Slide 1: Half Year Results Presentation
Half Year Results Presentation For the half year ended 31 December 2020
Slide 2: Agenda
AGENDA Development Timeline 2 For personal use only Results overview and highlights 3 Group structure 4 1 - Lottery Retailing 5 2 - Software-as-a-Service 7 3 - Managed Services 8 Financials 10 Balance Sheet and Cash Flow 14 Technology and Innovation 16 Key Management 17 Board of Directors 18 Summary
Slide 3: Expanding the Business: Building Growth and Resilience
EXPANDING THE BUSINESS BUILDING GROWTH AND RESILIENCE For personal use only “MAKING LOTTERIES EASIER” 2021 HY Results to Dec 2020. | 2
Slide 4: Result Overview and Highlights
RESULT OVERVIEW AND HIGHLIGHTS For personal use only KEY FINANCIALS ▪ Group Revenue up 9% to $40.9m ($32.6m pcp) despite only 15 large jackpots (23 pcp) – Number of large Jackpots down 35% to 15 (23 pcp) – Aggregate Division 1 Jackpots down 52% to $510m ($1,070m pcp) – Group TTV up 26% to $233m as S
Slide 5: Group Structure - Business Segments
GROUP STRUCTURE - 3 BUSINESS SEGMENTS For personal use only LOTTERY RETAILING SaaS MANAGED SERVICES Sale of Lottery tickets through internet and Providing a Software-as-a-Service lottery Providing lottery management to mobile devices. platform to operators globally. operators. (prize procurement, ga
Slide 6: Lottery Retailing: Certainty to 2030
1 - LOTTERY RETAILING For personal use only CERTAINTY TO 2030 • Extending 15 year relationship • Binding Term Sheet signed 28 June 2020 • Long Term Reseller Agreements signed 25 Aug 2020 • Certainty provides ability to continue growing sales in Australia over the long term • 32.1% of tickets sold on
Slide 7: Lottery Retailing: Strong Underlying Business
1 - LOTTERY RETAILING STRONG UNDERLYING BUSINESS For personal use only • Moving Average Total (MAT) - TTV • Consistent growth in TTV for small Jackpots under $15m (Light Blue) • TTV in large Jackpots dependent on the frequency of those large Jackpots (Dark Blue) • 17.1% 5-year CAGR to 31 December 20
Slide 8: SaaS Business Model
2 - Software-as-a-Service (SaaS) – “Powered by Jumbo” SaaS BUSINESS MODEL For personal use only • Providing a lottery software platform to Australian and International lottery operators in the Government and Charity sectors • TAM: A$25 Billion1 LOTTERYWEST • First Government Partner launched – site
Slide 9: Managed Services: The Challenge Facing Charities Due to COVID-19
3 - MANAGED SERVICES For personal use only THE CHALLENGE FACING CHARITIES DUE TO COVID-19 THE JUMBO SOLUTION – “MAKING LOTTERIES EASIER” Provide a full Lottery Managed Service – Targeting Charities without a lottery – Provides a more sustainable and regular 49 source of funds for Charities 45 1 1 So
Slide 10: Managed Services: Total Addressable Market
3 - MANAGED SERVICES • Expanding the scope of potential partners For personal use only • Large number of smaller partners • Large TAM • Higher fee (~20% TTV – Gatherwell) TAM – Total Addressable Market • Australia $10.5 billion • Larger TAM than SaaS business as a lot more charities need managed ser
Slide 11: Financials: Consolidated Underlying EBITDA
FINANCIALS For personal use only CONSOLIDATED UNDERLYING EBITDA ($’000) • Revenue up $3,385k • Lottery Retailing up $996k or 2.7% notwithstanding lower large jackpots • SaaS up $1,093k or 200.1% as the busines scales • Managed Services up $1,296k or 654.5% with Gatherwell contributing 6 months • Cos
Slide 12: Financials: Lottery Retailing
