RESULTS FOR ANNOUNCEMENT TO THE MARKET FOR THE HALF YEAR ENDED 31 DECEMBER 2017

Transcription

1 8 February 2018 Australian Securities Exchange Cmpanies Annuncements Platfrm 20 Bridge Street Sydney NSW 2000 RESULTS FOR ANNOUNCEMENT TO THE MARKET FOR THE HALF YEAR ENDED 31 DECEMBER 2017 In accrdance with the ASX Listing Rule 4.2A, the fllwing infrmatin in respect f the half year ended 31 December 2017 is transmitted fr ldgment: 1. Appendix 4D; 2. Media Release; 3. Directrs Reprt; and 4. Financial Reprt. The infrmatin cntained in this annuncement shuld be read in cnjunctin with Tabcrp s mst recent Annual Reprt. Yurs faithfully Fina Mead Grup Cmpany Secretary Tabcrp Hldings Limited Level 21, Twer Cllins Street Melburne VIC 3008 GPO Bx 1943 Melburne VIC Australia 3001 tabcrp.cm.au ABN

2 A P P E N D I X 4 D Results fr annuncement t the market Half year reprt fr the 6 mnths ended 31 December 2017 Tabcrp Hldings Limited (ABN ) Results $m % change increase/(decrease) Revenue frm rdinary activities 1, % Prfit frm rdinary activities after tax attributable t members 24.6 (58%) Net prfit fr the perid attributable t members 24.6 (58%) Amunt Franked amunt Dividend Recrd date Payable per share per share Interim dividend 14 February March N freign cnduit incme is attributable t the interim dividend. Dividend reinvestment plan Tabcrp's dividend reinvestment plan (DRP) will perate in respect f the interim dividend, with the last date fr receipt f electin ntices being 15 February N discunt is applicable t shares allcated t participants and n brkerage, cmmissin r ther transactin csts will be payable by participants n shares acquired under the DRP. Shares will be allcated n 13 March 2018 and will rank equally in all respects with existing shares. The price at which shares are allcated is the daily vlume weighted average market price f Tabcrp shares sld in the rdinary curse f trading n the Australian Securities Exchange ver a perid f 10 business days beginning n the secnd business day after the dividend recrd date. Net tangible asset backing December 2017 $ December 2016 $ Net tangible asset backing per rdinary share (1.81) (1.26) Net tangible asset backing per rdinary share including licences (1.00) (0.47) Supplementary infrmatin The previus crrespnding perid is the half year ended 31 December Fr additinal Appendix 4D disclsures, refer t the accmpanying Media Release, Directrs' Reprt and the Financial Reprt fr the half year ended 31 December This Appendix 4D shuld be read in cnjunctin with Tabcrp Hldings Limited's Annual Reprt 2017.

3 M E D I A R E L E A S E 8 February 2018 Tabcrp 1H18 Results: Reshaping Tabcrp a significant first half Cmbinatin f Tatts Grup and Tabcrp cmpleted in December 2017 Creates a wrld-class, diversified gambling entertainment grup Large natinal ftprint and a diverse prduct ffering acrss Wagering, Media, Ltteries, Ken and Gaming Services Cmbined Executive Leadership Team appinted Integratin prgressing t plan At least $130m per annum f EBITDA synergies and business imprvement benefits planned t be delivered in the first full year fllwing integratin. Integratin is planned t take apprximately tw years Strategic investments t enhance cmpetitive psitin in Australian gambling market New wagering venue partnerships, including digital cmmissins Imprved digital capability and custmer experience Strengthened regulatry cmpliance and risk management capability acrss all businesses Well placed t cmpete in evlving regulatry landscape Luxbet ceased peratins and Odyssey Gaming Services divested Sun Bets business remains under review 1H18 Financial verview Statutry results 1 Revenues $1,376.2m, up 18.7% NPAT $24.6m, dwn 58.2% EPS cents per share, dwn 63.4% NPAT and EPS adversely impacted by significant items after tax 3 f $57.4m Results befre significant items 4 Revenues $1,376.2m, up 18.7% EBITDA $269.6m, dwn 0.3% NPAT $82.0m, dwn 20.2% EPS 8.6 cents per share, dwn 30.1% Interim dividend 11.0 cents per share, fully franked Operatinal highlights Cmpletin f cmbinatin with Tatts TAB business reprted 3.1% turnver grwth driven by a 16.5% uplift in digital turnver and strng custmer acquisitin Gaming Services delivered duble digit earnings grwth, with Intecq nw fully integrated Ken turnver grwth f 3.5% in 2Q18, with mmentum building in digital sales Grup pr-frma 5 results befre significant items Revenues $2,666.2m, up 3.1% EBITDA $485.4m, dwn 1.2% EBIT $350.8m, dwn 3.1% 1 Tabcrp results include 18 days cntributin frm Tatts Grup frm 14 December EPS calculated using weighted average shares fr the perid. 3 Significant items (after tax) f $57.4m cmprise Tatts Grup acquisitin related csts $59.3m, Sun Bets nerus cntract prvisin $49.0m, Sun Bets impairment $3.2m, Luxbet clsure csts $12.4m, lss n Odyssey divestment $6.3m, partly ffset by the net gain n the cash-settled equity swap $72.8m. 4 Tabcrp results befre significant items include the Sun Bets perating result in 1H18. 5 Pr-frma results cntain six mnths f Tabcrp and Tatts results, with adjustments. Refer t slide 22 f 2017/18 Tabcrp Hldings Limited First Half Results Presentatin fr further details.

