Aristocrat Leisure Limited (ALL) Earnings Call Transcript & Summary

Thank you for standing by, and welcome to the Aristocrat half year results briefing. [Operator Instructions] I would now like to hand the conference over to Mr. Trevor Croker, CEO. Please go ahead.

Good morning, and welcome to Aristocrat Leisure Limited's Financial Results Presentation for the 6 months to 31 March 2020. My name is Trevor Croker, Chief Executive Officer and Managing Director of Aristocrat. It's a pleasure for me to be presenting today alongside Julie Cameron-Doe, our Chief Financial Officer. This call is a little different in that Julie and I are participating from our Las Vegas office due to ongoing travel restrictions and observing all social-distancing guidelines. Other team members are on the line in Las Vegas and Sydney. Thank you all for joining us. Before we begin, please note the usual disclaimer statement on Slide 2. Turning now to our agenda on Slide 3. As you're all aware, today's presentation takes place in the context of the COVID-19 crisis, which has had a material effect on our people, customers, communities and all parts of our business over recent months. Until mid-March, when broad-scale operator closures took effect, our Land-based business was on track to deliver profit and revenue growth over the PCP, in line with our internal plan. Clearly, we are in a particularly volatile period right now. However, I would stress that our portfolio-led, customer-focused strategy remains very much in place, and we are more convinced than ever of the benefits of a diversified business and a focus on sustainable, long-term growth. While we can't predict the future, there's no doubt the second half of fiscal 2020 will look materially different, both for the first half and the previous full year results in terms of size and composition of the result, the underlying drivers and market dynamics. I'd therefore like to begin by recapping Aristocrat's short- to medium-term COVID-19 response and recovery efforts, providing more color on our approach and some of the key assumptions that underpin it. We'll then move to a summary of our group results and operational performance for the reporting period before providing a brief summary and opening the line to Q&A. For clarity, all references to prior corresponding period, or PCP, represent the 6 months to 31 March 2019. In addition, all amounts are expressed in Australian dollars unless otherwise specified. The group has confirmed that it remains a going concern, and we have applied a consistent financial treatment to the full year reporting period, including the time during which operators were closed. Turning to Slide 4. Aristocrat expects that COVID-19 will drive a mix of temporary and long-term changes in our land-based and digital markets, reflecting consumer preferences as well as operator choices and commercial dynamics. Since late calendar year 2019, Aristocrat has responded to the unfolding crisis by focusing on the things we can control and remaining as agile as possible. This is a core company entity rooted in the successful turnaround we instigated 10 years ago. Our business is drawing on this capability again in these turbulent times. As was signaled, our response plans have centered around protecting the health and well-being of our employees, customers and suppliers; leveraging our strategic advantages in products, including investment in our core growth engines of D&D and User Acquisition; positioning the Land-based business to be fit to fight as demand returns; and optimizing liquidity. I'll now step through each of these areas individually and address our COVID-19 response on Slide 5. People first. In terms of our people, effectively, our entire organization of over 6,200 individuals globally was supported to shift to a work-from-home arrangement by the beginning of April. We have seen no negative impact on productivity as a result of this change. Pleasingly, there have been only a handful of COVID-19 infections among our people to date. All staff have recovered, and no infections have been reported to have occurred at any Aristocrat work site. With the shift to an effective remote working model, the business put in place enhanced information security and asset-protection measures, along with increased cybersecurity training and communication. In addition, we have substantially boosted overall communications to uphold well-being and morale and maintain alignment through this period. Aristocrat has explicitly taken a people-first approach, for example, in covering health insurance costs for our employees in the U.S. and launching a comprehensive new well-being program for employees. Recent employee pulse surveys have revealed high levels of engagement across the team and understanding of the business' needs to make difficult choices. We are focused on enhancing that engagement as part of ensuring we have the right people, drive and culture to power our recovery. And we are gradually reopening work sites and bringing people back from standdowns on the basis of clear criteria with appropriate health and safety protocols in place. Ensuring our people feel safe and confident and our plans align with local health and customer requirements remains a priority. Through Big Fish, Aristocrat was also one of the founding sponsors to the global #PlayApartTogether campaign endorsed by the WHO. Along with other gaming industry leaders, Big Fish disseminated public health information to its player community, encouraging