Aristocrat Leisure Limited · ASX:ALL
Aristocrat Leisure — FY2005 Earnings Presentation
35 slides from Aristocrat Leisure's earnings presentation, Feb 21, 2006
Slide 1: Aristocrat Leisure Limited Results Presentation
Aristocrat Leisure Limited Welcomes you to our Results Presentation
Slide 2: Results for the Year Ended 31 December 2005
Aristocrat Leisure Limited Results for the Year Ended 31 December 2005 Chief Executive Officer & Managing Director Chief Financial Officer Paul Oneile Simon Kelly
Slide 3: Agenda
Oe Agenda Introduction Review of Financials Review of Operations Business Objectives Growth Framework Update Outlook
Slide 4: Summary of Results
Oe Summary of Results * Total Revenue $1,317 million — up 15.3% * Profit After Tax $244.3 million — up $102.1 million * Strong international growth — 75.1% of segment profit * Operating cash flow $393.2 million — up $143.2 million ¢ Final dividend — 20 cps fully franked vs prior 4 cps unfranked * On
Slide 5: Review of Financials
Slide 6: Actual vs Guidance PAT
es Actual vs Guidance PAT $m Guidance ($225m-$240m) Mid Point 232.5 South African sale delayed to 2006 (6.0) Employee benefit adjustment (5.1) US Hurricane (5.3) Russian market (1.4) Legal costs (4.2) Incremental Japanese contribution 25.0 Trading in other regions 8.8 Actual Reported Result 244.3
Slide 7: AIFRS
AIFRS 2005 2004 Variance $m $m % Profit After Tax pre AIFRS 248.1 174.7 42.0% Intangibles 3.3 4.2 Share Based Payments (7.7) (8.0) Foreign Exchange - (28.5) Other 0.6 (0.2) Profit After Tax post AIFRS 244.3 142.2 71.8%
Slide 8: Income Statement
ee Income Statement 2005 2004 Variance $m $m % Total Revenue 1,317.0 1,142.3 15.3% Gross Profit 679.9 554.4 22.6% GP% 51.6% 48.5% 3.1 Points Expenses 336.7 338.4 -0.5% EBIT 358.4 230.0 55.8% Profit Before Tax 363.9 225.5 61.4% Income Tax Expense 119.6 83.3 43.6% Effective Rate 32.9% 36.9% 4.0 Points
Slide 9: EBIT bridge
-$20.5m +$56.8m E mom: Lu é <j: © : © ; MN « OQ 2 > =F Te) ? © © Wl +$78.6m_ +$40.7m $230.0m EBIT A$m 440 420 400 380 360 340 320 300 280 260 240
Slide 10: Key Drivers of EBIT Improvement
Loe i alle ee Key Drivers of EBIT Improvement ¢ Global volume growth ¢ Improved pricing * Cost efficiencies ¢ Leverage of fixed cost structures ¢ Offset by infrastructure investment, higher legal and employee benefit provisioning
Slide 11: Segment Revenue Split
Segment Revenue” Split 2004 Segment Revenue by region $1134.9 million North America 32% 2005 Segment Revenue by region $1300.3 million North America 38% * Revenue excluding interest
Slide 12: Segment Contribution Profit Split
Segment Contribution Profit* Split 2004 Segment Contribution Profit by region 2005 Segment Contribution Profit by region $319.9 million $428.7 million North America 43% North America 32% * Excludes unallocated expenses, interest and tax
Slide 13: Management Cash Flow
I Management Cash Flow 2005 2004 $m $m Net cash/(debt) - opening balance 119.6 (70.2) EBIT 358.4 230.0 Depreciation and amortisation 39.7 35.9 EBITDA 398.1 265.9 Net (profit)/loss on sale of non-current assets (0.1) 0.7 Net foreign exchange differences 25 40.2 Net interest received/(paid) 6.6 (2.6)
Slide 14: Working Capital
Working Capital % of LTM Revenue Net Working Capital - % of Last 12 Months Revenue 40.0% 35.0% 30.0% 25.0% 20.0% 15.0% 10.0% 5.0% 0.0% Jun Dec Jun Dec Jun Dec Jun Dec Jun Dec 01 O11 O02 O02 038 O38 04 04 O05 05
Slide 15: Capital Management
Capital Management Objectives - Maintain conservative funding structure - Strategic and operational flexibility - Pro-active approach Strong Ongoing Financial Capacity/Flexibility - Substantial cash on hand, strong cash flows - New syndicated $300 million bank facilities established - Convertible bo
Slide 16: Capital Management
Capital Management 2005 Dividends - Total 30 cps fully franked vs 8 cps unfranked in prior year - Dividend Reinvestment Plan does not operate - Franking outlook remains positive Capital Return - $100 million - completed July 2005 On-market Share Buyback - $130 million of the total $200 million progr
Slide 17: Key Financials and Ratios
ee ee Key Financials and Ratios 2005 2004 $m $m EBITDA 398.1 265.9 EBIT 358.4 230.0 Working Capital/Revenue (%) 3.4% 9.4% Operating Cash Flow 393.2 250.0 Operating Cash Flow/Revenue (%) 29.9% 21.9% Net Cash 183.7 119.6 Debt/EBITDA 0.4X 0.6X EBITDA/Interest Expense 35.4X 22.3X Return on Equity 69.5%
Slide 18: Segment Review
Slide 19: Australia
Australia 2005 2004 Variance $m $m % Segment Revenue 271.1 283.8 (4.5)% Segment Contribution Profit 106.8 96.7 +10.4% Segment Margin 39.4% 34.1% +5.3 Pts * Operating environment remains difficult * Profit and margin improvement * Unit sales down 19.5%, conversions up 13.5% reflecting business strate
