Slide 1: FY23 Results Presentation
FY23 Results Presentation For the full-year ended 30 June 2023 25 August 2023
Slide 2: Disclaimer
Disclaimer This presentation contains summary information about the activities of Jumbo This presentation may contain certain forward-looking statements including Interactive Limited ABN 66 009 189 128 (Jumbo) and its controlled statements regarding Jumbo’s current anticipated belief, expectation or
Slide 3: Business update
Business update Mike Veverka CEO and Founder 2
Slide 4: FY23 report card
FY23 report card Updated FY23 Outlook2 Status FY23 Outlook1 (Feb 2023) (May 2023) (FY23) Commentary Lottery • Marketing costs expected to be in the range of 1.5% to • Marketing spend influenced by 1.3% - 1.5% 1.3% unfavourable run of jackpots Retailing* 2.0% of Lottery Retailing TTV (FY22: 1.7%) • U
Slide 5: FY23 key highlights
FY23 key highlights Lottery SaaS Managed Capability Balance Retailing Services sheet • Record $160m • +18%1 underlying • Completed • Disciplined cost • Strong balance Powerball in October TTV growth driven acquisition of management sheet and flexibility 2022; Exceptional by Mater StarVale • Integrat
Slide 6: FY23 Group result overview
FY23 Group result overview TTV ($m) Revenue ($m) Underlying EBITDA1 ($m) Revenue margin Underlying EBITDA margin +29% 15.8% 13.9% 52.9% 49.6% +14% +7% 851.9 659.9 118.7 104.3 55.1 58.9 FY224 FY233 FY224 FY233 FY224 FY233 Underlying NPATA1,2 ($m) Free cash flow5 ($m) Dividend declared (cps) Underlyin
Slide 7: Active players provide the foundation for future growth
Active players provide the foundation for future growth Active players who made a purchase in the 12-month period (FY15 – FY23) 2.3x Includes contribution from Lottery Retailing only Includes contribution from SaaS and Managed Services 333k 376k 354k 438k 762k 1.0m 1.8m 2.9m 4.0m Canada United Kingd
Slide 8: Lottery Retailing
Lottery Retailing – Australian sales of digital lottery tickets up to 38.4% (1H23: 38.4%) – 42 large jackpots (Oz Lotto/Powerball ≥ $15m) (1H23: 23 jackpots) – Average value per large jackpot down 9.3% to $36.9m (1H23: $41.7m) % of AUS lottery sales through the online channel1 Aggregate Division 1 J
Slide 9: Lottery Retailing
Lottery Retailing – 300,194 new players for the 12 months ended 30 June 2023, down 24% vs pcp (FY22: 395,916) – $17.86 cost per lead for the 12 months ended 30 June 2023, down 2.6% vs pcp (FY22: $18.33) – 914,215 active players for the 12-month period ended 30 June 2023, down 0.5% vs pcp (FY22: 918,
Slide 10: Software-as-a-Service (SaaS)
Software-as-a-Service (SaaS) “Our relationship with Jumbo has proved to be a great way to meet the needs of our customers, by combining the respective strengths “The adoption of the PBJ platform along with Jumbo’s digital lottery expertise and collaborative approach have helped transform our lottery
Slide 11: Current Managed Services propositions
Current Managed Services propositions Our current propositions enable access to the full spectrum of lottery management and raffle services across grassroots, mid- market and enterprise not-for-profits. Revenue contribution Overview Primary objective ($m) Margin % Focused on digital lotteries for sm
Slide 12: Our blueprint for acquisitions
Our blueprint for acquisitions Our M&A strategy seeks to enhance the existing portfolio by acquiring new businesses that enable access to new markets, complementary capabilities and propositions, and to build operating scale. Strategic rationale 1 2 3 Access to new Develop complementary Consolidate
Slide 13: Financial results
Financial results David Todd CFO Jumbo・FY22 Results 12
Slide 14: Underlying EBITDA
Underlying EBITDA Underlying EBITDA FY23 vs FY22 ($’000) EBITDA margin % 52.9% 51.0% 38.9% 41.1% 49.6% 58,915 58,146 2,844 (769) 1,052 239 54,559 54,045 3,137 (538) 860 0.2% (2,525) 52,934 (199) +17.4% -2.5% FY22 EBITDA One-offs1 Intellitron FY22 EBITDA Revenue Cost of sales Operating Other FY23 EBI
Slide 15: Lottery Retailing
Lottery Retailing TTV ($’000) Revenue ($’000) EBITDA ($’000) Revenue margin % EBITDA margin % -2.5% 19.8% 20.3% 33.1% 33.4% +0.2% +1.4% 460,637 449,085 91,098 91,287 30,112 30,534 FY22 FY23 FY22 FY23 FY22 FY23 Jumbo・FY23 Results 14
Slide 16: Software-as-a-Service (SaaS)
