Tabcorp Holdings Limited · Tabcorp Holdings Limited ACN 66 063 780 709 Investor Day 12 October...

Tabcorp Holdings LimitedACN 66 063 780 709

Investor Day12 October 2011

2Tabcorp Investor Day, 12 October 2011

Disclaimer> This Presentation contains summary information about the current activities of Tabcorp Holdings Limited and its subsidiaries

(Tabcorp Group). It should be read in conjunction with Tabcorp Group’s other periodic and continuous disclosure announcements lodged with the Australian Securities Exchange (ASX), which are available at www.asx.com.au.

> No member of the Tabcorp Group gives any warranties in relation to the statements or information contained in this Presentation. The information contained in this Presentation is of a general nature and has been prepared by Tabcorp in good faith and with due care but no representation or warranty, express or implied, is provided in relation to the accuracy or completeness of the information.

> This Presentation is for information purposes only and is not a prospectus, product disclosure statement or other disclosure or offering document under Australian or any other law. This Presentation does not constitute an offer, invitation or recommendation to subscribe for or purchase any security and neither this presentation nor anything contained in it shall form the basis of any contract or commitment.

> This Presentation is not a recommendation to acquire Tabcorp shares. The information provided in this Presentation is not financial product advice and has been prepared without taking into account any recipient's investment objectives, financial circumstances or particular needs, and should not be considered to be comprehensive or to comprise all the information which recipient may require in order to make an investment decision regarding Tabcorp shares.

> All dollar values are in Australian dollars (A$) unless otherwise stated. > Neither Tabcorp nor any other person warrants or guarantees the future performance of Tabcorp shares or any return on any

investment made in Tabcorp Shares. This Presentation may contain certain 'forward-looking statements'. The words 'anticipate', 'believe', 'expect', 'project', 'forecast', 'estimate', 'likely', 'intend', 'should', 'could', 'may', 'target', 'plan' and other similar expressions are intended to identify forward-looking statements. Indications of, and guidance on, financial position and performance are also forward-looking statements. Any forecasts or other forward looking statements contained in this Presentation are subject to known and unknown risks and uncertainties and may involve significant elements of subjective judgement and assumptions as to future events which may or may not be correct. Such forward-looking statements are not guarantees of future performance and involve known and unknown risks, uncertainties and other factors, many of which are beyond the control of Tabcorp, that may cause actual results to differ materially from those expressed or implied in such statements. There can be no assurance that actual outcomes will not differ materially from these statements. You are cautioned not to place undue reliance on forward looking statements. Except as required by law or regulation (including the ASX Listing Rules), Tabcorp undertakes no obligation to update these forward-looking statements.

> Past performance information given in this Presentation is given for illustrative purposes only and should not be relied upon as(and is not) an indication of future performance.


1 Overview of Tabcorp

Tabcorp investor day: Agenda

2

4

5

6

3

Capital structure

Keno

Media & International

Gaming

David Attenborough

Mohan Jesudason

Damien Johnston

Brendan Parnell

Mohan Jesudason

Key messages7 David Attenborough

2 Doug Freeman, Craig Nugent and Adam RytenskildWagering


Wagering Media & International Gaming Keno

Profile • 43.3% share of turnover (estimated)

• 1.2m regular customers• New 12 year Victorian

Wagering & Betting licence

• 2.35m homes have access to Sky Racing

• Export racing vision to 29 countries

• 82,000 races pa

• 1.2m EGM customers • 53.9% share of revenue• 7,500 EGMs signed to TGS• TGS is expected to

commence August 2012

• 1.3m customers• New 10 year Victorian Keno

licence

OutletsAccounts

FY11RevenueEBITDA

2,627 (Sept 2011)315,000 (Sept 2011)

$1,569m$288m

5,100 (outlets)

$179m$60m

263 (venues)

$1,077m$280m

2,876 (venues)

$170m$61m

Licenceexpiry

NSW 2097NT 2015VIC 2024 (new)

VIC 2012 NSW 2022QLD 2022VIC 2022

Market leading businesses


> Quality portfolio of businesses with market leading positionsGeographic diversificationOperational diversificationLong dated licencesLoyal customer base

> Attractive industry structureSole licensee for off-course wagering in the key Australian states of New South Wales and VictoriaSuccessfully 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

Tabcorp has an attractive investment case – defensive earnings, strong cashflow and growth from new investments

Investment highlights


Financial performance

Tabcorp delivered earnings growth across all four businesses in FY11

$m FY11 FY10

Revenues 2,942 2.9% 2,860 1.7%

Variable contribution

1,080 4.4% 1,035 1.6%

Operating expenses

(393) 2.0% (385) 1.4%

EBITDA 687 5.8% 650 1.6%

D&A (124) 8.5% (115) 6.2%

EBIT 563 5.2% 535 0.7%

EBITDA by business

Wagering 287 4.8% 274 6.6%

Media 60 6.0% 56 (1.6%)

Gaming 280 6.7% 262 (2.0%)

Keno 61 8.6% 56 0.4%

> Each business delivered growth in revenues and earnings

> Wagering growth underpinned by 31.7% increase in fixed odds revenues and strong Trackside performance

> Media and International growth driven by the launch of Sky2 and Sky World and continued international expansion

> Gaming growth reflected the ongoing strategy of actively competing for market share whilst managing down costs in preparation for transitioning to TGS in August 2012

> Keno growth was a result of a targeted distribution expansion in NSW and Queensland and the roll out of Keno self service in NSW


1Q12 trading update

Positive revenue trends continued into the first quarter with all businesses growing

Revenue ($m) 1Q12 1Q11 Change

Wagering 394.1 386.3 2.0%

Media & International 46.6 44.5 4.7%

Gaming 285.2 279.7 2.0%

Keno 45.8 42.9 6.9%

Total 1 759.4 739.7 2.7%

> Wagering

Allowing for Soccer World Cup in 1Q11, growth was 4%

Strong growth in fixed odds revenue

Growth in NSW retail continued turnaround from 2H11

Continued strong growth in internet channel

> Media

Increased subscription revenue

> Gaming

Steady growth

> Keno

Expanded distribution

Note: Revenues do not aggregate to Group total due to intercompany eliminations


> Fixed Odds betting on racing in retail NSW (launched January 2011)

> Trackside product in NSW (launched January 2011)

> International pooling in NSW (launched July 2011)

> New Victorian Wagering and Betting Licence (commences August 2012)

> New Victorian Keno Licence (commences April 2012)

> Tabcorp Gaming Solutions (commences August 2012)

Executing on our growth opportunities

Tabcorp has completed a year of significant transformation and is executing a number of valuable growth opportunities


Key strategiesStrategies to continue leadership in retail and online gaming and wagering are in place

Build on strength in retail

> Expand footprint with new formats e.g. kiosks> Deliver full suite of products> Lead with world-class self-service technology> Expand Trackside product in NSW

Drive fixed odds expansion > Expand fixed odds offer

Drive online > Develop leading online presence across full suite of products

Seek to improve regulatory conditions

> Pursue levelling of the competitive playing field (e.g. in products, taxes, fees)

Promote loyalty program > Grow “No 1 Club”— leading customer loyalty program in Australian Wagering

Wag

erin

g

Enhance Australian racing exposure and expand internationally

> Enhance Australian racing exposure to customers> Expand international pooling> Drive export of Australian racing through Sky, import international

product

Med

ia

Develop TGS > Enhance gaming earnings in Victoria to August 2012> Expand TGS in Victoria and establish interstate

Grow Keno > Expand distribution > Expand self-service

Gam

ing

Ken

o



1

4

5

6

3

Overview of Tabcorp

Capital structure

Keno


Gaming

David Attenborough

Mohan Jesudason

2 Wagering Doug Freeman, Craig Nugent and Adam Rytenskild

Damien Johnston

Brendan Parnell

Mohan Jesudason



Wagering: Agenda

ii

i

iv

v

vi

iii


Business overview

Financial performance and trading update

New Victorian Wagering and Betting Licence

Fixed odds

Distribution


Business overview

> Operates exclusive tote wagering in Victoria and New South Wales

> Operates fixed odds betting on sports and racing under the TAB Sportsbet and Luxbet brands

