Aristocrat Leisure Limited · ASX:ALL
Aristocrat Leisure — H1 2005 Earnings Presentation
29 slides from Aristocrat Leisure's earnings presentation, Aug 25, 2005
Slide 1: Results for the 6 months ended 30 June 2005
Aristocrat Leisure Limited Results for the 6 months ended 30 June 2005 Chief Executive Officer & Managing Director Chief Financial Officer Paul Oneile Simon Kelly
Slide 2: Summary of Results
ee E F*FT*=Ee Summary of Results” * Profit After Tax $101.7 million — up $69.4 million * Total Revenue $525.3 million — strong US growth ¢ International growth — 76% of segment profit, up from 71% * Operating cash flow $119.7 million — up $29.5 million ¢ Interim dividend — 10 cps fully franked vs pr
Slide 3: Review
Review
Slide 4: Profit and Loss
Profit and Loss Hi 2005 Hi 2004* Variance $m $m % Total Revenue 525.3 523.4 0.4% Gross Profit 277.8 237.8 16.8% GP% 52.9% 45.4% 7.5 Points Expenses 140.0 185.3 -24.4% EBIT 145.8 62.9 131.8% Profit Before Tax 150.0 59.1 153.8% Income Tax Expense (48.3) (26.8) 80.2% Profit After Tax 101.7 32.3 214.9%
Slide 5: AIFRS
AIFRS H1 2005 H1 2004 #Variance $m $m % Profit After Tax pre AIFRS 103.9 63.3 64.1% Intangibles 2.0 2.1 Share Based Payments (4.3) (4.9) Foreign Exchange - (28.1) Other 0.1 (0.1) Profit After Tax post AIFRS 101.7 32.3. 214.9%
Slide 6: H1 2004 vs H1 2005 EBIT
H1 2004 vs H1 2005 EBIT EBIT A$m 170— -$5.8m +$12.4m $145.8m -$1.2m -$1.1m +33.1m +$18.8m,,,.,.. 160-— 150-—
Slide 7: Key Drivers of EBIT Improvement
a Key Drivers of EBIT Improvement ¢ Ex Japan volume growth ¢ Improved pricing ¢ Cost efficiencies ¢ Leverage of fixed cost structures
Slide 8: Segment Revenue Split
Segment Revenue” Split Hi 2004 Segment Revenue by Region $520.9 million North America 29% H1 2005 Segment Revenue by Region America 47% * Revenue excluding interest
Slide 9: Revenue Split
ee ee Revenue” Split + Other ses 90% a 80% | North America 0% pb — a ee — Dec Jun Dec Jun Dec Jun Dec Jun Dec Jun 00 01 01 02 02 03 03 04 04 05 * Revenue excluding interest
Slide 10: Management Cash Flow
ee "eee. OE Management Cash Elow H1 co W. 2004 $m Net Debt - opening balance 121.5 (70.2) EBIT 145.8 62.9 Depreciation and amortisation 19.3 16.0 EBITDA 165.1 78.9 Net loss on sale of non-current assets 0.3 Net foreign exchange differences 2.1 37.9 Net interest received/(paid) 4.0 (3.8) Net tax paid
Slide 11: Working Capital
Working Capital 40.0% 35.0% w 30.0% E 25.0% 8 20.0% = 15.0% 5 10.0% 3 5.0% 0.0% Net Working Capital - % of Last 12 Months Revenue i 1 Jun 01 Dec 01 Jun 02 Dec 02 Jun 03 Dec 03 Jun 04 Dec 04 Jun 05
Slide 12: Capital Management
e*'"=e Capital Management Objectives - Maintain conservative funding structure - Strategic and operational flexibility - Pro-active approach Strong Ongoing Financial Capacity/Flexibility - Substantial cash on hand, strong cash flows - New syndicated $300 million bank facilities established July - Co
Slide 13: Capital Management
Oe *'*=ee Capital Management 2005 Interim Dividend - 10 cps fully franked vs 4 cps unfranked in prior year - Dividend Reinvestment Plan does not operate - Franking outlook positive Capital Return - $100 million - completed 15 July 2005 On-market Share Buyback - $46.6 million of $100 million program
Slide 14: Key Financials and Ratios
etc Nea Key Financials and Ratios H1 2005 H1 2004 | FY 2004 $m $m $m EBITDA 165.1 78.9 265.9 EBIT 145.8 62.9 230.0 Working Capital/Revenue (%)* 9.9% 9.5% 9.4% Operating Cash Flow 119.7 90.2 250.0 Operating Cash Flow/Revenue (%) 22.8% 17.2% 21.9% Net Cash/(Debt) 175.8 (10.9) 119.6 Debt/EBIT DA* 0.5X
Slide 15: Slide 15
Slide 16: Australia
Australia H1 2005 H1 2004 Variance $m $m % Segment Revenue 118.6 126.9 (6.5)% Segment Contribution Profit 43.4 39.2 +10.7% Segment Margin 36.6% 30.9% +5.7Pts * Operating environment remains difficult * Replacement cycle recorded further historic lows * Margin improvement reflects improved product mi
