Tabcorp Holdings Limited · ASX:TAH
Tabcorp — FY2023 Earnings Presentation
38 slides from Tabcorp's earnings presentation, Aug 24, 2023
Slide 1: Tabcorp full year results presentation
24 August 2023 ASX Market Announcements Australian Securities Exchange 20 Bridge Street Sydney NSW 2000 Tabcorp full year results presentation Attached is the presentation regarding Tabcorp Holdings Limited’s (Tabcorp’s) results for the financial year ended 30 June 2023 to be presented by Adam Ryten
Slide 2: FY23 Results: We're Raising the Game
FY23 WE’RE RAISING THE GAME RESULTS YEAR ENDED 30 JUNE 2023 ABN 66 063 780 709
Slide 3: The Line Up
THE LINE UP SECTION 1: FY23 SUMMARY AND PROGRESS 04 SECTION 2: FINANCIAL RESULTS 15 SECTION 3: WAGERING AND MEDIA 22 SECTION 4: GAMING SERVICES 26 SECTION 5: SUMMARY 29 SECTION 6: APPENDICES 31 This presentation provides the following financial disclosures to help investors understand the FY23 resul
Slide 4: TAB25: Creating a Different Company
TAB25: CREATING A DIFFERENT COMPANY Reshaping the business to deliver market leading customer experiences, products and offers A SIMPLE, GROWING, MORE VALUABLE BUSINESS FOR SHAREHOLDERS 3 3
Slide 5: FY23: Year Building Foundations
FY23: YEAR 1 BUILDING FOUNDATIONS HIGHER REVENUE STRONG COST IMPROVED DIGITAL AND PROFIT PERFORMANCE COMPETITIVENESS Revenue $2,434m +2% OPEX $618m, below FY22 PF and Successful new App launch below guidance EBITDA $391m +8% Key product gaps closed, 10 Genesis program on-track product releases since
Slide 6: FY23 Result Summary
FY23 RESULT SUMMARY1 FY23 FY22 PF2 % FY22 STATUTORY EPS DIVIDEND4 2.9 CPS 2.3 CPS Revenue $2,434m $2,377m +2% $2,373m Opex $618m $627m -1% $600m EBITDA $391m $361m +8% $382m DIVIDEND PAYOUT RATIO4 ROIC5 60% 5.5% EBIT $150m $74m +103% $95m Statutory NPAT3 $67m N/A N/A $6,776m 1. EBITDA and EBIT refer
Slide 7: TAB25: Reshaping the Business for Growth
TAB25: RESHAPING THE BUSINESS FOR GROWTH OUR STRATEGY WIN THE GAME SHAPE THE GAME CHANGE THE GAME Our FY25 Targets1 Grow core customer metrics with a key metric of Level Playing Field on fees and taxes Targeted investments for accelerated & 30% digital revenue market share diversified growth Pivot G
Slide 8: The Right Eco-System to Grow Share in a Changing Market
THE RIGHT ECO-SYSTEM TO GROW SHARE IN A CHANGING MARKET #2 DIGITAL, DIGITAL SCALE #1 VISION, #1 RETAIL & ONCOURSE (~4,000 VENUES) MULTIPLE CHANNELS REACH TO ENGAGE WITH OUR CUSTOMERS CUSTOMERS UNIQUE, HARD TO REPLICATE PORTFOLIO DIFFERENTIATED OF ASSETS ALIGNED DESTINATIONS VISION & CONTENT TO MARKE
Slide 9: Win the Australian Market: Leading Indicators
WIN THE AUSTRALIAN MARKET: LEADING INDICATORS CUSTOMER 1 TOTAL ACTIVES SPORTS ACTIVES 805K +3% +6% PREFERENCE DIGITAL FIRST2 CHOICE FOR DIGITAL FIRST CHOICE FOR BETTING: TAB BETTING: <35 YRS 29% 24% (28% FY22) (21% FY22) PRODUCT MULTIS: ACTIVES MULTIS: TURNOVER +14% +10% 1. 2. Wagering active users
Slide 10: Win the Australian Market: TAB Market Share
WIN THE AUSTRALIAN MARKET: TAB MARKET SHARE1 FY23 FY22 Growth in TAB Total Revenue Market Share (digital & cash) delivered in first TAB Total Revenue Share 34.6% 33.6% year of transformation strategy Optimised market share and Digital Turnover Market Share 20.0% 19.7% profitability. 2H23 generosity
Slide 11: Win the Australian Market: Momentum Building in Key Sports
WIN THE AUSTRALIAN MARKET: MOMENTUM BUILDING IN KEY SPORTS GROWTH IN KEY SPORTS1 FY23 2H23 Active digital +3% +8% customers Turnover +17% +13% (digital & cash) Net Revenue +17% +48% (digital & cash) SGM Actives +12% +19% SGM Turnover +33% +45% 1. Key sports consist of AFL, NRL & NBA. Growth compared
