Tabcorp Holdings Limited · ASX:TAH
Tabcorp — H1 2017 Earnings Presentation
25 slides from Tabcorp's earnings presentation, Feb 2, 2017
Slide 1: 2016/17 First Half Results Presentation
TABCORP HOLDINGS LIMITED 2016/17 FIRST HALF RESULTS PRESENTATION 2 FEBRUARY 2017 ABN 66 063 780 709
Slide 2: 1H17 Overview
1H17 OVERVIEW o Statutory results • NPAT $58.9m, down 28.1% • EPS 7.1 cents per share, down 28.3% • Results adversely impacted by significant items after tax of $43.8m o Results before significant items • EBITDA $270.4m, up 1.7% • NPAT $102.7m, up 5.3% • EPS 12.3 cents per share, up 5.1% o Interim d
Slide 3: Group Results
GROUP RESULTS $m 1H17 1H16 Change Revenues 1,159.3 1,135.6 2.1% Variable contribution 521.5 507.3 2.8% Operating expenses (251.1) (241.3) 4.1% EBITDA before significant items 270.4 266.0 1.7% D&A (86.7) (89.5) (3.1%) EBIT before significant items 183.7 176.5 4.1% Interest (34.9) (34.7) 0.6% Tax expe
Slide 4: Business Results
BUSINESS RESULTS Wagering Change Gaming Change Change Change Keno Group $m & Media on pcp Services on pcp on pcp on pcp Revenues 987.0 1.4% 60.2 13.8% 112.1 2.2% 1,159.3 2.1% Variable contribution 397.7 1.3% 58.7 11.9% 65.1 4.6% 521.5 2.8% Operating expenses (201.6) 3.0% (22.7) 22.1% (24.9) 1.5% (25
Slide 5: Wagering & Media: KPIs
WAGERING & MEDIA: KPIs $m 1H17 1H16 Change o Revenues up 1.4% on pcp • Wagering driven by record Spring Racing Wagering revenue 897.9 887.2 1.2% Carnival results for core TAB business, Media revenue 89.1 85.8 3.8% partly offset by softness in Trackside and Luxbet Revenues 987.0 973.0 1.4% • Media dr
Slide 6: TAB: KPIs
TAB: KPIs $m 1H17 1H16 Change % o Digital turnover growth of 13.8%, driving total turnover growth of 2.3% Turnover by distribution ($m) • Record Spring Racing Carnival with Digital Retail 3,302.5 3,388.4 (2.5%) growth of 17.6% underpinning total racing Digital 2,192.5 1,926.0 13.8% turnover growth o
Slide 7: TAB: Product and Marketing
TAB: PRODUCT AND MARKETING o Take a clear, compelling and differentiated brand leadership position • New brand campaign, ‘We Love a Bet’, successfully launched in August • Marketing investment re-weighted to ensure right time, right place market presence o Provide products and promotions that ensure
Slide 8: Media
MEDIA o Continued investment in Sky coverage quality and integration of wagering • Reformatted magazine shows on Sky Thoroughbred Central to increase focus on wagering • Key media talent recruited • Refresh of graphics on Sky Racing 1 & 2 • Unique digital content, such as Sky preview shows, incorpor
Slide 9: Sun Bets
SUN BETS o Sun Bets launched in the UK in August 2016 $m 1H17 • Attractive, well regulated market with double-digit online revenue growth continuing Turnover 96.8 • Initial digital offering comprising sportsbook and online Revenue 1.5 casino, as well as first stage of betting integration in The Sun’
Slide 10: Gaming Services: KPIs
GAMING SERVICES: KPIs o Gaming Services results include one month of $m 1H17 1H16 Change trading from INTECQ, which contributed: Revenues 60.2 52.9 13.8% • Revenues $3.6m EBITDA 36.0 33.8 6.5% • EBITDA $1.1m EBIT 20.7 19.6 5.6% • EBIT $0.8m o Victoria • Approximately 8,700 EGMs under contract, with
Slide 11: Keno: KPIs
KENO: KPIs $m 1H17 1H16 Change o Continued strong turnover momentum in 1H17, up 3.7% compared with the pcp Revenues 112.1 109.7 2.2% o Revenue performance EBITDA 40.2 37.8 6.3% • Vic up 13.8% EBIT 29.4 28.0 5.0% • NSW up 11.0% Venues 3,599 3,625 (0.7%) • Qld down 4.9% Ticket Count (m) 51.6 51.4 0.4%
Slide 12: Keno: Product and Digital Driving Reinvigoration
KENO: PRODUCT AND DIGITAL DRIVING REINVIGORATION o Queensland jackpot pooling • Commenced in December. Keno jackpot pools now combine turnover from customers in Victoria, NSW, ACT and Queensland • Pooling drives faster jackpot growth, creating an opportunity for greater engagement and participation
