31 10 2013 agm presentation slides
For personal use only
ANNUAL GENERAL MEETING 31 October 2013 ABN 19 108 686 040
For personal use only
HARRY BOON
Chairman
For personal use only
FY13 Highlights •
New CEO and Managing Director;
•
We won the management rights to the South Australian Lotteries;
•
Net profit from continuing operations lifted an impressive 40.8% to $227.4 million;
•
Statutory net profit of $247.3 million representing a 22.5% reduction compared to FY12;
•
Revenues from continuing operations are up 11.0% to $2.95 billion;
•
We contributed over $1.2 billion to state governments, as well as paying corporate and federal taxes. And last but not least...
•
We moved our head office to Brisbane and are now proud Queenslanders.
For personal use only
FY13 Highlights • • •
•
Strong rotation from sales growth to NPAT
CONTINUING OPERATIONS RESULTS FY 13 (Excluding Tatts Pokies)
EBIT margin 13.8% up from 12.2% in FY12 Results enhanced by ~six months contribution from rights to manage SA Lotteries and a full 12 months contribution from TOTE Tasmania NPAT includes a $16.2 million tax benefit settlement of the Golden Casket tax claim
Change on PCP
Revenue
$2,948.8 m
11.0%
EBITDA
$490.2 m
17.9%
EBIT
$406.1 m
25.1%
NPAT (Continuing)
$227.4 m
40.8%
16.4c
35.5%
EPS
Strong profitability and cash flow give the Board confidence that a high dividend payout ratio can continue
102.3% 100.0%
98.2%
97.5% 96.0%
95.0%
95.1%
95.1%
85.0%
80.0%
FY08
FY09
FY10
15.5 cents
90.0%
23.0 cents
•
Dividend reinvestment plan operative with a 1.5% discount with a 39.7% take-up
105.0%
21.5 cents
•
Full year dividend payout ratio from continuing operations of 95.1% (87.4% from statutory NPAT)
Dividend Payout Ratio
21.0 cents
•
Continued high dividend payout ratio above 95% (7 years running)
21.0 cents
•
20.0 cents
For personal use only
Dividend payout
75.0%
- As a % of continuing NPAT
FY11
FY12
FY13
- As a % of statutory NPAT
For personal use only
Total shareholder returns
Source: Bloomberg. Tabcorp share price adjusted for the demerger in June 2011.
Tatts Up 27.8%
Tatts Up 74.9%
For personal use only
Lotteries – FY13 highlights Lotteries •
Record Lotteries revenues - $2.01 billion up 13.6% (FY12: $1.77 billion)
•
Acquired exclusive management rights to SA Lotteries - EBITDA of $24.8 million in ≈ 6 months
•
South Australia Lotteries integration was executed on time and within budget by a team with an exceptional integration track record
Financials
FY13 FY12 $’million $’million
Change on PCP %
2,008.6
1,767.5 ▲ 13.6%
EBITDA
294.6
223.8 ▲ 31.6%
EBIT
269.5
202.6 ▲ 33.0%
Revenue
For personal use only
Wagering – FY13 highlights Wagering
FY13 FY12 $’million $’million
Change on PCP %
•
5.2% revenue growth driving 25.4% EBIT growth
Financials
•
Total sales from betting on fixed price betting now exceeding $1 billion
Revenue
655.7
623.3 ▲ 5.2%
EBITDA
173.9
144.1 ▲ 20.7%
EBIT
155.6
124.1 ▲ 25.4%
•
TOTE Tasmania performing to acquisition model - win rates approaching Group levels
For personal use only
Gaming Solutions – FY13 highlights FY13 $’million
FY12 $’million
Change on PCP
Revenue
113.2
114.7
▼1.3%
EBITDA
63.1
65.8
▼4.2%
EBIT
48.1
44.5
▲ 8.1%
Talarius
FY13 $’million
FY12 $’million
Change on PCP
Revenue
78.0
69.2 ▲12.8%
EBITDA
7.7
7.0 ▲10.8%
(1.0)
(2.7) ▲ 63.7%
Maxgaming
EBIT Bytecraft
FY13 $’million
FY12 $’million
Change on PCP
Revenue
116.0
103.8 ▲11.7%
EBITDA
(1.0)
8.4 ▼112.2%
EBIT
(3.0)
6.9 ▼144.0%
For personal use only
Community highlights •
Responsible gambling codes of conducts exist in each jurisdiction and include:
• •
Responsible gambling information Pre-commitment strategies Game rules Advertising restrictions Customer complaint mechanisms Self-exclusion programs