Slide 12: Best Social Entertainment Experience
WIN THE AUSTRALIAN MARKET: BEST SOCIAL ENTERTAINMENT EXPERIENCE NEXT-GEN RETAIL UPGRADES Turn eyeballs to TAB Actives Integrate venue, TAB App and uplifted vision to inform, engage and drive calls to action Increase foot traffic and conversion to TAB digital customers in-venue Phase 1: 50 venues acr
Slide 13: Shape the Game: QLD Level Playing Field
SHAPE THE GAME: QLD LEVEL PLAYING FIELD QLD TAB GROWTH VS. WAGERING (ex. QLD) SINCE LEVELLING THE PLAYING FIELD1 +9% +5% HIGHER ACTIVES HIGHER TURNOVER GROWTH GROWTH +4% +26% HIGHER NET HIGHER VC REVENUE GROWTH GROWTH 1. For the period 1 December 2022 to 30 June 2023. QLD licence restructured 1 Dece
Slide 14: Shape the Game: Industry Advocacy
SHAPE THE GAME: INDUSTRY ADVOCACY CUSTOMER RESPONSIBLE NATIONAL CARE ADVERTISING REGULATION Deliver customer-centric responsible We advocate for limits on betting Support national regulatory wagering and gaming initiative, designed advertising, including on free-to-air harmonisation, to ensure gambl
Slide 15: Shape the Game: Pivot to Integrity Services
SHAPE THE GAME: PIVOT TO INTEGRITY SERVICES Sale of MAX Performance Solutions for $21.3m1 follows the sale of eBet, as we pivot to Integrity Services Integrity Services delivered a strong earnings performance with EBITDA +36% to $55m New, exclusive Tasmanian monitoring licence successfully implement
Slide 16: Financial Results
FINANCIAL RESULTS
Slide 17: FY23 Group Results
FY23 GROUP RESULTS1 $M FY23 FY22 PF CHANGE (%) FY22 Revenues 2,434.4 2,377.3 2.4% 2,373.3 Variable contribution 1,008.5 987.2 2.2% 981.2 Operating expenses (617.5) (626.6) (1.5%) (599.6) EBITDA from continuing operations before significant items 391.0 360.6 8.4% 381.6 D&A (240.5) (286.4) (16.0%) (28
Slide 18: Group EBITDA ($M)
GROUP EBITDA ($M) Genesis program cost Revenue growth savings Revenue growth driven cycling COVID retail by cycling of COVID closures in the pcp Insurance proceeds retail closures in the pcp benefit ($11m) Integrity Services price Partly offset by a increases Partly offset by cost decline in the dig
Slide 19: Opex
OPEX GROUP OPEX >$700m2 FY23 opex of IN-YEAR COST REDUCTIONS $618m, below • Technology function reorganisation guidance and • A&P through change in mix toward more digital and content $627m $618m $630m- down 1.5% on $640m $600m- marketing and lower Gaming Services A&P spend $597m $620m1 FY22 PF • Lo
Slide 20: Net Debt: Strong Cash Conversion
NET DEBT: STRONG CASH CONVERSION OPERATING CASH FLOW Adjusted cash flow conversion of 104% One off items: • RQ settlement ($160m) • Significant items ($33m) • TLC receivable ($39m) Key investing cash flows: • Capex $157m • Racing QLD licence exclusivity payment $38m • Dabble $33m • Exclusive Tasmani
Slide 21: Capital and Debt: Strong Balance Sheet Providing Flexibility
CAPITAL AND DEBT: STRONG BALANCE SHEET PROVIDING FLEXIBILITY FY23 ROIC AVG. DEBT MATURITY (YEARS) DEBT PROFILE ($M) 5.5%1 4.7 600 USPP 500 Undrawn Drawn (1H23 4.7%2) 400 300 FY23 NET DEBT3 TARGET NET DEBT3 200 / EBITDA / EBITDA 100 0.9x 1.0-1.5x 0 FY24 FY25 FY26 FY27 FY28 FY29 FY30 FY31 FY32 FY33 Av
Slide 22: Capital Expenditure
CAPITAL EXPENDITURE FY23 CAPEX1 CAPITAL ALLOCATION ($M) $155M 155 27 134 14 Maintenance Growth & Sustainability 54 Transformation & Risk 76 34% 49% 17% (FY22: 49%) (FY22: 40%) (FY22: 11%) Forecast Forecast 66 FY24 CAPEX FY24 D&A 52 UP TO $240M – $150M $250M FY23 FY22 Maintenance Growth & Transformat
Slide 23: Wagering and Media
WAGERING AND MEDIA
Slide 24: Wagering & Media EBITDA ($M)