4 M E D I A R E L E A S E NOTES: 1. Results include 18 days cntributin frm Tatts frm 14 December Sun Bets was treated as a significant item in 1H17 3. Significant items (after tax) f $57.4m cmprise Tatts Grup acquisitin related csts $59.3m, Sun Bets nerus cntract prvisin $49.0m, Sun Bets impairment $3.2m, Luxbet clsure csts $12.4m, lss n Odyssey divestment $6.3m, partly ffset by the net gain n the Tatts cash-settled equity swap $72.8m BUSINESS RESULTS NOTES: 1. Sun Bets was treated as a significant item in 1H17 2. Results include 18 days cntributin frm Tatts frm 14 December Tatts Grup has been identified as a single segment due t the prximity f the acquisitin t the perid end. Tabcrp s perating segments will be reassessed prir t 30 June Business results d nt aggregate t Grup ttal due t unallcated expenses and intercmpany eliminatins

5 M E D I A R E L E A S E MANAGING DIRECTOR AND CEO COMMENTARY "1H18 was an imprtant half fr Tabcrp as we cmpleted the cmbinatin with Tatts Grup, bringing tgether tw highly cmplementary businesses. The cmbinatin psitins us well t invest, innvate and cmpete in a rapidly evlving envirnment, Tabcrp s Managing Directr and CEO, David Attenbrugh, said. The 1H18 financial result reflects a perid f reshaping the Tabcrp business fr sustainable grwth. This includes implementing the cmbinatin with Tatts, exiting Luxbet and Odyssey Gaming Services, and ur nging investments in areas such as ur digital capability, custmer acquisitin and the risk management and cmpliance framewrk. The fundamentals in Tabcrp s Wagering business remained strng in the first half, with gd turnver grwth and a strng uplift in digital turnver and custmer acquisitin. This was pleasing in a highly cmpetitive wagering market in which cmpetitrs aggressively pursued custmer acquisitin ahead f regulatry change. The Wagering business has made strategic investments in digital cmmissins and venue partnerships. While these investments impact variable cntributin, they have strengthened ur venue partnerships and the sustainability f ur Wagering business. Tabcrp s Gaming Services business cntinued t grw, while Ken had an imprved secnd quarter and is building mmentum in digital sales. The diversificatin benefits that the Tabcrp-Tatts cmbinatin brings were highlighted by the six-mnth financial results f the Tatts Grup businesses. Tatts Ltteries and Gaming businesses delivered strng earnings grwth, while the Wagering perfrmance reinfrces the pprtunity we have in successfully integrating ur tw Wagering businesses. Tabcrp is well placed t cmpete in the evlving regulatry landscape. This includes the intrductin f pint f cnsumptin taxes, and restrictins n credit betting, advertising, inducements and live betting. WAGERING & MEDIA Tabcrp s Wagering & Media revenues were $1,000.7m, up 1.4%. EBITDA was $181.8m, dwn 7.3%. Wagering revenue grwth, ex-luxbet, was up 2.6%. Revenue grwth in the secnd quarter declined relative t the first quarter. Media revenues were $89.2m, in line with the pcp. The KPIs fr the cre TAB business remained strng, with digital turnver grwth f 16.5% and ttal TAB fixed dds revenue grwth f 14.4%, including 16.1% grwth in racing. Active TAB accunt custmers were up 7.2% in the half, driven by 17.1% grwth in new custmer acquisitin and gd retentin rates. The csts f strategic venue partnerships and the rllut f a digital cmmissins mdel were reflected in the lwer variable cntributin. Operating expense grwth f 4.1% was driven by increased custmer acquisitin activity and legal csts, which included the defence f CrwnBet s retail challenge in NSW. Luxbet recrded an EBIT lss f $7.8m. A strategic review f Luxbet was cmpleted in the half, which resulted in the business ceasing peratins in December. GAMING SERVICES Tabcrp s Gaming Services revenues, which include a full six mnths f Intecq trading cmpared t ne mnth in the pcp, were $83.3m, up 38.4%. EBITDA was $46.3m, up 28.6%. The integratin f Intecq has cmpleted, with the business nw cvering apprximately 57,600 gaming machines acrss lyalty and value-added systems in Victria, NSW, Queensland and Tasmania.

