TABCORP HOLDINGS LIMITED — AGM Information 2018

Oct 16, 2018

TABCORP HOLDINGS LIMITED ANNUAL GENERAL MEETING

17 OCTOBER 2018

CHAIRMAN’S ADDRESS

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A W OR LD - C LASS, D IVER SIFIED GAMBLIN G EN TERTAIN MEN T GR OU P

Tabcorp is now one of the largest publicly listed, diversified gambling entertainment businesses in the world.

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WAGERING & MEDIA LOTTERIES & KENO GAMING SERVICES
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EBITDA CONTRIBUTION BY BUSINESS UNIT[1, 2]

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45% 40% 15%
WAGERING LOTTERIES GAMING
& MEDIA & KENO SERVICES
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• Annualised revenues in excess of $5bn

• Australia’s biggest retail footprint

• 3 million+ registered customers

Notes

• 1 Pro-forma EBITDA, which includes adjustments to Tabcorp’s reported results to permit investors to examine the financial performance of the combined group as if the Tatts combination had been in place for the full year.

• 2 Business results do not aggregate to Group total due to unallocated items.

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THE TABCORP-TATTS COMBINATION

We are on track to deliver the integration benefits

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$130m+
$50m
$78m
$50m $19m
$5m
$80m
$8m $59m
$45m
$2m
$6m
2H18 FY19 FY20 FY21
EBITDA - Cost Synergies EBITDA - Revenue Synergies
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TABCORP HOLDINGS LIMITED ANNUAL GENERAL MEETING

17 OCTOBER 2018

GROUP RESULTS 1,2

$m	FY18	FY17	Change on pcp
Revenues	3,828.7	2,229.6	71.7%
Variable contribution	1,489.9	1,006.3	48.1%
Operating expenses	(753.5)	(502.2)	50.1%
EBITDA before significant items	736.4	504.1	46.1%
D&A	(248.6)	(178.7)	39.2%
EBIT before significant items	487.8	325.4	49.9%
Interest	(118.6)	(68.3)	73.6%
Tax expense	(123.0)	(78.2)	57.4%
NPAT before significant items	246.2	178.9	37.6%
Significant items (after tax)3	(217.5)	(199.7)	8.9%
Statutory NPAT	28.7	(20.8)	>100.0%

Notes:

1. Results include Tatts Group from 14 December 2017

2. Sun Bets was treated as a significant item in FY17

3. Significant items expense (after tax) of $217.5m comprise Tatts Group combination $114.6m, Sun Bets exit $90.5m, and Luxbet closure $12.4m

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TABC OR P’S BU SIN ESSES C R EATE VALU E FOR ITS STAKEH OLD ER S

The combined Tabcorp-Tatts business underpins Australia’s vibrant racing industry and is a large taxpayer.

A$917 MILLION In racing industry funding (FY18).

A$1.1+ BILLION In gambling taxes and GST (FY18).

A$594 MILLION In venue partner commissions (FY18).

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DROUGHT RELIEF SUPPORT TO FARMERS AND COMMUNITIES ACROSS QUEENSLAND AND NSW

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POSITIVE D EVEL OPMEN TS IN AU STR ALIAN GAMBL IN G R EGU L ATION

• Tabcorp has welcomed recent developments which create a better regulated and more sustainable gambling industry

• Legislation to ban synthetic lotteries and Keno products effective from January 2019

• South Australia and Queensland have introduced a Point of Consumption tax on wagering, with other states to follow

• Legislative amendments introduced in August 2017 clarify that online betting on live sport is illegal

• The offering of credit to bet by wagering operators prohibited since February 2018

• New restrictions on gambling advertising during sports commenced in March 2018

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BOARD UPDATE

• Tabcorp welcomed Harry Boon as a Non-Executive Director in December 2017

• Elmer Funke Kupper retires from the Board of Tabcorp today

• Board Committees have been restructured to focus on key business priorities

• New diversity targets established:

