Slide 1: Tabcorp Full Year Results Presentation ASX cover letter
Tabcorp Holdings Limited ACN 063 780 709 5 Bowen Crescent Melbourne Australia 3004 GPO Box 1943 Melbourne Australia 3001 Telephone 61 3 9868 2100 Facsimile 61 3 9868 2300 For personal use only Website www.tabcorp.com.au 16 August 2011 To: Australian Securities Exchange Companies Announcements Platfo
Slide 2: 2010/11 Full Year Results Presentation
For personal use only Tabcorp Holdings Limited 2010/11 Full Year Results Presentation 16 August 2011
Slide 3: A significant and successful year
A significant and successful year ¾ Tabcorp has completed a year of significant transformation For personal use only Demerger of Echo Entertainment Group New Victorian Wagering and Betting Licence announced (commences August 2012) New Victorian Keno Licence awarded (commences April 2012) Fix
Slide 4: FY11 financial results
FY11 financial results ¾ Reported NPAT $534.8m, up 13.9% For personal use only Tabcorp EBIT $562.5m, up 5.2% Casinos EBIT $347.2m, up 33.6% Demerger impact: Gain on demerger of Echo (net) $351m Goodwill impairment ($358m) Net loss after tax ($7m) ¾ Normalised NPAT $486.3m, up 1.9% Normalised
Slide 5: Tabcorp FY11 financial results – continuing businesses
Tabcorp FY11 financial results – continuing businesses ¾ Tabcorp performance For personal use only Revenues $2,941.9m up 2.9% Operating expenses $393.1m up 2.0% EBIT $562.5m up 5.2% ¾ Business performance (EBIT) Wagering $220.2m up 4.5% Media & International $52.8m up 2.7% Gaming $241.4m
Slide 6: Business results
Business results For personal use only Wagering Change Media Change Gaming Change Keno Change Group1 Change $m on pcp & Int'l on pcp on pcp on pcp on pcp Revenues 1,569.1 1.0% 179.3 9.3% 1,077.4 3.9% 169.6 7.9% 2,941.9 2.9% Variable contribution 551.0 2.5% 168.2 8.0% 316.3 5.0% 94.8 7.2% 1,079.9 4.4
Slide 7: Wagering: KPIs
Wagering: KPIs $m 1H11 Change 2H11 Change FY11 Change Revenues product For personal use only ¾ Strong growth in Fixed odds offsetting Totalisator Vic 344 (2.6%) 290 (3.4%) 634 (3.0%) decline in totalisator revenues Totalisator NSW 414 (3.9%) 354 (6.3%) 768 (5.0%) ¾ Soccer World Cup revenues (Fixed o
Slide 8: Channel initiatives
Channel initiatives ¾ Retail is growing despite challenging market conditions For personal use only ¾ Growth supported by improved customer experience New and upgraded venues in NSW Trackside expansion Bet Live installations Self-service terminal deployment Interactive form and betting inf
Slide 9: Victorian Wagering and Betting Licence
Victorian Wagering and Betting Licence ¾ Tabcorp to be awarded the Victorian Wagering and Betting Licence For personal use only ¾ Key terms: Licence fee of $410m payable shortly Sole retail licence 50/50 Joint Venture with Victorian Racing Industry, previously 75/25 Licence term of 12 years,
Slide 10: Media & International
Media & International $m FY11 FY10 Change For personal use only ¾ Revenue growth from additional channels and Revenues 179 164 9.3% International Operating expenses (108) (99) 9.1% ¾ Expenses growth driven by new channels EBITDA 60 56 6.0% ¾ Recently concluded Media Rights Agreements: EBIT 53 51 2.7
Slide 11: Gaming: KPIs
Gaming: KPIs $m FY11 FY10 Change For personal use only Revenues 1,077 1,037 3.9% Vic EGMs Operating expenses (37) (39) (6.3%) ¾ Market share up, to 53.9% EBITDA 280 262 6.7% ¾ Managing transition for end of licence in August 2012 EBIT 241 225 7.1% Venues (period end) 263 263 0.0% EGMs (average) 13,3
