Slide 1: Tabcorp half year results presentation
22 February 2024 ASX Market Announcements Australian Securities Exchange 20 Bridge Street Sydney NSW 2000 Tabcorp half year results presentation For personal use only Attached is the presentation regarding Tabcorp Holdings Limited’s (Tabcorp’s) results for the half year ended 31 December 2023 to be
Slide 2: 1H24 Results: We're Raising the Game
For personal use only 1H24 WE’RE RAISING THE GAME RESULTS FOR THE SIX MONTHS ENDED 31 DECEMBER 2023 ABN 66 063 780 709
Slide 3: The Line Up
THE LINE UP For personal use only SECTION 1: 1H24 SUMMARY AND TAB25 PROGRESS 03 SECTION 2: FINANCIAL RESULTS 16 SECTION 3: WAGERING AND MEDIA 24 SECTION 4: GAMING SERVICES 28 SECTION 5: SUMMARY AND TRADING 31 SECTION 6: APPENDICES 33
Slide 4: 1H24 Summary and TAB25 Progress
1H24 SUMMARY For personal use only AND TAB25 PROGRESS
Slide 5: 1H24 Summary: Transforming Tabcorp
1H24 SUMMARY TRANSFORMING TABCORP… For personal use only TAB MARKET SHARE VC MARGIN NEW VICTORIAN GROWTH1 GROWTH WAGERING LICENCE Total revenue market share 33.7% Licence reform agenda on track Attractive new licence from 16 August (2H23 32.9%) 2024, materially accretive to earnings Level playing fi
Slide 6: 1H24 Result Summary
1H24 RESULT SUMMARY1 For personal use only 1H24 1H23 % EPS BEFORE FULLY FRANKED SIGNIFICANT ITEMS INTERIM DIVIDEND Revenue $1,210m $1,275m (5.1%) AND DABBLE3 1.0 CPS 0.9 CPS Variable Contribution $486m $500m (2.8%) Opex2 $316m $303m 4.2% EBITDA $170m $197m (13.6%) DIVIDEND EBIT $50m $73m (31.7%) PAY
Slide 7: Market Observations and Group Opex
MARKET OBSERVATIONS For personal use only GROUP OPEX The Australian wagering market is an attractive market: >$700m2 Australian Wagering Industry Revenue 1 Delivering 6% revenue CAGR over the past decade, above GDP growth Resilient through economic cycles History of innovation and product expansion
Slide 8: Win the Australian Market: TAB Market Share
WIN THE AUSTRALIAN MARKET: TAB MARKET SHARE1 For personal use only 1H24 2H23 Winning in market through product, offers and customer experience Total Revenue Market Share 33.7% 32.9% Technology and Data transforming competitiveness Digital Turnover Market Share 21.2% 20.1% Turnover share growth deliv
Slide 9: Data and Analytics Transforming Competitiveness
WIN THE AUSTRALIAN MARKET: DATA AND ANALYTICS TRANSFORMING COMPETITIVENESS For personal use only CASE STUDY: GENEROSITY EFFICIENCY Data and Analytics capability significantly higher and continuing to lift Deeper understanding of Customer Segments delivering improved relevance of offers and promotion
Slide 10: Technology Transforming Competitiveness
WIN THE AUSTRALIAN MARKET: TECHNOLOGY TRANSFORMING COMPETITIVENESS For personal use only TECHNOLOGY DIGITAL DATA FIXED ODDS SIMPLIFICATION PRODUCT DELIVERY ACCELERATION TRANSFORMATION AND MODERNISATION New TAB App and multiple Consolidation to a single Fixed Odds platform to move Migration to cloud
Slide 11: Best Wagering Entertainment Experience
WIN THE AUSTRALIAN MARKET: BEST WAGERING ENTERTAINMENT EXPERIENCE For personal use only NEXT GEN RETAIL UPGRADES NEXT GEN PERFORMANCE TO 31 MAGIC MILLIONS (MM) 2024 DECEMBER 20231 24 venues upgraded in 1H24 Launch of Next Gen venue Turnover +13% at Gold Coast Turf Club in January 2024 Mix across QLD
Slide 12: New Victorian Wagering Licence
LEVEL THE PLAYING FIELD: NEW VICTORIAN WAGERING LICENCE For personal use only EXCLUSIVE MATERIAL 20 YEAR EARNINGS AND LICENCE ROIC ACCRETION PRO-FORMA FY23 LEVEL PLAYING EBITDA UPLIFT OF FIELD FOR FEES $140M1 AND TAXES GOVERNMENT ENABLES GREATER COMMITMENT TO COMPETITIVENESS ENSURE RETAIL AND A PLAT
Slide 13: QLD Improved Performance Post Reform
