Tabcorp Holdings Limited · ASX:TAH
Tabcorp — FY2003 Earnings Presentation
36 slides from Tabcorp's earnings presentation, August 2003
Slide 1: TABCORP Holdings Limited Annual Results
TABCORP Holdings Limited Annual Results For the 12 months to 30 June 2003
Slide 2: Agenda
Agenda • FY2003 Key Features Matthew Slatter • FY2003 Financial Performance David Elmslie • Focus for FY2004 and Matthew Slatter Key Business Strategies • FY2004 Update and Conclusion Matthew Slatter Annual Results 2003
Slide 3: FY2003 Key features
FY2003 Key features • Increased profits and EPS before non-recurring items, despite impact of smoking bans • Final dividend of 34 cents taking full year dividend to 67 cents per share fully franked – 63 cents LY • Continued underlying growth in wagering profitability • Strong second half performance
Slide 4: FY2003 Key features - Financial performance
FY2003 Key features - Financial performance 12 months to 12 months to % 30 June 2002 30 June 2003 change Net operating revenue ($m) 1,933.1 1,900.7 (1.7) Net profit after tax - Before goodwill amortn and 277.2 281.0 1.4 non-recurring items ($m) - Before non-recurring items ($m) 259.3 263.1 1.5 - Bas
Slide 5: FY2003 Key features - Summary divisional results
FY2003 Key features - Summary divisional results 12 months to 12 months to % $m 30 Jun 2002 30 Jun 2003 change Net operating revenue Wagering 403.6 421.3 4.4 Gaming 917.6 848.1 (7.6) Star City 611.9 631.3 3.2 PBITA1 Wagering2 61.2 68.4 11.9 Gaming2 236.3 213.0 (9.9) Star City2 163.3 183.1 12.1 Notes
Slide 6: FY2003 Key features - Wagering
FY2003 Key features - Wagering • Revenue growth in all racing codes – greyhounds particularly strong at 7.4% • 29% increase in Trackside revenue • Ongoing agency restructure program – 47% of network refurbished • Expansion of self service betting terminals in TAB outlets and racecourses • Customer a
Slide 7: FY2003 Wagering – Account sales
FY2003 Wagering – Account sales Breakdown Breakdown of of account account sales sales Turnover Turnover growth growth 100% 800 90% 700 80% 600 % of account sale transactions 70% 500 60% Turnover $m 50% 400 40% 300 30% 200 20% 100 10% 0% 0 2000 2001 2002 2003 2000 2001 2002 2003 Operator Touchtone Vo
Slide 8: FY2003 Wagering – On Course
FY2003 Wagering – On Course On-Course On-Course turnover turnover Turnover Turnover growth growth $m • Growth for the first year 255 since 1994 245 • Particularly strong 235 provincial thoroughbred 225 meetings (+9.3% growth) which reflects increased 215 participation/attendances 205 • Joint efforts
Slide 9: FY2003 Key features - Gaming
FY2003 Key features - Gaming • Performance post 1 September adversely impacted by smoking bans • 2 new venues and top ups in 5 venues, partly offset by impact of regional caps and restrictions on 24 hour trading • Ongoing venue refurbishment – 42 venues refurbished / upgraded during the year • 3,525
Slide 10: Gaming – Monthly revenue
Gaming – Monthly revenue TABCORP monthly revenue $’000 95,000 Impact of smoking ban 90,000 85,000 80,000 75,000 70,000 65,000 60,000 55,000 50,000 Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun 2001 2002 2003 Annual Results 2003
Slide 11: Relative performance of Grade 4 Venues
Relative performance of Grade 4 Venues Monthly Monthly revenue revenue relative relative to to prior prior Critical Critical Success Success Factors Factors comparative comparative period period s hs hs pg r e ad s s s • Amenity of smokers’ th th th th de t t lounge s s s s s m 4u 1m 2m 3m th th th
Slide 12: FY2003 Key features – Star City
