Tabcorp Holdings Limited · ASX:TAH
Tabcorp — FY2007 Earnings Presentation
40 slides from Tabcorp's earnings presentation, Aug 23, 2007
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 1943R Melbourne Australia 3001 Telephone 61 3 9868 2100 Facsimile 61 3 9868 2300 For personal use only Website www.tabcorp.com.au 23 August 2007 To: Australian Securities Exchange Companies Announcements Platf
Slide 2: 2006/07 Full Year Results Presentation
For personal use only 2006/07 Full Year Results Presentation Thursday 23 August 2007 1
Slide 3: Overview
Overview For personal use only ¾ Operating revenue up 3.2 percent to $3.9 billion ¾ Poor bottom line result due to unacceptable expense growth ¾ Other drivers of bottom line result: Smoking bans in Queensland Below theoretical win rate in the International Rebate Business Material restructurin
Slide 4: Group results
Group results For personal use only ¾ Normalised and pre non-recurring items1 Operating revenue up 3.2% to $3,881.7m NPAT down 3.8% to $515.6m EPS down 3.8% to 98.2 cents ¾ Reported Operating revenue up 1.5% to $3,835.0m NPAT down 17.1% to $450.4m EPS down 17.1% to 85.8 cents ¾ Dividend
Slide 5: Group results table
Group results1 Normalised2 For personal use only Actual $m 12 months to Change 12 months to Change 30 Jun 07 on pcp 30 Jun 07 on pcp Revenue Operating revenue 3,877.2 3,837.1 1.6% 1.5% 3,921.8 3,881.7 3.2% Net operating expenses (1,008.8) 9.1% (1,008.8) 9.1% EBITDA 1,000.0 (7.4%) 1,040.0 (2.2%) EBIT
Slide 6: Dividends Per Share and Earnings Per Share
Dividends Per Share and Earnings Per Share Normalised earnings per share1,2 Dividends per share For personal use only 94 102.1 99.7 98.2 89 92.5 81 71 76.4 67 3.5% 21.1% 7.8% 2.4% (3.8% ) 6.3% 6.0% 14.1% 9.9% 5.6% Growth Growth on pcp on pcp FY03 FY04 FY05 FY06 FY07 FY03 FY04 FY05 FY06 FY07 Payout R
Slide 7: Four major issues in the result
Four major issues in the result For personal use only 9.7 (56.6) 34.4 Turnover more than doubled to $12.4b. Win rate was Qld smoking bans, below theoretical in FY07 impacting EBIT -$40.1m, Qld EGM revenue: and above theoretical in FY06 impacting EBIT +$16.5m -$16.6m, -5.7% 19.4 (42.1) 939.7 One-offs
Slide 8: World class assets in Vic, NSW and Qld
World class assets in Vic, NSW and Qld Casinos Wagering Gaming For personal use only Brands Footprint Four properties: Leading operator: Strong Vic gaming presence: 407 tables 2,652 retail outlets 13,647 EGMs 4,583 EGMs 700,000 regular customers 265 venues 1,398 hotel rooms Sky avail
Slide 9: Divisional results 2006/07
Divisional results 2006/071 For personal use only 2 $m Casinos Change Wagering Change Gaming Change Revenue revenue Operating 1,343.1 1,335.9 1.8% 1.9% 1,479.1 1,466.2 4.5% 4.4% 1,101.6 1,081.8 3.3% 3.4% Net operating expenses (637.3) 7.1% (290.0) 17.7% (73.8) 8.5% EBITDA 456.4 (4.7%) 303.3 (3.0%) 2
Slide 10: Casinos: KPIs
Casinos: KPIs For personal use only ¾ MGF up driven by heightened Operating Revenue ($m) FY07 FY06 % interest in table games; poker Main Gaming Floor 379.1 361.6 4.9% ¾ PGR down due to transfers to IRB, unfavourable win rates and Private Gaming Rooms 169.2 188.2 (10.1%) domestic competition ¾ IRB ma
Slide 11: Casinos: Investment in destinations
Casinos: Investment in destinations For personal use only Priorities Transform New Star Theatre $53m refurbishment on New premium EGM Strong local growth properties into Big name shows, incl time and budget rooms (Gold, Platinum Outdoor gaming destinations Priscilla, Miss Saigon New Premium
Slide 12: Casinos: Priorities
Casinos: Priorities For personal use only Strategy Immediate priorities ¾ Create leading leisure and ¾ Division entertainment destinations Win in the premium segment Star City expansion and Drive non-gaming revenues redevelopment Implement new hotel management Jupiters Casino and Spa Resor
Slide 13: Wagering: KPIs
Wagering: KPIs For personal use only ¾ Full year benefit from split Turnover product ($m) FY07 FY06 % picture resolution Racing Vic 3,719 3,465 7.3% Racing NSW 4,609 4,549 1.3% ¾ Greater focus on industry stakeholders Sportsbetting 665 598 11.2% Trackside 142 126 12.5% ¾ Vic growth from strong racin
Slide 14: Wagering: State based strategies