Access for each online account holder to their own “Self Manage page” Numerous community contributions Proud to announce an agreement to support the Sydney Opera House in November 2013
Questions from Notice of Meeting
•
Dividends and growth
Tatts Group EBITDA growth excluding Pokies 600
Director and Executive Remuneration
11% constant annual growth
500
EBITDA $'million
For personal use only
•
400
300
200
100
0 FY08
FY09
- Prior year EBITDA excluding Tatts Pokies
FY10
FY11
- FY13 continuing EBITDA
FY12
FY13 - Tatts Pokies FY08 EBITDA
For personal use only
Robbie Cooke CEO/Managing Director
For personal use only
Group performance – FY13 Records
$2.01b
$655.7m
39 20.2%
$112m
8.2%
$1 billion +
Group performance – Tatts Lotteries
For personal use only
Record revenue - $2.01 billion – 13.6% revenue growth driving 33% EBIT growth
Exceptional jackpot sequence - 39 jackpots (Oz Lotto/Powerball) at
Financials Revenue
FY13 $’million
FY12 $’million
Change on PCP %
2,008.6
1,767.5 ▲ 13.6%
or above $15 million (FY12: 22)
Acquired exclusive management rights - SA Lotteries
EBITDA
294.6
223.8 ▲ 31.6%
SA Lotteries contributed EBITDA of $24.8 million ≈ 6 months of
EBIT
269.5
202.6 ▲ 33.0%
operations
4,222 retail outlets, including 584 in South Australia (FY12: 3,693) generating 91.8% of revenues - excl. SA Lotteries management fee
Lotteries licences – Years Remaining
35.2% growth in online sales – now 8.2% of all lottery sales (FY12: 6.6%) - excl. SA Lotteries management fee
Tatts’ proprietary lotteries platform rolled out in all jurisdictions, with
2032 2015 2052 2018 2050
South Australia scheduled for FY14/FY15
2072
Mobile lottery App launched in August - 65,000+ downloads to date Licence/Authorisation
Group performance – Tatts Wagering
For personal use only
5.2% revenue growth driving 25.4% EBIT growth EBIT margin improvement - now 23.7% (FY12: 19.9%) 21.5% growth in online sales – now 20.2% of all wagering sales
Financials
FY13 $’million
approaching Group levels
Change on PCP
Revenue
655.7
623.3 ▲ 5.2%
EBITDA
173.9
144.1 ▲20.7%
EBIT
155.6
124.1 ▲25.4%
(FY12:16.9%)
TOTE Tasmania performing to acquisition model - win rates
FY12 $’million
Total sales from betting on fixed price betting now exceeding $1 billion Innovation will be critical to continuing success brand revitalisation program
Wagering Licences – Years Remaining
increasing our team of book makers introduction of new products; the redevelopment of our retail and online wagering platforms
2062
2111
2015 2100
the roll-out of our cashless, touch screen self-service terminals;
2098
and the continued use of mobile betting vans
Licence/Authorisation Option to renew by Tatts
Group performance – Maxgaming
For personal use only
Monitor all gaming machines in NSW and the Northern Territory Monitor 81% of all gaming machines in Queensland
Maxgaming
FY13 $’million
FY12 $’million
More than 131,000 machines monitored in 3,832 venues Customer loyalty solutions on more than 19,000 machines Introduction of Maxgaming’s patented electronic paperless payout system – Max E-Pay in 7 venues
Change on PCP
Revenue
113.2
114.7 ▼1.3%
EBITDA
63.1
65.8 ▼4.2%
EBIT
48.1
44.5 ▲ 8.1%
All major gaming machine manufacturers now subscribe to Maxgaming’s Maxreports / Maxmobile reporting, benchmarking and analysis system
Maxgaming Licences – Years Remaining
Approval and rollout of Cash Redemption Terminals to support Simplay My Cash, Max E-Pay and TITO
Simplay MyCash became operational on 5,250 EGMs across Queensland
Launch of MaxConnect – Customer relationship and promotional vouchering system (75 venues – 8,900 gaming machines)
