Tabcorp Holdings Limited · ASX:TAH
Tabcorp — 2019 Macquarie Conference
34 slides from Tabcorp's conference presentation, Apr 30, 2019
Slide 1: Tabcorp 2019 Macquarie Conference
For personal use only TABCORP 2019 MACQUARIE CONFERENCE 30 APRIL 2019 EXCITEMENT WITH INTEGRITY
Slide 2: Agenda
AGENDA For personal use only Item Slide Group Overview & Industry Context 3 Lotteries & Keno 11 Wagering & Media 16 Gaming Services 21 Conclusion 25 2
Slide 3: Group Overview & Industry Context
For personal use only GROUP OVERVIEW & INDUSTRY CONTEXT
Slide 4: Tabcorp is Australia's leading diversified gambling entertainment group
TA B C O R P I S A U S T R A L I A’ S L E A D I N G D I V E R S I F I E D G A M B L I N G E N T E R TA I N M E N T G R O U P For personal use only V I S I O N : T H E T R U S T E D G A M B L I N G E N T E RTA I N M E N T C O M PA N Y KEY FINANCIAL METRICS (CY18) o Tabcorp completed its combination w
Slide 5: The Australian market is large and growing
THE AUSTRALIAN MARKET IS LARGE AND GROWING For personal use only AUSTRALIAN GAMBLING EXPENDITURE BY PRODUCT SEGMENT $23.6B $23.7B $22.7B 0.3 0.4 $21.2B 0.3 $20.7B 2.0 2.2 $19.4B 0.3 2.0 CAGR FY12-17 0.3 0.3 2.0 TOTAL 4.1% 2.2 3.9 4.4 1.8 3.6 KENO 4.6% 3.4 3.2 3.0 LOTTERIES 2.5% 5.2 5.2 4.8 4.4 WAGER
Slide 6: We play an integral role in our industry
W E P L AY A N I N T E G R A L R O L E I N O U R I N D U S T R Y For personal use only C R E AT I N G VA L U E T H R O U G H C O L L A B O R AT I O N : INDUSTRY & GOVERNMENT (CY18)1 EXAMPLE ~$2B Federal Taxes ~$1B o Sports and charity raffle backed by Tabcorp’s Charitable Games unit State ~$0.8B Wag
Slide 7: At our core is a commitment to responsible gambling
AT O U R C O R E I S A C O M M I T M E N T T O R E S P O N S I B L E G A M B L I N G For personal use only Responsible Gambling (RG) involves the conduct of gambling in a manner whereby the potential for harm associated with gambling is minimised FY19 initiatives o Introduction of Take A Break for T
Slide 8: Diversified business secured by long-dated licences
OUR BUSINESS IS DIVERSIFIED ACROSS GEOGRAPHIES AND P R O D U C T S A N D S E C U R E D B Y L O N G - D AT E D L I C E N C E S For personal use only TA B C O R P L I C E N C E / A U T H O R I S AT I O N P O R T F O L I O 1 NSW 2097 NSW 2050 VIC 2024 VIC 2022 WAGERING QLD 2098 QLD 2047 KENO SA 2100 SA
Slide 9: Regulatory changes support a more sustainable industry
R E G U L AT O R Y C H A N G E S S U P P O R T A M O R E S U S TA I N A B L E I N D U S T R Y For personal use only SYNTHETIC POINT OF ADVERTISING RESTRICTIONS CONSUMER PROTECTIONS LOTTERIES BAN CONSUMPTION TAXES o Synthetic lotteries are products o Wagering point of consumption o From March 2018, n
Slide 10: Each business is well positioned for long-term profit growth
EACH BUSINESS IS WELL POSITIONED FOR LONG -TERM PROFIT GROWTH For personal use only LOTTERIES AND KENO WAGERING AND MEDIA GAMING SERVICES o Focused on unlocking further upside from o Tabcorp’s unique combination of assets creates o Unique opportunity to be services partner of developing a contempora
Slide 11: Lotteries and Keno
For personal use only LOTTERIES AND KENO
Slide 12: Lotteries and Keno - scale, broad appeal, widely accepted
LOTTERIES AND KENO - SCALE, BROAD APPEAL, WIDELY ACCEPTED For personal use only $2.5B REVENUE (CY18) $447M EBITDA (CY18) LOTTERIES TURNOVER BY PRODUCT - CY18 ($B) 3.0 1 1 LOTTERIES 3,700+ OUTLETS KENO 3,600+ OUTLETS Other Set for Life 2 2 2.0 LOTTERIES 472M TICKETS KENO 106M TICKETS Instants Oz Lott
Slide 13: Clear set of priorities to drive profitable growth
WE HAVE A CLEAR SET OF PRIORITIES TO CONTINUE TO DRIVE PROFITABLE GROWTH For personal use only SUPERB BRILLIANT COLLABORATIVE CUSTOMER LED EXPERIENCES EXECUTION PARTNERSHIPS Relaunched Powerball Enhanced digital app and Development of new retailer remuneration model social media engagement EXAMPLES
Slide 14: Customer-led game innovation
C U S T O M E R - L E D G A M E I N N O VAT I O N For personal use only o Powerball game changes are delivering: o New customer acquisition – from bigger jackpots, more JACKPOT PERFORMANCE (POWERBALL & OZ LOTTO) often 70 o More winners overall (up c.55-75%) – from additional $37.8m 41.0 prize divisi
Slide 15: Accelerated digital growth and enhanced customer engagement
A C C E L E R AT E D D I G I TA L G R O W T H A N D E N H A N C E D C U S T O M E R ENGAGEMENT For personal use only D I G I TA L S H A R E O F T U R N O V E R o Digital up 64% in 1H19 – now represents 21.5% of Lotteries turnover o Investing in superb digital experiences o Significant investment in
Slide 16: Wagering and Media
For personal use only WAGERING AND MEDIA
Slide 17: We are the market leader in Australian wagering
W E AR E TH E MAR KET L EAD ER IN AU STR AL IAN WAGER IN G For personal use only ~57% revenue >720K % market share active accounts ~1.1B bets taken annually Market leading yield % management >4,400 venues 71% unprompted ~$1B returns Multi-platform, market- brand awareness to industry partners leadin
Slide 18: Our strategy aims for long term profitable growth
