Tabcorp Holdings Limited · ASX:TAH
Tabcorp — H1 FY2010 Earnings Presentation
27 slides from Tabcorp's earnings presentation, Feb 4, 2010
Slide 1: Tabcorp Holdings Limited Half Year Results Presentation
2009/10 Tabcorp Holdings Limited Half Year Results Presentation 4 February 2010 1
Slide 2: 1H10 financial results
1H10 financial results ¾ Normalised NPAT $264m, up 0.8% Revenues up 2.6%, expenses up 2.9% Higher gaming taxes and race field fees $13m; offset by income tax credits EPS 43.5 cents, down 11.9% following capital raising in FY09 Actual NPAT $258m, down 2.0%, with VIP win rate below theoretical
Slide 3: Group results
Group results Actual Change Normalised 1 Change $m 1H10 on pcp 1H10 on pcp Net revenues 2,180.7 2.1% 2,190.5 2.6% Variable contribution 1,079.5 0.1% 1,088.3 1.1% Operating expenses (547.2) 2.9% (547.2) 2.9% EBITDA 531.7 (3.1%) 540.5 (1.2%) D&A (99.5) 13.3% (99.5) 13.3% EBIT 432.2 (6.2%) 441.0 (4.0%)
Slide 4: Key drivers of 1H10 result
Key drivers of 1H10 result $m NPAT 10 (9) 11 (4) 1 (9) (8) 10 264 262 1H09 Casinos VC Casinos Wagering Wagering Gaming VC Divisional D&A Interest, 1H10 Normalised (ex Qld taxes) Qld taxes (ex race fields) race fields Opex Tax & Normalised NPAT Other NPAT 4
Slide 5: Divisional results
Divisional results Casinos Change Wagering Change Gaming Change $m Normalised 1 on pcp on pcp on pcp Net revenues 694.9 3.0% 872.0 4.6% 626.6 (0.3%) Variable contribution 547.2 0.3% 337.2 2.9% 205.2 0.5% Operating Expenses (355.5) 2.4% (155.9) 2.2% (37.6) 3.1% EBITDA 191.1 (4.5%) 181.3 3.3% 167.6 (0
Slide 6: Casinos: KPIs
Casinos: KPIs NSW Qld Total ¾ Star City earnings up Change Change Change Operating Revenue 1H10 1H10 1H10 on pcp on pcp on pcp Additional MTGMs and EGMs New gaming management EGMs 101.6 12.3% 139.9 (2.8%) 241.5 3.0% system and loyalty program Main Gaming Floor 148.2 4.9% 66.7 3.4% 214.9 4.5% M
Slide 7: Project Star: Sports Theatre and Poker area opened 1H10
Project Star: Sports Theatre and Poker area opened 1H10 7
Slide 8: Project Star: Excavation completed; Harbour side progressing
Project Star: Excavation completed; Harbour side progressing 8
Slide 9: Project Star: Baccarat, Noodle Bar to open Chinese New Year
Project Star: Baccarat, Noodle Bar to open Chinese New Year 9
Slide 10: Wagering: KPIs
Wagering: KPIs Change $m 1H10 1H09 on pcp Revenues product ¾ Intense competition continuing Racing Vic 353.2 353.4 (0.1%) Racing NSW 430.6 414.7 3.8% ¾ Growth in all products and channels except phone Fixed Odds (1) 77.5 62.9 23.3% Trackside 18.5 16.5 12.2% ¾ Strategies showing traction Media 57.3 5
Slide 11: Gaming: KPIs
Gaming: KPIs Change 1H10 1H09 on pcp Vic Gaming Vic Gaming Revenue ($m) 542.4 548.4 (1.1%) ¾ EGM market contracting EBIT ($m) 119.4 119.2 0.2% Less disposable income EGMs (average) 13,368 13,376 (0.1%) Reduced venue investment pre 2012 NMR/EGM/Day ($) 294 297 (1.0%) Change in max bets from $10
Slide 12: Group: Capital expenditure
Group: Capital expenditure Capex trend (excluding Project Star) Capex trend - Project Star 123 103 93 67 36 14 1H09 2H09 1H10 1H09 2H09 1H10 ¾ 2H10 capex expected to be higher ¾ 1H10 capex includes first $50m payment to NSW Government ¾ FY10 D&A expense approximately $200m ¾ Full year capex $220m to
Slide 13: Group: Key capital features
Group: Key capital features 700 600 500 400 $M 300 200 100 - FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 Drawn Bank Debt Undrawn Bank Debt Medium Term Notes Tabcorp Retail Bonds US Private Placement ¾ Undrawn facilities $1.1b ¾ Gross Debt/EBITDA 2.1x ¾ FY10 interest expense expected to be
Slide 14: Outlook
Outlook ¾ Tabcorp’s businesses have proven resilient Improving revenue performance from new investments Market share gains in most lines of business ¾ Economic environment remains uncertain Unemployment and consumer confidence improving Wind back of government stimulus Interest rate rises
Slide 15: Summary
