Slide 1: Financial Results Presentation Slides
23 August 2023 ASX Market Announcements Office ASX Limited 20 Bridge Street Sydney NSW 2000 FINANCIAL RESULTS PRESENTATION SLIDES Attached is a copy of the slides that will be presented at The Lottery Corporation Limited’s 2023 full-year results briefing today. The briefing commences at 10.00am (Mel
Slide 2: FY23 Full Year Results Presentation
® FY23 Full Year Results Presentation Full Year ended 30 June 2023 23rd August 2023 The Lottery Corporation Limited ABN 21 081 925 706
Slide 3: A world-class lotteries business
® A world-class lotteries business 2
Slide 4: Table of Contents
® Table of Contents 04 - 09 Group Overview 11 - 19 Business Results 21 - 23 Capital 25 - 27 Strategy & Conclusion 29 - 36 Appendices
Slide 5: A successful first year: highlights
® A successful first year: highlights Continued earnings growth • 4.2% increase in Group Comparable1 EBITDA (before significant items) • 9.7 million total active Lotteries customers2 (including 4.2 million registered) • Continuing to deliver to a plan that’s successfully driven long-term growth Deli
Slide 6: A successful first year: the key numbers in FY23
® A successful first year: the key numbers in FY23 132k Active registered 1.3% Group Turnover 4.2% 0.2% 14.0 cps Ordinary dividend, Group EBITDA (before Lotteries customers; significant items) fully franked3 now 4.2 million in total - on a comparable (total active customers basis1,2 9.7 million) 1.5
Slide 7: A track record of sustainable growth and resilience
® A track record of sustainable growth and resilience Australian Turnover – Lotteries and Keno Industry (A$bn)1,2 Global Financial Crisis COVID-19 +7.5% p.a. 9.3 9.4 8.6 FY18 v FY23 CAGR +3.7% Lotteries +8.0% 7.8 7.7 p.a. Keno +5.1% 6.4 6.6 6.6 6.2 6.3 6.0 6.0 5.7 5.7 FY03 v FY23 CAGR 5.3 5.4 4.9 4.
Slide 8: Drivers of the FY23 performance
® Drivers of the FY23 performance ® • Powerball® – active management of jackpot sequences; record $160m jackpot • Oz Lotto® – a 1 in 20-year unfavourable jackpot run • Base games turnover up, evidencing the resilience of the portfolio • 132k new active registered customers – now 4.2 million (total a
Slide 9: FY23 Group Results
® FY23 Group Results Reported Comparable1,2 Reported results: $m Change Change FY23 FY22 FY23 FY22 • 12 months of Lotteries in both periods $ % $ % Revenues 3,513.1 3,278.6 234.5 7.2% 3,513.1 3,507.2 5.9 0.2% • Keno for 12 months in FY23 Variable contribution 983.6 830.6 153.0 18.4% 983.6 950.2 33.4
Slide 10: Group Comparable EBITDA Growth
Group Comparable1 EBITDA Growth (up $28.6m or 4.2%) ® Increased EBITDA contribution from both Lotteries and Keno Lotteries Keno +$14.5m +$14.1m 14.8 2.7 (3.4) 713.2 21.5 (1.4) 684.6 (5.6) FY22 EBITDA Lotteries Lotteries Lotteries Keno Keno Keno FY23 EBITDA Comparable Revenue VC margin Opex Revenue V
Slide 11: Table of Contents
® Table of Contents 04 - 09 Group Overview 11 - 19 Business Results 21 - 23 Capital 25 - 27 Strategy & Conclusion 29 - 36 Appendices
Slide 12: Comparable Group & Business Results
® Comparable Group & Business Results1,2 Lotteries Keno Group $m FY23 FY22 FY23 FY22 FY23 FY22 % % % Comparable Comparable Comparable Comparable Comparable Comparable Revenues 3,232.6 3,254.9 (0.7%) 280.5 252.4 11.1% 3,513.1 3,507.2 0.2% Variable contribution 833.2 817.3 1.9% 150.4 132.9 13.2% 983.6
Slide 13: Lotteries: Result Highlights
® Lotteries: Result Highlights (Comparable)1 $m FY23 FY22 Change Increase in active registered customers through digital and marketing innovation Revenues 3,232.6 3,254.9 (0.7%) Variable contribution 833.2 817.3 1.9% Active portfolio and jackpot sequence management helped maintain revenue in a perio
Slide 14: Lotteries: KPIs – Product
