Tabcorp Holdings Limited ACN 063 780 709 5 Bowen Crescent - PDF document

Tabcorp Holdings Limited ACN 063 780 709 5 Bowen Crescent Melbourne Australia 3004 GPO Box 1943R Melbourne Australia 3001 Telephone 61 3 9868 2100 Facsimile 61 3 9868 2300 Website www.tabcorp.com.au 7 February 2013 To: Australian Securities Exchange Market Announcements 20 Bridge Street Sydney NSW 2000 TABCORP HALF YEAR RESULTS PRESENTATION Attached is the presentation regarding Tabcorp’s half year results ended 31 December 2012 to be presented by David Attenborough, Managing Director and Chief Executive Officer. This presentation will be webcast on Tabcorp’s website at www.tabcorp.com.au from 10.00am (Melbourne time) today. The information contained in this announcement should be read in conjunction with today’s announcement of Tabcorp’s half year results and Tabcorp’s most recent annual financial report. Kerry Willcock Executive General Manager – Corporate, Legal and Regulatory Enc.

Tabcorp Holdings Limited ABN 66 063 780 709 2012/13 Half Year Results Presentation 7 February 2013

1H overview  Statutory NPAT of $72.9m  NPAT from continuing operations before significant items of $71.6m  EPS from continuing operations before significant items of 9.8 cents per share  Interim dividend of 11 cents per share, fully franked  Includes earnings from discontinued operations and significant items  Strong revenue growth across the business  Total Wagering revenue up 6.2% (including Victorian Racing Industry interest)  Media & International up 8.1%  Keno up 15.3%  TGS EBITDA currently running at an annualised run rate above $55m  Keno QLD and NSW delivering strong EBITDA growth with the new Victorian business contributing significantly to top line growth  Distributions to Victorian Racing Industry ahead of run rate required to meet FY13 MPO  Growth achieved whilst managing significant changes to the business portfolio 2

Definitions and major adjustments  1H results reflect significant changes to the business portfolio  Changeover to the new 50/50 Victorian Wagering JV on 16 August, previously 75/25  Victorian Tabaret business ceased 15 August  Gaming Services (TGS) business commenced on 16 August  The business benefited from “significant items” after tax of $22.9m – GST refund of $14.3m (previously announced) and one-off profit of $8.6m on the close out of an option held by TGS  The results include one-off costs of $4m relating to re-branding the TAB and Luxbet businesses, and launch of new tab.com.au  Comparisons to the prior period are not an accurate reflection of the underlying performance  Key definitions used in this presentation include  Statutory = reported performance  Continuing operations = excludes Victorian Tabaret business  Discontinued operations = Victorian Tabaret business 3

Group Results Change $m 1H13 1H12 on pcp Revenues 1,034.9 1,013.8 2.1% Variable contribution 450.0 424.7 6.0% Operating expenses (218.7) (199.3) 9.7% EBITDA from continuing operations before significant items 231.3 225.4 2.6% D&A (70.9) (47.6) 48.9% EBIT from continuing operations before significant items 160.4 177.8 (9.8%) Interest (52.5) (42.6) 23.2% Tax expense (36.3) (40.6) (10.6%) NPAT from continuing operations before significant items 71.6 94.6 (24.3%) Significant items (tax effected) 22.9 - 100% NPAT from discontinued operations (21.6) 94.7 (>100%) Statutory NPAT 72.9 189.3 (61.5%)  NPAT from discontinued operations includes  Goodwill write off of $47.2m (previously advised)  Provision for Health Benefit Levy of $3.7m (after tax). Final outcome to be determined (refer to the media release supporting the 1H13 results announcement and 1H13 financial reports) Notes: Variable contribution and EBITDA is non-IFRS financial information and has not been audited or reviewed in accordance with Australian Auditing Standards Earnings before significant items presented to provide the most meaningful presentation of Tabcorp’s results 4

