Tabcorp Holdings Limited · ASX:TAH
Tabcorp — H1 FY2022 Earnings Presentation
37 slides from Tabcorp's earnings presentation, Feb 17, 2022
Slide 1: Tabcorp Half Year Results Presentation (ASX announcement)
For personal use only 17 February 2022 Australian Securities Exchange Companies Announcements Platform 20 Bridge Street Sydney NSW 2000 TABCORP HALF YEAR RESULTS PRESENTATION Attached is the presentation regarding Tabcorp Holdings Limited’s (Tabcorp) results for the half year ended 31 December 2021
Slide 2: 2021-22 Half Year Results Presentation
For personal use only 2021-22 HALF YEAR RESULTS PRESENTATION FOR THE SIX MONTHS ENDED 31 DECEMBER 2021 17 FEBRUARY 2022 ABN 66 063 780 709
Slide 3: Table of Contents
For personal use only TA B L E O F CONTENTS 03 - 08 Group Overview 10 - 19 Business Results 21 - 22 Capital 24 - 25 Conclusion 27 - 34 Appendices
Slide 4: Executive Summary
EXECUTIVE SUMMARY Record lotteries result; significant COVID-19 impacts on the other businesses For personal use only GROUP REVENUE GROUP EBITDA1 GEARING 1H22 DIVIDEND $2,934M $529M 2.5X 6.5 CPS DOWN 13.3% ON PCP +2.2% ON PCP -5.5% ON PCP GROSS DEBT/EBITDA 77% PAYOUT RATIO LOTTERIES & KENO WAGERING
Slide 5: Group Results
1 H 2 2 G R O U P R E S U LT S For personal use only Change $M 1H22 1H21 $ % EBITDA NPAT Revenues 2,934 2,870 64 2.2% Variable contribution 942 951 (9) (0.9%) -5.5% -9.7% Operating expenses (413) (391) (22) 5.6% BEFORE SIGNIFICANT BEFORE SIGNIFICANT ITEMS items) (before significant ITEMS EBITDA befo
Slide 6: Group EBITDA Down 5.5%
GROUP EBITDA DOWN 5.5% Record Lotteries & Keno result (despite cycling the strong COVID-19 tailwind from 1H21) For personal use only Wagering & Media heavily impacted by retail closures in largest market (NSW)1 Gaming Services returned to full fee model on 1 December 2021 2 2 3 Notes: 1. NSW effecti
Slide 7: COVID Revenue Impacts
C O V I D - 1 9 R E V E N U E I M PA C T S Limited overall impact of Victorian closures on period-on-period performance For personal use only However, significant impact from NSW closures on Wagering & Media, Gaming Services and Keno LOTTERIES & KENO WAGERING & MEDIA GAMING SERVICES • Lotteries’ ret
Slide 8: Capital Metrics
C A P I TA L M E T R I C S Strong and flexible financial position leading into the demerger For personal use only Gearing at lower end of target range despite COVID-19 impacted earnings GEARING DEBT PROFILE CREDIT RATING 2.5X AVG MATURITY1: 6.6 YEARS BBB- /STABLE GROSS DEBT / AVG INTEREST EBITDA RAT
Slide 9: Optimisation Programs
O P T I M I S AT I O N P R O G R A M ‘ 3 S ’ Ongoing savings expected to help offset ongoing incremental cash costs post demerger For personal use only 1H22 FY22 $16M $20-25M ACTUAL EBIT SAVINGS1 TARGET EBIT SAVINGS VARIABLE OPERATING DEPRECIATION & Key initiatives include: CONTRIBUTION EXPENSES AMO
Slide 10: Table of Contents
For personal use only TA B L E O F CONTENTS 03 - 08 Group Overview 10 - 19 Business Results 21 - 22 Capital 24 - 25 Conclusion 27 - 34 Appendices
Slide 11: Group & Business Results
G R O U P & B U S I N E S S R E S U LT S 1 For personal use only Lotteries & Keno Wagering & Media Gaming Services Group $M 1H22 1H21 Change 1H22 1H21 Change 1H22 1H21 Change 1H22 1H21 Change Revenues 1,784 1,609 10.9% 1,073 1,189 (9.8%) 78 73 6.8% 2,934 2,870 2.2% Variable contribution 475 427 11.2
Slide 12: Lotteries & Keno Result Highlights
$M 1H22 1H21 Change Revenues 1,784 1,609 10.9% LOTTERIES & KENO Variable contribution 475 427 11.2% R E S U LT H I G H L I G H T S Operating expenses (117) (116) 0.9% For personal use only EBITDA 358 311 15.1% Strong revenue growth (+11%) underpinned by game D&A (53) (53) - development, active portf
Slide 13: Lotteries & Keno Key Performance Indicators