LEVEL THE PLAYING FIELD: QLD IMPROVED PERFORMANCE POST REFORM For personal use only VC MARGIN HIGHER TURNOVER GROWTH GROWTH1 +21% +4% HIGHER ACTIVES POSITIVE INDICATOR GROWTH1 FOR PERFORMANCE UNDER A LEVEL +5% PLAYING FIELD 1. 1H24 QLD TAB growth vs. TAB wagering ex. QLD. 12
Slide 14: Integrity Services: High Quality Earnings Stream
INTEGRITY SERVICES: HIGH QUALITY EARNINGS STREAM For personal use only Integrity Services1 EBITDA +8% driven by new Tasmanian licence, higher monitored EGMs and fee increases MAX Performance Solutions sold (completed October 2023) Delivers earnings diversification through a soft wagering market 1. C
Slide 15: Genesis Creating Capacity to Invest
WORLD CLASS BUSINESS PERFORMANCE: GENESIS CREATING CAPACITY TO INVEST For personal use only NEXT GENERATION DELIVERED TO DATE OPERATING MODEL Enterprise-wide transformation Next Gen Operating model : Reduced net headcount by to deliver a lean, fast and 15% and contractors by 45% digital-first compan
Slide 16: Investment Performing: Dabble Australia and USA
INVESTMENT PERFORMING For personal use only DABBLE DABBLE AUSTRALIA1 USA2 $33m investment in October 2022 20% equity interest Tabcorp invested US$1.75m as part of December 2023 capital raise Continues to grow and scale 21.25% effective equity interest3 Differentiated ‘social + betting’ product Low-c
Slide 17: Financial Results
For personal use only RESULTS FINANCIAL
Slide 18: 1H24 Group Results
1H24 GROUP RESULTS1 For personal use only $M 1H24 1H23 CHANGE (%) Revenues 1,209.6 1,274.5 (5.1%) Variable contribution 485.6 499.7 (2.8%) Operating expenses (315.8) (303.1) 4.2% EBITDA from continuing operations before significant items 169.8 196.6 (13.6%) D&A (119.8) (123.4) (2.9%) EBIT from conti
Slide 19: 1H24 Results: Impairment
1H24 RESULTS: IMPAIRMENT For personal use only Non-cash impairment charge of $731.9m after tax relating to certain assets in the NSW and SA Wagering businesses, and goodwill relating to the Wagering and Media Segment Reflects: softness in the Australian wagering market observed through the six month
Slide 20: Group EBITDA
GROUP EBITDA ($M) For personal use only Wagering market impact Impact of eBet Partly offset by and MPS sale QLD level playing Cycling insurance Partially offset by proceeds benefit field (increased commencement in pcp ($11m) margins) and of Tasmanian increased export Cost inflation and monitoring me
Slide 21: Opex
OPEX For personal use only FY24 1H24 FY24 Opex - prior 338 630-640 1H24 underlying opex growth +1%1 including TAB brand relaunch Broadcast Rights re-classification2 (22) (43) Opex - new 316 587-597 Genesis program helping to offset inflationary pressures including regulatory and compliance costs FY2
Slide 22: Capital Expenditure
CAPITAL EXPENDITURE For personal use only Higher growth and 1H24 CAPEX transformation investment Capital Allocation ($M) $76M 72% 76 70 (1H23: 44%) 8 13 Maintenance Sustainability spend lower and Risk 17% 11% 55 31 (1H23: 37%) (1H23: 19%) Forecast FY24 Forecast 26 CAPEX FY24 D&A1 13 UP TO $150M $220
Slide 23: Net Debt: Strong Balance Sheet Providing Flexibility
NET DEBT: STRONG BALANCE SHEET PROVIDING FLEXIBILITY For personal use only Operating Cash Flow Cash Flow impacts One off payment to TLC related to ATO settlement ($42.6m) Impact of significant items on gross operating cash flows Adjusting for these, underlying conversion is 70% Working capital timin
Slide 24: Capital and Debt: Strong Balance Sheet
CAPITAL AND DEBT: STRONG BALANCE SHEET PROVIDING FLEXIBILITY For personal use only Debt Maturity Profile ($M) 1H24 NET DEBT1 TARGET NET DEBT1 / EBITDA / EBITDA 600 USPP Undrawn 0.9x 1.0-1.5x 500 400 300 200 AVG. DEBT 1H24 ROIC2 100 MATURITY (YEARS) 5.0% 0 4.2 FY24 FY25 FY26 FY27 FY28 FY29 FY30 FY31
Slide 25: Wagering and Media
For personal use only WAGERING AND MEDIA
Slide 26: Wagering and Media EBITDA
