Tabcorp Holdings Limited · ASX:TAH
Tabcorp — H1 FY2020 Earnings Presentation
31 slides from Tabcorp's earnings presentation, Feb 19, 2020
Slide 1: Tabcorp Half Year Results Presentation (ASX announcement)
For personal use only 19 February 2020 Australian Securities Exchange Companies Announcements Platform 20 Bridge Street Sydney NSW 2000 TABCORP HALF YEAR RESULTS PRESENTATION Attached is the presentation regarding Tabcorp’s half year results ended 31 December 2019 to be presented by David Attenborou
Slide 2: 2019/20 First Half Results Presentation
For personal use only TABCORP HOLDINGS LIMITED 2019/20 First Half Results Presentation for the 6 months ended 31 December 2019 19 FEBRUARY 2020 ABN 66 063 780 709
Slide 3: Table of Contents
TABLE OF CONTENTS For personal use only 03 – 06 Group Overview 08 – 15 Business Results 17 Capital 19 Conclusion 21 – 28 Appendices
Slide 4: Group result driven by excellent revenue contribution
GROUP RESULT DRIVEN BY EXCELLENT REVENUE CONTRIBUTION2 LOTTERIES PERFORMANCE 5% For personal use only o Group revenue up 4.4% and EBITDA1 up 2.1% vs pcp 41% o Interim dividend maintained at 11.0 cps, fully franked 54% o Integration in the final phase • EBITDA benefits expected to be $100m in FY20 (p
Slide 5: First Half Results
FIRST HALF RESULTS For personal use only REPORTED FIGURES THROUGHOUT THE PRESENTATION ARE RESTATED FOR AASB 16 CHANGES1 VS PCP REVENUE $2,913.9M UP 4.4% 1H20 EBITDA DIVIDEND (CONTINUING OPERATIONS BEFORE SIGNIFICANT ITEMS) $596.5M UP 2.1% PER SHARE (FULLY FRANKED) NPAT (CONTINUING OPERATIONS BEFORE
Slide 6: Group Results
GROUP RESULTS For personal use only $m 1H20 1H19 Change Revenues 2,913.9 2,790.2 4.4% Variable contribution 1,029.7 1,017.0 1.2% Operating expenses (433.2) (432.9) 0.1% EBITDA before significant items 596.5 584.1 2.1% D&A (192.3) (174.8) 10.0% EBIT before significant items 404.2 409.3 (1.2%) Interes
Slide 7: Integration: Synergies & Business Improvements
INTEGRATION: SYNERGIES & BUSINESS IMPROVEMENTS For personal use only INTEGRATION IN FINAL PHASE; REMAIN ON TRACK TO DELIVER FY21 TARGET OF $130M-$145M EBITDA o Significant progress on delivery of integration program EBITDA ($M) • Full insourcing of data centre and retail network management and assoc
Slide 8: Table of Contents
TABLE OF CONTENTS For personal use only 03 – 06 Group Overview 08 – 15 Business Results 17 Capital 19 Conclusion 21 – 28 Appendices
Slide 9: Group & Business Results
GROUP & BUSINESS RESULTS 1 For personal use only Lotteries & Keno Wagering & Media Gaming Services Group 1H20 $m Change $m Change $m Change $m Change Revenues 1,584.3 12.4% 1,179.5 (3.7%) 149.0 (4.4%) 2,913.9 4.4% Variable contribution 413.0 13.0% 472.7 (5.9%) 142.0 (4.0%) 1,029.7 1.2% Operating exp
Slide 10: Lotteries & Keno
LOTTERIES & KENO For personal use only STEP-CHANGE IN PERFORMANCE CONTINUES o Performance being driven by strategic Powerball game change, acceleration of digital and marketing investments, and deeper alignment with retail partners $m 1H20 1H19 Change o Active management of game portfolio to engage
Slide 11: Jackpot Performance
JACKPOT PERFORMANCE (POWERBALL & OZ LOTTO) 26 LOTTERIES & KENO KPIs 23 8 23 18 6 8 2 14 For personal use only 2 300,000 ADDITIONAL ACTIVE REGISTERED PLAYERS AND GROWTH 16 17 18 15 12 ACROSS ALL CHANNELS Lotteries 1H18 2H18 1H19 2H19 1H20 Number of jackpots Number of jackpots o Strong jackpot sequenc
Slide 12: Wagering & Media
WAGERING & MEDIA For personal use only RESULT REFLECTS A SOFT MARKET AND A BUSINESS IN TRANSITION o Industry turnover1 down reflecting • Soft consumer discretionary spending $m 1H20 1H19 Change • Increased yields/pricing Revenues 1,179.5 1,224.6 (3.7%) • Impact of Soccer World Cup in pcp Variable co
Slide 13: Wagering & Media KPIs: Account Market Share
ACCOUNT MARKET SHARE2 38.0% 36.9% WAGERING & MEDIA KPIs 1 34.6% 8.0% 8.8% 8.0% 34.3% 7.7% 32.2% 6.7% 23.7% 23.7% 23.7% 23.7% 23.1% For personal use only 5.7% 5.4% 5.0% 4.6% 4.4% TAB TRANSFORMING AND COMPETITIVENESS IMPROVING; 26.6% 29.2% 28.9% 26.6% 25.5% UBET UPLIFT TO COME POST INTEGRATION 18.0% 1
Slide 14: Wagering & Media: Significant Progress on TAB Transformation
WAGERING & MEDIA: SIGNIFICANT PROGRESS MADE ON TAB TRANSFORMATION (AND UBET CUSTOMERS WILL SOON ALSO BENEFIT) For personal use only BRAND AND MARKETING CUSTOMER EXPERIENCE MEDIA A reinvigorated brand is now in market with Product and customer experience The media modernisation has progressed strong
Slide 15: Wagering & Media: FY21 Single Transformed TAB Offer