Software-as-a-Service (SaaS) Underlying TTV ($’000) Underlying Revenue ($’000) Underlying EBITDA ($’000) External Revenue margin % EBITDA margin % +17.6% 4.5% 4.4% 67.7% 65.3% External +15.3% 41,941 42,393 -2.5% External 7,551 8,710 196,035 166,698 28,406 27,691 Internal2 34,390 33,683 FY221 FY23 FY
Slide 17: Managed Services
Managed Services United Kingdom Canada Australia Group Gatherwell StarVale1 Stride2 Jumbo Fundraising3 Managed Services FY23 FY22 FY23 FY22 FY23 FY22 FY23 FY22 FY23 FY22 AUD1 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 TTV 20,591 22,044 83,187 - 102,278 9,068 757 710 206,813 31,822 R
Slide 18: Disciplined cost management
Disciplined cost management Operating expenses FY23 vs FY22 ($’000) Underlying opex 769 42,936 (ex M&A and Lottery Retailing marketing costs) 42,167 FY22 FY23 % Underlying opex (ex M&A) 34,700 34,062 (1.8) 4,073 LR marketing costs 7,850 5,957 (24.1) 26,850 28,105 4.7 36,728 4,032 34,700 219 (1,577)
Slide 19: Balance sheet strength
Balance sheet strength – Strong balance sheet as at 30 June 2023 with a cash balance of $41.2m1 (FY22: $60.0m1) – FY23 final ordinary dividend of 20cps reflects a full 30 Jun 2023 30 Jun 2022 year payout ratio of 85.7% of statutory NPAT, slightly $’000 $’000 above the top end of the targeted 65% to
Slide 20: Balance sheet strength underpinned by cash generation
Balance sheet strength underpinned by cash generation – Free cash flow of $46.2m1 (FY22: $38.2m1) – Cash conversion ratio of 146.4%2 (FY22: 122.4%2) Cashflow reconciliation ($’000) Pro forma adjustments 2,683 8,612 31,569 (6,558) 47,000 75,646 68,930 (27,400) 7,031 53,190 (28,560) 41,226 (3,117) (11
Slide 21: Conclusion & FY24 Outlook
Conclusion & FY24 Outlook Mike Veverka CEO and Founder 20
Slide 22: Successfully growing earnings and cash generation
Successfully growing earnings and cash generation Revenue ($m) EBITDA ($m) Operating cashflow ($m) +24% FY18 – FY23 CAGR +25% FY18– FY23 CAGR +26% FY18 – FY23 CAGR 44.5 42.5 42.5 35.5 36.5 119 55 104 26.5 23.5 58 54 44 83 39 47 71 43 35 65 40 28 40 17 32 19 14 11 FY17 FY18 FY19 FY20 FY21 FY22 FY23 F
Slide 23: Powerball price change (in line with expectations but still early days)
Powerball price change (in line with expectations but still early days) Powerball RPPU1 for jackpots ≤ $20m ($) RPPU Draw size Powerball price change (May 23) + 20 cents price increase (+14.8%) Average RPPU (pre price change) + 29% increase in RPPU2 -0.3% decrease in tickets sold2 Average RPPU (post
Slide 24: FY24 Outlook – Primed for margin optimisation
FY24 Outlook – Primed for margin optimisation • Marketing costs expected to be in the range of 1.5% to 2.0% of TTV (FY23: 1.3%), dependent on jackpots Lottery • Final step up in TLC service fee1 to 4.65% of subscription price of tickets (FY23: 3.5%) Retailing* • Improved revenue margin2 following po
Slide 25: Harnessing Artificial Intelligence
Harnessing Artificial Intelligence As a software company, Jumbo has always been an early adopter of new technology and has been conducting experiments with AI for several years Already in use In development Marketing Development Customer Support Operations Deploying Machine Employing GitHub Copilot
Slide 26: Questions
Questions
Slide 27: Supplementary Information
Supplementary Information 26
Slide 28: We are a digital lottery specialist
We exist to create positive social impact through making We are a digital lotteries easier by being the lottery specialist number one choice in digital lottery and services Providing our best in class lottery software platform and lottery management Founded in 1995, expertise to the charity and list
Slide 29: A clear strategy to deliver value for all our key stakeholders
A clear strategy to deliver value for all our key stakeholders Mission To create positive social impact through making lotteries easier Vision To be the number one choice in digital lottery and services Maximise Replicate Diversify Strategic Potential of our existing businesses Best practice operati
Slide 30: Our three operating segments
Our three operating segments Group result overview Reseller Software only 1 Software + Services 1 Software-as-a- Lottery Retailing Managed Services Service (SaaS) Jumbo is an authorised reseller of We license our ‘Powered by Jumbo’ (PBJ) We provide our lottery platform and Australian digital lottery