hygiene and social distancing to slow the spread of the virus. I do want to take a moment to acknowledge and thank our extraordinary team of employees whose resilience, pragmatism and care for each other throughout this period have been nothing short of inspiring. The energy and culture of our team has been particularly striking during this challenging time and places Aristocrat in great stead going forward. Leveraging our strategic advantage in product. Throughout this crisis, we've also been highly focused on leveraging our strategic advantages in product, including D&D and Land-based, and effectively laying investment in Digital. In terms of D&D, our industry-leading creative and technology talent remains hard at work. Unlike many competitors, Aristocrat chose not to furlough any D&D staff among the 1,000 people stood-down at the beginning of this month, nor have we closed any game studios. We are continuing to evolve and build games, and our teams have used this time to reset priorities, consult customers and adapt to our portfolio and product pipeline. Our D&D and commercial team is driving hard to bring forward the products and options that will help our customers recover and best respond to market needs as they evolve. I'll speak more to our commercial focus in Land-based shortly. There is absolutely no stepping back from our conviction that having the best product will continue to be critical differentiator in the Land-based markets going forward. Speaking to a percentage of revenue investment commitment in D&D doesn't make sense in the context of our current circumstances. However, our commitment to leading the industry in product will never waver. We remain unrelenting in our focus on engaging and unleashing the very best product and technology talent to deliver the best-performing portfolio in the market for our customers. In Digital, COVID-19-related stay-at-home mandates have seen many consumers migrate to online sources of entertainment, including digital games. We have moved to allocate additional UA in line with our rigorous investment criteria. The Digital business is also investing strongly in game content and in new game pipelines in order to accelerate our portfolio growth strategy. In short, Aristocrat believes that great product fundamentally drives performance across both our Land and Digital segments. This can be seen by incremental share growth and penetration of adjacent segments, including during periods of increased competition and, in some cases, lower total market growth. This focus on product and improving our own competitiveness has been a consistent plank in our strategy and culture for many years and will continue to be going forward. Moving now to the COVID-19 response within our global Land-based commercial operations. Fit to fight in Land-based. Our commercial teams are liaising continuously with customers across all major markets to stay close to likely reopening schedules, understand customers' needs and partner with them on strategic recovery initiatives. Globally, operators are generally expected to pare back capital spend and reduce short-term costs wherever possible. This suggests a more competitive outlook for our Land-based business in both outright and Gaming Operations. Against this backdrop and under the leadership of global Land-based CEO, Mitchell Bowen, Aristocrat is taking an agile and flexible approach to meeting customer needs and ensuring we make a fast start as and when demand returns. We will build on our outstanding product momentum we had leading to this crisis to partner with customers and maximize share for long-term growth. The COVID-19 crisis has also underlined the benefits of our global Land-based structure under Mitchell with strong coordination, prioritization and implementation of robust commercial governance and recovery plans evident throughout this challenging period. Optimizing liquidity. Finally, Aristocrat has taken a comprehensive approach to optimizing liquidity and protecting our financial fundamentals at this time. The group had $1.8 billion of liquidity available on a pro forma basis as of 31 March 2020. This is comprised of $750 million in cash from operations, a $142 million drawdown of the group's revolving credit facility and an additional $136 million available in headroom following the upsizing of this facility in late April. This month, we also successfully secured an incremental USD 500 million Term Loan B facility. The Director's decision to suspend the FY '20 interim dividend further enhances our liquidity position and balance sheet. In addition, we have eliminated discretionary spend and made workforce changes affecting all nondigital staff that will reduce operating expenses for the second half of fiscal 2020 by $100 million compared to the prior period. Finally, in line with the group structure changes announced in November 2019, the group has recognized a deferred tax asset of approximately $1 billion, which will generate significant cash tax savings over the long term. Our liquidity positions us extremely well to not only survive in the current challenges, but to emerge strongly and compete to grow going forward. I'll now turn to our financial fundamentals and group performance in more detail, beginning with our balance sheet and debt profile on Slide 6. Aristocrat's balance sheet remains strong with a net debt-to-EBITDA ratio of 1.4x as at 31 March 2020. As I've previously addressed, our overall liquidity position is robust, and we're just at ease that