Slide 12: Keno: KPIs
Keno: KPIs $m FY11 FY10 Change ¾ Strong underlying performance in core For personal use only Revenues 170 157 7.9% business with revenue in NSW and QLD Operating expenses (34) (33) 4.9% both up 8.2% EBITDA 61 56 8.6% ¾ Expense growth driven by distribution EBIT 49 47 4.7% expansion and technology up
Slide 13: Keno Victoria
Keno Victoria ¾ Tabcorp awarded Keno Victoria Licence For personal use only ¾ Key terms: Licence fee of $60m paid in April 2011 Licence term of 10 years commencing 15 April 2012 Expanded distribution into clubs and hotels Licence includes simulated racing games Tax rate (including GST) mai
Slide 14: Capital expenditure and investments
Capital expenditure and investments Capex trend Major projects For personal use only ¾ Major capex projects in FY11 New internet platform 139 NSW Trackside 121 119 108 Self service in Wagering and Keno Venue refurbishment Sky / Digital decoder roll out Major investments FY08 FY09 FY10 FY11
Slide 15: Key capital features
Key capital features 700 For personal use only 600 500 Undrawn Bank Debt 400 Drawn Bank Debt Tabcorp Retail Bonds $M 300 Medium Term Notes 200 100 - FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 ¾ $800m of new bank loan facilities in place on demerger ¾ Undrawn bank facilities $570m at 16 August ¾ $4
Slide 16: Summary
Summary ¾ Demerger implemented For personal use only ¾ Tabcorp’s continuing businesses on track EBIT $562.5m, up 5.2% Revenue and earnings growth across all businesses Operating expenses well controlled ¾ Investment plans in place Wagering - NSW roll out of Fixed Odds and Trackside - Victori
Slide 17: Appendices
Appendices 1. Group results For personal use only 2. Demerger impacts 3. Tabcorp trends – continuing businesses 4. Tabcorp five year history – continuing businesses 5. Wagering: Financial data 6. Wagering: Revenues by state and product 7. Gaming: Financial data 8. Gaming: Market share 9. Keno: Finan
Slide 18: 1. Group results
1. Group results Actual Change Normalised 1 Change For personal use only $m FY11 on pcp FY11 on pcp Revenues 4,469.5 5.9% 4,381.8 3.5% Government taxes & levies (1,204.6) 3.4% (1,195.9) 2.6% Operating commissions (524.9) 4.9% (524.9) 4.9% Racing industry fees (454.5) 0.2% (454.5) 0.2% Variable contr
Slide 19: 2. Demerger impacts
2. Demerger impacts (i) Gain on demerger of Echo For personal use only $m ¾ Gain on demerger of Echo 492 Market value $2,889m less net book value $2,397m ¾ Transaction costs (net of tax) (141) Cash expenses $88m, non cash $100m, less tax benefit $47m ¾ Net gain 351 (ii) Demerger costs Scheme Revised
Slide 20: 3. Tabcorp trends – continuing businesses
3. Tabcorp trends – continuing businesses Revenue EBITDA For personal use only $m $m 2,942 2,860 687 2,813 649 639 2,628 605 2,575 584 FY07 FY08 FY09 FY10 FY11 FY07 FY08 FY09 FY10 FY11 19
Slide 21: 4. Tabcorp financial trends – continuing businesses
4. Tabcorp financial trends – continuing businesses For personal use only $m FY07 FY08 FY09 FY10 FY11 Revenues 2,575.3 2,627.7 2,813.0 2,860.0 2,941.9 Growth (%) 2.0% 7.0% 1.7% 2.9% Variable contribution 951.8 971.4 1,018.8 1,034.6 1,079.9 Operating expenses 367.9 366.1 380.0 385.4 393.1 EBITDA 583.
