Aristocrat Leisure Limited · ASX:ALL
Aristocrat Leisure — Investor Day (May 2018)
72 slides from Aristocrat Leisure's investor day presentation, May 1, 2018
Slide 1: Aristocrat Leisure Limited 2018 Investor Day
Aristocrat Leisure Limited 2018 Investor Day 1 May 2018 For personal use only
Slide 2: Disclaimer
Disclaimer This document and any oral presentation accompanying it has been prepared in good faith, however, no express or implied representation or warranty is given as to the accuracy or completeness For personal use only of the information in this document, in any accompanying presentation or in
Slide 3: Section 1: Introduction
For personal use only Section 1 Introduction Trevor Croker Chief Executive Officer & Managing Director
Slide 4: Objectives for today
Objectives for today For personal use only 1 Meet our new leadership team Leadership team 2 Outline our strategic direction 3 Communicate our product, talent and innovation focus Strategy and Execution 4 Outline our growth strategy for Land-based and Digital businesses 5 Demonstrate the latest slots
Slide 5: Agenda
Agenda For personal use only Time Topic Presenter Trevor Croker 09:00–09:15 Welcome and introduction Chief Executive Officer & Managing Director 09:15–09:40 Group overview and strategy Trevor Croker 9:40–10:00 Land-based Trevor Croker Jeff Goldstein Chief Digital Officer/ Chief Strategy Officer 10:0
Slide 6: Today's presenters
Today’s presenters For personal use only Trevor Croker Jeff Goldstein Avraham (Avi) Shalel Julie Cameron-Doe Christie Roser Chief Executive Officer Chief Digital Officer/ Chief Executive Officer, Chief Financial Officer Chief Human & Managing Director Chief Strategy Officer Plarium Resources Officer
Slide 7: Group Overview
For personal use only Section 2 Group Overview Trevor Croker Chief Executive Officer & Managing Director
Slide 8: Our values underpin how we think and what we do
Our values underpin how we think and what we do For personal use only To create the world’s greatest gaming experience, everyday ✓ People first ✓ Customer centric ✓ Innovation Core Values 8
Slide 9: We are diversified across attractive gaming segments
We are diversified across 3 attractive gaming segments We have incumbent or growing positions in each of our portfolio businesses, consistently taking share in our markets whether stable or growing. For personal use only Product revenue contribution (LTM ending 30 September 2017(1)) Land-based: Clas
Slide 10: Our operating model supports long-term growth and value creation
Our operating model supports long-term growth and value creation Our operating model and portfolio of quality businesses allow us to execute on our strategy, supporting sustainable long-term growth and value creation. For personal use only Inputs Outputs Growth enabling business model • Superior tal
Slide 11: Our growth journey
Our growth journey Our operating model has positioned us to innovate and grow our core, enter adjacencies, make disciplined acquisitions, focus on D&D and re-invest in our For personal use only business both organically and inorganically. 1 2 Invested in best-in-class slot products Enabled our playe
Slide 12: Our operational scale has increased significantly
Our operational scale has increased significantly… Reinvestment of cash flows into our businesses and strategically aligned acquisitions have driven growth in the business. For personal use only Operational scale FY14 Growth FY17PF Gaming operations installed base 9,071 +326% 38,598 (units) Digital
Slide 13: Resulting in attractive financial performance
Resulting in attractive financial performance... Continued investment and execution of our business strategy has resulted in strong earnings growth and cashflow generation in recent years. For personal use only Financial scale FY14 Growth FY17PF Revenue (A$m) 839 +299% 3,347(1) Underlying EBITDA 219
Slide 14: Resulting in market leading returns
Resulting in market leading returns We have continued to deliver above market shareholder returns (482% vs. 28% TSR for the ASX 100 vs. 81% TSR for NASDAQ) driven by significant growth in For personal use only earnings and strong cash flow generation, which has been reinvested into the business and
Slide 15: Earnings base supported by high levels of recurring revenue