WAGERING & MEDIA: FY21 WILL BE THE FIRST TIME WE HAVE A SINGLE AND TRANSFORMED TAB OFFER ACROSS THE MARKET For personal use only FY19 FY20 FY21+ Maintain active customer Modernise, Unique, personalised base & drive value digitalise & optimise customer experiences BIGGER THAN o A seamless omni-channe
Slide 16: Gaming Services
GAMING SERVICES For personal use only BUSINESS UNDER REVIEW TO IMPROVE PERFORMANCE AND REALISE FULL POTENTIAL o Business performance impacted by: • Revenue decline due to contract expiries, contract extensions at lower daily rates and reduced project work $m 1H20 1H19 Change MAX Venue Services 102.0
Slide 17: Table of Contents
TABLE OF CONTENTS For personal use only 03 – 06 Group Overview 08 – 15 Business Results 17 Capital 19 Conclusion 21 – 28 Appendices
Slide 18: Capital Management
CAPITAL MANAGEMENT For personal use only Effective capital expenditure CAPITAL EXPENDITURE ($M) 152 o Business as usual (BAU) capex 30 • 1H20: $122m, up 32.6% vs pcp 109 • 2H20: c.$160m (e.g. retail roll-out of the Lott brand, Wagering 17 38 data/personalisation program) 44 • Subsequent return to mo
Slide 19: Table of Contents
TABLE OF CONTENTS For personal use only 03 – 06 Group Overview 08 – 15 Business Results 17 Capital 19 Conclusion 21 – 28 Appendices
Slide 20: Conclusion: The Trusted Gambling Entertainment Company
CONCLUSION: THE TRUSTED GAMBLING ENTERTAINMENT COMPANY For personal use only POSITIONING FOR IMPROVED PERFORMANCE IN FY21 Group Business Units LOTTERIES & KENO o Diversified business mix delivered growth in o Lotteries & Keno group revenue and EBITDA in a soft environment for consumer discretionary
Slide 21: Table of Contents
TABLE OF CONTENTS For personal use only 03 – 06 Group Overview 08 – 15 Business Results 17 Capital 19 Conclusion 21 – 28 Appendices
Slide 22: 1. Significant Items (After Tax)
1. SIGNIFICANT ITEMS (AFTER TAX) For personal use only 1H20 $m Implementation costs 11.0 Racing Queensland arrangements 8.2 Com bination w ith Tatts Group 19.2 ACTTAB POCT compensation (4.5) Total 14.7 Implementation costs o Implementation costs are non-recurring costs and comprise restructure charg
Slide 23: 2. Balance Sheet
2. BALANCE SHEET For personal use only $m Dec-19 Jun-19 Change Total current assets 787.1 766.4 2.7% Licences 2,200.7 2,254.4 (2.4%) Other intangible assets 9,238.7 9,184.1 0.6% Property, plant and equipment 487.0 554.6 (12.2%) Other non current assets 798.8 863.6 (7.5%) Total assets 13,512.3 13,623
Slide 24: 3. Cash Flow
3. CASH FLOW For personal use only $m 1H20 1H19 Change Net operating cash flows 433.3 564.7 (23.3%) Net interest paid (98.3) (114.8) (14.4%) Income tax paid (98.4) (95.7) 2.8% Payments for PP&E and intangibles (177.8) (110.8) 60.5% Sub-total 58.8 243.4 (75.8%) Sun Bets operating cashflows and costs
Slide 25: 4. Group Operating Expenses
4. GROUP OPERATING EXPENSES For personal use only Reported opex ex-synergies +4.1% +11.2% -0.2% +7.6%1 2 24 Notes: 1. Gaming Services growth rate reflects adjustment for $2.0m provision release in 1H19. Reported opex ex-synergies is 10.4% 2. 1H20 incremental cost synergies vs pcp of $17.3m (Lotterie
Slide 26: 5. Impact of AASB Leases (By Half)
5. IMPACT OF AASB 16 LEASES 1 (BY HALF) For personal use only o AASB 16 Leases represents significant changes to how lessees account for operating leases. The adoption of AASB 16 will result in: • Higher assets and liabilities in the balance sheet; and • Charges to the income statement will be inclu
Slide 27: 6. Lotteries & Keno
6. LOTTERIES & KENO For personal use only $m 1H20 1H19 Change Lotteries Revenue 1,466.8 1,292.8 13.5% Keno Revenue 117.5 116.4 0.9% Revenues 1,584.3 1,409.2 12.4% Lotteries Variable contribution 347.3 300.0 15.8% Keno Variable contribution 65.7 65.5 0.3% Variable contribution 413.0 365.5 13.0% Opera
Slide 28: 7. Wagering & Media KPIs
7. WAGERING & MEDIA KPIs For personal use only 1H20 Com bined Change TAB Change ex UBET Change Turnover by distribution ($m ) 1 Retail 3,611.9 (9.0%) 2,740.4 (9.1%) 871.5 (8.8%) Digital 3,408.4 (4.9%) 2,884.8 (2.0%) 523.6 (18.1%) Call Centre 207.6 (12.7%) 159.8 (4.7%) 47.8 (31.8%) 2 Other 767.8 4.3%
Slide 29: 8. Glossary
8. GLOSSARY For personal use only Term Definition Term Definition Lotteries and The Group’s business that operates lotteries and Keno, which are 1H Six months ended 31 December of the relevant financial year Keno games of chance 2H Six months ended 30 June of the relevant financial year MAX The Grou
Slide 30: Disclaimer
DISCLAIMER For personal use only 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 lo
Slide 31: Tabcorp Racing
For personal use only Tabcorp RACING