Wagering: State based strategies 12 month wagering turnover For personal use only 108 ¾ Vic performing strongly Vic growth ¾ Focus on product leadership, 106 international growth and marketing 104 ¾ Distribution expansion – at least 50 new sites from 2H 2008 102 ¾ NSW remains weak 100 NSW growth ¾ $
Slide 15: Wagering: Priorities
Wagering: Priorities For personal use only Strategy Immediate priorities ¾ Maintain leadership in national ¾ Division market Mitigate smoking ban impact Maintain product leadership Fix IT and service issues Continue Victorian growth Improve cost performance Turn around NSW performance
Slide 16: Gaming: KPIs
Gaming: KPIs For personal use only Vic Gaming FY07 FY06 % Gaming Revenue ($m) 972.0 933.2 4.2% ¾ Product leadership in 2007 Venues 265 265 - ¾ Continued growth in market EGMs (average) 13,647 13,658 (0.1)% share ¾ 251 venues with smoking Jackpots EGMs (average) 67.8% 66.9% 0.9% solutions NMR/EGM/Day
Slide 17: Gaming: Market share
Gaming: Market share Tabaret vs Tattersall's For personal use only 52.00% Gaming Revenue Market Share June 2003 to June 2007 TABCORP 51.00% Market Share % 50.00% 49.00% TATTERSALL'S 48.00% Jun-03 Sep-03 Mar-04 Dec-03 Jun-04 Sep-04 Mar-05 Dec-04 Jun-05 Sep-05 Mar-06 Dec-05 Jun-06 Sep-06 Mar-07 Dec-06
Slide 18: Gaming: Priorities
Gaming: Priorities For personal use only Strategy Immediate priorities ¾ Maintain category leadership ¾ Vic Gaming Maintain product leadership Complete transition to smoke-free Prepare for server based gaming environment Further improve distribution footprint ¾ Improve distribution performan
Slide 19: Group: Unacceptable expense growth
Group: Unacceptable expense growth For personal use only Expense growth 9.1% 2007 expense growth $84m $m $m %pcp Casinos Labour (including EBA) 11 One-offs 1 8 11.3% Technology 7 Cost of Sales (food & beverage) 8 Advertising & promotions 2 Other 6 42 +7.1% 6.9% Wagering Broadcast rights/Vision fees
Slide 20: Group: Expense focus
Group: Expense focus For personal use only ¾ Second half actions Reduced overhead and IT staffing –127 net headcount reduction FY07 Simplified accountability to three operating divisions and Shared Services Tightened expense controls; reduced capitalisation of IT development Settled all outs
Slide 21: Capital expenditure
Capital expenditure For personal use only Actual $m 12 months to 12 months to Change 30 Jun 07 30 Jun 06 on pcp Casinos 83.6 85.4 (2.1)% Wagering 39.0 76.9 (49.3)% Gaming 41.1 33.8 21.6% Corporate and International 19.1 27.7 (31.3)% Total 182.7 223.8 (18.4)% Major FY07 projects: Casinos: Refurbishme
Slide 22: Outlook: Environment
Outlook: Environment For personal use only ¾ Economy Solid economic growth across Eastern seaboard GSP1 growth: Vic 3.3%, NSW 2.5%, Qld 5.0% Interest rate rise, petrol prices may dampen discretionary spending ¾ Smoking bans Vic and NSW Impacting 45% of Group revenues Well prepared in Gamin
Slide 23: Outlook: Tabcorp
Outlook: Tabcorp For personal use only ¾ 2008 will be another challenging year for Tabcorp ¾ Improvements Expense growth will be contained Benefits from improvement initiatives flowing in second half No material non-recurring items ¾ Underlying performance expected to be broadly in line with 2
Slide 24: Group priorities clear
Group priorities clear For personal use only ¾ Domestic agenda for next 18 months Exploring options to exit China Keno business ¾ Operational focus Fix customer and technology issues in Wagering Deliver on 2008 and 2009 expense programs Drive organic growth and market share Invest in our c
Slide 25: Summary
Summary For personal use only ¾ Operating revenue up 3.2 percent to $3.9 billion ¾ Poor bottom line result due to unacceptable expense growth ¾ Other drivers of bottom line result: Smoking bans in Queensland Below theoretical win rate in the International Rebate Business Material restructuring
Slide 26: Appendices
Appendices For personal use only ¾ Appendices 1. Group results 2. Casinos: Financial data 3. Casinos: Revenue by state and product 4. Wagering: Financial data 5. Wagering: Revenue by state and product 6. Gaming: Revenue by product 7. International: Financial data 8. Non-recurring items 9. Balance sh
Slide 27: 1. Group results
1. Group results Actual1 Normalised1,2 $m 12 months to Change 12 months to Change For personal use only 30 Jun 07 on pcp 30 Jun 07 on pcp Total operating revenues 3,837.1 1.5% 3,881.7 3.2% 3 Other revenue 40.1 3.4% 40.1 3.4% Revenue 3,877.2 1.6% 3,921.8 3.2% Government taxes & levies (1,044.3) 2.5%
