Slide 1: 1H23 Results Presentation
For personal use only 1H23 Results Presentation For the half-year ended 31 December 2022 24 February 2023
Slide 2: Disclaimer
Disclaimer For personal use only This presentation contains summary information about the activities of Jumbo This presentation may contain certain forward-looking statements including Interactive Limited ABN 66 009 189 128 (Jumbo) and its controlled statements regarding Jumbo’s current anticipated
Slide 3: Agenda
Agenda For personal use only 1 Business Update 2 Financial Results 3 Mike Veverka David Todd CEO and Founder CFO Conclusion & FY23 outlook 4 Q&A Jumbo・1H23 Results 2
Slide 4: Business update
For personal use only Business update Mike Veverka CEO and Founder Jumbo・FY22 Results 3
Slide 5: 1H23 Group result overview
1H23 Group result overview TTV ($m) Revenue ($m) Underlying EBITDA1 ($m) Revenue margin Underlying EBITDA margin For personal use only +27% 16.1% 15.0% 53.7% 48.8% +18% +7% 417.0 327.9 62.4 52.8 28.3 30.4 1H22 1H233 1H22 1H233 1H22 1H233 Underlying NPATA1,2 ($m) Operating cashflow ($m) Dividend decl
Slide 6: 1H23 key highlights
1H23 key highlights For personal use only Lottery SaaS Managed Capability Balance Retailing Services sheet • +8% TTV growth • +20%1 underlying • Completed • Refined operating • Strong balance underpinned by a TTV growth driven acquisition of model and ways of sheet and flexibility recovery in jackpo
Slide 7: Active players provide the foundation for future growth
Active players provide the foundation for future growth For personal use only Active players who made a purchase in the 12-month period (FY15 – 1H23) 2.3x Includes contribution from Lottery Retailing only Includes contribution from SaaS and Managed Services 333k 376k 354k 438k 762k 1.0m 1.8m 2.9m 4.
Slide 8: Lottery Retailing
Lottery Retailing – Australian digital sales of lottery tickets up to 38.4% (1H22: 36.9%) – 23 large jackpots (Oz Lotto/Powerball ≥ $15m) (1H22: 23 jackpots) For personal use only – Average value per large jackpot up 10.3% to $41.7m (1H22: $37.8m) % of AUS lottery sales through the online channel1 A
Slide 9: Lottery Retailing
Lottery Retailing – 198,751 new players for the six months ended 31 December 2022, down 0.1% vs pcp (1H22: 198,912) – $17.85 cost per lead for the six months ended 31 December 2022, down 10.8% vs pcp (1H22: $20.02) For personal use only – 983,831 active players for the 12-month period ending 31 Dece
Slide 10: OzLotto game change 2022
OzLotto game change 2022 OzLotto RPPU1 for jackpots ≤ $10m ($) For personal use only OzLotto game change RPPU + 15c price increase (+10%) Average RPPU (pre game change) + 17% increase in RPPU2 Average RPPU (post game change) 3.8 3.6 3.4 3.2 3.0 2.8 2.6 2.4 2.2 2.0 1.8 1.6 1.4 1.2 1.0 1459 1460 1461
Slide 11: Software-as-a-Service (SaaS)
Software-as-a-Service (SaaS) “ “ For personal use only The Jumbo team has worked brilliantly with Lotterywest to create an The adoption of the PBJ platform along with Jumbo’s digital lottery opportunity for shared growth, it’s the sort of creativity and collaboration expertise and collaborative appr
Slide 12: Managed Services – creating a blueprint for acquisitions
Managed Services – creating a blueprint for acquisitions For personal use only ~12k good causes 119 Local Government Authorities (total market ~400) 2.2k Schools using Your School Lottery (total market ~30k) Jumbo・1H23 Results 11
Slide 13: Integration goals
Integration goals Evolution, not revolution For personal use only Best of breed Confidence we’re Uncover and Continuous two- New teams align compliance, risk & empowering with execute growth way value with Jumbo Core player welfare the best opportunities exchange Values standards technology British
Slide 14: Financial results
For personal use only Financial results David Todd CFO Jumbo・FY22 Results 13
Slide 15: Underlying EBITDA
Underlying EBITDA For personal use only Underlying EBITDA 1H23 vs 1H22 ($’000) Revenue margin % 53.7% 49.8% 48.8% 40.8% 36.4% (2,326) 30,440 30,165 3,681 716 (275) 126 28,348 +32.1% (1,491) 1,589 28,222 28,135 (77) +7.0% +8.5% 1H22 EBITDA One-offs1 1H22 EBITDA Revenue Cost of sales Operating Other i
Slide 16: Lottery Retailing
Lottery Retailing For personal use only TTV ($’000) Revenue ($’000) EBITDA ($’000) Revenue margin % EBITDA margin % +7.9% 19.9% 19.8% 33.9% 30.6% +7.2% -3.3% 253,259 234,655 46,727 50,103 15,844 15,321 1H22 1H23 1H22 1H23 1H22 1H23 Jumbo・1H23 Results 15
Slide 17: Software-as-a-Service (SaaS)