> Conducts betting at 267 race courses, 2,627 TAB retail outlets and via internet and telephone

> 1.2m regular customers> Operates Trackside, a computer simulated

racing product which complements Tabcorp’sproduct offering


Australian wagering market

Victoria

TAB $4,454mMarket $4,804m% national 21%

Western Australia

TAB $1,677mMarket $1,755m% national 8% New South Wales


South Australia

TAB $819mMarket $873m% national 4%

Northern Territory

TAB $180mMarket $5,380m% national 24%

Tasmania


ACT


Note: 1. Total TAB turnover includes fixed odds 2. Excludes betting exchanges and offshore providers % national = state wagering market turnover / national wagering market turnover

Source: ARB Fact Book FY10

Queensland


National FY10

TAB turnover1 $16.0bMarket turnover2 $22.6bRetail outlets 4,125


Forms of betting in Australia

Betting Type Description Operators Comments

Pari-mutuel(the Tote)

Pool betting – bets are accumulated in a pool with dividends paid based on a set % of that pool, with each winning ticket getting a proportional share

NSW/Vic – TabcorpQld/SA/NT – TattsACT – ACTTABTas – Tote TasWA – RWWA

> Key funding source for racing industry> The dividends paid vary from product to

product – they have different takeout rates

Fixed Odds The punter is guaranteed a set dividend if their bet wins

BookmakersTAB SportsbetOther TABs

> Each state TAB was formerly a member of TAB Sportsbet. Now they run their own sports betting businesses

Tote Odds A relatively new product where winning bets receive a dividend based on the dividend paid by any of the TABs

Bookmakers > Effectively copies the tote product> Bookmakers can ‘bet back’ into the tote

pools> Assisted by lower tax and product fees

payable in the Northern Territory

Betting Exchange

A facility which effectively allows punters to bet against each other. The facility provides a means for punters to back or lay their selection against someone wanting to bet on the opposite outcome

BetfairTabcorp’s new Victorian licence allows operation of a betting exchange from August 2012

> Betfair retains a commission when bets are matched

> Betfair is only licensed in Tasmania and competes nationally


> Prize money> Incentives> Other

> Admission> Membership> Sponsorship> Food & beverages

Owners’ fees

Punters Wagering operators

Racing industry

Media broadcasters

Other

Owners

Tabcorp is an integral part of the Australian wagering market, accounting for approximately 38% of funding to the racing industry and approximately 66% to NSW and Victorian racing

Wagers

Wagering product

Rights fees

Broadcasting rights

Vision

Racing product

> Product fees> Race fields> Earnings contribution

Tabcorp plays a vital role in the wagering market value chain

Participants in the Australian wagering market for racing


Wagering: Agenda


Business overview



Fixed odds

Distribution

i

ii

iv

v

vi

iii


> Consistent wagering market growthRacing turnover is growing steadilySports turnover is growing strongly

> Leading wagering product offeringLeader in pari-mutuel racingLeader in fixed odds racingLeader in sports bettingTrackside virtual racing product continues to grow in Victoria and NSW

> Wagering continues to deliver growth across channelsStrong online wagering turnover growthRetail initiatives are driving growth

Tabcorp is the leader in an expanding wagering market and is successfully executing on a multi-channel distribution strategy across retail and online



0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

4.5

FY01 FY02 FY03 FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11

Annu

al T

urno

ver (

$b)

Sports

9

11

13

15

17

19

21

23


Annu

al T

urno

ver (

$b)

Parimutuel Racing

Total Racing

Source: ARB Fact Books, internal Tabcorp data, includes some estimates. All turnover shown on a 52 week rolling basis

The wagering market has demonstrated consistent growth, driven by steady growth in racing and strong growth in sports betting

Consistent wagering market growth

Australian wagering market

12

14

16

18

20

22

24


Annu

al T

urno

ver (

$b)

CAGR FY01 - FY06 FY06 - FY11Total 6.0% 5.4%

Racing turnover Sports turnover

CAGR FY01 - FY06 FY06 - FY11Parimutuel Racing 3.6% 1.3%

Total Racing 6.4% 4.0%

CAGR FY01 - FY06 FY06 - FY11Sports 19.2% 14.1%


-

100

200

300

400

500

600

700

800

Jan-

09

Mar

-09

May

-09

Jul-0

9

Sep

-09

Nov

-09

Jan-

10

Mar

-10

May

-10

Jul-1

0

Sep

-10

Nov

-10

Jan-

11

Mar

-11

May

-11

Jul-1

1

Sep

-11

Turn

over

($m

)

TAB Sportsbet fixed odds racing turnover 1

CAGR = 24%

TAB Sportsbet has rapidly grown its share of fixed odds racing turnover while achieving yields and returns similar to the pari-mutuel product.

21.0%16.6%Other bookmakers

Wagering Fixed Odds RacingTurnover share

FY11 FY10

TAB Sportsbet 10.4% 5.4%

Luxbet 7.3% 6.4%

Tatts 8.3% 3.9%

Other TAB’s 1.8% 1.3%

NT bookmakers 16.7% 18.6%

NT Tote Odds 38.9% 43.4%

Product offering – a leader in fixed odds racing

TAB Sportsbet has a competitive fixed odds racing offer

Note: 1. Turnover shown on a 52 week rolling basisSource Tabcorp data


0.7

0.8

0.9

1.0

1.1

1.2

1.3

Jan-

09

Mar

-09

May

-09

Jul-0

9

Sep

-09

Nov

-09

Jan-

10

Mar

-10

May

-10

Jul-1

0

Sep

-10

Nov

-10

Jan-

11

Mar

-11

May

-11

Jul-1

1

Sep

-11

Turn

over

($b)

CAGR = 22%

Increase due to Soccer World Cup

Decrease due to Soccer World Cup

TAB Sportsbet has maintained leadership despite a significantmarketing push by key competitors

Wagering Sports Turnover share

FY11 FY10

TAB Sportsbet 37.4% 36.8%

Luxbet 2.6% 3.7%

Tatts 7.3% 7.1%

Other TAB’s 5.2% 5.1%

Bookmakers 47.5% 47.3%

Product offering – TAB Sportsbet clear leader in sports betting

Sports betting is growing strongly

TAB Sportsbet fixed odds sport turnover 1

Note: 1. Turnover shown on a 52 week rolling basisSource Tabcorp data


Tabcorp’s initiativesIntroduced Trackside to NSW from January 2011Increased frequency of Trackside racesExpanded Victorian coverage

> Over 1,400 Trackside installations to date, representing approximately 90% of target

> NSW is on track to deliver an expected $30m EBITDA from Trackside in FY13

165

175

185

195

205

215

225

235

Jan-

09

Mar

-09

May

-09

Jul-0

9

Sep-

09

Nov

-09

Jan-

10

Mar

-10

May

-10

Jul-1

0

Sep-

10

Nov

-10

Jan-

11

Mar

-11

May

-11

Jul-1

1

Sep-

11

Turn

over

($m

)

CAGR = 14%

0.0

1.0

2.0

3.0

4.0

5.0

Jan-

11

Feb-

11

Mar

-11

Apr-

11

May

-11

Jun-

11

Jul-1

1

Aug-

11

Sep-

11

Wee

kly

Turn

over

($m

)

Actual Target

NSW 2Victoria 1

Business case target in FY13

Product offering – Trackside turnover continues to growTrackside is growing consistently in Victoria and is on track to meet our targets in NSW

Note: 1. Victorian turnover shown on a 52 week rolling basis2. NSW turnover is weekly from 1 Jan 11

Source: Tabcorp data


Tabcorp’s online turnover 1

> 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

1,230

1,330

1,430

1,530

1,630

1,730

1,830

1,930

Jan-

09

Mar

-09

May

-09

Jul-0

9

Sep

-09

Nov

-09

Jan-

10

Mar

-10

May

-10

Jul-1

0

Sep

-10

Nov

-10

Jan-

11

Mar

-11

May

-11

Jul-1

1

Sep

-11

Turn

over

($m

)

CAGR = 19%

Wagering is shifting online and Tabcorp is capturing its share, with online 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

Wagering channels – strong online wagering turnover growth

Note: 1. Turnover shown on a 52 week rolling basisSource: Tabcorp data.


