Lottery Corporation Limited · ASX:TLC
Lottery — The Lottery — 1H23 Earnings Presentation
39 slides from Lottery's earnings presentation, Feb 23, 2023
Slide 1: ASX announcement: 2023 half year results presentation slides
23 February 2023 For personal use only ASX Market Announcements Office ASX Limited 20 Bridge Street Sydney NSW 2000 2023 HALF YEAR FINACNIAL RESULTS PRESENTATION SLIDES Attached is a copy of the slides that will be presented at The Lottery Corporation Limited’s half year 2023 results briefing today.
Slide 2: 1H23 Half Year Results Presentation
For personal use only ® 1H23 Half Year Results Presentation Half Year ended 31 December 2022 23 February 2023 The Lottery Corporation Limited - ABN 21 081 925 706
Slide 3: Table of Contents
Table of Contents For personal use only 03 - 07 Group Overview 09 - 18 Business Results 20 - 21 Capital 23 - 26 Strategy & Conclusion 28 - 36 Appendices
Slide 4: A winning first six months
A winning first six months For personal use only 3.5% 8.0 7.7% 15.8% 221k cps Retail Lotteries Turnover Interim dividend4 Group Revenue (on a comparable basis)1,2 Driving the whole Group EBITDA before significant items (on a comparable basis)2,3 Active registered Lotteries customers; now 4.3 million
Slide 5: A winning first six months
A winning first six months For personal use only • Double-digit earnings growth1 despite Lotteries cycling significant COVID benefits in the pcp Delivering strong financial • Continued strong cashflow generation performance • Result shows the business’ resilience, defensive qualities and benefits of
Slide 6: Key Segment Drivers
Key Segment Drivers For personal use only Lotteries • Significant increase in active registered customers – 221,000 in the last six months • Continued growth in both retail and digital • No material net impacts evident in the period from COVID • Active management of the portfolio – optimising the in
Slide 7: 1H23 Group Results
1H23 Group Results Reported Comparable2 Results for 1H22 were pre-demerger and under the For personal use only $m Change Change ownership of Tabcorp Holdings Limited 1H23 1H22 1H23 1H22 $ % $ % Reported results: Revenues 1,920.2 1,664.6 255.6 15.4% 1,920.2 1,783.6 136.6 7.7% • Six months of Lotterie
Slide 8: Group Comparable EBITDA Growth $55.9m or 15.8%
Group Comparable1 EBITDA Growth $55.9m or 15.8% For personal use only Lotteries Keno +$37.1m +$18.8m 6.8 (2.1) 409.4 14.1 13.4 (3.3) 27.0 353.5 1H22 EBITDA Lotteries Lotteries Lotteries Keno Keno Keno 1H23 EBITDA Comparable2 Revenue VC margin Opex Revenue VC margin Opex Comparable Notes: 1. “Compara
Slide 9: Table of Contents
Table of Contents For personal use only 03 - 07 Group Overview 09 - 18 Business Results 20 - 21 Capital 23 - 26 Strategy & Conclusion 28 - 36 Appendices
Slide 10: Comparable Group & Business Results
Comparable Group & Business Results1,2 For personal use only Lotteries Keno Group $m 1H23 1H22 1H23 1H22 1H23 1H22 % % % Comparable Comparable Comparable Comparable Comparable Comparable Revenues 1,772.8 1,664.6 6.5% 147.4 119.0 23.9% 1,920.2 1,783.6 7.7% Variable contribution 455.9 415.5 9.7% 80.0
Slide 11: Lotteries: Result Highlights (Comparable)
Lotteries: Result Highlights (Comparable)1 $m 1H23 1H22 Change For personal use only Significant increase in active registered customers; continued growth in both retail Revenues 1,772.8 1,664.6 6.5% and digital Variable contribution 455.9 415.5 9.7% Operating expenses (106.3) (103.0) 3.2% Revenue g
Slide 12: Lotteries: KPIs – Product
Lotteries: KPIs – Product For personal use only Turnover by Product Type ($m) Turnover Growth Further growth in both jackpot and base game categories reflects a strong Three year CAGR vs pre-COVID evidences strength of underlying business and balanced portfolio of products performance and momentum;
Slide 13: Lotteries: KPIs – Jackpot Games
Lotteries: KPIs – Jackpot Games For personal use only Powerball® and Oz Lotto® Major Jackpots Cumulative Jackpot Value Offered ($m) In both the current and the pcp, six of the seven $50m+ jackpots related to Increase driven by Powerball® jackpots of 2 x $100m and a record $160m draw Powerball® with