Software-as-a-Service (SaaS) For personal use only Underlying TTV ($’000) Underlying Revenue ($’000) Underlying EBITDA ($’000) External Revenue margin % EBITDA margin % +19.8% 4.5% 4.5% 69.1% 67.7% External +18.7% 23,250 21,138 +7.8% 4,336 External 3,652 97,185 81,118 14,610 15,747 Internal2 17,486
Slide 18: Gatherwell (Managed Services)
Gatherwell (Managed Services) For personal use only Gatherwell TTV (£’000) Gatherwell Revenue (£’000) Gatherwell EBITDA (£’000) Revenue margin % EBITDA margin % -2.3% 17.8% 20.4% 30.2% 21.6% +12.0% 6,186 6,046 -19.9% 1,232 1,100 332 266 1H22 1H23 1H22 1H23 1H22 1H23 Jumbo・1H23 Results 17
Slide 19: Operating cost growth moderating
Operating cost growth moderating For personal use only Operating expenses 1H23 vs 1H22 ($’000) 275 22,544 22,269 1,253 +8.5% 2,056 18,960 630 17,595 761 (470) 570 +20.9% 17,469 (126) -10.1% +21.0% +10.8% 1H22 One-offs1 1H22 Employee Marketing / Other Other 1H23 Stride StarVale 1H23 operating One-off
Slide 20: Balance sheet strength
Balance sheet strength – Strong balance sheet as at 31 December 2022 with a For personal use only cash balance of $59.0m1 (FY22: $60.0m1) – 1H23 interim ordinary dividend of 23cps reflects a 31 Dec 2022 30 Jun 2022 payout ratio of 84.2% of statutory NPAT, at the top $’000 $’000 end of the targeted 6
Slide 21: Balance sheet strength underpinned by cash generation
Balance sheet strength underpinned by cash generation – Free cash flow of $25.7m1 (1H22: $24.4m1) For personal use only – Cash conversion ratio of 149.3%2 (1H22: 148.5%2) Cashflow reconciliation ($’000) Pro forma adjustments 1H23 (14,472) dividend 4,317 944 15,000 17,186 Debt (10,000) (3,364) repaym
Slide 22: Conclusion & FY23 Outlook
For personal use only Conclusion & FY23 Outlook Mike Veverka CEO and Founder Jumbo・FY22 Results 21
Slide 23: Successfully growing earnings and cash generation
Successfully growing earnings and cash generation For personal use only Revenue ($m) EBITDA ($m) Operating cashflow ($m) +26% FY17 – FY22 CAGR +31% FY17 – FY22 CAGR +32% FY17 – FY22 CAGR 44.5 42.5 35.5 36.5 104 26.5 Interim 23.5 23.0 83 54 44 47 71 39 65 43 62 40 35 28 29 30 40 32 19 17 14 11 FY17 F
Slide 24: A clear strategy to deliver value for all our key stakeholders
A clear strategy to deliver value for all our key stakeholders For personal use only Vision To create positive social impact through making lotteries easier Mission To be the number one choice in digital lottery and services Maximise Replicate Diversify Strategic Potential of our existing businesses
Slide 25: 1H23 report card and FY23 outlook
1H23 report card and FY23 outlook FY23 outlook Status (1H23) Commentary For personal use only • Cost of sales to be impacted by increase in Lottery • Marketing costs expected to be in the range of 1.5% to TLC service fee to 3.5% of subscription price 1.5% of tickets purchased1 (FY22: 2.5%) Retailing
Slide 26: Questions
For personal use only Questions
Slide 27: Supplementary Information
For personal use only Supplementary Information 26
Slide 28: We are a digital lottery specialist
We exist to create positive We are a digital social impact through making For personal use only lottery specialist lotteries easier by being the number one choice in digital Providing our best in class lottery and services lottery software platform and lottery management expertise to the charity and
Slide 29: Our three operating segments
Our three operating segments Group result overview For personal use only 1 1. Jumbo is an authorised reseller of lottery tickets via Reseller Agreements with TLC. In August 2020, Jumbo extended its long running Reseller Agreements with TLC for a further 10 years to August 2030. The Reseller Agreemen
Slide 30: Jumbo investment highlights
Jumbo investment highlights Profitable and global growth underpinned by yield and positive sector dynamics For personal use only Pure play digital lottery specialist with best-in-class lottery software Capital light business model, with and digital marketing expertise strong balance sheet Growth und
Slide 31: Large, growing and underpenetrated serviceable available market
Large, growing and underpenetrated serviceable available market For personal use only 1. Reflects total government lottery market in Australia and the US plus total individual charitable giving in Australia, UK and Canada. 2. Reflects the current portion of the market that can be acquired based on o
Slide 32: Lotteries have proven to be highly resilient to recessions
For personal use only Lotteries have proven to be highly resilient to recessions Australian lotteries sales over time ($bn)1,2 ‘91 ‘01 ‘08 ‘20 Recession Recession GFC COVID-19 7.8 7.1 6.5 6.6 +3.8% 5.2 5.3 5.2 4.8 4.9 5.0 4.7 4.8 4.4 4.5 4.3 4.0 4.1 3.7 3.8 3.9 3.4 3.5 3.2 3.2 2.9 3.0 2.9 3.1 2.7 2.
