TABCORP HOLDINGS LIMITED — AGM Information 2017

Oct 26, 2017

TABCORP HOLDINGS LIMITED ANNUAL GENERAL MEETING

2 7 O C T O B E R 2 0 1 7

CHAIRMAN’S ADDRESS

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TABCORP TODAY

WAGERING & MEDIA KENO

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GAMING SERVICES

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FY17: AN IMPORTANT YEAR

o Significantly progressed our combination with Tatts Group, expected to be completed by the end of 2017

o Ongoing execution of multi-channel strategy

o Launched our UK start-up, Sun Bets

o Acquired and integrated Intecq, adding scale and capability to TGS

o Settled the AUSTRAC civil proceedings

o Continued investment in risk and compliance

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GROUP RESULTS[1]

$M	FY17	FY16	CHANGE
NPAT before significant items 178.9 185.9 (3.8%)
Significant items (after tax)2 (199.7) (16.2) >100%
Statutory NPAT (20.8) 169.7 (>100%)

1. Results include 7 months contribution from Intecq from December 2016.

2. Significant items (after tax) of $199.7m comprise: AUSTRAC civil proceedings $61.8m, AFP Cambodia investigation $1.9m, proposed combination with Tatts $53.9m (including impact of the Tatts cash-settled equity swap), Intecq acquisition $4.9m, Sun Bets operating loss $47.6m and impairment $20.7m and Melbourne premises relocation $8.9m.

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TABCORP AND TATTS TO COMBINE TO CREATE A WORLD
-CLASS, DIVERSIFIED GAMBLING ENTERTAINMENT GROUP
50
An ASX50 company More than A$5 billion Expected to deliver at $50 million p.a. of Complementary
in annual revenue1 least $130 million p.a. additional funding businesses, delivering
EBITDA synergies expected to flow to a winning offer for
and business Australian racing customers
improvements
6 1. Based on FY17 revenues for Tabcorp and Tatts Group.
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DEVELOPMENTS IN GAMBLING REGULATION

• Tabcorp has welcomed recent developments in the regulation of gambling

• Amendments to the Interactive Gambling Act make it clear that online betting on live sport is illegal

• The offering of credit to customers by corporate bookmakers will end in February 2018

• Restrictions on gambling advertising during sports broadcasts expected to commence next year

• Significant progress being made by Federal Government on National Consumer Protection Framework

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BOARD OF DIRECTORS

Bruce Akhurst and Vickki McFadden formally commenced as Non-Executive Directors on 1 July 2017 and are standing for election today.

Jane Hemstritch is retiring from the Board today.

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TABCORP PLAYS AN INTEGRAL ROLE IN THE INDUSTRY

$1.26 BILLION OF TAXES AND RACING INDUSTRY FUNDING IN FY17

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CONCLUSION

• FY17 was a strategically important, but challenging year

• Invested in core businesses

• Strengthened risk and compliance capability

• Our business is now stronger and more resilient

• Our priority remains the successful completion of the Tatts combination

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MANAGING DIRECTOR AND CHIEF EXECUTIVE OFFICER’S ADDRESS

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GROUP RESULTS[1]

$M	FY17	FY16	CHANGE
Revenue 2,229.6 2,188.7 1.9% Variable contribution 1,006.3 984.5 2.2% Operating expenses (502.2) (468.7) 7.1%
EBITDA before significant items 504.1 515.8 (2.3%)
D&A (178.7) (178.6) 0.1%
EBIT before significant items 325.4 337.2 (3.5%)
Interest (68.3) (69.9) (2.3%) Tax expense (78.2) (81.4) (3.9%)
NPAT before significant items 178.9 185.9 (3.8%)
Significant items (after tax)2 (199.7) (16.2) >100%
Statutory NPAT (20.8) 169.7 (>100%)

1. Results include 7 months contribution from Intecq from December 2016.

2. Significant items (after tax) of $199.7m comprise: AUSTRAC civil proceedings $61.8m, AFP Cambodia investigation $1.9m, proposed combination with Tatts $53.9m (including impact of the Tatts cash-settled equity swap), Intecq acquisition $4.9m, Sun Bets operating loss $47.6m and impairment $20.7m and Melbourne premises relocation $8.9m.

