For personal use only Financial Year Results Tatts Group Limited ABN

Transcription

1 2013 Financial Year Results Tatts Group Limited ABN

2 FY13 GROUP MILESTONES Lotteries Record Lotteries revenues - $2.01 billion up 13.6% (FY12: $1.77 billion) Lotteries EBITDA Contribution EBITDA of $294.6 million achieved in FY13 up 31.6%. Acquired exclusive management rights to SA Lotteries - EBITDA of $24.8 million in 6 months 35.2% growth in Lotteries online sales now 8.2% of all Lottery sales (FY12: 6.6%) (excluding SA Lotteries management fee) Record jackpot sequence of 39 jackpots at or above $15 million (vs. FY12: 22 & H1 FY13: 21) 50 0 Powerball game changes successfully implemented EBITDA CAGR 22.8% FY13 FY12 Wagering Record Wagering revenue - $655.7 million up 5.2% (FY12: $623.3 million) FY11 FY09 FY10 FY08 Tote Tasmania acquisition performing to acquisition model win rates at Group levels Fixed price betting sales exceeded $1 billion up 16.0% 21.5% growth in Wagering online sales now 20.2% of all Wagering sales (FY12: 16.9%) Wagering EBITDA Contribution EBITDA CAGR 5.9% 1

3 2 FY13 GROUP MILESTONES Gaming Solutions Maxgaming, Bytecraft and Talarius under control of one COO Maxgaming introduction of MaxConnect Installed on over 8,900 machines Bytecraft revenue growth of 11.7% Talarius revenue growth of 12.8% Pokies Tatts Pokies ceased - 15 August 2012 Profit on sale of gaming machines - $23.6 million Health Benefit Levy determination still outstanding Compensation claim lodged following Victorian Gaming Operator Licence expiry. To be heard in February 2014

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5 FY13 RESULTS OVERVIEW Results - Statutory vs. Continuing Operations Basis Tatts Pokies operations ceased in FY13 (15 Aug 2012) 6 weeks contribution from Tatts Pokies distorts comparison with prior period Results provided both on a: statutory basis (including Tatts Pokies); and continuing operations basis (excluding Tatts Pokies) Continuing Operations Results Strong rotation from sales growth to NPAT: Revenue up 11.0% EBITDA up 17.9% EBIT up 25.1% NPAT up 40.8% EBIT margin 13.8% up from 12.2% in FY12 STATUTORY RESULTS FY13 (including Tatts Pokies) CONTINUING OPERATIONS RESULTS FY 13 (Excluding Tatts Pokies) Change on PCP Change on PCP Revenue $3,115.9 m 20.1% EBITDA $544.1m 16.3% EBIT $441.9 m 19.6% NPAT (Statutory) $247.3 m 22.5% 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% 4

6 As a % of statutory NPAT 15.5 cents 23.0 cents 21.5 cents 21.0 cents 21.0 cents 20.0 cents 20.0 cents FY13 RESULTS OVERVIEW Dividends 7.5 full franked final dividend per share (FY12: 12 ) record date 4 September 2013 payment date 7 October 2013 Dividend reinvestment plan operative with a 1.5% discount Full year dividend payout ratio from continuing operations of 95.1% (87.4% from statutory NPAT) Track record of strong payout ratios current intention to maintain that record Dividend Payout Ratio 105.0% 102.3% 100.0% 95.0% 95.1% 97.5% 95.1% 96.0% 98.2% 90.0% 85.0% 80.0% 75.0% FY13 FY12 FY11 FY10 FY09 FY08 - As a % of continuing NPAT - As a % of Statutory NPAT 5

7 SEGMENT RESULTS FY13 RESULTS OVERVIEW Total revenue (continuing operations) FY13 FY12 Change on PCP $2,948.8 $2, % Other income % State Government share ($1,376.4) ($1,265.6) 8.8% Venue share/commission ($414.2) ($359.0) 15.4% Product and program fees ($191.5) ($193.2) 0.9% Other expenses (cont. operations) ($478.1) ($423.4) 12.9% Total expenses (cont. operations) ($2,460.2) ($2,241.3) 9.8% EBITDA (continuing operations) $490.2 $ % Depreciation and amortisation ($84.1) ($91.0) 7.6% EBIT (from continuing operations) $406.1 $ % Interest income $3.7 $ % Finance costs ($106.7) ($104.5) 2.2% PBT (from continuing operations) $303.1 $ % Income tax ($75.7) ($63.8) 18.5% NPAT (from continuing operations) $227.4 $ % Profit from discontinued operations* $19.9 $ % NPAT (statutory basis) $247.3 $ % * - Discontinued Operations relate to Tatts Pokies which ceased operations on 15 August 2012 Revenue (Continuing operations) FY13 FY12 Change on PCP Lotteries Revenue 2, , % Wagering Revenue % Maxgaming Revenue % Bytecraft Revenue % Talarius Revenue % EBITDA (Continuing operations) FY13 FY12 Change on PCP Lotteries EBITDA % Wagering EBITDA % Maxgaming EBITDA % Bytecraft EBITDA (1.0) % Talarius EBITDA % EBIT (Continuing operations) FY13 FY12 Change on PCP Lotteries EBIT % Wagering EBIT % Maxgaming EBIT % Bytecraft EBIT (3.0) % Talarius EBIT (1.0) (2.7) 63.7% Discontinued operations FY13 FY12 Change on PCP Pokies Revenue , % Pokies EBITDA % Pokies EBIT % 7 6

