Tabcorp Holdings Limited · ASX:TAH
Tabcorp — H1 FY2023 Earnings Presentation
43 slides from Tabcorp's earnings presentation, Feb 21, 2023
Slide 1: Tabcorp half year results presentation
For personal use only 21 February 2023 ASX Market Announcements Australian Securities Exchange 20 Bridge Street Sydney NSW 2000 Tabcorp half year results presentation Attached is the presentation regarding Tabcorp Holdings Limited’s (Tabcorp’s) results for the half year ended 31 December 2022 to be
Slide 2: We're Raising the Game: 1H23 Results
For personal use only WE’RE RAISING THE GAME 1H23 RESULTS FOR THE SIX MONTHS ENDED 31 DECEMBER 2022
Slide 3: Spark, Play, Raise the Game values
TABCORP For personal use only SPARK PLAY RAISE THE We disrupt and spark We do what's right for our We bring our passion and change to make it better. customers, partners, and have fun doing what we each other, always. love. 2
Slide 4: The Line Up
THE LINE UP For personal use only 04 1H23 SUMMARY 10 FINANCIAL RESULTS 23 TAB25 31 OUTLOOK & SUMMARY This presentation provides the following financial disclosures to help investors understand the 1H23 result: • 1H22 results from continuing operations • 1H22 PF (pro forma) results (basis for Group a
Slide 5: 1H23 Summary
1H23 SUMMARY For personal use only HELD DIGITAL DELIVERED ON OUR HIGHER REVENUE, REVENUE MARKET COMMITMENTS PROFIT AND SHARE1 DIGITAL New TAB App, new products, CUSTOMERS3 And grew total revenue market focusing our Revenue +11% share2 business EBITDA +24% (sale of eBet) EBIT +356% UPGRADING FY23 TAB
Slide 6: 1H23 Result Summary
1H23 RESULT SUMMARY1 For personal use only 1H23 1H22 PF3 % 1H22 DIGITAL Revenue $1,275m $1,152m +11% $1,150m REVENUE Opex $323m $311m +4% $296m MARKET EBITDA $197m $159m +24% $171m SHARE2 EBIT $73m $16m +356% $28m 1H23: 25.1% Statutory NPAT4 $52m - - $175m Statutory EPS Dividend5 Dividend payout ROI
Slide 7: 1H23 Deliverables – What We Did
1H23 DELIVERABLES – WHAT WE DID 25.1% 34.8% For personal use only Delivering on the transformation and doing what we say DIGITAL REVENUE TOTAL REVENUE WIN THE MARKET SHARE MARKET SHARE 1 2 Held digital GAME New product delivered: revenue market Up from 31.2% in 1H22 • Same-race multi (launched Feb-2
Slide 8: 1H23 Deliverables – Product: Social Betting, Same-Race Multi
1H23 DELIVERABLES – WHAT WE DID: PRODUCT For personal use only SOCIAL SAME-RACE BETTING: MULTI BET, TIP + BANTER Connecting punters Same Race Multi and driving digital addresses a product engagement supported gap in the multi-betting by TAB talent and experience content Launched to customers 35% Wee
Slide 9: 1H23 Deliverables – Product: Same-Game Multi, NBA Stats Centre
1H23 DELIVERABLES – WHAT WE DID: PRODUCT For personal use only POPULAR NBA STATS SAME-GAME CENTRE MULTI (SGM) Trending bets Providing in depth product has improved content on NBA teams and SGM product metrics players, driving higher turnover 28% uplift in SGM actives1, 25 days post 87% higher NBA tu
Slide 10: TAB25
TAB25 We’re creating a simpler and very different looking company. Our targets for FY25 are1: WINNING SHAPING CHANGING use only THE GAME THE GAME THE GAME A transformed TAB brand and CX LEVEL PLAYING FIELD IN TARGETED EVERY STATE & MEASURES 30% DIGITAL REVENUE MARKET INVESTMENTS SHARE personal corpo
Slide 11: Financial Results
For personal use only RESULTS FINANCIAL
Slide 12: 1H23 Group Results
1H23 GROUP RESULTS1 $M 1H23 1H22 PF CHANGE (%) 1H22 For personal use only Revenues 1,274.5 1,152.3 10.6% 1,150.3 Variable contribution 519.8 469.5 10.7% 466.5 Operating expenses (323.2) (310.5) 4.1% (296.0) EBITDA from continuing operations before significant items 196.6 159.0 23.6% 170.5 D&A (123.4
Slide 13: Group EBITDA
GROUP EBITDA ($M) For personal use only Revenue growth cycling Cost inflation, higher COVID retail closures in A&P spend incl. Football the pcp World Cup costs Revenue growth driven by higher total revenue market Partly offset by share, cycling of COVID retail insurance proceeds closures in the pcp
Slide 14: Net Debt