Summary ¾ Normalised NPAT up 0.8% Revenues up 2.6% driven by Star City and Wagering Expenses up 2.9% ¾ Divisional performance Casinos – Star City performing well; Qld impacted by gaming taxes and soft market Wagering – strategic initiatives gaining traction Gaming – Vic Gaming flat, with g
Slide 16: Appendices
Appendices 1. Group results 2. Earnings per share and dividends per share 3. Casinos: Financial data 4. Casinos: Revenues by state and product 5. Wagering: Financial data 6. Wagering: Revenues by state and product 7. Gaming: Financial data 8. Gaming: Market share 9. Balance sheet 10. Cashflow 16
Slide 17: 1. Group results
1. Group results Actual Change Normalised Change $m 1H10 on pcp 1H10 on pcp Total operating revenues 2,153.8 1.9% 2,163.6 2.4% Other revenues1 26.9 23.0% 26.9 23.0% Revenue 2,180.7 2.1% 2,190.5 2.6% Government taxes & levies (602.6) 3.8% (603.6) 4.0% Operating commissions (261.5) 3.3% (261.5) 3.3% R
Slide 18: 2. Earnings per share and dividends per share
2. Earnings per share and dividends per share Normalised earnings per share Dividends per share 53.5 51.5 49.4 47 47 47.4 44 43.5 35 30 Growth Growth on pcp: on pcp: 0.0% (3.7%) (8.0%) 4.3% (11.9%) 10.0% 6.8% 0.0% (25.5%) (14.3%) 1H06 1H07 1H08 1H09 1H10 1H06 1H07 1H08 1H09 1H10 Payout ratio: 82% 91
Slide 19: 3. Casinos: Financial data
3. Casinos: Financial data Actual Change Normalised Change $m 1H10 1H09 on pcp 1H10 1H09 on pcp Revenue 685.1 676.6 1.3% 694.9 674.7 3.0% Taxes, levies, commissions and fees (146.7) (129.1) 13.6% (147.7) (128.9) 14.6% Operating Expenses (355.5) (347.3) 2.4% (355.5) (347.3) 2.4% Other Income (0.6) 1.
Slide 20: 4. Casinos: Revenue by state and product
4. Casinos: Revenue by state and product NSW Change Qld Change Total Change $m 1H10 on pcp 1H10 on pcp 1H10 on pcp EGMs 101.6 12.3% 139.9 (2.8%) 241.5 3.0% Main Gaming Floor 148.2 4.9% 66.7 3.4% 214.9 4.5% Private Gaming Rooms 62.8 6.9% 31.4 (1.8%) 94.2 3.8% VIP Rebate (Normalised, net) 21.8 9.4% 2.
Slide 21: 5. Wagering: Financial data
5. Wagering: Financial data Change $m 1H10 1H09 on pcp Operating revenues Racing - Victoria1 268.5 268.8 (0.1%) 2 Racing - NSW 430.6 414.7 3.8% Fixed Odds 69.1 56.6 22.1% Trackside 13.9 12.3 13.0% Media 59.4 55.9 6.2% Other 24.4 19.8 23.3% Total operating revenues 865.9 828.1 4.6% Other revenue 6.1
Slide 22: 6. Wagering: Revenue by state and product
6. Wagering: Revenue by state and product NSW1 Change Vic1 Change Total Change $m 1H10 on pcp 1H10 on pcp 1H10 on pcp Operating revenues Thoroughbred 298.3 3.3% 184.8 (0.6%) 483.1 1.8% Harness 54.5 4.5% 38.6 1.9% 93.1 3.4% Greyhounds 77.8 5.4% 45.1 0.4% 122.9 3.5% Total racing 430.6 3.8% 268.5 (0.1%
Slide 23: 7. Gaming: Financial data
7. Gaming: Financial data Change $m 1H10 1H09 on pcp Operating revenues Victorian network - Hotel 351.1 353.8 (0.8%) - Clubs 191.3 194.6 (1.7%) Total Victorian gaming 542.4 548.4 (1.1%) Keno 67.3 64.3 4.6% Other 2.7 2.9 (6.9%) Total operating revenues 612.4 615.6 (0.5%) Other revenue 14.2 13.2 7.6%
Slide 24: 8. Gaming: Market share
8. Gaming: Market share Tabcorp vs Tatts Group 54.0% Vic Gaming Revenue Market Share July 2005 to December 2009 53.0% 52.0% Tabcorp Market Share % 51.0% 50.0% 49.0% Tatts Group 48.0% 47.0% 46.0% Dec-05 Dec-06 Dec-07 Dec-08 Dec-09 Jun-05 Jun-06 Jun-07 Jun-08 Jun-09 Sep-05 Sep-06 Sep-07 Sep-08 Sep-09
Slide 25: 9. Balance sheet
9. Balance sheet As at As at Change $m 31 Dec 09 30 Jun 09 on pcp Total current assets 372.2 403.2 (7.7%) Licences 670.3 688.1 (2.6%) Other intangible assets 3,646.3 3,641.8 0.1% Property, plant and equipment 1,613.9 1,566.3 3.0% Other non current assets 45.1 40.0 12.7% Total assets 6,347.8 6,339.4
Slide 26: 10. Cashflow
10. Cashflow Actual Change $m 1H10 1H09 on pcp Net operating flows 507.0 527.6 (3.9%) Net interest payments (73.8) (83.4) (11.5%) Income tax paid (98.9) (98.8) 0.1% Payments for PP&E (201.7) (144.6) 39.5% Net operating cash flows 132.6 200.8 (33.9%) Proceeds from sale of assets/business - 1.4 - Divi
Slide 27: Front cover: images from Tabcorp's Casino, Wagering, and Gaming businesses.
Front cover: images from Tabcorp’s Casino, Wagering, and Gaming businesses. 27