Wagering channels – retail initiatives are driving growth

Tabcorp’s retail turnover is growing, driven by initiatives

6.40

6.45

6.50

6.55

6.60

6.65

6.70

6.75

6.80

Jan-

09

Mar

-09

May

-09

Jul-0

9

Sep

-09

Nov

-09

Jan-

10

Mar

-10

May

-10

Jul-1

0

Sep

-10

Nov

-10

Jan-

11

Mar

-11

May

-11

Jul-1

1

Sep

-11

Turn

over

($m

)

Retail turnover 1,2

New retail strategy launched including fixed odds racing & Trackside

in NSW

CAGR = 1.3%

> Retail represents 64% of our wagering turnover 1

> Cash is the key advantage of retail

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

Note: 1. Quarter ended 30 September 2011 2. Turnover shown on a 52 week rolling basis – but excludes Soccer World Cup

Source: Internal Tabcorp data


Wagering: Agenda


Business overview



Fixed odds

Distribution

i

iii

iv

v

vi

ii


Wagering: Financial performance

> Strong growth in Fixed Odds offsetting decline in pari-mutuel revenues

> Soccer World Cup revenues (Fixed Odds)

FY11 $7.5mFY10 $15m

> Fixed Odds racing in NSW retail from January 2011

> Trackside in NSW retail from January 2011

> Margins improved through strong focus on operating expenses

> Race fields feesFY11 $35m (FY10 $35m) FY12 estimate $38m, increasing to $55m from August 2012

Note: Victorian revenue and expenses are net of 25% allocation to JV partnerNSW figures are 100% of revenue and expenses with an incentive fee equivalent to 25% of profits included in variable contribution

$m FY11 FY10 ChangeTotalisator - Vic 481 496 (3.0%)Totalisator - NSW 768 809 (5.0%)Fixed Odds 219 164 33.7% Trackside 40 27 47.4% Other 61 58 5.8% Revenues 1,569 1,554 1.0% Variable contribution 551 538 2.5%Operating expenses (264) (264) 0.0% EBITDA 287 274 4.8% D&A (67) (63) 5.9% EBIT 220 211 4.5% EBIT/Revenue 14.0% 13.6% 0.5%


1Q12 trading update – Wagering KPIs

> 1Q11 included $7.5m Fixed Odds revenues from Soccer World Cup. Allowing for this, growth was 4%

> 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 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

Solid performance showing benefits from investments and improved regulatory conditions

$m 1Q12 1Q11 ChangeRevenue by productTotalisator Vic 145.1 150.3 (3.4%)

Totalisator NSW 180.9 190.1 (4.9%)

Fixed Odds 72.7 61.5 18.2%

Luxbet 4.6 4.2 9.0%

Trackside 20.8 11.1 88.5%

Turnover by distributionRetail Vic 767.0 754.4 1.7%

Retail NSW 972.5 911.7 6.7%

Internet 508.4 424.5 19.8%

Phone 203.6 215.1 (5.4%)

Oncourse 184.0 187.7 (2.0%)

Luxbet 100.5 144.7 (30.6%)


Wagering: Agenda


Business overview



Fixed odds

Distribution

i

iv

ii

v

vi

iii



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


Wagering: Agenda

1

2


Business overview



Fixed odds

Distribution

i

v

iv

ii

vi

iii


14%

35%

22%

29%

> Fixed Odds products now comprise 43% of wagering turnover, up from 33% in 2007

> Tabcorp participates in Fixed Odds across racing and sport through TAB Sportsbet and Luxbet> In FY11, Tabcorp captured 25% of the Fixed Odds/Tote Odds turnover. In FY07 this was 10%

Fixed Odds is a growing segmentFixed Odds is the fastest growing segment of the wagering market, and Tabcorp has increased its share of Fixed Odds turnover significantly

10%

42%

25%

23%Fixed Odds Sport

Tote Win/Place

Tote Exotics

Fixed Odds Racing

FY07 Wagering Turnover

(Total Sales $19.4bn)

FY11 Wagering Turnover

(Total Sales $23.9bn)


> In FY12, TAB Sportsbet will offer more than 260,000 different betting books across 50 different sports and non-sporting events (FY11: 204,000, FY10: 136,000)

> Employs approximately 50 specialised bookmakers to price markets and manage risk

TAB Sportsbet bookmakers’ expertise is recognised by competitors

> A significant focus for TAB Sportsbet is the management of ‘smarter’ customers

> The TAB Sportsbet risk management system has the most robust controls in place to effectively manage “multi” betting

> Despite increasing competition TAB Sportsbet has continued its strong growth and maintained overall yields exceeding 11.5% in each of the last 5 years

TAB Sportsbet: Fixed Odds overview

FY11 FY10 FY09

Total Turnover $1.91b $1.38b $886m

Total Revenue $221m $169m $109m

TAB Sportsbet has doubled its revenue in the last two years and maintained attractive yields

Note: Turnover and revenue includes Victorian Joint Venture partner’s 25% interest


Revenue by Bet Value$1-$100 66%$101-$1,000 29%$1,001-10,000 3%>$10,000 2%

Revenue by Distribution ChannelRetail 71%Internet 22%Telephone 7%

Sports TurnoverSingle Bets 68%Multi Bets 32%

Sports Revenue

Single Bets 37%Multi Bets 63%

TAB Sportsbet: Fixed Odds key metrics

Note: Data for full year 30 June 2011

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


> The progressive removal of regulatory restrictions over the past two years has seen TAB Sportsbet Fixed Odds turnover grow rapidly

> In FY12 it is expected that 45% of total TAB Sportsbet fixed odds turnover will come from racing. This will be driven by

A full 12 months benefit from Fixed Odds racing in NSW retail Increased customer take up of the Fixed Odds product Increased product in all three racing codes

> TAB Sportsbet targets a yield of ~12% from Fixed Odds racing over this time

TAB Sportsbet: Fixed Odds racing growthFixed Odds racing is the primary driver of growth in Fixed Odds revenue

FY12 Projected Sources of Fixed OddsRevenue Growth

67%

17%

8%

6% 2%

Fixed Odds Racing Sports Growth Live BettingSuper Multi Customer Management


> The key areas for growth in sport are Increased productIncreased live betting Expansion of the multi product, where the maximum number of legs was recently increased to 20

> Live betting turnover grew 50% in FY1160% of live betting turnover is generated in retail outlets

> The growth in betting on US sports is being driven by expanded live coverage on pay television and greater general awareness of these sports

> Betting on sports is well diversified and leaves TAB Sportsbet less susceptible to a series of abnormal results in any one sport

TAB Sportsbet: Fixed Odds sportFixed odds sports betting continues to grow, with catalysts from live betting and multis


TAB Sportsbet: Comparison of margins

NSW Parimutuel Fixed Odds Racing Fixed Odds Sport

Turnover 100 100 100

Revenue 15.7 12.0 11.5

Variable Contribution 3.9 3.4 5.7

VIC

New licence

Parimutuel Fixed Odds Racing Fixed Odds Sport

Turnover 100 100 100

Revenue 15.7 12.0 11.5

Variable Contribution 2.5 3.3 3.5

Note: Parimutuel revenue is based on win, place and doubles which are the bet types offered in fixed oddsCalculated on an incremental basis, includes product fees, taxes, venue commissions, profit share arrangementsRace fields fees calculated under new arrangements currently expected to be in place from August 2012

