Analyst & Investor Day
Cormac Barry – CEO Introduction 24 October 2014
Agenda Time Topic Presenter 2.00-2.40 Welcome / Office Tour 2.40-3.00 Introduction Cormac Barry – CEO Ben Sleep – CFO & 3.00-3.20 Regulatory Environment Regulatory Affairs Director 3.20-4.00 Risk & Trading, Online & Customer Operations Luke Rattigan – COO 4.00-4.20 Coffee Break 4:20-4.40 Technology & Product Delivery Simon Noonan – CIO 4.40-5.00 Marketing Barni Evans – Marketing Director 5.00-5.20 Wrap Up & Q&A Cormac Barry – CEO 5.20-6.30 Canapés 3
Sportsbet – Great Illustration of Paddy Power Strategy • Regulated • Substantial ATTRACTIVE STRONG PAYBACK • Fast ‐ growing MARKETS • Where we have an edge Sportsbet Operating Profit Growth since Acquisition Building scale for the long term: • Product 36% of INVEST CA CAGR GR • Marketing H1’14 Group HEAVILY 25% 25% Profits • Value • People €22m Aspire to be: STRONG • Biggest €7m POSITIONS • Fastest ‐ growing H1'09 Proforma H1'14 Proforma financials represent combined pre ‐ acquisition amounts for Sportsbet and IAS; In constant currency at H1’14 rate 4
Attractive Market – Key Events Event Legend Legal / Regulatory Consolidation New Entrant Date Key Events Date Key Events 2008 Mar Betfair High Court Case 2012 Jul Product fees move to turnover basis 2009 May Paddy Power acquires 51% of Sportsbet 2013 Mar William Hill acquires Sportingbet Australia 2009 Oct Sportsbet acquires IASBET 2013 May Federal government restricts advertising 2010 Dec Paddy Power acquires 100% of Sportsbet 2013 Aug William Hill acquires Tom Waterhouse IGA review recommends legalising BIR and 2011 Aug 2013 Sept Ladbrokes acquires bookmaker.com.au online poker 2011 Sept Tom Waterhouse investment accelerates 2014 Mar Matt Tripp acquires Betezy 2011 Oct Sportingbet acquires Centrebet 2014 Apr Ladbrokes acquires Betstar Sportsbet & Betfair lose product fee high court 2012 Mar 2014 Jul Product fee increases accelerate case 2012 Jun Bet365 enters the market 2014 Aug Crown buy 100% of Betfair Aus 5
Investment - Sportsbet Acquisition Close Date Purchase Consideration EBITDA A$59m Jul 2009 Sportsbet (incl 20% IAS) 51% A$16m Oct 2009 IAS (remaining 80%) Tranche 51% 51% A$75m A$75m A$23.2m A$23.2m (Y/e (Y/e 30 30 Jun Jun 09) 09) 9.8% A$15m Feb 2010 Buyout of a minority shareholder 49% Tranche 39.2% A$133m Mar 2011 Full Ownership 49% 49% A$148m A$148m A$37.8m $37.8m (Y/e (Y/e 31 31 Dec Dec 10) 10) EBITDA/ A$198m * Consideration = 39% €135m * €52m At historical FX rates (Annualised H1’14) * Net of A$25m (€19m) post‐tax benefit of GST refund awarded to Sportsbet in Aug 2011 relating to pre‐acquisition trading 6
Sportsbet Over Indexes in the Market’s Growth ‘Hot Spots’ FIXED ODDS GROWING SPORTS GROWING STRONG ONLINE GROWTH, DRIVEN BY MOBILE FASTEST FASTER THAN RACING Sports Sports Online Online CAGR CAGR Fixed Fixed CAGR CAGR 11.6% 11.6% Odds Odds 22.5% 22.5% CAGR CAGR 7.2% 7.2% Racing CAGR 1.8% Tote CAGR 1.2% Offline CAGR (3%) FY09 FY13 FY09 FY13 FY09 FY13 Source : Australian Racing Factbook ; excludes exchange turnover. FY here and throughout presentation refers to years ended 30 June 7
Fastest Growing & Largest Corporate Bookmaker… MARKET SHARE UP 6 MARKET SHARE OF ONLINE + PERCENTAGE POINTS IN 4 YEARS TELEPHONE GROSS WIN Sport Sportsbe bet Online nline Gross Gross Wi Win Ma Market et Share Share 23.5% 17.2% FY10 FY14 Source: Australian Racing Factbook + Competitor data Year ended 30 June 2014 sourced from public filings and internal estimates Source: Competitor public filings and internal estimates 8 8
…With Strong Scope for Further Growth TAB’s STILL 78% OF MARKET INCLUDING RETAIL CONTINUING TO TAKE MARKET SHARE Jan Jan ‐ Jun Jun 2014, 2014, Onl Online ne YoY YoY Turnover urnover Grow Growth Total Total FY14 FY14 Gros Gross Wi Win from from Onl Online, Tel Telephone phone and and Retail Retail ($ ($m) +23% +21% Tabcorp 1,774 Tatts 649 +13% Sportsbet 308 +10% WA TAB 246 William Hill 218 (2%)* Betfair 53 Tabcorp Tattsbet William Betfair Ladbrokes 40 Online Online Hill * Estimated constant currency movement based on Betfair Bet365 27 plc’s disclosures 9 9
Investment - People
Substantial and Continuous Investment in People Headcount 500 +107% in 4 years 450 461 400 350 370 300 280 250 246 200 223 150 100 50 0 Dec 2009 Dec 2010 Dec 2011 Dec 2012 Dec 2013 Online and Technology Headcount up 157% to over 280 people 11
