The Lottery Corporation Limited (TLC) Earnings Call Transcript & Summary

Welcome, everybody. We've still got a few people arriving, delayed flights, traffic, et cetera, that I thought we should get started. So good morning, all, and welcome to The Lottery Corporation's 2024 Investor Day. I'd like to begin by acknowledging the traditional custodians of the land on which we meet today, the Wurundjeri Peoples of the Kulin Nation. I pay my respects to their elders, past and present. I also acknowledge and pay my respects to the Aboriginal and Torres Strait Islander peoples joining us today in the room or online. So welcome. I'm fortunate to know many of you. For those that I don't, my name is Chris Richardson. And I'm the General Manager for Investor Relations and Treasury at The Lottery Corporation. We're very excited to have you join today. This is an amazing business with a great and unique investment proposition. We're looking forward to sharing more of that with you today. And give you the chance to hear from and interact with a wider array of our management, you might normally be accustomed to. I'll just cover a couple of quick housekeeping matters. For those here, toilets are located down the corridor here. The ladies is the first door on the right. The men's is 3 doors down on the right. In the highly unlikely case of emergency, please remain seated in the forum until instructed by the warden on the next steps. If instructed to evacuate, you will be led to the closest emergency exit stairs, which are the doors located at the corridor opposite the men's restrooms in the main foyer. And finally, I'd ask you to please and pop your phones on to silent. Before I hand over to Sue, let me just go through the running order for the day. We expect the formal side of things will run for 4 hours finishing at 1. We'll have a 30-minute at 11:00. Maybe even fractionally before if we can catch-up some time after the first set of presentations, and then look to finish the final presentation by no later than 12:30 to leave at least 30 minutes for Q&A with the panel of today's presenters. We'll have the opportunity to ask questions about any of the contents you've seen today or any other matters that you want to ask about. Following that from 1:00 p.m., there will be a light lunch and refreshments and a further chance to mix with the leadership team. So again, welcome. And with that, I'll hand you over to Sue.

Well, good morning, everyone, and welcome. It's lovely to see so many familiar faces here today. And for those though that I haven't met, my name is Sue van der Merwe, and I'm the CEO of The Lottery Corporation. So thank you all for taking this time to join us. This is a business that we, as a team, are very passionate about. And we're certainly looking forward to sharing some deeper insights into the business with you today. The strength of our business lies in its scale, its broad appeal and its wide acceptability. And lotteries is about dreams. It's about the anticipation of maybe, and it's about the celebration of the winning moment. Every week, millions of people buy into that dream, the dream of receiving this magic call. [Presentation]

So that is, you just heard a real-life winners call. That's actually a winner. And obviously, they gave us permission to use that call. But that joy, that excitement, the fact they're sharing that excitement together that captures the essence of what our lotteries brands are all about. And that ability to change people's lives in that way, together with the community funding aspect of lotteries is what the rest of us in the business are just so passionate about. It's also why we reached 10 million Australians with our products. That's over half the Australian adult population. And the opportunity to continue to build and invest and make this business successful now and into the future is what excites all of us at The Lottery Corporation. So what can you expect from today? For us to provide a greater level of insight into the business, we want to leave you with a deeper understanding of the business model, our strategy and also the levers that we use to drive long-term sustainable growth and to create value for our shareholders. We'll share insights into how we are investing in customer experience and how we're growing our customer base. And we'll touch on how we are continuing to retain the lotteries positive marketing position that we enjoy and how we're taking care of our customers. So this will be our program for the day. We've got some exciting sessions planned, and we plan to share some new content with you. I'm going to begin by providing an overview of the group, and then I'll hand over to members of our executive team to take you through other areas of the specialization in the business. But before I do that, I'll now introduce the team, and I will ask each of them to stand up just so that you can see them. So firstly, Andrew Shepherd, our Chief Customer and Marketing Officer; followed by Loren Somerville, our Chief Information Officer; Antony Moore, our Chief Channel Officer; and Adam Newman, our CFO. Also in the room, we have Michelle Williamson -- Williams, should I say, our CPO; Rob Ure, our Chief Corporate Development Officer; and Nicholas Allton, our Chief Legal Officer; and Callum Mulvihill, Chief Commercial