Transcripción procesada de la conferencia telefónica o presentación en ALL.AX resultados 21 de mayo, 20, 8:30 p.m. GMT

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NSW, 5 de junio de 2020 (Thomson StreetEvents) – Minutos de la conferencia telefónica o presentación sobre el resultado de Aristocrat Leisure Ltd publicado el jueves 21 de mayo de 2020, 12:30 p.m. GMT

Aristocrat Leisure Limited – CEO de Global Land Based & Chief Transformation Officer

* Trevor J. Croker

* Matthew H. Ryan

Evans & Partners Pty. Ltd., departamento de investigación – Director Ejecutivo de Gaming & Leisure

Gracias por esperar y bienvenidos a la Reunión informativa de resultados de medio año de Aristocrat.

Ahora me gustaría entregar la conferencia al Sr. Trevor Croker, CEO. Por favor continua.

Trevor J. Croker, Aristocrat Leisure Limited – CEO, CEO y Director [2]

Buenos días y bienvenidos a los resultados financieros de Aristocrat Leisure Limited para los seis meses terminados el 31 de marzo de 2020. Mi nombre es Trevor Croker, director ejecutivo y gerente general de Aristocrat. Es un placer para mí presentar hoy con Julie Cameron-Doe, nuestra CFO.

Esta llamada difiere un poco en que Julie y yo asistimos desde nuestra oficina de Las Vegas debido a las restricciones de viaje en curso y al cumplimiento de todas las pautas de distancia social. Otros miembros del equipo están desplegados en Las Vegas y Sydney. Gracias por estar con nosotros.

Antes de comenzar, tenga en cuenta el descargo de responsabilidad habitual en la diapositiva 2.

Pasemos ahora a nuestra agenda en la diapositiva 3. Como todos saben, la presentación de hoy tiene lugar en el contexto de la crisis de COVID 19, que ha tenido un impacto significativo en nuestra gente, clientes, comunidades y todas las partes de nuestro negocio en los últimos meses. A mediados de marzo, cuando entró en vigencia el cierre a gran escala de los operadores, nuestro negocio de tierras estaba en el camino correcto para lograr un crecimiento de ganancias e ingresos a través del PCP de acuerdo con nuestro plan interno. Actualmente estamos claramente en una fase particularmente volátil. Sin embargo, me gustaría enfatizar que nuestra estrategia orientada al cliente y orientada a la cartera sigue vigente y que estamos más convencidos que nunca de las ventajas de un negocio diversificado y el enfoque en el crecimiento sostenible a largo plazo.

Aunque no podemos predecir el futuro, la segunda mitad del año financiero 2020 sin duda será muy diferente, tanto para los resultados de la primera mitad del año como para el año completo anterior en términos del tamaño y la composición del resultado, los impulsores subyacentes y la dinámica del mercado. Por lo tanto, primero quisiera recapitular los esfuerzos de respuesta y recuperación de COVID-19 a corto y mediano plazo de Aristocrat y explicar nuestro enfoque y algunos de los supuestos clave que lo subyacen. Luego procederemos a un resumen de nuestros resultados consolidados y desempeño operativo para el período antes de proporcionar un breve resumen y abrir la línea para preguntas y respuestas. En aras de la claridad, todas las referencias al período correspondiente anterior (PCP) se refieren a los 6 meses hasta el 31 de marzo de 2019. Además, todas las cantidades se dan en dólares australianos a menos que se indique lo contrario. El grupo confirmó que aún es una empresa y que hemos aplicado un tratamiento financiero uniforme durante todo el período del año, incluido el tiempo en que los operadores estuvieron cerrados.

Pasemos a la diapositiva 4. Aristocrat espera que COVID-19 produzca una combinación de cambios temporales y a largo plazo en nuestros mercados terrestres y digitales que reflejen las preferencias de los consumidores, la selección de operadores y el dinamismo comercial. Desde finales del calendario 2019, Aristocrat ha respondido a la crisis emergente enfocándose en las cosas que podemos controlar y siendo lo más ágil posible. Esta es una unidad de negocio central basada en el cambio exitoso que iniciamos hace 10 años. En estos tiempos turbulentos, nuestra compañía utiliza esta habilidad nuevamente. Como ya se indicó, nuestros planes de respuesta se centraron en proteger la salud y el bienestar de nuestros empleados, clientes y proveedores. Aproveche nuestros beneficios estratégicos de productos, incluida la inversión en nuestros motores de crecimiento central, D&D y adquisición de usuarios; Posicionar el negocio con base en tierra como combatible cuando la demanda regrese; y optimización de liquidez.

Ahora examinaré cada una de estas áreas individualmente y abordaré nuestra respuesta de COVID 19 a la diapositiva 5.

La gente primero. Con respecto a nuestros empleados, toda nuestra organización recibió el apoyo de más de 6.200 personas en todo el mundo para cambiar a un acuerdo de trabajo desde el hogar a principios de abril. No hemos visto efectos negativos en la productividad de este cambio. Afortunadamente, hasta ahora solo ha habido un puñado de infecciones por COVID-19 entre nuestros empleados. Todos los empleados se han recuperado y se ha informado que no se han producido infecciones en ningún lugar de trabajo aristocrático. Con el cambio a un modelo de trabajo remoto efectivo, la compañía ha introducido medidas mejoradas de seguridad de la información y protección de activos, así como una mejor capacitación y comunicación de seguridad cibernética. Además, hemos mejorado significativamente la comunicación general para mantener el bienestar y la moral y para mantener la alineación durante este período. Aristocrat ha elegido explícitamente un enfoque prioritario para las personas, por ejemplo, para cubrir los costos del seguro de salud de nuestros empleados en los Estados Unidos y comenzar un nuevo programa integral de bienestar para los empleados. Encuestas recientes de empleados han demostrado que todo el equipo muestra un alto nivel de compromiso y que las necesidades de la empresa deben ser entendidas para tomar decisiones difíciles. Nos enfocamos en mejorar este compromiso para garantizar que tengamos las personas adecuadas, el impulso correcto y la cultura correcta para impulsar nuestra recuperación. Y estamos reabriendo gradualmente los lugares de trabajo y recuperando a las personas de las paradas basadas en criterios claros con protocolos adecuados de salud y seguridad. Sigue siendo una prioridad garantizar que nuestros empleados se sientan seguros y confiados y que nuestros planes se adapten a las necesidades locales de salud y de los clientes.

A través de Big Fish, Aristocrat fue también uno de los patrocinadores fundadores de la campaña global #PlayApartTogether patrocinada por la OMS. Junto con otras compañías líderes de juegos, Big Fish distribuyó información de salud pública a su comunidad de jugadores y promovió la higiene y la distancia social para frenar la propagación del virus.

Me gustaría tomar un momento para reconocer y agradecer a nuestro equipo excepcional de empleados cuya resistencia, pragmatismo y cuidado mutuo fueron inspiradores durante este tiempo. La energía y la cultura de nuestro equipo fue particularmente impresionante en este momento desafiante y le dará a Aristocrat un papel importante en el futuro.

Use nuestra ventaja estratégica de producto. Durante esta crisis, también nos enfocamos fuertemente en aprovechar nuestros beneficios estratégicos de productos, incluyendo D&D y en tierra, e invertir efectivamente en digital. Cuando se trata de D&D, nuestro talento creativo y tecnológico líder en la industria continúa trabajando duro. A diferencia de muchos de sus competidores, Aristocrat ha decidido no emplear ningún empleado de D&D entre los 1,000 empleados que renunciaron a principios de este mes, y tampoco hemos cerrado ningún estudio de juegos. Seguimos desarrollando y desarrollando juegos. Nuestros equipos aprovecharon este tiempo para restablecer las prioridades, consultar a los clientes y adaptarse a nuestra cartera y a nuestra cartera de productos. Nuestro equipo de D&D y comercial se esfuerza por desarrollar los productos y opciones que ayudan a nuestros clientes a recuperarse y responder mejor a las cambiantes demandas del mercado.

En breve hablaré más sobre nuestro enfoque comercial en tierra. No hay absolutamente ninguna razón para abandonar nuestra creencia de que el mejor producto continuará siendo un diferenciador clave en los mercados terrestres.

Dadas nuestras circunstancias actuales, no tiene sentido hablar con un porcentaje de su compromiso con las inversiones de ventas en D&D. Sin embargo, nuestro compromiso de liderar la industria en productos nunca fallará. Nos enfocamos incansablemente en atraer y liberar el mejor talento en productos y tecnología para ofrecer a nuestros clientes el portafolio de mejor desempeño en el mercado.

En Digital, los mandatos de estadía en el hogar relacionados con COVID 19 han llevado a muchos consumidores a cambiar a fuentes de entretenimiento en línea, incluidos los juegos digitales. Nos hemos movido para asignar UA adicionales de acuerdo con nuestros estrictos criterios de inversión. El negocio digital también está invirtiendo fuertemente en contenido de juegos y nuevas líneas de juegos para acelerar nuestra estrategia para el crecimiento de la cartera.

En resumen, Aristocrat cree que un gran producto mejorará fundamentalmente el rendimiento tanto en nuestro segmento terrestre como digital. Esto se puede ver en el crecimiento gradual de las acciones y la penetración de los segmentos vecinos, incluso en tiempos de competencia creciente y, en algunos casos, de un menor crecimiento general del mercado. Este enfoque en los productos y la mejora de nuestra propia competitividad ha sido una parte integral de nuestra estrategia y cultura durante muchos años y continuará en el futuro.