Slide 14: Lotteries: Jackpot Games – Sequences and Game Changes
Lotteries: Jackpot Games – Sequences and Game Changes Active jackpot sequence management drove significant turnover growth; Oz Lotto® yet to be tested at higher jackpot levels For personal use only Accelerated Powerball® jackpot sequences Oz Lotto® game change yet to deliver larger implemented from
Slide 15: Lotteries: KPIs – Channel & Customers
Lotteries: KPIs – Channel & Customers For personal use only Turnover by Channel ($m) Number of Active1 Registered Customers (000’s) An omni-channel approach focused on optimising customer value Significant increase in active registered customers – 221,000 in the last 6 months across all channels Est
Slide 16: Store Syndicates Online: Driving seamless customer experiences
Store Syndicates Online: Driving seamless customer experiences across all channels A leading innovation, now allowing customers to also buy store syndicate shares online from local lotteries outlets For personal use only In the month following launch in late November 2022: Used by Bought by c.1,700
Slide 17: Keno: Result Highlights (Comparable)
Keno: Result Highlights (Comparable)1 $m 1H23 1H22 Change For personal use only Revenues 147.4 119.0 23.9% Return to unrestricted trade in NSW, Victoria, ACT (vs COVID related closures in the pcp) Variable contribution 80.0 59.1 35.4% Operating expenses (20.2) (18.1) 11.6% Successful return to venue
Slide 18: Keno: KPIs
Keno: KPIs For personal use only Keno Turnover by Product ($m) Keno Turnover by Channel ($m) Strong growth across all product categories Digital share of turnover has more than doubled from pre-COVID Retail growth rate in 1H23 reflects COVID-related closures and restrictions in 1H22 +36.1% +36.1% vs
Slide 19: Keno: Australian-owned and trusted; real winners
Keno: Australian-owned and trusted; real winners For personal use only Integrated retail and digital offer launching in Victorian market in February 2023 Latest marketing campaigns have been focused on differentiating Keno’s reputation and trust in market 18
Slide 20: Table of Contents
Table of Contents For personal use only 03 - 07 Group Overview 09 - 18 Business Results 20 - 21 Capital 23 - 26 Strategy & Conclusion 28 - 36 Appendices
Slide 21: Capital Allocation Framework
Capital Allocation Framework A long-term framework to underpin a disciplined approach to the allocation of shareholders’ capital For personal use only A disciplined approach to capital Driving Operating Game Portfolio allocation Operating Efficiency Capital Productivity Cash Flow Management • Commit
Slide 22: Capital Metrics
Capital Metrics Strong balance sheet provides the capacity to support organic growth and flexibility, including for potential capital management Dividends1 (fully franked) BAU Capex For personal use only 8.0 cps Interim 1.0 cps Special 1H23 $19.3m Target: 80-100% of full year NPAT before significant
Slide 23: Table of Contents
Table of Contents For personal use only 03 - 07 Group Overview 09 - 18 Business Results 20 - 21 Capital 23 - 26 Strategy & Conclusion 28 - 36 Appendices
Slide 24: Leader in Australia's lotteries and Keno market
The Lottery Corporation is the leader in Australia’s lotteries and Keno market and one of the highest performing lotteries businesses globally1 For personal use only Exclusive Diversified and Significant and Highly Low capital and/or long balanced diverse retail defensive intensity dated licences po
Slide 25: Vision, Purpose & Principles
Vision, Purpose & Principles For personal use only Our Vision Our Purpose What is our aspiration? Why do we exist? To be the world’s best lottery operator To create positive impacts Strategic Priorities What we need to do to realise our Vision? Be the first choice partner Make a positive difference
Slide 26: FY23 Key Focus Areas and Priorities
FY23 Key Focus Areas and Priorities1 Customer-led focus on product innovation, deepened engagement across all channels and digital expansion Significant ongoing implementation activity post-demerger including continued people, systems and vendor separation For personal use only • Powerball® price in