Officer. So let's talk about TLC, a world-class lottery business. Through the presentation, we'll cover the attributes of this business that we believe are its differentiating strengths. And we believe that is what makes it one of the top-performing businesses globally in our lotteries industry. Now for those of you who do not know my background, I started in lotteries more than 30 years ago in Golden Casket, which was the Queensland Lottery at the time. I've been the CEO and Managing Director of TLC since its commencement in 2022. But I led the business in a previous iteration since 2017. And prior to that, I was the Chief Operating Officer of Lotteries at Tatts Group. During that time, I've played an instrumental role in bringing together what previously were multiple state lotteries and creating this national operator of lotteries across Australia. I've got strong global connections. I currently sit on the World Lottery Association Executive Committee and the past Chairman of the Asia Pacific Lottery Association until my term came to an end recently. I'm very passionate about this business, and I'm very confident about its performance into the future and its continued success into the future. We're also very fortunate to have a highly experienced and engaged Board led by our Chair, Doug McTaggart, and our executive team brings a mix of experience and deep insight into our industry as well as broader diverse experience from outside the industry. We're a team that work very well together. We have robust debate. We challenge one another, always with finding the best solution for the company, for us going forward. And importantly, we're aligned behind the vision and the strategy, and we work well together as a team. So let's look at TLC by the numbers and see just how significant this business is both in terms of scale, but also contribution to society. In FY '24, we generated $4 billion in revenue from $9 billion in turnover, and 41% of that came from digital channels. We delivered over $400 million net profit after tax. Our retail footprint is an important part of the business. It spans over 7,000 outlets, to whom we paid $725 million in commissions in FY '24. Now an important number, our average license tenure, which is 24 years, and that entrenches our privileged market position, and it also gives us strong confidence into the future. Now I started the session with the winner's call. And I did that deliberately because that is the culmination of what we are selling. That's the realization of the dream. In FY '24, we paid out $5.6 billion in prize money, including an Australian record jackpot of $200 million in Powerball and $90 million in Oz Lotto. And we made more than 320 new millionaires in just 12 months. Now last night, I was sitting in my hotel room and my watch gave a little alert that a message had come through. And I looked down and it said there had been 1 winner in Queensland last night and Weekday Windfall. And that's the magic. And I sit there, and I get those messages every single night with the results, and I sit there and go, someone just became a millionaire out there. And I take my mind to imagining how they're feeling at that moment in time when they've just learned that a bit like the winners' call. That is the magic of this business. We have around 10 million lotteries customers, of which nearly half are active and registered, with an average spend of $13 per transaction. And in aggregate, that places us on the podium globally for total lottery spend per capita. Also important to us is our contribution to our key stakeholders, including governments who received almost $2 billion in duties in FY '24. Now the next slide is one you may be familiar with, summarizing why we think TLC is a great investment. Firstly, our business model. One of broad participation and low spend with this wide community acceptance. We have a diversified portfolio of powerful and very high-profile brands. We have a significant retail channel with digital upside. And we have defensive qualities, which are underpinned by strong cash flow management and a privileged market position. And we'll explore these attributes in more detail during the course of the morning. To put TLC in context globally, we are the only large-scale listed pure-play lottery operator in the world. We think that characteristic gives us edge because it brings focus to our operations across areas like customers, products and regulatory engagement to name just a few. And as a multi-jurisdictional operator across 7 separate jurisdictions, we also clearly benefit from scale. Importantly, we operate in a market that has proven to be resilient through the economic cycle. As illustrated on this slide, both Lotteries and Keno markets have grown consistently over the past 2 decades, with a long-term historical growth rate at around that 4% per annum. And that growth continues to be driven by factors, including population growth, price inflation, product renewal, all of which we expect to continue. Looking specifically now at lotteries. Growth has been strong, having grown at a CAGR of 6.3%, since FY '15. We focused on and invested in building a channel agnostic and a customer-focused approach, which allows customers to play whenever and wherever they choose. Now digital has represented the