Ahora llegamos a la respuesta COVID-19 dentro de nuestro negocio global con base en tierra. Apto para luchar en tierra. Nuestros equipos de negociación trabajan continuamente con clientes en todos los mercados principales para mantenerse cerca de los planes de reapertura anticipados, comprender las necesidades de los clientes y trabajar con ellos en iniciativas de recuperación estratégica. En general, se espera que los operadores de todo el mundo reduzcan sus gastos de capital y reduzcan los costos a corto plazo siempre que sea posible. Esto sugiere una perspectiva más competitiva para nuestro negocio de terrenos en los sectores directo y de juego.

Con esto en mente, y bajo el liderazgo del CEO global con base en tierra, Mitchell Bowen, Aristocrat adopta un enfoque ágil y flexible para satisfacer las necesidades de los clientes y garantizar que regresemos rápidamente a medida que la demanda regrese. Nos basaremos en nuestra dinámica de producto sobresaliente que ha llevado a esta crisis a trabajar con los clientes y maximizar la participación para el crecimiento a largo plazo. La crisis de COVID-19 también ha resaltado los beneficios de nuestra estructura terrestre global bajo Mitchell, ya que la coordinación sólida, la priorización y la implementación de planes sólidos para la gobernanza comercial y la reconstrucción se pueden ver en este momento desafiante.

Optimizar la liquidez. Después de todo, Aristocrat adoptó un enfoque integral para optimizar la liquidez y proteger nuestras bases financieras. Al 31 de marzo de 2020, el grupo tenía una liquidez pro forma de $ 1.8 mil millones. Esto incluye el flujo de efectivo de las actividades operativas de $ 750 millones, la utilización de la línea de crédito renovable del Grupo de $ 142 millones y un margen adicional de $ 136 millones después de aumentar esta línea a fines de abril. Este mes, también aseguramos con éxito una facilidad adicional de préstamo B a plazo de $ 500 millones. La decisión del director de suspender el dividendo a cuenta para el año fiscal 20 mejora aún más nuestra posición de liquidez y balance general. Además, eliminamos el gasto discrecional e hicimos cambios en la fuerza laboral que afectan a todos los empleados no digitales y que reducirán los costos operativos en $ 100 millones en la segunda mitad del año fiscal 2020 en comparación con el período anterior. Finalmente, en línea con los cambios en la estructura del Grupo anunciados en noviembre de 2019, el Grupo reconoció un activo por impuestos diferidos de aproximadamente $ 1 mil millones, lo que resultará en ahorros fiscales significativos en efectivo a largo plazo. Nuestra liquidez nos posiciona muy bien no solo para enfrentar los desafíos actuales, sino también para ser fuertes y competir por el crecimiento futuro.

Ahora entraré en más detalles sobre nuestras bases financieras y el desempeño del Grupo, comenzando con nuestro balance y perfil de deuda en la diapositiva 6. El balance de Aristocrat se mantiene sólido en 1.4x deuda neta a EBITDA al 31 de marzo de 2020. Como se mencionó anteriormente, es nuestra posición general de liquidez es sólida y confiamos en que nuestras líneas de crédito a largo plazo son extremadamente competitivas y flexibles, y proporcionarán a la compañía seguridad de financiamiento a largo plazo. Los acuerdos de préstamo subyacentes también son ligeros y no se requiere refinanciación hasta la segunda mitad del calendario 2024. Tanto S&P como Moody’s han mantenido las calificaciones crediticias de la compañía en BB + y Ba1, respectivamente.

En la diapositiva 7, ahora me gustaría proporcionar un contexto para el enfoque y las prioridades de la asignación de capital de Aristocrat en este punto. Aristocrat asigna capital para apoyar nuestra estrategia de crecimiento y maximizar el retorno de los accionistas a largo plazo. Esta diapositiva aborda los desafíos en nuestras prioridades y expectativas para la asignación de capital debido a los efectos de COVID-19 a lo largo del tiempo. Tanto antes como en el futuro, nuestra primera prioridad continuará siendo invertir con UA ​​y Digital en nuestros motores de crecimiento orgánico para actividades de diseño y desarrollo y juegos en el país. Nuestro enfoque no cambiará aquí, excepto nuestra expectativa de que las inversiones impulsadas por las operaciones de juego disminuyan a corto plazo en línea con la demanda probable de los operadores y las condiciones del mercado.

Nuestra siguiente prioridad fueron las oportunidades positivas, no orgánicas, que aceleran nuestra estrategia, ya sea en términos de habilidades y capacidades, propiedad intelectual, expansión de cartera o escalado. Las ventajas de nuestro enfoque son evidentes en la creciente diversidad de nuestro negocio, más obviamente en nuestro crecimiento de la presencia digital. En el futuro, intentaremos utilizar nuestro balance para explorar oportunidades durante este período de acuerdo con nuestros estrictos criterios de adquisición.

Nuestra tercera prioridad en el pasado ha sido aumentar nuestra posición de efectivo y reducir la deuda para garantizar la opcionalidad y flexibilidad futuras. En el futuro, daremos prioridad de liquidez sobre el desapalancamiento.

Como se anunció anteriormente, el Consejo de Administración ha suspendido su política de dividendos progresivos sobre las opciones de retorno de capital. Creemos que este enfoque de asignación de capital en este punto es el equilibrio correcto entre precisión, riesgo y rendimiento y está en línea con los intereses de los accionistas.

Antes de pasar a un resumen del desempeño del Grupo Aristocrat para el medio año 2020, me gustaría proporcionar otro contexto en la diapositiva 8 de la presentación con una actualización del panorama en los mercados clave en el momento actual.

Como se indica en nuestra divulgación del mercado a fines de abril, los mercados clave se están reabriendo gradualmente de jurisdicción en jurisdicción. Nuestro mercado direccionable más grande en América del Norte está compuesto por casi 1,000 casinos y otros lugares de juego. Las autoridades estatales de juego, los gobiernos y las agencias de viajes, en consulta con los operadores, determinan el tiempo y el alcance de la reapertura en el sitio. Un número modesto se ha reabierto hasta ahora, aunque muchos planean abrir en junio. Los lugares reabiertos generalmente funcionan bajo condiciones estrictas, que incluyen la distancia social, los límites de ocupación, el horario comercial reducido y los protocolos de higiene.

Las propiedades de viaje, particularmente en Oklahoma, fueron de las primeras en ser reiniciadas. Se espera que aproximadamente la mitad de los bienes inmuebles del estado estén abiertos a fines de mayo. Esto es alentador para Aristocrat dada nuestra fuerte presencia en el segmento de viajes. Es más probable que los destinos que dependen más del turismo y los viajes tarden más en ser completamente funcionales nuevamente.

En Australia, el gobierno federal aconseja que las operaciones de servicios no alimentarios en pubs y clubes se incluyan en la reapertura del Nivel 3, y los estados deben determinar si esto incluye los días de partido y el momento exacto de la reapertura. Según las recomendaciones actuales, los principales mercados pueden ver una reapertura gradual alrededor de julio, lo que requiere que se cumplan los límites de distancia y patrocinio. En este momento, no se dio un calendario de reapertura de casino en Australia.

Aunque la situación general sigue siendo muy dinámica, reafirmamos la expectativa que fijamos en abril para el aumento gradual de los días de juego en los próximos meses. El patrocinio mejorará con el tiempo, en línea con la mejora en la confianza del consumidor y el retroceso de la distancia social y las restricciones de viaje. Mientras tanto, veremos un impacto significativo en nuestro negocio, por ejemplo, si no hay ingresos del negocio global de juegos en abril y, según mis comentarios anteriores, solo se espera mínimamente hasta mayo.

Antes de pasar a un resumen de los resultados de medio año, me gustaría resumir una vez más que Aristocrat está respondiendo a los desafíos y la volatilidad de COVID-19 centrándose en lo que podemos controlar. Protegemos la salud y el bienestar de nuestros empleados y nos aseguramos de que permanezcan motivados y centrados. Invertimos en fortalecer y adaptar nuestra cartera de productos con base en tierra y estamos listos para responder rápidamente para aumentar la participación cuando la demanda regrese. Invertimos mucho en digital, que desempeña un papel clave en la generación de flujo de caja y el aumento de las ventas y ganancias como parte de nuestro negocio diversificado. Tomamos medidas operativas importantes para lograr ahorros y optimizar las reservas de liquidez cuando es prudente, y continuamos fortaleciendo nuestro balance. Nuestros esfuerzos ciertamente no son solo defensivos. Aprovecharemos al máximo las oportunidades de mercado disponibles y confiamos en que creceremos fuertemente en competencia y crecimiento en los próximos años.

Ahora invitaré a Julie a revisar los resultados financieros de Aristocrat para los seis meses que terminaron el 31 de marzo de 2020 antes de volver al rendimiento operativo a la mitad. Julie?

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Julie Cameron-Doe, Aristocrat Leisure Limited – CFO [3]

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Gracias, Trevor, y buenas tardes a todos.

