2020 Annual Report Tabcorp in Closing As Chairman Serve to It Has Been a Privilege of the Demerger Following Tabcorp of in the Nine in 2011
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TABCORP ANNUAL REPORT 2020 REPORT ANNUAL TABCORP ANNUAL REPORT 2020 CONTENTS Operating and financial review 01 About the Annual Report About Tabcorp 01 Tabcorp Holdings Limited (Company or Tabcorp) publishes its Annual Report Our purpose and vision 02 as a single document and on the day Strategic pillars and foundations 02 it releases its full year results, which Chairman’s message 04 provides information to stakeholders in a timely and efficient manner. This Managing Director’s message 06 Annual Report relates to the operations FY20 overview 08 of Tabcorp and the consolidated entity Future priorities 09 comprising Tabcorp and its subsidiaries (Group or Tabcorp Group) and the FY20 financial performance 10 Group’s interests in joint arrangements Benefits for our stakeholders 12 and associates in respect of the Lotteries and Keno business 14 financial year ended 30 June 2020 (FY20). A copy of the Annual Report Wagering and Media business 16 is available, free of charge, on request. Gaming Services business 18 Current and past Annual Reports are available from the Company’s website Corporate responsibility 20 at www.tabcorp.com.au. Governance 26 Elect not to receive a hard copy Board of Directors 26 Shareholders can elect not to receive Corporate governance 28 a hard copy Annual Report by updating their communications Executive Leadership Team 30 preferences with the share registry – go online at Directors’ Report 32 linkmarketservices.com.au or call 1300 665 661. Remuneration Report 46 Notice of meeting Financial Report 71 The Annual General Meeting Independent auditor’s report 121 of Tabcorp Holdings Limited will commence at 10.00am (AEDT) At the back 126 on Tuesday, 20 October 2020. Five year review 126 Corporate Governance Statement Shareholder information 127 Tabcorp’s 2020 Corporate Company directory 129 Governance Statement is available Indicative key dates 129 from the Company’s website at www.tabcorp.com.au. Tabcorp Holdings Limited ABN 66 063 780 709 FINANCIAL REVIEW FINANCIAL OPERATING & & OPERATING ABOUT TABCORP ® › The Tabcorp Group is a world-class diversified gambling entertainment group. › We operate three market leading businesses: ® – Lotteries and Keno – Wagering and Media – Gaming Services › We manage iconic Australian brands which ignite passion ® and excitement in millions of Australians. › Our goal is to build a sustainable future for gambling entertainment while making a positive impact for our stakeholders and community. › Each year our operations return billions of dollars to the Australian community, the racing industry and venue partners including newsagents, hotels, clubs and TAB agents. › We are an Australian based company with supporting operations in the Isle of Man (a wagering pooling hub) and in Las Vegas, USA (a vision distribution hub). $5.2 billion $6.0 billion $4.5 billion 3.7 million+ 9,000+ 5,000+ Revenues Net assets Benefits to Active registered Venues, the largest Employees stakeholders customers Australian retail footprint (i) For FY20 or as at 30 June 2020, as applicable. Tabcorp Annual Report 2020 01 Tabcorp’s brands are trusted by millions of Australians to provide moments of excitement every day. We act with integrity and are committed to creating value for our stakeholders in a responsible and sustainable manner. We do this by delivering on our strategic pillars, modelling our values in our behaviours, and leveraging our strong foundations. 02 Tabcorp Annual Report 2020 FINANCIAL REVIEW FINANCIAL OPERATING & & OPERATING Delivering our vision and purpose in a sustainable manner We support our people to model our values and deliver Excitement with Integrity to our customers. We work collaboratively with all our stakeholders to achieve success in a responsible and enjoyable manner. We also face challenges together, and through this year’s bushfires and COVID-19 pandemic we stood side-by-side with our stakeholders to share the burden and navigate the way forward. Through the strength of our business model and our enduring stakeholder partnerships we aim to emerge from COVID-19 stronger, together. Tabcorp Annual Report 2020 03 CHAIRMAN’S MESSAGE “Tabcorp is well on the way to setting the standard for responsibility in the gambling sector and today, our Company is the trusted choice for customers, industry partners and government.” Paula Dwyer Chairman The 2020 financial year is defined by the Performance in review including securing our financial liquidity Notwithstanding the significant disruption worldwide onset of COVID-19, the pandemic facilities, reductions in operating and from COVID-19, our businesses generated that upended our way of life and had a Tabcorp delivered a net