6 M E D I A R E L E A S E KENO Revenues in Tabcrp s Ken business were $112.2m, in line with the pcp. EBITDA was $39.2m, dwn 2.5%. The secnd quarter turnver perfrmance was strnger relative t the first quarter with turnver grwth f 3.5%. The first half perfrmance was impacted by an unfavurable jackpt sequence. SUN BETS The UK start-up Sun Bets recrded an EBITDA lss f $22.5m in 1H18. Sun Bets perfrmance remained unsatisfactry in 1H18, despite a better trading perfrmance in 2Q18. Significant items have been raised in respect f a Sun Bets nerus cntract prvisin f $49.0m and impairment f business assets f $4.3m ($3.2m after tax). The Sun Bets business remains under review. TATTS GROUP Revenues frm the businesses frmerly run by Tatts Grup fr the 18 days frm 14 December (effective merger date) t 31 December 2017 were $176.3m. EBITDA was $27.3m. Acrss the six mnths t 31 December 2017, Tatts Ltteries business recrded revenues f $1,081.2m, up 6.2%, and EBITDA f $161.1m, up 10.8%. Tatts Wagering business revenues were $311.1m, dwn 2.0%, and EBITDA was $55.9m, dwn 10.1%. Tatts Gaming revenues were $91.8m, up 4.8%, and EBITDA was $35.4m, up 9.5%. 6 DIVIDEND Tabcrp has annunced a fully franked interim dividend f 11.0 cents per share. The FY18 dividend target is 90% f NPAT befre significant items, amrtisatin f the Victrian Wagering and Betting Licence and Sun Bets. The Dividend Reinvestment Plan will perate fr the interim dividend. INTEGRATION The cmbinatin with Tatts is planned t deliver at least $130m per annum f EBITDA synergies and business imprvement benefits in the first full year after integratin. Integratin is planned t take apprximately tw years and is prgressing well. CONCLUSION Mr Attenbrugh said: "Nw that the cmbinatin with Tatts has been cmpleted, we are fcused n delivering the significant value and ther benefits that will flw t sharehlders, custmers and ur racing and venue partners. We have reshaped the business and have created a strng platfrm fr sustainable grwth, with a clear set f pririties t drive grwth acrss each f ur businesses. Our fcus n ensuring the highest levels f regulatry cmpliance will cntinue as we deliver n this agenda. At the same time, we will remain cmmitted t a disciplined apprach t perating expenses and capital investment t deliver sustainable returns t ur sharehlders. Fr mre infrmatin: Media: Nichlas Tzaferis, GM Crprate Affairs, Financial analysts: Sacha Krien, GM Investr Relatins, Refer t slide 16 f 2017/18 Tabcrp Hldings Limited First Half Results Presentatin fr further details n the preparatin f the Tatts Grup business results. The Tatts Grup 1H18 infrmatin is subject t review by the Tatts Grup external auditrs.

7 D I R E C T O R S R E P O R T The Directrs f Tabcrp Hldings Limited (the Cmpany) present their reprt fr the cnslidated entity cmprising the Cmpany and its subsidiaries (the Tabcrp Grup) in respect f the half year ended 31 December Principal activities The principal activities f the Tabcrp Grup during the half year cmprised the prvisin f gambling and entertainment services. The Tabcrp Grup s principal activities remain unchanged frm the previus financial year t 30 June 2017, except fr the inclusin f Tatts Grup Limited (and its subsidiaries) (Tatts Grup) which became a whlly wned subsidiary f the Cmpany in December 2017, and as disclsed elsewhere in this Directrs Reprt. The results fr the Tabcrp Grup fr the half year t 31 December 2017 include 18 days cntributin frm Tatts Grup frm 14 December Review f peratins The Tabcrp Grup has the fllwing five perating segments at the end f the perid: Wagering and Media; Gaming Services; Ken; Sun Bets; and Tatts Grup, which is a leading Australian lttery, wagering and gaming cmpany with a diversified netwrk f retail and direct channels acrss Australia. Sun Bets was identified as an perating segment during the current perid as it is n lnger in an establishment phase. Tatts Grup has been identified as a single segment due t the prximity f the acquisitin t the perid end and there has been n regular reprting t the Cmpany s Managing Directr and Chief Executive Officer (Chief Operating Decisin Maker) f results at a lwer level. The Tabcrp Grup's perating segments will be reassessed prir t 30 June The activities and results fr these peratins during the half year are set ut in the Media Release, which frms part f this Directrs Reprt. Dividend An interim dividend f 11 cents per share has been annunced. The interim dividend will be fully franked and payable n 13 March 2018 t sharehlders registered at 14 February The ex-dividend date is 13 February Further details relating t the interim dividend are prvided in Nte A2 f the Financial Reprt. The Cmpany s Dividend Reinvestment Plan (DRP) will perate in respect f this interim dividend, with n discunt r underwriting applicable.

8

9 Ernst & Yung 8 Exhibitin Street Melburne VIC 3000 Australia GPO Bx 67 Melburne VIC 3001 Tel: Fax: ey.cm/au Auditr s Independence Declaratin t the Directrs f Tabcrp Hldings Limited As lead auditr fr the review f Tabcrp Hldings Limited fr the half-year ended 31 December 2017, I declare t the best f my knwledge and belief, there have been: a) n cntraventins f the auditr independence requirements f the Crpratins Act 2001 in relatin t the review; and b) n cntraventins f any applicable cde f prfessinal cnduct in relatin t the review. This declaratin is in respect f Tabcrp Hldings Limited and the entities it cntrlled during the financial perid. Ernst & Yung David Shewring Partner 8 February 2018 A member firm f Ernst & Yung Glbal Limited Liability limited by a scheme apprved under Prfessinal Standards Legislatin

10 I N C O M E S T A T E M E N T F O R T H E H AL F Y E AR E N D E D 3 1 D E C E M B E R December December Nte $m $m Revenue 1, ,160.8 Other incme A Cmmissins and fees (539.2) (479.9) Gvernment taxes and levies (262.8) (165.8) Emplyment csts (135.7) (109.7) Depreciatin and amrtisatin (99.8) (88.2) Impairment A3 (18.1) - Cmmunicatin and technlgy csts (43.9) (42.3) Advertising and prmtins (48.2) (38.4) Prperty csts (26.2) (20.5) Other expenses (125.7) (83.4) Transactin csts - cmbinatin with Tatts Grup C1 (47.0) (9.1) Prfit befre incme tax expense and net finance csts Finance incme Finance csts (45.9) (36.7) Prfit befre incme tax expense Incme tax expense (64.6) (40.1) Net prfit after tax Other cmprehensive incme Items that may be reclassified t prfit r lss Change in fair value f cash flw hedges taken t equity Change in fair value f available fr sale financial assets (0.1) - Exchange differences n translatin f freign peratins (0.2) (1.5) Incme tax n these items (0.7) (2.3) Other cmprehensive incme fr the perid, net f incme tax Ttal cmprehensive incme fr the perid December December Earnings per share: cents cents Basic earnings per share Diluted earnings per share Dividends per share: Declared and paid during the perid A Determined in respect f the perid A The incme statement shuld be read in cnjunctin with the accmpanying ntes. Tabcrp Hldings Limited and its cntrlled entities