majority of our growth in recent years, and we expect that, that will likely become the biggest channel in the future. Retail remains a foundational channel and a very important part of our business because it provides a strong connection with the community and it supports thousands of small businesses, and they are an important part of Australian society. In the graph, you can see that we've managed to retain a stable retail performance, while adding incremental growth through digital and I think that's a real achievement. With digital having higher margins, this trend should also continue to benefit the group's bottom line. Our ultimate goal is to drive increased lifetime customer value through an engaged and increasingly known player base that plays with us over the long-term. And Andrew, in his presentation later, will share more on how we're doing that. So while we're not a new business by any stretch, having demerged from Tabcorp in 2022, we're still relatively young in the listed sense. However, in that period, I'm pleased with the financial performance and the shareholder returns that we have been able to deliver. We've consistently grown revenue, earnings and cash flow, while we've retained a strong and flexible balance sheet. We paid a cumulative $750 million in dividends to shareholders since demerger, highlighting our emphasis on shareholder returns and disciplined implementation of our capital allocation framework. And all of this has been delivered against a backdrop of material demerger costs and inflationary pressures on our expense base. Post separation, we now have full control of our costs, and we're focused on optimizing our cost base and maximizing efficiency in our operations. And you should see that focus coming through in the presentations today because as an exec team, we're all committed to that, and we've all signed up for that. As Chief Executive, I will, of course, hold the executive team accountable for that. And the Board, in turn, will be holding me accountable for that. Turning now to our licenses. The defensiveness of our business and strong performance is underpinned by a portfolio of largely exclusive and/or long-dated licenses. The average remaining tenure for our Lotteries licenses are 20 years and 30 for Keno. These licenses are extraordinarily valuable, and we remain focused on maximizing and enhancing their value to sustain and grow our competitive advantage, and Callum will cover more on that in his presentation. Under our ESG strategy, we have four pillars of focus. As you'd expect, as a lottery company, responsible gambling is a top priority and is strongly embedded in our culture. We have a comprehensive responsible play program to support this, and we continue to retain our WLA Level 4 responsible gambling accreditation. And that's the highest level available and something that we're very proud of. We recognize our people are one of our most important assets, and I'm proud to say we have a diverse and highly engaged workforce, who really unite around our vision and our purpose. The remaining pillars are around community and environmental impact, all of which are supported through a range of strategies and programs. Notwithstanding lottery products have this low harm profile, caring for our customers and reducing harm has always been a top priority for us. As we know, gambling harm is an increasingly significant focus for governments and regulators. Our lotteries products representing the bulk of our turnover, sit at the low harm end of the gambling harm spectrum, as you can see in this graphic. Now while Keno, particularly online Keno carries a higher risk rating. We recognize and seek to mitigate that in a range of ways. And you'll hear again more about that from Callum in his presentation. There are three components to our strategy: drive, develop and discover. Drive is all about extracting value from our existing assets on a BAU basis. And we have multiple levers to drive sustainable growth and shareholder value. Develop defines the areas that will deliver long-term growth and resilience, ensuring that we remain competitively fit and that we sustain our licenses. And while not a major focus on the near-term horizon, we're always alive to evaluating complementary growth avenues under our discover pillar. These strategic pillars are all underpinned by our core company principles. Others might call them values and ours are to create joy for moments to be accountable and transparent, dare to find a better way and nurture the uniqueness of our people. And the dare to find a better way is something that we're linking in to the cost optimization focus in the business. So this is about driving our team to have a mindset of continual improvement, to challenge, to question everything that they do and ask themselves, is there a better, smarter, more efficient way to do what I'm doing. So I'm going to hand over now to the team to provide a deeper insight into areas of our focus in our business. And those are areas of focus which continue to underpin our strong track record of performance, to preserve and enhance the value of our licenses and position us to continually build and grow in the future. So with that, I'll hand over now to Andrew to tell you more about our customer and marketing strategies. Thanks, Andrew.