Slide 27: Conclusion: A winning first six months
Conclusion: A winning first six months For personal use only ✓ A winning start as a standalone ASX listed company ✓ Highly engaged team mobilised around new Vision, Purpose and Principles and ongoing customer-led focus ✓ Continued momentum: double digit growth in earnings1 and active registered cust
Slide 28: Table of Contents
Table of Contents For personal use only 03 - 07 Group Overview 09 - 18 Business Results 20 - 21 Capital 23 - 26 Strategy & Conclusion 28 - 36 Appendices
Slide 29: Appendix 1: Significant Items
Appendix 1: Significant Items1 For personal use only 1H23 Significant items Significant Items ($m) 1H23 1H22 Separation Costs (30.6) - Separation Costs Other (3.8) - Relates to costs associated with the replication and separation of technology infrastructure and systems post demerger, particularly i
Slide 30: Appendix 2A: Group results (Comparable)
Appendix 2A: Group results (Comparable)1 $m 1H23 1H22 Change 2H22 For personal use only Revenues 1,920.2 1,783.6 7.7% 1,723.6 Variable contribution 535.9 474.7 12.9% 475.5 Operating expenses (126.5) (121.2) 4.4% (144.3) EBITDA 409.4 353.5 15.8% 331.2 D&A (48.6) (45.1) 7.8% (45.5) EBIT 360.8 308.4 17
Slide 31: Appendix 2B: Lotteries results (Comparable)
Appendix 2B: Lotteries results (Comparable)1 $m 1H23 1H22 Change 2H22 For personal use only Revenues 1,772.8 1,664.6 6.5% 1,590.2 Variable contribution 455.9 415.5 9.7% 401.8 Operating expenses (106.3) (103.0) 3.2% (121.6) EBITDA 349.6 312.5 11.9% 280.2 D&A (33.7) (29.0) 16.2% (30.0) EBIT 315.9 283.
Slide 32: Appendix 2C: Keno results (Comparable)
Appendix 2C: Keno results (Comparable)1 $m 1H23 1H22 Change 2H22 For personal use only Revenues 147.4 119.0 23.9% 133.4 Variable contribution 80.0 59.1 35.4% 73.8 Operating expenses (20.2) (18.1) 11.6% (22.9) EBITDA 59.8 41.0 45.9% 50.9 D&A (14.9) (16.1) (7.5%) (15.2) EBIT 44.9 24.9 80.3% 35.7 VC /
Slide 33: Appendix 3: Balance Sheet, Capex and Cash Flow
Appendix 3: Balance Sheet, Capex and Cash Flow Balance Sheet Cash Flow For personal use only $m Dec-22 $m Dec-22 Total current assets 948.9 Net operating cash flows 527.2 Licences 733.3 Net interest paid (59.1) Other intangible assets 2,241.3 Income tax paid (67.3) Property, plant and equipment 63.6
Slide 34: Appendix 4: Debt
Appendix 4: Debt For personal use only $m Debt Structure & Maturities5 ($m) Gross debt – excluding lease liabilities (at spot) 2,199.6 800 • USPP (A$1,821m drawn) Interest margins/rates Less: Benefit of FX hedges on USPP principal1 (218.5) 700 • Bank Facility (A$160m drawn) • Average hedged USPP rat
Slide 35: Appendix 5: Lotteries – Turnover by product
Appendix 5: Lotteries – Turnover by product For personal use only Turnover by Game ($m) 1H23 Turnover by Game Change 1H23 1H22 Game $ % Powerball® 1,441 1,223 218 17.8% 26.2% Oz Lotto® 466 493 (27) (5.5%) Powerball® 5.6% Oz Lotto® Jackpot Games 1,907 1,716 191 11.1% 12.8% Saturday Lotto Saturday Lot
Slide 36: Appendix 6: Lotteries – Comparable turnover growth
Appendix 6: Lotteries – Comparable turnover growth For personal use only 1H23 v 1H20 Actual Growth 1H21 v 1H20 1H22 v 1H21 1H23 v 1H22 CAGR1 Powerball® (17.4%) 26.7% 17.8% 7.3% Oz Lotto®2 (5.3%) 10.8% (5.5%) (0.3%) Saturday Lotto2 15.3% 15.5% (0.5%) 9.8% Mon & Wed Lotto 24.4% (10.8%) (7.6%) 0.8% Set
Slide 37: Appendix 7: Glossary
Appendix 7: Glossary For personal use only Term Definition Term Definition 1H/2H Six months ended 31 December/30 June of the relevant financial year FX Foreign exchange AAS Australian Accounting Standards GAAP Generally Accepted Accounting Principles Active registered Registered customers who have p
Slide 38: Disclaimer
Disclaimer For personal use only This presentation (Presentation) contains summary information about the current activities of The Lottery Corporation Limited (The Lottery Corporation) and its subsidiaries. It should be read in conjunction with The Lottery Corporation’s other periodic and continuous
Slide 39: For personal use only
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