LOTTERIES & KENO K E Y P E R F O R M A N C E I N D I C AT O R S For personal use only POWERBALL AND OZ LOTTO MAJOR JACKPOTS CUMULATIVE JACKPOT VALUE OFFERED1 1H22 outcomes broadly in line with model (expected) 634 outcomes Cumulative jackpots up on 2H21 due to more very large jackpots, especially Po
Slide 14: Lotteries & Keno: Oz Lotto Game Change
LOTTERIES & KENO OZ LOTTO GAME CHANGE For personal use only Planned game change expected to improve the customer value proposition and product experience, and drive a material uplift in Oz Lotto sales The opportunity o Oz Lotto is one of Australia’s favourite lottery games and enjoys awareness of ov
Slide 15: Lotteries & Keno Key Growth Strategies
LOTTERIES & KENO K E Y G R O W T H S T R AT E G I E S For personal use only Growth to be underpinned by a customer-led focus on product innovation, deepened engagement across all channels and digital expansion Strategy to be further refined with The Lottery Corporation Board INCREASE DIGITAL PURSUE
Slide 16: Wagering & Media Result Highlights
$M 1H22 1H21 Change Revenues 1,073 1,189 (9.8%) WA G E R I N G & M E D I A Variable contribution 394 458 (14.0%) R E S U LT H I G H L I G H T S Operating expenses (246) (231) 6.5% For personal use only EBITDA 148 227 (34.8%) Results heavily impacted by retail closures in largest market (NSW); D&A (1
Slide 17: Wagering & Media Key Performance Indicators
WA G E R I N G & M E D I A K E Y P E R F O R M A N C E I N D I C AT O R S For personal use only QUARTERLY ACTIVE USERS (‘000) DIGITAL MARKET SHARE1,2 Growth supported by improving digital experience, 634 but also impacted by Improved share in 2Q22 highlights that TAB digital performance is retail cl
Slide 18: Wagering & Media Strategy Post Demerger
WA G E R I N G & M E D I A Foundations in place and refreshing the strategy for a new era post demerger For personal use only Executed to date: • Strong data and personalisation capability, backed by market-leading Adobe technology • TAB brand (‘long may we play’ ) re-established into a strong, well
Slide 19: Gaming Services Result Highlights
$M 1H22 1H21 Change Revenues 78 73 6.8% GAMING SERVICES Variable contribution 73 66 10.6% R E S U LT H I G H L I G H T S Operating expenses (52) (44) 18.2% For personal use only EBITDA 21 22 (4.5%) Revenue continued to be heavily impacted by COVID-19 given D&A (38) (40) (5.0%) significant fee relief
Slide 20: Gaming Services Key Strategies
GAMING SERVICES K E Y S T R AT E G I E S For personal use only Continue to execute the current plan to simplify the operating and business model, and streamline the operating cost base Increasing focus on new markets for integrity services and products SIMPLIFY AND STREAMLINE THE BUSINESS INVEST IN
Slide 21: Table of Contents
For personal use only TA B L E O F CONTENTS 03 - 08 Group Overview 10 - 19 Business Results 21 - 22 Capital 24 - 25 Conclusion 27 - 34 Appendices
Slide 22: Cash Flow and Debt
CASH FLOW AND DEBT Strong balance sheet and operating cash flow conversion For personal use only Net debt reduction enabled by strong operating cash flows CASH FLOW ($M) KEY DEBT RATIOS4 GEARING Payments for PP&E, intangibles and other Gross debt (economic)5 / EBITDA (x) financial assets 2.5 2.4 Pri
Slide 23: Debt Structure and Capital Expenditure
D E B T S T R U C T U R E A N D C A P I TA L E X P E N D I T U R E Long-dated USPP debt intended to be assumed by Lotteries & Keno For personal use only Over $900m of unused bank facilities at period end Capex reflects disciplined BAU spend in a COVID-19 impacted environment DEBT STRUCTURE1 ($M) CAP
Slide 24: Table of Contents
For personal use only TA B L E O F CONTENTS 03 - 08 Group Overview 10 - 19 Business Results 21 - 22 Capital 24 - 25 Conclusion 27 - 34 Appendices
Slide 25: Demerger Update