FY2003 Key features – Star City • Revenue growth of 3.2% driven by strong second half • Electronic gaming revenue up 4.0% • MGF table games strong second half after slow start, boosted by introduction of more popular products • PGR revenue down with a low win rate relative to historical experience –
Slide 13: FY2003 Star City - Main gaming floor highlights
FY2003 Star City - Main gaming floor highlights Quarter Quarter 11 Quarter Quarter 22 Quarter Quarter 33 Quarter Quarter 44 •• New New roulette roulette pit pit (6 (6 •• Revise Revise black black jack jack // •• 00 00 roulette roulette on on $2 $2 •• Rapid Rapid Roulette Roulette tables) tables) pon
Slide 14: FY 2003 Key features - Reorganisation
FY 2003 Key features - Reorganisation • TABCORP reorganised into four divisions – Wagering, Gaming, Casinos and Technical Services • Provides operating businesses a stronger customer focus • Technical Services provides operational and IT support • New organisation structure ensures that company is w
Slide 15: FY2003 Financial Performance
FY2003 Financial Performance Annual Results 2003
Slide 16: Financial performance
Financial performance 12 months to 12 months to % $m 30 Jun 2002 30 Jun 2003 change Net operating revenue 1,933.1 1,900.7 (1.7) Other revenue2,3 19.8 18.9 (4.8) Taxes on gambling 609.6 589.9 (3.2) Operator commissions 294.9 276.6 (6.2) Racing industry fees 122.0 127.1 4.2 Other operating expenses1,2
Slide 17: Segmented earnings
Segmented earnings $m Wagering Gaming Star Unallocated Total 12 months to 30 Jun 2003 Operating revenue 421.3 848.1 631.3 - 1,900.7 Other revenue3 12.3 2.0 4.2 0.4 18.9 Total revenue 433.6 850.1 635.5 0.4 1,919.6 PBITA1 68.4 213.0 183.1 (11.2) 453.3 Goodwill 0.1 - 17.8 - 17.9 PBIT1 68.3 213.0 165.3
Slide 18: Wagering financial data
Wagering financial data 12 months to 12 months to % $m 30 Jun 2002 30 Jun 2003 change Total operating revenue 403.6 421.3 4.4 Other revenue2 12.5 12.3 (1.3) Revenue from ordinary activities 416.1 433.6 4.2 R.I., taxes & operator commissions 273.5 284.4 4.0 Other operating expenses1 70.9 69.3 (2.2) D
Slide 19: Wagering financial data
Wagering financial data 12 months to 12 months to % $m 30 Jun 2002 30 Jun 2003 change Operating revenue Racing Thoroughbred 273.5 283.0 3.5 Harness 57.1 59.8 4.7 Greyhound 53.9 57.8 7.4 Total racing 384.5 400.6 4.2 Sportsbet 10.0 9.0 (9.7) Trackside/ Keno 9.1 11.7 29.0 Total operating revenue 403.6
Slide 20: Gaming financial data
Gaming financial data 12 months to 12 months to % $m 30 Jun 2002 30 Jun 2003 change Total operating revenue 917.6 848.1 (7.6) Other revenue 2.0 2.0 (2.7) Revenue from ordinary activities 919.6 850.1 (7.6) Taxes & operator commissions 626.0 579.9 (7.4) Other operating expenses1 31.8 30.6 (3.5) Deprec
Slide 21: Gaming financial data
Gaming financial data 12 months to 12 months to % $m 30 Jun 2002 30 Jun 2003 change Operating revenue Hotels 610.4 566.1 (7.3) Clubs 305.3 280.1 (8.3) Other 1.9 1.9 - Total operating revenue 917.6 848.1 (7.6) Change EGMs (period end) 13,657 13,692 35 Venues 269 271 2 $NMR/EGM (daily average) 246 226
Slide 22: Star City financial data
Star City financial data 12 months to 12 months to % $m 30 Jun 2002 30 Jun 2003 change Total operating revenue 611.9 631.3 3.2 Other revenue 4.9 4.2 (14.1) Revenue from ordinary activities 616.8 635.5 3.0 Taxes 127.0 129.3 1.8 Other operating expenses1,2 272.3 274.1 0.7 Depreciation & amortisation 5
Slide 23: Star City financial data
Star City financial data 12 months to 12 months to % $m 30 Jun 2002 30 Jun 2003 change Net operating revenue Table games PGR 112.8 105.5 (6.5) MGF 223.8 234.2 4.6 Total tables 336.6 339.7 0.9 EGMs & other 194.1 201.7 3.9 Total gaming 530.7 541.4 2.0 Accommodation 22.3 23.7 6.4 Food & Beverage and ot