Pasemos a la diapositiva 10. Revisaré un resumen de los resultados del grupo para el período. Los activos intangibles normalizados después de impuestos y pre amortizados (NPATA) de $ 368 millones cayeron casi un 13%, mientras que las ventas aumentaron un 7% a poco menos de $ 2.3 mil millones. Las ganancias antes de intereses, impuestos, depreciación y amortización (EBITDA) disminuyeron casi un 8% a aproximadamente $ 708 millones. Las ventas digitales crecieron un 19% en moneda local, lo que refleja el rendimiento continuo de la cartera y compensó parcialmente una caída del 6% en las ventas en tierra. La última quincena de marzo ha sido tradicionalmente un momento pico de ventas ya que los clientes esperan hasta el final del trimestre para proporcionar capital para confirmar los pedidos. Los nuevos cierres, que fueron obligatorios en los mercados mundiales en la segunda mitad de marzo, detuvieron efectivamente los gastos de capital de los clientes y también redujeron significativamente los ingresos de las operaciones de juego durante el mes. Estos factores se reflejan en un aumento en las ventas totales de solo el 7% en el período del informe en comparación con el PCP.

Las ganancias por acción normalizadas y totalmente diluidas antes de la amortización de los activos intangibles adquiridos de $ 0.677 representan una disminución del 12.8% del PCP. Se generó un flujo de caja operativo de $ 620 millones en el período, un aumento de casi 42%. El engranaje neto disminuyó 1.4 veces al 31 de marzo, luego de haber disminuido 1.6 veces al 31 de marzo de 2019.

Ahora repasaré la composición del rendimiento normalizado de NPATA reportado por Aristocrat, igualando $ 368 millones en la diapositiva 11 con el PCP. En general, el negocio basado en tierra generó aproximadamente $ 105 millones menos de ganancias en el período del informe que en los seis meses, principalmente debido a las ubicaciones globales de clientes de COVID-19 y los cierres de la industria descritos anteriormente. El negocio digital generó una ganancia adicional de $ 22.3 millones de inversiones específicas en la adquisición de usuarios y el compromiso de los jugadores con el rendimiento continuo de la cartera. Los costos e intereses corporativos aumentaron $ 5.5 millones durante el semestre en comparación con el PCP. Los mayores costos absolutos de D&D en los seis meses terminados el 31 de marzo de 2020 reflejaron una inversión estratégica en talento, tecnología y productos que se alineó con una gama más amplia de mercados y segmentos en línea con la estrategia de crecimiento del Grupo. Esta inversión adicional redujo las ganancias del período en casi $ 1 millón. Una disminución en la tasa impositiva efectiva del Grupo del 27.5% al ​​24.2% resultó en una ventaja de ganancias de USD 16 millones y refleja el impacto de los cambios en las estructuras del grupo anunciados en noviembre de 2019. Finalmente, los movimientos del tipo de cambio mejoraron las ganancias en los seis meses en casi $ 24 millones hasta el 31 de marzo de 2020, en comparación con el período correspondiente anterior.

Pasemos ahora al flujo de efectivo en la diapositiva 12. El flujo de efectivo operativo aumentó 41.5% del PCP a $ 620 millones en el período de informe debido a la fuerte generación de flujo de efectivo libre en toda la empresa. Los intereses y los impuestos disminuyeron 17.3%, con la tasa de cuotas australiana reducida. Los pagos de impuestos más bajos también se realizaron fuera de Australia debido a los cambios en la estructura del grupo mencionados anteriormente. Las inversiones para los seis meses terminados el 31 de marzo de 2020 se relacionaron principalmente con inversiones en hardware para respaldar el crecimiento en el segmento de Operaciones de Juego de las Américas. Por razones de transparencia, esta diapositiva también muestra el flujo de caja en el formato legal.

Ahora me ocuparé de nuestro dinero ardiente. Como mencionó Trevor, nuestras acciones en respuesta al impacto de COVID-19 en comparación con el PCP traerán 20 ahorros de $ 100 millones durante el resto del año fiscal. Sobre una base conservadora, suponiendo que los ingresos en tierra de $ 0, un estado estable para digital y teniendo en cuenta nuestros costos de financiamiento adicionales, estimamos que nuestra quema mensual de efectivo antes de los gastos de capital sería de aproximadamente $ 50 millones. Incluso si no se esperan mejoras significativas en el mercado, Aristocrat, por lo tanto, tiene la capacidad suficiente para resistir una recesión y continuar invirtiendo en el crecimiento a largo plazo.

Esto concluye el resumen del desempeño del grupo para el período. Ahora volveré a Trevor para comentar sobre el rendimiento operativo. Trevor?

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Trevor J. Croker, Aristocrat Leisure Limited – CEO, CEO y Director [4]

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Gracias Julie. Ahora pasaré a un resumen del rendimiento en tierra en la diapositiva 14 y les recordaré que todos los detalles están incluidos en la revisión del documento operativo de esta mañana. Como mencioné en mis comentarios de apertura, nuestro desarrollo comercial global a mediados de marzo cumplió con nuestras expectativas durante medio año. En general, el negocio agrícola global generó ventas de más de $ 1.2 mil millones y una ganancia del segmento de $ 560 millones en el período del informe. Si bien los resultados financieros en todo el país finalmente estuvieron por debajo de nuestras expectativas, el desempeño operativo y la competitividad subyacentes de Aristocrat se mantuvieron muy fuertes durante el período. Los resultados fueron nuevamente impulsados ​​por el desempeño sobresaliente de juegos y gabinetes en mercados y segmentos clave.

En nuestro mercado más grande de EE. UU., Aristocrat mantuvo su posición como el mejor proveedor de tragamonedas del mercado y también logró una tarifa diaria promedio líder en el mercado. Echaré un vistazo más de cerca a algunos de estos aspectos destacados del rendimiento al mirar los resultados estadounidenses en la diapositiva 15. Tenga en cuenta que los resultados en esta diapositiva están en dólares estadounidenses.

Los ingresos en las Américas disminuyeron en más del 10% en comparación con el PCP y las ganancias disminuyeron en alrededor del 19% a poco más de $ 610 millones y $ 303 millones, respectivamente. Los márgenes disminuyeron 510 puntos básicos a poco menos del 50% debido a la combinación de productos, un aumento en la provisión de deuda incobrable y una disminución en el apalancamiento operativo relacionado con los efectos de COVID 19. El negocio aumentó aún más la participación de las operaciones de juego. La base premium de clase III instalada creció un 9,4% en el período del informe, impulsada por potentes gabinetes y juegos. La presencia de operaciones de juego de clase II aumentó 1.8%. La tarifa diaria promedio para las operaciones de juego de Clase II y III se mantuvo por encima de USD 50 durante el período del informe, normalizada para excluir la cantidad de días que los operadores estuvieron cerrados. Sin ajustar, la tarifa diaria promedio para el período fue de poco más de $ 46.

Las ventas totales disminuyeron un 29% en comparación con el mismo período del año pasado, principalmente debido a una caída en la demanda debido a COVID-19, pero también debido al cambio en los lanzamientos de nuevos productos, incluidos Washington CDS y VLT, en el mismo período del año pasado. El ASP se mantiene fuerte en $ 17,544, que es alrededor de un 5% más bajo que el período anterior correspondiente. Esto se debió a la combinación de productos y al impacto de los vecindarios más baratos, incluido el segmento de la barra superior. El video ASP permanece en línea con el período correspondiente anterior debido al fuerte desempeño del caso MarsX.

Aristocrat continuó recibiendo comentarios positivos de los clientes durante el período del informe y fue nombrado el mejor proveedor norteamericano por Eilers en marzo de 2020. Este premio se basó en el desempeño líder en el mercado en el segmento de arrendamiento premium para operaciones de juego, que fue 2.77 veces el promedio de la casa. y nuestro desempeño en el segmento progresivo de área amplia, que obtuvo una calificación de 2.15 veces el promedio de la casa.

Pasemos ahora a los resultados de ANZ y la clase internacional III en la diapositiva 16. Las ventas de ANZ disminuyeron 11% a moneda constante a $ 205.3 millones en comparación con el mismo período del año anterior, mientras que las ganancias cayeron 29.4% a $ 77 millones debido a las difíciles condiciones del mercado debido a los efectos de las sequías, incendios forestales y cierres de Sedes de COVID-19 y el momento de los lanzamientos de productos para la segunda mitad del año. El margen disminuyó 980 puntos básicos a 37.5% debido a la combinación de productos, un dólar australiano más débil que afectó los costos de materiales y un aumento en la provisión de deuda incobrable en respuesta a COVID-19.

El ASP disminuyó levemente de $ 21,264 en el PCP a $ 21,021 en el período del informe. El negocio de ANZ pudo mantener su posición de liderazgo en el mercado en acciones de buques debido al rendimiento continuo de la cartera de productos de Aristocrat. Las ventas y ganancias internacionales de Clase III disminuyeron 11.3% y 26.4% respectivamente a $ 85.9 millones y $ 31.3 millones, respectivamente, en comparación con el período anterior, como COVID- Se cerraron 19 locales relacionados.