NET DEBT Closing net debt position impacted by timing of several large cash receipts For personal use only Operating cash flow Since Dec-22, $126m received: • Separation cost reimbursement ($66m) • Industry payments ($37m) • Tax refund ($23m) Additional cash receipt post period end: • eBet sale3 pro
Slide 15: Net Debt: Debt profile and maturity
NET DEBT Increased sources of available debt with average maturity increasing from 3.7 to 5.0 years1 For personal use only Dec-22 Net Debt2 Net Debt3 / EBITDA4 $382M 1.4X EXISTING DEBT PROFILE ($M) DEBT PROFILE INCLUDING USPP5 ($M) 600 600 500 500 400 400 300 300 200 200 100 100 0 0 FY23 FY24 FY25 F
Slide 16: Capital Expenditure
CAPITAL EXPENDITURE For personal use only 1H23 CAPEX1 ($MILLION) $70M 70 13 58 Maintenance Growth & Sustainability Transformation & Risk 7 37% 44% 19% 31 20 (1H22: 53%) (1H22: 35%) (1H22: 12%) Forecast Forecast FY23 CAPEX FY23 D&A UP TO $250M – 31 26 $150M $260M 1 1H23 1H22 Maintenance Growth & tran
Slide 17: Wagering & Media
For personal use only & MEDIA WAGERING
Slide 18: Wagering & Media EBITDA
WAGERING & MEDIA EBITDA ($M) For personal use only Higher total revenue Increased generosities Cost inflation, higher market share, cycling and investment in new A&P spend incl. of COVID retail App launch impacting Football World Cup closures in the pcp and margin costs Football World Cup event High
Slide 19: 1H23 Results – Wagering & Media
1H23 RESULTS – WAGERING & MEDIA For personal use only $M 1H23 1H22 PF CHANGE (%) Digital wagering revenue 493.0 579.9 (15.0%) Cash wagering revenue 437.4 276.6 58.1% Wagering revenue 930.4 856.5 8.6% Media & International revenue 235.3 216.9 8.5% Wagering & Media revenue 1,165.7 1,073.4 8.6% Wagerin
Slide 20: 1H23 Wagering Revenue & KPIs
1H23 WAGERING REVENUE & KPI’S For personal use only WAGERING REVENUE ($M) 1H23 1H22 DIGITAL Active users (‘000)1 797 780 Digital turnover2 4,920.5 5,259.0 Gross yield 16.4% 17.0% Net yield 12.2% 13.4% Net digital revenue pre VRI share3 599.2 702.3 New disclosures based on channel view (cash Other4 (
Slide 21: Gaming Services
WE’RE RAISING THE GAME For personal use only GAMING SERVICES
Slide 22: Gaming Services EBITDA
GAMING SERVICES EBITDA ($M) For personal use only Impacted by COVID related cost savings delivered in pcp Inflation on underlying cost base COVID venue closures impacting pcp Negative impact of contract non-renewals from mid-August 1 1. Dis-synergies reflects impact of the Demerger as if the transac
Slide 23: 1H23 Results – Gaming Services
1H23 RESULTS – GAMING SERVICES INTEGRITY SERVICES HAS ATTRACTIVE CHARACTERISTICS: $M 1H23 1H22 PF CHANGE (%) CONTRACTED REVENUE For personal use only 1 Integrity Services 57.9 43.9 31.9% Other Venue Services2 50.9 35.7 42.6% Fee per machine, Gaming Services Revenue 108.8 79.6 36.7% CPI-linked pricin
Slide 24: TAB25
For personal use only TAB25
Slide 25: TAB25 targets
TAB25 We’re creating a simpler and very different looking company. Our targets for FY25 are1: WINNING SHAPING CHANGING use only THE GAME THE GAME THE GAME A transformed TAB brand and CX LEVEL PLAYING FIELD TARGETED IN EVERY STATE & MEASURES 30% DIGITAL REVENUE MARKET INVESTMENTS SHARE personal corpo
Slide 26: Genesis: Reduce Opex to $600-$620M
WINNING THE REDUCE OPEX TO GAME GENESIS $600-$620M For personal use only NEXT GENERATION GROUP OPEX OPERATING MODEL >$700m2 $640m- Enterprise-wide Opex reduction target net of $627m $646m transformation to deliver a investment and inflation, and $597m $600m- $620m1 lean, fast and digital-first based
Slide 27: Genesis: Pillars to Deliver Our Plan
GENESIS: 6 PILLARS TO DELIVER OUR PLAN For personal use only FUTURE INTEGRATED CORE OPERATIONS OPTIMISE REVENUE TECHNOLOGY OPTIMISE OPERATING VENUE COST-EFFICIENT PRODUCTION & TRANSFORMATION PROCUREMENT, MODEL & WAYS TRANSFORMATION GROWTH DIGITISE CX & SIMPLIFICATION PROPERTY & OF WORKING Low-cost,
Slide 28: Winning the Game: 30% Digital Revenue Market Share
WINNING THE 30% DIGITAL REVENUE GAME CUSTOMER MARKET SHARE1 For personal use only Leveraging our unique assets at scale, to acquire and retain high value omni- channel customers DIGITAL OUR CUSTOMERS VISION & DESTINATIONS CONTENT 1. Forward-looking statements are not guarantees of future performance
Slide 29: Winning the Game: Areas of focus next six months