Earnings base supported by high levels of recurring revenue Over the last 3 years, we have more than tripled in size, grown our Digital business, and substantially increased our recurring revenue. For personal use only Product revenue contribution Product revenue contribution (LTM ending 30 Septembe
Slide 16: Group overview summary
Group overview summary Investments in our portfolio of quality businesses have expanded our business capabilities and grown our operational footprint, delivering additional cashflow to For personal use only grow our business into adjacent segments. This has supported our strong operational and finan
Slide 17: Group Strategy
For personal use only Section 3 Group Strategy Trevor Croker Chief Executive Officer & Managing Director
Slide 18: Group strategy overview
Group strategy overview For personal use only Land-based Digital • Segment expected to be stable/ growing going • Segment is high growth Segment forward Segment dynamics dynamics • We have been taking share and expanding • We have been taking share capabilities via organic investments and M&A • Grow
Slide 19: Unique & diversified assets + focused execution = strong delivery
Unique & diversified assets + focused execution = strong delivery For personal use only Powerful combination of unique assets and capabilities Rigorous prioritisation, resource allocation, and investment Balanced portfolio Our capabilities Land-based Digital World class talent Superior content Class
Slide 20: We adopt a multi-channel approach for content commercialisation
We adopt a multi-channel approach for content commercialisation Our Lightning Link brand is one example of a proprietary brand which has been successfully leveraged across our business portfolio. For personal use only Segments Content / Hardware ANZ ANZ Americas Americas EMEA Land-based: APAC Class
Slide 21: Global tech, game design and digital talent is a critical driver of our competitive advantage
Global tech, game design and digital talent is a critical driver of our competitive advantage For personal use only 21
Slide 22: Collaboration across businesses benefits our portfolio
Collaboration across businesses benefits our portfolio For personal use only Land-based Digital Market leading content Digital first capabilities Video MSP Live Ops Systems and multi app Service portfolio Talent Class III Data Segmentation & geographic growth Social Meta Experience game and in casua
Slide 23: Focused on extending our competitive advantage
Focused on extending our competitive advantage For personal use only 23
Slide 24: Three priorities to ensure we are positioned for sustainable growth
Three priorities to ensure we are positioned for sustainable growth For personal use only Priority 1 Priority 2 Priority 3 Maintain & Improve Integrate and Operationalise Change our world (executing) (executing) • Continue to grow existing • Integrate Digital businesses • Leverage capabilities to en
Slide 25: Land-based
For personal use only Section 4 Land-based Trevor Croker Chief Executive Officer & Managing Director
Slide 26: Focused on delivering long-term value creation
Focused on delivering long-term value creation Strengthening customer experiences through a focus on investment and innovation. Customer centric solutions are at the core of our success. For personal use only Investment is a cornerstone of Innovation across the value Customer centric solutions our b
Slide 27: Invest to maintain leadership positions, grow in adjacent segments
Invest to maintain leadership positions, grow in adjacent segments For personal use only Class II ✓ Strategic investment in talent and Class III Video Stepper technology through increased D&D spend Continue to ✓ Continue to deliver market leading maintain and products across all key markets 1 grow l
Slide 28: There is significant opportunity in our current addressable markets
There is significant opportunity in our current addressable markets We have a clear runway for growth in our land-based business. We are focused on growing our share and investing in logical adjacencies. For personal use only North American addressable market 197k units Outright Sales (Class III) Ga
Slide 29: We have a track record of success and market leading positions
We have a track record of success and market leading positions We have continued to gain share in key markets by increasing penetration in relatively flat or declining land-based markets. We have a track record of success For personal use only in achieving growth and are committed to achieving furth