WAGERING AND MEDIA EBITDA ($M) For personal use only QLD level playing Wagering market field margin Cycling insurance impact improvement proceeds benefit in Partly offset by pcp ($11m) increased export Cost inflation and media revenue TAB brand relaunch, partly offset by Genesis savings 25
Slide 27: 1H24 Results: Wagering and Media
1H24 RESULTS: WAGERING AND MEDIA For personal use only $M 1H24 1H23 CHANGE (%) Digital wagering revenue 473.4 493.0 (4.0%) Wagering revenue down 3.9% reflecting Cash wagering revenue 420.6 437.4 (3.8%) current wagering market conditions Wagering revenue 894.0 930.4 (3.9%) Media & International reven
Slide 28: 1H24 Wagering Revenue and KPIs
1H24 WAGERING REVENUE AND KPI’S For personal use only WAGERING REVENUE ($M) 1H24 1H23 CHANGE (%) WAGERING CHANGE 1H24 1H23 TURNOVER2 ($M) (%) DIGITAL Active users (‘000)1 786 797 (1.4%) Digital turnover2 4,731.2 4,920.5 (3.8%) Racing 6,120.1 6,500.8 (5.9%) Gross yield 16.5% 16.4% 0.1% Net yield 12.1
Slide 29: Gaming Services
For personal use only GAMING SERVICES
Slide 30: Gaming Services EBITDA
GAMING SERVICES EBITDA ($M) For personal use only Impact of eBet and Margin improvement post Cost reduction through MPS sale sale of lower margin eBet the sale of eBet and business MPS Commencement of Tasmanian monitoring licence, CPI increases and higher monitored EGMs 29
Slide 31: 1H24 Results: Gaming Services
1H24 RESULTS: GAMING SERVICES For personal use only ($M) 1H24 1H23 CHANGE (%) Integrity Services monitored EGMs Integrity Services1 63.9 57.9 10.4% Other Venue Services2 29.1 50.9 (42.8%) MONITORED EGMs DEC-23 DEC-22 CHANGE Gaming Services Revenue 93.0 108.8 (14.5%) NSW 92,240 91,110 1,130 Integrity
Slide 32: Summary and Trading
For personal use only TRADING SUMMARY AND
Slide 33: Summary and Trading
SUMMARY AND TRADING For personal use only Successfully executing our TAB25 strategy and winning in the market with increased market share and a higher VC margin The new Victorian Licence will deliver a step-change in earnings and competitiveness from August 2024, and we continue to pursue level play
Slide 34: Appendices
For personal use only APPENDICES
Slide 35: Significant Items
SIGNIFICANT ITEMS For personal use only Impairment Transformation costs Non-cash impairment charges relating Genesis program costs, including to NSW and SA wagering assets, and redundancies and one-off core goodwill relating to the Wagering and transformation investments. PRE TAX TAX POST TAX Media
Slide 36: 1H24 Group Results Reconciliation
1H24 GROUP RESULTS RECONCILIATION1 For personal use only CONSOLIDATED $M ATO DISPUTE OTHER TAX TRANSFORMATION VIC WAGERING BEFORE SIGNIFICANT STATUTORY IMPAIRMENT DEMERGER COSTS MPS DIVESTMENT OTHER CONTINUING OPERATIONS SETTLEMENT MATTERS COSTS LICENCE ITEMS Revenues 1,209.6 - - - - - - - - 1,209.6
Slide 37: Group and Business Results
GROUP AND BUSINESS RESULTS1 For personal use only WAGERING AND MEDIA GAMING SERVICES GROUP $M 1H24 1H23 CHANGE 1H24 1H23 CHANGE 1H24 1H23 CHANGE Revenues 1,116.6 1,165.7 (4.2%) 93.0 108.8 (14.5%) 1,209.6 1,274.5 (5.1%) Variable contribution 393.9 398.3 (1.1%) 91.7 101.4 (9.6%) 485.6 499.7 (2.8%) Ope
Slide 38: Glossary
GLOSSARY For personal use only 1H/2H Six months ended 31 December/30 June of the relevant financial year JV Joint Venture 1Q/2Q/3Q/4Q Three months ended 30 September / 31 December / 31 March / 30 June of the relevant financial year KPI Key Performance Indicator AAS Australian Accounting Standards LT
Slide 39: Disclaimer
DISCLAIMER For personal use only This Presentation contains summary information about the current investment made in Tabcorp shares. This Presentation may contain 1934, as amended, and are not recognised under AAS and IFRS. Non- activities of Tabcorp Holdings Limited (Tabcorp) and its subsidiaries c
Slide 40: Thank You
For personal use only THANK YOU We’re Raising The Game