Ahora veamos el rendimiento de nuestro segmento digital en la diapositiva 17, que se expresa en dólares estadounidenses. Die digitalen Buchungen stiegen in den sechs Monaten bis zum 31. März 2020 um 19% gegenüber dem entsprechenden Vorjahreszeitraum auf rund 698 Mio. USD. Dies war auf die anhaltend starke Leistung von RAID: Shadow Legends, Lightning Link und Cashman Casino zurückzuführen, die durch eine breitere Portfolio-Dynamik unserer immergrünen Marken unterstützt wurde. Der digitale Gewinn stieg um 12,4% auf knapp 198 Mio. USD, wobei die Segmentmargen auf 28,4% zurückgingen. Dies spiegelt einen Anstieg der UA-Investitionen auf 29% des digitalen Umsatzes im Berichtszeitraum wider, der geringfügig über unserem Zielbereich von 25% bis 28% liegt, da qualitativ hochwertige Investitionsmöglichkeiten für das Wachstum von RAID zur Verfügung stehen. Das Unternehmen erhöhte auch die Investitionen in die Entwicklung neuer Funktionen und Live-Operationen im Segment Social Casino, um das Wachstum voranzutreiben.

Nach dem Ende des Berichtszeitraums profitierte das digitale Portfolio von seiner erkennbaren Leistungssteigerung, die vor allem von Spielern getragen wurde, die aufgrund der COVID-19-Bestellungen für den Heimgebrauch nach Optionen für die Heimunterhaltung suchten. Diese Dynamik trug jedoch in den sechs Monaten bis zum 31. März 2020 nicht in bedeutender Weise zum Ergebnis bei. Wir haben unser digitales Portfolio von zwei Genres zuvor in drei Genres unterteilt. nämlich Social Casino, Social Casual und Strategie, Rollenspiel und Action. Dies spiegelt die wachsende Vielfalt des Portfolios sowie die unterschiedlichen demografischen Merkmale, Genres, Merkmale und internen Fähigkeiten wider, die mit jedem Segment verbunden sind.

Das Segment Social Casino trug zu Buchungen in Höhe von 332 Mio. USD bei, was einer Steigerung von 5% gegenüber dem entsprechenden Vorjahreszeitraum entspricht. Dies ist auf die starke Leistung von Lightning Link und Cashman Casino zurückzuführen, die teilweise durch Rückgänge bei Big Fish Casino und Jackpot Magic Slots ausgeglichen wurde. Das Unternehmen bleibt unserer Strategie verpflichtet, Live-Operationen, Funktionen und neue Inhalte für Slot-Themen bereitzustellen, um die Spieler weiter zu motivieren.

Das Segment Social Casual lieferte im Berichtszeitraum Buchungen in Höhe von 118 Millionen US-Dollar, was einem Rückgang von 24% gegenüber dem PCP entspricht. Immergrüne Titel zeigten weiterhin eine Performance, aber neuere Veröffentlichungen wie Toy Story Drop! und Big Fish, die nicht den Erwartungen entsprechen. Während die Gewinne im Segment Social Casual in Bezug auf Branchen-Benchmarks eine allgemein niedrigere Trefferquote aufweisen, sind wir enttäuscht über das Scheitern einer Reihe von aktuellen Casual-Titeln. Die neu gebildete globale digitale Führungsgruppe unter Mike Lang konzentriert sich stark auf die Diagnose und Behandlung von Faktoren, die zur Verbesserung unserer Trefferquote, unseres Umsatzes und unserer Rentabilität in diesem wichtigen Genre beitragen.

Nach dem Ende des Berichtszeitraums werden weltweit neue Casual Games eingeführt, darunter Undersea Solitaire und EverMerge, die das schnell wachsende Genre der Merge-Spiele erschließen wollen.

Schließlich trug das Segment Strategie, Rollenspiele und Maßnahmen im Berichtszeitraum Buchungen in Höhe von 248 Mio. USD bei, was einer Steigerung von 116% gegenüber dem vorherigen entsprechenden Zeitraum entspricht. Dies spiegelte das herausragende Wachstum von RAID wider, das im Berichtszeitraum Buchungen in Höhe von 160 Millionen US-Dollar generierte, zusammen mit dem anhaltenden Beitrag immergrüner Titel. Die Gesamtzahl der täglich aktiven Benutzer (DAU) ging aufgrund unseres Fokus auf Monetarisierung auf 7,3 Millionen zurück, da die durchschnittlichen Buchungen pro täglich aktivem Benutzer um fast 32% oder 0,12 USD auf 0,50 USD stiegen.

Wenden wir uns nun einem Überblick über unser digitales Portfolio auf Folie 18 zu. Diese Folie zeigt die zunehmende Vielfalt unseres digitalen Portfolios in Bezug auf Genres, Regionen und Demografien. Zusätzlich zu unseren neuen Spielstarts wurden etablierte und immergrüne Titel mit neuen Inhalten, Live Ops und aktualisiert Funktionen zur Verbesserung des Spielerlebnisses und der Rentabilität.

Ich gehe jetzt zu Folie 19 über, die einen weiteren Überblick über die Qualität des digitalen Portfolios bietet. Die Diagramme auf der linken Seite zeigen eine kontinuierliche Entwicklung in der Mischung zwischen Social Casino, Social Casual und Strategie, RPG und Action-Spielen in Bezug auf den Gesamtbuchungsbeitrag im Vergleich zum Berichtszeitraum mit dem PCP. Der wesentlich höhere Beitrag von Strategie-, RPG- und Action-Spielen sowie der anhaltende Beitrag von Social Casino sind offensichtlich. Dies ist positiv für Aristocrat, da das Engagement und die Klebrigkeit der Spieler in diesen Genres im Vergleich zu Social Casual höher sind. Gleichzeitig zeigen die Diagramme auf der rechten Seite die Mischung der Gewinne, die in jedem Zeitraum zu Buchungen von mehr als 25 Mio. USD beigetragen haben. Das weitere Wachstum der Portfoliodiversität ist offensichtlich, ebenso wie unsere Fähigkeit, neue Spiele zusammen mit etablierten immergrünen Titeln zu starten und auszubauen.

Wenden wir uns nun Folie 20 und einer Zusammenfassung der digitalen Leistung zu. Die Leistung des digitalen Segments hat sich in den sechs Monaten bis zum 31. März 2020 weiter verbessert. Wie bereits erwähnt, konnten Buchungen, Umsatz und Gewinn zweistellig gesteigert werden. Das Digitalgeschäft von Aristocrat hat bewiesen, dass es mit RAID Weltklasse-Titel erstellen und skalieren kann, die im Berichtszeitraum eine beeindruckende Leistung liefern. Die wichtigsten Social Casino-Apps, Lightning Link und Cashman Casino, sind ebenfalls auf neue Funktionen in Live Ops zurückzuführen, die unsere Fähigkeit zur Stärkung der digitalen Kernkompetenzen widerspiegeln.

Die UA-Ausgaben stiegen im Berichtszeitraum um 32% auf etwas mehr als 200 Mio. USD, was 29% des Umsatzes entspricht, wie ich bereits erwähnt habe. Dies steht im Einklang mit unseren Prioritäten bei der Kapitalallokation und der Verpflichtung, gemäß unseren strengen Kriterien in Spiele und Portfoliowachstum zu investieren. I mentioned that we now have a global digital leadership group in place, analogous to our global leadership structure in Land-based, headed by our Digital CEO, Mike Lang. The creation of this team is a further step forward in the maturing of our digital organization from an adjunct to our predominantly Land-based business to a core operational engine of the group. The leadership team is highly focused on positioning Aristocrat’s digital operations to maximize its performance and sustain above-industry growth over the long term. The team includes the operational leaders of digital businesses and is focused on attracting and unleashing the best talent in the industry; embedding an entrepreneurial culture with decision-making, rigor and accountability; addressing strategic and operational betterments to growth and performance. The creation of this team is an important threshold and signals our intent to be a global leader in digital social games. We are leveraging our core strength in gaming content and technology, along with increasing our digital capability and skill sets and growing in scale.

Finally, I would comment on the performance we’ve seen in the Digital business post period end. There was an uplift in bookings of around 20% in April compared to March, which we attribute partly to the impact of widespread stay-at-home orders and an increase in player engagement. It’s too early to know whether this uplift is likely to be sustained.

In summary, we are continuing to make significant progress in building out a diversified digital games portfolio oriented towards priority genres and investing in long-term success.

Before moving to taking your questions, I’d like to recap the shape of our results for the half year to 31 March 2020 on Slide 22. Aristocrat delivered the results for the half that demonstrates our strength and the relevance of our strategy despite unprecedented challenges. And our track record of building our balance sheet and preserving strong financial metrics positions us extremely well. In addition, our focus on driving competitiveness through outstanding products and our success in diversifying revenue stream, including into Digital, are also evident in this result. We won’t be making any outlook comments in terms of key markets or performance expectations for the 2020 fiscal full year given the acute uncertainty of the present environment. However, I can reiterate how Aristocrat will approach the challenges ahead in the coming months. We will continue to focus on what we can control and take all the steps we can to keep our people safe and highly engaged. We will maintain our strong financial fundamentals and continue to invest in outstanding product portfolios and user acquisition to target share regardless of market conditions and positions us for long-term growth.

In Land-based, we’ll execute our ambitious recovery plans to partner and grow with our customers as conditions improve. And in Digital, we’ll continue to accelerate execution of our portfolio-based growth strategy and focus on maximizing opportunities. We will continue to mature our digital organization as a core operational engine of the group.

I’m now pleased to open the lines to Q&A.

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Questions and Answers

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Operator [1]

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(Operator Instructions) Your first question comes from Anthony Longo with CLSA.