Fixed Odds returns to Tabcorp are attractive due to lower tax rates and fees


Luxbet financials

FY11 FY10 FY09

Turnover $559m $477m $194m

Revenue $20.7m $11.6m $3.8m

EBITDA $40k ($6.3m) ($10.6m)

In FY11, Luxbet improved its yield and achieved positive EBITDA

> The majority of revenue is Racing Tote Odds, with the balance evenly split over Racing Fixed Odds and Sport

> Luxbet has two key objectivesCompete directly with NT bookmakers on product, price and services = sales focusIncrease Tabcorp’s profitability = profit focus


Luxbet overviewTabcorp’s objective for Luxbet is to move the business to sustained profitability

> Customer experience and retentionActive customers 21k in FY11Frequent customers 14k in FY11

> Customer acquisitionNew depositing customers 13k in FY11High focus on ‘natural’ acquisition top complement more expensive affiliate acquisition

> Risk managementCustomer management and categorisationProduct limitations for certain customers


Wagering: Agenda

2 Investment highlights

Business overview



Fixed odds

Distribution

i

ii

iv

v

vi

iii


Distribution: Broadest range of channels and products

Retail64% 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/Mobile19% of wagering

> Online traffic +30% for FY11: 1.5b page views, 37m unique visits> 315k mobile app downloads > 315k active account customers

Phone7% 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

On-course2% 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

Tabcorp’s distribution capability delivers key competitive advantages

Note: Figures quoted at 30 September 2011 unless otherwise notedLuxbet and Premium customers are not included in the table above. They represent 8% of Wagering


Distribution: Strong retail partnerships

National> Australian Hotels Association (AHA)

National

> Hotel groups includingALH Group - 296 hotels

New South Wales> AHA NSW

90% of 1,658 hotels5 year exclusive agreement to FY16

> Clubs NSW90% of 1,450 clubs5 year exclusive agreement to FY16

> NSW Agents Association100% of 213 agencies

Victoria> AHA VIC

59% of 1,600 hotelsCurrent agreement expires Dec 11

> Community Clubs Assoc of Victoria (CCAV)30% of 650 clubs

> Clubs Victoria 54% of 650 clubs

> RSL 100% of 69 RSL clubs

> Victorian Agents Association100% of 93 agencies

Tabcorp is proud of its strong partnerships with retail industry groups; with the aim of delivering sustainable benefits for licensed venues and for Tabcorp


Distribution Strategy: Driving growth for Retail & Online

1. Create an integrated shopfront, providing a seamless and consistent experience: everywhere, every time2. Penetrate new customer markets through technology, innovative design and targeted product expansion3. Attract, retain and reward customers for loyalty

Delivered through 5 key platforms


Distribution: Customers responding to investment

> Targeted investment drove our Retail & Mobile business in 2H11Retail site expansion: an additional (net) 60 wagering venuesNSW Trackside expansion: over 1,400 sites installed to 30 September 2011Targeted Agency upgrades: 65 sites refurbishedNSW Retail self-service expansion: +720 EBTs to 2,320 terminalsLive betting on sport: Retail Bet Live theatres, 95 theatres installedNew website and Mobile App development: iPhone, iPad, Android, IPTV

> Performance has been encouraging Retail rebound: NSW retail sales decreased 2.8% in 1H11 vs pcp, however grew 1.7% in 2H11 vs pcp. In FY12, NSW retail is up 6.7% YTDNSW self-service utilisation has more than doubled to 25% of NSW retail wagering transactions Mobile sales in August represented 6% of total account sales with over 21,500 (11%) unique account customers betting via a mobile device during the monthNew wagering account customer acquisition up 23% YTD vs pcp. 20,600 new account customers acquired so far in FY12


> Hotels & Clubs - a focus on self-service and enhancing the entertainment experience in a social environment

> Pubs are an important channel to connect to our younger customers. 65% of 18-34 yr old customers bet at Pub/Club 1

Note: 1. Millward Brown Brand Health Monitor Nov. 2010

Retail: Investment in the networkTabcorp is targeting investment in initiatives that improve customer experience


NSW EBT share of tickets and turnover Victoria EBT share of tickets and turnover

35%

37%

39%

41%

43%

45%

47%

49%

51%

Jan-

10

Feb-

10

Mar

-10

Apr

-10

May

-10

Jun-

10

Jul-1

0

Aug

-10

Sep

-10

Oct

-10

Nov

-10

Dec

-10

Jan-

11

Feb-

11

Mar

-11

Apr

-11

May

-11

Jun-

11

Jul-1

1

Aug

-11

% o

f Tot

al S

ales

& T

icke

ts

Sales Tickets

4%

6%

8%

10%

12%

14%

16%

18%

20%

22%

Jan-

10

Feb-

10

Mar

-10

Apr

-10

May

-10

Jun-

10

Jul-1

0

Aug

-10

Sep

-10

Oct

-10

Nov

-10

Dec

-10

Jan-

11

Feb-

11

Mar

-11

Apr

-11

May

-11

Jun-

11

Jul-1

1

Aug

-11

% o

f Tot

al S

ales

& T

icke

ts

Sales Tickets

Note: All graphs are 52 week rolling

Retail: Customers have responded positively to self-serviceSelf-service terminals have driven revenue growth and incremental margin improvement


> Live betting on sport complements the entertainment experience in pubs, clubs and agencies

> “In the game” in sport Live betting turnover grew 50% in FY11Is only available in retail and phone

> An entry point for sport lovers Average spend doubles when customers add racing to their repertoire Only 5% bet exclusively on sport 60% bet exclusively on racing 35% bet on racing & sport

Live Betting

Live betting is a key growth area


> Individual interactive racing displays are being trialed to enhance customer information, improve consistency and are possible future wall sheet replacements

> Better information for customers and reduces costs

Sky interactive formThe new interactive form is part of Tabcorp’s strategy to improve the customer experience through innovation and reduce operating costs


> To be delivered in FY12A leading online offer, meeting our future growth requirementsSubstantial customer engagement through development; delivers on core customer needs

> Key FeaturesBest practice design and usabilitySimple & fast to useMulti bets are built automaticallyIndustry standard, high performance APIPromotional offer managementImproved customer account functionalityPlatform to add additional capability in the future

Online: New wagering websiteThe new website will improve customer experience and help maintain TAB Sportbet’s strong competitive position


> Applications TAB Sportsbet iPhone application launched in April 2010 – first wagering app in the Apple iTunes StoreAndroid app launched February 2011iPad app launched May 2011Total of 315,000 app downloads to date

> PerformanceRapid growth. Average 6% of total account sales

> StrategyLead mobile betting on mass-market devices with continued enhancement

> Coming soonLive Sky1 and Sky2 streaming video on all applications from October 2011

Mobile: Innovative betting technologiesApplications have been developed to maximise the mobile wagering experience on mass-market devices, which is driving revenue growth


> Internet over your TVIn FY12 the TAB Sportsbet IPTV application is planned to be launched offering customers our full suite of wagering products

> Mobile walletA focus on reducing customer barriers to transacting with usIn-Application payment systems Simple account opening processes

Online: ConvergenceTabcorp is positioning its wagering offering for future changes in media and technology


> Refurbishment of on-course tote facilities

> Dedicated lounges for No.1 Club members at Rosehill racecourse

> Sponsorship of racing clubs & codes

> Sponsorship of Tabcorp Park Melton and Tabcorp Park Menangle

> VRC - Strongest membership base and home of a socially & internationally recognised carnival

> Cranbourne – building an alliance with one of Victoria’s high growth regions

> Using iPad technology for personal betting terminals in lounge facilities

On-course: Investment at the track


Distribution summary

> Tabcorp has a number of key competitive advantages in the distribution of wagering services to customers

