Slide 1: Results Presentation – half-year ended 31 December 2021
For personal use only Results Presentation For the half-year ended 31 December 2021 22 February 2022
Slide 2: Disclaimer
Disclaimer For personal use only This presentation contains summary information about the activities of All dollar values are in Australian dollars (A$) unless otherwise stated. Jumbo Interactive Limited (Jumbo) and its controlled subsidiaries This presentation may contain certain forward-looking st
Slide 3: Lotterywest adjustments to determine 1H21 underlying figures
Lotterywest adjustments to determine 1H21 underlying figures For personal use only Reported Lotterywest Underlying 1H21 1H21 Adjustment3 $’000 $’000 $’000 TTV 232,776 232,776 Revenue 40,939 (1,642) 39,297 Underlying EBITDA1 24,135 (1,434) 22,701 Underlying NPAT1 13,953 (1,004)2 12,949 Underlying EPS
Slide 4: 1H22 Group result overview
1H22 Group result overview TTV ($m) Revenue ($m) Underlying EBITDA2 ($m) For personal use only +41% +35% +25% 327.9 52.8 28.3 232.8 40.9 39.3 24.1 22.7 1H21 1H22 1H21 1H21 1H22 1H21 1H21 1H22 Reported Underlying1 Reported Underlying1 Underlying NPAT2 ($m) Operating cashflow ($m) Interim dividend dec
Slide 5: Our strategy
Our strategy We have a clear strategy and For personal use only Mission have created three operating segments, which will set us up Vision for sustained growth both domestically and overseas in the medium to long term Total Addressable Market Overview of Business Activity 1. Source: Australian gambl
Slide 6: Jumbo pro forma active player growth
Jumbo pro forma active player growth Active players that made a purchase in the 12-month period (FY15 – 1H22) For personal use only Lottery Retailing & SaaS Australia United Kingdom (Gatherwell) Managed Services Canada (Stride Management Inc.)1 3.7m United Kingdom (StarVale Group)2 Acquisition of St
Slide 7: Lottery Retailing
Lottery Retailing – Australian digital sales of lottery tickets up to 36.7% (FY21: 32.8%, 1H21: 32.1%) – 23 large jackpots (Oz Lotto/Powerball ≥ $15m) relative to 15 in 1H21 For personal use only – Average value per large jackpot up 11.2% to $37.8m (vs $34.0m in 1H21) % of AUS lottery sales through
Slide 8: Lottery Retailing – game matrix change
Lottery Retailing – Matrix change expected to result in higher jackpots and increase in active players – Tabcorp advised base price (excludes agents commission) increase of 10 cents For personal use only – Jumbo expects to increase price a further 5 cents, atop of the base price increase Portfolio m
Slide 9: Lottery Retailing – players and TTV
Lottery Retailing – 198,912 new players for the six months ended 31 December 2021, up 41% vs pcp (1H21: 140,7251) – $20.02 cost per lead for the six months ended 31 December 2021, up 24% vs pcp (1H21: $16.211) For personal use only – 836,582 active players for the 12-month period ending 31 December
Slide 10: Lottery Retailing – acquisition spend and cohort revenue
Lottery Retailing – 1H22 acquisition/marketing spend as a % of new player revenue is broadly in line with the past 3 comparative halves – Acquisition/marketing spend typically fully recovered at ~5 months on average for each new player For personal use only – Player retention/loyalty results in cont
Slide 11: Software-as-a-Service (SaaS)
Software-as-a-Service (SaaS) Underlying TTV ($m) Lotterywest update For personal use only +46% 81,476 – Encouraging early results from acquisition marketing trial in Q2 FY2022 -1% – From Q3 FY2022 progressing to jointly funded and managed acquisition/marketing program for an initial 1 55,898 year pe
Slide 12: Managed Services (Gatherwell)
Managed Services (Gatherwell) Gatherwell TTV (£m) Operational highlights >100 94% For personal use only +56% >10K Local Government Customer satisfaction Good causes supported 6,186 Authorities score on platform 3,963 (total market ~400) (2021) 1H21 1H22 +60 2k 108 Gatherwell Tickets Schools using Ch
Slide 13: Managed Services international expansion
Managed Services International Gatherwell StarVale Managed Services expansion Australia For personal use only (Nov 2019) (Jan 2022) Annual TTV Annual TTV ~£9.3m1 ~£63m3 • New client agreement with LifeFlight signed in February 2022 with an expected May Active players Active players 2022 launch ~160k
Slide 14: Financials – Underlying EBITDA
Financials – Underlying EBITDA – Strong broad-based underlying revenue growth – +34.9% in Lottery Retailing; +36.0% in SaaS; and +40.8% in Managed Services For personal use only – Cost of sales +84.4% driven by 1.0ppt increase in Tabcorp service fee (+$2.7m) and higher merchant fees as a function of
