Aristocrat Leisure Limited · ASX:ALL
Aristocrat Leisure — FY2007 Earnings Presentation
27 slides from Aristocrat Leisure's earnings presentation, Feb 26, 2008
Slide 1: Results for the year ended 31 December 2007
For personal use only Aristocrat Leisure Limited Results for the year ended 31 December 2007 Chief Executive Officer Chief Financial Officer & Managing Director & Finance Director Paul Oneile Simon Kelly
Slide 2: Disclaimer
Disclaimer For personal use only This document and any oral presentation accompanying it has been prepared in good faith. However, no express or implied warranty is given as to the accuracy or completeness of the information in this document or the accompanying presentation. All statutory representa
Slide 3: Paul Oneile, Chief Executive Officer and Managing Director
For personal use only Paul Oneile Chief Executive Officer and Managing Director
Slide 4: Summary of Results
Summary of Results For personal use only • Total Revenue $1,122 million – up 4.4% • Profit after Tax $247.2 million – up 3.4% • Underlying constant currency profit growth – up 11.1% • Investment in research and development – up 9.5% • Strong underlying operating cash of $222.2 million – up 8.5% • To
Slide 5: Simon Kelly, Chief Financial Officer and Finance Director
For personal use only Simon Kelly Chief Financial Officer and Finance Director
Slide 6: Profit and Loss
Profit and Loss Constant For personal use only Currency Reported Reported 2007 2007 2006 $Million $Million $Million Total Revenue 1,203.2 1,122.0 1,074.5 Gross Margin 57.4% 58.0% 59.8% SMG&A 248.7 238.7 221.1 EBIT before R&D 466.0 436.5 430.5 R&D 109.6 104.2 95.2 Profit before Tax 350.3 326.2 332.9
Slide 7: FY 2007 vs FY 2006 EBIT
FY 2007 vs FY 2006 EBIT For personal use only 430.0 $24.8 410.0 390.0 $35.0 $15.2 370.0 $14.1 EBIT$Million $11.5 $14.7 $5.1 350.0 $1.1 330.0 $24.1 310.0 290.0 $335.3 $332.3 270.0 250.0 D IT IT fs &A s r FX n ix e e le R& m EB EB pa of M th Sa G lu e/ O Ja ne SM 06 07 Vo ic of O Pr 20 20 st Co
Slide 8: Year Trend Analysis
5 Year Trend Analysis WEIGHTED AVERAGE GLOBAL PRICING REVENUE (1) (2) - CAGR 16.1% $Million GROWTH (1) (2) - CAGR 7.7% For personal use only 1,100 15% 1,031 1,000 10.2% 10% 8.6% 963 900 864 800 5% 5.1% 7.0% 700 742 0% 600 -0.8% 567 500 -5% 2003 2004 2005 2006 2007 2003 2004 2005 2006 2007 GROSS MARG
Slide 9: Segment Revenue Split
Segment Revenue Split For personal use only 2007 Segment Revenue by region 2006 Segment Revenue by region Japan Japan "Unique" "Unique" Emerging 5% Australia/ 8% Australia/ Markets NZ "Growth" NZ Emerging "Mature" 15% "Mature" Markets 27% 28% "Growth" 22% $1,122.0 $1,074.5 million million North Nort
Slide 10: Business Segmentation
Business Segmentation For personal use only $Million Revenue Segment Profit 600 (4.8)% 500 400 0.7% 300 65.0% (9.9)% 200 99.4% (2.0)% 62.9% 100 na - Australia/NZ North America Emerging Markets Japan *Percentage represents change vs prior corresponding period on a constant currency basis
Slide 11: Cash Flow
Cash Flow For personal use only 2007 2006 $Million $Million Net (debt)/cash - opening balance (40.8) 183.7 Operating cash flow 222.2 204.8 Investing cash flow (55.3) (189.6) 166.9 15.2 Financing activities cash flow 4.0 6.3 Capital management initiatives (253.0) (245.7) Movement in net (debt)/cash (
Slide 12: Operating Cash Flow
Operating Cash Flow For personal use only 450 35% 400 30% 350 Percentage of LTM Revenue 25% 300 250 20% $Million 200 15% 150 10% 100 5% 50 - 0% Dec 03 Dec 04 Dec 05 Dec 06 Dec 07 Operating Cash Flow LTM Operating Cash Flow % LTM Revenue
Slide 13: Working Capital
Working Capital For personal use only Net Working Capital - % of Last 12 Months Revenue 14% 12% 10% target % of LTM Revenue 10% 8% 6% 4% 2% 0% Dec 03 Dec 04 Dec 05 Dec 06 Dec 07
Slide 14: Capital Management
Capital Management For personal use only 2007 Initiatives: • Completed second on-market share buyback • Acquired 3.4 million shares taking total buyback to $200 million • 1.2 million shares acquired via trust structure for employee share based contingent obligations (95% of obligations covered) Next