our term loan debt facilities are highly competitive and flexible, providing the business with long-term funding certainty. Underlying credit agreements are also covenant-light, and no refinancing is required until the second half of calendar 2024. Both S&P and Moody's have maintained the company's credit ratings at BB+ and Ba1, respectively. I'd now like to provide some context around Aristocrat's capital allocation approach and priorities at this time on Slide 7. Aristocrat allocates capital to support our growth strategy and maximize shareholder returns for the long term. This slide addresses the challenges in our capital allocation priorities and expectations as a result of COVID-19 impacts over time. Both prepandemic and going forward, our first priority will continue to be investing in our organic growth engines of Design & Development and gaming operations in Land-based, together with UA and Digital. There will be no change in our focus here other than our expectation that CapEx driven by Gaming Operations will reduce over the short term, in line with likely operator demand and market conditions. Our next priority has been accretive, nonorganic opportunities that accelerate our strategy, whether that's in terms of skills and capability, intellectual property, portfolio expansion or scale. The benefits of our approach are evident in the increased diversity of our business, most obviously our growth in digital presence. Going forward, we'll look to utilize our balance sheet to explore opportunities in this period according to our rigorous acquisition criteria. Our third priority has historically been to build our cash position and reduce debt to provide future optionality and flexibility. Going forward, we'll be prioritizing liquidity over debt reduction. Finally, in terms of capital return options, the Board has suspended its progressive dividend policy, as previously announced. We believe this approach to capital allocation represents the right balance of rigor, risk and returns at this time and is consistent with shareholder interest. Before moving to a summary of Aristocrat group's performance for the 2020 half year, I'd like to provide some further context with an update on the landscape across key markets at the present time on Slide 8 of the presentation deck. As foreshadowed in our market disclosure in late April, we are seeing venue reopenings taking place in key markets on a phased and jurisdiction-by-jurisdiction basis. Our largest addressable market in North America is comprised of nearly 1,000 casinos, along with other gaming venues. State gaming boards, governments and travel authorities are determining the timing and extent of local reopenings in consultation with operators. A modest number have reopened to date, although many are planning to begin opening through June. Reopened venues will generally operate under strict conditions, including social distancing, occupancy limits, reduced trading hours and sanitary protocols. Travel properties, particularly those in Oklahoma, have been among the first to restart with around half of the properties in the state expecting to be open by the end of May. This is encouraging for Aristocrat given our strong presence in the travel segment. Destination venues that are more reliant on tourism and travel are more likely going to take a longer time to return to full operations. In Australia, the federal government is advising that the nonfood service operations in pubs and clubs will be included in stage 3 reopenings, with the states to determine whether this will include gaming floors as well as the precise timing of reopenings. Based on current advice, phased reopenings will potentially occur around July in major markets and require the observation of distancing measures and patronage limits. No time line has been indicated for casino reopenings in Australia at this stage. While the situation remains highly dynamic, overall, we reiterate the expectation we set out in April for the gradual ramping up of gaming floors over the coming months. Patronage will improve over time, in line with the improvements in consumer confidence and the wind back of social distancing and travel limitations. In the interim, we will see material impacts on our business, for example, with no revenue from global gaming operations through April and minimally expected through May, in line with my earlier comments. Before moving to a summary of results for the half year, I'd like to recap that Aristocrat is responding to the challenges and volatility generated by COVID-19 by focusing on what we can control. We are protecting the health and well-being of our people and ensuring they remain motivated and focused. We are investing in strengthening and adapting our Land-based product portfolio, and we are poised to react quickly to drive share as demand returns. We're investing strongly in Digital, which is playing a key role in generating cash flow as well as driving revenue and profits as part of our diversified business. We're taking significant operational steps to drive savings and optimize cash reserves where prudent and further strengthen our balance sheet. Our effort is certainly not just defensive. We will take full advantage of available market opportunities and are very confident that we will emerge strongly to compete and grow in the years ahead. I'll now invite Julie to address Aristocrat's financial results for the 6 months to 31 March 2020 before I return to operational performance for the half. Julie?