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Anthony Longo, CLSA Limited, Research Division – Research Analyst [2]

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I hope you’re both staying well and healthy. Quick question for me. So looking at — you made a comment earlier that, I guess, the composition and the way the second half will look could be quite different to what we’re used to. You also have given the clarity of some of those regions and potentially the time frame at which they’re likely to open up. So I guess what I’m trying to get my head around is what — how should gaming operations look and then how should the Americas look in that second half, both in terms of what you may be offering, in terms of fee waivers or concessions and then potentially the magnum of what that might look like?

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Trevor J. Croker, Aristocrat Leisure Limited – CEO, MD & Director [3]

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Ja. Thanks, Anthony, and thanks for your well wishes. Hope the same for you and your family. I’ll make a couple of comments, and then I’ll ask Mitchell Bowen to talk a little bit more about the detail in North America. I think the first thing is that there’s still acute uncertainty out there. There’s less than 100 casinos in North America that have opened. We still don’t see the full range of dates of when they’re going to open. And we’re also experiencing or seeing experience with social distancing, reduction in numbers, extra sanitary and cleaning requirements. So there’s a lot of pieces going on out there at the moment from an overall casino opening point of view. So the way we see the market at the moment is there’s just too much uncertainty. We continue to see — believe that we’ve positioned ourselves well. We’ve positioned ourselves well to come out of this and on the basis that we are focusing on what we can control. And we spoke about it earlier, that we’ve kept our D&D teams on this. They’ll still be making games. We’ve been focusing on bringing back our furloughed employees as consumer demand recovers. And we’ve already started to do that, and our manufacturing plants are back and operating again. So I’ll just pass to Mitchell because he’s closer to the customer comments around that.

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Mitchell Bowen, Aristocrat Leisure Limited – CEO of Global Land Based & Chief Transformation Officer [4]

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Thanks, Trevor. Yes, look, I don’t really have much more details other than, as Trevor talked about, our service technicians are coming back from furlough, and they are helping operators move those machines around and position them for appropriate social-distancing measures. We’re having — we’ve got a customer engagement program that we’ve been working through for the last 6 weeks where we’re targeting our segmentation customers approach, where we’re targeting our key corporate accounts, our key travel accounts and making sure that they have what they need to be successful upon our reopening. And then depending on the capacity that they do reopen at, whether it’s a 25% or 50% capacity, we’re making sure that they’ve got whatever they need for our machines and be ready to be turned on. So that is the process to make sure that we’ve got enough inventory. We’ve got — listening to our customers and listening to what they need from us and then ensuring that our operational support, whether it’s manufacturing or a service technician, is there to clean and turn machines on, ready for patients to enjoy.

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Anthony Longo, CLSA Limited, Research Division – Research Analyst [5]

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Okay. Großartig. So I guess from where you guys sit, is your expectation that the Americas will actually turn to profit in the second half? Or is it likely to run negative?

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Trevor J. Croker, Aristocrat Leisure Limited – CEO, MD & Director [6]

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It’s just still too early, Anthony, to be honest with you. Like I said, we’ve got — a majority of their properties haven’t opened. So it’s hard to predict when they’re going to open. It’s hard to predict what their fees are going to be on the basis they were opening because consumer restrictions, confidence, et cetera. So it’s too early for us to give any guidance on that at the moment and whilst we wait to see as the various markets open and as the properties open.

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Anthony Longo, CLSA Limited, Research Division – Research Analyst [7]

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That’s great. And one other question for me. I’m just trying to get a sense as to, I guess, looking at the extent of damage that has been inflicted on the industry. So casino balance sheets are obviously stretched and higher fixed cost basis and the like. Do you foresee potentially an opportunity for Aristocrat over the longer term as maybe in the U.S. and in other regions, Gaming Operations gains further importance and obviously a high return on capital from your perspective?

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Trevor J. Croker, Aristocrat Leisure Limited – CEO, MD & Director [8]

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Ja. Look, the customers are — the industry is feeling the pain of this across the board, and customers are taking their choices around what they want to do and how they want to manage their capital budgets and manage their overall flows of business. We expect to see a constriction on that basis, particularly in the for-sale market in the second half, particularly in the short term, on the basis that they will be looking at the incremental costs of operating such as security, sanitization, et cetera, et cetera required. I think what it will provide over time is, as I said, we are positioning ourselves to come out of this fast, and that’s around continuing to make games, continuing to invest in D&D so that when the customers are ready to buy and to play, we will have content and hardware on the floor and ready to go. So I think it’s — the key piece from my perspective here is we are only literally a couple of weeks to seeing the first properties opening, and there is a lot of different ways people are doing it. And therefore, we want to make sure that we keep our portfolio up. Remember, we came into this scenario with a very strong portfolio that was performing, and we’re going to keep that portfolio buildup and be able to move out of it. When the operator wants to invest, we’ll be ready to be a part of it.

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Anthony Longo, CLSA Limited, Research Division – Research Analyst [9]

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That’s great. And sorry, one last one for me before I let others have a crack. In terms of Digital, so I just noticed that slide where you look at the average bookings and the composition of that. It seems as though only RAID and Lightning Link and Cashman were the only titles that seem to be either rough year-on-year in terms of bookings, either quarter-on-quarter or year-on-year. So I just wanted to get more of a sense as to how you’re thinking about the DAU base and then monetization, which looked like it was obviously strong on a bookings per daily active user basis as well.

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Trevor J. Croker, Aristocrat Leisure Limited – CEO, MD & Director [10]

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Ja. I think we’ve been talking now for a couple of calls about the fact that we’re not seeing DAU extension, and that’s — we continue to believe that’s going to be the case. It’s too early to know whether there’s anything as a consequence to stay at home involved on that basis. Monetization has been good, and I think the team has done some good job. When we talked about the way that we needed to address product matters with features and Live Ops, et cetera, I think RAID has proven that we can scale again. And that’s been a game that — even last time we spoke to you, we were thinking that it was going to be closer to a profit as opposed to the investable brand. It continues to be investable against our internal ROI and ROAS metrics. And so I think where you’re seeing this at the moment is we’re continuing to build this portfolio of games, and we’re seeing strength in new games coming through. So if you think of the 3 buckets being evergreen games, which continue to be the underpinning of our portfolio, you then also got the new games that are coming through like RAID, which is still continuing to start. And then you’ve got launch of new titles like EverMerge and Undersea Solitaire.

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Operator [11]

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Your next question comes from Matt Ryan with UBS.

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Matthew H. Ryan, UBS Investment Bank, Research Division – Executive Director and Research Analyst [12]

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Just a question on outright sales. Can you give us a sense of when the customers stopped buying during the period? And also, any color on whether you thought you were up or down year-on-year prior to the virus?

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Trevor J. Croker, Aristocrat Leisure Limited – CEO, MD & Director [13]

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Ja. Thanks, Matt. Appreciate the question. So we were comfortable with where we were heading when we were coming into the shutdown period. We had a — we were confident around the pipeline that was going to continue to support our internal expectations. That dried up very quickly, once — in some cases, once some markets started to feel that there was going to be a slight downturn and they’re starting to see visitation numbers soften. But as soon as closures happened, obviously, that stopped basically straight away. So I think from that perspective, we feel that we will have the pipeline to do what we want to do and continue to deliver on our expectations. And I’ll just get Julie to talk about the way she saw the market or the way we saw the market in that piece.

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Julie Cameron-Doe, Aristocrat Leisure Limited – CFO [14]

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Yes, absolutely. Thanks, Trevor. Yes, coming into the situation, we were on track for the period to line up with our plan, which we put to grow. We have commented during our presentation, I think, in our materials on the comparison of the adjacencies year-over-year. So I think we’ve kind of got to step back and look at the impact Washington had on the prior year because we had all of that pent-up demand coming through from the initial entry into Washington. So we didn’t replicate that in the year. Similar situation really with VLT products where we had a couple of deals that closed in the prior period and we had a lot less going on in that adjacency in the period. So I think there’s an element of going into this knowing that we had some tailwinds from — some headwinds, sorry, from a difficult comp perspective on the adjacencies. But overall, given the strength of the portfolio and the pipeline we could see, we were still anticipating to close with growth for the period.

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Matthew H. Ryan, UBS Investment Bank, Research Division – Executive Director and Research Analyst [15]

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Okay. That’s helpful. And just to be clear, so did you start receiving commentary from customers that they wanted to stop receiving boxes prior to when they’re actually closing their doors? Because my understanding is most properties were closing sort of mid-March. Were they — did they stop taking deliveries before that in anticipation of those closures?

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Trevor J. Croker, Aristocrat Leisure Limited – CEO, MD & Director [16]

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Well, I don’t think they were taking — I think what I was saying is, I mean, this quarter has traditionally been pretty well back weighted, and it’s pretty common that this quarter tends to be a reasonably well back-weighted quarter. We were comfortable with both our ability to make and deliver the portfolio and pipeline that we wanted. What started to come in was people just looking to see what was happening. So remember, this is emerging on the East Coast part more than the West Coast. And people were starting to talk about, what does this mean, and there was some concerns around should we just put this on hold and see what happens from that perspective. But we didn’t see any wholesale stop. We saw people stay to ask questions. We didn’t see a wholesale stop until shutdowns really happened.

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Matthew H. Ryan, UBS Investment Bank, Research Division – Executive Director and Research Analyst [17]

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Okay. That’s helpful. And then just looking at participation. I know it’s very early days, but what are you hearing on customers that are looking to return participation boxes as a means of reducing operating costs?