D E M E R G E R U P D AT E The proposed demerger1 remains on track for completion in June 2022 For personal use only • Key workstreams o Scheme of arrangement process o Continued stakeholder and regulatory engagement to secure necessary approvals o Organisational design and key appointments o Techno
Slide 26: Conclusion
CONCLUSION • Lotteries & Keno: Record profit result (despite cycling the strong COVID-19 tailwind from 1H21) For personal use only • Wagering & Media: Heavily impacted by retail closures; improved performance following retail re-openings • Gaming Services: Following extended period of fee relief for
Slide 27: Table of Contents
For personal use only TA B L E O F CONTENTS 03 - 08 Group Overview 10 - 19 Business Results 21 - 22 Capital 24 - 25 Conclusion 27 - 34 Appendices
Slide 28: Group Operating Expenses
1 . G R O U P O P E R AT I N G E X P E N S E S For personal use only REPORTED +5.6% UNDERLYING +4.2% 1 Notes: 1. Comprises Lotteries & Keno $1m, Wagering & Media $6m, Gaming Services $2m, less costs to implement (program costs) of $1m 27
Slide 29: Group Results
2 A . G R O U P R E S U LT S For personal use only $M 1H22 1H21 Change 2H21 Revenues 2,934 2,870 2.2% 2,816 Variable contribution 942 951 (0.9%) 963 Operating expenses (413) (391) 5.6% (416) EBITDA before significant items 529 560 (5.5%) 547 D&A (196) (188) 4.3% (195) EBIT before significant items 3
Slide 30: Lotteries & Keno Results
2 B . L O T T E R I E S & K E N O R E S U LT S For personal use only $M 1H22 1H21 Change 2H21 Lotteries Revenues 1,665 1,477 12.7% 1,474 Keno Revenues 119 132 (9.8%) 123 Revenues 1,784 1,609 10.9% 1,597 Lotteries Variable contribution 416 354 17.5% 365 Keno Variable contribution 59 73 (19.2%) 66 Var
Slide 31: Wagering & Media Results
2 C . WA G E R I N G & M E D I A R E S U LT S For personal use only $M 1H22 1H21 Change 2H21 Revenues 1,073 1,189 (9.8%) 1,109 Variable contribution 394 458 (14.0%) 426 Operating expenses (246) (231) 6.5% (239) EBITDA 148 227 (34.8%) 187 D&A (105) (95) 10.5% (103) EBIT 43 132 (67.4%) 84 VC / Revenue
Slide 32: Gaming Services Results
2 D . G A M I N G S E R V I C E S R E S U LT S For personal use only $M 1H22 1H21 Change 2H21 MAX Venue Services 47 33 42.4% 66 MAX Regulatory Services 31 40 (22.5%) 44 Revenues 78 73 6.8% 110 Variable contribution 73 66 10.6% 106 Operating expenses (52) (44) 18.2% (57) EBITDA 21 22 (4.5%) 49 D&A (3
Slide 33: Additional KPIs
3. ADDITIONAL KPIS WAGERING & MEDIA For personal use only LOTTERIES & KENO: REVENUE BY PRODUCT 1H22 1H21 Change Turnover by distribution ($m)1 Powerball 4% Jackpot Retail 1,675 2,595 (35.5%) 4% games 6% Oz Lotto Digital 5,071 4,956 2.3% 6% 34% Mon // Wed Mon Wed Lotto Lotto & & Call Centre 179 211 (
Slide 34: Balance Sheet
4. BALANCE SHEET For personal use only $M Dec-21 Jun-21 Change Total current assets 1,160 898 29.2% Licences 1,988 2,041 (2.6%) Other intangible assets 8,043 8,056 (0.2%) Property, plant and equipment 341 376 (9.3%) Other non current assets 556 498 11.6% Total assets 12,088 11,869 1.8% Total liabili
Slide 35: Glossary
5. GLOSSARY TERM DEFINITION TERM DEFINITION For personal use only 1H/2H Six months ended 31 December/30 June of the relevant financial year Group The Tabcorp group of companies Three months ended 30 September/31 December/31 March/30 June of 1Q/2Q/3Q/4Q IFRS International Financial Reporting Standard
Slide 36: Disclaimer
DISCLAIMER This Presentation contains summary information about the current activities of Tabcorp Holdings Limited (Tabcorp) and its subsidiaries (Tabcorp Group). It should be read in conjunction with the Tabcorp Group’s other periodic and continuous disclosure announcements lodged with the Australi
Slide 37: For personal use only
For personal use only D 7 Tabcorp TAB RACING NMA <