Slide 1: Tabcorp Full Year Results Presentation cover letter
Tabcorp Holdings Limited vic T: t ACN 083 780 708 a co r Pp § Bowen Crescent * Melbourne Australia 3004 GPO Box 1943R, Melbourne Australia 3004 Telephone 61 3 9868 2100 Facsimile 61 3 9868 2300 Website www.tabcorp.com.au 26 August 2004 To: Australian Stock Exchange Companies Announcements Platform 2
Slide 2: Annual Results August 2004
Annual Results 26 August 2004 _ &* Tabcorp the bigger better game
Slide 3: Agenda
>» Matthew Slatter « Tabcorp key features > David Elmslie « Tabcorp financial performance >» Matthew Slatter « Tab Limited key features > Matthew Slatter = Focus for 2005 and conclusion e& Tabcorp * s + * * * * * Annual Results
Slide 4: Key features
Key features * > > > > Vv Net profit after tax (before goodwill and non recurring items) $364.8 million Earnings per share (before goodwill and non recurring items) increased 19.2% Final dividend of 36 cents taking full year dividend to 71 cents per share fully franked EBITA growth across all divisi
Slide 5: Key features
Key features * * * Earnings per share’ Dividends per share? 90.0 5 80.0 - 87% 80.0 4 70.0 4 87% 85% 70.0 5 60.0 + 60.0 + 88% 50.0 | Payout 99% 50.0 4 91% 40.0 5 40.0 + 30.0 + 30.0 4 20.0 | 20.0 4 10.0 4 10.0 5 0.0 + 0.0 + T T T T T 1999 2002 1999-2000 2001. 2002, 2003S 2004 2000 =. 2001 2003 2004 No
Slide 6: Key features
Key features EBITA business mix — 1999 EBITA business mix (incl. Tab) — 2004' Wagering 20% Gaming 80% Media 5% Casinos 41% EBITA geographic mix — 1999 Victoria 100% EBITA geographic mix (incl. Tab) — 2004' QLD 21% Victoria 37% NSW 42% Notes: 1. 2004 EBITA based on pro forma figures which include a c
Slide 7: Summary divisional results
Summary divisional results Actual Pro forma Pro forma $m 12 months to | 12 months to 12monthsto Change 30 June 20041 | 30 June 20037 30 June 2004? Net operating revenue Casinos at theo 1,024.6 1,172.3 1,210.4 3.3% Impact of above/below theo 40.3 (3.2) 41.0 na Casinos 1,064.9 1,169.1 1,251.5 7.1% Gam
Slide 8: Casinos — Key features
Casinos — Key features * * * * > Net operating revenue $1,251.5m, up 7.1% on a pro forma basis >» At theoretical win rates, net operating revenue increased 3.3% on a pro forma basis > Table games revenue up 8.9% — 0.4% on a normalised basis >» Revenue from gaming machines up 5.8% on a pro forma basi
Slide 9: Casinos — Key features
Casinos — Key features * * * * Townsville financial performance Performance improvement Proforma Pro forma 12mthsto 12 mths to $m 30 Jun 031 30 Jun 041 Chg Operating revenue Table games 6.7 6.5 (3.2)% EGMs and other 45.2 18.9 24.3% Total gaming 21.9 25.4 15.9% Non gaming 16.4 17.9 11.3% Total Op. re
Slide 10: Gaming — Key features
Gaming — Key features * * * > Net operating revenue $866.9m, in line with prior year on a pro forma basis » Victorian gaming down 0.2% * Qld monitoring up 6.5% > Rollout of Hyperlink machines continued » 798 machines rolled out across 110 venues > Marketing initiatives » 40 Years of Rock # Wildcash
Slide 11: Venue upgrades
* Venue upgrades Venue upgrades > 46 venues refurbished during the year > $7.7m at Mulgrave Country Club including major building extensions and refurbishment of existing facilities Gaming — Key features * * DOLE Ze an a ae: & Tabcorp * s ' ‘ * * * Annual Results
Slide 12: Wagering and Network Games — Key features
Wagering and Network Games — Key features * * * * * * ¥ * > Net operating revenue increased 6.9% to $557.3 million on a pro forma basis > Racing revenue up 4.2% with increases in all codes > Rugby World Cup, Euro 2004 soccer tournament and AFL betting drove 31.0% increase in sportsbetting revenue >»
