Light & Wonder, Inc. · ASX:LNW
Light & Wonder — Scientific Games — FY2009 Earnings Presentation
19 slides from Light & Wonder's earnings presentation, Mar 1, 2010
Slide 1: Fourth Quarter and Full Year 2009 Earnings Results
Fourth Quarter and Full Year 2009 Earnings Results
Slide 2: Safe Harbor Statement
Safe Harbor Statement In this presentation and the related discussion, Scientific Games Corporation (“Scientific Games” or the “Company”) makes “forward-looking statements” within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements describe future exp
Slide 3: Overview: 2009 was a challenging year
Lottery industry proved to be recession-resistant, with U.S. lottery sales +1%, French lottery sales +9% and double-digit instant ticket growth in Portugal (+13%) and Netherlands (+16%) in the context of a severe global recession 7% decline in U.S. retail sales(1) High single-digit percentage declin
Slide 4: Overview: 2009 achievements and strengthening trends
Exceeded Profitability Improvement Program savings and Free Cash Flow(1) targets Strengthened liquidity profile and extended weighted average debt maturity Made significant progress in China Positioned Racing and Venue Management businesses for sale Negotiated strategic partnerships with Playtech Be
Slide 5: Racing Transaction
Racing Transaction Negotiated strategic transaction to sell the Racing and Venue Management businesses to Sportech and strengthen the competitive profile of the businesses, while enabling Scientific Games to participate in future growth of combined entity Focuses the portfolio Lower margin business
Slide 6: Playtech Strategic Agreements
Playtech Strategic Agreements Internet Joint Ventures Creates entirely new interactive product that leverages Scientific Games’ strong government relationships and gaming experience with Playtech’s systems expertise and consumer knowledge Projected to result in cooperative service offering for the I
Slide 7: Corporate Strategy
Corporate Strategy To deliver long-term, profitable growth that drives long-term value creation for shareholders Build Core Businesses & Leverage into Growth Areas Pursue Strategic Growth Initiatives & Focus the Portfolio Evolve Business Model to Capitalize on Convergence Maintain Financial Discipli
Slide 8: Printed Products: 2009 Review
Printed Products: 2009 Review Awarded a significant number of new contracts and extensions: No material contract losses for the year U.S. instant ticket retail sales essentially flat in 2009 and improved as year progressed and continuing into 2010 France (+17%), Portugal (+13%) and Netherlands (+16%
Slide 9: Lottery Systems: 2009 Review
Lottery Systems: 2009 Review Awarded several new contracts, most notably Indiana Pricing environment expected to remain competitive, but early evidence suggests customers are becoming more focused on the full suite of products and services offered; we believe we can generate returns consistent with
Slide 10: Diversified Gaming: 2009 Review
Diversified Gaming: 2009 Review Expanded Global Draw installed terminal base in the U.K. and new international geographies, reaching 17,284 machines at year end; recently awarded new contracts with Gala Coral and Totesport Global Draw continued to outperform U.K. peers, expanding win per day in a hi
Slide 11: Q4'09 Consolidated Revenue
Q4’09 Consolidated Revenue Revenue ($M) Revenue continued to be impacted by the shift of Chinese instant ticket production to our joint venture and contract re-pricings and contract terminations Partially offset by gains from start-up of new instant ticket customers (AR/PR), improved performance in
Slide 12: Q4'09 Adjusted EBITDA
Q4’09 Adjusted EBITDA(1) Adjusted EBITDA grew ~10% year-over-year Improvement in SG&A driven by Profitability Improvement Program savings ($7M) 2009 adjusted EBITDA includes $15M of add-backs related to transaction-related expenses and restructuring-related expenses, primarily related to the propose
Slide 13: Printed Products Group
Printed Products Group Operating Income ($M) Revenue ($M) Significant portion of decline in instant ticket revenue caused by the shift in Chinese instant ticket production to our joint venture Operating income improved by over $10M, despite the decline in revenue, primarily due to: Impact of start u
Slide 14: Lottery Systems Group
Lottery Systems Group Operating Income ($M) Revenue ($M) 12 months of operating under revised PA contract as of January 1, 2010 The year-over-year improvement in operating income was offset by ~$25M of non-cash write-downs related to our contracts in CT and MD (reported in D&A) Q4’09 Q4’08 PA Contra
Slide 15: Diversified Gaming Group
Diversified Gaming Group Operating Income ($M) Revenue ($M) Games Media’s revenue decline from analog terminal sales to digital terminals that are being deployed under revenue participation agreements Modest growth in Global Draw service revenue primarily due to continuing growth in installed termin
Slide 16: Full Year Consolidated Revenue
Full Year Consolidated Revenue Revenue ($M) FY ‘08 Contract re-pricings (PA/FL/UK) FX FY ‘09 17 Lower Phone Card Sales Lower Sales of Licensed Properties Products Contract Terminations (SC/SD/WV/OH) Other PA and FL contract re-pricings will no longer impact results in 2010; U.K. Camelot contract pro
Slide 17: Full Year Adjusted EBITDA
Full Year Adjusted EBITDA(1) 18 Adjusted EBITDA(1) ($M) FY ‘08 Contract re-pricings (PA/FL/UK) Lower Phone Card Sales JV Income & Other FY ‘09 FX Lower SG&A $24M of cost savings achieved from Profitability Improvement Program; exceeded target of $15-20M of savings (1) Adjusted EBITDA is a non-GAAP f
Slide 18: Full Year Free Cash Flow
Full Year Free Cash Flow(1) Cash from Ops. Free Cash Flow Total Capital Expenditures Significant Free Cash Flow growth in 2009 Free Cash Flow does not reflect the benefit of ~$10M related to accounting for supplemental employee retirement plan payments 19 (1) Free Cash Flow is a non-GAAP financial m
Slide 19: Balance Sheet Achievements
Balance Sheet Achievements Extended weighted average life of debt maturities from 3.4 years at 12/31/08 to 5.2 years at 12/31/09 via debt retirement and bond offerings Successfully managed liquidity concerns related to convertible debentures Deferred a substantial portion of the Global Draw earn-out