Slide 30: Embedding innovation across our whole organisation
Embedding innovation across our whole organisation 02. Product and service For personal use only • Differentiated products and services • Adapted and augmented products and services • New segments and niches • Bundled offerings 02 01. Talent • Enhance employee engagement – 03. Business model e.g. cr
Slide 31: Customer centric solutions will be the core of our success
Customer centric solutions will be the core of our success For personal use only Tools and technology Process • Grow our execution capability • Product development system • Expertise Customer • Quality tracking centric • Experience solutions • Data analytics and insights • Performance management • Q
Slide 32: Digital
For personal use only Section 5 Digital Jeff Goldstein Chief Digital Officer/ Chief Strategy Officer Avi Shalel Chief Executive Officer, Plarium
Slide 33: A. Introduction to Digital
For personal use only A. Introduction to Digital Jeff Goldstein Chief Digital Officer/ Chief Strategy Officer
Slide 34: Mobile gaming is the driving force for the global games market
Mobile gaming is the driving force for the global games market Our Digital portfolio is well positioned to address a broad spectrum of opportunities in the ~US$50 billion mobile gaming market. For personal use only Mobile $4.5 • Strong growth expected to continue Console • High quality content • Mod
Slide 35: Plarium and Big Fish dramatically increase scale of Digital portfolio
Plarium and Big Fish dramatically increase scale of Digital portfolio The acquisition of Plarium and Big Fish significantly increase the scale of our Digital business, broaden our product portfolio and diversify our revenue streams. For personal use only Aristocrat Digital Social / mobile games Glob
Slide 36: Full suite of capabilities required to be successful in mobile gaming
Full suite of capabilities required to be successful in mobile gaming Leading publishers drive successful product innovation, know their customers and constantly strive for continuous improvement. For personal use only 1 2 3 Product Innovation Customer Centricity Operational Excellence Reach new lev
Slide 37: Growth in social casino driven by Meta games
Growth in social casino driven by Meta games Meta-structure driven applications occupy a uniquely differentiated segment of the social casino market and represent a significant and rapidly growing market For personal use only opportunity. Global social casino segmentation Content Driven: ~US$3.4bn M
Slide 38: Understanding Meta games
Understanding Meta games A social Meta game feature provides an application game layer designed to further engage and retain players in addition to core content. For personal use only Clubs are compelling Meta game propositions Why is this important? Increased engagement – Players can collaborate an
Slide 39: Understanding Live Ops
Understanding Live Ops Live Ops deliver new events or promotions that constantly keep a game “fresh” to its audience. Successful Live Ops significantly increase player engagement. For personal use only Why is this important? Segmented offerings – Creates targeted meaningful promotions for all player
Slide 40: Growth journey to acquire full suite capabilities and talents
Growth journey to acquire full suite capabilities and talents We have acquired world-class talent and development capabilities necessary to be successful in the global mobile gaming sector. For personal use only Building additional capabilities in digital gaming Meta game capability Digital-first co
Slide 41: Plarium and Big Fish have expanded our footprint and digital capabilities
Plarium and Big Fish have expanded our footprint and digital capabilities For personal use only 1 Best-in-class • Plarium and Big Fish are market leaders in player monetisation expertise monetisation 2 Digital content • Plarium and Big Fish have a track record of creating and origination developing
Slide 42: Compelling product portfolio to drive audience reach
Compelling product portfolio to drive audience reach We have assembled a diversified and compelling portfolio of franchises that has increased DAUs by >3.5x to more than 8 million by end of September 2017. For personal use only FY17 DAUs (m) 1.7 2.6 3.8 Social Casino Social Games ♀ 60%, 45-65+ ♀ 62%
Slide 43: Collaborate and leverage best practices across all three businesses