11 B A L A N C E AS AT 3 1 D E C E M B E R S H E E T December June Nte $m $m Current assets Cash and cash equivalents Receivables Prepayments Current tax assets Derivative financial instruments B Assets held fr sale Other A Ttal current assets 1, Nn current assets Receivables Investment in an assciate C Available fr sale financial assets B Licences 1, Other intangible assets A6 9, ,058.1 Prperty, plant and equipment Prepayments Held t maturity investments B Derivative financial instruments B Other Ttal nn current assets 11, ,184.3 TOTAL ASSETS 13, ,740.9 Current liabilities Payables 1, Interest bearing liabilities B1 1, Current tax liabilities Prvisins Derivative financial instruments B Liabilities directly assciated with assets held fr sale Other A Ttal current liabilities 2, ,416.4 Nn current liabilities Payables A Interest bearing liabilities B1 2, Deferred tax liabilities Prvisins Derivative financial instruments B Other Ttal nn current liabilities 3, TOTAL LIABILITIES 5, ,257.5 NET ASSETS 7, ,483.4 Equity Issued capital 8, ,444.5 Accumulated lsses (350.1) (270.3) Reserves (690.9) (690.8) TOTAL EQUITY 7, ,483.4 The balance sheet shuld be read in cnjunctin with the accmpanying ntes. Tabcrp Hldings Limited and its cntrlled entities

12 C A S H F L O W S T A T E M E N T F O R T H E H AL F Y E AR E N D E D 3 1 D E C E M B E R December December $m $m Cash flws frm perating activities Net cash receipts in the curse f peratins 1, ,169.8 Payments t suppliers, service prviders and emplyees (932.5) (841.1) Payment f gvernment levies, betting taxes and GST (159.4) (116.8) Finance incme received Finance csts paid (64.3) (35.6) Incme tax paid (21.5) (34.2) Net cash flws frm perating activities Cash flws frm investing activities Payments relating t cash-settled equity swap (325.1) (326.4) Prceeds relating t cash-settled equity swap Payment fr business acquisitin, net f cash acquired (210.7) (113.2) Net prceeds frm business divestment Payment fr prperty, plant and equipment and intangibles (105.9) (78.3) Prceeds frm sale f prperty, plant and equipment and intangibles Lan repayments received frm custmers Net cash flws used in investing activities (549.4) (516.8) Cash flws frm financing activities Net cash flws frm revlving bank facilities Prceeds frm brrwings 3, Repayment f brrwings (2,536.2) - Settlement f dividends payable by business acquired (235.0) - Dividends paid (104.4) (90.1) Payment f transactin csts fr share issue (2.4) - Payment fr n-market share purchase (4.9) - Net cash flws frm financing activities Net increase/(decrease) in cash held (17.0) Effects f exchange rate changes n cash Cash at beginning f perid Cash at end f perid The cash flw statement shuld be read in cnjunctin with the accmpanying ntes. Tabcrp Hldings Limited and its cntrlled entities

13 STATEMENT OF CHANGES IN EQUITY F O R T H E H AL F Y E AR E N D E D 3 1 D E C E M B E R Number f Issued capital Reserves rdinary shares Ordinary shares Treasury shares Accumulated lsses Hedging Demerger Other Ttal equity m $m $m $m $m $m $m $m 2017 Balance at 1 July ,445.1 (0.6) (270.3) (24.2) (669.9) 3.3 1,483.4 Prfit fr the perid Other cmprehensive incme (0.3) 1.3 Ttal cmprehensive incme (0.3) 25.9 Dividends paid (104.4) (104.4) Transfers (3.0) - Restricted shares issued - - (0.3) (0.3) Share based payments expense Cnsideratin fr business cmbinatin 1, , ,075.7 Transactin csts n business cmbinatin - (2.4) (2.4) Net utlay t purchase shares - (4.6) (4.6) Balance at 31 December , ,516.8 (0.5) (350.1) (22.6) (669.9) 1.6 7,475.3 Ttal issued capital 8,516.3 Ttal reserves (690.9) 2016 Balance at 1 July ,431.2 (0.6) (46.3) (31.4) (669.9) 5.1 1,688.1 Prfit fr the perid Other cmprehensive incme (1.5) 3.9 Ttal cmprehensive incme (1.5) 62.8 Dividends paid (99.8) (99.8) Dividend reinvestment plan Transfers (2.8) - Restricted shares issued (1.4) Perfrmance rights exercised Share based payments expense Balance at 31 December ,445.1 (1.0) (87.2) (26.0) (669.9) 2.3 1,663.3 Ttal issued capital 2,444.1 Ttal reserves (693.6) The statement f changes in equity shuld be read in cnjunctin with the accmpanying ntes. Tabcrp Hldings Limited and its cntrlled entities