® Lotteries: KPIs – Product Turnover by Product Type ($m) Turnover Growth Active management of well-balanced product portfolio has delivered Three year CAGR vs pre-COVID levels1 illustrates strength of healthy growth from pre-COVID levels1 of c.5% p.a. underlying business performance FY23 v FY20 6,7
Slide 15: Lotteries: KPIs – Jackpot Games
® Lotteries: KPIs – Jackpot Games Powerball® and Oz Lotto® Major Jackpots Cumulative Jackpot Value Offered ($m) Powerball® had fewer $50m+ jackpots (13 in FY22 vs 8 in FY23); accelerated Estimated impact on turnover of c. $250m from below sequences contributed to more $100m+ jackpots (1 in FY22 vs 4
Slide 16: Lotteries: Jackpot Games – Sequences and Game Changes
Lotteries: Jackpot Games – Sequences and Game Changes ® Impact of below average jackpot outcomes partially mitigated by active sequence management; Strong Powerball® momentum; larger jackpots from recent Oz Lotto® game change yet to play through ® Powerball® • Jackpot outcomes were overall marginall
Slide 17: Lotteries: KPIs – Channel & Customers
® Lotteries: KPIs – Channel & Customers Turnover by Channel ($m) Number of Active1 Registered Customers (000’s) Short-term moderation of digital share growth following acceleration during Further increase in active registered customers reflects strong post-COVID COVID and below average jackpot outco
Slide 18: Store Syndicates Online: delivering a world-class, customer-centred experience
Store Syndicates Online: delivering a world-class, customer-centred experience ® Industry-leading innovation embraced by customers and retailers It starts with the customer Store syndicates online A winner with retailers and convenience introduced November 2022 and customers Customers searching for
Slide 19: Keno: Result Highlights
® Keno: Result Highlights (Comparable)1 $m FY23 FY22 Change Revenues 280.5 252.4 11.1% Return to unrestricted trade in NSW, Victoria, ACT and strong growth in Queensland Variable contribution 150.4 132.9 13.2% due to increased footfall in venues Operating expenses (44.4) (41.0) 8.3% EBITDA (before s
Slide 20: Keno: KPIs
® Keno: KPIs Keno Turnover by Product ($m) Keno Turnover by Channel ($m) Strong growth across most product categories; Retail CAGR growth rate from 1H20 to 1H23 was 4.5% p.a.2; Unusually large jackpot offers for Keno Mega Millions® in 2H22 Digital share has doubled from pre-COVID (1H20: 6.9%) +16.3%
Slide 21: Table of Contents
® Table of Contents 04 - 09 Group Overview 11 - 19 Business Results 21 - 23 Capital 25 - 27 Strategy & Conclusion 29 - 36 Appendices
Slide 22: Capital Allocation Framework
Capital Allocation Framework ® A long-term framework to underpin a disciplined approach to the allocation of shareholders’ capital Driving Operating Game Portfolio A disciplined approach to capital Operating Efficiency Capital Productivity allocation Cash Flow Management • Commitment to a strong inv
Slide 23: Capital Metrics
Capital Metrics ® Strong balance sheet provides the capacity to support organic growth, and operational and strategic flexibility Dividends1 (fully franked) Ordinary 14.0 cps Capex Payout Ratio 92% FY23 $65.2m BAU Target: 80-100% of full year NPAT (before significant items) FY23 $16.7m Separation FY
Slide 24: Cash Flow, Capex and Debt
Cash Flow, Capex and Debt ® Average debt maturity of six years with the vast majority at fixed interest rates Cash Flow Debt Structure & Maturities2 ($m) $m Jun-23 800 • USPP (A$1,821m drawn) Interest margins/rates Net operating cash flows 704.6 700 • Bank Facility (A$380m drawn) • Average hedged US
Slide 25: Table of Contents
® Table of Contents 04 - 09 Group Overview 11 - 19 Business Results 21 - 23 Capital 25 - 27 Strategy & Conclusion 29 - 36 Appendices
Slide 26: The Lottery Corporation