2016
NT monitoring
2016 - 2019
NSW monitoring
2017
QLD monitoring 0
Licence/Authorisation Rolling renewal capability
10
20
30
Group performance – Bytecraft & Talarius
For personal use only
Bytecraft Record revenue of $116.0 million achieved in FY13 (up 11.7%)
71.2% of revenue generated from external sales (FY12: 61.4%) New contract costs have been cycled through FY13 which have impacted profitability
Bytecraft
FY13 $’million
FY12 $’million
Revenue
116.0
103.8 ▲11.7%
EBITDA
(1.0)
8.4 ▼112.2%
EBIT
(3.0)
6.9 ▼144.0%
Change on PCP
Talarius 173 venues operated with 7,461 gaming machines (FY12: 7,389
Talarius
FY13 $’million
Revenue
78.0
69.2 ▲12.8%
EBITDA
7.7
7.0 ▲10.8%
(1.0)
(2.7) ▲ 63.7%
machines)
425 additional machines added in FY13 Average net machine revenue (gross gaming revenue after return to player) per day £19.29 (FY12: £18.63)
Gaming machines at new Motorway Service Areas performing
well Property refurbishments continue to improve results
EBIT
FY12 $’million
Change on PCP
For personal use only
Balance Sheet Net Debt to EBITDA
3 Acquisitions:
TOTE TASMANIA
NSW LOTTERIES
2.5
SA LOTTERIES 2.68x
2.27x
2 2.00x 1.80x
1.5
1
1.20x
0.5
0 30 June 2009
30 June 2010
30 June 2011
30 June 2012
30 June 2013
Debt/EBITDA 2.68x (Dec 2012: 2.45x) - following acquisition of right to manage SA Lotteries
Interest expense for FY13 - $106.7 million (FY12: $104.5 million) additional debt for SA Lotteries offset by lower interest costs
For personal use only
Balance Sheet (continued) Net debt (excluding prize reserves) $1,454.3 million (FY12: $1,167.0 million)
Debt Maturity Profile - 30 September 2013 Weighted average Term improved from 2.78 years to 3.60 years
Refinance of $480 million syndicated facility successfully negotiated in February 2013
400 350
Refinance of $300 million syndicated facility successfully negotiated in October 2013
300
100 50
Refinanced in Feb 2013
150
Refinanced in Oct 2013
200
Refinanced in Feb 2013
$'million
250
FY17
FY18
FY19
Debt maturity profile extended – 3.60 years (was 2.78 years) Capex for FY13 - $60.1 million (FY12: $66.6 million)
0 FY14
FY15
FY16
Syndicated Facility
Tatts Bond Debt
USPP Debt
FY20
FY21
Total depreciation and amortisation from continuing operations of $84.1 million (FY12: $91.0 million) - $64.1 million depreciation and $20.0 million amortisation
For personal use only
Organisational renewal
For personal use only
Organisational renewal
For personal use only
Outlook Positive start to FY14 – 23% lift in after tax profits from continuing operations Positive as to the outlook for Q2 – challenge of cycling over the exceptional run of lottery jackpots in October and November 2012 Q2 will gain the benefit of an initial year’s uplift from SA Lotteries Overall wagering environment will remain highly competitive Intention to lift marketing and product development activities in our wagering operations in Q2 and beyond We remain excited by the opportunities in our lotteries, wagering and gaming solutions operations
ANNUAL GENERAL MEETING 31 October 2013 ABN 19 108 686 040
For personal use only
HARRY BOON
Chairman
For personal use only
FY13 Highlights •
New CEO and Managing Director;
•
We won the management rights to the South Australian Lotteries;
•
Net profit from continuing operations lifted an impressive 40.8% to $227.4 million;
•
Statutory net profit of $247.3 million representing a 22.5% reduction compared to FY12;
•
Revenues from continuing operations are up 11.0% to $2.95 billion;
•
We contributed over $1.2 billion to state governments, as well as paying corporate and federal taxes. And last but not least...
