MOMENTS THAT

THRILL!

TATTS GROUP LIMITED

FY17 INVESTOR PRESENTATION

ABN 19 108 686 040

Results Overview

PROFIT PERFORMANCE

  • STRONG FINANCIAL PERFORMANCE

    à Statutory NPAT $220.5m 5.7%, carrying:

    • $23.4m in merger costs (net of tax)

    • $137.8m revenue 'hit' from fewer jackpots at or above $15m (FY17: 31 vs FY16: 45)

    • the brunt of bad weather + reduced field sizes

      à Continuing operations NPAT 7.7% to $244.6m (normalised for merger costs)

  • DIVIDEND MAINTAINED

    NPAT from continuing operations

    Merger costs (net of tax)

    FY17 ($M)

    Discontinued operations

    244.6

    (23.4)

    (0.7)

    NPAT from coSnitginnuifiincganotpieteramtsions

    Merger costs (net of tax)

    FY16 ($M)

    Discontinued operations

    Statutory NPAT

    233.8

    264.9

    (1.5)

    (29.6)

    à Strong operational cashflows supporting dividend

    à Final dividend 8.0¢ per share (FY16: 8.0¢)

    à Full-year dividend 17.5¢ per share maintained

    Statutory NPAT220.5

    0 50 100 150 200 250 300

    0 50 100 150 200 250 300

    à 105.4% payout ratio (statutory before merger costs)

  • DIGITAL SALES CONTINUE TO POWER AHEAD

    LOTTERIES JACKPOT RUN

    48

    à Wagering: 31.7% of turnover - from 30.2% in FY16

    à Lotteries: 14.5%1of sales - from 13.5% in FY16

    à Lotteries 'the Lott' apps on 2.0m devices (FY16: 1.3m devices)

    à Wagering UBET apps on 0.4m devices (FY16: 0.2m devices)

    44

    40

    39

    36

    36

    32

    $29.0M

    28

    45

    34

    $28.8M 31

  • LICENCE RENEWAL

    à Renewal of exclusive licence to conduct lotteries in Victoria:

    • 10-year term starting 1 July 2018

    • $120m one-off payment at licence commencement date

$25.7M $25.3M

24

20

16

$24.2M

12

8

6

4

0 6 4 4 6 2

FY13

FY14 FY15 FY16 FY17

Number of jackpots at $15M or more

Average value of jackpot pool at $15M or more

Number of jackpots at $50M or more

1 Consistent with prior years this excludes South Australia, if South Australia is included, online sales represented 13.7% vs 12.7% in FY16

Tatts Group FY17 Results Presentation | 2

Results Overview (cont.)

  • Group revenue 5.1%

  • Group EBIT 8.1% before merger costs

    LOTTERIES FINANCIAL PERFORMANCE

    Revenue

    FY17

    FY16

    CHANGE

    ($M)

    ($M)

    (%)

    2,014.0

    2,139.5

    q 5.9%

    EBITDA

    315.6

    345.5

    q 8.7%

    EBIT

    290.5

    320.0

    q 9.2%

    WAGERING FINANCIAL PERFORMANCE

    Turnover

    Net Win Rate Revenue EBITDA

    EBIT

    EBIT

  • NPAT (Continuing) 7.7% before merger costs

  • NPAT (Statutory) 5.7%

    FY17 ($M)

    FY16 ($M)

    CHANGE (%)

    2,778.5

    2,928.1

    q

    5.1%

    (1,290.7)

    (1,370.9)

    q

    5.8%

    (407.3)

    (436.7)

    q

    6.7%

    (199.3)

    (202.7)

    q

    1.7%

    (415.5)

    (420.9)

    q

    1.3%

    (2,312.8)

    (2,431.2)

    q

    4.9%

    465.7

    496.9

    q

    6.3%

    (78.2)

    (75.2)

    p

    4.0%

    387.5

    421.7

    q

    8.1%

    (46.4)

    (41.1)

    p

    12.9%

    341.1

    380.6

    q

    10.4%

    (96.5)

    (115.7)

    q

    16.6%

    244.6

    264.9

    q

    7.7%

    (23.4)

    (1.5)

    p

    1,470.8%

    (0.7)

    (29.6)

    q

    97.6%

    220.5

    233.8

    q

    5.7%

  • Cost control - expenses 4.9% before merger costs

Total revenue and other income

Government share Venue share/commission

Product and program fees

Other expenses Total expenses EBITDA

Depreciation and amortisation

EBIT

Net interest expense Profit before taxIncome tax

Net profit after tax (continuing operations before merger costs)

Merger costs (net of tax)

Loss from discontinued operations1

Net profit after tax (statutory)

66%

14%

20%

Gaming 14%

Wagering 20%

Lotteries 66%

FY17 ($M)

3,841.9

FY16 ($M)

4,125.1

CHANGE (%)

q 6.9%

15.3%

14.8%

p

50 bps

587.5

609.9

q

3.7%

110.4

133.3

q

17.1%

90.3

115.7

q

22.0%

Revenue

FY17

FY16

CHANGE

($M)

($M)

(%)

- MAX

120.7

118.4

p 2.0%

- MAXtech

81.8

92.3

q 11.3%

EBITDA

67.7

64.7

p 4.6%

- MAX

- MAXtech

7.7

3.4

p 125.6%

EBIT

55.0

52.4

p 5.0%

- MAX

- MAXtech

5.5

1.0

p 444.9%

GAMING FINANCIAL PERFORMANCE

1 The loss from discontinued operations in FY17 represents estimated final costs associated with the pokies compensation case. In FY16, the loss represents the loss on sale from Talarius + the legal costs associated with the pokies compensation case

Tatts Group FY17 Results Presentation | 3

Dividends
  • STRONG SHAREHOLDER RETURN

    à Strong operational cashflows supports dividend

    à Final fully franked dividend:

    § 8.0¢ per share (FY16: 8.0¢)

    • Record date 4 September 2017

    • Payment date 3 October 2017

    • DRP suspended in accordance with merger terms

      à Total dividend for FY17:

      § 17.5¢ per share (FY16: 17.5¢)

    • 105.1% payout ratio on continuing operations basis (before merger costs)

    • 105.4% payout ratio on a statutory basis (before merger costs)

      à Total Shareholder Return (TSR):

    • Tatts TSR 16.5%

§ ASX200 TSR 15.7%

FINAL DIVIDEND

FY17 - 8.0¢

DIVIDENDS PER SHARE AND PAYOUT RATIO (CONTINUING OPERATIONS BEFORE MERGER COSTS)

Payout %

95.1%

84.8%

93.7%

97.3%

105.1%

12.0cps

11.0cps

10.0cps

H1 9.5c

9.0cps

8.0cps

H2 7.5c

7.0cps

6.0cps 5.0cps

4.0cps

3.0cps 2.0cps

1.0cps

0 cps

H1 8.0c

H2 7.5c

H1 8.0c

H2 5.5c

H1 9.0c

H2 8.0c

H1 9.5c

H2 8.0c

FY13 FY14 FY15

FY16

FY17

Tatts Group FY17 Results Presentation | 4

Tatts Group Limited published this content on 17 August 2017 and is solely responsible for the information contained herein.
Distributed by Public, unedited and unaltered, on 17 August 2017 07:21:02 UTC.

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