Light & Wonder, Inc. · ASX:LNW
Light & Wonder — Scientific Games — Q3 2010 Earnings Presentation
16 slides from Light & Wonder's earnings presentation, Nov 9, 2010
Slide 1: Scientific Games Third Quarter 2010 Earnings Presentation
Scientific Games Third Quarter 2010 Earnings Presentation
Slide 2: Safe Harbor Statement
Safe Harbor Statement In this presentation 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 expectations, plans, results or strategies and can often be identified by the use of t
Slide 3: Q3: Key Takeaways
Q3: Key Takeaways Completed the sale of racing and venue management businesses to Sportech Plc Company now focused on core lottery and gaming businesses First of its kind Private Management Agreement in Illinois awarded to Northstar Lottery Group, a joint venture in which Scientific Games participat
Slide 4: Stable Contract Base with Recurring Revenue
Stable Contract Base with Recurring Revenue 2009 Pro Forma Revenue: $818 million(1) Percent of 2009 Pro Forma Recurring Revenue by Contract Expiration(1)(2) $613 $205 Weighted Average Contract Duration(2) Printed Products 5.5 years Lottery Systems 6.1 years Diversified Gaming 5.1 years In the last 2
Slide 5: Northstar Lottery Group
Northstar Lottery Group Joint venture between Scientific Games (20%) and GTECH (80%) Awarded the private manager contract for the day-to-day operations of the Illinois Lottery for a period of 10 years First award of its kind in the U.S. lottery industry Northstar will be eligible for incentive compe
Slide 6: Northstar Growth Opportunities
Northstar Growth Opportunities Significant opportunity to grow lottery retail sales in Illinois, particularly instant ticket sales Northstar plans substantial increases in advertising and marketing to expand consumer awareness Northstar plans to increase the retailer base from 7K+ today to ~13K to m
Slide 7: China Update
China Update Total instant ticket retail sales grew by ~19% in Q3’10 driven primarily by the success of the China Welfare Lottery’s exclusive rights to the Shanghai Expo brand and aggressive campaign to increase price points Sales growth plan will focus on the implementation of best practices, inclu
Slide 8: Q3'10 Consolidated Results
Q3’10 Consolidated Results Decline in revenue primarily driven by lower Lottery Systems Group sales of hardware and online contract terminations Printed Products Group revenue negatively impacted by sales to international customers, primarily ticket sales to joint venture in Italy Diversified Gaming
Slide 9: Earnings Per Share
Earnings Per Share (1) Amounts reflected on a per diluted share basis. (2) Items reflect adjustments to “consolidated EBITDA” under the credit agreement on an after-tax basis. (3) Excludes a gain of approximately $0.02 per diluted share for the third quarter ended September 30, 2010 primarily relate
Slide 10: Joint Ventures
Joint Ventures Decline in equity in earnings of joint ventures primarily attributable to the decline in earnings from CLN (Italy) due to foreign currency translation and increased costs at our China printing joint venture Italy retail sales rebounded in August (+8.5% Y/Y) and September (+6.1% Y/Y) I
Slide 11: Printed Products
Printed Products The Company’s licensed properties business, MDI Entertainment, experienced growth due in part to its Properties PlusTM offering The decline in instant sales included sales to Italy due to the tender process and the impact of the timing of the €20 ticket release in Q3 last year The p
Slide 12: Lottery Systems
Lottery Systems The decline in hardware sales was primarily the result of the fulfillment of a large customer order in 2009 Lost contracts and contract rate changes primarily related to customer losses in NH (7/10), VT (7/10) and SD (8/09) 12 Revenue ($M) Operating Income ($M) Q3’10 Q3’09 Q3’10 Q3’0
Slide 13: Diversified Gaming
Q3’10 Q3’09 Hardware & Software Sales FX Racing Handle Global Draw Diversified Gaming Growth in hardware and software sales driven primarily by sales to racing and venue management customers The decline in Global Draw and Games Media revenue was primarily the result of contract renewals, along with
Slide 14: Debt Maturity Profile: Then vs. Now
Debt Maturity Profile: Then vs. Now At 12/31/08 At 9/30/10 Weighted average maturity has improved from 3.8 years to 5.6 years In Q3’10, the Company raised $250M in new notes due 2018 and successfully tendered for $108M, or 57%, of the 2012 Notes $151M of revolver availability and $250M of cash as of
Slide 15: Appendix
Appendix SCIENTIFIC GAMES
Slide 16: Reconciliation of Pro Forma Revenue
Reconciliation of Pro Forma Revenue ($ in millions) 2009 Reported revenue 927.7 $ Less: Racing and venue management businesses (110.2) 2009 Pro forma revenue 817.5 Less: Sales revenue (60.9) Less: Non-recurring service revenue (143.6) 2009 Pro forma recurring revenue 613.0 $