Aristocrat Leisure Limited · ASX:ALL
Aristocrat Leisure — H1 2010 Earnings Presentation
29 slides from Aristocrat Leisure's earnings presentation, 2010
Slide 1: FRONT PAGE REMOVED
FRONT PAGE REMOVED
Slide 2: Disclaimer
Disclaimer This document and any oral presentation accompanying it has been prepared in good faith. However, no express or implied warranty is given as to the accuracy or completeness of the information in this document or the accompanying presentation. All statutory representations and warranties a
Slide 3: Agenda
Agenda Results Overview Jamie Odell Financial Results & Segment Performance Toni Korsanos Strategy Update Jamie Odell Outlook Jamie Odell Questions 3
Slide 4: Results Overview
Results Overview Translational Constant FX impact currency $ million HY 2010 HY 2010 HY 2010 HY 2009 Operating profit after tax and 36.6 7.7 44.3 44.0 non-controlling interest 1 Net abnormal items after tax 12.7 12.7 (77.4) Net profit/(loss) after tax and 49.3 7.7 57.0 (33.4) non-controlling interes
Slide 5: Results Overview cont…
Results Overview cont… Variances vs HY2009 Constant Constant currency currency Reported $ million HY 2010 HY 2010 HY 2009 (%) (%) Revenue 340.5 396.5 441.7 10.2 22.9 Operating profit after tax and 36.6 44.3 44.0 0.7 16.8 non-controlling interest 1 Net abnormal items after tax 12.7 12.7 (77.4) nm nm
Slide 6: 2010 Half-Year Summary
2010 Half-Year Summary • One year into 3 - 5 year turnaround • Difficult trading conditions continue • Headline numbers demonstrate responsible fiscal management and the benefit of early turnaround improvements • Focus on North America beginning to yield tangible results • Performing strongly in Asi
Slide 7: Agenda
Agenda Results Overview Jamie Odell Financial Results & Segment Performance Toni Korsanos Strategy Update Jamie Odell Outlook Jamie Odell Questions 7
Slide 8: Profit & Loss
Profit & Loss Constant currency Change (%) HY HY HY Constant Unit 20101 20101 20091 Reported currency Revenue A$m 340.5 396.5 441.7 22.9 10.2 Total segment profit A$m 113.2 133.5 137.6 17.7 3.0 Segment profit margin % 33.2 33.7 31.2 2.0pts 2.5pts EBIT (before D&D) A$m 104.5 120.9 129.4 19.2 6.6 D&D
Slide 9: HY 2010 vs HY 2009 EBIT
HY 2010 vs HY 2009 EBIT 70.0 $12.7 60.0 $1.2 $1.2 $11.6 $2.0 EBIT $A million $10.3 50.0 $15.2 $5.5 $3.1 40.0 $69.6 $58.1 $59.9 30.0 $49.6 20.0 10.0 HY 2009 EBIT New Zealand Japan Excluding New Volume Price/Mix Cost of sales SMG&A D&D Other HY 2010 FX HY 2010 EBIT (normalised) Zealand & constant (tra
Slide 10: Capital Management
Capital Management • Prudent approach to balance sheet management • Conservative debt ratios well within BBB- rating • Secured debt facilities for the next 3 years, providing headroom and ability to act on strategic opportunities • Interim dividend of 3.5 cents per share. Represents a payout ratio o
Slide 11: North America
North America • Strong result despite contracting Unit HY2010 Change (%) market and difficult trading conditions Revenue US$m 159.8 3.0 • Replacement cycle remained flat and Profit US$m 66.8 5.5 no major new casinos/expansions Margin % 41.8 3.4pts • EGM ship share increased Volume • Release of new V
Slide 12: Australia
Australia • Sales dampened by poor game Units 2010 change (%) performance, customer capital Revenue A$m 69.6 22.3 constraints and regulatory Profit A$m 11.8 45.9 uncertainty Margin % 17.0 7.3 pts • Margins declined due to product mix, Volume pricing and games support • Significant leadership renewal
Slide 13: Japan
Japan • As flagged, result due to lack of Units 2010 Change (%) key game release Revenue ¥m 658.1 57.7 • Losses reduced through cost Loss ¥m (198.8) 30.1 containment Margin % (30.2) 11.9 pts • Accelerating demand for key Volume licensed games validating strategic direction - Games Units 2,342 59.2 •
Slide 14: Rest of World
Rest of World • Strong performances in Asia Pacific and Europe offset by weak results in Unit HY 20101 Change (%) New Zealand Revenue A$m 97.7 5.4 • Achieved highest floor share in new Singapore casinos. Strong sales Profit A$m 34.1 1.2 continued in Macau Margin % 34.9 2.3 pts • European profits dou
Slide 15: Agenda