•
We moved our head office to Brisbane and are now proud Queenslanders.
For personal use only
FY13 Highlights • • •
•
Strong rotation from sales growth to NPAT
CONTINUING OPERATIONS RESULTS FY 13 (Excluding Tatts Pokies)
EBIT margin 13.8% up from 12.2% in FY12 Results enhanced by ~six months contribution from rights to manage SA Lotteries and a full 12 months contribution from TOTE Tasmania NPAT includes a $16.2 million tax benefit settlement of the Golden Casket tax claim
Change on PCP
Revenue
$2,948.8 m
11.0%
EBITDA
$490.2 m
17.9%
EBIT
$406.1 m
25.1%
NPAT (Continuing)
$227.4 m
40.8%
16.4c
35.5%
EPS
Strong profitability and cash flow give the Board confidence that a high dividend payout ratio can continue
102.3% 100.0%
98.2%
97.5% 96.0%
95.0%
95.1%
95.1%
85.0%
80.0%
FY08
FY09
FY10
15.5 cents
90.0%
23.0 cents
•
Dividend reinvestment plan operative with a 1.5% discount with a 39.7% take-up
105.0%
21.5 cents
•
Full year dividend payout ratio from continuing operations of 95.1% (87.4% from statutory NPAT)
Dividend Payout Ratio
21.0 cents
•
Continued high dividend payout ratio above 95% (7 years running)
21.0 cents
•
20.0 cents
For personal use only
Dividend payout
75.0%
- As a % of continuing NPAT
FY11
FY12
FY13
- As a % of statutory NPAT
For personal use only
Total shareholder returns
Source: Bloomberg. Tabcorp share price adjusted for the demerger in June 2011.
Tatts Up 27.8%
Tatts Up 74.9%
For personal use only
Lotteries – FY13 highlights Lotteries •
Record Lotteries revenues - $2.01 billion up 13.6% (FY12: $1.77 billion)
•
Acquired exclusive management rights to SA Lotteries - EBITDA of $24.8 million in ≈ 6 months
•
South Australia Lotteries integration was executed on time and within budget by a team with an exceptional integration track record
Financials
FY13 FY12 $’million $’million
Change on PCP %
2,008.6
1,767.5 ▲ 13.6%
EBITDA
294.6
223.8 ▲ 31.6%
EBIT
269.5
202.6 ▲ 33.0%
Revenue
For personal use only
Wagering – FY13 highlights Wagering
FY13 FY12 $’million $’million
Change on PCP %
•
5.2% revenue growth driving 25.4% EBIT growth
Financials
•
Total sales from betting on fixed price betting now exceeding $1 billion
Revenue
655.7
623.3 ▲ 5.2%
EBITDA
173.9
144.1 ▲ 20.7%
EBIT
155.6
124.1 ▲ 25.4%
•
TOTE Tasmania performing to acquisition model - win rates approaching Group levels
For personal use only
Gaming Solutions – FY13 highlights FY13 $’million
FY12 $’million
Change on PCP
Revenue
113.2
114.7
▼1.3%
EBITDA
63.1
65.8
▼4.2%
EBIT
48.1
44.5
▲ 8.1%
Talarius
FY13 $’million
FY12 $’million
Change on PCP
Revenue
78.0
69.2 ▲12.8%
EBITDA
7.7
7.0 ▲10.8%
(1.0)
(2.7) ▲ 63.7%
Maxgaming
EBIT Bytecraft
FY13 $’million
FY12 $’million
Change on PCP
Revenue
116.0
103.8 ▲11.7%
EBITDA
(1.0)
8.4 ▼112.2%
EBIT
(3.0)
6.9 ▼144.0%
For personal use only
Community highlights •
Responsible gambling codes of conducts exist in each jurisdiction and include:
• •
Responsible gambling information Pre-commitment strategies Game rules Advertising restrictions Customer complaint mechanisms Self-exclusion programs
Access for each online account holder to their own “Self Manage page” Numerous community contributions Proud to announce an agreement to support the Sydney Opera House in November 2013
