Tabcorp Holdings Limited · ASX:TAH
Tabcorp — H1 FY2019 Earnings Presentation
33 slides from Tabcorp's earnings presentation, Feb 13, 2019
Slide 1: ASX cover letter: Tabcorp half year results presentation
For personal use only 13 February 2019 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 2018 to be presented by David Attenborou
Slide 2: 2018/19 First Half Results Presentation
For personal use only TABCORP HOLDINGS LIMITED 2018/19 FIRST HALF RESULTS PRESENTATION 13 FEBRUARY 2019 ABN 66 063 780 709 EXCITEMENT WITH INTEGRITY
Slide 3: Table of Contents
TABLE OF CONTENTS For personal use only Group Overview 3-4 Group Results 6-7 Integration Update 9 Group Results vs Pro-forma pcp 11 - 12 Business Results & Commentary 14 - 19 Capital 21 - 22 Conclusion 24 Appendices 26 - 30 2
Slide 4: Group Overview
GROUP OVERVIEW For personal use only Key message Key points o Revenue up 6.1% and EBITDA up 9.0% (vs pro-forma pcp): • Strong Lotteries & Keno performance from game innovation, and digital and retail growth • Wagering results reflect increased investment in customer generosities and UBET Strong grou
Slide 5: Results Overview
RESULTS OVERVIEW For personal use only o Statutory results • Revenues $2,787.4m, up 108.3% • NPAT $182.5m, up from $24.6m in pcp • EPS 9.1 cents per share, up from 2.6 cents per share in pcp • Results include significant items expense $18.3m after tax from Tatts Group combination, comprising impleme
Slide 6: Table of Contents
TABLE OF CONTENTS For personal use only Group Overview 3-4 Group Results 6-7 Integration Update 9 Group Results vs Pro-forma pcp 11 - 12 Business Results & Commentary 14 - 19 Capital 21 - 22 Conclusion 24 Appendices 26 - 30 5
Slide 7: Group Results
GROUP RESULTS 1 For personal use only Change $m 1H19 1H18 on pcp Revenues 2,787.4 1,338.1 >100.0% Variable contribution 1,013.3 579.6 74.8% Operating expenses (459.0) (289.5) 58.5% EBITDA from continuing operations before significant items 554.3 290.1 91.1% D&A (149.6) (98.8) 51.4% EBIT from continu
Slide 8: Business Results
BUSINESS RESULTS 1,2 For personal use only Lotteries Change Wagering Change Gaming Change Change 1H19 ($m) Group & Keno on pcp & Media on pcp Services on pcp on pcp Revenues 1,409.2 >100.0% 1,221.8 22.8% 155.8 69.0% 2,787.4 >100.0% Variable contribution 365.5 >100.0% 498.4 24.0% 147.9 75.2% 1,013.3
Slide 9: Table of Contents
TABLE OF CONTENTS For personal use only Group Overview 3-4 Group Results 6-7 Integration Update 9 Group Results vs Pro-forma pcp 11 - 12 Business Results & Commentary 14 - 19 Capital 21 - 22 Conclusion 24 Appendices 26 - 30 8
Slide 10: Integration: Synergies & Business Improvements
INTEGRATION: SYNERGIES & BUSINESS IMPROVEMENTS For personal use only FY21 target now $130m-145m EBITDA with cost synergies upgraded to $95m; FY19 upgraded to $55m 1H19 o Delivered $24m EBITDA synergies and business improvements EBITDA $m o Cost synergies of $23m underpinned by organisational restruc
Slide 11: Table of Contents
TABLE OF CONTENTS For personal use only Group Overview 3-4 Group Results 6-7 Integration Update 9 Group Results vs Pro-forma pcp 11 - 12 Business Results & Commentary 14 - 19 Capital 21 - 22 Conclusion 24 Appendices 26 - 30 10
Slide 12: Group Results (vs Pro-forma pcp)
GROUP RESULTS (VS PRO-FORMA PCP) For personal use only Change $m 1H19 1H18 on pcp Revenues 2,787.4 2,626.2 6.1% Variable contribution 1,013.3 982.7 3.1% Operating expenses (459.0) (474.0) (3.2%) EBITDA from continuing operations before significant items 554.3 508.7 9.0% D&A (149.6) (145.1) 3.1% EBIT
Slide 13: Business Results (vs Pro-forma pcp)
BUSINESS RESULTS (VS PRO-FORMA PCP) 1 For personal use only Lotteries & Change Wagering Change Gaming Change Change 1H19 ($m) Group2 Keno on pcp & Media on pcp Services on pcp on pcp Revenues 1,409.2 18.1% 1,221.8 (3.8%) 155.8 (4.0%) 2,787.4 6.1% Variable contribution 365.5 18.4% 498.4 (3.8%) 147.9
Slide 14: Table of Contents
TABLE OF CONTENTS For personal use only Group Overview 3-4 Group Results 6-7 Integration Update 9 Group Results vs Pro-forma pcp 11 - 12 Business Results & Commentary 14 - 19 Capital 21 - 22 Conclusion 24 Appendices 26 - 30 13
Slide 15: Lotteries & Keno (vs Pro-forma pcp)
LOTTERIES & KENO (VS PRO-FORMA PCP) 1 For personal use only Strong performance driven by game innovation, investment in digital and favourable jackpots $m 1H19 1H18 Change o Powerball game changes delivering as planned on pcp • Bigger and more frequent jackpots Lotteries 1,292.8 1,080.9 19.6% • Good
Slide 16: Lotteries & Keno KPIs (vs Pro-forma pcp)
LOTTERIES & KENO KPIs (VS PRO-FORMA PCP) 1 For personal use only Record Powerball jackpot sequence and increased investment accelerated digital growth and customer acquisition Jackpot 30 performance $37.4m Lotteries 35.0 $30.4m $30.7m 25 24 $26.9m $25.3m $26.7m 23 o Recent Powerball game changes del
Slide 17: Wagering & Media (vs Pro-forma pcp)
WAGERING & MEDIA (VS PRO-FORMA PCP) 1 For personal use only Results reflect increased investment in customer generosities and UBET pre transition Change o TAB $m 1H19 1H18 on pcp • Turnover up driven by strong digital growth Revenues 1,221.8 1,270.4 (3.8%) • Revenue down as a result of lower yields,
Slide 18: Wagering & Media KPIs (vs Pro-forma pcp)
WAGERING & MEDIA KPIs (VS PRO-FORMA PCP) 1 For personal use only Change Change Change 1H19 Combined TAB UBET on pcp on pcp on pcp Turnover by distribution ($m)2 o Strong TAB digital turnover growth 15.3% Retail 3,969.7 (6.7%) 3,014.6 (5.6%) 955.1 (10.0%) Digital 3,584.1 11.6% 2,944.8 15.3% 639.3 (2.