profit after tax and capital expenditure, and amending various more than $2 billion in taxes and levies significant impact on all enterprises, before significant items of $271m in FY20. commercial arrangements. to state and territory governments. including Tabcorp. After significant items, which included This, together with our employment $1.09 billion in non-cash goodwill impairment In May and June, we secured agreement of approximately 5,000 team members From the outset, Tabcorp’s priority has been charges relating to the Wagering and Media from bank lenders under our Syndicated and the strength of approximately our ensuring the safety and wellbeing of our and Gaming Services businesses, Tabcorp Facility Agreement and US Private relationships with our industry partners, people and supporting our business recorded a statutory net loss after tax Placement noteholders for waivers and once again underscores the important partners and the community generally. of $870m. adjustments of leverage and interest cover role Tabcorp plays in our community well covenants in relation to the next two testing beyond delivering gambling entertainment Our teams adapted to new ways of working Our Lotteries and Keno business, which dates (being 30 June 2020 and 31 December experiences to millions of Australians. quickly and professionally and I would like accounts for more than half the Group’s 2020). We acknowledge our syndicate banks to acknowledge their efforts to maintain revenues and almost 75% of EBIT, largely and US noteholders for their support of Board changes operations so that Australians could traded unaffected and delivered another Tabcorp during this challenging period. continue to play the lottery games they strong result in FY20. However, our Gaming During the year Tabcorp announced the love or watch and bet on racing or their Services, Wagering and Media, and Keno As part of securing this relief from our appointment of two new Directors, Anne favourite sport. operations were substantially impacted by covenants, the Board resolved not to pay a Brennan and David Gallop as part of the mandated COVID-19 related retail closures final dividend for FY20 in order to preserve planned Board succession process. After Our business partners, including the racing between March and June 2020. the Group’s liquidity in this challenging and initially serving as observers, Ms Brennan industry bodies and major sporting codes uncertain period. An interim dividend of 11 and Mr Gallop were formally appointed to across Australia, also deserve credit for The Group sought to mitigate the financial cents per share, fully franked, was paid to the Board in July 2020 following the receipt proving their ability to operate in a and earnings impacts of COVID-19 on our shareholders in March 2020. of regulatory and ministerial approvals. COVIDSafe way. businesses through a range of actions 04 Tabcorp Annual Report 2020 FINANCIAL REVIEW FINANCIAL OPERATING & & OPERATING Ms Brennan and Mr Gallop bring Mr Attenborough has been an inspiring The second highlight is Tabcorp’s ongoing partners, customers and the broader complementary skills to the Tabcorp Board CEO of Tabcorp and he has courageously commitment to responsible gambling, community will continue to be at the core and we welcome their contribution. navigated through enormous complexity culminating in the decision in 2018 to of our response. We remain focused on and multiple Company defining events define its vision as The‘ Trusted Gambling delivering the best possible gambling In February, Ziggy Switkowski retired as a which have arisen throughout his tenure. Entertainment Company’ which comes entertainment experiences while continuing Director. Dr Switkowski has been a valued I would like to personally thank him for his alive in our purpose ‘Excitement with to carefully manage the financial and contributor to Tabcorp, and we wish him well hard work, professionalism and support Integrity’. In this sector it is not enough to earnings impact of the pandemic. in retirement. over many years. be commercially successful; to sustain the Company and the industry there must be We have announced a 1 for 11 underwritten Vickki McFadden has also advised of her In closing a broader commitment to responsibly pro-rata accelerated renounceable intention to retire from the Tabcorp Board address the social impact of gambling. entitlement offer at a price of $3.25 per at the 2020 Annual General Meeting. Since It has been a privilege to serve as Chairman At Tabcorp our vision has informed new share to raise gross proceeds of joining the Board in 2017, Ms McFadden has of Tabcorp following the demerger of decision making and investment across the approximately $600m. These funds will be served as Chairman of the Audit Committee. Tabcorp’s casino assets in 2011. In the nine enterprise – we have invested in enhanced