14 NOTES TO THE FINANCIAL STATEMENTS F O R T H E H AL F Y E AR E N D E D 3 1 D E C E M B E R ABOUT THIS REPORT Tabcrp Hldings Limited (the Cmpany) is a cmpany dmiciled in Australia. The general purpse cndensed cnslidated half year financial reprt (half year financial reprt) f the Cmpany fr the six mnths ended 31 December 2017 cmprises the Cmpany and its subsidiaries (the Grup) and the Grup's interest in jint arrangements and assciates. The half year financial reprt was authrised fr issue by the Bard f Directrs n 8 February 2018 and has been prepared in accrdance with AASB 134 'Interim Financial Reprting' and the Crpratins Act This half year financial reprt des nt include all the ntes f the type nrmally included in an annual financial reprt. Accrdingly, this reprt is t be read in cnjunctin with the annual reprt fr the year ended 30 June 2017 and any public annuncements made by the Cmpany during the interim reprting perid in accrdance with the cntinuus disclsure requirements f the Crpratins Act The accunting plicies used are cnsistent with thse applied in the 30 June 2017 financial reprt. Nte disclsures in this half year financial reprt have been gruped int the fllwing fur sectins: A A1 A2 A3 A4 A5 A6 A7 B B1 B2 B3 B4 C C1 C2 C3 D D1 D2 Grup perfrmance and perating assets and liabilities Segment infrmatin Dividends Revenue and expenses Subsequent events Other assets and liabilities Other intangible assets Payables - nn current Capital and risk management Interest bearing liabilities Financial assets Derivative financial instruments Fair value measurement Grup structure Business cmbinatins Dispsal grup held fr sale Investment in an assciate Other disclsures Cmmitments Cntingent liabilities Tabcrp Hldings Limited and its cntrlled entities

15 NOTES TO THE FINANCIAL STATEMENTS F O R T H E H AL F Y E AR E N D E D 3 1 D E C E M B E R SECTION A - GROUP PERFORMANCE AND OPERATING ASSETS AND LIABILITIES A1 Segment infrmatin Operating segments reflect the business level at which financial infrmatin is prvided t the Managing Directr and Chief Executive Officer (Chief Operating Decisin Maker), fr decisin making regarding resurce allcatin and perfrmance assessment. The measure f segment prfit used excludes significant items nt cnsidered integral t the nging perfrmance f the segment. Inter-segment pricing is determined n cmmercial terms and cnditins. The Grup has five perating segments at perid end. Sun Bets was identified as an perating segment during the current perid as it is n lnger in an establishment phase. Tatts Grup has been identified as a single segment due t the prximity f the acquisitin t the perid end and there has been n regular reprting t the Chief Operating Decisin Maker f results at a lwer level. Tabcrp's perating segments will be reassessed prir t 30 June Tabcrp Grup Wagering and Media Ttalisatr and fixed dds betting activities and natinal and internatinal bradcasting f racing and sprting events Ken Ken peratins in licensed venues and TABs in Victria, Queensland and the Australian Capital Territry, and in licensed venues in New Suth Wales Gaming Services Supply f electrnic gaming machines, gaming systems and specialised services t licensed gaming venues including mnitring services Sun Bets Prvisin f interactive sprts betting and casin games in the United Kingdm and Ireland Tatts Grup Operatins f the Tatts Grup since acquisitin (being 18 days). Tatts Grup is a leading Australian lttery, wagering and gaming cmpany with a diversified netwrk f retail and direct channels acrss Australia. Refer nte C1. Segment revenue $m Segment prfit befre interest and tax $m 1H18 1H17 1H18 1H (23.5) , , , Wagering and Media Tatts Grup Ken Sun Bets Gaming Services Tabcrp Hldings Limited and its cntrlled entities

16 NOTES TO THE FINANCIAL STATEMENTS F O R T H E H AL F Y E AR E N D E D 3 1 D E C E M B E R SECTION A - GROUP PERFORMANCE AND OPERATING ASSETS AND LIABILITIES (CONTINUED) A1 Segment infrmatin (cntinued) December 2017 Wagering Gaming and Media Ken Services Sun Bets Tatts Grup Ttal $m $m $m $m $m $m Revenue - external custmers 1, ,376.2 Segment prfit/(lss) befre interest and tax (23.5) December 2016 Revenue - external custmers ,159.3 Segment prfit befre interest and tax December December December December $m $m $m $m Recnciliatin f segment revenue and prfit Segment revenue 1, ,159.3 Segment prfit befre interest and tax Unallcated items: - finance incme finance csts (i) - - (45.9) (36.7) - significant items: - net gain n cash-settled equity swap csts relating t the cmbinatin with Tatts Grup (ii) - - (69.4) (9.1) - Sun Bets nerus cntract prvisin (refer nte A3) - - (49.0) - - establishment and start-up f Sun Bets (22.8) - ther (iii) - - (27.6) (28.4) - ther - - (2.5) (1.9) Ttal per incme statement 1, , (i) (ii) (iii) Includes financing csts relating t the cash-settled equity swap f $6.3m (31 December 2016 $0.9m). Includes transactin csts per nte C1 f $47.0m (31 December 2016 $9.1m). Significant items - ther: cmprises csts relating t Luxbet clsure f $17.0m, lss n Odyssey divestment f $6.3m, and impairment f Sun Bets business assets f $4.3m. Significant items - ther: in the prir perid cmprised csts relating t the Intecq acquisitin f $4.1m and AUSTRAC civil prceedings f $24.3m. December December December December Cents per Cents per A2 Dividends share share $m $m Fully franked dividends declared and paid during the perid: Prir year final dividend Fully franked dividends determined in respect f the perid: Interim dividend Fully franked dividends declared after balance date t be recgnised in subsequent perid: Interim dividend Tabcrp Hldings Limited and its cntrlled entities