Thanks, Trevor, and good afternoon, everyone. Turning to Slide 10. I'll step through a summary of group results for the period. Normalized profit after tax and before amortization of acquired intangibles, or NPATA, of $368 million represents a drop of almost 13% in reported terms, while revenue increased 7% to just under $2.3 billion. And earnings before interest, tax, depreciation and amortization, EBITDA, declined almost 8% to around $708 million. Digital revenue grew 19% in local currency, reflecting sustained portfolio performance and partly offsetting a 6% drop in Land-based revenues. The last half of March is traditionally a peak sales period as customers wait until the end of the quarter to allocate capital to confirm orders. New shutdowns mandated across global markets through the second half of March effectively halted customers' capital spend and also significantly limited Gaming Operations revenue through the month. These factors are reflected in total revenue growing only 7% in reported terms for the period compared to the PCP. Normalized fully diluted earnings per share before amortization of acquired intangibles of $0.677 represents a 12.8% drop compared to the PCP. Operating cash flow of $620 million was generated in the period, an increase of almost 42%. Net gearing reduced to 1.4x at 31 March, as previously flagged, down from 1.6x at 31 March 2019. I will now step through the composition of Aristocrat's reported normalized NPATA performance, with $368 million reconciled to the PCP on Slide 11. On a combined basis, the Land-based business delivered around $105 million less in profit during the period compared to the 6 months to 31 March 2019. This was primarily driven by global COVID-19 customer venue and industry shutdowns, as previously described. The Digital business delivered incremental profit of $22.3 million due to targeted investment in User Acquisition and player engagement, an ongoing portfolio performance. Corporate costs and interest increased by $5.5 million during the half year compared to the PCP. Higher absolute D&D costs over the 6 months to 31 March 2020 reflected a strategic investment in talent, technology and products directed at a broader range of markets and segments, in line with the group's growth strategy. This incremental investment reduced profit for the period by almost $1 million. A decrease in the group's effective tax rate from 27.5% to 24.2% delivered a $16 million profit benefit and reflects the impact of the changes in group structures announced in November 2019. Finally, foreign exchange movements improved profit by almost $24 million for the 6 months to 31 March 2020 compared to the prior corresponding period. Turning now to cash flow on Slide 12. Operating cash flow for the period increased 41.5% to $620 million compared to the PCP, reflecting strong free cash flow generation across the business. Interest and tax decreased 17.3%, with a reduction in Australia's cash installment rate. Lower tax payments were also made outside Australia as a result of group structure changes previously referenced. Capital expenditure for the 6 months to 31 March 2020 primarily related to investment in hardware to support growth in the Americas Gaming Operations segment. Cash flow is also set out on this slide in the statutory format for transparency. I'll now address our cash burn. As Trevor referenced, our actions in response to COVID-19 impact will deliver $100 million in savings compared to the PCP over the balance of fiscal year '20. On a conservative basis, assuming $0 Land-based revenues, a steady state for Digital and factoring in our incremental funding costs, we estimate that our monthly cash burn would be circa $50 million prior to capital expenditure. Therefore, even assuming no material market improvements, Aristocrat has ample capacity to weather a downturn and continue to invest for long-term growth. That concludes the summary of group performance for the period. I will now pass back to Trevor to comment on operational performance. Trevor?