Slide 17: Initiatives and Outlook - Australia
Se ee e—=tdit(t..”} Initiatives and Outlook - Australia STRATEGIES * Premium product focus * Recurring revenue * Ongoing business efficiency and cost reduction OUTLOOK * Ongoing difficult market conditions * Well placed to secure any upside potential
Slide 18: North America
ON SS SS Sl—™t”*#CWWQCNYAN.._ |] North America H1 2005 H1 2004 Variance $m $m % Segment Revenue 245.2 149.8 +63.7 % Segment Contribution Profit 94.7 34.8 +172.1% Segment Margin 38.6% 23.2% +15.4Pts * Unit sales increased 84% to 9,054 * Recurring revenue units increased to 5,639 (up 6.5%) at US$54/da
Slide 19: Initiatives and Outlook - North America
Initiatives and Outlook — North America KEY STRATEGIES * Continue to capitalise on product performance and overall momentum * Participation revenue focus * Enhance product range — Multi Site Progressive, slant top, stepper * Content licencing * Key account focus OUTLOOK * Continuing growth in partic
Slide 20: Japan
Japan H1 2005 H1 2004 Variance $m $m % Segment Revenue 91.8 173.4 (47.1)% Segment Contribution Profit 21.6 37.3 (42.1)% Segment Margin 23.5% 21.5% +2.0Pts 24,064 games sold Successful launch of Street Fighter 2 Result in line with expectations Enhanced margin reflects reduced inventory provisioning
Slide 21: Initiatives and Outlook - Japan
ee Initiatives and Outlook - Japan KEY STRATEGIES * Optimisation of remaining Regulation 4 games * Development and approval of Regulation 5 compliant games * Revenue diversification and reduction in trading volatility * Enhanced sales/distribution infrastructure * Positioning for casino trial OUTLOO
Slide 22: Other Markets
SS SSS lr Tlt™”*t*=#RY....CCCCS te} Other Markets H1 2005 H1 2004 Variance $m $m % Segment Revenue 60.3 70.8 (14.8)% Segment Contribution Profit 17.1 25.0 (31.6)% Segment Margin 28.4% 35.3% (6.9)Pts * Strong Asia-Pacific growth led by Macau * South Africa growth from LPM market * New Zealand flat in
Slide 23: Initiatives and Outlook - Other Markets
ST Initiatives and Outlook — Other Markets KEY STRATEGIES * Focus on emerging opportunities: - Macau - Singapore, Thailand, Taiwan - Russia - South America « Low risk model * South African partnership OUTLOOK * Well positioned to capture growth opportunity * Full half of Russian sales * Medium term
Slide 24: Key Initiatives
ee Key Initiatives ¢ Research and development * Downloadable technology ¢ Recurring revenue ¢ Business development ¢ Global supply chain
Slide 25: Outlook
ON SS SS Slt™t™*=*#F#FTEERNCCL Outlook Overall Full year profit after tax of $225 - $240 million Key Assumptions ¢ Continuation of North American momentum * Success of the Kyojin-no-hoshi 3™ game launch * Stable regulatory environments ¢ The timing of product approvals
Slide 26: Thank You. Questions?
se ee=CCiCiitiiCC Aristocrat Leisure Limited Thank You. Questions?
Slide 27: Appendix - Balance Sheet Summary
ee Si Appendix - Balance Sheet Summary Jun-05 Dec-04 $m $m Working Capital 113.4 107.0 Other Current/Non-Current Assets 65.7 72.4 Property, Plant and Equipment 115.4 117.5 Intangibles 72.7 72.6 Other Current/Non-Current Liabilities (231.3) (119.4) Net Tax Balances 21.9 4.8 Funds Employed 157.8 254.9
Slide 28: Appendix - Receivables
Appendix - Receivables Receivables - %of Last 12 Months Revenue 40.0% 35.0% 30.0% + 25.0% 20.0% - 15.0% 10.0% 5.0% - 0.0% - Jun 01 ‘Dec 01 “Jun 02. Dec 02. Jun 03. Dec 03 Jun 04. Dec 04 Jun 05 i J. % of LTM Revenue
Slide 29: Appendix - Inventories
Appendix - Inventories % of LTM Revenue 30.0% 25.0% 20.0% 15.0% 10.0% 5.0% 0.0% Inventories - % of Last 12 Months Revenue 1 1 1 T T T T T T T T Jun 01 Dec 01 Jun 02 Dec 02 Jun 03 Dec 03 Jun 04 Dec 04 Jun 05