Thank you, Sue. It's lovely to see so many familiar faces in the audience. My career today has been across the automotive industry, the dairy industry, beverage industry and the lotteries industry. And I've got to say, I feel really passionate about this business because it makes such a positive impact across our communities, and for multiple stakeholders, like yourselves, our investors 7,000-plus retailers and our 10 million-plus customers. So let's talk about the brands. So the brand portfolio is quite extensive. Everything begins with the customer. So this brand portfolio has been developed through extensive customer research. It captures the hearts and minds of over 10 Australians that have played a lottery product in the last 12 months. We'll start at the top there with a Lott. Now the Lott is the official home of Australia's lotteries, whether you're purchasing via web or app or in retail, the Lott is that one-stop shop that you go to that reinforces that official home of Australia's lotteries. It's alongside those brands, we have the licensee brands. Now these enjoy a history that delivers trust and integrity of over 100 years with Tattersalls and Golden Casket to name a couple of them. Under this, we have our major game brands. Now these are amongst the most recognized brands in Australia with brand awareness levels over 90%. I've got to say during the Powerball $200 million, I was -- got goosebump, [ Antony ] and I went out into the network and seeing queues of people lining up on mass population and office is buzzing about the excitement. There's not many other brands that can deliver that sort of passion across Australia. Our three biggest brands Saturday Lotto, Oz Lotto and Powerball, they're certainly amongst the most valuable brands in Australia. In fact, Kantar actually value these in the top 40. So they sit alongside and prestigious brands like Bunnings and Woolworths and Qantas and Bundaberg. The important thing also about these major brands is that they appeal to the broad spectrum of dream possibilities. So Instant Scratch-Its, appeals to those everyday moments of joy right through the Powerball that appeals to those extreme dreams, those life-changing moments. Now our communication for these brands is about driving brand awareness, consideration and intention. That's about driving belief in the dream, belief in winning and reinforcing the work in the community, which really brings that strong brand license and social license. Now you'll be interested to know that in the last financial year, we generated $120 million in free publicity. This really speaks to the social permissibility, the social involvement that our community has with our brands. The news, there has been a lot of negative news, but people love hearing about lottery wins. They love hearing about big jackpots. We're very entrenched in the morning news programs, and it's seen as part of the Australian culture. Our brands are entrenched in the Australian culture. And that's really important in terms of being a key community activity and a strong point of difference for us to drive that social permissibility and social license. So let's talk about our portfolio of brands in terms of positioning. Now we use the Kantar brand map here. So this is called NeedScope and what it allows us to do is position each product with a very distinct position, freedom to dream in a very distinctive way. This is very important because it means that we attract the widest possible appeal across our population. Below this, we have sub-brands like Instant Scratch-Its, which offer different price points, different prices and different game mechanics that appeal to key segments as well as well as different ways to play like syndicates. So syndicates, for instance, it's a great social connection with family, friends, workplaces, sporting clubs, and that really reinforces our position, particularly for Saturday Lotto. The Kantar map also gives us opportunities to identify product gaps. And that leads to our right-hand side, we talk about product development and new product -- new business -- sorry, the management of new products. So that all starts with the customer. It starts with a key customer insight. So Callum is going to talk a bit about development of Powerball. That started with the key consumer insight that people were looking for bigger jackpots more often with Powerball. That then flowed into the ideation with the development team to develop a matrix, which was going to deliver on that key consumer insight. We then tested and validated that with qualitative focus groups to see that it was hitting the mark in terms of brand position, in terms of what the product was delivering. We then went into quantitative research to show that we could get incremental turnover and minimize cannibalization. This then leads through to further development and improvement. We have strong collaboration with multiple stakeholders, and then we get through to launch. We then go into a phase of monitoring and analyzing to see how that product is performing in market, if it's performing in line with those models. And then we have refinement and go back into ideation. So that product then may move on to a price change or a further matrix change and so forth. So that's a bit of a summary of that product development process. Now what we thought we'd show you today is the flow in of that positioning map and the impact that it has on the various demographics. So you can see that those unique positions flow through to different appeals with different demographics. So we've got the Australian population, excluding Western Australia at the top there in the 3 different brackets. You can see Instant Scratch-Its and Keno really appealing to a younger audience, and Saturday Lotto appealing to a slightly older audience. It's also reflected in the shares of digital across the product range, ranging from Saturday Lotto, which is about 35% digital mix through to Set for Life at 58% mix. We have, in the last 12 months, made a big push into driving new customer acquisition. During the $200 million Powerball offer, 75% of all new sign-ups that were registered in the 18 to 43 category, which is fantastic. And over the last 12 months, it's been 64% have fallen into that category with the fastest-growing category, 18 to 34. So now we see that, that bigger segment is in the 28 to 43 