FINANCIALS For personal use only LOTTERY RETAILING • OzLotteries.com – Australian Powerball, OzLotto, Charity Games Lottery Retailing ($’000) H1FY2021 H1FY2020 TTV $185,684 $183,800 REVENUE $37,807 $36,811 GROSS PROFIT $20,056 $34,020 EBITDA $15,377 n/a EBITDA/Revenue 40.7% 49 n/a 45 • 7.5% licence
Slide 13: Financials: SaaS
FINANCIALS SaaS For personal use only • PoweredByJumbo (PBJ) and Other software (lightningpayroll.com) • Margins range from ~3% to ~9.5% of ticket sales (TTV) for PBJ • Provides software to the Lottery Retailing business Segment (ozlotteries.com) at 7.5% of TTV • Provides software to Lotterywest (oz
Slide 14: Financials: Managed Services
FINANCIALS For personal use only MANAGED SERVICES • Providing full lottery management in addition to software – Jumbo Fundraising and External Lottery Manager. Includes prize procurement, game design, campaign marketing, and customer relationship and draw management. • Gatherwell in UK – 6 months tr
Slide 15: Balance Sheet
BALANCE SHEET For personal use only BALANCE SHEET GROUP ($’000) 31 December 2020 30 June 2020 Cash $61,999 $72,259 Other current assets $3,498 $3,749 Non-current assets $45,823 $33,520 Total Assets $111,320 $109,528 Current liabilities $24,378 $23,574 Non-current liabilities $5,083 $7,035 49 Total 4
Slide 16: Cash Flow
CASH FLOW For personal use only 49 45 • $15,000k cash payment for TAH extension fee • $3,364k increased website development costs • $10,616k FY2020 final dividend payment “MAKING LOTTERIES EASIER” 2021 HY Results to Dec 2020. | 15
Slide 17: Technology and Innovation
TECHNOLOGY AND INNOVATION For personal use only PROVIDING BENEFITS TO ALL 3 BUSINESS SEGMENTS AI (Artificial Intelligence) improved the likelihood of a customer adding a suggested product to their cart UX (User Experience) streamlining resulted in 8% faster checkout times with 63% of users completin
Slide 18: Key Management
KEY MANAGEMENT For personal use only Brad Board David Todd Chief Operating Officer Chief Financial Officer Xavier Bergade Richard Bateson Chief Technology Officer Chief Commercial Officer Nikki Searby Lauren Hook Legal Counsel and Risk, Compliance and Board Secretariat Internal Audit Manager Abby Pe
Slide 19: Board
BOARD For personal use only Mike Veverka Executive Director and CEO Susan Forrester AM Chair and Non-executive Director Giovanni Rizzo 49 Non-executive Director and 45 Committee Chair, Audit and Risk Management Committee Sharon Christensen Non-executive Director and Committee Chair, People and Cultu
Slide 20: Summary and Outlook
SUMMARY AND OUTLOOK GROWTH IN ALL DIVISIONS For personal use only • LOTTERY RETAILING • 17% 5-year CAGR to 31 December 2020 • Promising start to the second half • Covid-19 tailwind • Improvements to technology • SaaS (Software as a Service) • New partners in Australia, UK • Growth in existing partne
Slide 21: Disclaimer
DISCLAIMER For personal use only This presentation contains summary information about the current All dollar values are in Australian dollars (A$) unless otherwise activities of Jumbo Interactive Limited (Jumbo). It should be read in stated. Neither Jumbo nor any other person warrants or conjunction
Slide 22: Questions?
For personal use only Questions? “MAKING LOTTERIES EASIER” 2021 HY Results to Dec 2020. | 21
Slide 23: Half Year Results Presentation
Half Year Results Presentation ges For the half year ended 31 December 2020
Slide 24: For personal use only
For personal use only Hello all. I am here at Jumbo’s Brisbane head office with David Todd, our CFO, to present our half year results. I assume you’ve all had a chance to look at the presentation, so David and I plan to spend a short while highlighting some key issues, and then move to Q & A.
