Tabcorp Holdings Limited · ASX:TAH
Tabcorp — H1 FY2017 Earnings Presentation
26 slides from Tabcorp's earnings presentation, Feb 2, 2017
Slide 1: Tabcorp half year results presentation ASX cover letter
For personal use only 2 February 2017 Australian Securities Exchange Companies Announcements Platform 20 Bridge Street Sydney NSW 2000 TABCORP HALF YEAR RESULTS PRESENTATION Attached is the presentation regarding Tabcorp’s half year results ended 31 December 2016 to be presented by David Attenboroug
Slide 2: 2016/17 First Half Results Presentation
For personal use only TABCORP HOLDINGS LIMITED 2016/17 FIRST HALF RESULTS PRESENTATION 2 FEBRUARY 2017 ABN 66 063 780 709
Slide 3: 1H17 Overview
1H17 OVERVIEW For personal use only o Statutory results • NPAT $58.9m, down 28.1% • EPS 7.1 cents per share, down 28.3% • Results adversely impacted by significant items after tax of $43.8m o Results before significant items • EBITDA $270.4m, up 1.7% • NPAT $102.7m, up 5.3% • EPS 12.3 cents per shar
Slide 4: Group Results
GROUP RESULTS For personal use only $m 1H17 1H16 Change Revenues 1,159.3 1,135.6 2.1% Variable contribution 521.5 507.3 2.8% Operating expenses (251.1) (241.3) 4.1% EBITDA before significant items 270.4 266.0 1.7% D&A (86.7) (89.5) (3.1%) EBIT before significant items 183.7 176.5 4.1% Interest (34.9
Slide 5: Business Results
BUSINESS RESULTS For personal use only Wagering Change Gaming Change Change Change Keno Group $m & Media on pcp Services on pcp on pcp on pcp Revenues 987.0 1.4% 60.2 13.8% 112.1 2.2% 1,159.3 2.1% Variable contribution 397.7 1.3% 58.7 11.9% 65.1 4.6% 521.5 2.8% Operating expenses (201.6) 3.0% (22.7)
Slide 6: Wagering & Media: KPIs
WAGERING & MEDIA: KPIs For personal use only $m 1H17 1H16 Change o Revenues up 1.4% on pcp • Wagering driven by record Spring Racing Wagering revenue 897.9 887.2 1.2% Carnival results for core TAB business, Media revenue 89.1 85.8 3.8% partly offset by softness in Trackside and Luxbet Revenues 987.0
Slide 7: TAB: KPIs
TAB: KPIs For personal use only $m 1H17 1H16 Change % o Digital turnover growth of 13.8%, driving total turnover growth of 2.3% Turnover by distribution ($m) • Record Spring Racing Carnival with Digital Retail 3,302.5 3,388.4 (2.5%) growth of 17.6% underpinning total racing Digital 2,192.5 1,926.0 1
Slide 8: TAB: Product and Marketing
TAB: PRODUCT AND MARKETING For personal use only o Take a clear, compelling and differentiated brand leadership position • New brand campaign, ‘We Love a Bet’, successfully launched in August • Marketing investment re-weighted to ensure right time, right place market presence o Provide products and
Slide 9: Media
MEDIA For personal use only o Continued investment in Sky coverage quality and integration of wagering • Reformatted magazine shows on Sky Thoroughbred Central to increase focus on wagering • Key media talent recruited • Refresh of graphics on Sky Racing 1 & 2 • Unique digital content, such as Sky p
Slide 10: Sun Bets
SUN BETS For personal use only o Sun Bets launched in the UK in August 2016 $m 1H17 • Attractive, well regulated market with double-digit online revenue growth continuing Turnover 96.8 • Initial digital offering comprising sportsbook and online Revenue 1.5 casino, as well as first stage of betting i
Slide 11: Gaming Services: KPIs
GAMING SERVICES: KPIs For personal use only o Gaming Services results include one month of $m 1H17 1H16 Change trading from INTECQ, which contributed: Revenues 60.2 52.9 13.8% • Revenues $3.6m EBITDA 36.0 33.8 6.5% • EBITDA $1.1m EBIT 20.7 19.6 5.6% • EBIT $0.8m o Victoria • Approximately 8,700 EGMs
Slide 12: Keno: KPIs
KENO: KPIs For personal use only $m 1H17 1H16 Change o Continued strong turnover momentum in 1H17, up 3.7% compared with the pcp Revenues 112.1 109.7 2.2% o Revenue performance EBITDA 40.2 37.8 6.3% • Vic up 13.8% EBIT 29.4 28.0 5.0% • NSW up 11.0% Venues 3,599 3,625 (0.7%) • Qld down 4.9% Ticket Co
Slide 13: Keno: Product and Digital Driving Reinvigoration