Slide 13: Wagering and Network Games — Key features
Wagering and bees a mey featites Sportsbet revenue Drivers of growth >» CAGR of 22.0% for the period sso 4 2000 to 2004 >» Product expanded throughout 12,000 + network > Expansion of Customer 101000 9 Information Terminals provides World Cup § more detailed product and 8.o0 -| World Cup Soccer , , o
Slide 14: Wagering and Network Games — Key features
Wagering and Network Games — Key features Breakdown of account sales Lower cost distribution 400% + > Self services share of — oe transactions 53.7% compared to 45.7% in the prior year > 77.4% increase in number of internet bets processed > Marketing campaign promoting self service options > $10 min
Slide 15: Integration of the Jupiters group
Integration of the Jupiters group * * % * al * > All business units integrated — systems integration ongoing > Implementation of integration strategies ahead of target > Annual synergies/efficiencies identified are $27.9m, $3.3m above estimate at the half year > The 2004 synergies/efficiencies are $
Slide 16: Integration of Tab Limited
Integration of Tab Limited * * * * x >» Management control taken 6 July >» Key executives appointed and organisational structures announced 25 August > Operational review currently underway > Current estimate of synergies consistent with Bidders Statement >» Work relating to divestment of Tabcorp’s
Slide 17: Financial Performance
Financial Performance & Tabcorp * s ' ‘ * * * Annual Results
Slide 18: Financial performance
Financial performance x * ¥ % Actual Actual Normalised 12 mths to | 12 mths to 12 mths to 30 Jun 03 30 Jun 048 Change | 30 Jun 044 Change Net operating revenue 1,906.1 2,462.8 29.2% 2,422.5 27.1% Other revenue? 13.4 26.6 98.8% 26.6 98.8% Taxes on gambling (589.9) (678.5) 15.0% (674.1) 14.3% Operator
Slide 19: Financial performance
Financial performance * * ex % Actual Actual Normalised 12 mths to | 12 mths to 12 mths to 30 Jun 03 30 Jun 04! Change 30 Jun 042 Change Net operating revenue ($m) 1,906.1 2,462.8 29.2% 2,422.5 27.1% Net profit after tax ($m) 7 good - Before non-recurring items 263.1 310.6 18.1% 287.3 9.2% ~ Basic 2
Slide 20: Non-recurring items
Non-recurring items $m W&NG Gaming Casinos Unallocated Total 12 months to 30 June 2004 Restructure/integration costs 1.1 1.1 1.0 - 3.2 Goodwill amort" — Star City rent - - 5.4 - 5.4 Surplus lease provision (1.6) Total pre-tax 7.0 Tax impacts - Tax effect of non-recurring items (0.5) - Star City prep
Slide 21: Casinos — Financial data
Casinos — Financial data * * * * Actual Pro forma Pro forma 12 months to [12 months to 12 months to $m 30 June 20041 [30 June 20032 30 June 20042 Change Revenue from ordinary activities 1,069.6 1,175.8 4,258.1 7.0% Taxes & operator commissions (200.5) (221.8) (231.5) 4.4% Other operating expenses® (
Slide 22: Casinos — Financial data
Casinos — Financial data * * * * Normalised’ Pro forma Pro forma 12 mths to 12 mths to 30 June 2003 30 June 2004 Change Revenue from ordinary activities 1,179.0 1,217.0 3.2% Taxes & operator commissions (222.1) (227.0) 2.2% Other operating expenses* (570.7) (568.3) (0.4)% Depreciation & amortisation
Slide 23: Casinos — Financial data
Casinos — Financial data * * * * Actual Pro forma Pro forma 12 months to [12 months to 12 months to $m 30 June 20041 [30 June 20032 30 June 20042 Change Net operating revenue Table games Rebate play at theo 21.2 37.2 30.5 (18.1)% Above theo 40.3 (3.2) 41.0 na Other 445.5 485.5 494.3 1.8% Total table
Slide 24: Casinos — Financial data
