Tabcorp Holdings Limited · ASX:TAH
Tabcorp — 1H25 Earnings Presentation
41 slides from Tabcorp's earnings presentation, Feb 20, 2025
Slide 1: Tabcorp half year results ASX announcement
ASX ANNOUNCEMENT 20 February 2025 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 Dec
Slide 2: 1H25 Results for the six months ended 31 December 2024
1H25 RESULTS FOR THE SIX MONTHS For personal use only ENDED 31 DECEMBER 2024 ABN 66 063 780 709
Slide 3: The Line Up
THE LINE UP For personal use only SECTION 1 SECTION 2 SECTION 3 SECTION 4 SECTION 5 SECTION 6 SECTION 7 GETTING FIT STRATEGIC FINANCIAL WAGERING INTEGRITY SUMMARY & APPENDICES EVOLUTION RESULTS & MEDIA SERVICES OUTLOOK SLIDE SLIDE SLIDE SLIDE SLIDE SLIDE SLIDE 03 11 16 25 29 32 34 2
Slide 4: Getting Fit
For personal use only SECTION 1 GETTING FIT Tabcorp 1H25 Results | 3
Slide 5: 1H25 Summary
1H25 SUMMARY For personal use only 1H25 RESULT LEADERSHIP AND CULTURE VIC LICENCE BENEFITS Group Revenue of $1,331.3m, up 10.1% Change from matrix to vertical leadership structure, Reformed Victorian Wagering and Betting Licence with key appointments announced benefitting earnings and margins broadl
Slide 6: 1H25 Result Summary
1H25 RESULT SUMMARY For personal use only Earnings per $M 1H25 1H24 CHANGE (%) share2 Revenue 1,331.3 1,209.6 10.1% 1.9 CPS Variable Contribution 544.4 485.6 12.1% Opex (354.2) (315.8) (12.2%) 1H25 unfranked3 EBITDA 190.2 169.8 12.0% dividend 1.0 CPS EBIT 92.7 50.0 85.4% NPAT before significant item
Slide 7: Getting Fit: Where Are We?
GETTING FIT WHERE ARE WE? For personal use only NEW LEADERSHIP STRUCTURE AND CAPABILITY COST AND CAPITAL DISCIPLINE BEING IMPLEMENTED FOCUS ON EXECUTION STRATEGIC EVOLUTION Tabcorp 1H25 Results | 6
Slide 8: New Leadership Structure and Capability
GETTING FIT NEW LEADERSHIP STRUCTURE AND CAPABILITY CLARITY COMMITMENT CAPABILITY For personal use only GILL McLACHLAN Managing Director & Chief Executive Officer SHARON ROBERT MICHAEL MARK NARELLE PAUL JARROD BROADLEY FRASER FITZSIMONS HOWELL McKENZIE O’ROURKE VILLANI Chief People Chief Technology
Slide 9: Cost and Capital Discipline
GETTING FIT COST AND CAPITAL DISCIPLINE For personal use only OPEX CAPEX ~200 roles removed1 Review of all capital expenditure Zero-based cost design review underway Re-prioritisation of projects in line with evolved strategy Discretionary spend and A&P discipline Procurement optimisation FY25 targe
Slide 10: Focus on Execution: Looking, Thinking, Acting Bigger
GETTING FIT FOCUS ON EXECUTION For personal use only LOOKING, THINKING, ACTING BIGGER Innovative, simultaneous activation on-course, in-venue, through SKY and broadcast partnerships A window into the future of coordinating our assets TabcorpFY24 Tabcorp 1H25Results Results| | 9
Slide 11: Focus on Execution: Generosity Efficiency
GETTING FIT FOCUS ON EXECUTION For personal use only Generosity efficiency (%)1 90% 85% DELIVERING IMPROVED CUSTOMER EXPERIENCE AND 80% GREATER EFFICIENCY IN MARKETING AND GENEROSITY SPEND 75% GENEROSITY EFFICIENCY HAS INCREASED TO 90% FROM 70% 70% OVER THE LAST 2.5 YEARS 65% GENEROSITY SPEND ($M) R
Slide 12: Strategic Evolution
For personal use only SECTION 2 STRATEGIC EVOLUTION Tabcorp 1H25 Results | 11
Slide 13: What's Next
STRATEGIC EVOLUTION WHAT’S NEXT… For personal use only AUG ’24 – JUN ‘25 MAR ‘25 – DEC ‘25 2026 – 2028 DELIVER STRATEGIC DIFFERENTIATION OPERATIONALISE GETTING STRATEGY High-performance culture OURSELVES FIT Growth from our unique set of assets and differentiated customer offer Continued cost focus
Slide 14: Brands and Assets: Strategic Advantages
BRANDS AND ASSETS STRATEGIC ADVANTAGES READY TO BE UNLOCKED For personal use only Our unique assets provide us with significant potential as the Australian wagering market evolves BRAND Iconic Australian brands, with substantial growth DIGITAL EXPERIENCE Digital parity delivered. Only player with ab
Slide 15: A New Game Plan: How We Will Win