17 NOTES TO THE FINANCIAL STATEMENTS F O R T H E H AL F Y E AR E N D E D 3 1 D E C E M B E R SECTION A - GROUP PERFORMANCE AND OPERATING ASSETS AND LIABILITIES (CONTINUED) December December A3 Revenue and expenses $m $m (a) Other incme Net gain n cash-settled equity swap Net lss n dispsal f nn current assets (0.3) - Net lss n dispsal f subsidiaries (6.3) - Other 0.8 (0.1) (b) Impairment Plant and equipment Other intangible assets - sftware Other intangible assets - ther (c) Other expenses include: Onerus cntract prvisin (i) (i) Cmprises prvisin raised in relatin t cntractual bligatins fr Sun Bets. A4 Subsequent events Other than the events disclsed elsewhere in this reprt, n additinal matters r circumstances have arisen since the end f the half year, that may significantly affect the Grup's peratins, the results f thse peratins r the state f affairs f the Grup. December June A5 Other assets and liabilities Nte $m $m (a) Current assets SA Ltteries mnies held in trust Other (b) Current liabilities SA Ltteries mnies held in trust Other A6 Other intangible assets Gdwill (i) 8, ,512.6 Other intangible assets , ,058.1 (i) Gdwill mvement: Carrying amunt at beginning f perid 1, ,431.8 Acquisitin via business cmbinatins C1 7, Dispsals (5.6) - Other (0.2) - Carrying amunt at end f perid 8, ,512.6 A7 Payables - nn current Other payables Nn current payables have arisen due t the cmbinatin with Tatts Grup. Nn current payables are recgnised initially at fair value and subsequently measured at amrtised cst using the effective interest methd. Tabcrp Hldings Limited and its cntrlled entities

18 NOTES TO THE FINANCIAL STATEMENTS F O R T H E H AL F Y E AR E N D E D 3 1 D E C E M B E R SECTION B - CAPITAL AND RISK MANAGEMENT B1 Interest bearing liabilities The Grup brrws mney frm financial institutins and debt investrs in the frm f bank lans, subrdinated ntes and freign currency denminated ntes. The fllwing table details the debt psitin f the Grup at 31 December: December June Facility limit Facility Details $m Maturity $m $m Bank lans - unsecured Flating interest rate revlving facility. Subject t Jun financial undertakings as t gearing and interest cver Feb ,800.0 Dec-19 1, Dec Dec Dec , n/a n/a n/a n/a n/a , , ,372.9 US private placement Fixed interest rate US dllar debt. Aggregate US dllar principal f $390.0m. Crss currency swaps in place fr all US dllar debt. Under these swaps the Australian dllar amunts payable at maturity is $382.0m. USD 87.0 Apr USD Dec-20 (i) USD Apr Bnds Flating rate interest 90 day BBSW +3.1% paid quarterly in arrears (i) Jul , ,658.3 Current 1, Nn current 2, , ,658.3 (i) The Bnds and USPP ntes maturing in December 2020 were acquired thrugh the Tatts Grup cmbinatin and are disclsed as current. Hlders f these Bnds and USPP ntes were entitled t require redemptin f their investments as the Tatts Grup cmbinatin resulted in a change f cntrl event. Bth cntrl event redemptin perids ceased in January and n material redemptins were received. B2 Financial assets Available fr sale financial assets include equity investments and debt securities. Equity investments classified as available fr sale are thse that are neither classified as held fr trading nr designated at fair value thrugh prfit r lss. Debt securities in this categry are thse that are intended t be held fr an indefinite perid f time and that may be sld in respnse t needs fr liquidity r in respnse t changes in market cnditins. After initial measurement, available fr sale financial assets are subsequently carried at fair value (refer t nte B4). Changes in the fair value are recgnised in ther cmprehensive incme and accumulated in a reserve within equity. Held t maturity investments are measured at amrtised cst. December June $m $m (a) Available fr sale financial assets Unlisted investments - managed fund investment (b) Held t maturity investments Investment - term depsits Tabcrp Hldings Limited and its cntrlled entities

19 NOTES TO THE FINANCIAL STATEMENTS F O R T H E H AL F Y E AR E N D E D 3 1 D E C E M B E R SECTION B - CAPITAL AND RISK MANAGEMENT (CONTINUED) B3 Derivative financial instruments The Grup hlds the fllwing derivative financial instruments, all at fair value based n level 2 bservable inputs (refer t nte B4): December June $m $m Current assets Crss currency swaps Cash-settled equity swap Equity derivative Nn current assets Interest rate swaps Crss currency swaps Current liabilities Interest rate swaps Crss currency swaps Open betting psitins Nn current liabilities Interest rate swaps B3.1 Cash-settled equity swap During the prir year the Grup entered int a cash-settled equity swap with an investment bank in respect f circa 147 millin shares in Tatts Grup representing apprximately 10% f Tatts Grup shares n issue. This transactin was intended t help facilitate the cmbinatin f Tabcrp and Tatts Grup. The swap had an average reference price f $4.34 per Tatts Grup share, and prvided the Grup with vting rights (subject t certain cnditins) ver any Tatts Grup shares the investment bank held in cnnectin with the swap. During the term f the swap the Grup was entitled t receive payments equivalent t any cash dividends paid by Tatts Grup in respect f 147 millin shares. Frm 13 December 2017, the referenced share price f the swap was autmatically amended t refer t Tabcrp shares, instead f Tatts Grup shares. As a result, frm this date nwards the eventual gain r lss n the swap ver the perid the swap is unwund will depend n Tabcrp's share price. At 31 December 2017 the swap represents circa 117 millin shares in Tabcrp, and is currently in the prcess f being unwund, which is expected t be finalised by 30 June Tabcrp Hldings Limited and its cntrlled entities