The broadest range of customer channels and products

Strong retail industry partnerships

Our retail network

• Cash

• Differentiated product offering -Trackside, Keno and live sports betting

> Our Distribution strategy utilises these advantages

> Investment in customer experience and expanding reach is delivering growth for retail and online, and positions Tabcorp for continued growth in a competitive environment



1

2

4

5

6

3

Wagering

Overview of Tabcorp

Capital structure

Keno


Gaming

David Attenborough

Mohan Jesudason

Doug Freeman, Craig Nugent and Adam Rytenskild

Damien Johnston

Brendan Parnell

Mohan Jesudason



Business overview

> Sky Racing broadcasts thoroughbred, harness and greyhound racing on three channels plus digital media

Pay TV subscribers in 2.35m homes 5,100 hotels, clubs and TAB outlets, across AustraliaCoverage of more than 82,000 races per year

> Sky Sports Radio broadcasts racing and sports (NSW)> International manages the export of Australian racing to 29

countries including vision, form, wagering including co-mingling and imported racing content

> Acquisition of international wagering gateway on Isle of Man (50% equity)

> QLD thoroughbred media rights secured > Interactive Sky Form launched and on-line vision expanded> International pooling into NSW launched; Co-mingling with

Singapore initiated> Significant UK distribution arrangements secured

2011 operational highlights


> Media is a core part of the Wagering business

> Distribution expands reach and audience demographics

> Sky Racing’s extensions typically enhance wagering profitability

> Programming initiatives are likely to increase the customer pool and grow wagering

> Sky Racing has retained all broadcast rights as they have become due

> Tabcorp is a key player in international wagering

Media and International investments underpin Wagering growth strategies



Media is a core part of the Wagering business

Sky Racing’s Synergies with Wagering

> Co-ordinated vision and commentary drives wagering

> Sky Racing promotes wagering by integrating wagering data and prompts into its vision

> The import of international races allows 24/7 wagering and comingling opportunities

> Export of races contributes material wagering revenue, providing a platform for global opportunities. It is also fundamentally interlinked with imports (Biggest export markets are New Zealand, Singapore, United Kingdom, the United States and Sri Lanka)

> Sky Racing’s services establish relationships with the Racing Industry

> Sky Racing provides other non-vision services to wagering such as delivery of wagering data and other gaming product

> Wagering operators are the logical and effective owners of racing media


Sky Racing value chain: cost base delivers operational scale

Race Tracks Channels and Services

Note: 1. Audio and vision to meet regulatory requirements i.e. close of betting, final resultsSource: Tabcorp internal data

DistributionUp Link/ Communications 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> Sky PayPerView Sports> Interactive TV betting> TAB Raceday Control 1

> Optus Satellites (x2)> Internet > Cable> Mobile TV> Global (various)

> Racetracks> Licensed venues> TABs> Homes> Internet> Airborne (Virgin)> Mobile> Global

Broadcast rights fees expense $40m

Communications and technology

costs $21mProduction and employee costs

$35m

Subscription and

international revenues

$179m

88% of costs arefixed or output

critical


Multi-channel distribution network expands reach

DIGITAL

Pay TV> 2.35m homes> Virgin live2air> Tab.active

RETAIL > 5,100+ venues

Sky Racing viewership

> Sky is the most watched PayTV channel weekends 12-3pm for males 25+

> Continued investment in talent and programs will see improvement in the under 40 demographic

> Sky continues to grow its female audience

> Upcoming innovations such as smart phone streaming are expected to further drive viewership> www.skyracing.tv

> Sky Form> Sky Archive> Mobile TV 1> Apps

RADIO> 104 NSW

Transmitters> Internet, Apps

EXPORT> 7 feeds exported

daily across 29 countries

> Streaming

Sky is expected to increase audiences and improve customer demographics

Note: 1. Optus, Vodafone and Three, covering 60% of the mobile handset market


Sky Racing’s extensions typically enhance wagering profitability

Retail presentation> Dual screen displays in TABs – Sky

Racing1 and Sky Racing2> Synchronised single audio service > Coordinated race start times> Simulcast of carnival meetings to bring

showcase to retail customers

“Bet now”icons

Wagering data

Sky Racing media centre> Single or Dual screen options> User elects experience, channel and audio> Seamless connectivity to TAB betting> Sky Form (interactive video)> Sky Archive 170k races and growing


Programming initiatives are likely to increase the customer pooland grow wagering

Racing Retro > Number 1 racing show

– review/ panel format> Female anchorOff the Rails> Irreverent panel show taking a

light hearted view on racingGG Girls> Unique female-only perspective

on racingSocial Media & Fantasy sports> Sky Racing Star Stable > Social Media engagement

Big Sports Breakfast (Radio)> Entertaining and interactive,

racing and sports betting

> Target the younger generation (predominately Generation Y) as well as the female demographic

> Introduce racing to a whole new audience via higher quality production

> Further integrate wagering products’ promotion and data

Sky Racing programming strategy

Sky Racing programming initiatives


Broadcasting rights

Note: 1. TVN content is 9% of Australian race meetings FY11 (excludes International races)2. Telstra holds TVN’s New Media rights

> 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

DomesticType Race Meets New Media

Thoroughbred

NSW (non Metro) 468

QLD/NT 487

WA 241

SA 178

ACT 31

TAS 66

Greyhound &Harness

AUS 4,648

SYD Metro and VIC Metro & Provincial

612 1 X 2


Sky Racing has effective strategies in place

Broadcast rights recently secured

> Greyhound Racing Victoria 2011

> NSW harness 2011

> Western Australia thoroughbreds extension 2011

> Queensland thoroughbreds 2010

> Northern Territory thoroughbreds 2010

> ACT thoroughbreds 2009

> South Australia thoroughbreds 2008

Key pillars of premium rights

> Transparency – Alignment to Sky revenue performance

> Presentation controls – Programme Management Committee for Racing World

> Alignment – Increased export revenues

> Maximum exposure – Broad multi-platform distribution

> Event support – Major event sponsorship


Media & International: Financial performance

$m FY11 FY10 ChangeRevenues 179 164 9.3%Variable contribution 168 155 8.3%

EBITDA 60 56 6.0%

EBIT 53 51 2.7%EBIT/Revenue 29.6% 31.1% (1.5%)

Racing Industry contributions from International business

9 7 20.8%

Broadcast rights expense 40 38 3.5%

> Steady growth in subscribers

> Revenue growth from international export and new channels

> Growth in expenses attributable to new channels and international expansion

> Focus on securing broadcast rights

No. of Retail venues 5,015 4,990 0.5%

D&A 7 5 40%

Trading Update

Revenues ($m) 1Q12 1Q11

Media & International 46.6 44.5 4.7%

> Revenue growth mostly attributable to growth in subscriptions from commercial venues and TABs

Operating expenses (108) (99) 9.1%

Change


Race Broadcaster

Country Australia Australia UK UK UK USA USA USA France South Africa

Races/ Tracks (pa)2 65,000 10,000 3,800 2,500 11,000 (60 tracks) (53 tracks) (124 tracks) 18,000 3,800

Imported Races 15,499 <2,000 <2,000 <100 ~4,800 <1,000 <200 <200 <500 ~25,000

Export Channels 7 0 3 0 0 0 1 3

Vision Partner Countries

29 0 4+ combined (GBI) 3 2 2 0 31 23

Export of Sky Racing’s vision to its 29 partner countries helps establish trading relationships for import of vision and co-mingling opportunities

Top International Racing Media Broadcasters1, 2011

Notes: 1. Excluding NZ2. Domestic only3. ATR, RUK joint venture for export

GBI racing 4+3

Sky Racing is a leader in race broadcasting internationally


> To be an international leader in gambling entertainment

> Increase wagering opportunities through global betting pools (inclPGI Isle of Man)

> Retain/grow international revenue (for Australia and New Zealand racing)