Collaborate and leverage best practices across all three businesses Create a critical mass of creative talent and build a strong base of shared intelligence in common service areas. For personal use only • Product portfolio management 1 Portfolio Segmentation • Resource allocation • New talent recru
Slide 44: B. Product Madness & Big Fish Strategy
For personal use only B. Product Madness & Big Fish Strategy Jeff Goldstein Chief Digital Officer/ Chief Strategy Officer
Slide 45: Strong core content drives consistent growth
Strong core content drives consistent growth Product Madness has realised significant growth since launching Heart of Vegas, and the business is well positioned to continue the trend. For personal use only FY14 FY15 FY16 FY17 CAGR (FY14-17) DAU (m) 0.7 1.1 1.3 1.7 37% Next stage: 2018 and beyond • C
Slide 46: Big Fish is an established publisher with a diversified portfolio of franchise applications
Big Fish is an established publisher with a diversified portfolio of franchise applications For personal use only Franchise applications #6 Social Casino game publisher globally (1), also competes in social gaming and premium paid games Headquartered in Seattle, USA Big Fish Cooking Fairway Casino C
Slide 47: Growth journey driven by content innovation and development
Growth journey driven by content innovation and development Big Fish has grown to become a leading global publisher of free-to-play mobile games over the past 15 years. For personal use only 2017+ 2014 Significant casual F2P titles launched such as Cooking Craze • Launched signature 2012 Match-3 gam
Slide 48: Product Madness and Big Fish to collaborate on social casino
Product Madness and Big Fish to collaborate on social casino Combining Product Madness’ strength in core slots with Big Fish’s meta feature capabilities to deliver the next generation of social casino applications. For personal use only Product segmentation 1 Entertainment Enhance meta features with
Slide 49: Develop next generation of casual games
Develop next generation of casual games Leverage Big Fish’s world-class development capabilities to develop next generation of casual games with “Right Products, Right Segments” discipline. For personal use only • Focus on key segments of value within the casual genre • Expand presence and build fra
Slide 50: C. Plarium Strategy
For personal use only C. Plarium Strategy Avi Shalel Chief Executive Officer, Plarium
Slide 51: Plarium is a leading Strategy and RPG publisher
Plarium is a leading Strategy and RPG publisher Plarium focuses on developing robust game 'engines' which form the foundation for future game development. For personal use only Portfolio approach to game development Specialised global independent studios • Multi-studio, multi-game portfolio strategy
Slide 52: Plarium is continuously evolving, capturing new markets
Plarium is continuously evolving, capturing new markets With roots in Eastern European social networks, Plarium expanded geographically via Facebook and scaled its business to mobile. Today, Plarium is a leading For personal use only F2P mobile and online gaming company with category leadership in S
Slide 53: Strategy genre has been the focus, new genres to drive growth
Strategy genre has been the focus, 3 new genres to drive growth Plarium addressable markets For personal use only Core genre Adjacent genres Strategy – US$11.7bn RPG – US$10.0bn Casual – US$6.4bn Action – US$11.1bn Machine Match-3 Report Match 3 Zone Meta Card Based Collection Battle (no MZ) MMO Are
Slide 54: Core loops of various genres
Core loops of various genres Strategy Core Loop RPG Core Loop For personal use only Upgrade Build City Champions Battle Build Army (PvE, PvP) Earn silver, Experience/ Champions, Resources Resources, Artifacts. Attack- Users/Comp Upgrade Artifacts Casual Core Loop Action Core Loop Pass Match-3 Levels
Slide 55: Rich pipeline of high quality mobile titles across genres
Rich pipeline of high quality mobile titles across genres For personal use only 2 Stage 2: 2017 and beyond • Continue to drive market share in 1 Strategy • Diversifying genres – targeting RPG, Stage 1: up to 2017 Casual and Action Focus on developing leading strategy games RPG Casual Action 55
Slide 56: Finance
For personal use only Section 6 Finance Julie Cameron-Doe Chief Financial Officer
Slide 57: Superior financial performance