20 NOTES TO THE FINANCIAL STATEMENTS F O R T H E H AL F Y E AR E N D E D 3 1 D E C E M B E R SECTION B - CAPITAL AND RISK MANAGEMENT (CONTINUED) B4 Fair value measurement The fair value f financial assets and financial liabilities are estimated fr recgnitin, measurement and disclsure purpses at each balance date. Varius methds are available t estimate the fair value f a financial instrument and cmprise: Level 1 Level 2 Level 3 - calculated using quted prices in active markets. - estimated using inputs ther than quted prices included in Level 1 that are bservable fr the asset r liability, either directly (as prices) r indirectly (derived frm prices). - estimated using inputs fr the asset r liability that are nt based n bservable market data. The carrying amunt f financial assets r liabilities recgnised in the financial statements are deemed t be the fair value unless stated belw: Carrying amunt Fair value December June December June $m $m $m $m Financial liabilities US private placement Tatts Bnds The fair value f the Grup's financial instruments are estimated as fllws: US private placement Fair value is calculated using discunted future cash flw techniques, where estimated cash flws and estimated discunt rates are based n market data at balance date, in cmbinatin with restatement t freign exchange rates at balance date (level 2 in fair value hierarchy). Tatts Bnds Fair value is determined using independent market qutatins (level 1 in fair value hierarchy). Crss currency and interest rate swaps Fair value is calculated using discunted future cash flw techniques, where estimated cash flws and estimated discunt rates are based n market data at balance date (level 2 in fair value hierarchy). Cash-settled equity swap Fair value is calculated with reference t market data at initiatin f the swap and at balance date (level 2 in fair value hierarchy), cmbined with the value f cllateral paid t the cunterparty. Available fr sale financial assets Fair value is reference t market prices prevailing at balance date (level 2 in fair value hierarchy). Equity derivative Fair value is calculated using the Black Schles Discrete mdel (level 2 in fair value hierarchy). There have been n significant transfers between level 1 and level 2 during the half year ended 31 December Tabcrp Hldings Limited and its cntrlled entities

21 NOTES TO THE FINANCIAL STATEMENTS F O R T H E H AL F Y E AR E N D E D 3 1 D E C E M B E R SECTION C - GROUP STRUCTURE C1 Business cmbinatins (a) Acquisitin f Tatts Grup Limited In December 2017, the Grup purchased 100% f the rdinary shares f Tatts Grup Limited (Tatts Grup), thrugh a scheme f arrangement between Tatts Grup and its members. Tatts Grup is a leading Australian lttery, wagering and gaming cmpany with a diversified netwrk f retail and direct channels acrss Australia. The acquisitin creates a leading, diversified prtfli f gambling entertainment businesses. The accunting fr the Tatts Grup acquisitin has been prvisinally determined as at 31 December 2017, as the prcess f fair valuing Tatts Grup's net assets is still in prgress. Identifiable assets acquired and liabilities assumed The fair values f the identifiable assets and liabilities f Tatts Grup as at the date f the acquisitin have been prvisinally determined as fllws: December 2017 $m Cash and cash equivalents Receivables 54.3 Prepayments 27.9 Derivative financial instruments 73.6 Other assets 60.3 Investment in an assciate 22.8 Available fr sale financial assets 20.5 Held t maturity investments 55.0 Prperty, plant and equipment Licences 1,013.8 Other intangible assets Payables (762.3) Interest bearing liabilities (1,272.1) Current tax liabilities (4.5) Deferred tax liabilities (268.8) Prvisins (269.0) Other liabilities (66.4) Net identifiable assets/(liabilities) acquired (784.8) Gdwill arising n acquisitin (i) 7,249.8 Purchase cnsideratin transferred 6,465.0 (b) (c) (d) (i) Gdwill recgnised is primarily attributable t the expected synergies and ther benefits frm cmbining the assets and activities f Tatts Grup with thse f the Grup. Gdwill includes the value f intangible assets and tax balances fr which the fair values had nt been finalised at 31 December The gdwill is nt deductible fr tax purpses. Purchase cnsideratin Cnsideratin fr the acquisitin was 0.8 new shares f the Cmpany and $0.425 cash per Tatts Grup share less the amunt f any Tatts Grup special dividend paid per share. Tatts Grup sharehlders received a special dividend f $0.16 per share, reducing the cash cnsideratin payable by the Cmpany frm $0.425 t $0.265 per Tatts Grup share. The Cmpany issued 1,175 millin shares at a fair value f $5.17 per share as part f the purchase cnsideratin. Cash Shares Issued 6,075.7 Ttal purchase cnsideratin 6,465.0 Acquisitin csts Transactin csts f $47.0 millin have been expensed and are disclsed as 'Transactin csts - cmbinatin with Tatts Grup' in the incme statement and cmprise: $m $m Cnsultancy and legal csts Debt related csts Other expenses Ttal transactin csts Csts attributable t the issuance f shares f $2.4 millin have been charged directly t equity as a reductin in issued capital. Revenue and prfit cntributin Since the date f acquisitin, Tatts Grup has cntributed $176.3 millin revenue and $18.0 millin prfit befre incme tax expense. If the acquisitin had taken place at the beginning f the perid, the Grup's revenue and prfit befre incme tax expense wuld have been $2,671.9 millin and $218.1 millin respectively. $m Tabcrp Hldings Limited and its cntrlled entities