> Expand other international products and services (Gaming)

> $23m in export revenue (FY11) for Tabcorp and the Australasian racing industry

> Import (Wagering revenue $105m FY11) is a critical enabler for export (Import CAGR 40% FY07-11)

International ObjectivesCountry

Share of Export

Revenue, FY11

Share of Import

Revenue, FY11

Reciprocal Rights

New Zealand 51% 59%

Singapore 14% 9%

USA/ Canada 9% <1% Features only

UK 9% 7%

Sri Lanka 4% n/a X

South Africa 3% 11%

Hong Kong 3% 11%

Tabcorp is well positioned on the international stage


Summary

> Multi-channel distribution strategy delivering important exposure for Tabcorp and racing

> Extensive racing industry relationships and effective strategies to grow the business

> Well positioned for potential international expansion – Tabcorp is a world leader in racing broadcasting and wagering

Media is a core part of the Wagering business


1

4

5

6

3

Overview of Tabcorp

Capital structure

Keno


Gaming

David Attenborough

Mohan Jesudason

Damien Johnston

Brendan Parnell

Mohan Jesudason

2 Doug Freeman, Craig Nugent and Adam RytenskildWagering




Business overview

> Tabcorp has recently expanded the game in NSW and Queensland and successfully operates across 2,876 venues (including Victoria)

> Keno is a numbers gamePlayers buy a ticket and select numbers from 1 to 80In each game a random selection of 20 numbers from 1 to 80 is drawn every few minutes and displayed electronicallyCombinations of matching selected numbers win a prizeMost prizes are paid out immediately with larger prizes paid later by cheque

Tabcorp is Australia’s leading Keno operator with Keno licences in NSW, QLD and Victoria (commencing April 2012)



1. Attractive licences

New Victorian Keno Licence is structurally more attractive than current licence

• Low cost to secure core• Flexibility• Value-adding joint

licensee in NSW• Long duration

2. Strong customer base and distribution network

• Capability• Eastern seaboard• Device availability• Venue engagement• Frequency of wins

3. Keno terminal rollout track record

• Same venue productivity growth

• Core capability in rollout

4. Strategic growth platform

• New venues• New product pipeline• Self service terminals• Alternative animations• Brand investment

Keno is a fun, easy to play numbers game where customers play to win every three minutes

• Product roadmap • Duplicate of NSW host • Experience in rollout • Uses all growth levers

Keno is a fast growing business that is scalable


Keno has attractive licences and the terms and structure of the new Victorian Keno licence is better than the current licence

Attractive licences

QLD NSW NEW VIC OLD VICLong term licences (expiry)

2022(25 year licence)



2012

Flexibility/innovation Scope to extend Scope to extend Product roadmap included in licence

No approvals since Keno Bonus

Attractive structure Sole Licensee and operator

Joint Licence with ClubsNSW, sole operator

Sole licensee and operator

Joint Venture operated by Tatts

Channel Pubs, Clubs, TAB, Casino

Pubs, Clubs, Casino

Pubs, Clubs, TAB, Casino

Gaming venues only

Venues FY11Venue change (prior 12 months)

1,059+12

1,680+94

260 (current install)+740 (target additional)

137 (Tabcorp)-5

Ticket count FY11 44m 52m 35m FY14 (estimated)


Customer base> Over 1.3m customers> 96.5m tickets sold per annum

13,252 tickets per hour soldAverage bet of $9.64Replay rate 49%

> FY11 turnover: $941m

Distribution network> 2,876 Venues (inc Victoria)> 4,411 Terminals (operator & self service)> Over 10,000 screens

Frequency of wins> $710m paid out in wins last year> Ten Spot 10 Jackpots paid out in FY11

Strong customer base and distribution networkKeno has a large, loyal customer base that is accessed by its distribution network across the Eastern seaboard


Keno terminal rollout track record

Rollout is a core capability. In the last 12 months:> 600 Keno Touch (self service) units successfully deployed into

NSW Clubs and Pubs> 102 new Hotels trading with Keno in NSW (730 signed)

Keno has successfully been rolled out and driven turnover growth of 7.3% CAGR (FY07–FY11)

Keno - Key Metrics FY07 FY08 FY09 FY10 FY11 CAGR

Turnover ($ millions) 711 723 845 859 942 7.3%

Clubs NSW 345 346 370 373 398Clubs QLD 133 134 142 142 153Hotels NSW 0 3 71 87 110Hotels QLD 177 187 204 200 223Casinos 20 20 21 21 20TAB's 23 21 24 24 26VIC 13 12 13 12 12

Total Number Venues 2,232 2,357 2,734 2,775 2,876

Average Bet 8.3$ 8.3$ 9.0$ 9.4$ 9.6$


Strategic growth platform

Brand Investment

Retail StandardsSelf Service Terminals Updates

Product pipeline and customer knowledge

PlusNEW KENO VENUES OVER THE NEXT 12 MONTHS

Keno is well positioned for further growth


Keno: Financial performance

> Reliable earnings stream in NSW and Qld where game is entrenched

> Expansion initiatives summary:

NSW hotel rollout commenced FY08 to deploy into 800 hotels

Self service terminals rolling out

Sole Keno Victorian Licence secured from April 2012

Keno has grown earnings as a result of expansion in distribution and self service terminals

$m FY11 FY10 ChangeRevenues 170 157 7.9%Variable contributionOperating expenses

95(34)

89(33)

7.1%4.9%

D&A 12 9 33.3%

EBIT 49 47 4.7%

EBIT/Revenue

Venues (Qld, NSW)

28.8%

2,739

29.9%

2,633

(1.1%)

4.0%Ticket Count (m) (Qld, NSW) 96.5 90.1 7.1%Avg ticket size ($) (Qld, NSW) 9.6 9.4 2.1%

EBITDA 61 56 8.6%


1Q12 trading update

> Strong growth in NSW reflecting benefits from:

Further expansion in hotels

Self service terminals

> Strong growth in Qld

$m 1Q12 1Q11 ChangeRevenueKeno 45.8 42.9 6.9%

KPIsVenues 2,899 2,777 4.4%

Ticket count (m) 24.9 24.2 2.9%Avg ticket size ($) 10.00 9.60 4.2%

Keno continues to perform strongly as both the number of customers and the average spend are increasing


Using existing host software

Venue capital to be recovered through

daily fees

Terminals ready to deploy on existing

networks

Sign-up process commenced with industry support

Informed revenue assumptionsUtilise existing resourcesConfidence in earnings

Key Metrics VIC(Target FY15)

QLD(Actual FY11)

NSW (Actual FY11)

Average weekly turnover per venue

$5,000 $7,700 $6,000

Venues Up to 1,000 1,059 1,680

Experienced leadership and execution team

New Victorian Keno licence is on track to deliver earningsThe Victorian Keno licence is expected to generate EBITDA of approximately $20m in FY15


Keno Touch on display


1

2

4

5

6

3

Overview of Tabcorp

Capital structure

Keno


Gaming

David Attenborough

Mohan Jesudason


Damien Johnston

Brendan Parnell

Mohan Jesudason

Wagering




Victorian Gaming> Owns and operates electronic gaming machines (EGMs) under the Tabaret

brand in Victoria One of two licensed EGM operators (excluding casino)13,350 EGMs across 130 licensed hotels and 133 licensed clubs

> Upon expiry of Tabcorp’s Victorian Gaming Licence in August 2012, gaming operator licences will no longer be held by the two current operators

Tabcorp Gaming Solutions> Supply of EGMs for duration of contract> Average of 23% rotation of EGM product annually> Full EGM service and maintenance support> Loyalty systems and promotions facilitation> Optional funding assistance for Gaming Machine Entitlement deposits> Critical mass achieved with over 7,500 EGMs, average tenure 9 years

Business overviewThe Victorian Gaming business is expected to generate strong cashflows until August 2012. Following the expiry of the licence, TGS will commence operations and has already signed up over 7,500 EGMs


