For personal use only - ASX · For personal use only ABN 19 108 686 040 . Wagering Record Wagering...
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2013 Financial Year Results Tatts Group Limited
ABN 19 108 686 040
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Wagering Record Wagering revenue - $655.7 million up 5.2% (FY12: $623.3 million)
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%)
Lotteries Record Lotteries revenues - $2.01 billion up 13.6% (FY12: $1.77 billion)
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)
Powerball game changes successfully implemented
FY13 – GROUP MILESTONES
Lotteries EBITDA Contribution
EBITDA CAGR 22.8%
Wagering EBITDA Contribution
EBITDA CAGR 5.9%
FY13 FY12
FY11 FY10
FY09 FY08
105.4 118.8
144.8
196.4
223.8
294.6
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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
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%
FY13 – GROUP MILESTONES
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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)
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%
CONTINUING OPERATIONS RESULTS FY 13 (Excluding Tatts Pokies)
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%
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Dividends
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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
FY13 – RESULTS OVERVIEW
- As a % of continuing NPAT - As a % of Statutory NPAT
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95.1%
97.5%
102.3%
95.1% 96.0%
98.2%
75.0%
80.0%
85.0%
90.0%
95.0%
100.0%
105.0%
FY13 FY12 FY11 FY10 FY09 FY08
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FY13 – RESULTS OVERVIEW
FY13 $’million
FY12 $’million
Change on PCP
Total revenue (continuing operations)
$2,948.8 $2,656.9 ▲11.0%
Other income 1.6 0.3 ▲6252%
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 $415.6 ▲17.9%
Depreciation and amortisation ($84.1) ($91.0) ▼ 7.6%
EBIT (from continuing operations) $406.1 $324.6 ▲25.1%
Interest income $3.7 $5.2 ▼ 29.3%
Finance costs ($106.7) ($104.5) ▲ 2.2%
PBT (from continuing operations) $303.1 $225.4 ▲34.5%
Income tax ($75.7) ($63.8) ▲18.5%
NPAT (from continuing operations) $227.4 $161.5 ▲40.8%
Profit from discontinued operations* $19.9 $157.6 ▼ 87.4%
NPAT (statutory basis) $247.3 $319.1 ▼ 22.5%
Revenue (Continuing operations)
FY13 $’million
FY12 $’million
Change on PCP
Lotteries Revenue 2,008.6 1,767.5 ▲ 13.6%
Wagering Revenue 655.7 623.3 ▲ 5.2%
Maxgaming Revenue 113.2 114.7 ▼ 1.3%
Bytecraft Revenue 116.0 103.8 ▲ 11.7%
Talarius Revenue 78.0 69.2 ▲ 12.8%
EBITDA (Continuing operations)
FY13 $’million
FY12 $’million
Change on PCP
Lotteries EBITDA 294.6 223.8 ▲ 31.6%
Wagering EBITDA 173.9 144.1 ▲ 20.7%
Maxgaming EBITDA 63.1 65.8 ▼ 4.2%
Bytecraft EBITDA (1.0) 8.4 ▼112.2%
Talarius EBITDA 7.7 7.0 ▲ 10.8%
EBIT (Continuing operations)
FY13 $’million
FY12 $’million
Change on PCP
Lotteries EBIT 269.5 202.6 ▲ 33.0%
Wagering EBIT 155.6 124.1 ▲ 25.4%
Maxgaming EBIT 48.1 44.5 ▲ 8.1%
Bytecraft EBIT (3.0) 6.9 ▼144.0%
Talarius EBIT (1.0) (2.7) ▲ 63.7%
Discontinued operations
FY13 $’million
FY12 $’million
Change on PCP
Pokies Revenue 190.7 1,245.1 ▼ 84.7%
Pokies EBITDA 53.9 234.6 ▼ 77.0%
Pokies EBIT 35.8 225.1 ▼ 84.1%
* - Discontinued Operations relate to Tatts Pokies which ceased operations on 15 August 2012
SEG
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FY13 – LONG TERM DIVERSIFIED LICENCES
Significant growth in Tatts Lotteries
resulting in an ever growing segment
contribution
Tatts Gaming Solutions as a Segment
contributes xx% to EBITDA (FY12: 18%)
Exclusive wagering licences in SA, Tasmania and Queensland1
Circa. 95% of wagering EBITDA ($165.2m) from licences that run for at least a further 35 years
Exclusive monitoring licence in NSW and NT
81% monitoring segment share in Queensland
Indefinite licence in the UK
Lotteries – Years Remaining Licence/Authorisation
Wagering – Years Remaining
2015
2052
2018
2050
2072
2111 2061
2015
2100
2098
Licence/Authorisation
Option to renew by Tatts
Gaming Solutions – Years Licence/Authorisation
Rolling renewal capability
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2017
2016 - 2019
2016
2032 Exclusive lottery operator in SA,
NSW and Queensland
Circa. 75% of Lotteries EBITDA ($221.0m) from licences that run at least 35 years
Group EBITDA
$490.2m
1 – Queensland licence exclusivity runs to 30 June 2014, SA exclusivity runs to 6 December 2016 and Tasmania exclusivity runs to 26 March 2027
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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
291.5 million entries purchased in FY13 (FY 12: 270.1 million)
$13.54 average spend per transaction (FY 12: $12.68)
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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
SA Lotteries contributed EBITDA of $24.8 million ≈ 6 months of operations
Tatts’ proprietary lotteries platform rolled out in all jurisdictions, with South Australia scheduled for FY14/FY15
FY13 – LOTTERIES
Financials FY13
$’million FY12
$’million Change
on PCP %
Revenue 2,008.6 1,767.5 ▲ 13.6%
EBITDA 294.6 223.8 ▲ 31.6%
EBIT 269.5 202.6 ▲ 33.0%
Divisional Highlights
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• 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 11th largest lottery operation in the world by total sales
Source: La Fleurs Worldwide Lotteries Almanac 2013
FY13 – LOTTERIES
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Lotteries Per–Capita Revenue
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FY13 – LOTTERIES
New SA Lotteries Website – Coming soon!
