Tabcorp Holdings Limited · ASX:TAH
Tabcorp — FY2021 Earnings Presentation
39 slides from Tabcorp's earnings presentation, Aug 18, 2021
Slide 1: Tabcorp Full Year Results Presentation (ASX cover letter)
For personal use only 18 August 2021 Australian Securities Exchange Companies Announcements Platform 20 Bridge Street Sydney NSW 2000 TABCORP FULL YEAR RESULTS PRESENTATION Attached is the presentation regarding Tabcorp Holdings Limited’s ( Tabcorp) results for the financial year ended 30 June 2021
Slide 2: 2020-21 Full Year Results Presentation
For personal use only 2020-21 FULL YEAR RESULTS PRESENTATION YEAR ENDED 30 JUNE 2021 18 AUGUST 2021 ABN 66 063 780 709
Slide 3: Table of Contents
For personal use only TA B L E O F CONTENTS 03 - 07 Group Overview 09 - 19 Business Results 21 - 22 Capital 24 - 26 Conclusion 28 - 36 Appendices
Slide 4: Executive Summary
EXECUTIVE SUMMARY Strong operational result in a year heavily impacted by COVID-19 For personal use only GROUP REVENUE GROUP EBITDA1 GEARING FY21 DIVIDEND $5,686M $1,107M 2.4X 14.5 CPS UP 31.8% ON PCP +8.8% ON PCP +11.3% ON PCP GROSS DEBT/EBITDA 80% PAYOUT RATIO LOTTERIES & KENO WAGERING & MEDIA GAM
Slide 5: FY Group Results
F Y 2 1 G R O U P R E S U LT S For personal use only Change $M FY21 FY20 $ % Revenues 5,686 5,224 462 8.8% EBITDA NPAT Variable contribution 1,914 1,792 122 6.8% +11.3% +47.2% Operating expenses (807) (797) (10) 1.3% BEFORE SIGNIFICANT BEFORE SIGNIFICANT ITEMS items) (before significant ITEMS EBITDA
Slide 6: Group EBITDA Growth
G R O U P E B I T D A G R O W T H 11 . 3 % Strong Lotteries & Keno result For personal use only Wagering & Media improvement; cycling larger COVID-19 impacts in pcp Full year impact of COVID-19 on Gaming Services 19 7 Cost to implement Variable Opex contribution (5) 1 2 Notes: 1. Lotteries & Keno VC
Slide 7: Capital Metrics
C A P I TA L M E T R I C S Strong and flexible financial position For personal use only Payout ratio at top end of target range Material increase in ROIC with further improvement targeted GEARING DEBT PROFILE CREDIT RATING 2.4X AVG MATURITY1: 5.7 YEARS BBB- /STABLE GROSS DEBT / AVG INTEREST EBITDA R
Slide 8: Optimisation Programs
O P T I M I S AT I O N P R O G R A M ‘ 3 S ’ Further savings expected in FY22 For personal use only FY21 FY22 $30M $20-25M ACTUAL EBIT SAVINGS1 TARGET EBIT SAVINGS VARIABLE OPERATING DEPRECIATION & CONTRIBUTION EXPENSES AMORTISATION • Jumbo reseller agreement (L&K) • Agency rationalisation (W&M) • O
Slide 9: Table of Contents
For personal use only TA B L E O F CONTENTS 03 - 07 Group Overview 09 - 19 Business Results 21 - 22 Capital 24 - 26 Conclusion 28 - 36 Appendices
Slide 10: Group & Business Results
G R O U P & B U S I N E S S R E S U LT S 1 For personal use only Lotteries & Keno Wagering & Media Gaming Services Group $M FY21 FY20 Change FY21 FY20 Change FY21 FY20 Change FY21 FY20 Change Revenues 3,206 2,917 9.9% 2,298 2,084 10.3% 183 221 (17.2%) 5,686 5,224 8.8% Variable contribution 858 754 1
Slide 11: Lotteries & Keno Result Highlights
$M FY21 FY201 Change LOTTERIES & KENO Revenues Variable contribution 3,206 858 2,917 754 9.9% 13.8% R E S U LT H I G H L I G H T S Operating expenses (238) (212) 12.3% For personal use only EBITDA 620 542 14.4% Strong revenue growth driven by game development, and active D&A (104) (100) 4.0% portfol
Slide 12: Lotteries & Keno Key Performance Indicators
LOTTERIES & KENO K E Y P E R F O R M A N C E I N D I C AT O R S For personal use only POWERBALL AND OZ LOTTO MAJOR JACKPOTS CUMULATIVE JACKPOT VALUE OFFERED1 634 Below average major jackpots despite acceleration of sequences Powerball cycling three jackpots of $100m or more in FY20 547 49 2,234 1,96
Slide 13: Lotteries & Keno Customer-Focused Investments Driving Growth
LOTTERIES & KENO CUSTOMER-FOCUSED INVESTMENTS DRIVING GROWTH FY21 use only Investments in product enhancements, omni-channel program, digital platform and payment options helping deliver compelling offers and the ability for customers to buy when, where and how they wish Set for Life1 and Saturday L