Thank you, Julie. I'll now turn to a summary of Land-based performance on Slide 14 and remind you that full details are contained in the review of operations document released this morning. As I mentioned in my opening comments, until mid-March, our global Land-based business performance was tracking in line with our expectations for the half year. On a combined basis, the global land business delivered over $1.2 billion in revenue and $560 million in segment profit during the period. While financial results across the land business ultimately fell short of our expectations, underlying operational performance and Aristocrat's competitiveness through the period remain very strong. Once again, results were driven by standout game and cabinet performance across key markets and segments. In our largest market in the U.S., Aristocrat maintained its position as the market's top slot supplier and also achieved a market-leading average fee per day. I'll touch on some of these performance highlights in more detail as I turn to the Americas results on Slide 15. Please note the results on this slide are expressed in U.S. dollars. Americas revenue fell over 10%, and profit was down around 19% to just over $610 million and $303 million, respectively, over the reporting period compared to the PCP. Margins moderated 510 basis points to just under 50%, driven by product mix, an increase in bad debt provisioning and a reduction in operating leverage in connection with COVID-19 impacts. The business continued to increase share in Gaming Operations. The Class III premium installed base grew 9.4% over the period, fueled by top-performing cabinets and games. The Class II Gaming Operations footprint increased 1.8%. Average fee per day across both Class II and Class III Gaming Operations remained at levels above $50 in the period, normalized to exclude the number of days operators were closed. On an unadjusted basis, the average fee per day of the period was just above $46. Outright sales volumes decreased by 29% compared to the prior corresponding period, largely reflecting demand losses due to COVID-19, but also the cycling over of new product launches, including Washington CDS and VLT in the prior corresponding period. ASP remains strong at $17,544, which was around 5% lower than the prior corresponding period. This was driven by product mix and the impact of lower-priced adjacencies, including the Bar Top segment. Video ASP remain in line with the prior corresponding period, driven by the strong performance of the MarsX cabinet. Aristocrat received sustained positive customer feedback for the period and was named Top North American Supplier overall by Eilers in March 2020. This accolade was based on market-leading performance in the premium leased for Gaming Operations segment, which stood at 2.77x house average; and our performance in the Wide Area Progressive segment, which was rated at 2.15x house average. Turning now to the ANZ and international Class III results on Slide 16. ANZ revenue decreased by 11% to $205.3 million in constant currency compared to the prior corresponding period, while profit decreased by 29.4% to $77 million, driven by challenging market conditions, including the impact of droughts, bushfires and COVID-19 venue closures, coupled with the timing of product releases scheduled for the second half. Margin declined 980 basis points to 37.5%, driven by product mix, a weaker Australian dollar impacting material costs and an increase in bad debt provisioning in response to COVID-19. ASP decreased slightly from $21,264 in the PCP to $21,021 in the reported period. The ANZ business sustained its market-leading ship share position, driven by the ongoing performance of Aristocrat's product portfolio. International Class III revenue and profit decreased 11.3% and 26.4%, respectively, to $85.9 million and $31.3 million compared to the prior corresponding period due to COVID-19-related venue closures across all regions. Turning now to the performance of our Digital segment on Slide 17, which are expressed in U.S. dollars. Digital bookings grew 19% in the 6 months to 31 March 2020 compared to the prior corresponding period to approximately $698 million. This was driven by the continued strong performance of RAID: Shadow Legends, Lightning Link and Cashman Casino, supported by broader portfolio momentum across our evergreen brands. Digital profit increased 12.4% to just under $198 million, with segment margins moderating to 28.4%. This reflects an increase in UA investment to 29% of digital revenue in the period, which is slightly higher than our 25% to 28% target range, given the availability of quality opportunity to invest behind the growth of RAID. The business also increased investment in the development of new features and live operations in the Social Casino segment to drive growth. Post period end, the digital portfolio has benefited from its discernible uplift in performance, driven largely by players seeking in-home entertainment options as a result of the COVID-19 stay-at-home orders. This dynamic did not, however, contribute in any meaningful way to result over the 6 months to 31 March 2020. We have further segmented our Digital portfolio from 2 genres previously into 3; namely, Social Casino, Social Casual and Strategy, RPG and Action. This reflects the growing diversity of the portfolio as well as the distinct demographics, genre, characteristics and internal capabilities associated with each segment. The Social Casino segment contributed $332 million in bookings, an increase of 5% from the prior corresponding period, driven by the strong performance of Lightning Link and Cashman Casino, partly offset by declines in Big Fish Casino and Jackpot Magic Slots. The business remains committed to our strategy of delivering Live Ops, Features and new slot theme content to further engage players. The Social Casual segment delivered $118 million in bookings in the period, a decrease of 24% on the PCP, with evergreen titles continuing to perform, but with more recent releases such as Toy Story Drop! and Big Fish failing to scale in line with expectation. While gains in the Social Casual segment have a generally lower hit rate in terms of industry benchmarks, we are disappointed in the failure of a number of recent casual titles. The newly formed global digital leadership group under Mike Lang is highly focused on diagnosing and addressing contributing factors to improve our hit rate, revenue and profitability in this important genre. Post period end, new casual games are being launched globally, including Undersea Solitaire and EverMerge, the latter seeking to tap into the fast-growing merge game genre. Finally, the Strategy, RPG and action segment contributed $248 million in bookings in the period, an increase of 116% on the prior corresponding period. This reflected the outstanding growth in RAID, which generated $160 million of bookings in the period, together with the continued contribution of evergreen titles. Total daily active users, DAU, decreased to 7.3 million, driven by our focus on monetization, as average bookings per daily active user grew almost 32% or $0.12 to $0.50. Turning now to an overview of our digital portfolio on Slide 18. This slide demonstrates the increasing diversity of our digital portfolio across genres, geographies and demographics, in addition to our new game launches established and evergreen titles were refreshed with new content, Live Ops and Features to enhance game experience and profitability. I'll now move to Slide 19, which provides a further lens on the quality of the digital portfolio. Charts on the left shows an ongoing evolution in the mix between Social Casino, Social Casual and Strategy, RPG and Action games in terms of total bookings contribution comparing the reporting period with the PCP. The substantially higher contribution of Strategy, RPG and Action games is evident, along with the sustained contribution from Social Casino. This is a positive for Aristocrat given higher player engagement and stickiness evident in these genres compared to Social Casual. At the same time, the charts on the right demonstrate the mix of gains that contributed more than USD 25 million in bookings in each period. The further growth in portfolio diversity is evident, as is our ability to launch and grow new games, along with established evergreen titles. Turning now to Slide 20 and a summary of digital performance. Digital segment performance strengthened further through the 6 months to 31 March 2020, with double-digit increases in bookings, revenue and profit, as previously noted. Aristocrat's Digital business has proved it can build and scale world-class titles with RAID delivering impressive performance during the period. key Social Casino apps, Lightning Link and Cashman Casino, also grew off the back of new features in Live Ops, reflecting our strengthening capability in core digital skill sets. UA spend for the period grew 32% to just over USD 200 million, representing 29% of revenue, as I noted earlier. This is consistent with our capital allocation priorities and a commitment to investing in games and portfolio growth in line with our rigorous criteria. 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.