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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)
FY13 – WAGERING
Financials FY13
$’million FY12
$’million Change on PCP
Revenue 655.7 623.3 ▲ 5.2%
EBITDA 173.9 144.1 ▲20.7%
EBIT 155.6 124.1 ▲25.4%
55 self service terminals rolled-out in Queensland, Northern Territory and Tasmania in June 2013 (now more than
100 rolled-out)
Queensland sports wagering licence extended to 2037
Tatts Tipping launched for 2013 NRL and AFL seasons
Divisional Highlights
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Market Overview
FY13 – WAGERING
Betting by sales channel FY10 Betting by sales channel FY13
■ Retail ■ On-course ■ Phone Betting ■ Online Betting
■ Tote ■ Fixed
Sales by bet type FY10 Sales by bet type 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
Migration from tote betting
to fixed price betting continues – fixed price now 31.3% of total sales from 12.9% in FY10
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SPORTS RACING
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14 Source: Hitwise Ranking Report – FY2013
FY13 – WAGERING
Most Popular Websites - Wagering
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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)
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FY13 – GAMING SOLUTIONS
Maxgaming 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%
Divisional Highlights
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16 View the Maxgaming Connect Video by clicking Play on your Video Control Menu
FY13 – GAMING SOLUTIONS F
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173 venues operated with 7,461 gaming machines (FY12: 7,389
machines)
NMR (gross gaming revenue after return to player) per day (average)
£19.29 (FY12: £18.63)
Gaming machines at new Motorway Service Areas performing well
Property refurbishments continue to improve results
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
FY13 – GAMING SOLUTIONS
Talarius FY13
$’million FY12
$’million Change on PCP
Revenue 78.0 69.2 ▲12.8%
EBITDA 7.7 7.0 ▲10.8%
EBIT (1.0) (2.7) ▲ 63.7%
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%
Divisional Highlights
Divisional Highlights
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At 30 June 2013
$’million
At 30 June 2012
$’million
Variance %
ASSETS
Current assets 613.4 528.2 ▲ 16.1%
Intangible assets 4,553.3 4,098.1 ▲ 11.1%
Property, plant and equipment 186.2 186.9 ▼ 0.4%
Other non-current assets 92.2 130.8 ▼ 29.5%
Total assets 5,445.1 4,944.0 ▲ 10.1%
LIABILITIES
Current liabilities 1,059.9 1,091.0 ▼ 2.9%
Non-current liabilities 1,624.7 1,189.4 ▲ 36.6%
Total liabilities 2,684.6 2,280.4 ▲ 17.7%
TOTAL EQUITY 2,760.4 2,663.6 ▲ 3.6%
FY13 – BALANCE SHEET
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 2013
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Net Debt to EBITDA
TOTE TASMANIA
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FY13 – KEY FINANCIAL RATIOS
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
Acquisitions: NSW
LOTTERIES
SA LOTTERIES
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FY13 – DEBT FACILITY MATURITY PROFILE
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
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Debt Maturity Profile - 30 June 2013 Weighted average Term improved from 2.78 years to 3.46 years
Syndicated Facility Tatts Bond Debt USPP Debt
Refinanced $480 million Syndicated Facility
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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
FY13 – ORGANISATIONAL RENEWAL – CHALLENGE, RETHINK & REFRESH
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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.
FY13 – LOOKING FORWARD F
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