Slide 31: Jumbo investment highlights
Jumbo investment highlights Profitable and global growth underpinned by yield and positive sector dynamics Pure play digital lottery specialist with best-in-class lottery software Capital light business model, with and digital marketing expertise strong balance sheet Growth underpinned by structural
Slide 32: Large, growing and underpenetrated serviceable available market
Large, growing and underpenetrated serviceable available market 1. Reflects total Government lottery market in Australia and the US plus total individual charitable giving in Australia, UK and Canada. 2. Reflects the current portion of the market that can be acquired based on our existing business m
Slide 33: Lotteries have proven to be highly resilient to recessions
Lotteries have proven to be highly resilient to recessions Australian lotteries sales over time ($bn)1,2 ‘91 ‘01 ‘08 ‘20 Recession Recession GFC COVID-19 7.9 7.8 7.2 6.5 6.6 +3.7% 5.2 5.3 5.2 4.8 4.9 5.0 4.7 4.8 4.4 4.5 4.3 4.0 4.1 3.7 3.8 3.9 3.4 3.5 3.2 3.2 2.9 3.0 2.9 3.1 2.7 2.7 2.8 2.6 2.4 FY90
Slide 34: Significant growth potential from increasing online penetration
Significant growth potential from increasing online penetration 20221 total internet revenues as a % of total lottery sales 70% 69% 62% 57% 55% 53% 52% 50% 46% 45% 45% 43% 38% 28% 24% 23% 23% 12% 12% 10% 10% 5% 3% Poland Iceland Estonia Slovenia Sweden Italy Denmark Hungary Finland United Japan New
Slide 35: Integration goals
Integration goals Evolution, not revolution Strong focus on Confidence we’re Uncover and Continuous two- New teams align compliance, risk & empowering with execute growth way value with Jumbo Core player welfare the best opportunities exchange Values standards technology British Columbia Refined ope
Slide 36: Group FY23 consolidated results
Group FY23 consolidated results FY23 FY22 Variance 1H23 2H23 1H22 2H22 $’000 $’000 % $’000 $’000 $’000 $’000 TTV 851,933 659,924 29.1% 417,045 431,032 327,934 331,990 Revenue 118,712 104,251 13.9% 62,389 54,608 52,841 51,410 Cost of sales (17,953) (14,473) 24.0% (9,853) (8,187) (7,252) (7,221) Gross
Slide 37: Reconciliation to FY23 reported earnings
Reconciliation to FY23 reported earnings FY23 FY22 Variance $’000 $’000 % EBITDA 58,146 54,045 7.6% EBIT 46,851 45,303 3.4% NPAT 31,569 31,176 1.3% Reported 1 NPATA 33,743 31,481 7.2% EPS (cps) 50.2 49.9 0.6% 1 EPSA (cps) 53.6 50.3 6.5% - Profit on disposal of subsidiary2 - (525) 3 - Acquisition cos
Slide 38: FY23 Group result overview – like for like performance & impact of acquisitions
FY23 Group result overview – like for like performance & impact of acquisitions Group Group Group 1-month Group Variance Reported Stride2 StarVale3 (excl. Stride Reported Reported Stride2 (excl. Stride) (excluding FY23 FY23 FY23 & StarVale) Variance FY224 FY22 FY224 Stride & $’000 $’000 $’000 FY23 %
Slide 39: FY23 result – segmental information
FY23 result – segmental information Lottery Managed Intersegment SaaS Total Retailing Services eliminations $’000 $’000 $’000 $’000 $’000 TTV 449,085 196,035 206,813 - 851,933 − Group 449,085 - - - 449,085 − Third-party - 196,035 206,813 - 402,848 Total segment sales revenue from external customers
Slide 40: Lottery Retailing
Lottery Retailing FY23 FY22 Variance % TTV ($’000) 449,085 460,637 -2.5% TTV by product (%) Revenue ($’000) 91,287 91,098 0.2% Revenue margin (%) 20.3% 19.8% 0.6% Cost of sales1 ($’000) (49,791) (48,002) 3.7% Operating expenses ($’000) (10,962) (12,984) -15.6% - Marketing (5,957) (7,850) -24.1% - Ot
Slide 41: Managed Services (constant currency basis)
Managed Services (constant currency basis) Gatherwell (GBP) StarVale1 (GBP) Stride2 (CAD) FY23 FY22 Variance FY23 FY22 Variance FY23 FY22 Variance Constant currency £’000 £’000 % £’000 £’000 % $’000 $’000 % TTV 11,733 12,175 -3.6% 46,677 - n/a 94,446 8,331 n/a Revenue 2,083 2,288 -9.0% 3,895 - n/a 7
Slide 42: Financial framework and P&L drivers
Financial framework and P&L drivers 1. Pursuant to the Reseller Agreements with TLC dated 25 August 2020, a ‘stepped-up’ service fee is payable in the subscription cost of the tickets purchased at 1.5% FY2021, 2.5% FY2022, 3.5% FY2023, and 4.65% FY2024 and thereafter. If the subscriptions exceed $40