Slide 15: Financials – Lottery Retailing
Financials – Lottery Retailing – Strong underlying TTV and revenue growth driven by higher large jackpots and increased customer activity/spend (underpinned by strong player engagement and retention) For personal use only – Modest reduction in revenue margin due to product mix – EBITDA impacted by h
Slide 16: Financials – SaaS
Financials – SaaS – Strong underlying TTV and revenue growth with all four Australian clients fully operational on the PBJ platform – Revenue margin ranges between ~3% and 9.5% of TTV and includes an intersegment software license fee of 7.5% of relevant Lottery Retailing TTV (shown as For personal u
Slide 17: Financials – Gatherwell performing to model
Financials – Gatherwell performing to model – Continued strong TTV and revenue growth underpinned by new client wins (schools and Local Government Authorities) and momentum with existing clients For personal use only – Reduction in revenue margin reflects product mix – EBITDA impacted by higher oper
Slide 18: Operating costs
Operating costs – Underlying operating expenses (excluding one-offs) up $4.6m (+35.9%) mainly reflecting: For personal use only – $2.1m increase in acquisition/marketing costs in line with increased larger jackpots to drive growth in Lottery Retailing TTV. – $1.7m increase in employee costs reflecti
Slide 19: Balance sheet
Balance sheet – Strong balance sheet as at 31 December 2021 with a For personal use only cash balance of $69.6m1 (FY21: 53.8m1) – 1H22 ordinary dividend of 22cps reflects a payout 31 Dec 2021 30 Jun 2021 ratio of 83.7% of statutory NPAT: $’000 $’000 – Record date: 4 March 2022 Cash 75,697 63,139 – P
Slide 20: Cashflow
Cashflow – Free cash flow of $24.4m1 (1H21: $15.8m1) For personal use only – Cash conversion ratio of 148.5%2 (1H21: 119.8%2) – Pro forma general account balance estimated at $42.7m after deducting 1H22 interim dividend, consideration for Stride and StarVale acquisitions and allowing for first tranc
Slide 21: 1H22 pro forma financials (Stride + StarVale)
1H22 pro forma financials (Stride + StarVale) Illustrative only For personal use only TTV ($m) Revenue ($m) Underlying EBITDA2 ($m) ~450 ~60 233 41 ~31 24 328 53 39 28 23 1H21 1H22 1H21 1H22 1H21 1H22 Reported Pro forma Reported Pro forma Reported 1H21 underlying1 1H22 Reported Conditional acquisiti
Slide 22: Best in class lottery software
Best in class lottery software Our lottery software is complemented For personal use only – Machine learning to provide real-time, by modern technology and integrations Personalised product personalised recommendations recommendations – Minimises friction and maximises up-sell – Customer data pipeli
Slide 23: 1H22 Summary
1H22 Summary 1 Successfully executing our growth strategy: For personal use only – Lottery Retailing: Strong growth driven by higher jackpots and increased customer activity (underpinned by strong player engagement and retention) – SaaS: All clients on a full run-rate and growing organically; Jumbo
Slide 24: Appendices
Appendices For personal use only Supplementary financial information
Slide 25: 1H22 Group consolidated results
1H22 Group consolidated results For personal use only 1H22 1H21 Variance $’000 $’000 % TTV 327,934 232,776 40.9 Revenue 52,841 40,939 29.1 Cost of sales (7,252) (4,095) 77.1 Gross profit 45,589 36,844 23.7 Other revenue 228 187 21.9 Expenses (17,595) (13,948) 26.1 EBITDA 28,222 23,083 22.3 Depreciat
Slide 26: Reconciliation to statutory earnings
Reconciliation to statutory earnings For personal use only 1H22 1H21 $’000 $’000 Underlying EBITDA 28,348 24,135 Underlying EBIT 24,050 20,078 Underlying NPAT 16,496 13,953 Add/(deduct) significant items – Acquisition costs (126)1 (98)2 − Consulting and legal fees - (867)2 − Fair value movement on f
Slide 27: 1H22 Group results overview – Lotterywest adjustments to pcp
1H22 Group results overview – Lotterywest adjustments to pcp For personal use only Reported Lotterywest Underlying Reported Variance 1H21 Adjustment 1H21 1H22 % $’000 $’000 $’000 $’000 TTV 232,776 232,776 327,934 40.9 Revenue 40,939 (1,642) 39,297 52,841 34.5 Underlying EBITDA1 24,135 (1,434) 22,701
Slide 28: Lotterywest adjustments - detail
Lotterywest adjustments - detail 1H21 Lotterywest 1H21 1H22 Variance Reported adjustment1 Underlying Reported % $’000 $’000 $’000 $’000 For personal use only Lottery Retailing 185,684 (15,964) 169,720 234,655 38.3 SaaS 39,934 15,964 55,898 81,476 45.8 TTV Managed Services 7,158 7,158 11,803 64.9 Gro
Slide 29: Lotterywest adjustments - detail