[Operator Instructions] Your first question comes from Anthony Longo with CLSA.

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?

Yes. 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.

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.

Okay. Great. 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?

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.

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?

Yes. 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.

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.

Yes. 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.

Your next question comes from Matt Ryan with UBS.

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?

Yes. 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.

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.

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?

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.

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?

Yes. 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.

Yes. 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.

Your next question comes from Bryan Raymond with Citi.

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.

Yes. Sure. 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.

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

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.

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?

Yes. 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.

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.

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

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.

Yes. 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.

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.

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?

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.

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?

Yes. 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.

Your next question comes from David Fabris with Macquarie.

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?

Sure. 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.

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.

Great. 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?

Yes. 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.

Your next question comes from Rohan Sundram with MST Marquee.

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.

Yes. 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.

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?

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

Yes. 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.

Your next question comes from Desmond Tsao with Goldman Sachs.

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.

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

Yes. 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.

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?

Yes. 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.

Your next question comes from Larry Gandler with Crédit Suisse.

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?

Yes. 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.

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

Yes. 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.

Okay. Great. 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?

Carefully.

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.

Yes. 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.

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

We're happy with the early results, yes.

Yes. Okay. Great. 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?

Yes. 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 [indiscernible] 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.

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

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?

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.

Yes. 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.

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.

Yes. 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.

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

Well, thank you, everybody, for your time, and I'll now call to the [indiscernible] 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.