Gen Y over our whole registered customer database. We do have a proud history of registration with customers. So this dates back to the 1980s. So we have built off a very solid base. It is important for us to continue to drive, as Sue said, the unregistered customers to registered because it enables us to personalize, to upsell, to cross-sell and drive incremental revenue value. One of the key initiatives that we've got here is DERM. This is digitally enabled retail membership. It's allowing customers to sign up in-store by a simple text message. This will become the foundation for us to enable online price payments straight into people's accounts, which they'll be able to use in stores. So that will be a great example of greater efficiency, greater price reinvestment. In this chart on the left, you can see the sort of growth that we've had over the last 12 -- sorry, over the last 4 years in terms of registered and unregistered. We got 28% growth in registered and 16% growth overall. We've then broken that out on the right-hand side to show across the whole population, the fastest-growing segment. So you'll see the 34 -- sorry, the 35 to 44 age group, up 33% in the light green. Followed by the 25 to 34, up 26.3% in the dark green. Interestingly, the majority of our turnover still comes from that 55-plus demographic, which economically makes us -- insulates us from economic lows, which is great. Okay. So here, we're talking about customer convenience. So this is all about having channel choice. And you'll see this is Roy Morgan showing the channels that people have purchased in over the last 3 months. And you'll see for news agents, there's a strong preference for 45-plus, for digital and convenience, they are really helpful in reaching that much younger audience with digital peaking in that 25 to 44. Combining that with the convenience really helps us target that 18- to 24-year-old age group. As Sue said, this is about growing lifetime customer value with a channel-agnostic approach, and this really highlights that. Once a customer is registered, we can drive them in terms of cross-sells and upsells, making sure we get the right product, to the right channel and in the right time for customers. And you can see how that's reflected in the difference in value. So if you look at the 12-month value of a customer that's unregistered versus registered versus omnichannel, it's double. So once they come into our digital ecosystem, we are able to cross-sell and upsell to drive that incremental value and 4.5x more valuable than an unregistered customer and omnichannel customers. So that's somebody that's purchasing in retail and digital. That value really comes from being digitally enabled, being a multichannel, being a multiproduct consumer, and us retaining that customer for a long time in terms of driving tenure. I thought we'd also highlight today the sophisticated marketing approach that we have. So we use what's called a race model. This model is about reaching you as many customers as possible in a cost-efficient way, getting you to act and purchase our product to convert you, to register and then to have ongoing engagement. The idea here is that we have key KPIs. So whether these are paid, owned or earned media at each of these points. We have key KPIs to measure how effective we are at each of these levels. This helps drive demand. It helps us sign up more customers and strong CRM and channel experience certainly helps drive that. Post draw, there is very strong engagement with winners hearing about those winners, sharing those winners, sharing attributes that others can relate to, strengthens that belief in the dream and that belief in winning. Okay. So we've talked about signing up more customers and personalization. How do we do that at scale? So this is an example of a personalized journey. This will be further improved with the customer data platform that we're launching in the third quarter of this year. This will enable hyper-personalized experiences in real time, it will also enable us to measure when a person is purchased and then to be able to turn that advertising off online real time, which is going to increase our cost efficiency and cost effectiveness. We'll also be able to hyperpersonalize in terms of this creative. So you can see there's an example at the top here with Powerball. We've identified that this customer dreams about going to Europe, so we can then embed some of the more personalized dreams into that communication. This approach makes sure that it's very consistent across all touch points. It enables us to suppress advertising once we've converted somebody to purchase, and it gives us new ways through AI to create a more personalized creative content. Okay. Data really has -- is the way to drive this personalization. And these are 5 different models that we use in the machine learning and the AI area. The first one here is our next best offer model. So every registered customer, we have our next best offer. So at any point in time, we have analyzed what the best product is to cross sell you or to sell to you. We then use Adobe Sensei. This allows -- it's an AI solution, a white labeled one, which allows us to optimize a full-scale. Engagement model. So what we measured here is what channel, what product, what time of the communication reaches you to make sure that it's most effective. So that's a great engagement model. Then we have our early intervention model. So this is picking up any behaviors that could be problematic, where there could be potential harm. So it's about harm minimization. We can then intervene and make sure that through those channels that we've taken action. The final model is our cross-sell model. So once you are in the website or app, we can -- we may have cross-sold you the -- sorry, to Powerball with the next best offer. And then we can use our cross-sell model to say, okay, which should we be cross-selling you to now. So it might be Set for Life, or it might be Lucky or another brand, and that's been very effective for us as well. So it is about driving every customer interaction to make sure it's relevant and it's timely and it's as valuable as possible. So this is something we're really proud of, and it's something that we are pioneering. And what we're using here is this is data driving out-of-home media. So some of you may be very familiar with the