Jumbo Interactive Limited and its Controlled Subsidiaries Appendix 4E – Preliminary Financial Year Report JUMBO INTERACTIVE LIMITED AND ITS CONTROLLED SUBSIDIARIES (ABN 66 009 189 128) APPENDIX 4E PRELIMINARY FINAL REPORT FOR THE PERIOD ENDED 30 JUNE 2021 This information, given under ASX listing Rule 4.2A, should be read in conjunction with the most recent annual financial report. Current period: 1 July 2020 to 30 June 2021 Prior corresponding period: 1 July 2019 to 30 June 2020 Jumbo Interactive Limited and its Controlled Subsidiaries Appendix 4E – Preliminary Financial Year Report RESULTS FOR ANNOUNCEMENT TO THE MARKET For the period ended 30 June: Consolidated Group Financial Year 2021 2020 Change Change $’000 $’000 $’000 % Revenue from operations 83,319 71,168 Up 12,151 Up 17.1 Earnings before interest, tax, depreciation and amortisation 47,276 42,641 Up 4,635 Up 10.9 Earnings before interest and tax 39,037 36,654 Up 2,383 Up 6.5 Profit after tax from operations attributable to members 26,959 25,883 Up 1,076 Up 4.2 Total comprehensive income for the period attributable to members 27,208 25,207 Up 2,001 Up 7.9 DIVIDENDS On 26 August 2021, Directors declared a final fully franked ordinary dividend of 18.5 cents per share (2020: 17.0 cents) that will be paid on ordinary shares making a total fully franked ordinary dividend of 36.5 cents per share (2020: 35.5 cents) as follows: • Record date: 3 September 2021 • Payment date: 24 September 2021 The Company has no Dividend Reinvestment Plan at present. NET TANGIBLE ASSETS Consolidated Group Financial Year 2021 2020 Cent Cent Net Tangible Assets (NTA) per ordinary share 73.3 85.2 The decrease in net tangible assets by 11.9¢ or 14.0% is mainly due to the use of cash (tangible asset) for the payment of the $15,000,000 Tabcorp extension fee, relating to the new 10-year agreements in August 2020, that has been capitalised and amortised over the term of the agreements (intangible asset). Excluding the impact of the $15,000,00 Tabcorp extension fee, the NTA would be 96.6¢ per ordinary share. CONTROL GAINED OVER ENTITIES Not applicable. LOSS OF CONTROL OVER ENTITIES Not applicable. Page 2 of 3 Jumbo Interactive Limited and its Controlled Subsidiaries Appendix 4E – Preliminary Financial Year Report DETAILS OF ASSOCIATES AND JOINT VENTURE ENTITIES Not material as carrying values are $nil. AUDIT QUALIFICATION OR REVIEW The financial report has been audited and an unqualified opinion has been issued. ATTACHMENTS The Annual Report of Jumbo Interactive Limited for the year ended 30 June 2021 is attached. SIGNED Susan Forrester Mike Veverka Chair Chief Executive Officer and Executive Director Brisbane 26 August 2021 Page 3 of 3 Lottery Software-as- Managed Retailing a-Service Services Annual Report 2021 JUMBO INTERACTIVE LIMITED Jumbo Interactive Ltd Annual Report 2021 3 Table of Contents 4. Performance highlights 6. About Jumbo Interactive 8. Our strategy 10. Letter from Chair 12. Letter from CEO and Founder 14. Review of operations 18. Lottery management excellence 20. Proprietary lottery technology stack 22. Lottery Retailing 26. Software-as-a-Service 30. Managed Services 34. People of Jumbo 38. Sustainability 44. Directors’ Report 53. Operating and Financial Review 63. Remuneration Report 79. Financial Report 4 Jumbo Interactive Ltd Annual Report 2021 Performance highlights TTV Active players2 $487.0m 36.7%YOY 1.8m 81% YOY Revenue Underlying EBITDA $83.3m 17.1% YOY $48.9m 13.2% YOY Free cash flow1 Dividend declared $28.6m 32.9% YOY 36.5cps 2.8% YOY Cash balance $63.1m (12.6%) YOY (1) Cashflow from operating activities less cash flows used for investing activities, excluding cash used for acquisitions of, and investments into, businesses and strategic assets. (2) Players that made a purchase over the 12 months to 30 June 2021 (FY20 includes Gatherwell and Mater Foundation for 12 months and Deaf Services for approximately 2 months). Jumbo Interactive Ltd Annual Report 2021 5 6 Jumbo Interactive Ltd Annual Report 2021 About Jumbo Interactive Jumbo Interactive (Jumbo) is a dedicated Kingdom (UK) as a Business to Consumer digital lottery software and services company, (B2C), Business to Business (B2B), and providing its proprietary lottery software Business to Government (B2G) provider, with platform and lottery management expertise three distinct operating segments. to the charity and government lottery sectors All three operating segments are in Australia and globally. underpinned by our proprietary lottery Jumbo’s innovative and player-centric software platform and over 25 years of approach to digital lotteries and online proven lottery management expertise. retailing make us the platform of choice for more than 1.8 million active players and more than 9,300 good causes. Our platform and superior player experience is scalable and caters for causes ranging from local causes The platform of choice for over 1.8 to large state lotteries. Jumbo was founded by Chief Executive million active players supporting OfficerCEO ( ) Mike Veverka, in 1995 and