Tabcorp Holdings Limited · ASX:TAH
Tabcorp — Macquarie Securities Investor Conference (May 2006)
19 slides from Tabcorp's conference presentation, May 2006
Slide 1: Tabcorp Holdings Update
Tabcorp Holdings Update Macquarie Securities Investor Conference Matt Bekier Chief Financial Officer 1
Slide 2: Agenda
Agenda ¾ Overview of the Australian gambling entertainment industry ¾ Overview of Tabcorp ¾ 1H 06 results ¾ Next growth phase for Tabcorp ¾ Focus for FY 06 Half Year Results 2
Slide 3: Overview - Australia's gambling industry
Overview - Australia’s gambling industry Lotteries Wagering ¾ Operators 6 Total Gambling Expenditure 2006 ¾ Operators 5 ¾ Ownership Govt/Private A$17.9b (est) ¾ Ownership Govt/Private ¾ Retail outlets 4,732 ¾ Retail outlets c.4,233 ¾ Expenditure A$2.20b ¾ Expenditure A$2.40b $m 20,000,000 18,000,000
Slide 4: Gambling entertainment spend
Gambling entertainment spend Gambling market relative to total Leisure and Entertainment market by key overseas countries shows a greater proportion of L+E is spent on gambling in Australia A$bn 600.0 928 30.0% 27.9% 500.0 25.0% 400.0 20.0% 300.0 15.0% 12.7% 9.4% 200.0 10.0% 5.3% 6.3% 100.0 5.0% 0.0
Slide 5: Tabcorp business – key metrics
Tabcorp business – key metrics Market capitalisation1 ($m) $ 8,062.9 Enterprise value1 ($m) $ 10,286.3 EPS growth - 5 year 14.6% EPS growth - 10 year 14.0% DPS growth - 5 year 12.0% DPS growth - 10 year 17.2% Average dividend P/O ratio (10 year average) 88.7% Credit rating (S&P) BBB+ Number of emplo
Slide 6: The current competitive environment
The current competitive environment Tabcorp ranking relative to overseas G+E companies on an EBIT basis A$m 1,750 1,462 1,500 1,250 1,170 1,000 754 750 650 564 558 551 500 421 408 367 322 206 197 250 -148 0 -250 MGM Mirage Rank Group (3) Genting (2) Boyd Gaming PartyGaming Ladbrokes (1) William Hill
Slide 7: MSCI EAFE index
MSCI EAFE(1) index Total returns index 250 5 Year CAGR – 14.2% 200 150 100 5 Year CAGR – 3.8% 50 0 Feb-01 Feb-02 Feb-03 Feb-04 Feb-05 Feb-06 MSCI EAFE(2) Tabcorp(3) Notes: (1) The MSCI EAFE (Europe, Australasia and Far East) consists of 21 MSCI country indices, representing the developed markets out
Slide 8: Overview – Tabcorp businesses
Overview – Tabcorp businesses % Of EBIT ¾ ¾ Four properties 387 tables Casinos 4,568 EGMs 42% ¾ > 51k visitors/day ¾ 13,614 EGMs ¾ 264 venues Enterprise value = $10.2b Gaming ¾ 1.14m players 28% ¾ 2,099 Keno venues, in three states ¾ 588 retail outlets in Victoria, and 2,151 in NSW Wagering ¾ On
Slide 9: 1H 06 results
1H 06 results ¾ NPAT pre non-recurring items up 12.8% to $283.2m ¾ Normalised NPAT growth pre non-recurring items up 7.9% to $279.7m ¾ EPS pre non-recurring items growth of 10.0% to 54.0 cents ¾ EPS up 5.2% on a normalised basis to 53.3 cents ¾ DPS up 10.0% to 44.0 cents per share Half Year Results
Slide 10: Financial performance
Financial performance 1000000 Actual Actual Normalised 6 months to 6 months to Change 6 months to 31 Dec 051 31 Dec 041 on pcp 31 Dec 051,2 Net profit after tax 283.2 251.1 12.8% 279.7 EPS 54.0 49.1 10.0% 53.3 3 Capital expenditure (m) 93.2 50.3 85.3% 93.2 Gross debt / EBITDA (x) 2.2 2.5 (14.6)% 2.2
Slide 11: Split racing picture
Split racing picture ¾ Racing vision split between Sky Channel and TVN since 4 May 2005 ¾ Detrimental impact on NSW and Victorian wagering revenue ¾ Proposals currently being evaluated to resolve disruptive impact: Wagering racing channel for retail network and Pay TV (Sky Channel) Showcase thor
Slide 12: Performance Disaggregation – Parimutuel Racing
Performance Disaggregation – Parimutuel Racing 6.0% 0.7% (3.4%) 5.0% 4.4% 4.0% % Growth 3.0% (0.8%) 2.0% (0.3%) (1.4%) 1.0% (0.8%) 0.0% -1.0% 1st Half FY05 Calendar impacts Split picture Abandonments Smoking bans Other 1st Half FY06 ¾ Calendar impacts – Additional Saturday + favourable holiday perio
Slide 13: Gaming
Gaming ¾ Operating revenue up 5.1% Victorian gaming up 4.5% Keno up 9.6% ¾ EBIT growth of 1.7% impacted by increase in Victorian EGM levy Normalising for this increase growth would have been 7.4% ¾ Solid customer service results, with loyalty database members growing from 519,000 to 647,000, u
Slide 14: Casinos – table games
Casinos – table games ¾ Strong performance across all casinos with table revenue up 11.7% ¾ Private Gaming Rooms were up 16.2% with Star City up 18.2% Some pull through of premium customers from Main Gaming Floor ¾ Rebate play revenue up $18.3m due to above theoretical win in current period and be
Slide 15: International
International ¾ China Technical Cooperation Agreement (TCA) signed July 2005 TCA signed between Tabcorp International Hong Kong (‘TIHK’) and Beijing Lottery Online (‘CLO’) CLO, owned 40% by by the Welfare Lottery Centre (‘CWL’) has been granted an exclusive licence to operate Keno on a nationwid
Slide 16: The Tabcorp journey moves into a new phase
The Tabcorp journey moves into a new phase Growth 2006-2011 Integration 2004-2006 Leverage Acquisition Leveragescale scale and diversity 1999-2004 Remove Remove and diversity Drive duplication duplication Drive aggressive Top Top Star StarCity City(1999) (1999) Identify Identifyand an
Slide 17: Wagering, Gaming, Keno Licence Renewal Update
Wagering, Gaming, Keno Licence Renewal Update Tabcorps’ objective - secure the long term continuation of the Victorian gaming, wagering and keno operations in a manner that delivers the optimum industry structure for Tabcorp, Victorian Government and other industry stakeholders. ¾ Submissions in res
Slide 18: Focus for FY2006
Focus for FY2006 ¾ Substantially complete Tab integration, consider other Merger and Acquisition opportunities ¾ Engage in 2007 Star City tax and exclusive licence review ¾ Complete process for 2012 License renewal ¾ Invest in next phase of China Keno project ¾ Achieve FY 2006 normalised EPS growth
Slide 19: # TABARET.
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