Questions from Notice of Meeting
•
Dividends and growth
Tatts Group EBITDA growth excluding Pokies 600
Director and Executive Remuneration
11% constant annual growth
500
EBITDA $'million
For personal use only
•
400
300
200
100
0 FY08
FY09
- Prior year EBITDA excluding Tatts Pokies
FY10
FY11
- FY13 continuing EBITDA
FY12
FY13 - Tatts Pokies FY08 EBITDA
For personal use only
Robbie Cooke CEO/Managing Director
For personal use only
Group performance – FY13 Records
$2.01b
$655.7m
39 20.2%
$112m
8.2%
$1 billion +
Group performance – Tatts Lotteries
For personal use only
Record revenue - $2.01 billion – 13.6% revenue growth driving 33% EBIT growth
Exceptional jackpot sequence - 39 jackpots (Oz Lotto/Powerball) at
Financials Revenue
FY13 $’million
FY12 $’million
Change on PCP %
2,008.6
1,767.5 ▲ 13.6%
or above $15 million (FY12: 22)
Acquired exclusive management rights - SA Lotteries
EBITDA
294.6
223.8 ▲ 31.6%
SA Lotteries contributed EBITDA of $24.8 million ≈ 6 months of
EBIT
269.5
202.6 ▲ 33.0%
operations
4,222 retail outlets, including 584 in South Australia (FY12: 3,693) generating 91.8% of revenues - excl. SA Lotteries management fee
Lotteries licences – Years Remaining
35.2% growth in online sales – now 8.2% of all lottery sales (FY12: 6.6%) - excl. SA Lotteries management fee
Tatts’ proprietary lotteries platform rolled out in all jurisdictions, with
2032 2015 2052 2018 2050
South Australia scheduled for FY14/FY15
2072
Mobile lottery App launched in August - 65,000+ downloads to date Licence/Authorisation
Group performance – Tatts Wagering
For personal use only
5.2% revenue growth driving 25.4% EBIT growth EBIT margin improvement - now 23.7% (FY12: 19.9%) 21.5% growth in online sales – now 20.2% of all wagering sales
Financials
FY13 $’million
approaching Group levels
Change on PCP
Revenue
655.7
623.3 ▲ 5.2%
EBITDA
173.9
144.1 ▲20.7%
EBIT
155.6
124.1 ▲25.4%
(FY12:16.9%)
TOTE Tasmania performing to acquisition model - win rates
FY12 $’million
Total sales from betting on fixed price betting now exceeding $1 billion Innovation will be critical to continuing success brand revitalisation program
Wagering Licences – Years Remaining
increasing our team of book makers introduction of new products; the redevelopment of our retail and online wagering platforms
2062
2111
2015 2100
the roll-out of our cashless, touch screen self-service terminals;
2098
and the continued use of mobile betting vans
Licence/Authorisation Option to renew by Tatts
Group performance – Maxgaming
For personal use only
Monitor all gaming machines in NSW and the Northern Territory Monitor 81% of all gaming machines in Queensland
Maxgaming
FY13 $’million
FY12 $’million
More than 131,000 machines monitored in 3,832 venues Customer loyalty solutions on more than 19,000 machines Introduction of Maxgaming’s patented electronic paperless payout system – Max E-Pay in 7 venues
Change on PCP
Revenue
113.2
114.7 ▼1.3%
EBITDA
63.1
65.8 ▼4.2%
EBIT
48.1
44.5 ▲ 8.1%
All major gaming machine manufacturers now subscribe to Maxgaming’s Maxreports / Maxmobile reporting, benchmarking and analysis system
Maxgaming Licences – Years Remaining
Approval and rollout of Cash Redemption Terminals to support Simplay My Cash, Max E-Pay and TITO