Casinos — Financial data * * ae *% Actual Pro forma Pro forma 12 months to | 12 months to 12 months to $m 30 June 20041 [30 June 20032 30 June 20042 Change Star City Table games PGR 106.6 105.5 106.6 1.1% MGF 239.7 234.1 239.7 2.4% EGMs & other gaming 204.9 201.8 204.9 1.6% Non-gaming 88.4 89.9 88.4
Slide 25: Gaming — Financial data
Gaming — Financial data Actual Pro forma Pro forma 12 months to [12 months to 12 months to $m 30 June 20041 [30 June 20032 30 June 20042 Change Revenue from ordinary activities 862.2 869.2 869.3 0.0% Taxes & operator commissions (578.8) (579.9) (578.8) (0.2)% Other operating expenses® (37.6) (43.7)
Slide 26: Gaming — Financial data
Gaming — Financial data Actual Pro forma Pro forma 12 months to [12 months to 12 months to $m 30 June 20041 [30 June 20032 30 June 20042 Change Net operating revenue Victorian network Hotels 558.7 566.1 558.7 (1.3)% Clubs 285.9 280.2 285.9 2.0% Total Victorian gaming 844.6 846.3 844.6 (0.2%) Qld mon
Slide 27: Wagering & Network Games — Financial data
Wagering & Network Games — Financial data Actual Pro forma Pro forma 12 months to [12 months to 12 months to $m 30 June 20041 [30 June 20032 30 June 20042 Change Revenue from ordinary activities 538.3 541.4 581.0 74% R.L, taxes & op. commissions (331.3) (324.6) (340.8) 5.0% Other operating expenses®
Slide 28: Wagering & Network Games — Financial data
Wagering & Network Games — Financial data Actual Pro forma Pro forma 12 months to [12 months to 12 months to $m 30 June 20041 [30 June 20032 30 June 20042 Change Net operating revenue Racing Thoroughbred 291.3 283.0 291.3 2.9% Harness 63.5 59.8 63.5 6.3% Greyhound 62.5 57.9 62.5 8.1% Total racing 41
Slide 29: Tabcorp Group — Financial position
Tabcorp Group — Financial position As at As at As at $m 30 June 2003_ 31 Dec 2003 30 June 2004 Current assets 158.4 303.0 361.0 Licences/management agreement 1,081.8 1,122.4 1,118.6 Goodwill 292.9 1,320.8 1,280.6 Property, plant & equipment 759.2 1,483.8 1,412.3 Other non current assets 107.2 203.6
Slide 30: Tab Limited
Tab Limited & Tabcorp * * ' ‘ * * * Annual Results
Slide 31: Tab Limited - Summary financial results
Tab Limited - Summary financial results 12 months to 12 months to $m 30 June 2003 30 June 2004 Change Net operating revenue’ Wagering 785.9 825.6 5.1% Media 100.1 101.9 1.8% Gaming 41.9 52.7 25.8% EBITA' Wagering 117.8 128.4 9.0% Media 38.7 40.9 5.7% Gaming (7.2) (6.5) 9.7% Net profit after tax Pre
Slide 32: Focus for 2005 and Conclusion
Focus for 2005 and Conclusion & Tabcorp * s ' ‘ * * * Annual Results
Slide 33: Focus for FY2005
Focus for FY2005 * * >» Continuing track record of consistent, solid earnings growth >» Continue to maximise synergies/efficiencies through the integration of Jupiters and Tab >» Developing growth and efficiency opportunities across media operations >» Cultural integration and investing in our peopl
Slide 34: Conclusion
Conclusion * * * >» Strong performance for the year, result above forecast and continued track record of solid earnings growth > All divisions contributed to earnings growth > Jupiters integration ahead of synergy targets and schedule and Tab commenced and in line with Bidders Statement — year ahead
Slide 35: tab sp@rtsbet rownsyrtag
tab sp@rtsbet 7 rownsyrtag &« Tabcorp the bigger better gare convention and exhibition centre om. fatytip TAB Annual Results
Slide 36: Appendices
Appendices & Tabcorp * * ' ‘ * * * Annual Results
Slide 37: Appendices
Appendices * * *& Tabcorp 1. Segmented earnings 2. Jupiters acquisition accounting — goodwill 3. Jupiters acquisition accounting — accounting changes Tab Limited Financial performance Reconciliation to profit guidance Wagering financial data Media financial data Gaming financial data Financial posit