Lotterywest adjustments - detail 1H21 Lotterywest 1H21 1H22 Variance Reported adjustment1 Underlying Reported % $’000 $’000 $’000 $’000 For personal use only Lottery Retailing 20,056 (1,652) 18,404 22,365 21.5 Gross SaaS 15,468 173 15,641 21,348 36.5 profit Managed Services 1,320 - 1,320 1,876 42.1
Slide 30: 1H22 result – segmental information
1H22 result – segmental information Lottery Managed Intersegment SaaS Total Retailing Services eliminations $’000 $’000 $’000 $’000 $’000 For personal use only TTV 234,655 81,476 11,803 - 327,934 − Company 234,655 - - - 234,655 − Third-party - 81,476 11,803 - 93,279 Total segment sales revenue from
Slide 31: Lottery Retailing
Lottery Retailing 1H22 1H21 Variance For personal use only TTV by product (%) TTV1 ($’000) 234,655 169,720 1 38.3% Revenue1 ($’000) 46,727 34,6481 34.9% Cost of goods sold2 ($’000) (24,362) (16,244)1 50.0% Operating expenses ($’000) (6,521) (4,634)1 40.7% EBITDA ($’000) 15,844 13,7701 15.1% Number o
Slide 32: SaaS – key client metrics (pre and post PBJ)
SaaS – key client metrics (pre and post PBJ) # of tickets processed1 Active players1,2 Average TTV ($) per draw1 For personal use only This client saw the largest draw in history on PBJ – +16% +42% +16% up 25% on the pre PBJ record Client #1 Pre PBJ Post PBJ Pre PBJ Post PBJ Pre PBJ Post PBJ This cl
Slide 33: Questions
For personal use only Questions
Slide 34: Welcome and introductions (speaker notes)
For personal use only Good morning and welcome. Today I am joined in our Brisbane office by our CFO David Todd. I’ll provide an overview of the 1H22 result and progress we are making with our strategy, while Dave will provide a more detailed run through of the numbers. I’ll then wrap up and move to
Slide 35: Disclaimer
Disclaimer This presentation contains summary information about the activities of Jumbo Interactive Limited (Jumbo) and its controlled subsidiaries (Group) current as at the date of this presentation. It should be read in conjunction with Jumbo's other periodic and continuous disclosure announcement
Slide 36: Underlying figures and Lotterywest adjustment (notes)
For personal use only For our presentation today, you will see that we have provided both the 1H21 reported and underlying figures. The underlying figures reflect an adjustment for one-off costs of circa $1.1 million, however we have also included an adjustment for Lotterywest, reflecting the transf
Slide 37: Group results overview (notes)
For personal use only Turning to the results, and this slide presents the key Group metrics for the half. We are very pleased with this set of results, with all key metrics up more than 20% on the pcp. The results were underpinned by higher jackpot activity in Lottery Retailing and all our Australia
Slide 38: Our strategy (notes)
For personal use only Our strategy is unchanged and our focus has been on ensuring we have the appropriate infrastructure and capability to successfully execute on this strategy. Our SaaS business is focused on licensing the Powered By Jumbo platform to government and charity lotteries while our Man
Slide 39: Pro forma active player growth (notes)
For personal use only This is one of my favourite slides. Here we show our 1H22 actual active players, but also have a 1H22 pro forma illustrating the active players that the Stride and StarVale acquisitions will add once the acquisitions are completed. While we continue to build our active player b
Slide 40: Lottery Retailing external trends (notes)
For personal use only Starting with Lottery Retailing and this slide captures the key external trends impacting performance. • As expected, online sales of lottery ticket continue to trend upwards, increasing by 3.9 ppts to 36.7% over the half. • We had 23 Powerball/Oz Lotto jackpots greater than or
Slide 41: Oz Lotto game change (notes)
For personal use only I note that further detail of the Oz Lotto game change was released last week with a planned launch in May this year. Oz Lotto is a significant part of our portfolio and we expect the game changes to lead to higher jackpots and increased customer engagement, which in turn will
Slide 42: Lottery Retailing sales performance (notes)
For personal use only This is our usual chart showing Lottery Retailing’s sales performance over several years and helps explain both the resilience (as seen by the light blue shaded bar) and boost we get from large jackpots (as seen by the dark blue shaded bar). New players in the half were up 41%
Slide 43: Cost per lead and new player revenue (notes)