A NEW GAME PLAN HOW WE WILL WIN OUR CORE ASSETS For personal use only DIGITAL RETAIL TOTE MEDIA MAX EXECUTION PLAN Clarity, commitment and capability Attract talented people and partners who want to succeed and deliver for 1 Growth for industry and ourselves Lead industry reform with our 2 Unrivalle
Slide 16: Broader Strategic Focus Now Digital Is Competitive
STRATEGIC EVOLUTION BROADER STRATEGIC FOCUS NOW DIGITAL IS COMPETITIVE For personal use only Our Core Assets DIGITAL RETAIL TOTE MEDIA MAX Strengths • Digital parity • Large retail network and • World pool events • Best racing inventory in • Largest provider presence the world of monitoring • Tradin
Slide 17: Financial Results
For personal use only SECTION 3 FINANCIAL RESULTS Tabcorp 1H25 Results | 16
Slide 18: 1H25 Group Results
1H25 GROUP RESULTS For personal use only Strong revenue, variable contribution and earnings growth driven by reformed Victorian Wagering and Betting Licence $M 1H25 1H24 CHANGE (%) Revenue 1,331.3 1,209.6 10.1% Variable contribution 544.4 485.6 12.1% Operating expenses (354.2) (315.8) (12.2%) EBITDA
Slide 19: Group and Business Segment Results
GROUP AND BUSINESS SEGMENT RESULTS For personal use only Strong operating leverage on an underlying basis for each segment delivered in 1H25 $M 1H25 1H241 CHANGE (%) Revenue Wagering & Media 1,243.2 1,116.6 11.3% Integrity Services - underlying 88.1 80.3 9.7% Group revenue – underlying 1,331.3 1,196
Slide 20: Group EBITDA
GROUP EBITDA For personal use only ($M) 6.4 6.3 64.2 (34.0) 190.2 169.8 (15.0) (7.5) Incremental impact CPI indexed fee (Refer following 1H24 impact of VIC Incentive accrual of reformed VIC increases and slide) JV costs previously (nil STI in pcp) Licence1 monitored EGM shared 50% with increases VRI
Slide 21: Cost Control to Deliver Operating Leverage
COST CONTROL TO DELIVER OPERATING LEVERAGE For personal use only UP $3.7M / 1.1% ($M) ($6.3M) / 1.8% IMPROVEMENT 12.1 10.0 34.0 5.0 350.5 1.1 354.2 (19.5) (4.3) 315.8 1H24 impact of VIC JV costs previously shared 50% with VRI 1H24 4.5 months MPS Demerger 1H24 Incentive Inflation Cost Other 1H25 Opex
Slide 22: Financial Discipline: Cost and Capital Reset
FINANCIAL DISCIPLINE COST AND CAPITAL RESET For personal use only CONTEXT Soft macroeconomic environment impacting wagering market Persistent cost inflation 1H25 ACTIONS 2H25 PRIORITIES Large proportion of costs fixed or contracted Cost and capex disciplines implemented Deliver $30m FY25 targeted co
Slide 23: Capital Expenditure: Focusing on Returns
CAPITAL EXPENDITURE FOCUSING ON RETURNS For personal use only Increased focus on returns when approving new CAPITAL ALLOCATION ($M) capital spend. FY25 capex guidance of $110m - $120m -25% 1H25 CAPEX Growth & transformation 76 8 investment $57M 67% 57 (1H24: 72%) 4 55 38 FY25 CAPEX FY25 D&A (revised
Slide 24: Capital and Leverage
CAPITAL AND LEVERAGE STRONG BALANCE SHEET PROVIDING FLEXIBILITY For personal use only DEBT MATURITY PROFILE ($M) FUNDING AND TARGET 600 USPP (Drawn) LIQUIDITY LEVERAGE 500 SFA (Undrawn) 400 SFA (Drawn) Tabcorp continues to maintain To provide Tabcorp with the access to diversified funding necessary
Slide 25: Cash Flow
CASH FLOW For personal use only Operating cash conversion1 108% Strong cash flow generation led to a reduced leverage of 2.2x On an underlying2 basis 88% Positive working capital movement due to ($M) the close out of the Victorian Joint Venture 39.0 4.3 Significant items cash flow includes costs rel
Slide 26: Wagering & Media
For personal use only SECTION 4 WAGERING & MEDIA Tabcorp 1H25 Results | 25
Slide 27: Wagering & Media EBITDA
WAGERING & MEDIA EBITDA For personal use only Reformed Victorian Wagering and Betting Licence result is broadly in line with expectations given soft trading conditions ($M) INCREMENTAL VIC EBITDA $36.4M 70.4 4.0 (34.0) 156.7 (6.2) (11.5) 134.0 Turnover decline more than offset by improved yields Inc
Slide 28: 1H25 Results Wagering & Media