Gaming: Financial performance

> Market share up to 53.9%

> Opex savings as the business is managed for transition in August 2012

4.1%(37)(39)D&A7.1%225241EBIT0.6%21.7%22.3%EBIT / Revenue

4.1%282.7294.2NMR/EGM/Day ($)1.0%52.9%53.9%Market Share (2H average)

$m FY11 FY10 ChangeRevenues 1,077 1,037 3.9%Variable contributionOperating expenses

317(37)

301(39)

5.0%(6.3%)

EBITDA 280 262 6.7%

Venues (period end) 263 263 0.0%EGMs (average) 13,303 13,349 (0.3%)

Gaming is highly cash generative and continues to deliver earnings growth


1Q12 trading update

> Solid performance taking into account strong prior period and tough retail conditions

1.1%306.0309.2NMR/EGM/day ($)0.2%53.753.9Market share (avg)

$m 1Q12 1Q11 GrowthRevenueGaming 285.2 279.7 2.0%

Gaming KPIsVenues 261 261 0.0%EGMs (avg) 13,294 13,209 0.6%

Gaming’s trend of revenue growth continued into the first quarter of FY12


> Competitor differentiation

> Substantial contracted revenues based on a fixed fee per day, with escalation

> Compelling full service offering

> Market leading capabilities

TGS is an attractive business which utilises Tabcorp’s core capabilities. Tabcorp is confident in relation to future earnings as most of the revenues are contracted



Competitor differentiation

Proven ability> Tabaret has outperformed the Victorian market> Strong relationships exist with both Tabaret

venues, and Wagering / Keno customers> This provides a unique competitive advantage

Ease of transition> For existing Tabaret venues, there will be

limited change impacting the venue –primarily gaming floor optimisation

> Demonstrates Day 1 readiness and ability to positively influence venues prior to regulatory change

Scale> TGS is the largest service provider> This creates efficiencies and economies of scale > It also allows investment in innovation like the world class IGT loyalty system

Tabcorp is the leading gaming operator in Victoria, which is a key advantage for the services TGS can offer its customers

45.0%

46.0%

47.0%

48.0%

49.0%

50.0%

51.0%

52.0%

53.0%

54.0%

55.0%

Jun-

06

Sep-

06

Dec

-06

Mar

-07

Jun-

07

Sep-

07

Dec

-07

Mar

-08

Jun-

08

Sep-

08

Dec

-08

Mar

-09

Jun-

09

Sep-

09

Dec

-09

Mar

-10

Jun-

10

Sep-

10

Dec

-10

Mar

-11

Jun-

11

Tabcorp v Tatts GroupVic Gaming Revenue Share

Jun 2006 to Jun 2011

Tatts Group

Tabcorp


TGS key metrics

Tabcorp is confident in TGS earnings expectations as approximately 75% of sign ups are contracted for a 10 year term

Sign ups > Over 7,500 EGMs currently contracted to TGS

Contract term

> Approx 75% of signed EGMs are contracted for a 10 year term, with no termination option> Approx 25% of signed EGMs have a 10 year term, with a 30 day termination option

at year 5, requiring 12 months notice (effectively 6 year contract)> Daily fee (from Aug 12) is subject to annual CPI Indexing (from Aug 13)

Loan funding

> $15m has been loaned to TGS clients to assist their payment of Gaming Machine Entitlements to the Victorian Government. This is repaid via daily fees

> $37m has been loaned to key TGS clients to facilitate business expansion> Interest is payable, the majority of debt will be repaid within 5 years, and appropriate

risk mitigation strategies are in place

Estimated earnings

7,500 EGMs + 1,000 EGMsEBITDA $45m $54mEBIT $24m $31mThe above numbers include interest revenue on loans detailed belowThe + 1,000 EGM projection assumes similar sign up terms to existing contracts


Substantial contracted revenues

-

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500

5,000

Key Partners - RSL, MelbourneRacing Club, Dominion Hotel

Group

Additional 10 year contracts Additional 10 year contractswith 5th year termination

clause

Sign Up Profile – TGS EGM Contracts TGS vs Non TGS relative performance comparison 1,2

July/Aug 2011

July/Aug 2010

% change

Hotels $m $m

TGS Tabaret Venues 37.6 36.5 2.9%

Non TGS Tabaret Venues 125.2 125.6 (0.3%)

Total Hotels 162.8 162.1 0.4%

Clubs

TGS Tabaret Venues 31.5 30.1 4.7%

Non TGS Tabaret Venues 58.5 57.7 1.4%

Total Clubs 90.0 87.8 2.5%

Overall Total 252.8 249.9 1.1%

Note: 1. Gaming Revenue includes 25% of Joint Venture partner

2. Gaming Revenue excludes venues not operating in Tabaret network for both

current and comparative periodNote: Current estimate of Victorian Gaming Operation post August 2012

Future Victorian Gaming Structure

TGS has signed up more than 7,500 EGMs, which are already performing strongly


Compelling full service offering

Unique & Compelling Full

Service Offer

Market Leading Knowledge & Systems

Industry Leading Break/Fix

Provision of Machines & Upgrades

World Class Loyalty

> Promoting Tabaret’s leading performance, knowledge, systems and facilities

> TGS offer re-defined by regulatory requirement and customer need

> Experience managing complexity of sector & reg. environment

[…]

• […]

– […]

• […]

> 75 staff with significant industry experience

> Established & effective metro and regional service centre footprint

> Day one access to all required spare parts/service tools

> Currently own 14,000 Victorian regulator approved EGM’s

> Exclusive Vic. distribution rights with IGT & AGT EGM’s – market leading manufacturers

> Tabcorp capital backing distinct competitive advantage

> Exclusive Victorian distributor of IGT loyalty system - world class whole of venue package

TGS’ value proposition is underpinning substantial sign-ups


Market leading capabilities

Loyalty POS Integration + Membership management functionality for clubs

Gateway Customer extranet providing a range of online resources 24/7 including product training videos, Business Intelligence reporting, compliance toolkits (including Responsible Gaming), and marketing resources

Marketing Toolkit

Partnership with high impact design and print service providing a wide range of industry relevant marketing collateral templates that can be easily customised by venues, and produced at low cost.

Venue Design In-house design team with considerable experience in delivering gaming room renovations leading to revenue growth

Field Services TGS have 75 staff with significant experience in providing field services to the Vic gaming market. An established service network across metro and regional areas exists, together with a comprehensive spare parts inventory

Responding to Regulatory Change

Tabcorp has significant experience in dealing with regulatory change. This knowledge and experience will be part of the core TGS service offer

Responsible Gaming

Tabcorp is externally recognised for leadership in responsible service of gambling products. This knowledge and experience will be part of the core TGS service offer

Business Consultants Team of experienced customer relationship managers in the field helping venues develop their business

Client Umbrella Brand

As part of the loyalty system there will be an “umbrella” brand Diamond Rewards available to TGS customers to heighten consumer awareness

Tabcorp’s leading position in the Victorian gaming market gives it an advantage in understanding the requirements of EGM operators (post August 2012)


Growth opportunities

Interstate expansion

Diversify existing business

Sustain and grow established Victorian Business

> Use Victorian capability to facilitate geographic expansion

> Additional value added service opportunities

> CPI indexed fee base> New signups> Service upgrade opportunities> Additional revenue if contracts with

termination option run full 10 year term

TGS has identified achievable opportunities to expand its business



1

2

4

5

6

3

Overview of Tabcorp

Capital structure

Keno


Gaming

David Attenborough

Mohan Jesudason


Damien Johnston

Brendan Parnell

Mohan Jesudason

Wagering



Balance sheet

As at As at Change$m 30 Jun 11 30 Jun 10 on pcpTotal current assets 251 381 (34.1%)Licences 430 653 (34.1%)Other intangible assets 1,806 3,627 (50.2%)Property, plant and equipment 281 1,763 (84.1%)Other non current assets 71 34 111.9%Total assets 2,839 6,458 (56.0%)Total liabilities 1,628 3,003 (45.8%)Shareholders’ funds 1,211 3,455 (64.9%)Net debt 818 1,730 (52.7%)Shares on issue (m) 688 613 12.3%

Ratios FY11Gross debt / EBITDA 1 (x) 1.4Interest cover 6.5Net debt / Equity (%) 67.6

Tabcorp has a strong balance sheet

Note: 1. For the purposes of this ratio EBITDA of $687m relating to Tabcorp’s continuing business is used.


