Slide 1: 2024 Half Year Results Investor Presentation (ASX announcement)
21 February 2024 ASX Market Announcements Office ASX Limited 20 Bridge Street Sydney NSW 2000 2024 HALF YEAR RESULTS INVESTOR PRESENTATION Attached is a copy of the slides that will be presented at The Lottery Corporation’s 2024 Half Year Results Briefing today. The Briefing will commence at 10:30am
Slide 2: 1H24 Half Year Results Presentation
® 1H24 Half Year Results Presentation Half Year ended 31 December 2023 21st February 2024 The Lottery Corporation Limited ABN 21 081 925 706
Slide 3: A world-class lotteries business
® ® A world-class lotteries business 2
Slide 4: Table of Contents
® Table of Contents 04 - 08 Group Overview 10 - 16 Business Results 18 - 19 Capital 21 - 24 Strategy & Conclusion 26 - 31 Appendices 3
Slide 5: 1H24 highlights
® 1H24 highlights A resilient performance from a balanced portfolio • Revenue resilient amid softer consumer conditions Solid business • Benefits of a diversified and balanced portfolio evident performance • Solid result versus a pcp that benefited from timing of Saturday lotto Mid-Year Megadraw and
Slide 6: The Lottery Corporation
® The Lottery Corporation The leader in Australia’s lotteries and Keno market and one of the highest performing lotteries businesses globally Exclusive and/or long dated licences and approvals Low-spend, mass participation model underpins wide community acceptance Diversified and balanced portfolio
Slide 7: A track record of sustained growth and resilience
® A track record of sustained growth and resilience Growth in the rolling 3-year average turnover has always been positive, notwithstanding some short-term fluctuations due to jackpot variability Australian Industry Turnover – Lotteries and Keno (A$bn)1,2 Global Financial Crisis COVID-19 +7.6% p.a.
Slide 8: 1H24 Group Results
® 1H24 Group Results $m Change 1H24 1H23 $ % Revenue 1,884.9 1,920.2 (35.3) (1.8%) Variable contribution 534.3 535.9 (1.6) (0.3%) Operating expenses (135.2) (126.5) (8.7) (6.9%) EBITDA (before significant items)1 399.1 409.4 (10.3) (2.5%) D&A (52.1) (48.6) (3.5) (7.2%) EBIT (before significant items
Slide 9: Group EBITDA
Group EBITDA ® Solid result versus a pcp that benefited from timing of Saturday lotto Mid-Year Megadraw and unusually large Lucky Lotteries® Super jackpots1 Lotteries Keno -$6.5m -$3.8m 409.4 (8.9) 9.6 (7.2) (0.4) (1.9) (1.5) 399.1 • Inflationary impacts • Impact of move to standalone technology arr
Slide 10: Table of Contents
® Table of Contents 04 - 08 Group Overview 10 - 16 Business Results 18 - 19 Capital 21 - 24 Strategy & Conclusion 26 - 31 Appendices 9
Slide 11: Lotteries: Result Summary
® Lotteries: Result Summary Revenue resilient amid softer consumer conditions $m 1H24 1H23 Change Active portfolio and jackpot sequence management helped moderate the impacts of softer Revenue 1,738.3 1,772.8 (1.9%) consumer conditions and periods of below-model jackpot outcomes Variable contributio
Slide 12: Lotteries: KPIs – Product
® Lotteries: KPIs – Product Medium-term growth rates illustrate strength of underlying business performance Turnover Growth (including medium-term CAGR) Turnover by Product Type ($m) 3,649 -5.5% 3,438 3,449 vs pcp 3,278 2,965 1H24 (v 1H23) CAGR: 1H20 - 1H243 1,907 -2.0% Actual1 Like-for-like1,2 Actu
Slide 13: Lotteries: KPIs – Jackpot Games
Lotteries: KPIs – Jackpot Games ® Strong jackpot period for Oz Lotto®; aggregate outcome in line with model (expected) outcomes1,2 Cumulative Jackpot Value Offered ($m) Powerball® and Oz Lotto® Major Jackpots +3.0% 1,174 vs pcp 28 1,140 1,030 1,054 6 328 +62.2% 23 23 253 532 vs pcp 314 20 779 7 7 19
Slide 14: Oz Lotto game change
Oz Lotto game change ® ® Increased the probability of large jackpots which helped to deliver jackpots of $70m and $90m Increased player awareness and consideration; driving digital activity Oz Lotto® • Modelled outcomes from game change have now played through – May 2022 matrix change was designed t
Slide 15: Lotteries: KPIs – Channel & Customers
Lotteries: KPIs – Channel & Customers ® Resumption of digital share growth following a period of consolidation of COVID-era gains; customer growth in recent years greatest in young adult cohorts Turnover by Channel ($m) Number of Active Registered Customers – last 52 weeks1 (000’s) Short term moveme
Slide 16: Keno: Result Summary
® Keno: Result Summary Strong retail performance with Queensland leading the way; changes in commercial arrangements impacted margins $m 1H24 1H23 Change Revenue 146.6 147.4 (0.5%) Increased footfall in venues underpinned growth in Queensland and New South Wales Variable contribution 77.7 80.0 (2.9%
Slide 17: Keno: KPIs
® Keno: KPIs Strong retail performance, especially in Queensland; digital performance stabilised in 2Q24 following initial impact of competition in Victoria Turnover by Channel ($m) Keno Turnover by Product ($m) +0.5% +0.5% vs pcp vs pcp 781 785 781 785 -12.5% 715 115 718 103 42 vs pcp (13.1%) -10.4
Slide 18: Table of Contents