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Trevor J. Croker, Aristocrat Leisure Limited – CEO, MD & Director [18]

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Ja. Thanks, Matt. I’ll pass that one to Mitchell who’s closer to some of the dialogue going on with customers. I don’t think we’re having a lot of that feedback to date that I’m hearing because people are still focused on opening at the moment and making sure that they’re compliant with opening and hygiene standards and local government regulations, but I’ll ask Mitchell just to provide any extra color.

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Mitchell Bowen, Aristocrat Leisure Limited – CEO of Global Land Based & Chief Transformation Officer [19]

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Ja. No, Matt, we’re being as flexible as we can on the commercial arrangements with our customers, understanding that it’s looking like a bit of a slow climb back. The properties that have opened at the moment with appropriate distancing and whatnot, we are encouraged by some of the performance that’s coming through, albeit a very, very small pocket. But our commercial job is to make sure that we have as many machines on and operating as possible to support our customers on that recovery. So we’re not seeing any of that dialogue happening at the moment, but we are being quite flexible in our agreements.

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Operator [20]

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Your next question comes from Bryan Raymond with Citi.

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Bryan Raymond, Citigroup Inc, Research Division – VP & Analyst [21]

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First one is just on Digital, actually. I’m just trying to get that bit of a picture of how April is shaping up. You mentioned you’ve seen 20% growth. I’ve noticed that’s in line with what you delivered in the first half, largely. I’m just interested if the composition of that growth will be different, if you’ve seen Social Casino ramp-up as the Land-based closures occurred and also what you’ve seen around RAID, whether that UA spend is continuing at the same pace and, therefore, bookings continue at the same pace. So if you could just give us more color on that 20% in April, that would be great.

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Trevor J. Croker, Aristocrat Leisure Limited – CEO, MD & Director [22]

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Ja. Sicher. Thank you for that. So that 20% was up April over March. So that was a month-on-month increase that we talked, the 20%. So that was enough month-on-month. If you look at what’s happened, across the board, all of the segments that we talked to being Social Casino, Social Casual and Strategy, RPG and Action have gone up. Some of them have gone up at slower rates. So Strategy, RPG hasn’t gone up as much, but it’s a much tighter and stickier player. So we’ve seen, generally, an increase across the board with people on stay-at-home and looking to consume entertainment whilst they’re away, away from work, I should say. So it hasn’t really been anything from a breakout point of view. It has raised on both. I think the games are the new and performing. So things like RAID, Lightning Cash and Lightning Link have seen that momentum with them more because they are quite positive and performing at the moment. If I then talk about how’s RAID going, RAID is continuing to be able to scale. We have been — through this period, certainly in the early parts of the stay-at-home, we saw quite positive CPI opportunities for certain geographies, and RAID was one of those. So we’ve continued to invest within the parameters that we use for our return on our OS to RAID. And we continue to do that, and we’re able to get good traffic from that perspective. And then we’ve seen just general monetization improvement across the board.

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Bryan Raymond, Citigroup Inc, Research Division – VP & Analyst [23]

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Okay. Did RAID make an EBIT or EBITDA contribution in the first half?

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Trevor J. Croker, Aristocrat Leisure Limited – CEO, MD & Director [24]

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It’s — we’re expecting to do that in — I think when we spoke to you at the full year, we thought that we were sort of at that post-scaling stage from RAID’s point of view. We are still actually able to invest effectively for RAID. So we haven’t got there yet, but we expect that we’re getting closer to that now on the basis that, like I said, we’ll continue to scale. But there is only so many players in the shore now.

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Bryan Raymond, Citigroup Inc, Research Division – VP & Analyst [25]

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Right. And then just my final question is on the cost saves of $100 million in the second half. I guess a couple of components to it. But just confirming there was no real material cost savings in the first half, that you saw, obviously, all this happened pretty quickly in February and March. But just want to check that. And then just whether you’re still on track for $100 million, but I think you guys mentioned earlier, you’re bringing some of your technicians back a bit earlier than you thought. What is the potential for that $100 million to be realized in the second half?

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Trevor J. Croker, Aristocrat Leisure Limited – CEO, MD & Director [26]

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Ja. I’ll pass to Julie to talk you through the detail behind that, Bryan. But the overall comment is that we had fixed costs that — which really were 2 weeks ago in the half, we weren’t really able to do much except for looking at contractors and consultants, which didn’t make any material numbers. So I’ll pass you to Julie who’ll talk you through some of that detail.

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Julie Cameron-Doe, Aristocrat Leisure Limited – CFO [27]

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Thanks, Trevor. Yes, so in March, of course, we immediately moved to eliminate discretionary spend. And obviously, it was quite easy to eliminate travel, for example. But from a contractor and consulting perspective, we were putting people on notice so that we could produce all of that. The workforce changes we made, which we announced in April, came into effect on the 1st of May. And as we’ve calculated the cost savings for the remainder of the year being $100 million, that does take into account the expectation of how long some of those furloughs are going to take — are going to be in effect. So we’re not assuming that everybody is going to be out for the whole of the period in those cost savings. So even though you’re hearing about us using the word un-furloughing now, we have already anticipated that in the cost savings. So we still feel confident that we’ll achieve the $100 million in the second half.

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Operator [28]

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Your next question comes from Sacha Krien with Evans & Partners.

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Sacha Krien, Evans & Partners Pty. Ltd., Research Division – Executive Director of Gaming & Leisure [29]

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Hope you guys are well. Just a couple of questions. First of all, I just wanted to start on your expenses, a few different items, just in terms of — it looks like your employee benefits expense in the period was up about 7%, which implies that the other OpEx was up very strongly. I’m just — can you just dig a little bit more into some of those? Maybe you could describe them as one-off type expenses that we saw in the period, so the bad debt provision and the increase in the legal costs that came through.

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Trevor J. Croker, Aristocrat Leisure Limited – CEO, MD & Director [30]

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Ja. Thanks, Sacha. And yes, we’re well in Las Vegas. Thank you for your thoughts, and I’ll pass you over to Julie. She’ll take you through that detail.

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Julie Cameron-Doe, Aristocrat Leisure Limited – CFO [31]

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Sacha, thanks for the question. In terms of — I know if you look at the revenue growth compared to the EBITDA decline in the period, I suppose you know the question of what happens when the cost base comes in. So I’ll maybe start by addressing it broadly and then narrowing a little bit. Obviously, within that, there’s a mix shift because digital has grown significantly in the period and is a bigger share of the overall business, and that does have a lower margin. And in the period, we chose to invest heavily into UA. So we spent — we went outside of our original guidance of 25% to 28% of revenue being spent on UA and took it up to 29% because we have such great opportunities to invest behind the performing games that we had, in particular, RAID. So the User Acquisition was certainly a driver of that. Within the land-based business, you’re correct. We took into account the provisions required in respect of bad debt as we looked to the receivable balances at the period end, and then we applied the formula we have to apply in terms of recovery. We did take additional provisioning in the in that area. We refer as well to some one-off legal costs that we incurred in corporate in respect of a settlement that we made. So that was another of those one-off costs there.

D&D was also increased in the period as well, which is just in line with our growth strategy to invest behind D&D, which, obviously, we apply very strict criteria to what we invest in D&D. So I think you’ll find that when you look at the costs year-over-year, the biggest chunk of the increase was really behind User Acquisition and D&D, which are the 2 kind of investment areas that we really prioritize in the P&L. And then the rest of it was really some one-off costs that we incurred as a result of COVID-19 and also this one-off legal settlement.

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Sacha Krien, Evans & Partners Pty. Ltd., Research Division – Executive Director of Gaming & Leisure [32]

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Is it fair to say that those sort of one-offs, I mean they’re not going to be there in the second half, what the bad debt provision may be, but the legal cost settlement might be?

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Julie Cameron-Doe, Aristocrat Leisure Limited – CFO [33]

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We always have legal issues going on, so I wouldn’t say that — we don’t have anything to refer to at the moment on that. But it was a one-off that came in, in the first half. So that one is closed and wouldn’t recur. And then obviously, with bad debt provisioning, that’s the position we have to take at the end of each period to assess the recoverability. So then we’d be — we have to look at all the different areas of the balance sheet at each period end.

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Sacha Krien, Evans & Partners Pty. Ltd., Research Division – Executive Director of Gaming & Leisure [34]

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Okay. And then my second question or second group of questions maybe. Just wanted to follow-up on some of the comments around the participation footprint. Wondering if, Mitch, maybe you could provide some color on whether there’s any consistent themes you’re seeing on how casinos are opening up in terms of their floor configuration. And are you seeing a particular — a skew towards their higher-performing machines? Or are they trying to skew towards the casino-only machines to reduce some of those fees? And then maybe as part of your answer, is it correct to say that on a net basis, so including the fees, your gaming ops product would still outperform the casino-only product on these casino floors?

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Mitchell Bowen, Aristocrat Leisure Limited – CEO of Global Land Based & Chief Transformation Officer [35]

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Ja. Thanks, Sacha. So probably a couple of pieces to that. So when you think about the first part of your question on, are there any similarities and trends, look, I think the obvious piece is they’re all following social-distancing measures. They’re all putting in hand sanitizers, cleanliness measures, all staff wearing masks and those sorts of things. That would be the first point. The second point then, it varies by the size of the venue. So larger properties, integrated resorts that have the ability, they are prioritizing EGM placements or machine placements over live tables or bingo halls or those event centers, and they are repurposing some of those areas to spread and move their machines around to accommodate those social-distancing measures. So that is a common theme across the large venues. At which point then, if you go the opposite end of the spectrum and you have a route market or a smaller venue, they’re getting a bit more creative in terms of maybe some health shields or turning every second machine off or those sort of things. So it does vary based on the size and location of it. And so from a Gaming Operations, to your second part of the question, our Gaming Operations footprint generally is a premium performer, yes, and that is what we are continuing to see in the early stages of reopenings at the moment.