KENO: PRODUCT AND DIGITAL DRIVING REINVIGORATION For personal use only o Queensland jackpot pooling • Commenced in December. Keno jackpot pools now combine turnover from customers in Victoria, NSW, ACT and Queensland • Pooling drives faster jackpot growth, creating an opportunity for greater engagem
Slide 14: Continued Investment in Risk and Compliance
CONTINUED INVESTMENT IN RISK AND COMPLIANCE For personal use only o Tabcorp is committed to highest standards of regulatory compliance and risk management, consistent with our vision to be the most respected gambling-led entertainment company in the world o Significant investment in risk and complia
Slide 15: People and Engagement
PEOPLE AND ENGAGEMENT For personal use only o Our vision to be the world’s most respected gambling-led entertainment company is supported by a continued focus on building a world-class organisation • Ongoing increase in employee engagement levels • Highly diverse organisation – 40% of senior leaders
Slide 16: Combination with Tatts
COMBINATION WITH TATTS For personal use only o Proposed combination with Tatts Group announced on 19 October 2016, to create a leading, diversified portfolio of gambling entertainment businesses o Will provide a wide range of benefits for stakeholders and enhance the long-term sustainability of Aust
Slide 17: Operating Expenses and Capital Investment
OPERATING EXPENSES AND CAPITAL INVESTMENT For personal use only OPEX / REVENUE RATIO CAPEX TRENDS ($m) 90 21.7% 21.3% 21.4% 21.2% 73 62 FY14 FY15 FY16 1H17 1H16 2H16 1H17 Wagering & Media Gaming Services Keno o Operating expense growth reflects increased resourcing o FY17 capex expected to be approx
Slide 18: Capital Management
CAPITAL MANAGEMENT For personal use only DEBT STRUCTURE ($m) DIVIDENDS (¢) Tabcorp Subordinated notes US Private Placement Cash-settled equity swap funding Term Debt 12.5 325 12.0 10.0 8.0 400 84 400 250 150 127 FY17 FY18 FY19 FY20 FY21 FY22 1H14 1H15 1H16 1H17 o Tabcorp Subordinated Notes to be red
Slide 19: Conclusion
CONCLUSION For personal use only o 1H17 highlights – advancing our strategic priorities • Revenue growth across all three businesses, including record Spring Racing Carnival results • Continued focus on integrated customer experience – enhanced TAB app, digital commission model roll-out • Extension
Slide 20: Appendices
APPENDICES For personal use only 1. Wagering & Media: Financial data 2. Wagering & Media: Revenues by state and product 3. Balance sheet 4. Cashflow 19
Slide 21: Wagering & Media: Financial Data
1. WAGERING & MEDIA: FINANCIAL DATA For personal use only $m 1H17 1H16 Change Revenues 987.0 973.0 1.4% Taxes, levies, commissions and fees (589.3) (580.5) 1.5% Variable contribution 397.7 392.6 1.3% Operating expenses (201.6) (195.8) 3.0% EBITDA 196.1 196.8 (0.4%) D&A (60.6) (65.5) (7.5%) EBIT 135.
Slide 22: Wagering & Media: Revenues by State and Product
2. WAGERING & MEDIA: REVENUES BY STATE AND PRODUCT For personal use only NSW Change Vic Change ACT Change Total Change $m 1H17 on pcp 1H17 on pcp 1H17 on pcp 1H17 on pcp Racing 476.9 (0.1%) 227.7 3.1% 13.6 4.1% 718.2 1.0% Sports 69.4 14.2% 18.9 2.5% 1.3 37.9% 89.6 11.6% Trackside 19.4 (12.7%) 12.0 (
Slide 23: Balance Sheet
3. BALANCE SHEET For personal use only $m Dec 16 Jun 16 Change Total current assets 546.6 197.1 177.3% Licences 659.8 682.4 (3.3%) Other intangible assets 2,059.7 1,945.3 5.9% Property, plant and equipment 309.0 311.7 (0.9%) Other non current assets 171.4 166.3 3.1% Total assets 3,746.5 3,302.8 13.4
Slide 24: Cashflow
4. CASHFLOW For personal use only $m 1H17 1H16 Change Net operating flows 211.9 228.1 (7.1%) Net interest payments (34.8) (34.1) 2.1% Income tax (paid)/refund (34.2) 32.8 (>100%) Payments for PP&E and intangibles (78.3) (73.2) 7.0% Sub-total 64.6 153.6 (57.9%) Ordinary dividends paid (90.1) (73.5) 2
Slide 25: 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 26: To Advance the Way We Play
For personal use only TO ADVANCE THE WAY WE PLAY