Tabcorp Holdings Limited · ASX:TAH
Tabcorp — Merger or Acquisition (March 2022)
39 slides from Tabcorp's merger presentation, Mar 31, 2022
Slide 1: Demerger of The Lottery Corporation – Briefing Presentation
31 March 2022 ASX Market Announcements Australian Securities Exchange 20 Bridge Street Sydney NSW 2000 Demerger of The Lottery Corporation – Briefing Presentation Attached is a presentation regarding Tabcorp Holdings Limited’s (Tabcorp) proposed demerger of The Lottery Corporation. This presentation
Slide 2: Demerger of The Lottery Corporation Briefing Presentation
DEMERGER OF THE LOTTERY CORPORATION B R I E F I N G P R E S E N TAT I O N 31 MARCH 2022 ABN 66 063 780 709
Slide 3: Disclaimer
DISCLAIMER This Presentation contains summary information only about the current activities of Tabcorp Holdings Limited (Tabcorp) and its subsidiaries (Tabcorp Group) as at 31 March 2022. If you are a Tabcorp shareholder, you should read Tabcorp’s demerger booklet dated 30 March 2022 (Demerger Bookl
Slide 4: Table of Contents
Table of Contents 4 - 9 Overview of the Demerger 11 - 1 7 The Lottery Corporation post Demerger 19 - 27 New Tabcorp post Demerger 29 - 37 Appendices 3
Slide 5: Overview of the Demerger
OVERVIEW OF THE DEMERGER The Demerger is anticipated to create two significant, standalone ASX listed companies OVERVIEW POST DEMERGER STRUCTURE • Tabcorp’s Lotteries and Keno business (“The Lottery Corporation” or “TLC”) to be demerged into a separate ASX-listed company Tabcorp shareholders at Reco
Slide 6: Rationale for the Demerger
R AT I O N A L E F O R T H E D E M E R G E R The Tabcorp Board has determined that the Demerger is the most certain and timely path, with lower regulatory impediments, to maximise value for shareholders Creates two significant businesses with focused Executive Leadership Teams Allows each business t
Slide 7: Potential Disadvantages and Risks of the Demerger
POTENTIAL DISADVANTAGES AND RISKS OF THE DEMERGER Potential disadvantages • Transaction, implementation, and ongoing incremental corporate and operating costs of the Demerger • Reduction in size and diversification of existing Tabcorp with implications to index inclusion • The Lottery Corporation an
Slide 8: Impact of the Demerger
I M PA C T O F T H E D E M E R G E R Tabcorp (actual) The Lottery Corporation1 New Tabcorp1 FY21 Revenue ($m) 5,686 3,206 2,493 FY21 EBITDA ($m) 1,107 611 464 FY21 transactions ~600M tickets sold2 ~1bn wagering bets taken FY21 digital share of 32.8% for Lotteries; 57.7% for Wagering turnover 15.5% f
Slide 9: The Demerger Represents the Next Phase in the Tabcorp Journey
THE DEMERGER REPRESENTS THE NEXT PHASE IN THE TABCORP JOURNEY The Lottery Corporation and New Tabcorp are well positioned to deliver further growth 2017-20 Pre 2017 Post 2021 Merger & integration + The Lottery Corporation • Exclusive retail wagering operator in VIC, NSW, ACT L&K • Sky Media operator
Slide 10: Key Dates
K E Y D AT E S Subject to receipt of the necessary shareholder and Court approvals, The Lottery Corporation will commence trading on the ASX as a separately listed entity on 24 May 2022 on a deferred settlement basis Event Indicative date (Sydney time) Demerger Booklet registered with ASIC and relea
Slide 11: Table of Contents
Table of Contents 4 - 9 Overview of the Demerger 11 - 1 7 The Lottery Corporation post Demerger 19 - 27 New Tabcorp post Demerger 29 - 37 Appendices 10
Slide 12: The Lottery Corporation Board and ELT
The Lottery Corporation Board and ELT Non-executive Board Steven Gregg Harry Boon Anne Brennan Independent Chairman Independent Non-Executive Independent Non-Executive Director Director Doug McTaggart1 John O’Sullivan1 Independent Non-Executive Independent Non-Executive Director Director Executive L
Slide 13: The Lottery Corporation Overview
The Lottery Corporation Overview The Lottery Corporation is expected to be an omni-channel business with a portfolio of high profile, recognised brands and games, strong digital growth and a retail footprint across c.7,000 retail outlets / venues (one of the largest in the country) Lotteries Overvie
Slide 14: Investment Highlights