Business results – continuing operations Wagering Change Media Change Gaming Change Keno Change Group Change $m on pcp & Int'l on pcp Services on pcp on pcp on pcp Revenues 816.1 (4.0%) 101.5 8.1% 37.8 >100% 106.5 15.3% 1,034.9 2.1% Variable contribution 285.8 (7.0%) 92.0 4.1% 37.8 >100% 59.0 14.1% 450.0 6.0% Operating expenses (147.9) 2.9% (59.8) 4.7% (12.4) >100% (22.3) 13.2% (218.7) 9.7% EBITDA 137.9 (15.8%) 32.2 2.9% 25.4 >100% 36.7 14.7% 231.3 2.6% D&A (46.6) 25.9% (4.7) 20.5% (8.6) 100% (11.1) 65.7% (70.9) 48.9% EBIT 91.3 (27.9%) 27.5 0.4% 16.8 >100% 25.6 1.2% 160.4 (9.8%) EBIT/Revenue (%) 11.2% (3.7%) 27.1% (2.0%) 44.4% >100% 24.0% (3.4%) 15.5% (2.0%) Capex 24.0 (9.1%) 3.3 (52.9%) 27.8 >100% 8.9 (25.8%) 68.4 8.9%  Wagering reported results impacted by change over to new Victorian Wagering and Betting licence which commenced 16 August 2012. The proportionate interest under the new Joint Venture is 50/50, previously 75/25.  Gaming Services division represents the TGS business Notes: Variable contribution and EBITDA is non-IFRS financial information and has not been audited or reviewed in accordance with Australian Auditing Standards Business results do not aggregate to Group total due to intercompany eliminations between Wagering and Media & International businesses, and unallocated items 5

Wagering: KPIs $m 1H13 1H12 Change  Revenues by product Total revenue growth of 6.2% including Victorian Racing Industry interest Totalisator Vic 341.2 325.1 5.0%  Totalisator revenues benefited from the cessation of ToteTas pooling Totalisator NSW 375.7 384.3 (2.2%) transferring to direct betting, and PGI approvals in NSW and Victoria Fixed Odds 195.6 152.3 28.4% Trackside 45.5 41.8 8.9%  Fixed Odds yields assisted by expanded products and risk management Luxbet 19.6 12.3 59.3%  Racing revenue up 46% in 1H13 Turnover by distribution  Sport revenue up 9% in 1H13 Retail Vic 1,568.6 1,598.6 (1.9%) Retail NSW 2,040.9 2,023.5 0.9%  Luxbet marketing investments and risk management driving revenue Digital 1,253.7 1,081.3 15.9% growth Call Centre 398.5 429.8 (7.3%) * Other 582.4 446.9 30.3%  Retail performance reflects both the continued transfer to the digital Luxbet 335.6 266.6 25.9% channel and the relatively soft retail conditions Retail  Strong digital turnover growth of 15.9% Self service turnover Vic 53.2% 47.7% 5.5%  Mobile devices were 28% of digital turnover, up from 9% in the pcp Self service turnover NSW 40.5% 28.7% 11.8%  Increased contributions to the Racing Industry Racing Industry contributions Victoria (incl. Gaming) 185.3 173.0 7.1%  Including benefit of GST refund of $6.8m New South Wales 130.7 126.3 3.5%  Race fields 34.6 18.3 89.1% Ahead of required run rate for FY13 Victorian MPO of $337m Notes: * Other includes Oncourse, Premium Customers and PGI Victorian revenue includes JV partner interest, NSW represents 100% of revenue 6

Wagering: commentary  1H investments include  Brands launched, new website and digital  Increased bookmaking capability and expanded markets  Customer acquisition during Spring Racing Carnival  Multi channel strategy  Digital investments driving revenue and market share growth (TAH market share in digital channels up from 25% in FY10 to 28% in FY12)*  Retail expansion complete  Fixed Odds and international co-mingling opportunities are progressing  Disciplined marketing and media strategy  Selective major code and broadcast partnerships  Ongoing investment in CRM and digital marketing capabilities  “Betbox” case in NSW discontinued after the State and Tabcorp’s win in the Victorian Betbox case  Effectively upholds the prohibition on the use of self service internet betting kiosks by corporate bookmakers. Note: *Sourced from Australian Racing Board Fact book and Tabcorp estimates 7

Media & International $m 1H13 1H12 Change  Revenue growth from Revenues 101.5 93.9 8.1%  Increased subscriptions Operating expenses (59.8) (57.1) 4.7%  International growth – co-mingling & vision EBITDA 32.2 31.3 2.9%  Expenses increase due to EBIT 27.5 27.4 0.4%  Digital investments (Distribution & Apps) Broadcast Rights and Racing Industry contributions from 28.8 25.6 12.5%  Outside Broadcast and media rights International business  Strong growth in Racing Industry contributions  2H13 focus  Negotiations for TVN media rights 8

Gaming Services $m 1H13 1H12 Change  Commenced operations 16 August 2012 Revenues 37.8 2.2 >100%  Sign ups covering over 8,500 EGM’s Operating expenses (12.4) (3.8) >100% EBITDA 25.4 (1.6) >100%  75% 10 year contracts EBIT 16.8 (1.6) >100%  25% minimum 6 year contracts Venues (period end) 173  EBITDA currently running at an annualised run rate above $55m 9