Slide 24: Financial position
Financial position As at As at As at $m 30 Jun 2002 31 Dec 2002 30 Jun 2003 Current assets 162.4 155.3 158.4 Licences/management agreement 1,033.7 1,031.3 1,081.8 Goodwill 311.1 301.8 292.9 Property, plant & equipment 802.3 783.2 759.2 Other non current assets 104.2 107.7 107.2 Total assets 2,413.7
Slide 25: Focus for FY2004 and Key Business Strategies
Focus for FY2004 and Key Business Strategies Annual Results 2003
Slide 26: Focus for FY2004
Focus for FY2004 • Continue to drive profit growth in our existing businesses • Successfully complete the Jupiters integration • Seek a successful outcome in Victorian relicensing • Implement improvements in our Responsible Gambling Code Annual Results 2003
Slide 27: Focus for FY2004 – Key business strategies
Focus for FY2004 – Key business strategies • Wagering - Continued growth in customer usage of lower cost distribution and enhance revenue through working with the racing industry • Gaming – Improving venue amenity and customer service, supported by the Venue Performance Program • Star City – Improvi
Slide 28: Focus for FY2004 - Jupiters
Focus for FY2004 - Jupiters • Proposed timetable – Release scheme booklet Mid September – Scheme meetings 24 October – Implementation date 10 November • Financing – Approximately 48.4 million shares to be issued to Jupiters shareholders as part of the consideration – DRP to be put in place from Marc
Slide 29: Focus for FY2004 – Jupiters (continued)
Focus for FY2004 – Jupiters (continued) • Preliminary discussions with Park Place have been had regarding acquisition of the management contracts • Integration planning has commenced with a team from TABCORP and Jupiters • Integration to be substantially completed by September 2004 • The merger prov
Slide 30: TABCORP/Jupiters – Group profile
TABCORP/Jupiters – Group profile Key Key Business Business Statistics Statistics Casinos Other businesses Keno outlets: c2,000 No of casinos: 4 Wagering outlets: 566 Casino customers per day: 36,800 EGM monitoring(QLD): c14,000 Casino gaming machines: c4,400 TAB account customers: 120,000 Casino gam
Slide 31: 2012 update
2012 update • The Bracks Government has indicated that it wishes to resolve relicensing arrangements within its current term – prior to November 2006 • The Minister for Gaming and Racing, John Pandazopoulos, has stated that the Government will review all options available to it in considering the is
Slide 32: Responsible gambling
Responsible gambling • First independent review of compliance with the TABCORP Responsible Gambling Code conducted by KPMG – Gaming, wagering, casino and TABCORP internal compliance infrastructure – Used pilot study, statistical selection of venues for review, independent field audit, self assessmen
Slide 33: FY2004 Update and Conclusion
FY2004 Update and Conclusion Annual Results 2003
Slide 34: Revenue performance in current half year
Revenue performance in current half year 1 Jul – 9 Aug 03 Comments c.f PCP Wagering 9.5% Continued growth Gaming (15.5)% Impact of smoking ban against very strong prior year Star City 4.1% Trends continue Total TABCORP (4.8)% Growth in Wagering and at Star City has continued into FY2004. Gaming up a
Slide 35: Conclusion
Conclusion • FY2003 was a challenging year, however managed to achieve 1.5% growth in NPAT pre non-recurring items • Each of our businesses holds a strong position in its respective market and is well positioned for continued growth in profitability • Company remains ready to engage in discussions o
Slide 36: Australia’s premier gambling and entertainment group
Australia’s premier gambling and entertainment group Annual Results 2003