Investment Highlights The Lottery Corporation is Australia’s leading lottery and Keno operator offering infrastructure-like asset qualities, with low capital intensity and upside potential from digital growth The leader in the Australian lotteries and Keno market and one of 1 the highest performing
Slide 15: Growth Strategy
Growth Strategy The Lottery Corporation management and Board are continuing to develop The Lottery Corporation growth strategy. The strategy includes a customer-led focus on product innovation, deepened engagement across all channels and digital expansion Increase Digital Enhance Customer Pursue New
Slide 16: Innovate Game Portfolio: Oz Lotto
Innovate Game Portfolio: Oz Lotto New Oz Lotto game change set to launch in May 20221 has been carefully assessed based on player input and in the context of the wider game portfolio Overview of Oz Lotto Game Portfolio Change Process and Considerations Portfolio considerations 1 • Balance portfolio
Slide 17: Historical Financials Overview
Historical Financials Overview The Lottery Corporation has performed strongly over the past 3 years and was resilient through COVID-19 Pro Forma Historical EBITDA Pro Forma Historical Revenue (A$M)1 Ex Significant Items (A$M)1 Growth n/a 1.8% 634 9.8% Margin 17.7% 18.4% 19.1% 611 2,868547 2,920 3,20
Slide 18: Capital Structure Overview
Capital Structure Overview The proposed capital structure of The Lottery Corporation has been developed having regard to its business requirements, earnings and cash flow generation. It is anticipated that The Lottery Corporation’s first dividend will be the 1H23 interim dividend, with reference to
Slide 19: Table of Contents
Table of Contents 4 - 9 Overview of the Demerger 11 - 1 7 The Lottery Corporation post Demerger 19 - 27 New Tabcorp post Demerger 29 - 37 Appendices 18
Slide 20: New Tabcorp Board and ELT
New Tabcorp Board and ELT Non-executive Board Bruce Akhurst David Gallop Janette Kendall Justin Milne Independent Chairman Independent Non- Independent Non- Independent Non- Executive Director Executive Director Executive Director Brett Chenoweth1 Raelene Murphy1 Karen Stocks1 Independent Non- Indep
Slide 21: New Tabcorp Overview
New Tabcorp Overview New Tabcorp is a leader in omni-channel wagering, racing and sports broadcasting, and gaming services solutions. The business is well positioned for organic growth and potential upside from possible change in the wagering and gaming industry Wagering overview Gaming Services ove
Slide 22: Investment Highlights
Investment Highlights New Tabcorp has scale, diversification, a unique omni- channel offering and growth potential from possible change in the wagering and gaming industry A leading omni-channel diversified wagering operator in 1 Australia and one of the most recognised wagering brands nationally1 A
Slide 23: Scale & Diversity
Scale & Diversity New Tabcorp has a unique combination of scale and diversity Wagering Media International Gaming Services • One of the most • Retail and digital • SRW – exposure to the • Significant reach across recognised wagering distribution US wagering market 84% of national EGMs3 brands in Aus
Slide 24: Impact of COVID-19
Impact of COVID-19 COVID-19 has significantly affected Wagering and Media through retail closures and disruption to the sports and international racing events calendar. Gaming Services has also been significantly affected by retail closures, with Tabcorp providing fee relief to venues through lockdo
Slide 25: Transformation and Growth Strategy
Transformation and Growth Strategy The New Tabcorp management and Board are continuing to develop New Tabcorp’s transformation & growth strategy Executed to date: • Strong data and personalisation capability, backed by market-leading Adobe technology • TAB brand (‘long may we play’ ) re-established
Slide 26: New Wagering App in Development
New Wagering App in Development Delivering1 a new betting experience with a refreshed user interface, faster platform, and removing customer friction points in account admin, post-bet experience, racing information and performance. Step one in a strategy to improve digital competitiveness, allow for
Slide 27: Historical Financials Overview
