Aristocrat Leisure Limited · ASX:ALL
Aristocrat Leisure — H1 2004 Earnings Presentation
27 slides from Aristocrat Leisure's earnings presentation, Aug 24, 2004
Slide 1: Aristocrat Leisure Limited Results for the Six Months Ended 30 June 2004
Aristocrat Leisure Limited Results for the Six Months Ended 30 June 2004 CEO & Managing Director Chief Financial Officer Paul Oneile Simon Kelly
Slide 2: Agenda
Agenda Introduction Review of Financials Review of Operations ¢ Australia ¢ North America « Japan ¢ Other Markets Outlook Priorities
Slide 3: Summary of Results
Summary of Results * Revenue $525 million * Profit After Tax of $63.3 million * Strong International growth * Revenue declines in Australia and NZ markets ¢ Strong financial position * On-market share buyback $100 million ¢ Interim dividend — 4 cents per share
Slide 4: Review of Financials
Slide 5: Profit & Loss
Profit & Loss Hi 2004 H1 2003* Variance $m $m % Total Revenue 525.6 404.8 29.8% Gross Profit 239.3 165.7 44.4% GP% 45.5% 40.9% 4.6 Points Expenses 138.2 148.5 -6.9% EBIT 105.9 20.0 430% Profit Before Tax 102.1 11.8 765% Income Tax Expense 38.8 7.5 417% Profit After Tax 63.3 4.3 1372% * Pre one-off a
Slide 6: H1 2003/H1 2004 EBIT
H1 2003/H1 2004 EBIT EBIT $120m- $100m4 $80m4 $60m4 * Pre one-off adjustments
Slide 7: Management Cash Flow
Management Cash Flow Net Debt - Opening Balance EBIT pre one-off adjustments Depreciation and amortisation pre one-off adjustments EBITDA pre one-off adjustments Net loss on sale of non-current assets Net foreign exchange differences Interest paid Net tax paid Cash impact of one-off adjustments Chan
Slide 8: Working Capital
Working Capital Receivables -% of Last 12 Months Revenue 40% Jun01 Dec01 Jun02 Dec02 Jun03 Dec03 Jun04
Slide 9: Working Capital
Working Capital Inventories - % of Last 12 Months Revenue 30% Jun01 Dec01 Jun02 Dec02 Jun03 Dec03 Jun 04
Slide 10: Working Capital
Working Capital Net Working Capital - % of Last 12 Months Revenue 40% 35% - 30% - 25% + 20% - 15% + 10% - 5% + 0% - Jun01 Dec01 Jun02 Dec02 Jun03 Dec03 Jun 04
Slide 11: Balance Sheet Summary
Balance Sheet Summary Jun-04 Dec-03 $m $m Working Capital 108.6 110.8 Other Current/Non-Current Assets 57.1 61.6 Property, Plant and Equipment 122.3 109.5 Intangibles 68.5 70.6 Other Current/Non-Current Liabilities (108.2) (99.5) Net Tax Balances 45.2 35.9 Funds Employed 293.5 288.9 Net Debt (10.9)
Slide 12: Capital Management
Capital Management Dividend - Interim dividend of 4 cents per share, unfranked - DRP does not operate for interim dividend - Expect return to some level of franking in 2005 On-market Share Buyback - $100 million Strong Ongoing Financial Capacity/Flexibility - Substantial Cash on Hand - Strong Cash F
Slide 13: Key Financials and Ratios
Key Financials and Ratios H1 2004 H1 2003 |FY 2003 $m $m $m EBITDA 123.9 39.5 143.4 EBIT 105.9 20.0 103.5 Working Capital/Revenue (%) 7) 9.6% 23.8% 11.0% Operating Cash Flow 90.2 33.0 204.4 Operating Cash Flow/Revenue (%) 17.2% 8.2% 20.0% Net Debt 10.9 257.2 70.2 Net Debt/Equity (%) 3.9% 69.9% | 32.
