Light & Wonder, Inc. · ASX:LNW
Light & Wonder — Scientific Games — Q2 2010 Earnings Presentation
16 slides from Light & Wonder's earnings presentation, Aug 5, 2010
Slide 1: Scientific Games Second Quarter 2010 Earnings Presentation
Scientific Games Second Quarter 2010 Earnings Presentation
Slide 2: Safe Harbor Statement
Safe Harbor Statement In this presentation the Company makes "forward-looking statements" within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements describe future expectations, plans, results or strategies and can often be identified by the use of t
Slide 3: Key Takeaways
Key Takeaways Lottery and gaming retail trends in the U.S. and U.K. continue to improve Q2 revenue increased 4% vs. the prior-year period Maintained solid operating margins Progress made year-to-date on each of our eight key strategic growth initiatives Key contract wins and expanding pipeline of ne
Slide 4: Printed Products - Strategy
Printed Products - Strategy Strategic Initiatives Achievements Opportunities 4 1 2
Slide 5: Lottery Systems - Strategy
Lottery Systems - Strategy Strategic Initiatives Achievements Opportunities 5 3 4
Slide 6: Diversified Gaming - Strategy
Diversified Gaming - Strategy Strategic Initiatives Achievements Opportunities 6 5 6 7 8
Slide 7: Ladbrokes Award
Ladbrokes Award Global Draw awarded ~7,600 new terminals in Ladbrokes’ U.K. terminal estate for a period of four years Roll-out anticipated to commence in early 2011; terminals will be deployed using VideoBet’s software platform VideoBet contributing a portion of the upfront capital costs in return
Slide 8: Q2'10 Consolidated Results
Q2’10 Consolidated Results Achieved 4% revenue growth vs. prior-year period Results driven by higher instant ticket revenue and higher Lottery Systems sales of hardware and software Believe revenue was negatively impacted by Italy tender process disruption Q2’10 Q2’09 Printed Products Lottery System
Slide 9: Joint Ventures
Joint Ventures Decline in equity in earnings of joint ventures primarily attributable to higher non-operating expenses in Italy Received cash distributions of $28M during the quarter from CLN 9 Equity in Earnings of Joint Ventures ($M) Joint Venture EBITDA1 ($M) (1) Joint venture EBITDA is a non-GAA
Slide 10: Earnings Per Share
Earnings Per Share Amounts reflected on a fully-diluted per share basis. Items reflect adjustments to EBITDA permitted by the credit agreement. Amounts reflect write-off of unamortized deferred financing costs in connection with early extinguishment of debt. Amounts reflect Global Draw employee cont
Slide 11: Printed Products
Printed Products Increase in instant ticket revenue driven by new contracts in Arkansas and Puerto Rico, the benefit of transitioning the U.K. contract to percentage-of-sales and foreign exchange translation benefit Limited impact from foreign exchange on operating income Believe the Italy tender pr
Slide 12: Lottery Systems
Lottery Systems Revenue increase driven by sales of hardware and software and retail sales increase Higher U.S. retail sales primarily driven by the cross-selling of Powerball® and Mega Millions Higher SG&A primarily reflects increased accrual of incentive compensation due to forecasted performance
Slide 13: Diversified Gaming
Diversified Gaming Decline in revenue primarily due to revised Global Draw contract terms in the U.K. and lower Austrian OTC results, partially offset by foreign exchange translation benefit and increases in U.K. gross win/terminal/day and number of terminals Operating income decrease driven primari
Slide 14: Debt Maturity Profile
Debt Maturity Profile ($ in millions) Net debt of $1.23B at 6/30/10 Paid down the balance of the Convertible Debentures and substantially all of the Global Draw Notes by drawing down new $78M term loan commitment No material maturities until December 2012 Significant liquidity position of $316M comp
Slide 15: Italy Update
Italy Update On May 10, 2010, CLN submitted a bid for one of four potential licenses to operate Italy’s Gratta e Vinci instant ticket lottery CLN awarded the sole concession on May 13, 2010 Under the terms of the tender, CLN’s members established Lotterie Nazionali SrL (“LNS”), a joint stock company
Slide 16: Italy Update Cont'd
Italy Update Cont’d Scientific Games to remain primary supplier of instant tickets to the joint venture Will continue to be paid in US$ on price/thousand tickets basis Improved payment terms Annual cash dividend payable to Scientific Games for equity participation in LNS as well as periodic return o