WAGERING & MEDIA EBITDA ($M) Cycling of COVID retail Increased investment Genesis program closures in the pcp in customer cost savings generosities and new Partially offset by a App launch impacting Insurance proceeds decline in the digital margin benefit ($11m) wagering market Partly offset by cost
Slide 25: FY23 Results: Wagering and Media
FY23 RESULTS: WAGERING AND MEDIA $M FY23 FY22 PF CHANGE (%) Digital wagering revenue 942.7 1,073.5 (12.2%) Digital revenue impacted by decline in digital Cash wagering revenue 818.4 654.0 25.1% wagering market Wagering revenue 1,761.1 1,727.5 1.9% Media & International revenue 469.7 454.4 3.4% Cash
Slide 26: FY23 Wagering Revenue and KPI's
FY23 WAGERING REVENUE AND KPI’S WAGERING TURNOVER2 WAGERING REVENUE ($M) FY23 FY22 DIGITAL $M FY23 FY22 Active users (‘000)1 805 783 Racing 11,946.5 11,769.7 Digital turnover2 9,266.7 9,697.0 Sport 2,604.3 2,124.0 Total 14,550.8 13,893.7 Gross yield 16.4% 16.9% Digital in venue5 744.3 651.0 Net yiel
Slide 27: Gaming Services
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Slide 28: Gaming Services EBITDA ($M)
GAMING SERVICES EBITDA ($M) Genesis program cost savings Revenue growth cycling COVID venue Partly offset by COVID closures in the pcp related cost savings delivered in pcp and CPI increases on cost inflation contracted revenues Partly offset by negative impact of contract non-renewals in Other Venu
Slide 29: FY23 Results: Gaming Services
FY23 RESULTS: GAMING SERVICES $M FY23 FY22 PF CHANGE (%) Integrity Services1 117.9 99.1 19.0% INTEGRITY SERVICES MONITORED EGMs Other Venue Services2 85.7 97.8 (12.4%) Gaming Services Revenue 203.6 196.9 3.4% MONITORED EGMs JUN-23 JUN-22 CHANGE NSW 91,970 90,340 1,630 Integrity Services 116.2 97.8 1
Slide 30: Summary
SUMMARY
Slide 31: Summary and Investment Case
SUMMARY AND INVESTMENT CASE FY24 PRIORITIES DEMONSTRATED GENESIS PROGRAM ABILITY TO DELIVER DELIVERING Digital customer offering and product development ON WHAT WE SAY DISCIPLINED COST VIC licence outcome and JV transition WE WILL DO MANAGEMENT AND Level Playing Field in all jurisdictions OPERATIONA
Slide 32: Appendices
APPENDICES Tabcorp
Slide 33: Significant Items
SIGNIFICANT ITEMS Gain on sale of eBet MPS write-down Net gain on the sale of eBet to Venue A Share Purchase Agreement has Digital Technology Pty Ltd which been entered into for the sale of MPS, PRE TAX POST TAX completed on 1 February 2023. with completion subject to the ($M) ($M) purchaser receivi
Slide 34: Group Operating Expenses ($M)
GROUP OPERATING EXPENSES ($M) (1.5%) 1 1. Net additional stand-alone costs following the Demerger as if they had been incurred for the full year ended 30 June 2022. 33
Slide 35: Pro Forma Group and Business Results
PRO FORMA GROUP AND BUSINESS RESULTS1 WAGERING AND MEDIA GAMING SERVICES GROUP $M FY23 FY22 PF CHANGE FY23 FY22 PF CHANGE FY23 FY22 PF CHANGE Revenues 2,230.8 2,181.9 2.2% 203.6 196.9 3.4% 2,434.4 2,377.3 2.4% Variable contribution 815.1 801.3 1.7% 193.2 186.3 3.7% 1,008.5 987.2 2.2% Operating expen
Slide 36: Glossary
GLOSSARY 1H/2H Six months ended 31 December/30 June of the relevant financial year JV Joint Venture 1Q/2Q/3Q/4Q Three months ended 30 September / 31 December / 31 March / 30 June of the relevant financial year KPI Key Performance Indicator Lotteries and Keno (L&K) The Group’s former business that is
Slide 37: Disclaimer
DISCLAIMER This Presentation contains summary information about the current Neither Tabcorp nor any other person warrants or guarantees and ‘non-GAAP financial measures’ within the meaning of Regulation G activities of Tabcorp Holdings Limited (Tabcorp) and its subsidiaries the future performance of
Slide 38: Thank You
THANK YOU We’re Raising The Game