Slide 14: Lotteries & Keno Key Growth Strategies
LOTTERIES & KENO K E Y G R O W T H S T R AT E G I E S For personal use only Growth to be underpinned by a customer-led focus on product innovation, deepened engagement across all channels and digital expansion DRIVE INNOVATION OPTIMISE DIGITAL EVOLVE RETAIL PURSUE GROWTH WITH A CUSTOMER ENGAGEMENT F
Slide 15: Wagering & Media Result Highlights
$M FY21 FY20 Change WA G E R I N G & M E D I A Revenues Variable contribution 2,298 884 2,084 825 10.3% 7.2% R E S U LT H I G H L I G H T S Operating expenses (470) (454) 3.5% EBITDA 414 371 11.6% For personal use only Improved underlying performance despite COVID-19 disruptions D&A (198) (196) 1.0%
Slide 16: Wagering & Media Key Performance Indicators
WA G E R I N G & M E D I A K E Y P E R F O R M A N C E I N D I C AT O R S For personal use only QUARTERLY ACTIVE USERS (‘000) DIGITAL MARKET SHARE1,4 Growth supported by improving digital634experience 2H21 share reflects improving digital capability and reduced (highest acquisition growth in 18 - 35
Slide 17: Wagering & Media Foundations and Capability Built
WA G E R I N G & M E D I A W E H AV E B U I LT T H E F O U N D AT I O N S A N D I N V E S T E D I N C A PA B I L I T Y T O D R I V E F U T U R E G R O W T H For personal use only AN INTEGRATED VENUE AND DIGITAL EXPERIENCE ALL NEW DATA AND PERSONALISATION CAPABILITY POWERFUL AND TRUSTED BRANDS ADDED
Slide 18: Wagering & Media Key Growth Strategies
WA G E R I N G & M E D I A K E Y G R O W T H S T R AT E G I E S For personal use only Growth to be underpinned by a unique and improved customer experience, domestic structural reform and targeted international expansion STRUCTURAL REFORM AND CREATE THE BEST CUSTOMER UNLEASH THE FULL POTENTIAL OF TA
Slide 19: Gaming Services Result Highlights
$M FY21 FY20 Change GAMING SERVICES Revenues Variable contribution 183 172 221 210 (17.2%) (18.1%) R E S U LT H I G H L I G H T S Operating expenses (101) (126) (19.8%) For personal use only EBITDA 71 84 (15.5%) Continuing impacts from COVID-19 closures and other restrictions, D&A (81) (98) (17.3%)
Slide 20: Gaming Services Key Strategies
GAMING SERVICES K E Y S T R AT E G I E S For personal use only The focus is on executing the current plan to simplify the operating and business model, and streamline the operating cost base amidst continued COVID-19 disruptions EXECUTE PLAN TO SIMPLIFY AND INVEST TO GROW THE CORE STREAMLINE THE BUS
Slide 21: Table of Contents
For personal use only TA B L E O F CONTENTS 03 - 07 Group Overview 09 - 19 Business Results 21 - 22 Capital 24 - 26 Conclusion 28 - 36 Appendices
Slide 22: Cash Flow and Debt
CASH FLOW AND DEBT Strong balance sheet and operating cash flow conversion For personal use only Net debt reduction enabled by strong operating cash flows and equity raising CASH FLOW ($M) KEY DEBT RATIOS GEARING Payments for PP&E and intangibles ($183m), partly offset by sale of Jumbo shares ($98m)
Slide 23: Debt Structure and Capital Expenditure
D E B T S T R U C T U R E A N D C A P I TA L E X P E N D I T U R E Long-dated USPP debt intended to be allocated to Lotteries & Keno; bank debt provides shorter term flexibility For personal use only Over $900m of unused bank facilities at year end Capex reduction reflects completion of integration
Slide 24: Table of Contents
For personal use only TA B L E O F CONTENTS 03 - 07 Group Overview 09 - 19 Business Results 21 - 22 Capital 24 - 26 Conclusion 28 - 36 Appendices
Slide 25: Trading Update: COVID Impact on July 2021 Result
T R A D I N G U P D AT E C O V I D - 1 9 I M PA C T O N J U LY 2 0 2 1 R E S U LT COVID-19 restrictions had a significant impact on results in July1 For personal use only Full year impacts are dependent on the length and nature of restrictions LOTTERIES & KENO WAGERING & MEDIA GAMING SERVICES Revenu