400 400450

150

284

450

0

200

400

600

800

1,000

FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19

$m

Bank Debt Medium term notes Tabcorp Bonds 1 year debt facility

Capital structure

> $450m Medium Term Notes due October 2011 with $450m bridge loan facility in place> Victorian Wagering & Betting licence $410m payable shortly> FY11 Gross Debt/EBITDA 1.4x> Gross borrowings of $1,080m at 30 September 2011> DRP underwriting agreement for 50% of next dividend> FY12 interest rate range expected to be 8.25% to 8.5% on borrowings

Debt structure and maturity profile

Tabcorp has diversified sources of funding and an attractive maturity profile


Capex

108 121 119

139

FY08 FY09 FY10 FY11Wagering Media & Int'l Gaming Keno Corporate

Capex D&A Outlook

> Major investments

Vic Wagering Licence (FY12)

NSW Trackside (FY12, FY13)

Vic Keno Rollout (FY12)

$m

410

150

30

> FY12 D&A expense ~ $130 – $140m

Includes current Vic Wagering and Gaming licence amortisation of $27m

> FY13 D&A expense ~ $150 – $160m

Vic Wagering licence $34m p.a.

Vic Keno licence $6m p.a.

Tabcorp’s businesses are low in capital intensity


Entitlement to refund in relation to the Victorian Gaming Licence and the Victorian Wagering Licence

> The Gaming and Betting Act 1994 (Vic) provided for payment by the State of Victoria to Tabcorp on the grant of new licences of an amount equal to the ‘licence value’ of Tabcorp’s initial licences, or the premium payment paid by the new licensee, whichever is the lesser

> This payment was originally provided for in section 21 of the Gaming and Betting Act 1994 (Vic), and is now provided for in section 4.3.12 of the Gambling Regulation Act 2003 (Vic)

> The ‘licence value’ of the initial licences is to be calculated in accordance with a formula. Tabcorp estimates that the ‘licence value’ will be $686.78 million

> Tabcorp intends to pursue all of its rights and take all appropriate action in respect of the payment

> See Section 6.10 of Tabcorp’s Demerger Scheme Booklet for further details


Federal Court decision on internet betting terminals

Victoria

> A single judge in the Federal Court of Australia recently handed down a judgement affecting the deployment of a Sportsbet “Betbox” internet terminal in a Victorian hotel

> The judge found that the Victorian legislation that made such internet terminals illegal was not valid

> The State of Victoria, as well as Tabcorp, have appealed the decision to the full bench of the Federal Court. The appeal will not be heard until 2012

> It is understood the Victorian hotel will not operate the internet terminal before the appeal has been determined

NSW

> The Unlawful Gambling Act in NSW makes the installation of a Betbox internet terminal in NSW illegal



1

2

4

5

6

3

Overview of Tabcorp

Capital structure

Keno


Gaming

David Attenborough

Mohan Jesudason


Damien Johnston

Brendan Parnell

Mohan Jesudason

Wagering



Key messagesWagering> Tabcorp is aiming to continue to lead the Australian wagering market> Developments in the overall wagering market are such that it is expected to continue to grow strongly> Fixed odds is attractive for Tabcorp, delivering strong yields in racing & sports betting> Tabcorp is successfully executing on a multi-channel distribution strategy across retail and online > Retail growth will continue through new products / Trackside / live betting / expanded retail footprint> Tabcorp’s online strategy strongly positioned to capture expected higher margin product growth

Media & International> Sky Racing is core to Tabcorp and is important for sustaining wagering and the racing funding model> All broadcast rights have been secured to date as they fall due> Wagering operators are the logical and effective owners of racing media

Keno> Keno has attractive licences> Keno is ideally placed to replicate NSW success in Victoria from 2012 under new licence> Currently has a strong pipeline of product development to underpin growth

Gaming> Gaming division has strong momentum leading into 2012 licence expiry> Outperformed the Victorian gaming market, consistently winning EGM market share> TGS is the clear leader > Unique and compelling full service offer is underpinning substantial sign-ups


Glossary Agencies: Agencies are stand-alone TAB retail outlets, not attached to a pub or club.Betbox: A touch-screen self-serve Internet kiosk that allows customers to connect to the website of Sportsbet Pty Ltd (owned by Irish betting company Paddy Power). Bookmakers: Bookmakers set the prices for fixed odds markets. Co-mingling: Co-mingling (or pooling) of totalisator pools is the process where one or more totalisator organisations, combines its wagering pool with another. This has been occurring in Victoria for many years, as Western Australia, the Australian Capital Territory and Tasmania pool most of their totalisator pools with our Victorian totalisator to form SuperTAB. International co-mingling extends this process of combining wagering pools to include international totalisator organisations. ‘Hosting’ and ‘guesting’ describes which totalisator organisation is ‘hosting’ and which totalisators ‘guest’ their pools into the ‘host’.EBT: Easy Bet Terminals are electronic self-service machines found in TAB outlets and on-course. Customers can place tote, fixed odds and Trackside bets with cash, vouchers or TAB account cards. EBTs also allow the customer to check odds and form.Exotics: Totalisator bet types other than a Win or Place. These include Quinella, Trifecta, Exacta, Duet, Quaddie, First 4 and BIG6 and are higher margin products.Fixed Odds: A type of betting where the price a customer receives for their wager at the time the bet is placed is fixed and will not change. Fixed odds betting is available on sport, racing and selected special events.Multi: A bet type which enables a customer to effectively ‘all-up’ their investment across sports, racing and betting options. The dividend is calculated by multiplying the prices of each selection. Northern Territory (Corporate) Bookmakers: Bookmakers licensed in the Northern Territory, who offer wagering services, primarily online.Off-Course: All betting that takes place away from racetracks, such as online, telephone and in retail outlets.Pari-mutuel: See Totalisator BettingPooling (see co-mingling)Retail Outlets: Tabcorp operates physical retail outlets operate across Victoria and NSW. The network includes stand-alone TAB agencies, hotels and clubs.TGS: Tabcorp Gaming Solutions, Tabcorp’s new gaming machine services provider that will help clubs and pubs manage their gaming offer from mid-2012, including the provision of gaming machines.Totalisator Betting: Also referred to as pari-mutuel betting or the ‘tote’. Customers bet into a pool with all others who are betting on the same race and bet type. The odds fluctuate depending on the amounts wagered on each possible outcome.Tote Odds: A relatively new product where winning bets receive a dividend based on the dividend paid by any of the TABs. TVN: ThoroughVisioN, which manages the thoroughbred horse racing rights for racing in Victoria and metropolitan Sydney. Variable Contribution: Revenue, minus government taxes and levies.Wagering Accounts: Tabcorp has more than 300,000 active wagering account customers. Account holders can top up their accounts online, over the phone and in retail outlets. Bets can be placed through the Internet, Pay TV, retail outlets and phone. Wagering account customers can also withdraw funds in TAB outlets and Australia Post outlets who offer Bank@Post services.Yield: The percentage of turnover that is not returned to customers.


Date post:	19-May-2020
Category:	Documents
Upload:	others
View:	3 times
Download:	0 times

Tabcorp Holdings Limited · Tabcorp Holdings Limited ACN 66 063 780 709 Investor Day 12 October...

Documents