1H25 RESULTS WAGERING & MEDIA For personal use only $M 1H25 1H24 CHANGE (%) Wagering turnover down Media revenue up 1.6% driven 4.3% driven by a continued by growth in distribution partly Digital wagering revenue 539.6 473.4 14.0% soft trading environment. offset by the impact of a softer Cash wager
Slide 29: 1H25 Domestic Wagering Revenue and KPIs
1H25 DOMESTIC WAGERING REVENUE AND KPIs For personal use only DOMESTIC WAGERING REVENUE ($M) 1H25 1H24 CHANGE (%) DOMESTIC WAGERING TURNOVER2 ($M) 1H25 1H24 CHANGE (%) Digital Racing 5,798.3 6,120.1 (5.3%) Active users (‘000)1 801 786 1.9% Sport 1,347.4 1,343.5 0.3% Digital turnover2 4,353.9 4,731.2
Slide 30: Integrity Services
For personal use only SECTION 5 INTEGRITY SERVICES Tabcorp 1H25 Results | 29
Slide 31: Integrity Services EBITDA
INTEGRITY SERVICES EBITDA For personal use only Integrity Services is growing strongly on an underlying basis (ex MPS) ($M) 35.8 2.3 6.4 33.5 (3.5) (7.5) CPI indexed fee Share of opex Incentive accrual increases and improvement (nil STI in pcp) monitored EGM increases Demerger technology cost Increa
Slide 32: 1H25 Results Integrity Services
1H25 RESULTS INTEGRITY SERVICES For personal use only $M 1H25 1H24 CHANGE (%) MONITORED EGMs DEC 24 DEC 23 CHANGE (%) Integrity Services – Reported NSW 93,000 92,240 0.8% Revenue 88.1 93.0 (5.3%) QLD 29,470 29,300 0.6% EBITDA 33.5 35.8 (6.4%) TAS 2,210 2,250 (1.8%) EBIT 13.3 16.7 (20.4%) NT 1,570 1,
Slide 33: Summary & Outlook
For personal use only SECTION 6 SUMMARY & OUTLOOK Tabcorp 1H25 Results | 32
Slide 34: Summary and Outlook
SUMMARY AND OUTLOOK For personal use only SUMMARY Tabcorp’s performance in 1H25 demonstrates that Tabcorp is getting fitter. We have increased wagering and media capability, created a simpler more cost-effective operating model and are operating with a new cadence and increased accountability Our im
Slide 35: Appendices
For personal use only SECTION 7 APPENDICES Tabcorp 1H25 Results | 34
Slide 36: Significant Items
SIGNIFICANT ITEMS For personal use only PRE-TAX TAX POST-TAX TRANSFORMATION Costs to implement long term strategic cost reduction program initiatives, including one- (23.8) 7.2 (16.6) COSTS off redundancies and other transformation initiatives. DEMERGER Costs incurred to separate Tabcorp and The Lot
Slide 37: 1H25 Group Results Reconciliation
1H25 GROUP RESULTS RECONCILIATION For personal use only BEFORE CONSOLIDATED ($M) TRANSFORMATION DEMERGER VICTORIAN STATUTORY OTHER SIGNIFICANT CONTINUING OPERATIONS COSTS COSTS LICENCE ITEMS Revenue 1,331.3 - - - - 1,331.3 Taxes, levies, commissions and fees (760.5) - - (24.6) (1.8) (786.9) Net oper
Slide 38: Group and Business Results
GROUP AND BUSINESS RESULTS For personal use only WAGERING & MEDIA INTEGRITY SERVICES GROUP $M 1H25 1H24 CHANGE (%) 1H25 1H24 CHANGE (%) 1H25 1H24 CHANGE (%) Revenue 1,243.2 1,116.6 11.3% 88.1 93.0 (5.3%) 1,331.3 1,209.6 10.1% Variable contribution 458.1 393.9 16.3% 86.3 91.7 (5.9%) 544.4 485.6 12.1%
Slide 39: Media: The Value of Vision
MEDIA: THE VALUE OF VISION DIVERSIFIED MARKET LEADER For personal use only 1H25 Media revenue sources ($m) INTERNATIONAL DIGITAL DISTRIBUTION $62M (32%) External External $40m $66M (34%) Export revenue (% of turnover) to overseas $44m countries, including through SKY Racing World Revenue (% of turno
Slide 40: Glossary
GLOSSARY 1H/2H Six months ended 31 December/30 June of the relevant financial year LTM Last twelve months A&P Advertising and Promotion MAX The Group’s Integrity Services brand MPS For personal use only AAS Australian Accounting Standards Max Performance Solutions ACT Australian Capital Territory NM
Slide 41: Disclaimer
DISCLAIMER For personal use only This Presentation contains summary information about the current Any forecasts or other forward looking statements contained in this This Presentation does not constitute an offer to sell, or the solicitation of an activities of Tabcorp Holdings Limited (Tabcorp) and