Historical Financials Overview New Tabcorp’s financial performance has been significantly impacted by COVID-19 over FY20 and FY21 Pro Forma Historical EBITDA Pro Forma Historical Revenue (A$m)1 Ex Significant Items (A$m)1 Growth n/a -12.0% 7.6% Margin 22.2% 18.4% 18.6% 2,634 2,493 585 12 2,317 304 1
Slide 28: Capital Structure Overview
Capital Structure Overview The proposed capital structure of New Tabcorp has been developed having regard to its business requirements, earnings profile and cash flow generation profile New Tabcorp does not intend to hold a public credit rating at the time of the Demerger Target Net Debt Target Divi
Slide 29: Table of Contents
Table of Contents 4 - 9 Overview of the Demerger 11 - 1 7 The Lottery Corporation post Demerger 19 - 27 New Tabcorp post Demerger 29 - 37 Appendices 28
Slide 30: New Tabcorp – Building Capability
New Tabcorp – Building Capability New talent appointed to Executive Leadership Team to build strategy execution capabilities New Chief Information Officer (CIO) New Chief Customer Officer (CCO) Chief Strategy & Ventures Officer (CSVO) Chief Legal & Risk Officer (CLRO) Alan Sharvin Jenni Barnett Angu
Slide 31: The Lottery Corporation – Pro Forma Historical Balance Sheet
The Lottery Corporation – Pro Forma Historical Balance Sheet Pro-forma Intangible assets $M historical Dec-211 • Compared to the Tabcorp statutory accounts, there is a Cash and cash equivalents 2 350 derecognition of fair value adjustments (predominantly goodwill and intangible assets of $4,463m) fr
Slide 32: The Lottery Corporation – Pro Forma Historical Income Statements
The Lottery Corporation – Pro Forma Historical Income Statements $M FY19 FY20 FY21 1H21 1H22 Revenue 2,868 2,920 3,206 1,609 1,784 EBITDA, excluding significant 507 536 611 306 353 items Depreciation and amortisation1 (70) (82) (80) (42) (40) Impairment 2 (1) - - - EBIT, excluding significant items
Slide 33: The Lottery Corporation – Pro Forma Historical Segment Information
The Lottery Corporation – Pro Forma Historical Segment Information $M FY19 FY20 FY21 1H21 1H22 Lotteries 2,642 2,726 2,951 1,477 1,665 Keno 223 191 255 132 119 Segment revenue1 2,865 2,917 3,206 1,609 1,784 Other income transferred from Tabcorp2 3 3 - - - Pro forma historical revenue 2,868 2,920 3,2
Slide 34: The Lottery Corporation – Pro Forma Historical Cash Flows
The Lottery Corporation – Pro Forma Historical Cash Flows $M FY19 FY20 FY21 1H21 1H22 Pro forma historical EBIT, excluding significant items 439 453 531 264 313 Depreciation, amortisation and impairment 68 83 80 42 40 Pro forma historical EBITDA, excluding significant items 507 536 611 306 353 Other
Slide 35: New Tabcorp – Pro Forma Historical Balance Sheet
New Tabcorp – Pro Forma Historical Balance Sheet Pro-forma $M historical No noteworthy accounting treatments unique to New Tabcorp Dec-211 upon demerger in determining the pro-forma balance sheet Cash and cash equivalents2 171 Licences 721 Other intangible assets 2,528 Property, plant and equipment
Slide 36: New Tabcorp – Pro Forma Historical Income Statements
New Tabcorp – Pro Forma Historical Income Statements $M FY19 FY20 FY21 1H21 1H22 Revenue 2,634 2,317 2,493 1,268 1,156 EBITDA, excluding significant 585 427 464 238 160 items Depreciation and amortisation (262) (277) (276) (135) (143) Impairment 2 (20) (3) - - EBIT, excluding significant items 325 1
Slide 37: New Tabcorp – Pro Forma Historical Segment Information
New Tabcorp – Pro Forma Historical Segment Information $M FY19 FY20 FY21 1H21 1H22 Wagering and Media 2,318 2,084 2,298 1,189 1,073 Gaming Services 304 221 183 73 78 Other1 12 12 12 6 5 Pro forma historical revenue 2,634 2,317 2,493 1,268 1,156 Wagering and Media 461 371 414 227 148 Gaming Services
Slide 38: New Tabcorp – Pro Forma Historical Cash Flows
New Tabcorp – Pro Forma Historical Cash Flows $M FY19 FY20 FY21 1H21 1H22 Pro forma historical EBIT, excluding significant items 325 130 185 103 17 Depreciation, amortisation and impairment 260 297 279 135 143 Pro forma historical EBITDA, excluding significant items 585 427 464 238 160 Other non-cas
Slide 39: Tabcorp
Tabcorp RACING
Tabcorp Holdings — Merger or Acquisition (March 2022) on 6ix