Trade Desk. This is -- we've brought all of our digital media in-house, and we're buying directly using our first-party data. So across Australia, there's some 15,000 screens across shopping centers, there's outdoor sites and so forth. We're using that first-party data together with the trading desk measurement tools. And we can identify with proximity to their outdoor sites whether that device ID has passed that and who has seen our advertising. Where this is going is that we will be able to measure when they've purchased as well. The importance to this is that we're learning using algorithms to refine that advertising to find when it's most effective to continuously refine that execution of advertising and drive increased efficiency and effectiveness. So it's constantly being optimized for conversion, driving [indiscernible] by -- sorry, impressions that it's making to consumers and sales. As I said, the most valuable customer is our omnichannel customer. The product and service offerings that we currently offer includes syndicates online. You can check your ticket. There's a lot of unregistered customers that will check their tickets via the app. So we feel that there's a big opportunity to convert them. In store at the moment, you can use your member's card. You can use your wallet to make a purchase in-store. You can use Google and Apple wallet as well. So moving forward, we want customers to be able to start in any channel and finish in any channel. What that means is we've got some examples here. We're -- moving forward, we have physical tickets that we'll be able to send digitally. We'll have physical coupons that will be app-enabled, so we can start to reduce down those coupons. We have already launched DERM, a digitally enhanced sign-up process via SMS. And finally, we've got looking at price payments in-store off of that DERM platform. So all of that will drive ultimately more unregistered customers to registered to drive up that customer value. So key takeaways from a customer marketing point of view. Overall, we have a very strong portfolio of highly recognized brands. They're positioned very, very strongly to generate mass appeal to the Australian population. We're applying a very sophisticated approach to our marketing through the race model, in terms of brand and customer management. We are seeing strong growth, particularly amongst our younger audience, which we're excited about. We are driving higher lifetime customer value with that very personalized customer-centric approach. Going forward, we will deliver upside growth in registered customer counts, and that will enable us to deliver much greater personalization. I would now like to hand over to Loren Somerville, our CIO.

All right. Thank you, Andrew. And well, hello, everyone. So my name is Loren Somerville. I'm the Chief Information Officer at The Lottery Corporation, and I joined TLC in 2022, shortly before our separation. It has been a very busy couple of years for the technology function. I think for everybody else; it looked like demerger had occurred; it had occurred. But we had a lot of work to do because we still needed to separate our systems, we needed to launch and optimize our stand-alone technology services, initiate start planning and initiating all of our own system transformations, and that included implementing a new ERP over that period, rationalizing over 25 enterprise applications. So it's been a busy time. But prior to that, I was the Chief Digital Officer, a Chief Digital and Information Officer at Youi Insurance. And before that, I've had senior roles at Gartner and at Rio Tinto. So now that we've heard from Andrew on how our growth is driven by our customer-centric approach and seamless omnichannel experiences. I'll expand a bit more on the technology that enables it. You'll notice a lot of overlap for obvious reasons, technology is here to support and enable our business functions. So our technology systems have been reliable for many years. And most importantly, we've got a proven scalability and robustness to deal with significant jackpot transaction nodes. So in February 2024, we ran our first $200 million draw. We peaked at over 40,000 account logins per minute. There were 10,000 tickets sold per minute in the last 24 hours, and our system handled over 1.2 million customer deposits. So these are large volume spikes that would really strain typical systems. Our operational process preparation, our scenario testing and what's really a fine-tuned architecture has served us well. And our systems performed exceptionally well during the draw, and it confirmed for us that the scalability and reliability of in-house bespoke lottery platforms as well as the expertise that we have in the teams that manage and support them is really what is going to support our business going forward. So even at peak activity, I think it's worth noting that our Powerball transactions actually accounted for only less than 20% of our system transactions of the day. So that includes ticket sales, logins, deposits, many system transactions. So it was a big spike, but it wasn't -- it was actually in the minority of the transactions that we handled. We customize our technology environment to deliver those experiences that our customers want. We know and everyone here recognizes that our customer expectations are evolving rapidly. Our technology solutions span a number of carefully curated customer touch points. And with our road map, we're unlocking that capability across our entire technology stack to activate channels of acquisition, seamless interaction and personalization supporting that race model that Andrew mentioned. As we expand our known customer base, we're leveraging an advanced marketing technology ecosystem to make the most of these opportunities. So from a digital perspective, we have high levels of traffic, exceptional customer satisfaction across our web and mobile apps. And from a retail perspective, we're actually servicing one of the largest retail networks in Australia at over 7,200 sites. So I've looked at those numbers a few times, and I actually questioned that when I joined, is that right? So I won't say definitively, it is the largest, but I've yet to find one, and all the obvious contenders that I've looked at the numbers, we have a large retail network. So this comprises the lotteries and Keno terminals, our