• At least 40% female non-executive directors by end of FY23

• At least 40% of senior leadership roles filled by females by end of FY21

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TABCORP HOLDINGS LIMITED ANNUAL GENERAL MEETING

17 OCTOBER 2018

A COMPANY-DEFINING YEAR

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MANAGING DIRECTOR & CHIEF EXECUTIVE OFFICER’S ADDRESS

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GR OU P R ESU LTS 1,2

$m	FY18	FY17	Change on pcp
Revenues	3,828.7	2,229.6	71.7%
Variable contribution	1,489.9	1,006.3	48.1%
Operating expenses	(753.5)	(502.2)	50.1%
EBITDA before significant items	736.4	504.1	46.1%
D&A	(248.6)	(178.7)	39.2%
EBIT before significant items	487.8	325.4	49.9%
Interest	(118.6)	(68.3)	73.6%
Tax expense	(123.0)	(78.2)	57.4%
NPAT before significant items	246.2	178.9	37.6%
Significant items (after tax)3	(217.5)	(199.7)	8.9%
Statutory NPAT	28.7	(20.8)	>100.0%

Notes:

1. Results include Tatts Group from 14 December 2017

2. Sun Bets was treated as a significant item in FY17

3. Significant items expense (after tax) of $217.5m comprise Tatts Group combination $114.6m, Sun Bets exit $90.5m, and Luxbet closure $12.4m

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LOTTERIES & KENO

Business Results

FY18 in review

Revenue

$1,390.7m

Up | >100% EBITDA

$255.6m

Up | >100%

• Powerball game change launched April 2018

• Sales growth in retail network

• Strong digital performance o Digital sales up 27.8%

• Digital share of Keno sales 3.8%, up from 0.7% in the pcp

• Keno Mega Millions launched in Queensland in March 2018

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WAGERING & MEDIA

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Business Results
FY18 in review
Revenue
•
Strong digital and fixed odds
performance in TAB
$2,186.1m
•
720,000-plus active account
Up | 16.7%
customers, supported by Soccer World
Cup campaign and venue sign-ups
EBITDA • TAB performance relative to UBET
highlights improvement opportunity
$396.9m
•
Sun Bets ceased trading in July 2018
Up | 13.4%
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GAMING SERVICES

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Business Results
FY18 in review
Revenue
•
New NSW monitoring licence
commenced December 2017
$249.7m
•
New Victorian gaming
Up | 73.5% arrangements now provide
industry certainty to 2032
(previously 2022)
EBITDA
•
TGS is seeking to transition
existing Victorian customers to
$121.8m
longer term contracts beyond
2022
Up | 48.4%
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INTEGRATION ON TRACK

Corporate

• Board and senior leadership changes implemented

• New management structures implemented across group

• Corporate functions consolidated

• Back office integration in progress

• Procurement contract re-negotiations underway

Wagering & Media

• Fixed odds trading system integration to drive improved risk management and productivity

• UBET Fixed Odds and Tote markets expansion underway including introduction of higher-yielding products

• UBET brand change to TAB across retail & digital commencing end 1H19, with enhancements including vision, form, and flexi-betting

• Corporate systems consolidation on track

• Property rationalisation commenced

Lotteries & Keno

Technology

• Core technology functional consolidation occurring across FY19/FY20, including removal of duplication and the re-negotiation of commercial contracts including insourcing where appropriate

• Data centre consolidation 2H20

• Wagering host systems consolidation 2H20

• Keno SA brand alignment and game enhancements planned FY20

• Combined marketing team

Gaming Services

• Dandenong call centre consolidated in 2H18

• Combined sales team

• Co-location of field services underway

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BUILDING A HIGH PERFORMANCE CULTURE

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Rachel Osborne Talent Acquisition Advisor

THIS IS WHAT TRUST FEELS LIKE

All for one

Craig McSorley Head of Technical Services QLD

THIS IS WHAT ASKING FOR HELP LOOKS LIKE All for one

FY19 PRIORITIES

• Deliver expected benefits from the combination with Tatts

• Continue to execute on growth opportunities across all businesses

• Enhance digital capability and improve consistency of customer digital experience

• Deepen integration of digital technology into retail network

• Deploy new products across all markets for all businesses

• Ongoing investment to maintain the highest levels of risk management and regulatory compliance

• Maintain discipline with operating expenses, capital expenditure and balance sheet management

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L O T T E R I E S
&
K E N O
W A G E R I N G &
M E D I A
G A M I N G
S E R V I C E S
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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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