Tabcorp Holdings Limited. Citigroup Wagering Forum 9 November 2011

Transcription

1 Tabcorp Holdings Limited Citigroup Wagering Forum 9 November 2011

2 Agenda Investment highlights Wagering market growth 1Q Wagering KPIs Fixed odds Distribution platforms Victorian Wagering and Betting licence Media Q&A 2

3 Investment highlights Tabcorp has an attractive investment case defensive earnings, strong cashflow and growth from new investments Quality portfolio of businesses with market leading positions Geographic diversification Operational diversification Long dated licences Loyal customer base Attractive industry structure Sole licensee for off-course wagering in the key Australian states of New South Wales and Victoria Successfully executed Keno model in NSW and Queensland can now be replicated in Victoria following award of new Victorian Keno Licence Strong cash generating businesses and defensive earnings profile Growth from new investments Experienced management team with a proven track record 3

4 Consistent wagering market growth The wagering market has demonstrated consistent growth, driven by steady growth in racing and strong growth in sports betting Australian wagering market Annual Turnover ($b) CAGR FY01 - FY06 FY06 - FY11 Total 6.0% 5.4% FY01 FY02 FY03 FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11 Racing turnover Sports turnover Parimutuel Racing Total Racing Sports Annual Turnover ($b) CAGR FY01 - FY06 FY06 - FY11 Parimutuel Racing 3.6% 1.3% Total Racing 6.4% 4.0% FY01 FY02 FY03 FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11 Annual Turnover ($b) CAGR FY01 - FY06 FY06 - FY11 Sports 19.2% 14.1% FY01 FY02 FY03 FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11 Source: ARB Fact Books, internal Tabcorp data, includes some estimates. All turnover shown on a 52 week rolling basis 4

5 1Q12 Wagering KPIs Solid performance showing benefits from investments and improved regulatory conditions $m 1Q12 1Q11 Change Revenue by product Totalisator Vic (3.4%) Totalisator NSW (4.9%) Fixed Odds % Luxbet % Trackside % Turnover by distribution Retail Vic % Retail NSW % Internet % Phone (5.4%) Oncourse (2.0%) Luxbet (30.6%) 1Q11 included $7.5m Fixed Odds revenues from Soccer World Cup. Allowing for this, growth was 4%, up from 2% Strong growth in fixed odds revenue of 18.2% Allowing for Soccer World Cup in prior period, growth was 35% Growth in Fixed Odds racing and Trackside more than offset reduction in totalisator revenues Improved results from Luxbet with increased focus on managing yield Growth in NSW retail continued turnaround from 2H11, reflecting Benefits from rollout of Trackside Benefits from rollout of Fixed Odds racing Continued strong growth in internet channel Note: Victoria includes Joint Venture partner s 25% interest 5

6 TAB Sportsbet: Fixed Odds key metrics 71% of fixed odds revenue was generated in retail, 66% of fixed odds revenue was derived from bets <$100 and multi bets drove 63% of sports revenue Revenue by Distribution Channel Retail 71% Internet 22% Telephone 7% Revenue by Bet Value $1-$100 66% $101-$1,000 29% $1,001-10,000 3% >$10,000 2% Sports Turnover Single Bets 68% Multi Bets 32% Sports Revenue Single Bets 37% Multi Bets 63% Note: Data for full year 30 June

7 TAB Sportsbet: Comparison of margins Fixed Odds returns to Tabcorp are attractive due to lower tax rates and fees NSW Parimutuel Fixed Odds Racing Fixed Odds Sport Turnover Revenue Variable Contribution New licence VIC Parimutuel Fixed Odds Racing Fixed Odds Sport Turnover Revenue Variable Contribution Note: Parimutuel revenue is based on win, place and doubles which are the bet types offered in fixed odds Calculated on an incremental basis, includes product fees, taxes, venue commissions, profit share arrangements Race fields fees calculated under new arrangements currently expected to be in place from August

8 Distribution: Broadest range of channels and products Tabcorp s distribution capability delivers key competitive advantages Retail 64% of wagering Online/Mobile 19% of wagering > 2,627 wagering venues: Vic 627, NSW 2,000 > 2,012 venues now have Trackside > 3,570 self service Easy Betting Terminals (EBTs) > Online traffic +30% for FY11: 1.5b page views, 37m unique visits > 315k mobile app downloads, 315k active account customers > New Internet platform in trial On-course 2% of wagering > Wagering at 267 tracks and 5 sports stadiums in 3 states > Support over 5,000 live racing and sports events each year > Large team with over 1,300 people Phone 7% of wagering > 600 seat customer call centre > 11m operator calls last year > 10m Touch Tone / Speech Express calls last year > Opened 74,000 new customer accounts last year Note: Figures quoted at 30 September 2011 unless otherwise noted Luxbet and Premium customers are not included in the table above. They represent 8% of Wagering 8