Slide 15: Capital Management
Capital Management For personal use only Current Status: • Inaugural supplementary unfranked dividend of 10 cps paid January 2008 • 2007 fully franked dividends of 39 cps declared – 74% payout ratio • Franking outlook remains positive • Dividend Reinvestment Plan to operate with shares acquired on m
Slide 16: Key Financials and Ratios
Key Financials and Ratios For personal use only 2007 2006 $Million $Million EBIT before R&D 436.5 430.5 EBIT 332.3 335.3 Working Capital/Revenue (%) 12.1% 7.7% Operating Cash Flow 222.2 204.8 Operating Cash Flow/Revenue (%) 19.8% 19.1% Net Debt 111.8 40.8 Debt/EBITDA* 0.5X 0.4X EBITDA*/Interest Expe
Slide 17: Segment Review
For personal use only Segment Review
Slide 18: Australia/New Zealand
Australia/New Zealand For personal use only Constant Currency^ 2007 2006 Variance $Million $Million % Revenue 304.8 302.8 +0.7% Profit 118.8 121.2 (1.9)% Margin 39.0% 40.0% (1.0)pts ^ Adjusted for translational exchange rates using rates applying in 2006 • Australian unit sales down 11.6%, average p
Slide 19: Initiatives and Outlook: Australia/New Zealand
Initiatives and Outlook Australia/New Zealand For personal use only STRATEGIES • Focus on innovative premium products • Development of recurring revenue model • Ongoing business efficiency and cost reduction OUTLOOK • Positive feedback on Viridian™ cabinet and Gen 7™ • Continuing market leadership •
Slide 20: North America
North America For personal use only Constant Currency^ 2007 2006 Variance $Million $Million % Revenue 538.2 565.2 (4.8)% Profit 227.4 252.4 (9.9)% Margin 42.3% 44.7% (2.4)pts ^ Adjusted for translational exchange rates using rates applying in 2006 • Margin decline reflects mix, recurring revenue mar
Slide 21: Initiatives and Outlook: North America
Initiatives and Outlook For personal use only North America STRATEGIES • Strong premium product performance • Out performing stepper proposition • New jurisdictions and expansion of existing markets • Growing recurring revenue base • Systems competitive positioning • Investment in new technologies -
Slide 22: Japan
Japan For personal use only Constant Currency^ 2007 2006 Variance $Million $Million % Revenue 100.5 50.4 +99.4% Profit 5.9 (5.6) na Margin 5.9% na na ^ Adjusted for translational exchange rates using rates applying in 2006 • Revenue increased 99.4%, restored profitability • Variable margins maintain
Slide 23: Initiatives and Outlook: Japan
Initiatives and Outlook Japan For personal use only STRATEGIES • Proven strong game titles in 2008 • Strong pipeline of further games in development • 3 games approved, 7 currently in progress • Independent supply chain capability in use • Casino style gaming potential OUTLOOK • Short term results c
Slide 24: Other Markets
Other Markets For personal use only Constant Currency^ 2007 2006 Variance $Million $Million % Revenue 298.5 191.4 +56.0% Profit 94.3 57.9 +62.9% Margin 31.6% 30.3% +1.3pts ^ Adjusted for translational exchange rates using rates applying in 2006 • Strong underlying growth in emerging markets: • Asia-
Slide 25: Initiatives and Outlook: Other Markets
Initiatives and Outlook For personal use only Other Markets STRATEGIES • 40% share of new markets • Infrastructure/resources in place in key locations • Tailored business model • Lower risk OUTLOOK • Strong growth – solid pipeline of opportunities • Dependent on timing of new market openings
Slide 26: Growth Opportunities
Growth Opportunities 2008 2009 2010 2011 For personal use only Platform - Launch of Viridian and Gen 7 - Replacement cycle Australia - Software/licencing model - Replacement cycle - Stepper - video migration - 5 reel stepper - New markets, Class II, III, VLT Americas - Recurring revenue - Conversion
Slide 27: Outlook
Outlook For personal use only 2008 – outlook improving • Regulatory and market developments over the last 4-5 months have provided positive momentum for 2008 • Business fundamentals of improved pricing, cost leverage and strong cash flows remain intact • Key factors influencing overall result: • siz