Superior financial performance We have increased our EBITDA more than five-fold, from A$219m in FY14 to A$1,175m in FY17PF. For personal use only Historical Revenue, EBITDA and EBITDA margin Sep y/e, A$m EBITDA margin: 26% 33% 38% 35% 4,000 3,347 3,000 (Sep y/e, A$m) 2,129 2,000 1,582 1,175 1,000 83
Slide 58: Our unique financial profile
Our unique financial profile We have a unique financial profile, combining both high growth and high margin. For personal use only Aristocrat’s financial profile relative to ASX 100 Industrials Index constituents(1) High Growth, Low Margin High Growth, High Margin more than 15% NPAT Growth 28% 13% G
Slide 59: Our unique financial profile
Our unique financial profile We have a unique financial profile, combining both high growth and high margin. For personal use only Aristocrat’s financial profile relative to ASX 100 Industrials Index constituents(1) High Growth, Low Margin High Growth, High Margin • Globally diversified earnings bas
Slide 60: Solid foundations for continued financial discipline
Solid foundations for continued financial discipline For personal use only ✓ Positions us for long-term sustainable growth Recurring revenue ✓ Flexibility for further investment in growth opportunities ✓ Drives long term earnings growth Cash flow generation ✓ Provides funding for D&D and UA investme
Slide 61: Recurring revenue positions us for long-term sustainable growth
Recurring revenue positions us for long-term sustainable growth For personal use only Recurring revenue benefits ✓ Consumption-based revenue model ✓ Position for long-term sustainable growth ✓ More visible revenue build ✓ Flexibility for further investment in growth opportunities ✓ Maximise sharehol
Slide 62: We continue to manage our leverage and risk exposures
We continue to manage our leverage and risk exposures Strong cashflow generation and earnings growth has driven deleveraging in the business, supported by the flexibility of TLB funding and prudent risk For personal use only management. Net debt / EBITDA (x) (1) Risk management Sep y/e Net debt / EB
Slide 63: Organisation & Culture
For personal use only Section 7 Organisation & Culture Christie Roser Chief Human Resources Officer
Slide 64: Experienced global leadership team
Experienced global leadership team Corporate functions For personal use only Trevor Croker 29 Chief Executive Officer & Managing Director 9 11 26 Jeff Goldstein 18 Julie Cameron-Doe Rich Schneider Chief Digital Officer/ Chief Financial Officer 5 Chief Product Officer 7 1 Chief Strategy Officer Chris
Slide 65: Values drive culture. Culture drives our performance
Values drive culture. Culture drives our performance For personal use only Talent – Attract, Retain & Grow, Perform ✓ People first ✓ Customer centric ✓ Innovation Core Values 65
Slide 66: We continue to achieve sustainable performance
We continue to achieve sustainable performance Our drive to sustainable performance is underpinned by improvements across the key areas of Diversity & Inclusion, Talent, Corporate Governance & Cyber Security and Responsible Gaming. For personal use only Diversity & Inclusion Talent Corporate Governa
Slide 67: Conclusion
For personal use only Section 8 Conclusion Trevor Croker Chief Executive Officer & Managing Director
Slide 68: Conclusion
Conclusion For personal use only A strong position and specific focus on long-term sustainable growth 6 Focus on disciplined 5 investment in organic and inorganic growth Continue to execute 4 on recurring revenue strategy to maintain 3 financial strength to A digital strategy that enable and enhance
Slide 69: Q&A
For personal use only Q&A Section 9
Slide 70: Product demonstrations
For personal use only Section 10 Product demonstrations
Slide 71: Glossary of terms
Glossary of terms A$ Australian dollar For personal use only DIFOTQ Deliver In Full On Time with Quality Average bookings per Daily Active User (‘ABPDAU’) is computed as ABPDAU our total bookings in a given period, divided by the number of days in that period, divided by the DAU during the period A
Slide 72: Glossary of terms (cont'd)
Glossary of terms (cont'd) A genre in social gaming that involves matching three of the same Casino management systems. This offering allows a casino operator Match-3 For personal use only token in a row Systems to manage player loyalty as well as slot machine performance across its gaming floor A m