WINNING THE 30% DIGITAL REVENUE GAME CUSTOMER MARKET SHARE1 For personal use only Areas of focus for the next six months New products and upgrades to the TAB App Increase SGM actives from new multi DIGITAL products Leverage data and analytics for greater customer insight and more effective New brand
Slide 30: Shaping the Game: Customer and Community Care
SHAPING THE GAME CUSTOMER AND COMMUNITY CARE For personal use only RESPONSIBLE AWARENESS & MONITORING & SOCIAL ADVERTISING TRAINING INTERVENTION IMPACT • We advocate for limits on • Improved responsible gambling • Data driven tools to monitor and • Invest in community programs betting advertising, i
Slide 31: Shaping the Game: Regulation
SHAPING THE GAME REGULATION For personal use only PROACTIVELY The gambling sector remains a focus for As a responsible wagering operator we Tabcorp is regulated in every State and Territory Broader gambling sector reforms may also provide WORKING regulators, government embrace this and are we operat
Slide 32: Outlook & Summary
For personal use only SUMMARY OUTLOOK &
Slide 33: Market Observations & Outlook
MARKET OBSERVATIONS & OUTLOOK For personal use only Historically the wagering market has been resilient during periods of economic uncertainty The wagering market is changing due to increased government and community expectations, higher costs of funding and higher costs to compete Wagering operator
Slide 34: Summary
SUMMARY For personal use only Our business has rebounded strongly from COVID, delivering double digit group revenue and EBITDA growth Increased total revenue market share and held digital revenue market share for the first time since 2019 TAB25 provides clear targets on where we are heading Our cost
Slide 35: Appendices
Image to be updated For personal use only APPENDICES
Slide 36: Group Operating Expenses
GROUP OPERATING EXPENSES ($M) For personal use only +4.1% 1 1. Net additional stand-alone costs following the Demerger as if they had been incurred for the half year ended 31 December 2021. 35
Slide 37: Pro Forma Group and Business Results
PRO FORMA GROUP AND BUSINESS RESULTS1 For personal use only WAGERING AND MEDIA GAMING SERVICES GROUP $M 1H23 1H22 PF CHANGE 1H23 1H22 PF CHANGE 1H23 1H22 PF CHANGE Revenues 1,165.7 1,073.4 8.6% 108.8 79.6 36.7% 1,274.5 1,152.3 10.6% Variable contribution 418.4 394.9 6.0% 101.4 74.6 35.9% 519.8 469.5
Slide 38: 1H22 Pro Forma Reconciliation
1H22 PRO FORMA RECONCILIATION For personal use only WAGERING AND MEDIA GAMING SERVICES GROUP $M 1H22 DIS-SYNERGIES 1H22 PF 1H22 DIS-SYNERGIES 1H22 PF 1H22 DIS-SYNERGIES 1H22 PF Revenues 1,073.4 - 1,073.4 77.6 2.0 79.6 1,150.3 2.0 1,152.3 Variable contribution 393.9 1.0 394.9 72.6 2.0 74.6 466.5 3.0
Slide 39: Wagering & Media Historical Results
WAGERING & MEDIA HISTORICAL RESULTS WAGERING TURNOVER1 $M 1H23 1H22 FY22 FY21 For personal use only $M FY22 PF FY21 PF Digital wagering revenue 1,073.5 1,071.7 Racing 6,500.8 6,032.2 11,769.7 12,511.4 Cash wagering revenue 654.0 885.1 Sport 1,258.7 947.3 2,124.0 2,398.0 Wagering revenue 1,727.5 1,95
Slide 40: Gaming Services Historical Results
GAMING SERVICES HISTORICAL RESULTS ADDITIONAL METRICS For personal use only $M FY22 PF FY21 PF DEC-22 JUN-22 CHANGE Integrity Services 1 99.1 108.1 MONITORED EGMs Other Venue Services2 97.8 79.1 NSW 91,110 90,340 770 Gaming Services Revenue 196.9 187.2 QLD 28,660 28,660 - NT 1,520 1,370 150 Integrit
Slide 41: Glossary
GLOSSARY 1H/2H Six months ended 31 December/30 June of the relevant financial year Lotteries and Keno (L&K) The Group’s former business that is reported as a discontinued operation following the Demerger For personal use only 1Q/2Q/3Q/4Q Three months ended 30 September / 31 December / 31 March / 30
Slide 42: Disclaimer
DISCLAIMER For personal use only This Presentation contains summary information about Neither Tabcorp nor any other person warrants or guarantees under the U.S. Securities Exchange Act of 1934, as amended, the current activities of Tabcorp Holdings Limited (Tabcorp) the future performance of Tabcorp
Slide 43: We're Raising the Game
For personal use only THE GAME RAISING WE’RE