Sportsbet Management Team – Bio’s Cormac Barry ‐ CEO Barni Evans – Marketing Director Joined Paddy Power in 2000 • • Marketing Director at Paddy Power from 2001 • Appointed Sportsbet CEO in March 2011 • Moved to Sportsbet in September 2011 • Worked in paddypower.com in a variety of • 5 years at News International launching their roles including Head of Online early digital products • BA Economics and Politics, Trinity College BSc (Hons) from Kingston University • Dublin Simon Noonan ‐ CIO Luke Rattigan ‐ COO • Joined in October 2013 • Joined in August 2011 • Responsible for leveraging technology to enable • Responsibility for Online, Risk and Trading, as customer outcomes and delivering our staff well as Customer Operations. facing systems • Worked in London, New York, Beijing and • Prior to joining Sportsbet spent 8 years with ANZ Shanghai in strategy and GM roles at Reed Bank, held Technology roles in Digital, Retail and Elsevier Wealth management • Masters of Economics (Hons) from Melbourne University Ben Sleep – CFO & Regulator Affairs Director Tania Abbotto – HR Director • Joined in 2012 • Joined in February 2010 • Over 15 years experience in HR in legal, e ‐ • 5 years at Tabcorp in Corporate Strategy and commerce, telecommunication and retail CFO Star Casino Sydney sectors, including the Coles Group • Corporate Finance ABN AMRO • Specialisation in leading organisational • 3 years in Audit & Corporate Finance at Ernst & development and transformational change Young programs • Bachelor of Commerce from Melbourne Bachelor of Behavioural Science (Psychology) • University and a Member of the Institute of from Melbourne University Chartered Accountants in Australia 12
Ben Sleep – CFO & Regulator Affairs Director Regulatory Environment 24 October 2014
Significant Legal/Regulatory Milestones Productivity Sportsbet places a Betfair High Sportsbet wins Commission SA introduces Betbox in Rising Sun Court case lifts ACCC action Betbox case in (Gambling) new onerous Hotel triggering advertising against Bet365 first instance but gambling code action by VCGR restriction loses appeal 2008 2009 2010 2011 2012 2013 2014 High Court rules NSW Racing introduces Review of IGA Increased against Sportsbet Live ‐ odds Increased turnover based released Product Fees; and Betfair in advertising enforcement of product fees. recommending RNSW product fees case code state based Sportsbet and Betfair changes. Govt and introduces introduced promotions both challenge in court Opposition oppose Minimum Bet restrictions recommendations Rule 14
What Does The Interactive Gambling Act (2001) Prohibit? Offshore Illegal Offshore Illegal • • Live Online Wagering on Sport Online Bingo Onshore Legal • • Online Slots Online Tournament Poker Wagering on Racing Lotteries Wagering on Sport • Online Casino Table Games • Online Cash Poker • Online Keno Enforcement Provisions of IGA • to offer or advertise • $1.7m per day for It is an offence… Penalties… corporations prohibited services… • for customers to use It is not an offence… Enforcement… • NONE prohibited services… 15
Onshore/Offshore Online Gross Win Half the Market ($1.2b of Gross Win) is Offshore…and Offshore Growing Strongly Bingo Wagering Offshore Onshore Poker Offshore Casino Offshore Wagering Offshore Source: H2 Gambling Capital FY13 Estimate 16
Liberal-National Coalition Government House of Representatives (150 seats) ‐ Prime Minister Tony Abbott’s Coalition Government enjoys a healthy majority: Senate (76 seats) – The Government faces challenges in the Senate where it does not have a majority: The 8 “Others” hold the balance of power: • Clive Palmer’s Palmer United Party controls the votes of 4 of the 8 “Others” • Includes anti ‐ gambling Senator Nick Xenophon 17
Federal Government Gambling Policy Federal Coalition’s policy paper to “help problem gamblers” (Aug 2013) The Coalition: • Does not support proposals to relax online gambling regulations • Will legislate to control gambling advertising if self ‐ imposed industry regulations prove ineffective • Will legislate to prohibit credit Prime Minister Tony Abbott has, publicly and privately, expressed conservative views about gambling on the internet 18
State / Territory Landscape Each State & Territory has their own laws & regulations covering wagering services, specifically: • Licensing regime (interstate & intrastate) • Advertising • Product fees Licensed Totalisator Operators Corporate Bookmakers & the betting exchange 19
Recommend
More recommend