Slide 38: Tabcorp — Segmented earnings
Tabcorp — Segmented earnings $m WE&NG Gaming Casinos Unallocated Total 12 mths to 30 June 2004 Operating revenue 519.9 859.8 1,064.9 18.2 2,462.8 Other revenue 18.4 2.4 47 1.4 26.6 Total revenue 538.3 862.2 1,069.6 19.4 2,489.5 EBITA' 94.0 220.0 332.1 (14.8) 631.3 Goodwill (8.3) (1.1) (44.6) (0.3) (
Slide 39: Jupiters acquisition accounting — Goodwill
Jupiters acquisition accounting —Goodwill Equity consideration (48.4m TAH shares @ $10.58/share) 512 Cash consideration (202m JUP shares @ $2.85/share, options, costs) 591 Total consideration paid for Jupiters equity 1,103 Jupiters net debt acquired (fair value) (bank debt, US Notes, RPS, less cash)
Slide 40: Jupiters acquisition accounting — Accounting changes
Jupiters acquisition accounting — Accounting changes Actual Pro forma 8 months to 12 months to $m 30 June 2004 _ 30 June 2004 Statement of Financial Performance ~ Lease rental charge at Jupiters Treasury! (2.9) (4.3) - Provision relating to Caesar's Management contract? 146 na Notes: 4. Rentis being
Slide 41: Tab Limited — Financial performance
Tab Limited — Financial performance x * ¥ * & x 12 months to 12 months to $m 30 June 2003 = 30 June 2004 Change Net operating revenue ($m) 927.9 980.2 5.6% Net profit after tax - Before goodwill amort™ and non- 87.1 96.7 11.0% recurring items ($m) - Before non-recurring iterns ($m) 74.5 84.1 12.9% -
Slide 42: Tab Limited — Reconciliation to profit guidance
Tab Limited — Reconciliation to profit guidance * * * 12 months to $m 30 June 2004 Profit upgrade 90.0 Gaming Incentive Fee rebate uncertain due to ownership changes (2.8) Asset write-offs (2.6) Equity swap gains 11.7 Corporate activity expenses (24.6) Franking credit penalty (1.0) Income tax favour
Slide 43: Non-recurring items
Non-recurring items $m Wagering Gaming Media Unallocated Total 12 months to 30 June 2004 Corporate activity expenses (31.2) (31.2) Equity swap gains 16.7 16.7 Asset write-offs (3.0) (0.6) (3.7) Unclaimed dividends writeback 3.2 3.2 Parramatta South compensation 0.9 0.9 Oncourse creditors 0.8 0.8 Key
Slide 44: Tab Limited Wagering — Financial data
* 12 months to Tab Limited Wagering — Financial data 12 months to $m 30 June 20031 30 June 20041 Change Net operating revenue Racing Thoroughbred 517.5 531.6 2.7% Harness 101.0 107.1 6.0% Greyhound 123.7 133.2 7.7% Total racing 742.2 771.9 4.0% Sportsbetting 23.9 30.7 28.5% Other 19.8 23.0 16.2% Tot
Slide 45: Tab Limited Media — Financial data
Tab Limited Media — Financial data * * ex * * * 12 months to 12 months to $m 30 June 20031 30 June 20041 Change Net operating revenue 100.1 101.9 1.8% Other revenue 0.4 0.6 50.0% Revenue from ordinary activities 100.5 102.5 2.0% Operating expenses 56.9 57.1 0.4% Depreciation and amortisation 4.9 45
Slide 46: Tab Limited Gaming — Financial data
Tab Limited Gaming — Financial data * * ex * * * 12 months to 12 months to $m 30 June 20031 30 June 20041 Change Net operating revenue CMS 32.2 35.1 9.0% Maxgaming 7.8 17.0 117.9% Other 1.9 0.6 (31.6)% Total net operating revenue 41.9 §2.7 25.8% Other revenue 0.3 1.5 na Revenue from ordinary activit
Slide 47: Tab Limited — Financial position
Tab Limited— Financial position As at As at As at $m 30 June 2003 31 Dec 2003 30 June 2004 Current assets 61.6 76.8 76.9 Licences/management agreement 372.2 369.9 367.5 Goodwill 183.5 177.2 170.9 Property, plant & equipment 400.4 378.8 358.0 Other non current assets 6.6 6.2 10.7 Total assets 4,024.3