22 NOTES TO THE FINANCIAL STATEMENTS F O R T H E H AL F Y E AR E N D E D 3 1 D E C E M B E R SECTION C - GROUP STRUCTURE (CONTINUED) C2 Dispsal grup held fr sale On 12 December 2017, the Grup cmpleted the sale f its Odyssey Gaming Services business (by way f the sale f 100% f the shares f Odyssey Gaming Limited), which was classified as held fr sale at 30 June December June C3 Investment in an assciate $m $m Investment in Jumb Interactive Ltd An assciate is an entity ver which the Grup has significant influence but nt cntrl r jint cntrl. Significant influence is the pwer t participate in the financial and perating decisins f the investee. Investments in assciated are accunted fr using the equity methd. SECTION D - OTHER DISCLOSURES D1 Cmmitments The cmbinatin with Tatts Grup during the perid resulted in the fllwing additinal cmmitments: December 2017 $m (a) Capital expenditure cmmitments Prperty, plant and equipment (b) Operating lease cmmitments Cntracted but nt prvided fr and payable: Nt later than ne year 21.1 Later than ne year but nt later than five years 51.0 Later than five years D2 Cntingent liabilities Since the last annual reprting date, the material changes in cntingent liabilities are: Tatts Grup Limited merger reimbursement fees Fllwing the implementatin f the cmbinatin with Tatts Grup, the cntingency disclsed at 30 June 2017 is n lnger required. Tabcrp Hldings Limited and its cntrlled entities

23

24 Ernst & Yung 8 Exhibitin Street Melburne VIC 3000 Australia GPO Bx 67 Melburne VIC 3001 Tel: Fax: ey.cm/au Independent Auditr's Review Reprt t the Members f Tabcrp Hldings Limited Reprt n the Half-Year Financial Reprt Cnclusin We have reviewed the accmpanying half-year financial reprt f Tabcrp Hldings Limited (the Cmpany) and its subsidiaries (cllectively the Grup), which cmprises the cndensed statement f financial psitin as at 31 December 2017, the cndensed statement f cmprehensive incme, cndensed statement f changes in equity and cndensed statement f cash flws fr the half-year ended n that date, ntes cmprising a summary f significant accunting plicies and ther explanatry infrmatin, and the directrs declaratin. Based n ur review, which is nt an audit, nthing has cme t ur attentin that causes us t believe that the half-year financial reprt f the Grup is nt in accrdance with the Crpratins Act 2001, including: a) giving a true and fair view f the cnslidated financial psitin f the Grup as at 31 December 2017 and f its cnslidated financial perfrmance fr the half-year ended n that date; and b) cmplying with Accunting Standard AASB 134 Interim Financial Reprting and the Crpratins Regulatins Directrs Respnsibility fr the Half-Year Financial Reprt The directrs f the Cmpany are respnsible fr the preparatin f the half-year financial reprt that gives a true and fair view in accrdance with Australian Accunting Standards and the Crpratins Act 2001 and fr such internal cntrl as the directrs determine is necessary t enable the preparatin f the half-year financial reprt that is free frm material misstatement, whether due t fraud r errr. Auditr s Respnsibility Our respnsibility is t express a cnclusin n the half-year financial reprt based n ur review. We cnducted ur review in accrdance with Auditing Standard n Review Engagements ASRE 2410 Review f a Financial Reprt Perfrmed by the Independent Auditr f the Entity, in rder t state whether, n the basis f the prcedures described, anything has cme t ur attentin that causes us t believe that the half-year financial reprt is nt in accrdance with the Crpratins Act 2001 including: giving a true and fair view f the Grup s cnslidated financial psitin as at 31 December 2017 and its cnslidated financial perfrmance fr the half-year ended n that date; and cmplying with Accunting Standard AASB 134 Interim Financial Reprting and the Crpratins Regulatins As the auditr f the Grup, ASRE 2410 requires that we cmply with the ethical requirements relevant t the audit f the annual financial reprt. A review f a half-year financial reprt cnsists f making enquiries, primarily f persns respnsible fr financial and accunting matters, and applying analytical and ther review prcedures. A review is substantially less in scpe than an audit cnducted in accrdance with Australian Auditing Standards and cnsequently des nt enable us t btain assurance that we wuld becme aware f all significant matters that might be identified in an audit. Accrdingly, we d nt express an audit pinin. Independence In cnducting ur review, we have cmplied with the independence requirements f the Crpratins Act Ernst & Yung David Shewring Partner Melburne 8 February 2018 A member firm f Ernst & Yung Glbal Limited Liability limited by a scheme apprved under Prfessinal Standards Legislatin

25 C O M P A N Y D I R E C T O R Y Registered ffice Tabcrp Hldings Limited Level 21, Twer Cllins St Dcklands VIC 3008 Australia Telephne Facsimile enquiries@tabcrp.cm.au Share registry Link Market Services Limited Lcked Bag A14 Sydney Suth NSW 1235 Australia Telephne Telephne Facsimile tabcrp@linkmarketservices.cm.au Website Crprate infrmatin The Cmpany is a cmpany limited by shares that is incrprated and dmiciled in Australia. Stck exchange listings The Cmpany s rdinary shares are quted n the Australian Securities Exchange under the cde TAH. Tatts Bnds, issued by Tatts Grup Limited, a whlly wned subsidiary f the Cmpany, are quted n the Australian Securities Exchange under the cde TTSHA. Annual Reprts The Cmpany s Annual Reprts are available frm the Cmpany s website at Currency References t currency are in Australian dllars unless therwise stated.