Agenda Results Overview Jamie Odell Financial Results & Segment Performance Toni Korsanos Strategy Update Jamie Odell Outlook Jamie Odell Questions 15
Slide 16: 5 Initiatives that Underpin Success
5 Initiatives that Underpin Success Focus to unlock • Double gaming operations market share (by value) potential in North over five years America • Grow systems footprint • Develop stepper businesses Agile and customer • Close gap between ship share and installed base led in Australia Manage volatil
Slide 17: North America - Focus to Unlock Potential
North America - Focus to Unlock Potential Key deliverable Status Double gaming operations market • On track to achieve a 10% value share by share (by value) over five years 2014 • Impressive pipeline of new titles due for release in H2 including Rockin’ Olives™, Tarzan™ & Beijing Bonanza™ Grow syste
Slide 18: Australia - Agile and Customer Led
Australia - Agile and Customer Led Key deliverable Status Close gap between ship share and • Ship share improved, but challenge remains installed base to grow ship share towards installed base • Key changes implemented including: – Significant leadership renewal and capability building – Comprehensi
Slide 19: Japan - Manage Volatility
Japan - Manage Volatility Key deliverable Status Minimum of 2 key licensed game • Integrated Spiky acquisition releases and 50,000 unit sales p.a. • New agreement signed with one of Japan’s largest distribution agents • Developed comprehensive licensed games roadmap • Commissioned an additional crea
Slide 20: World-Class Product Development
World-Class Product Development Key deliverable Status Deliver the best games and • Additional resources placed in video, systems in each market – faster, stepper and platform development teams and more efficiently in North and Latin America • Invested in dedicated creative studios in Australia and
Slide 21: World-Class Organisation
World-Class Organisation Key deliverable Status Align resources to strategy and • Increased design and development and eliminate cost that will not drive strategic pricing capability value • Restructured the Australian sales and marketing organisation • Divested the remaining share of Elektroncek •
Slide 22: Agenda
Agenda Results Overview Jamie Odell Financial Results & Segment Performance Toni Korsanos Strategy Update Jamie Odell Outlook Jamie Odell Questions 22
Slide 23: Outlook 2010
Outlook 2010 A tough year, focused on building for long term value Market Aristocrat Aim to maintain sales momentum & No improvement expected in North America market size increase gaming ops installed base with strong product releases in Q4 Stronger game releases in Australia Market to remain flat a
Slide 24: Agenda
Agenda Results Overview Jamie Odell Financial Results & Segment Performance Toni Korsanos Strategy Update Jamie Odell Outlook Jamie Odell Questions 24
Slide 25: Supplementary materials
Supplementary materials 25
Slide 26: Detailed P&L
Detailed P&L Constant A$ million currency (unless otherwise stated) HY 20101 HY 20091 Change (%) 20101 Change (%) Revenue 340.5 441.7 (22.9)% 396.5 (10.2)% Gross margin 190.1 231.7 (18.0%) 215.8 (6.9%) Gross margin 55.8% 52.5% 3.3 pts 54.4% 1.9 pts EBIT (pre D&D) 104.5 129.4 (19.2)% 120.9 (6.6)% D&D
Slide 27: North America
North America Unit HY 2010 HY 2009 Change Revenue US$m 159.8 164.8 (5.0) (3.0)% Profit US$m 66.8 63.3 3.5 5.5% Margin % 41.8 38.4 - 3.4 pts Revenue A$m 181.3 227.7 (46.4) (20.4)% Profit A$m 76.3 86.5 (10.2) (11.8)% Margin % 42.1 38.0 - 4.1 pts Volume - Platforms Units 4,040 4,264 (224) (5.3)% - Conv
Slide 28: Australia
Australia Unit HY 2010 HY 2009 Change Revenue A$m 69.6 89.6 (20.0) (22.3)% Profit A$m 11.8 21.8 (10.0) (45.9)% Margin % 17.0 24.3 - (7.3) pts Volume - Platforms Units 2,075 2,189 (114) (5.2)% - Conversions Units 3,128 6,677 (3,549) (53.2)% Price - Average selling price A$/unit 16,597 17,790 (1,193)
Slide 29: Japan
Japan Unit HY 2010 HY 2009 Change Revenue ¥m 658.1 1,555.3 (897.2) (57.7)% Loss ¥m (198.8) (284.4) 85.6 30.1% Margin % (30.2) (18.3) - (11.9) pts Revenue A$m 8.3 21.1 (12.8) (60.7)% Loss A$m (2.5) (4.5) 2.0 44.4% Margin % (30.1) (21.3) - (8.8) pts Volume - Games Units 2,342 5,747 (3,405) (59.2)% Pri