The Lottery Corporation ® The leader in Australia’s lotteries and Keno market and one of the highest performing lotteries businesses globally1 Exclusive and/or long Diversified and Low capital dated licences and balanced portfolio of intensity approvals high-profile and recognised brands Significant
Slide 27: A bright future: FY24 key focus areas and priorities
® A bright future: FY24 key focus areas and priorities Supercharging the Delivering our games customer experience safely and with integrity Digitally-enabled, customer experience-led • Continued commitment to high • Major refresh of Mon & Wed Lotto, standards of customer care, including possible ext
Slide 28: Conclusion: A successful first year; a bright future
® Conclusion: A successful first year; a bright future A successful first year • Continued earnings growth1 • Successfully established The Lottery Corporation as a top ASX50 entity • Creating value for all stakeholders Delivering world-class customer-centred initiatives • Continued performance momen
Slide 29: Table of Contents
® 28 Table of Contents 04 - 09 Group Overview 11 - 19 Business Results 21 - 23 Capital 25 - 27 Strategy & Conclusion 29 - 36 Appendices
Slide 30: Appendix 1: Significant Items
® Appendix 1: Significant Items1 FY23 Significant items Significant Items ($m) FY23 FY22 Separation costs (70.8) - Separation Costs Relates to costs associated with the replication and separation of technology Other (3.8) (26.6) infrastructure and systems post demerger, particularly in relation to:
Slide 31: Appendix 2A: Group results
® Appendix 2A: Group results (Comparable)1 $m 1H23 1H22 Change 2H23 2H22 Change FY23 FY22 Change Revenues 1,920.2 1,783.6 7.7% 1,592.9 1,723.6 (7.6%) 3,513.1 3,507.2 0.2% Variable contribution 535.9 474.7 12.9% 447.7 475.5 (5.8%) 983.6 950.2 3.5% Operating expenses (126.5) (121.2) 4.4% (143.9) (144.
Slide 32: Appendix 2B: Lotteries results
® Appendix 2B: Lotteries results (Comparable)1 $m 1H23 1H22 Change 2H23 2H22 Change FY23 FY22 Change Revenues 1,772.8 1,664.6 6.5% 1,459.8 1,590.3 (8.2%) 3,232.6 3,254.9 (0.7%) Variable contribution 455.9 415.5 9.7% 377.3 401.8 (6.1%) 833.2 817.3 1.9% Operating expenses (106.3) (103.0) 3.2% (119.7)
Slide 33: Appendix 2C: Keno results
® Appendix 2C: Keno results (Comparable)1 $m 1H23 1H22 Change 2H23 2H22 Change FY23 FY22 Change Revenues 147.4 119.0 23.9% 133.1 133.4 (0.2%) 280.5 252.4 11.1% Variable contribution 80.0 59.1 35.4% 70.4 73.8 (4.6%) 150.4 132.9 13.2% Operating expenses (20.2) (18.1) 11.6% (24.2) (22.9) 5.7% (44.4) (4
Slide 34: Appendix 3: Balance Sheet and Debt
® Appendix 3: Balance Sheet and Debt Balance Sheet Debt $m Jun-23 $m Jun-23 Total current assets 926.4 Gross debt – excluding lease liabilities (at spot) 2,460.0 Licences 716.0 Less: Benefit of FX hedges on USPP principal1 (258.9) Other intangible assets 2,255.4 Gross debt – excluding lease liabilit
Slide 35: Appendix 4: Lotteries – Turnover by product
® Appendix 4: Lotteries – Turnover1 by product Turnover by Game ($m) FY23 Turnover by Game Change FY23 FY22 Game $ % Powerball® 2,483 2,587 (104) (4.0%) 6.5% 2.0% Oz Lotto® 882 897 (15) (1.7%) 2.5% 5.0% Powerball® Oz Lotto® Jackpot Games 3,365 3,484 (119) (3.4%) 6.3% 37.5% Saturday Lotto Saturday Lo
Slide 36: Appendix 5: Lotteries – Comparable turnover growth
® Appendix 5: Lotteries – Comparable turnover growth FY23 v FY20 Actual Growth1 FY21 v FY20 FY22 v FY21 FY23 v FY22 CAGR2 Powerball® (2.2%) 32.5% (4.0%)3 7.5% Oz Lotto® 5.0% 1.2% (1.7%)3 1.5% Saturday Lotto 22.1% (0.6%) 1.5% 7.2% Mon & Wed Lotto 11.1% (8.2%) (3.9%) (0.6%) Set for Life® 32.7% 2.4% (3
Slide 37: Appendix 6: Glossary
® Appendix 6: 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 Active registered Registered customers who have p
Slide 38: 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 announce
Slide 39: he SS
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