8 FY13 LONG TERM DIVERSIFIED LICENCES Lotteries Years Remaining Licence/Authorisation Exclusive lottery operator in SA, NSW and Queensland Circa. 75% of Lotteries EBITDA ($221.0m) from licences that run at least 35 years Wagering Years Remaining Licence/Authorisation Option to renew by Tatts Group EBITDA $490.2m Exclusive wagering licences in SA, Tasmania and Queensland 1 Circa. 95% of wagering EBITDA ($165.2m) from licences that run for at least a further 35 years Gaming Solutions Years Licence/Authorisation Rolling renewal capability Exclusive monitoring licence in NSW and NT 81% monitoring segment share in Queensland Indefinite licence in the UK 1 Queensland licence exclusivity runs to 30 June 2014, SA exclusivity runs to 6 December 2016 and Tasmania exclusivity runs to 26 March

9 FY13 LOTTERIES Exceptional jackpot sequence - 39 jackpots (Oz Lotto /Powerball) at or above $15 million (FY12: 22 equivalent jackpots) Record revenue - $2.01 billion 13.6% revenue growth driving 33% EBIT growth Scale efficiencies evident - EBIT margin improvement now 13.4% (FY12: 11.5%) High participation rates approximately 49% of Australian adult population have played in past 12 months Currently 2.3 million player card members with 0.9 million registered on Tatts.com million entries purchased in FY13 (FY 12: million) $13.54 average spend per transaction (FY 12: $12.68) 4,222 retail outlets, including 584 in South Australia (FY12: 3,693) generating 91.8% of revenues - excl. SA Lotteries management fee 35.2% growth in online sales now 8.2% of all lottery sales (FY12: 6.6%) - excl. SA Lotteries management fee Acquired exclusive management rights - SA Lotteries For personal use only Divisional Highlights SA Lotteries contributed EBITDA of $24.8 million 6 months of operations Financials FY13 Tatts proprietary lotteries platform rolled out in all jurisdictions, with South Australia scheduled for FY14/FY15 FY12 Change on PCP % Revenue 2, , % EBITDA % EBIT % 8

10 US$ capita FY13 LOTTERIES Lotteries Per Capita Revenue $350 Global Per Capita revenue from Draw Type Games $300 $250 $200 $150 $100 $50 $0 All Tatts owned/operated lotteries rank in the top 10 per capita draw type game lotteries in the world Tatts Lotteries is now ranked as the 11 th largest lottery operation in the world by total sales Source: La Fleurs Worldwide Lotteries Almanac

11 FY13 LOTTERIES For personal use only New SA Lotteries Website Coming soon! 10

12 FY13 WAGERING 5.2% revenue growth driving 25.4% EBIT growth EBIT margin improvement - now 23.7% (FY12: 19.9%) 109,500 unique devices with an iphone or Android App installed (H1 FY13: 81,800) 21.5% growth in online sales (FY12: 8.8%) now 20.2% of all wagering sales (FY12:16.9%) Phone based sales reduced by 11.0% TOTE Tasmania performing to acquisition model - win rates approaching Group levels Total sales from betting on fixed price betting now exceeding $1 billion Racing dominates fixed price book 79% of fixed price sales Fixed price revenue on racing up 28.7% and win rates lifted (up one percentage point) Financials FY13 FY12 Change on PCP Revenue % EBITDA % EBIT % 55 self service terminals rolled-out in Queensland, Northern Territory and Tasmania in June 2013 (now more than 100 rolled-out) For personal use only Divisional Highlights Queensland sports wagering licence extended to 2037 Tatts Tipping launched for 2013 NRL and AFL seasons 11

13 FY13 WAGERING Market Overview Betting by sales channel FY10 Betting by sales channel FY13 Betting migration over the past 4 years Migration from phone to online continues now 20.2% of total sales up from 15.9% in FY10 Retail On-course Phone Betting Online Betting Migration from tote betting to fixed price betting continues fixed price now 31.3% of total sales from 12.9% in FY10 Sales by bet type FY10 Sales by bet type FY13 Tote Fixed 12