Slide 22: 5. Wagering: Financial data
5. Wagering: Financial data $m FY11 FY10 Change For personal use only Racing - Vic 481.5 496.4 (3.1%) Racing - NSW 768.2 808.8 (5.3%) Fixed odds 218.8 163.7 33.7% Trackside 39.5 26.8 47.4% Other 61.1 57.8 5.7% Revenues 1,569.1 1,553.5 1.0% Taxes, levies, commissions and fees (1,018.1) (1,015.7) 0.2%
Slide 23: 6. Wagering: Revenue by state and product
6. Wagering: Revenue by state and product For personal use only NSW Change Vic Change Total Change $m FY11 on pcp FY11 on pcp FY11 on pcp Operating revenues Thoroughbred 509.1 (8.1%) 317.9 (5.4%) 826.9 (7.1%) Harness 100.1 (6.1%) 70.2 (7.2%) 170.3 (6.6%) Greyhound 159.0 7.4% 93.4 10.0% 252.5 8.4% To
Slide 24: 7. Gaming: Financial data
7. Gaming: Financial data For personal use only $m FY11 FY10 Change Victorian network - Hotel 704.3 681.3 3.4% - Clubs 367.2 351.7 4.4% Total Victorian gaming 1,071.5 1,033.0 3.7% Other revenue 5.9 4.1 43.9% Revenues 1,077.4 1,037.1 3.9% Taxes, levies, commissions and fees (761.1) (736.0) 3.4% Opera
Slide 25: 8. Gaming: Market share
8. Gaming: Market share Tabcorp v Tatts Group Vic Gaming Revenue Market Share For personal use only Jun 2006 to Jun 2011 55.0% 54.0% 53.0% Tabcorp 52.0% 51.0% 50.0% 49.0% 48.0% Tatts Group 47.0% 46.0% 45.0% Jun-06 Jun-07 Jun-08 Jun-09 Jun-10 Jun-11 Sep-06 Dec-06 Sep-07 Dec-07 Sep-08 Dec-08 Sep-09 De
Slide 26: 9. Keno: Financial data
9. Keno: Financial data $m FY11 FY10 Change For personal use only Keno 141.5 130.1 8.8% Other revenue 28.1 27.1 3.7% Revenue 169.6 157.2 7.9% Taxes, levies, commissions and fees (74.8) (68.8) 8.7% Operating expenses (34.2) (32.6) 4.9% EBITDA 60.6 55.8 8.6% D&A (11.8) (9.2) 28.3% EBIT 48.8 46.6 4.7%
Slide 27: 10. Balance Sheet
10. Balance Sheet As at As at Change For personal use only $m 30 Jun 11 30 Jun 10 on pcp Total current assets 251.1 381.1 (34.1%) Licences 430.0 652.6 (34.1%) Other intangible assets 1,805.7 3,627.5 (50.2%) Property, plant and equipment 280.5 1,762.9 (84.1%) Other non current assets 71.2 33.6 111.9%
Slide 28: 11. Cashflow
11. Cashflow Actual Change For personal use only $m FY11 FY10 on pcp Net operating flows 1,006.9 1,028.6 (2.1%) Net interest payments (151.1) (148.4) 1.8% Income tax paid (197.7) (179.0) 10.4% Payments for PP&E and licences (595.6) (408.1) 45.9% Net operating cash flows 62.5 293.1 (78.7%) Proceeds f
Slide 29: 12. Comparative financial results for FY12 reporting
12. Comparative financial results for FY12 reporting For personal use only 6 months ended 31 December 2010 6 months ended 30 June 2011 $m Wagering Media & Int'l Gaming Keno Total Wagering Media & Int'l Gaming Keno Total Revenues 825.9 89.5 556.2 83.8 1,528.1 743.2 89.8 521.2 85.8 1,413.8 Taxes, levi
Slide 30: 13. Reconciliation of reported results
13. Reconciliation of reported results For personal use only Discontinued Intersegment Group Results $m Reported Operations Revenue (per Appendix 1) Revenues 2,947.5 1,527.2 (5.2) 4,469.5 Expenses (2,385.0) (1,180.0) 5.2 (3,559.7) Profit before tax, interest & 562.5 347.2 - 909.8 impairment Interest
Slide 31: For personal use only
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