.6% Operating expenses (99) (95) 4.2% (118) (102) 15.7% (217) (197) 10.2% EBITDA
Slide 33: Appendix 2C: Keno results (Comparable)
Appendix 2C: Keno results (Comparable)1 $M 1H22 1H21 Change 2H22 2H21 Change FY22 FY21 Change Revenues 119 132 (9.8%) 133 123 8.1% 252 255 (1.2%) Variable contribution 59 73 (19.2%) 74 66 12.1% 133 139 (4.3%) Operating expenses (18) (21) (14.3%) (21) (20) 5.0% (39) (41) (4.9%) EBITDA 41 52 (21.2%) 5
Slide 34: Appendix 3: Balance Sheet and Comparable Capital Expenditure
Appendix 3: Balance Sheet and Comparable1 Capital Expenditure $M Jun-22 $M Total current assets 707 Gross debt – excluding lease liabilities (at spot) 2,389 Licences 751 Less: Benefit of FX hedges on USPP principal (188)2 Other intangible assets 2,230 Gross debt – excluding lease liabilities (at hed
Slide 35: Appendix 4: Lotteries – Turnover by product
Appendix 4: Lotteries – Turnover by product Turnover by Game ($M) Change FY22 FY21 Game $ % FY22 Turnover by Game Powerball® 2,587 1,952 635 32.5% Powerball® Oz Lotto® 897 886 11 1.2% 26% Oz Lotto® Saturday Lotto 1,752 1,762 (10) (0.6%) Saturday Lotto 6% 13% Monday & Wednesday Lotto Monday & Wednesd
Slide 36: Appendix 5: Glossary
Appendix 5: Glossary Term Definition Term Definition 1H/2H Six months ended 31 December/30 June of the relevant financial year Financial year/FY The Group’s financial year is 1 July to 30 June AAS Australian Accounting Standards FX Foreign exchange ACA Allocatable cost amount GAAP Generally accepted
Slide 37: Disclaimer
Disclaimer This presentation (Presentation) contains summary information about the current activities of The Lottery Corporation Limited (The Lottery Corporation) and its subsidiaries. It should be read in conjunction with The Lottery Corporation’s other periodic and continuous disclosure announceme
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