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Operator [36]

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Your next question comes from David Fabris with Macquarie.

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David Fabris, Macquarie Research – Research Analyst [37]

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On Digital, I’m hoping to better understand the opportunities there. You put these 2 recent global launches, but how many other games are you planning on releasing across Social Casinos and Social Casual in the near term? And how do you accelerate these launches?

And just a follow-up on that. You’ve got a chart on Page 27 of the slide deck. Could you sort of talk about which Digital game genres you see the most attractive or the best opportunities in as well?

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Trevor J. Croker, Aristocrat Leisure Limited – CEO, MD & Director [38]

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Sicher. Okay. There’s a few in there. So I’ll start, and Julie, you might just help out the way through. So from an opportunities point of view, we have a pipeline of games. So this is about a portfolio. You’ve got — as we’ve spoken to, you’ve got the evergreen games. We talk about those games that were recently launched. And then we’ve got games for soft launch. And we’ve now got 2 more games that are planned in soft launch plus a portfolio of other games, which are not as progressed as that. So we have a portfolio of about 10 games that we have available that are in the portfolio as a whole. But as you know, when you get to soft launch, it doesn’t necessarily mean you go all the way through to worldwide launch. In some cases, games get pulled or get reprioritized, and that’s really what Mike and the digital team continue to look at, at that pipeline is make sure the pipeline is broad enough and detailed.

The reference that we use on Page 27 is really around the segments, the 6 segments that we think fit our portfolio, capabilities and skills. There are more than these — if you go and add up the whole mobile games market, there are many other genres that we could be participating in. But when you think about the acquisitions of Plarium and Big Fish, they really helped us broaden out sort of Social Casino with the Casual Strategy, RPG and Action and then ultimately, simulation, which is really where you see the Merge — option of the Merge game and EverMerge being a blend between Merge and sim-type product.

So we see these 6 segments as markets where we have opportunity to penetrate and have some existing positions in some of them, but also see opportunity to go deeper into others and build off whether it’s the capability that we have, and that capability comes largely with the RPG strategy and action capability from Plarium, for instance, where they had Lightning as a strong brand, and now they’ve gone to RAID, and have another couple of products that are thinking about in that sort of genre. Each one of these genres is slightly different, both from monetization, from a DAU size, also from a CPI — CPI basis as well. So the return profiles are slightly different. But I think what we’re saying on Slide 27 is that there’s adequate opportunity in the segments and the subsegments to actually create games, and that’s where Mike and the leadership team are focusing on the games to launch into various genres and, like I said, built off of DNA, which is exactly the same way we think about our Land-based businesses. We look at adjacency. We look at what’s the capability and skill sets required to compete, what do we need to be successful and then how do we enter it. And that’s really the same thing that we’ve been using for digital.

I’ll just hand over to Julie now to go a bit further.

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Julie Cameron-Doe, Aristocrat Leisure Limited – CFO [39]

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Thanks, Trevor. I don’t have a lot to add to what Trevor said and certainly nothing financial. But I would just say, you’re absolutely right. With digital being such a critical part of our business right now, given that Land-based is in the situation it’s in, we are very, very focused on digital and focused on how we can grow this business more. We’re not going to start rushing games out that aren’t ready, though. We want to take the right time to build the games properly to make sure that they’ve got all the features that they require to truly scale and then be investable. So we’re not going to be rushing games out, but we are very serious about growing digital, and we’re focused on how we can build the pipeline so that we can continue. We can see already — with the games that we have in development, we can see what the pipeline gets us to, but we’re focusing on beyond that and how do we add more capacity so that we can build more for the future there.

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David Fabris, Macquarie Research – Research Analyst [40]

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Großartig. And just one more follow-up question. Just looking at, I guess, Design talent across the industry. Have you seen an appetite for more people to shift around, given COVID-19? Some of your Land-based peers are running pretty heavy cost-out programs. So on the flip side, are you seeing your peers come and try and sort of poach some of your main key talent? And how are you defending that?

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Trevor J. Croker, Aristocrat Leisure Limited – CEO, MD & Director [41]

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Ja. So I’ve spoken to all about key creative and key talent over the last few weeks or months, actually, because it’s been going on for months. It feels like weeks, every day is a Monday. So I’ve spoken to them. What I would say is that we did not furlough or stand down any of our D&D talent. So our D&D teams have remained on, and their productivity has remained roughly where it was when they were working from the office. So we’ve continued to invest. They’ve been able to take this time to reprioritize games and game segments and innovation to meet the customers’ needs as they feel we’re going to come out of this and the sort of product that’s required. So from that perspective, our game teams are energized because we are the only company that’s kept game teams on, we are the only company that hasn’t cut our studios and we’re continuing to make a commitment as our #1 capital priority to invest in the D&D to drive our annual growth. And so from that perspective, we’re having engagement conversation with our teams. I think coming back to this opportunity for creative is they want the canvas that they’ve got the opportunity to make great games on. And when you’re investing in technology, when you’re investing in hardware and you’re providing the opportunity to make great games, that makes a big difference. And with Mitchell’s opportunity that he has through commercialization, he’s then being able to commercialize those products, makes this an attractive place for people to stay and to make games for in the longer term.

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Operator [42]

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Your next question comes from Rohan Sundram with MST Marquee.

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Rohan Sundram, MST Marquee – Gaming and Contractors Analyst [43]

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Glad to hear you’re all well. Just a question around M&A for me. I take your comments on board, Trevor. Were you — are you able to comment — what are you able to say around how COVID-19 might have impacted the pipeline and the opportunities you might have been seeing? And yes, maybe just some commentary around that would be helpful.

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Trevor J. Croker, Aristocrat Leisure Limited – CEO, MD & Director [44]

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Ja. Thanks, Rohan. Appreciate your thoughts. All the best to you and your family as well. Look, we’ve got — you can see where we sit as an organization that we have the long-term — we have the capacity. It’s long-term debt, it’s flexible and it positions us well to thrive as we come out of this period. We still face our principles on best content, distribution and customer value. And then we’re not speculating any M&A right now. But what I would say is that we have got a good track record when you look at VGT, Product Madness, Plarium or Big Fish. It’s what they’ve done to actually continue to provide growth for us longer term. Right now, our focus is actually weathering the storm. We are continuing to monitor the market, and we continue to monitor the market on the basis of what are the portfolio options that we want to solve for and then what are the options that we would look at. And so we’re continuing to monitor that. I think it’s going to be interesting to see what valuations we do off the back of this. And so we have the capacity, but we also have the flexibility to continue to drive investments through the Land-based business and the Digital business, whether that’s through acquisitions of talent or acquisitions of capability required in those businesses as well.

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Rohan Sundram, MST Marquee – Gaming and Contractors Analyst [45]

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Okay. Actually, just one more question, maybe for Mitchell or Trevor. In terms of the flexibility you’ve been providing to the customers, have you been pleased with how they’ve been responding? Have they responded as you would have hoped? Or is it too early to say thus far?

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Trevor J. Croker, Aristocrat Leisure Limited – CEO, MD & Director [46]

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Ja. Thanks, Rohan. I think Mitchell is best to talk to this. He’s closer to this business.

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Mitchell Bowen, Aristocrat Leisure Limited – CEO of Global Land Based & Chief Transformation Officer [47]

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Ja. Absolutely. Thanks, Rohan. Probably, yes, they’ve responded very, very well. Obviously, they’ve got — everybody has got their own challenges they’re solving for. And operation — operators have their own people, their own processes, their own things that they’re going to deal with. So they’ve just appreciated the fact that we were there as a solution-focused provider and anything that we can help to do for them to get them back on an opening and take a problem away and solve for. They’ve been very supportive, and we’ve kind of been really proactive on that in the last 6 weeks or so. So it has been received well, and it’s a good trend and lead indicator for us.

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Operator [48]

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Your next question comes from Desmond Tsao with Goldman Sachs.

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Desmond Tsao, Goldman Sachs Group Inc., Research Division – Associate [49]

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I just got a couple of really quick ones. Just wondering how we should think about U.S. margin to a more normalized environment once we get through the restructure that you’re sort of referring to. And also, just wondering whether there was a provisioning impact for the U.S. business in the half.

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Trevor J. Croker, Aristocrat Leisure Limited – CEO, MD & Director [50]

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Thanks, Desmond. I appreciate the questions. I’ll hand them over to Julie who can walk you through.

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Julie Cameron-Doe, Aristocrat Leisure Limited – CFO [51]

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Ja. Desmond, thanks for your questions. So in terms of the U.S. and margins and provisions and all that, when we look at the margins year-over-year, I think the key things we called out in terms of the difference year-over-year and the decline in the margin was really as a result of the mix of the product, reduction in operating leverage because you’ve got high-margin gaming ops business where you effectively had no revenue for a couple of weeks in the period, but you didn’t avoid any of those costs. So really, that was the pain points there as well as that we also called out the provisioning for bad debt had an impact on the U.S. margin as well. So we certainly felt the pain in the margins in the half.