Simplay MyCash became operational on 5,250 EGMs across Queensland
Launch of MaxConnect – Customer relationship and promotional vouchering system (75 venues – 8,900 gaming machines)
2016
NT monitoring
2016 - 2019
NSW monitoring
2017
QLD monitoring 0
Licence/Authorisation Rolling renewal capability
10
20
30
Group performance – Bytecraft & Talarius
For personal use only
Bytecraft Record revenue of $116.0 million achieved in FY13 (up 11.7%)
71.2% of revenue generated from external sales (FY12: 61.4%) New contract costs have been cycled through FY13 which have impacted profitability
Bytecraft
FY13 $’million
FY12 $’million
Revenue
116.0
103.8 ▲11.7%
EBITDA
(1.0)
8.4 ▼112.2%
EBIT
(3.0)
6.9 ▼144.0%
Change on PCP
Talarius 173 venues operated with 7,461 gaming machines (FY12: 7,389
Talarius
FY13 $’million
Revenue
78.0
69.2 ▲12.8%
EBITDA
7.7
7.0 ▲10.8%
(1.0)
(2.7) ▲ 63.7%
machines)
425 additional machines added in FY13 Average net machine revenue (gross gaming revenue after return to player) per day £19.29 (FY12: £18.63)
Gaming machines at new Motorway Service Areas performing
well Property refurbishments continue to improve results
EBIT
FY12 $’million
Change on PCP
For personal use only
Balance Sheet Net Debt to EBITDA
3 Acquisitions:
TOTE TASMANIA
NSW LOTTERIES
2.5
SA LOTTERIES 2.68x
2.27x
2 2.00x 1.80x
1.5
1
1.20x
0.5
0 30 June 2009
30 June 2010
30 June 2011
30 June 2012
30 June 2013
Debt/EBITDA 2.68x (Dec 2012: 2.45x) - following acquisition of right to manage SA Lotteries
Interest expense for FY13 - $106.7 million (FY12: $104.5 million) additional debt for SA Lotteries offset by lower interest costs
For personal use only
Balance Sheet (continued) Net debt (excluding prize reserves) $1,454.3 million (FY12: $1,167.0 million)
Debt Maturity Profile - 30 September 2013 Weighted average Term improved from 2.78 years to 3.60 years
Refinance of $480 million syndicated facility successfully negotiated in February 2013
400 350
Refinance of $300 million syndicated facility successfully negotiated in October 2013
300
100 50
Refinanced in Feb 2013
150
Refinanced in Oct 2013
200
Refinanced in Feb 2013
$'million
250
FY17
FY18
FY19
Debt maturity profile extended – 3.60 years (was 2.78 years) Capex for FY13 - $60.1 million (FY12: $66.6 million)
0 FY14
FY15
FY16
Syndicated Facility
Tatts Bond Debt
USPP Debt
FY20
FY21
Total depreciation and amortisation from continuing operations of $84.1 million (FY12: $91.0 million) - $64.1 million depreciation and $20.0 million amortisation
For personal use only
Organisational renewal
For personal use only
Organisational renewal
For personal use only
Outlook Positive start to FY14 – 23% lift in after tax profits from continuing operations Positive as to the outlook for Q2 – challenge of cycling over the exceptional run of lottery jackpots in October and November 2012 Q2 will gain the benefit of an initial year’s uplift from SA Lotteries Overall wagering environment will remain highly competitive Intention to lift marketing and product development activities in our wagering operations in Q2 and beyond We remain excited by the opportunities in our lotteries, wagering and gaming solutions operations