Slide 13: Continued Investment in Risk and Compliance
CONTINUED INVESTMENT IN RISK AND COMPLIANCE o Tabcorp is committed to highest standards of regulatory compliance and risk management, consistent with our vision to be the most respected gambling-led entertainment company in the world o Significant investment in risk and compliance • Implementation o
Slide 14: People and Engagement
PEOPLE AND ENGAGEMENT o Our vision to be the world’s most respected gambling-led entertainment company is supported by a continued focus on building a world-class organisation • Ongoing increase in employee engagement levels • Highly diverse organisation – 40% of senior leaders are women • Received
Slide 15: Combination with Tatts
COMBINATION WITH TATTS o Proposed combination with Tatts Group announced on 19 October 2016, to create a leading, diversified portfolio of gambling entertainment businesses o Will provide a wide range of benefits for stakeholders and enhance the long-term sustainability of Australian racing • At lea
Slide 16: Operating Expenses and Capital Investment
OPERATING EXPENSES AND CAPITAL INVESTMENT OPEX / REVENUE RATIO CAPEX TRENDS ($m) 90 21.7% 21.3% 21.4% 21.2% 73 62 FY14 FY15 FY16 1H17 1H16 2H16 1H17 Wagering & Media Gaming Services Keno o Operating expense growth reflects increased resourcing o FY17 capex expected to be approximately $200m, across
Slide 17: Capital Management
CAPITAL MANAGEMENT DEBT STRUCTURE ($m) DIVIDENDS (¢) Tabcorp Subordinated notes US Private Placement Cash-settled equity swap funding Term Debt 12.5 325 12.0 10.0 8.0 400 84 400 250 150 127 FY17 FY18 FY19 FY20 FY21 FY22 1H14 1H15 1H16 1H17 o Tabcorp Subordinated Notes to be redeemed on 22 o FY17 div
Slide 18: Conclusion
CONCLUSION o 1H17 highlights – advancing our strategic priorities • Revenue growth across all three businesses, including record Spring Racing Carnival results • Continued focus on integrated customer experience – enhanced TAB app, digital commission model roll-out • Extension of key domestic media
Slide 19: Appendices
APPENDICES 1. Wagering & Media: Financial data 2. Wagering & Media: Revenues by state and product 3. Balance sheet 4. Cashflow 19
Slide 20: 1. Wagering & Media: Financial Data
1. WAGERING & MEDIA: FINANCIAL DATA $m 1H17 1H16 Change Revenues 987.0 973.0 1.4% Taxes, levies, commissions and fees (589.3) (580.5) 1.5% Variable contribution 397.7 392.6 1.3% Operating expenses (201.6) (195.8) 3.0% EBITDA 196.1 196.8 (0.4%) D&A (60.6) (65.5) (7.5%) EBIT 135.5 131.3 3.2% Ratios 1H
Slide 21: 2. Wagering & Media: Revenues by State and Product
2. WAGERING & MEDIA: REVENUES BY STATE AND PRODUCT NSW Change Vic Change ACT Change Total Change $m 1H17 on pcp 1H17 on pcp 1H17 on pcp 1H17 on pcp Racing 476.9 (0.1%) 227.7 3.1% 13.6 4.1% 718.2 1.0% Sports 69.4 14.2% 18.9 2.5% 1.3 37.9% 89.6 11.6% Trackside 19.4 (12.7%) 12.0 (14.6%) 0.7 >100% 32.1
Slide 22: 3. Balance Sheet
3. BALANCE SHEET $m Dec 16 Jun 16 Change Total current assets 546.6 197.1 177.3% Licences 659.8 682.4 (3.3%) Other intangible assets 2,059.7 1,945.3 5.9% Property, plant and equipment 309.0 311.7 (0.9%) Other non current assets 171.4 166.3 3.1% Total assets 3,746.5 3,302.8 13.4% Total liabilities 2,
Slide 23: 4. Cashflow
4. CASHFLOW $m 1H17 1H16 Change Net operating flows 211.9 228.1 (7.1%) Net interest payments (34.8) (34.1) 2.1% Income tax (paid)/refund (34.2) 32.8 (>100%) Payments for PP&E and intangibles (78.3) (73.2) 7.0% Sub-total 64.6 153.6 (57.9%) Ordinary dividends paid (90.1) (73.5) 22.6% Payment for cash-
Slide 24: Disclaimer
DISCLAIMER 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 lodged with the Australi
Slide 25: To Advance the Way We Play
TO ADVANCE THE WAY WE PLAY RACING