Slide 25: For personal use only
For personal use only On this page I present a timeline of recent milestones we have achieved at Jumbo. It will help you understand why we have now moved to presenting our results along three segment lines, which are: - Lotteries Retailing - Software-as-a-Service (SaaS)/PBJ; and - Managed Services I
Slide 26: For personal use only
For personal use only But before I expand on these developments in later slides, here are our Group results presented in the usual manner. In Lotteries Retailing, the random jackpot cycle was not kind to the Australian lottery market with only 15 large jackpots compared with 23 in the previous corre
Slide 27: For personal use only
For personal use only This is a new slide I have inserted to help explain our evolving business. You will notice firstly that our activities are underpinned by our world class and proprietary lottery technology stack, developed and enhanced over the 25 years we have been in business. Secondly, we ar
Slide 28: For personal use only
For personal use only On this slide I take a closer look at Lottery Retailing, which is a business we have been in now for 20 years, since we sold our first RSL lottery ticket in 2000. And while the lotteries sequence went against us in the first half, there are significant growth prospects for the
Slide 29: For personal use only
For personal use only This is another new chart I wanted to show, because it demonstrates the continual growth of Jumbo’s TTV from low jackpots (under $15 million) over the past 6 years. The light blue bottom section is the Moving Average Total (MAT) TTV for small jackpots (under $15 million) and th
Slide 30: For personal use only
For personal use only Moving on to discuss the SaaS business on slide 7, where a number of key milestones were reached in the first half. Our first government partner - LotteryWest - was successfully launched and the site is live at oz.lotterywest.com, and our team continues to work with the Lottery
Slide 31: For personal use only
For personal use only The third segment of our business, Managed Services, supports charities which do not yet have their own lottery. These charities have typically relied on traditional and relatively expensive fundraising activities, as well as donations and government grants, which are now under
Slide 32: For personal use only
For personal use only In this last slide before I hand over to David to run through the financials, I have aimed to demonstrate the scale of the market for our Managed Services segment, which we estimate to be in the region of A$42billion. In addition, a higher fee (~20% of ticket sales) is appropri
Slide 33: For personal use only
For personal use only Thanks Mike and hello everyone. As Mike mentioned, we have re-aligned the organisation structure to support our growth strategy, which has resulted in a change to how we present our financial results. So I will look at the Group results first and then each of the new operating
Slide 34: For personal use only
and decreases in operating expenses: $749k in marketing expenses, which reflects lower customer acquisition costs in line with the lower large jackpot activity; and $281k decrease in travel and accommodation owing to our more flexible working model since COVID 19, including from travel restricti
Slide 35: For personal use only
For personal use only Turning now to our important Lottery Retailing segment. TTV is up $1,884k or 1% on the pcp, notwithstanding lower large jackpot activity (15 v 23) and $560m or 52% less in aggregate value ($510m v $1,070m). And although not reflected in this slide, I also note that the TTV from
Slide 36: For personal use only
EBITDA from this segment, in line with that trend as it re-emerges. However, I also again draw attention to the structure of the new service fee payable under the Tabcorp Agreement, which is a headwind to the EBITDA margin for this segment as the fee steps up to FY2024, and constant beyond then to 2
Slide 37: For personal use only
For personal use only Now turning to the SaaS operating segment, which is the first time we have split this out separately, even though we trace its origins back at least to our association with the Mater Foundation, which became a customer over two years ago, in November 2018. In the latter part of
Slide 38: For personal use only
For personal use only Now turning to the Managed Services segment, which again is the first time we have split this out, which we are now able to do since our acquisition of the Gatherwell business in the UK, in November 2019. Overall, the Gatherwell business is running in line with our acquisition
Slide 39: For personal use only
For personal use only Now turning to one of the enduring strengths of the Group, our Balance Sheet. The main change has been in cash and non-current assets, largely with the cash payment of the $15,000k extension fee under the Tabcorp Agreement, which is capitalised and amortised over the term of th
Slide 40: For personal use only
For personal use only Finally, turning to our cash and cash flow, you can see a snapshot of the key moving parts in this waterfall slide, which are: Organic net profit contribution of $13,161k D&A of $4,057k; Website development investment of $3,364k; The $15,000k payment to Tabcorp connecte
Slide 41: For personal use only
For personal use only Thanks David. Technology and innovation have always been key to Jumbo's competitive advantage, and they underpin everything we do. For example, we continue to push the technology envelope as we invest heavily in Artificial Intelligence and focus on improving the user experience
Slide 42: For personal use only
For personal use only Our key management are predominately in our head office is Brisbane while Richard is resident in North America.
Slide 43: For personal use only
For personal use only During the first half, Susan Forrester was appointed as our new Chair, and we farewell Bill Lyne at the end of March and thank him for over 10 years of service to Jumbo.
Slide 44: For personal use only
For personal use only Which brings me to the Summary and Outlook. Summary We have reshaped our business into three profitable segments which each have significant growth runways, as they leverage our lottery management excellence and our world class and proprietary technology stack. Our powerful Lot
Slide 45: For personal use only
On that note, David and I are happy to take questions. For personal use only
Slide 46: Disclaimer
DISCLAIMER This presentation contains summary information about the current activities of Jumbo Interactive Limited (Jumbo). It should be read in conjunction with Jumbo's other periodic and continuous disclosure announcements lodged with the Australian Securities Exchange (ASX), including the Half Y
Slide 47: Questions?
JUMBO Questions? “MAKING LOTTERIES EASIER” 2021 HY Results to Dec 2020. | 21