Slide 14: Segment Review
Slide 15: Australia
Australia Segment Revenue Segment Contribution Profit Segment Contribution Profit pre one-off adjustments H1 2004 $m 129.1 39.2 39.2 H1 2003 $m 143.7 36.9 37.7 * Revenue down 10.2% * Market share maintained * Success of new products — Zorro, Golden Goals, Players’ Choice ¢ Recurring revenue rollout
Slide 16: Initiatives and Outlook - Australia
Initiatives and Outlook - Australia INITIATIVES * Premium products — Zorro, Players’ Choice, Pick a Box ¢ Recurring revenue ¢ Business and cost efficiencies OUTLOOK Mature market, caps, smoking restrictions, tax increases Implications of IPART Report Initiatives to enhance market share Cost reductio
Slide 17: North America
North America Segment Revenue Segment Contribution Loss Segment Contribution Profit pre one-off adjustments H1 2004 $m 149.9 35.5 35.5 H1 2003 $m 120.3 (12.0) 6.8 * Revenue up 24.6% ¢ Recurring revenue increased by over 300% * 58.5% improvement in game and platform sales * Expansion into Canada * De
Slide 18: Initiatives and Outlook - North America
Initiatives and Outlook — North America INITIATIVES * Participation revenue focus ¢ Product range/approvals « New stepper * Systems business - PersonalBanker™ * Content licencing * Key account focus OUTLOOK ¢ Continuing growth in participation revenue *« Growth in MKVI platform sales
Slide 19: Japan
e e e e e Japan Segment Revenue Segment Contribution Profit H1 2004 $m 173.4 37.5 H1 2003 $m 95.7 16.6 Revenue increased by 81.2% 43,000 games sold Daruma-Neko game success Renewal of Manufacturing Entrustment Agreement with Sammy Regulation 5
Slide 20: Initiatives and Outlook - Japan
Initiatives and Outlook - Japan INITIATIVES * Kyojin-no-hoshi 2 to be released 26 August * Focus on game design ¢ Alternative revenue sources being explored OUTLOOK ¢ Regulation 5 impact still uncertain * Six Regulation 4 products in pipeline for launch * Casino trial
Slide 21: Other Markets
Other Markets * New Zealand Revenue down 46.4% due to new legislation and regulations * Europe Russian growth * South Africa Increase in revenue but slow market growth * Asia Pacific Strong growth — particularly sales into Philippines * South America Revenue up to $12.2 million — includes legacy con
Slide 22: Initiatives and Outlook - Other Markets
Initiatives and Outlook — Other Markets INITIATIVES Focus on emerging opportunities: * Macau * Singapore, Thailand « UK Game sales to emerging VLT jurisdictions Tailored content Business development resourcing in key regions OUTLOOK ¢ Well positioned to exploit new markets
Slide 23: Full Year Outlook
Full Year Outlook * Full year 2004 Profit after tax of $115 - $135 million * Conditional on a number of operational variables including: = Volatility of the Japanese market and the uptake of new products to be released into that market = Product approvals in a number of jurisdictions » Maintenance o
Slide 24: Current Business Objectives
Current Business Objectives * Enhance market leadership position in Australia and NZ * Capitalise on product performance/momentum in North America * Build on success in Japan * Financial control, risk management and corporate governance * Business and cost efficiencies * Continue to focus on new mar
Slide 25: Summary
Summary Revenue up 33.9% to $525 million Profit after tax of $63.3 million Strong operating cash flow — 17.2% of revenue Healthy balance sheet — virtually debt free Interim dividend of 4 cents per share On-market buyback of up to $100 million Full year profit after tax outlook of $115 - $135 million
Slide 26: Thank You. Questions?
Aristocrat Leisure Limited Thank You. Questions?
Slide 27: Appendix - Segment Summary
Appendix - Segment Summary H1 2004 H1 2003* $m $m SEGMENT CONTRIBUTION PROFIT Australia 39.2 37.7 North America 35.5 6.8 South America 8.6 (3.9) Japan 37.5 16.6 New Zealand 5.4 9.5 Other 11.2 2.2 Total Trading Segment Profit 137.4 68.9 Group R&D expense (28.7) (29.6) Amortisation - intangibles (2.1)