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WAGERING & MEDIA: KPIs

	$M FY17 FY16 CHANGE Revenue 1,873.0 1,873.0 0.0% EBITDA 350.0 382.1 (8.4%) EBIT 228.0 252.2 (9.6%)

Note: Wagering & Media results have been prepared on a statutory basis and exclude the impact of the UK start-up, Sun Bets, that has been treated as a significant item in FY17.

• Key KPIs for the TAB business remain strong

• Digital turnover growth of 13.9%

• Total TAB Fixed Odds revenue growth of 15.0%

• Active TAB account customers up 9.7% driven by 13.3% growth in new customer acquisition and good retention rates

• However, results impacted by Luxbet and Trackside underperformance, wet weather during the Autumn Carnival and lower than expected 2H17 yields

• Luxbet EBIT loss of $13m, strategic review underway

• Review of Trackside product and marketing activity completed, new initiatives underway

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WAGERING & MEDIA: FY17 INITIATIVES

• Continued investment in digital transformation

• Successful roll-out of digital commission model to retail venue partners with effect from October 2016

• Check & Collect – allowing customers to scan winning tickets via the TAB app into their TAB account

• New additions to TAB’s stable of innovative products

• Quaddie Cash Out – to drive parimutuel exotic activity

• Key media rights extended during FY17

• RWWA (all codes) until 2021

• Perth Racing until 2022

• Tasmania (all codes) until 2026

• SA Thoroughbreds secured on non-exclusive basis until 2024

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“We’re particularly excited with the direction Tabcorp is heading with digital wagering in PubTABs and we’re looking forward to the roll-out of new hotel products and technology over the next five years.”

– John Whelan, AHA NSW

• Sun Bets reset to improve performance

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GAMING SERVICES: KPIs AND HIGHLIGHTS

	$M FY17 FY16 CHANGE Revenue 143.9 107.2 34.2% EBITDA 82.1 70.1 17.1% EBIT 47.9 41.0 16.8%

• Further geographic expansion of Gaming Services with the acquisition of Intecq and signing of Panthers Group

• TGS

• Approximately 10,650 EGMs under contract (VIC 8,700; NSW 1,950), with 89% of Victorian EGMs contracted through to 2022

• TGS venues continued to outperform the market

• Intecq

• Results for 7 months trading: Revenues $28.3m, EBITDA $9.2m and EBIT $6.6m

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KENO: KPI s AND H IGH LIGH TS

	$M FY17 FY16 CHANGE Revenue 212.7 208.5 2.0% EBITDA 72.0 70.3 2.4% EBIT 49.5 50.7 (2.4%)

• Ongoing transformation driving growth of 3.6%

• Revenue performance

• VIC up 9.4%

• NSW up 4.7%

• QLD down 2.4%

• Further progress on key strategic initiatives

• Jackpot pooling now in place across NSW, Queensland, Victoria and ACT

• Keno Mega Millions launched in NSW and ACT

• Digital play in-venue in NSW commenced

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OUR PEOPLE AND CULTURE

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INTEGRITY ALWAYS CUSTOMER FIRST
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WIN-WIN PARTNERSHIPS EXCELLENCE
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MAKING TABCORP A GREAT PLACE TO WORK

Tabcorp was the only gambling company to be recognised by the Workplace Gender Equality Agency as an Employer of Choice for Gender Equality in FY17.

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1Q18 TRADING PERFORMANCE

Revenue	1Q18($M)	1Q17($M)	CHANGE ON PCP
Wagering & Media 481.5 460.9 4.5%
Gaming Services 41.4 28.0 47.8%
Keno 54.8 57.9 (5.3%)
Sun Bets 1.1 1.0 5.3%
Group Revenue 578.8 547.8 5.7%

Notes: Unaudited. Wagering revenue excludes the VRI’s interest in the Joint Venture.

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FY18 PRIORITIES

• Complete proposed combination with Tatts Group in 2017, integration planning well advanced

• Continue to drive performance in our core businesses

• Ensuring the highest levels of regulatory compliance across all of our businesses

• Disciplined management of operating expenses and capital expenditure

• Well positioned for future growth

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DISCLAIMER

This Presentation contains summary information about the current activities of Tabcorp Holdings Limited (Tabcorp) and its subsidiaries (Tabcorp Group). It should be read in conjunction with the 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 recipients 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.

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TO ADVANCE THE WAY WE PLAY

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