9 Wagering channels retail initiatives are driving growth Tabcorp s retail turnover is growing, driven by initiatives Turnover ($m) Jan-09 Mar-09 CAGR = 1.3% May-09 Jul-09 Sep-09 Nov-09 Retail turnover 1,2 > Retail represents 64% of our wagering turnover 1 Jan-10 Mar-10 > Cash is the key advantage of retail May-10 Jul-10 New retail strategy launched including fixed odds racing & Trackside in NSW Note: 1. Quarter ended 30 September Turnover shown on a 52 week rolling basis but excludes Soccer World Cup Source: Internal Tabcorp data Sep-10 Nov-10 Jan-11 Mar-11 May-11 Jul-11 Sep-11 Tabcorp s initiatives > More self-service terminals > Consolidated distribution across all Tabcorp products > Regulatory approvals fixed odds racing & Trackside in NSW > Trialling retail loyalty program > Negotiated new long term agreements with key partners > Expanded reach using low cost kiosks more outlets > Outlet refurbishments > Sky distribution expansion 9

10 Wagering channels strong online wagering turnover growth Wagering is shifting online and Tabcorp is capturing its share, with online growing rapidly Turnover ($m) 1,930 1,830 1,730 1,630 1,530 1,430 1,330 1,230 Tabcorp s online turnover 1 CAGR = 19% Jan-09 Mar-09 May-09 Jul-09 Sep-09 Nov-09 Jan-10 Mar-10 May-10 Jul-10 Sep-10 Nov-10 Jan-11 Mar-11 May-11 Jul-11 Sep-11 > Phone turnover has declined, but more than offset by growth in online > Competitor businesses are built around online > Mobile devices a small part of the market, but growing rapidly Tabcorp s initiatives > Introduced market leading loyalty program > New world s best practice internet facility to be launched this year > Launched wagering apps for all new mobile devices > National expansion & branding TAB Sportsbet > Launched Luxbet > Re-focused phone channel cost base & service strategies > Fixed odds expansion Note: 1. Turnover shown on a 52 week rolling basis Source: Tabcorp data. 10

11 Victorian Wagering and Betting Licence Overview > Sole retail licence > 50/50 joint venture with Victorian Racing Industry (previously 75/25) > Minimum performance obligation: FY13 $337m and FY14 $342m $1bn in aggregate for FY13 through FY15 > Discussions in respect of the new joint venture are well advanced, documentation being finalised Licence period > 12 years, commencing August 2012 > At the discretion of the minister, the licence period may be extended for a further two years EBITDA estimate > $120m in FY14 Licence payment > $410m expected to be paid shortly 11

12 Media is a core part of the Wagering business Co-ordinated vision and commentary drives wagering Broadcast rights fees expense $40m Communications and technology costs $21m Production and employee costs $35m 88% of costs are fixed or output critical Subscription and international revenues $179m Race Tracks Up Link/ Communications Channels and Services Distribution Customers > 230 Australian tracks > 270+ international tracks > DVN Fibre Link from 170 tracks > SNG Link from 60 tracks > International feed via satellite/ circuits to and from NZ, USA, UK, South Africa and Asia Main Channels > Sky Racing1 > Sky Racing2 > Sky Racing World > Sky Sports Radio Additional Services > Trackside > Sky Text (form & data) > Oracle Tipping Service > Optus Satellites (x2) > Internet > Cable > Mobile TV > Global (various) > Racetracks > Licensed venues > TABs > Homes > Internet > Airborne (Virgin) > Mobile > Global > Sky PayPerView Sports > Interactive TV betting > TAB Raceday Control 1 Note: 1. Audio and vision to meet regulatory requirements i.e. close of betting, final results Source: Tabcorp internal data 12

13 Broadcasting rights Thoroughbred Greyhound & Harness Domestic Type Race Meets New Media NSW (non Metro) 468 QLD/NT 487 WA 241 SA 178 ACT 31 TAS 66 AUS 4,648 SYD Metro and VIC Metro & Provincial X 2 > Sky provides Tabcorp with direct relationships with all thoroughbred, harness and greyhound racing > Rights to UK, NZ, South Africa and Singapore races are held long term Note: 1. TVN content is 9% of Australian race meetings FY11 (excludes International races) 2. Telstra holds TVN s New Media rights 13

14 Recent developments in the Australian Wagering sector. Q & A 14

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