customer contact center and the network infrastructure that powers all the communication and transactions across our business. From a core technology perspective, which is what we refer to as our host games and our host systems, which are actually running our games. We are uniquely or at least rare in that we operate and integrate across multiple jurisdictions across Australia. So while we're planning and managing major events that are relating to our jackpots, we -- where those transactional loads really do spike. Behind the scenes, we're also enabling key functions across all business areas. So that includes reporting and insights, player account management, retail venue management and then the emerging technologies such as AI, machine learning and advanced analytics. Our technology team capabilities are strong. And as a function, we're focused on reliability, efficiency and innovation. Our digital apps are loved by customers with a 4.8 Apple app store rating and a 4.7 in the Google Playstore. We're really proud of these ratings. Our customers also tell us that they appreciate the ease of use of the app, and that's reflected in a common metric called Effort Score. So our low effort rating is 84%, and that's a very good indicator. Since 2019, we've seen an increase in lotteries digital penetration from 23.5% to 40.9%. So that's as a result of consistent and effective investment across a range of digital initiatives. Some examples are we launched the Lott voice app in 2022, and that allows players to interact with Google Assistant and Amazon Alexa. We also expanded our payment types to Apple and Google Pay in 2023. And then we had some notable key transformation projects that also boosted digital penetration and that Andrew did mention, too. So by delivering the Store Syndicates Online project, we built the world's first syndication tool for customers and retailers. It's been hugely popular with a significant uplift to customer experience across our channels. The results of Store Syndicates Online have been amazing. So within the last financial year, we've seen over 11 million syndicate shares sold online. 66% of those online shares have been through our apps, and over 449,000 unique customers purchased a share online. And over $130 million in spend by these online players. Over 3,000 retailers have been favorited by players. And that means significant commissions that are delivered back to our local retailers. So it's really been a win-win and it's a truly transformational project for our customers and for our business and our partners. Our recent initiative of digitally enabled retail membership, which we finally refer to as DERM is about providing smoother omnichannel services for our customers. This includes a simpler sign-up, digitized membership and a loyalty that's agnostic to retail and digital. It also helps drive efficiencies through digitized payments -- through our digitized payment options across channels. It's critical to driving that lifetime value by converting customers from being unknown to being registered. The DERM project was implemented in Q1, and it's already resulted in thousands of new accounts being created or upgraded. We expect that further benefits are going to come through that continuous improvement and innovation pipeline of our customer omnichannel solutions. But technology never sits still. In our road map, we've prioritized investments across customer, product, data and foundations. So for our customers, we'll be delivering experiences that are based on those shifting customer expectations. Past examples include DERM and Store Syndicates Online, but we're continuing to progress the emerging customer needs. And we refer to that as seamless, personalized, social and supported. We'll also be modernizing our retail hardware and software. And you will have seen some of that outside as you walked in. We're aiming to improve the speed of change and to actively manage our asset life cycle. We'll soon deploy some of those exciting new lotteries terminal software and hardware throughout Queensland with progressive rollout to all other jurisdictions. We're also improving our retail network visibility and flexibility. We're upgrading our retail network infrastructure to enhance our operational excellence and retailer support. We're moving from reliable, but slightly outdated technology, to cutting-edge technology called SD-WAN. Those are interested, but that will make our network more agile, and it allows us to quickly adapt to changing business conditions. It also is going to make us more efficient. So it's improving our performance, reducing our operational costs. It's also going to make it more visible and secure and that means we're going to enhance our ability to protect our customer data. And lastly, more scalable because we're going to enable rapid expansion and support of that peak network traffic that we experience. This upgrade positions us to better serve our customers and retailers and to optimize operations and to stay at the forefront of technological advancements that enable our business. Then for product innovation, technology also remains poised to deliver on the new custom product opportunities within our in-house lottery platforms, and with a mature engineering capability that we have. Of course, technology will be enabling the required modifications to innovate across our existing games portfolio. And that means to adjust the pricing, branding and game changers in the code across existing customer offerings. Then for data and artificial intelligence. We'll be implementing our customer data platform for personalization at scale. We'll be embedding AI enhanced operations and risk management, and we're going to be uplifting our data governance. So that emphasizes the continued investment in compliance with privacy act reforms and the elevation of data as an asset. For our critical technology foundations, we'll be delivering our cybersecurity program, which is a targeted multiyear and continuous improvement program. We'll be focusing on efficiency-based optimization programs. So there's a number of optimization opportunities that we've identified spanning or, I should say, additional optimization opportunities we've identified, spanning application rationalization and right through to operational excellence and productivity uplifts. And then lastly, we'll be