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15 FY13 WAGERING For personal use only Most Popular Websites - Wagering Source: Hitwise Ranking Report FY

16 FY13 GAMING SOLUTIONS Monitor all gaming machines in NSW and the Northern Territory Monitor 81% of all gaming machines in Queensland More than 131,000 machines monitored in 3,832 venues Revenue distribution: 53.6% from monitoring 21.9% from value-add services 24.5% from EGM maintenance Customer loyalty solutions on more than 19,000 machines Introduction of Maxgaming s patented electronic paperless payout system Max E-Pay in 7 venues All major gaming machine manufacturers now subscribe to Maxgaming s Maxreports / Maxmobile reporting, benchmarking and analysis system 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) For personal use only Divisional Highlights Maxgaming FY13 FY12 Change on PCP Revenue % EBITDA % EBIT % 15

17 FY13 GAMING SOLUTIONS View the Maxgaming Connect Video by clicking Play on your Video Control Menu 16

18 FY13 GAMING SOLUTIONS Divisional Highlights 173 venues operated with 7,461 gaming machines (FY12: 7,389 machines) NMR (gross gaming revenue after return to player) per day (average) (FY12: 18.63) Gaming machines at new Motorway Service Areas performing well Property refurbishments continue to improve results Talarius FY13 FY12 Change on PCP Revenue % EBITDA % EBIT (1.0) (2.7) 63.7% Divisional Highlights 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 FY12 Change on PCP Revenue % EBITDA (1.0) % EBIT (3.0) % 17

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20 FY13 BALANCE SHEET ASSETS At 30 June 2013 At 30 June 2012 Variance % Current assets % Intangible assets 4, , % Property, plant and equipment % Other non-current assets % Total assets 5, , % LIABILITIES Current liabilities 1, , % Non-current liabilities 1, , % Total liabilities 2, , % TOTAL EQUITY 2, , % Net debt (excluding prize reserves) $1,454.3 million (FY12: $1,167.0 million) Reflecting the SA Lotteries acquisition funding - $427 million Increase in intangibles - acquisition of right to manage SA Lotteries Joint venture properties sold for $20.2 million in June

21 FY13 KEY FINANCIAL RATIOS Acquisitions: 1.20x 2.27x Net Debt to EBITDA NSW LOTTERIES 2.00x TOTE TASMANIA 1.80x SA LOTTERIES 2.68x 30 June June June June June 2013 Debt/EBITDA 2.68x (Dec 2012: 2.45x) - following acquisition of right to manage SA Lotteries Capex for FY13 - $60.1 million (FY12: $66.6 million) FY14 capex expected to be in the region of $75 million with terminal roll-outs in Wagering and SA Lotteries Total depreciation and amortisation from continuing operations of $84.1 million (FY12: $91.0 million) - $64.1 million depreciation and $20.0 million amortisation Interest expense for FY13 - $106.7 million (FY12: $104.5 million) - additional debt for SA Lotteries offset by lower interest costs 20

22 $'million FY13 DEBT FACILITY MATURITY PROFILE Debt Maturity Profile - 30 June 2013 Weighted average Term improved from 2.78 years to 3.46 years Refinanced $480 million Syndicated Facility Refinance of $480 million syndicated facility successfully negotiated in February 2013 Debt maturity profile extended 3.46 years (was 2.78 years) FY14 maturity considerations are underway DRP continues including 1.5% discount 50 0 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 Syndicated Facility Tatts Bond Debt USPP Debt 21

23 FY13 ORGANISATIONAL RENEWAL CHALLENGE, RETHINK & REFRESH Focus upon: Organisational structure deconstruct divisional silos Bench strength resource up in critical business areas and optimise existing resources Brand & Retail position major repositioning works in progress Product innovation & improvement multi-jurisdictional opportunities across wagering and lotteries Online demand generation significant and to date under exploited opportunity for Group Industry partnerships partnership approach to produce mutually beneficial outcomes State of the art online platforms new Tatts.com site and App 22

24 FY13 LOOKING FORWARD FY14 Focus upon: Expanding Wagering offering; Brand development & retail enhancements; Lifting our online and traditional marketing activities; Team & skills expansion in identified growth areas (+ optimise existing resources); Online platform improvements. Positive start to FY14 with: 2 jackpots above $15 million in July 2013; SA Lotteries contribution continuing lift through H1 FY14; Win rates in Wagering maintained. Balanced against full year challenge of cycling over: exceptional FY13 jackpot run; the lift from the first year s contribution from Tote Tasmania. 23

25 Thank you