For personal use only As shown on the previous slide, our cost per lead increased 24% to just over $20. I’ve included this slide to demonstrate the revenue and cost dynamics of new players and why we are comfortable spending more to acquire new customers. The chart on the left-hand side shows the fi
Slide 44: SaaS segment (notes)
For personal use only Moving to our SaaS business segment now, where TTV growth increased 46% on the pcp, after adjusting for the transfer of our WA customers to SaaS in 1H21. While this level of growth is pleasing, it’s important to note that the comparator doesn’t reflect the full run-rate of all
Slide 45: Managed Services and Gatherwell (notes)
For personal use only Turning now to Managed Services and starting with Gatherwell in the UK, which continues to demonstrate impressive growth with TTV up 56% on the pcp and active players up 27%. Gatherwell now supports over 10k good causes and has increased its market share of schools and local go
Slide 46: Stride and StarVale acquisitions (notes)
For personal use only Staying on Managed Services, we are very pleased to have announced the Stride and StarVale acquisitions which will add significantly more scale to our business. Just to quickly recap on the StarVale acquisition which we only announced last month. The acquisition is transformati
Slide 47: Underlying EBITDA (notes)
For personal use only Thanks Mike and good morning everyone. For my presentation, you will see that I have provided both the 1H21 reported and underlying figures, as Mike mentioned at the start of the presentation. Further detail on Lotterywest adjustments are included in the appendix. Underlying EB
Slide 48: Lottery Retailing financials (notes)
For personal use only I’ll now run through the results at a segmental level, starting with Lottery Retailing. The strong revenue growth of 34.9% was a function of the strong TTV growth, underpinned by higher large jackpots and increased customer activity, partially offset by a slightly reduced reven
Slide 49: SaaS financials (notes)
For personal use only Turning to SaaS, where we saw all four Australian clients fully operational on the PBJ platform. The 45.8% increase in TTV is distorted by the fact that 1H21 doesn’t reflect the full six months contribution from all clients. Only Mater and Lotterywest have been fully captured i
Slide 50: Gatherwell financials (notes)
For personal use only Gatherwell achieved strong TTV growth of 56.1% on the back of new client wins and momentum with existing clients. The fall in revenue margin was mainly due to product mix, while EBITDA grew 8.9%, impacted by increased investment in marketing and staff, both of which are expecte
Slide 51: Operating costs (notes)
For personal use only Underlying operating costs increased 35.9% on the pcp driven by: • An 82% or $2.1 million increase in acquisition/marketing costs • A 28% or $1.7 million increase in employee costs reflecting a combination of factors including: • The establishment of a new senior leadership gro
Slide 52: Balance sheet and dividend (notes)
For personal use only Turning now to the balance sheet, where we continue to maintain a strong position underpinned by the strong organic cash generation of the business. The Board has declared an interim fully franked dividend of 22 cents per share, reflecting a payout ratio of 83.7% of statutory N
Slide 53: Cashflow (notes)
For personal use only And finally turning to cashflow, where the cash generative profile of the business is clearly evident, with a free cash flow of $24.4 million and greater than 100% cash conversion. On the right-hand side of the chart, on a pro forma basis, I have shown the key items expected to
Slide 54: Pro forma key metrics (notes)
For personal use only Thanks Dave. This slide simply represents our key 1H22 metrics on a pro forma basis, overlaid with the half year contributions from Stride and StarVale. While I note the acquisitions remain subject to regulatory approval, it gives you a sense of our future performance and demon
Slide 55: Software platform and expansion (notes)
For personal use only At its core, Jumbo is a software company that operates in the lottery sector. We continue to invest in the platform, technology expertise and tools to ensure the core platform is best in class, and is complemented by the latest technology and integrations to drive the best play
Slide 56: Key messages summary (notes)
For personal use only Before moving on to Q&A, I just wanted to summarise the key messages from today’s presentation. 1. We have a clear strategy and are focused on execution. – Lottery Retailing continues to perform very well, driven by a favourable jackpot cycle and our focus on player engagement