Slide 26: Demerger Update
D E M E R G E R U P D AT E The proposed demerger1 is expected to unlock significant value and be implemented no later than June 2022 For personal use only Next demerger update to be provided at October AGM Detailed planning & preliminary execution phase Execution phase (Jul 2021 – Sep 2021) (Jul 202
Slide 27: Conclusion
CONCLUSION Strong operational result in a year heavily impacted by COVID-19 For personal use only • Lotteries & Keno: Record profit result (despite below average jackpots) • Wagering & Media: Improved performance and growth across TAB, Media and International • Gaming Services: Progressing with impl
Slide 28: Table of Contents
For personal use only TA B L E O F CONTENTS 03 - 07 Group Overview 09 - 19 Business Results 21 - 22 Capital 24 - 26 Conclusion 28 - 36 Appendices
Slide 29: Significant Items
1. SIGNIFICANT ITEMS GOODWILL IMPAIRMENT For personal use only $M FY21 • Non-cash impairment of Gaming Services goodwill reflects reduced expectations for future growth and contract extensions, particularly due to the ongoing COVID-19 impacts. Goodwill impairment (122) AMENDED TAX ASSESSMENT RE MAX
Slide 30: Group Operating Expenses
2 . G R O U P O P E R AT I N G E X P E N S E S For personal use only REPORTED +1.3% UNDERLYING INCL 3S +1.6% UNDERLYING EXCL 3S +3.9% 3 1 2 Notes: 1. FY21 3S opex savings of $19m (Lotteries & Keno $1m, Wagering & Media $12m, Gaming Services $6m) 29 2. FY21 COVID-19 cost mitigations of $31m (Lotterie
Slide 31: Group Results
3 A . G R O U P R E S U LT S For personal use only $M 1H21 1H20 Change 2H21 2H20 Change FY21 FY20 Change Revenues 2,870 2,914 (1.5%) 2,816 2,310 21.9% 5,686 5,224 8.8% Variable contribution 951 1,027 (7.4%) 963 765 25.9% 1,914 1,792 6.8% Operating expenses (391) (430) (9.1%) (416) (367) 13.4% (807)
Slide 32: Lotteries & Keno Results
3 B . L O T T E R I E S & K E N O R E S U LT S 1 For personal use only $M 1H21 1H20 Change 2H21 2H20 Change FY21 FY20 Change Lotteries Revenues 1,477 1,467 0.7% 1,474 1,259 17.1% 2,951 2,726 8.3% Keno Revenues 132 117 12.8% 123 74 66.2% 255 191 33.5% Revenues 1,609 1,584 1.6% 1,597 1,333 19.8% 3,206
Slide 33: Wagering & Media Results
3 C . WA G E R I N G & M E D I A R E S U LT S For personal use only $M 1H21 1H20 Change 2H21 2H20 Change FY21 FY20 Change Revenues 1,189 1,180 0.8% 1,109 904 22.7% 2,298 2,084 10.3% Variable contribution 458 473 (3.2%) 426 352 21.0% 884 825 7.2% Operating expenses (231) (239) (3.3%) (239) (215) 11.2
Slide 34: Gaming Services Results
3 D . G A M I N G S E R V I C E S R E S U LT S For personal use only $M 1H21 1H20 Change 2H21 2H20 Change FY21 FY20 Change MAX Venue Services 33 102 (67.6%) 66 48 37.5% 99 150 (34.0%) MAX Regulatory Services 40 47 (14.9%) 44 24 83.3% 84 71 18.3% Revenues 73 149 (51.0%) 110 72 52.8% 183 221 (17.2%) V
Slide 35: Balance Sheet
4. BALANCE SHEET For personal use only $M Jun-21 Jun-20 Change Total current assets 898 727 23.5% Licences 2,041 2,148 (5.0%) Other intangible assets 8,056 8,134 (1.0%) Property, plant and equipment 376 456 (17.5%) Other non current assets 498 951 (47.6%) Total assets 11,869 12,416 (4.4%) Total liab
Slide 36: Additional KPIs
5. ADDITIONAL KPIS WAGERING & MEDIA LOTTERIES & KENO: REVENUE BY PRODUCT For personal use only FY21 FY20 Change Turnover by distribution ($m)1 Powerball Jackpot Retail 5,305 5,354 (0.9%) 5% 5% games Digital 9,097 7,067 28.7% Oz Lotto 6% 30% Call Centre 384 391 (1.8%) Mon // Wed Mon Wed Lotto Lotto &
Slide 37: Glossary
6. GLOSSARY TERM DEFINITION TERM DEFINITION For personal use only 1H/2H Six months ended 31 December/30 June of the relevant financial year IFRS International Financial Reporting Standards Three months ended 30 September/31 December/31 March/30 June of A game of chance that is played approximately e
Slide 38: 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
Slide 39: For personal use only
For personal use only D 3 Tabcorp TAB RACING NM <