O U R S TAT E G Y A I M S F O R L O N G T E R M P R O F I TA B L E G R O W T H I N REVENUE MARKET SHARE For personal use only WHERE WE ARE WHERE WE ARE A WHERE WE WERE B TODAY C GOING o Unrivalled retail platform o Integrated retail/digital business (50:50 mix) o TAB: The home for punters o Heritage
Slide 19: Delivering on key strategic initiatives
W E A R E D E L I V E R I N G O N K E Y S T R AT E G I C I N I T I AT I V E S For personal use only o Increased and more contemporary customer offers and campaigns o Enhanced responsible gambling initiatives – ‘Take A Break’ PUNTER o Commenced in-venue CRM and location based marketing EXPERIENCE o I
Slide 20: Disciplined investing for profitable growth
D I S C I P L I N E D I N V E S T I N G F O R P R O F I TA B L E G R O W T H P O S T I N T E G R AT I O N For personal use only TA B F I XE D O D D S YI E L D S o Confident in the long term growth outlook for the combined business Average Net Yield o Remain focused on profitable growth in revenue ma
Slide 21: Gaming Services
For personal use only GAMING SERVICES
Slide 22: MAX is the market leader in Australian gaming services
MAX IS THE MARKET LEADER IN AUSTRALIAN GAMING SERVICES For personal use only MAX MAX MAX Total Regulatory Services Venue Services $309M revenue (CY18) $95M revenue (CY18) $214M revenue (CY18) EGM monitoring share Venue Solutions Significant reach across QLD 80% contracts across 85% of national EGMs
Slide 23: Staged approach to growth over the next three years
S TA G E D A P P R O A C H T O G R O W T H O V E R T H E N E X T T H R E E Y E A R S For personal use only ENTER NEW 4 MARKETS GROW o Enter new jurisdictions with 3 EXISTING emphasis on regulated systems MARKET (e.g. monitoring) E X PA N D 2 PRODUCT & o Offer existing customer base new C O N S O L I
Slide 24: Good progress securing the customer base through contract extensions
GOOD PROGRESS ON SECURING THE CUSTOMER BASE THROUGH LONG TERM CONTRACT EXTENSIONS For personal use only M A X V E N U E S O L U T I O N S : C O N T R A C T M AT U R I T Y P R O F I L E 1 o Victoria gaming arrangements provide industry certainty to 2032 (previously 2022) 8,154 o MAX Venue Services is
Slide 25: Conclusion
For personal use only CONCLUSION
Slide 26: Tabcorp is an attractive long term investment
TA B C O R P I S A N AT T R A C T I V E L O N G T E R M I N V E S T M E N T For personal use only o Our market is large and growing, and recent regulatory reforms support a more sustainable industry structure in which Tabcorp is well positioned to compete and grow o Tabcorp is Australia’s leading di
Slide 27: Disclaimer
DISCLAIMER For personal use only This Presentation contains summary information about the current activities of Tabcorp Holdings Limited (Tabcorp) and its subsidiaries (Tabcorp Group). It should be read in conjunction with the Tabcorp Group’s other periodic and continuous disclosure announcements lo
Slide 28: Speech by David Attenborough, Managing Director & CEO
2019 MACQUARIE CONFERENCE SPEECH BY DAVID ATTENBOROUGH – MANAGING DIRECTOR & CEO 30 APRIL 2019 INTRODUCTION For personal use only Good afternoon and thank you for joining me. I’m David Attenborough. I’ve been the MD and CEO of Tabcorp since 2011 and it’s my pleasure to present to you today. It’s bee
Slide 29: For personal use only
Over and above the taxes and industry returns we pay, we have a strong track record of collaborating with our retail and industry partners to generate value and mutually beneficial outcomes. We also use our skills and experience in other ways to benefit communities, and a good example of this is the
Slide 30: For personal use only
I’d like to spend the next few minutes on each individual business, beginning with Lotteries and Keno. SLIDE 12 This is a great business. Lotteries and Keno has reach into more than half the Australian For personal use only adult population, with trusted brands, core product propositions that have t
Slide 31: For personal use only
We are launching a new remuneration program which aligns the way that we and our retail partners work and grow together as we create a more exciting, contemporary and integrated experience for customers. Customers will be able to seamlessly move between digital and retail channels. We’ve removed pai
Slide 32: For personal use only
In parallel with the integration, we are creating a highly differentiated customer experience using our unique assets. We are moving from meeting the market to being first to market and genuinely customer led. An example of this is targeted customer engagement weighted towards a segment we call For
Slide 33: For personal use only
Tatts’ Gaming businesses have now been fully integrated with Tabcorp’s under a simpler structure. MAX Regulatory Services comprises monitoring and related services to governments and industry. It’s a business characterised by stable annuity style revenues, augmented by project work. For personal use
Slide 34: Disclaimer
DISCLAIMER This Presentation contains summary information about the current activities of Tabcorp Holdings Limited (Tabcorp) and its subsidiaries (Tabcorp Group). It should be read in conjunction with the Tabcorp Group’s other periodic and continuous disclosure announcements lodged with the Australi