Slide 20: Initiatives and Outlook - Australia
ee Initiatives and Outlook - Australia KEY STRATEGIES * Premium product focus * Hardware to software strategy * Recurring revenue * Cashless technology * Ongoing business efficiency and cost reduction OUTLOOK * Stable revenue with improving margins * Well placed for any upturn in market
Slide 21: North America
ee North America 2005 2004 Variance $m $m % Segment Revenue 498.9 368.3 +35.5% Segment Contribution Profit 182.3 102.3 +78.2% Segment Margin 36.5% 27.8% +8.7 Pts * Standout performance * Margin improvement reflects improved pricing, revenue mix and leverage of fixed costs * Unit sales increased 43.1
Slide 22: Initiatives and Outlook - North America
Initiatives and Outlook — North America KEY STRATEGIES * Continue to capitalise on product performance and overall momentum * Participation revenue and outright sale focus * Low denomination strategy * Enhance product range — multi-site progressive, stepper, slant top, multi-terminal product, PokerT
Slide 23: Japan
Japan 2005 2004 Variance $m $m % Segment Revenue 373.7 336.8 +11.0% Segment Contribution Profit 88.0 75.9 +15.9% Segment Margin 23.5% 22.5% +1.0 Pts * Lower inventory provisioning offset by higher trade-ins impacted margin 98,000 games sold Success of Streetfighter 2™ and Kyojin-no-hoshi 3™ Opened O
Slide 24: Initiatives and Outlook - Japan
Initiatives and Outlook - Japan KEY STRATEGIES * Optimisation of Regulation 4 sales * Development and approval of Regulation 5 compliant games ¢ Licensing opportunities * Positioning for casino trial OUTLOOK * Short term dependent on sale of additional Kyojin-no-hoshi 3™ production run * Approval an
Slide 25: Other Markets
ee Other Markets 2005 2004 Variance $m $m % Segment Revenue 156.6 146.0 +7.3% Segment Contribution Profit 51.6 45.0 +14.7 % Segment Margin 33.0% 30.8% +2.2 Pts * Revenue growth in Asia-Pacific, New Zealand and South Africa * Strong market shares in new markets * Macau remains standout performer in A
Slide 26: Initiatives and Outlook - Other Markets
ee a —t—C(ié(‘C®;ONCOCOCOCONOCOwiC(C‘iC Initiatives and Outlook — Other Markets KEY STRATEGIES * Focus on emerging opportunities: - Asia — Macau, Malaysia, Singapore, South Korea, Thailand, Philippines, Cambodia - Europe — Russia, UK - South America — Argentina, Chile, Peru, Brazil, Mexico, Panama *
Slide 27: Business Objectives
Business Objectives ¢ Continue to improve returns in Australia and NZ * Grow North American business ¢ Successfully transition to Regulation 5 in Japan * Obtain significant market share in all emerging markets ¢ Enhance R&D resourcing * Maintain focus on business and cost efficiencies * Continue cul
Slide 28: Growth Framework - Update
ee Growth Framework - Update Global gaming market + Remains substantial . + Estimated 5-15% pa compound growth over next 5 years growth potential + Significant opportunities in 2007 and beyond Leverage core + Focus on video slots, content and systems competencies + Infrastructure and licenses to sup
Slide 29: Outlook
es Outlook Key Factors impacting Outlook 2006 - Continued share and profit growth Major influences on outcome: * Australian replacement cycle * North America — market subdued, but growing * Japanese Regulation 5 acceptance * Russian regulatory environment Future - Strong growth potential * Global ma
Slide 30: Summary
Summary * Revenue up 15.3% to $1.3 billion * Profit after tax of $244.3 million ¢ Strong operating cash flow — 29.9% of revenue * Cash exceeds debt by $183.7m ¢ Final dividend of 20 cents per share, fully franked * Ongoing capital management initiatives ¢ Shareholder value emphasis
Slide 31: Thank You, Questions?
ee Aristocrat Leisure Limited Thank You Questions?
Slide 32: Fe oe a
Fe oe a i i
Slide 33: Appendix - Revenue Split
ON Appendix - Revenue” Split 100% 90% 80% North America 70% 60% 50% 40% 30% 20% 10% 0% oe Dec Jun Dec Jun Dec Jun Dec Jun Dec Jun Dec 00 01 01 02 02 03 03 04 04 05 05 * Revenue excluding interest
Slide 34: Appendix - Receivables
Appendix - Receivables % of LTM Revenue 40.0% 35.0% 30.0% 25.0% 20.0% 15.0% 10.0% 5.0% 0.0% Receivables - % of Last 12 Months Revenue Jun Dec Jun Dec Jun Dec Jun Dec Jun Dec 01 O01 O02 O02 O03 O03 O04 04 05 05
Slide 35: Appendix - Inventories
Appendix - Inventories % of LTM Revenue 30.0% 25.0% 20.0% 15.0% 10.0% 5.0% 0.0% Inventories - % of Last 12 Months Revenue Jun Dec Jun Dec Jun Dec Jun Dec Jun Dec 01 01 02 02 O03 03 04 04 05 05