has matured into a digital lottery retailer and over 9,300 good causes ranging lottery software provider. from local causes to large, state Jumbo is an ASX 300 listed company, operating in Australasia and the United lotteries. Operating segments 1 2 3 Lottery Retailing Software-as-a-Service Managed Services Jumbo is a fully accredited retailer (SaaS) We provide cost effective lottery of Australian digital lottery tickets We license our ‘Powered by Jumbo’ management services for charities through Oz Lotteries. (PBJ) digital lottery platform as a and worthwhile causes who do SaaS solution to government and not operate a lottery to enable vital charity lottery operators in Australia fundraising for good causes. and globally. Jumbo Interactive Ltd Annual Report 2021 7 25 years >9,300 since Jumbo launched good causes supported through our platform >1.8m active players 2 Regions Australasia and United Kingdom >$1.5bn transactions processed on our 150+ platform in the last five years employees 8 Jumbo Interactive Ltd Annual Report 2021 Our strategy Our mission is Making Lotteries Easier. Easier for clients to develop their own successful digital lottery programs. Easier for players by focusing on the right outcomes and experiences to make play more convenient, personalised and engaging. Our vision is to be the number one choice in digital lottery and services to the charity and government lottery sectors. We aim to achieve this by continuing to delight our players with leading technology supported by Jumbo’s deep-rooted industry and player understanding. Our continued focus on innovation ensures new markets by exporting our Lottery our proprietary lottery software platform Retailing, SaaS and Managed Services maintains a very high standard of operational capabilities into each market we enter, performance and integrity, and remains either organically or through acquisitions, modern, popular and relevant. or partnerships. With Jumbo’s track record of success in • Over the medium to long term, we will Australia and the significant investment in seek to diversify into new markets, our technology platform, we have a unique creating new revenue streams, following opportunity to export our capabilities into the acquisition of considerable local new markets outside of Australia. Our market experience. international expansion strategy targets the Our new operating model and leadership charity and government lottery sectors in the structure has been designed to drive UK and North America. greater focus, improve decision-making We have adopted a three-horizon approach through clearer accountabilities, and to strategy execution. accelerate strategy delivery. The operating model comprises three distinct operating • We will maximise our Australian Lottery segments with clear value propositions in Retailing segment to optimise growth, their target markets. For our emerging SaaS market share, and player experience. and Managed Services businesses, we will • In the short to medium term, we will establish strategic footholds in our target replicate our successful Australian markets before seeking to scale. operating model and expertise into Jumbo Interactive Ltd Annual Report 2021 9 We have a clear strategy and have created three operating segments, which will set us up for sustained growth both domestically and overseas in the medium to long term. Making Lotteries Easier Mission The number one choice in digital lottery and services to the Vision charity and government lottery sectors Three distinct operating segments servicing the full lottery management value chain Lottery Retailing Software-as-a-Service Managed Services 1 2 3 Total $6bn $25bn $42bn Addressable Australia US, UK, Canada UK, Canada, Australia Market Licensing our ‘Powered by Providing lottery management Selling lottery tickets through Jumbo” SaaS lottery platform services to charities and Overview of internet and mobile devices to Government and larger worthwhile causes who do not Business Activity charity lottery operators currently operate a lottery Lottery Management Excellence Lottery expertise built Exceptional player experience Continual innovation up over 25 years Core Capabilities Proprietary Lottery Technology Stack High standard of performance Incremental platform improvements Scalable and versatile and reliability benefit all operating segments Revenue model - % of Player spend (Total Transaction Value) Revenue model (1) Source: Australian gambling statistics report (2018-19) (2) 2Total TAM of $25bn equates to TAM by region of: UK $1.6bn; US $22bn; and Canada $1.3bn. UK TAM of $1.6bn: The UK Gambling Commission reports TTV for sector of £775m (Sept 2019) applying a 5-year CAGR of +14% and/or PY rise of 8% gives a range of £837m to £884m in sector growth (to Sept’20). Using 6-month average GBP £1 to AUD $1.89, this leaves forecast TTV between $1.67bn and $1.58bn (Reference UKGC Annual Report18/19). 2018 US lottery sales were USD77bn. Draw games were USD28bn. With 50% iLottery penetration forecast in next 5 years (23 US lotteries).