Tabcorp Holdings Limited · ASX:TAH
Tabcorp — Investor Presentation (July 2007)
21 slides from Tabcorp's investor presentation, Jul 12, 2007
Slide 1: Gaming Update
Gaming Update Mohan Jesudason Managing Director Gaming 12 July 2007 1
Slide 2: Before we start
Before we start Tabcorp currently in a blackout period pre results announcement Smoking bans in Victoria and NSW effective July 2007, impact too early to quantify Full year results announcement 23 August 2007 2
Slide 3: Key messages
Key messages Victorian Gaming market is attractive Tabcorp is market leader with growing market share Executing strategy to strengthen leadership Smoking bans will hurt – Tabcorp well prepared 3
Slide 4: Tabcorp businesses - overview
Tabcorp businesses - overview EBIT divisional share Gaming Division 1 $m % Change vs pcp 1H07 Gaming Operating revenues 549.9 1.6% 29% Casino 40% Other revenues 10.9 7.6% Revenues 560.8 1.7% Taxes and Commissions (377.0) 2.3% Wagering 31% Operating Expenses (36.1) 3.6% Gaming key contributor Depr.
Slide 5: Tabcorp's gaming businesses
Tabcorp’s gaming businesses Gaming Keno Games of Skill Leading Brands Strong Victoria QLD, NSW, VIC New Business Presence & 1.0 million customers 1.3 million customers Victoria Customer base 1,327 Clubs 538 Hotels 130 Hotels Distribution 255 TABs 330 Terminals / 135 Clubs (Ju
Slide 6: Victorian gaming
Victorian gaming Market Structure Recent regulatory changes Victorian market capped at 30,000 EGMs EGM levy increase from 1 July 2007 to - 13,750 Tabcorp $4,333pa. PBIT impact $17.9m pa - 13,750 Tattersalls Full in venue smoking bans from 1 July - 2,500 Crown Casino 2007 Player information d
Slide 7: Per capita gambling expenditure
Operator model works well in highly regulated market Low gaming machines penetration Fewer gaming venues 25 3,500 Gaming Machines per 1,000 adults 3,000 20 2,500 Gaming Venues 15 2,000 1,500 10 1,000 5 500 0 0 VIC QLD NSW SA VIC QLD NSW SA Average per capita expenditure Highest NMR $/day per EGM 300
Slide 8: Gaming key metrics
Gaming key metrics 1H 05 1H 06 1H 07 Venues 268 264 266 EGMs (average) 13,631 13,684 13,608 % Jackpots EGMS 65.6% 67.7% 68.1% NMR/EGM/Day $247 $256 $263 Revenue ($m)1 613.8 641.7 659.4 Market Share % 50.0% 50.5% 50.9% Capex ($m) 1 18.4 12.5 19.1 Number of venues constant, composition changing St
Slide 9: Victorian gaming market share growth
Victorian gaming market share growth 9
Slide 10: Business approach
Business approach We bring the best Gaming and Entertainment experience to a Venue near You Customers Product Distribution People Focus on whole of Continue product Optimise distribution Invest in training and venue leadership and footprint staff development speed to market Build R&R loyal
Slide 11: Customer segmentation
Customer segmentation Customers Customer Needs / Motivations Enablers Gaming Frequent Motivations Products - Thrill of the “Win” - EGM innovation - Favourite games - Product leadership Products/service - Jackpots - Latest games/large jackpots - Casino style games - Visit multiple venues Venu
Slide 12: Venue based approach to customer loyalty
Venue based approach to customer loyalty R&R Program Unique program designed to reward customers for visitation - Launch November 2006 - Venue driven - 120 venue partners - 100,000 active members Avenue for low cost marketing allowing multiple communication channels - Direct mail, Email, SMS R
Slide 13: Product leadership
Product leadership xxx Product selection and placement Gaming venue EGM optimisation Product selection skills - First to market - Product diversity - Capital investment approx $30m to 35m Product allocation - EGM venue allocation and cascading through network (18,000 activities FY07) - EGM gamin
Slide 14: Distribution – location and quality of footprint
Distribution – location and quality of footprint Optimising footprint Quality of footprint Securing existing footprint Venue improvement program - All key venues contracted to 2012 - Approximately 70% of venues in last 3 years have been redeveloped, Superior performance in new venue and upgrad
Slide 15: Zoned layout to suit customer segments
Zoned layout to suit customer segments 15
Slide 16: People and customer care
People and customer care People Customer Care Venue Employment Responsible Gaming key to success - Over 10,000 people employed in - Training of venue managers and staff Tabaret gaming venues - Participation in industry forums - Venue staff drive customer service - Government & regulation relatio
Slide 17: Smoking bans – customer impact
Smoking bans – customer impact Revenue contribution – Smokers vs Non-Smokers 1 18.2% of the Victorian population smoke 2 Share of Players 70% 33% of customers who visit a Share of Revenue 53% gaming venue more than once a 47% week smoke 30% 45% of customers who spend more than $100 per visit a
Slide 18: Smoking bans impact from July 2007
Smoking bans impact from 1 July 2007 Experience Expectation Victorian Impact EGM Revenue Revenue impact of July 2008 smoking bans: Smoking Bans Change on pcp High level of smoking by gaming customers Q1 03 0% 8.1% Offset by smoking solutions implemented at gaming venues Q2 03 100% (11.9%) Q3 03
Slide 19: Tabcorp smoking mitigation strategy
Tabcorp smoking mitigation strategy Mitigation 248 venues with outdoor smoking facilities Staff training face to face or via DVD Extension of customer proposition - Outdoor food service - Beverages service - Ambiance (climate control, lighting) Comprehensive marketing program underway: - Cus
Slide 20: Venue site visit
Venue site visit Zagames Caulfield Highways Tabaret Tabcorp facilities Tabcorp facilities - Gaming – 100 EGMs - Gaming – 100 EGMs - TAB (4 x EBTs & 1 terminal) - TAB (Full Service) - Sportsbet/Trackside - Sportsbet/Trackside - Club Keno - Club Keno - Tabaret Loyalty Program – R&R Club - Tabaret
Slide 21: Summary
Summary Victorian Gaming market is attractive Tabcorp is market leader with growing market share Executing strategy to strengthen leadership Smoking bans will hurt – Tabcorp well prepared 21