Slide 19: UBET Transition to TAB Commenced
UBET TRANSITION TO TAB COMMENCED For personal use only UBET will align with TAB offering in FY21 once all initiatives are implemented UBET today – initiatives completed o Rebrand to TAB commenced in November 2018 • Digital completed • Racetracks 90% complete • Retail 33% rebranded, to be completed b
Slide 20: Gaming Services (vs Pro-forma pcp)
GAMING SERVICES (VS PRO-FORMA PCP) 1,2 For personal use only Integration complete; business in transition; result impacted by expiry of some Victorian EGM contracts Change o New structure implemented under the umbrella MAX brand $m 1H19 1H18 on pcp • Regulatory Services (monitoring and related servi
Slide 21: Table of Contents
TABLE OF CONTENTS For personal use only Group Overview 3-4 Group Results 6-7 Integration Update 9 Group Results vs Pro-forma pcp 11 - 12 Business Results & Commentary 14 - 19 Capital 21 - 22 Conclusion 24 Appendices 26 - 30 20
Slide 22: Capital Expenditure (vs Pro-forma pcp)
CAPITAL EXPENDITURE (VS PRO-FORMA PCP) For personal use only Non-BAU projects across FY19 and FY20 o Integration capex expected to be $70m • 1H19 spend of $11m primarily related to $m Wagering o Data centre relocation $38m • 1H19 spend of $6m o Ann St Brisbane office fit-out $34m • Expected to be co
Slide 23: Capital Management
CAPITAL MANAGEMENT For personal use only DEBT STRUCTURE o Headroom available under bank facilities of $0.9bn at 31 December 2018 1000 o Gross Debt1 / EBITDA ratio of 3.3x at 31 December 2018; target range of 3.0-3.5x o Committed to maintaining an investment grade credit rating $millions 500 o Interi
Slide 24: Table of Contents
TABLE OF CONTENTS For personal use only Group Overview 3-4 Group Results 6-7 Integration Update 9 Group Results vs Pro-forma pcp 11 - 12 Business Results & Commentary 14 - 19 Capital 21 - 22 Conclusion 24 Appendices 26 - 30 23
Slide 25: Conclusion: Excitement with Integrity
CONCLUSION: EXCITEMENT WITH INTEGRITY For personal use only Strong group financial results; continued focus on integration and business performance 1H19 o Integration benefits upgraded to $130m-145m in FY21 o Strong Lotteries & Keno result, underpinned by game innovation, and digital and retail grow
Slide 26: Table of Contents
TABLE OF CONTENTS For personal use only Group Overview 3-4 Group Results 6-7 Integration Update 9 Group Results vs Pro-forma pcp 11 - 12 Business Results & Commentary 14 - 19 Capital 21 - 22 Conclusion 24 Appendices 26 - 30 25
Slide 27: Appendices
APPENDICES For personal use only 1. Significant Items 2. Balance Sheet 3. Cash Flow 4. AASB15: Comparative Period Restatement 26
Slide 28: 1. Significant Items (After Tax)
1. SIGNIFICANT ITEMS (AFTER TAX) For personal use only 1H19 $m Combination with Tatts Group Implementation costs 12.3 Racing Queensland arrangements 6.0 Total 18.3 Implementation costs o Implementation costs are non-recurring costs and comprise restructure charges, integration management office and
Slide 29: 2. Balance Sheet
2. BALANCE SHEET For personal use only $m Dec 18 Jun 18 Change Total current assets 756.5 667.7 13.3% Licences 2,307.4 2,361.1 (2.3%) Other intangible assets 9,115.4 9,142.0 (0.3%) Property, plant and equipment 527.5 488.2 8.0% Other non current assets 464.0 281.8 64.7% Total assets 13,170.8 12,940.
Slide 30: 3. Cash Flow
3. CASH FLOW For personal use only $m 1H19 1H18 Change Net operating cash flows 1 530.5 337.8 57.0% Net interest paid (106.1) (63.3) 67.6% Income tax paid (95.7) (23.4) >100% Payments for PP&E and intangibles (110.8) (100.4) 10.4% Sub-total 217.9 150.7 44.6% Sun Bets operating cashflows and costs re
Slide 31: 4. AASB15: Comparative Period Restatement
4. AASB15: COMPARATIVE PERIOD RESTATEMENT For personal use only o On application of AASB 15, certain commission arrangements are reclassified from commissions and fees expense to revenue. The reclassification has no impact on profit Financial Results (Pro-forma) 1H18 FY18 Wagering & Media Group Wage
Slide 32: 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 33: Excitement with Integrity
For personal use only EXCITEMENT WITH INTEGRITY