Slide 28: 2. Casinos: Financial Data
2. Casinos: Financial Data For personal use only 1,000,000.0 Actual1 Normalised1,2 $m 12 months to 12 months to Change 12 months to 12 months to Change 30 Jun 07 30 Jun 06 on pcp 30 Jun 07 30 Jun 06 on pcp Revenue 1,298.5 1,337.3 (2.9%) 1,343.1 1,318.8 1.8% Taxes, levies, commissions and fees (244.9
Slide 29: 3. Casinos: Revenue by state and product
3. Casinos: Revenue by state and product For personal use only $m NSW Change Qld Change Total Change FY07 on pcp FY07 on pcp FY07 on pcp Operating revenues Gross rebate play at theoretical 142.5 >100% 25.5 (28.4%) 168.0 >100% Rebate (81.4) >100% (13.3) (27.5%) (94.7) >100% Above/below theoretical (3
Slide 30: 4. Wagering: Financial data
4. Wagering: Financial data 1000000 Actual1 $m 12 months to 12 months to Change For personal use only 30 Jun 07 30 Jun 06 on pcp Operating revenues Wagering - Victoria2 525.5 486.4 8.0% Wagering - NSW2 848.5 832.2 2.0% Media 90.2 82.7 9.1% Trackside International 2.0 3.7 (46.7%) Total operating reve
Slide 31: 5. Wagering: Revenue by state and product
5. Wagering: Revenue by state and product For personal use only $m NSW1 Change Vic1 Change Total Change FY07 on pcp FY07 on pcp FY07 on pcp Operating revenues Thoroughbred 537.9 1.7% 321.8 5.9% 859.7 3.2% Harness 103.9 0.9% 73.2 9.4% 177.2 4.2% Greyhound 132.0 0.3% 78.1 10.3% 210.1 3.8% Total racing
Slide 32: 6. Gaming: Financial data
6. Gaming: Financial data Actual1 For personal use only $m 1000000 12 months to 12 months to Change 30 Jun 07 30 Jun 06 on pcp Operating revenues Victorian network - Hotels 628.0 604.1 3.9% - Clubs 344.0 329.0 4.6% Total Victorian gaming 972.0 933.2 4.2% Keno 107.7 113.0 (4.7%) Other 2.2 0.4 >100% T
Slide 33: 7. International: Financial data
7. International: Financial data For personal use only Actual1 $m 12 months to 12 months to Change 30 Jun 07 30 Jun 06 on pcp Revenue 2.5 2.5 0.7% Taxes, levies, commissions and fees (0.1) (0.0) >100% Net operating expenses (8.6) (13.4) (35.4%) Depreciation & amortisation (1.1) (0.6) 90.0% EBIT (7.3
Slide 34: 8. Non-recurring items
8. Non-recurring items $m Casino Wagering Gaming Int'nal Unalloc Total For personal use only 12 months to 30 June 2007 Restructure/integration costs1 (11.6) (26.3) (10.5) (0.0) (1.6) (50.1) UNiTAB bid cost2 (0.6) (0.5) (0.5) 0.0 (0.2) (1.9) Split picture resolution - implementation costs3 - (1.2) -
Slide 35: 9. Balance sheet
9. Balance sheet $m 1000000 As at As at1 Change For personal use only 30 Jun 07 30 Jun 06 on pcp Total current assets 282.3 278.6 1.3% Licences 1,220.8 1,230.1 (0.8%) Other intangible assets 3,680.6 3,676.5 0.1% Property, plant and equipment 1,461.8 1,442.3 1.3% Other non current assets 80.5 44.5 80
Slide 36: 10. Tabcorp Group: Debt key features
10. Tabcorp Group: Debt key features Fixed rate swaps and For personal use only Debt structure and maturity profile ($m) fixed interest medium term notes ($m) 600 2,000 500 1,800 1,600 400 1,400 1,200 300 1,000 800 200 600 100 400 200 - - 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2
Slide 37: 11. Cashflow
11. Cashflow Actual For personal use only $m 12 months to 12 months to Change 30 Jun 07 30 Jun 06 on pcp Net operating flows 958.8 1,076.8 (11.0%) Net interest payments (152.7) (153.2) (0.3%) Income tax paid (198.2) (218.4) (9.2%) Payments for PP&E (166.8) (236.1) (29.4%) Net operating cash flows 44
Slide 38: 12. Reconciliation of prior period segment results
12. Reconciliation of prior period segment results $m1 Wagering International Wagering 2 For personal use only Year ended 30 June 2006 (as reported) Product Reclassification Media Eliminations (restated) Operating revenues 1,318.6 6.5 113.6 (33.8) 1,405.0 Other revenues 10.7 0.1 10.8 Revenue 1,329.4
Slide 39: 13. Reconciliation of 2005/06 comparatives – balance sheet
13. Reconciliation of 2005/06 comparatives – balance sheet For personal use only Balance Sheet Deferred Balance Sheet $m FY 06 Software CIP Tax Asset FY06 as reported1 Reallocation2 Reallocation3 restated Total current assets 278.6 278.6 Licences 1,230.1 1,230.1 Other intangible assets 3,611.4 65.1
Slide 40: For personal use only
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