® Table of Contents 04 - 08 Group Overview 10 - 16 Business Results 18 - 19 Capital 21 - 24 Strategy & Conclusion 26 - 31 Appendices 17
Slide 19: Capital Allocation Framework
® Capital Allocation Framework A long-term framework to underpin a disciplined approach to the allocation of shareholders’ capital Driving Operating Game Portfolio A disciplined approach to capital Operating Efficiency Capital Productivity allocation Cash Flow Management • Commitment to a strong inv
Slide 20: Capital and Other Metrics
® Capital and Other Metrics Strong balance sheet provides financial flexibility and the capacity to support growth Dividend (fully franked) Debt: Average tenure3 Opex Interim 8.0 cps 5.5 Years 1H24 $135.2m (1H23: 8.0 cps1) Payout Ratio 91% Target: FY24 Opex $c.300m6 Target: 80-100% of full year NPAT
Slide 21: Table of Contents
® Table of Contents 04 - 08 Group Overview 10 - 16 Business Results 18 - 19 Capital 21 - 24 Strategy & Conclusion 26 - 31 Appendices 20
Slide 22: A bright future: FY24 key focus areas and priorities
® A bright future: FY24 key focus areas and priorities Continued progress in customer-centred initiatives to deliver long-term sustainable growth Supercharging the Digitally-enabled, customer experience-led customer experience • Major refresh of Monday & Wednesday lotto, including extension to Frida
Slide 23: Introducing Weekday Windfall
® Introducing Moving from state-based brands… to a new national brand (ex. WA)2 Weekday Windfall Major refresh of Monday & Wednesday lotto into Tatts NSW Lotteries Golden Casket SA Lotteries a new standalone brand, with a Friday draw • Target launch in May 20241 • Addition of Friday draw follows a s
Slide 24: Key customer convenience initiatives
Key customer convenience initiatives ® Digitally-enabled, customer experience-led: delivering improved registered customer acquisition, conversion and retention; driving customer life-time value Customer onboarding improvement Real-time customer experience Customer growth through digitally- through
Slide 25: Conclusion: A resilient, world-class lotteries business
® Conclusion: A resilient, world-class lotteries business ✓ Solid business performance in 1H24 ✓ Proactive management initiatives delivering results ✓ Ongoing strategic execution ✓ Delivering value for stakeholders; promoting responsible play ✓ A track record of sustainable growth and resilience 24
Slide 26: Table of Contents
® 25 Table of Contents 04 - 08 Group Overview 10 - 16 Business Results 18 - 19 Capital 21 - 24 Strategy & Conclusion 26 - 31 Appendices 25
Slide 27: Appendix 1: Significant Items
® Appendix 1: Significant Items1 Settlement of pre-demerger tax litigation matters Significant Items ($m) 1H24 1H23 • On 11 September 2023 Tabcorp Holdings Limited and The Lottery Corporation Settlement of pre-demerger tax litigation Limited (TLC) resolved a dispute with the Australian Tax Office re
Slide 28: Appendix 2: Group & Business Results
® Appendix 2: Group & Business Results Lotteries Keno Group $m 1H24 1H23 % 2H23 1H24 1H23 % 2H23 1H24 1H23 % 2H23 Revenue 1,738.3 1,772.8 (1.9%) 1,459.8 146.6 147.4 (0.5%) 133.1 1,884.9 1,920.2 (1.8%) 1,592.9 Variable contribution 456.6 455.9 0.2% 377.3 77.7 80.0 (2.9%) 70.4 534.3 535.9 (0.3%) 447.7
Slide 29: Appendix 3: Lotteries – Turnover by product
® Appendix 3: Lotteries – Turnover1 by product Turnover by Game ($m) 1H24 Turnover by Game Change 1H24 1H23 Game $ % Powerball® 1,211 1,441 (230) (16.0%) 6.6% 1.3% Oz Lotto® 658 466 192 41.2% 4.7% 2.4% Powerball® Jackpot Games 1,869 1,907 (38) (2.0%) 5.8% 35.1% Oz Lotto® Saturday lotto 2 2 Saturday
Slide 30: Appendix 4: Balance Sheet and Debt
® Appendix 4: Balance Sheet and Debt Balance Sheet Debt $m Dec-23 $m Dec-23 Total current assets 1,167.2 Gross debt – excluding lease liabilities (at spot)1 2,536.7 Licences 698.6 Less: Benefit of FX hedges on USPP principal2 (201.0) Other intangible assets 2,254.2 Gross debt – excluding lease liabi
Slide 31: Appendix 5: Cash Flow, Capex and Debt
® Appendix 5: Cash Flow, Capex and Debt Cash Flow Debt Structure & Maturities2($m) $m Dec-23 800 • USPP (A$1,821m drawn) Interest margins/rates Net operating cash flows 451.4 700 • Bank Facility (A$515m drawn) • Average hedged USPP rate: 5.7% Net interest paid (51.4) 600 (60.4) • Bank facility margi
Slide 32: Appendix 6: Glossary
® Appendix 6: Glossary Term Definition Term Definition 1H/2H Six months ended 31 December/30 June of the relevant financial year Gross Debt Defined as per Appendix 4 AAS Australian Accounting Standards IFRS International Financial Reporting Standards ACT Australian Capital Territory Jackpot games Po
Slide 33: Disclaimer
® Disclaimer This presentation (Presentation) contains summary information about the current activities of The Lottery Corporation Limited (The Lottery Corporation) and its subsidiaries. It should be read in conjunction with The Lottery Corporation’s other periodic and continuous disclosure announce
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