Slide 33: Lotteries' share of household spend relatively stable
For personal use only Lotteries’ share of household spend relatively stable Lottery turnover as a % of ADI1 % 0.60 0.50 0.40 0.30 0.20 0.10 0.00 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21E FY22E Source: Australian Gambling Statistics, ABS FY21E & FY22E: estimated based on Tabcorp/TL
Slide 34: Player engagement and retention drives future growth
Player engagement and retention drives future growth Illustrative analysis For personal use only Lottery Retailing Acquisition spend as a % of new Illustrative cumulative revenue contribution from new player revenue1 (in a six month period) player cohorts 95% 85% 86% 83% 59% 1H19 1H20 1H21 1H22 1H23
Slide 35: Lottery Retailing – Key stats from $160m Powerball
Lottery Retailing – Key stats from $160m Powerball (Oct-22) For personal use only 706,650 tickets 100% uptime over >13 signups/second >10% sales sold the draw event (full during peak (47k compared to $120m 59k new signups service availability) new signups within draw in Feb 2022 1,283 tickets sold 2
Slide 36: Group 1H23 and proforma FY22 consolidated results
Group 1H23 and proforma FY22 consolidated results 1H23 1H22 Variance FY22 FY21 $’000 $’000 % $’000 $’000 For personal use only TTV 417,045 327,934 27.2% 659,924 486,981 Revenue 62,389 52,841 18.1% 104,251 83,319 Cost of sales (9,853) (7,252) 35.9% (14,473) (8,339) Gross profit 52,536 45,589 15.2% 89
Slide 37: Reconciliation to 1H23 reported earnings
Reconciliation to 1H23 reported earnings 1H23 1H22 Variance For personal use only $’000 $’000 % EBITDA 30,165 28,222 6.9% EBIT 24,904 23,924 4.1% NPAT 17,186 16,408 4.7% NPATA1 17,932 16,708 7.3% EPS (cps) 27.3 26.3 3.8% EPSA1 (cps) 28.5 26.8 6.3% Add/(deduct) significant items - Investment disposal
Slide 38: 1H23 Group result overview – like for like performance & impact of acquisitions
1H23 Group result overview – like for like performance & impact of acquisitions For personal use only Group Group Group (excluding Stride Stride StarVale Variance Reported Reported & StarVale) Reported (excluding Stride 1H23 1H23 Variance 1H22 1H23 1H23 & StarVale) $’000 $’000 % % $’000 $’000 $’000
Slide 39: 1H23 result – segmental information
1H23 result – segmental information Lottery Managed Intersegment SaaS Total Retailing Services eliminations $’000 $’000 $’000 $’000 $’000 For personal use only TTV 253,259 97,185 66,601 - 417,045 − Group 253,259 - - - 253,259 − Third-party - 97,185 66,601 - 163,786 Total segment sales revenue from e
Slide 40: Lottery Retailing
Lottery Retailing 1H23 1H22 Variance % For personal use only TTV ($’000) 253,259 234,655 7.9% TTV by product (%) Revenue ($’000) 50,103 46,727 7.2% Revenue margin (%) 19.8% 19.9% -0.1% Cost of sales1 ($’000) (28,127) (24,362) 15.5% Operating expenses ($’000) (6,655) (6,521) 2.1% - Marketing (3,894)
Slide 41: Managed Services
Managed Services For personal use only United Kingdom Canada Australia Group Gatherwell StarVale1 Stride2 Jumbo Fundraising3 Managed Services 1H23 1H22 1H23 1H22 1H23 1H22 1H23 1H22 1H23 1H22 AUD1 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 TTV 10,428 11,367 22,057 33,721 - 395 436 6
Slide 42: Financial framework and P&L drivers
Financial framework and P&L drivers For personal use only 1. Pursuant to the Reseller Agreements with TLC signed on 29 August 2020, a ‘stepped-up’ service fee is payable in the subscription cost of the tickets purchased at 1.5% FY2021, 2.5% FY2022, 3.5% FY2023, and 4.65% FY2024 and thereafter. If th