In terms of go-forward, look, it’s very hard to make a call on this, but what I would say is our anticipation coming out of this is that with operators being constrained in terms of having to reopen and having suffered what they would suffer through the closure, their CapEx is going to be constrained. They’re going to be highly focused on costs. They’re going to be highly focused on how they allocate capital and all of those things. It’s going to mean a much more competitive environment than we’ve seen before. So we have to anticipate that, that’s going to have an impact on us from a margin perspective going forward. But I’m not in a position to call what would that mean to us right now.

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Desmond Tsao, Goldman Sachs Group Inc., Research Division – Associate [52]

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Okay. That’s great. And then maybe just a question around dividend. Obviously, interim dividend has been suspended. But just keen to hear your thoughts around what we should expect for the final dividend. Like what would you guys need to see before the Board or management considers reinstating that?

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Julie Cameron-Doe, Aristocrat Leisure Limited – CFO [53]

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Ja. Thanks. I’ll take that one as well. So we — in our announcement that we went out with at the end of April, we talked about the — we’ve suspended our progressive dividend policy because, I guess, historically, you would have seen that we’ve grown our dividend over time. And given all of the uncertainty, we — the Board decided that it made sense to suspend that for the time being. So it’s the interim dividend, we put that out that we wouldn’t be declaring one. But at this point in time, the progressive dividend policy remains suspended. So I think we’ll — the Board will assess that over the second half and as we close out the half and would look to where we’re at, at that point. But it’s not something we’d be able to make a call on. At this point in time, it’s something that would be under review of the Board.

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Operator [54]

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Your next question comes from Larry Gandler with Crédit Suisse.

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Larry Gandler, Cr̩dit Suisse AG, Research Division РDirector [55]

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I hope everybody’s well. A few questions. Trevor or Mitch, I just wanted to come back to Gaming Operations, again, if I can, but maybe perhaps start with the service element of it. Mitch, you mentioned you’re proactive. It seems to me that perhaps that could be a critical success factor in retaining and maybe even growing market share. What exactly — in what way exactly are you proactive? Were not some sales staff stood down or furloughed prior — with COVID?

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Mitchell Bowen, Aristocrat Leisure Limited – CEO of Global Land Based & Chief Transformation Officer [56]

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Ja. Thanks, Larry. Look, I think, let’s hope it’s a critical success factor, right? That’s kind of the plan of the commercialization approach. But I think what the service technicians do is exactly that. They service, they clean, they relocate, they monitor our AGMs on the floor. So they are a different mindset to what a salesperson is, albeit both the salesperson and the service personnel are around managing the account. What the service technicians allow us to do is to get boots on the ground early and to understand exactly what other problems are being experienced on the floor that allow us a proactive approach to go to the respective stakeholder within that venue. So again, the — it’s coming — as Trevor talked about, it’s a state-by-state and even a city-by-city approach, right? So whether it’s Arizona or Idaho or Oklahoma, as we start to get visibility of those properties coming on, we then start to mobilize our service technicians to ensure that the property can open with a nice floor for patrons to experience. So it’s a conscious choice, leading with our service technicians because we do have over 1,000 open globally, and they are — they do offer us some pretty good insight on the ground.

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Larry Gandler, Cr̩dit Suisse AG, Research Division РDirector [57]

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So would you say that you guys have a greater presence than the competition, given the stand-downs in the industry in this regard?

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Mitchell Bowen, Aristocrat Leisure Limited – CEO of Global Land Based & Chief Transformation Officer [58]

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Ja. Look, I think what we’re hearing — again, I don’t want to comment on what the competition is doing. But we — as Trevor talked about, our D&D have remained working through. And obviously, our touch points on the customer have been received well from each venue. And so we are hearing ground sales around some other competitors starting to bring back some staff that we’ve obviously been on the ground for a couple of weeks. So it’s just one of those things we monitor on a day-to-day basis.

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Larry Gandler, Cr̩dit Suisse AG, Research Division РDirector [59]

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Okay. Großartig. And when I think about the installed base, obviously, a very large part of it is Lightning Link, Dragon Link and Buffalo, but there’s a spectrum of games. How do you approach the conversation now that you guys want, perhaps, your fair share — revenue share of the games that will be available on the floor, given that perhaps only half of the games will be turned on? How do you have that conversation?

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Mitchell Bowen, Aristocrat Leisure Limited – CEO of Global Land Based & Chief Transformation Officer [60]

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Carefully.

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Trevor J. Croker, Aristocrat Leisure Limited – CEO, MD & Director [61]

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I can give you, I would have it, Larry, but obviously, Mitchell’s better to give it to you because he’s more closer to this.

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Mitchell Bowen, Aristocrat Leisure Limited – CEO of Global Land Based & Chief Transformation Officer [62]

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Ja. No, no. Yes, carefully is the short answer. So again, our approach is 2 ears and 1 mouth, right? So listen to what’s going on, on the venue, listen to their opening plans, listen to how they are going to put in their health measures and their social-distancing measures, listen to what sort of patrons they’re expecting to come back, who they’re targeting with their marketing campaigns and then work with them proactively to figure out what their fleet looks like and ensure that we — and again, having a service track there on the fly ready to go to mobilize and move machines and turn them on when appropriate. So it’s really a conversation about how they want to get under 20% or 25% or 50% or whatever that capacity looks like, have they got other venues and rooms that they want to move their machines to and making sure that we are being as commercially flexible as possible to ensure that we get as many of the floor shares as we can.

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Larry Gandler, Cr̩dit Suisse AG, Research Division РDirector [63]

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And it sounds like your early feedback has been, you’ve been achieving that aim, getting the floor share that you expect or desire.

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Mitchell Bowen, Aristocrat Leisure Limited – CEO of Global Land Based & Chief Transformation Officer [64]

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We’re happy with the early results, yes.

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Larry Gandler, Cr̩dit Suisse AG, Research Division РDirector [65]

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Ja. Okay. Großartig. And Trevor, I just had one question on Digital. So you’ve got Mike Lang from November now running the group. I guess the area of weakness is Social Casual. And I recall, after the acquisition and subsequent change in management in Big Fish, the company need to migrate teams away from legacy projects into more prospective opportunities. What’s the progress there? Has Mike Lang continued that process? Has he altered it? Where are we at with Social Casual and improving Big Fish?

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Trevor J. Croker, Aristocrat Leisure Limited – CEO, MD & Director [66]

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Ja. Thanks, Larry. Yes, Mike joined us in November, and he came from a digital entertainment background. So he’s a very experienced senior executive from the (inaudible) world. He — for the reasons Mike really fits well with the risk strategy has a similar approach in the way that we think about portfolio prioritization, execution and credit development. And really, Mike has embraced that, and he’s built a strong — or is in the throes of completing and building a strong team around him to do that. He’s immersed himself many times in games and game portfolio and has been looking at the right priority based off the skills, the capability and our willingness to invest as well. And so from that perspective, he actually has made some of the tougher decisions on things like Toy Story and [The Curse], but at the same time, has really been driving the focus around new opportunities like EverMerge and also working with the Plarium team about how do we look at what their — able to contribute in other parts of our portfolio is the best way to think about it. So he’s making good traction. He’s building that momentum, and I think he’s building out the right portfolio and the right skill sets to do that.

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Operator [67]

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Your next question comes from Sacha Krien with Evans & Partners.

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Sacha Krien, Evans & Partners Pty. Ltd., Research Division – Executive Director of Gaming & Leisure [68]

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Just had one quick follow-up question. Can you say whether or not you think there was any impact on the participation installed base from COVID-19 in March or the March half?

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Trevor J. Croker, Aristocrat Leisure Limited – CEO, MD & Director [69]

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I don’t think we can say it materially impacted the installed base. But I think we can say there’s a feed today, which we’ve given you the guidance for an unadjusted $46 versus circa $50. But given it happened in the last 2 weeks of the period, I don’t believe it’s a material piece around the installed base change.

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Sacha Krien, Evans & Partners Pty. Ltd., Research Division – Executive Director of Gaming & Leisure [70]

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Ja. And that’s what I would have thought. But I guess when I look at the results of your peers, it does appear that, across the 3 biggest, there was a net decline in the installed base. I guess, this question, just wondering if you’ve got any theory about why that might have been the case.

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Trevor J. Croker, Aristocrat Leisure Limited – CEO, MD & Director [71]

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I don’t have anything off the top of my head, Sacha, to be honest with you. I don’t — I haven’t seen a shift. I would have to go back and look at whether there was actually a shift in some of the customers because we did see some customer movement over the period. But I would have to go back and look at whether there was anything in that space.

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Julie Cameron-Doe, Aristocrat Leisure Limited – CFO [72]

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Ja. And might I add, I mean, you can see that we grew our installed base over the period, so we continue to take share. And I think it was the continuation of that trend where it’s not really a growing market. So any sort of gains that we’re making are coming from the competition.

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Operator [73]

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There are no further questions at this time. I’ll now hand back to Mr. Croker for closing remarks.

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Trevor J. Croker, Aristocrat Leisure Limited – CEO, MD & Director [74]

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Well, thank you, everybody, for your time, and I’ll now call to the (inaudible) call to an end. On behalf of the broader Aristocrat team, we thank you for your interest in the company and wish you all the best and a safe time with you and your families and your teams as well. Thank you very much for your time.

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