proactively modernizing our core systems. So we've commenced a significant review of our largely in-house built core lottery and Keno platforms to ensure that they're fit for purpose for the future and also to ensure we're making the most of any potential synergies. So we've shared our delivery track record, but we're also continuing to invest in the technology road map of activities to delight our customers. Looking forward in our road map, our goals are for the digital customer experience to be seamless, social, supported and personalized. By seamless, we mean that we're aiming to drive intuitive and engaging cross-channel experiences where customers can start in one channel and end the other -- or in another. The customer should be selecting their channel of preference at all times. By social, we're amplifying that community-driven engagement and that enables our customers to connect, play together and share experiences as well as embedding charitable games in our apps. By supported, we want to ensure our customers always have convenient and instant access to information, assistance and self-service options. And then by personalized, this is where we leverage the data, AI, the right content to deliver relevant customer experiences that resonate and are memorable. Our investment in the customer data platform or CDP is going to enable those experiences. It's a single 360-degree view of the customer that will help us to deliver an experience that's timely and relevant as well as enhance our commitment to privacy and care of our customers, with elements such as a wider choice of consent for marketing across channels. The CDP is designed to bring together understanding of the customers in terms of how they want to interact with us, what they want to know about and enable us to deliver on this knowledge at the right time. For example, we're currently using machine learning to predict the next best offer for customers as well as to understand the customer's preferred channel and time of engagement. But using the CDP, we can make use of these existing models and new ones to provide a near realtime hyperpersonalized experience for each one of our customers. We're further enhancing our customer engagement and marketing strategies to drive growth. By improving customer communication with enhancements to the customer consent and marketing suppression management, we're upgrading those systems to better cater to customer preferences and to ensure that our messages reach the right people at the right time. By boosting marketing efficiency, by leveraging our own customer data more effectively, we expect that we can increase our marketing efficiency materially over the next 3 years. That means we'll get more value from every dollar spent on advertising. And then also by enhancing the customer journey. We're creating a smooth experience for new customers from the initial registration right through the personalized engagement based on the interactions with our products. These improvements are going to help us attract and retain more customers and ultimately drive revenue growth. We see this capability is going to add not only to a richer customer experience but also tremendous commercial benefit to TLC. By providing customers with the content that they want in ways they're happy to engage, we hope to grow our digital visits and the average order value as we've seen happen with our initial personalization efforts. And this has considerable potential to boost turnover in the coming years. We're also driving the use of data and AI to uplift all areas of our business. We're getting started on delivering value with AI use cases, and I'll talk through some of those while also looking ahead and mapping out our broader AI strategy so that we're poised to make the most of what is really a very rapidly developing emerging technology. Some examples of where we're leveraging data and AI in the business are in improving our customer care. So we use data-driven models to identify those customers that are at risk and to intervene to help reduce the risk of gambling harm. This is part of our wider commitment to responsible gambling, and we'll continue to refine those approaches using the latest technology available. And in supporting our venues, we reduce risk and uplift compliance within our retail network by detecting anomalous behavior at our venues. We use this to help inform our approach to compliance and to investigations. We're also continuing to refine these approaches with new sources of data such as the terminal logs. We're further optimizing our network infrastructure by using the machine learning to drive efficient operations in areas such as printing. And AI is also an enabler for our people to work their best. Here, we're driving pilots to improve the way we work, to enhance productivity and as well as identifying novel efficiency opportunities that will help shape and inform our workforce for the future. The dynamic regulatory and technology landscape necessitate ongoing reevaluation of the cybersecurity practices for everyone. This is critical to address the continually evolving external threat landscape. To safeguard our operational assets and the data privacy of our customers and partners, we've adopted a threat informed, risk-based approach to cybersecurity. That allows us to efficiently allocate our resources to uplift capabilities where they're most needed and most beneficial. In terms of investment and monitoring, we've invested in globally recognized, best-of-breed cyber defensive and monitoring tools and partners. Our 24/7 teams ensure there's continuous monitoring and rapid response to cyber threats. In line with our cyber strategy, we continue delivering delivery of our Cyber Uplift program, which is already realizing tangible benefits. Our Cyber program is focused on strengthening cyber foundations in preparation for that continued system transformation. That includes uplift in governance practices, policy, asset management visibility and any remedial activities that are triggered by those vulnerability management programs. Change management is an important element, and we emphasize that workforce education to manage the human risks. And that extends beyond the standard phishing simulations. It's augmented by additional tabletop simulations for technology teams and our executives to improve muscle memory and operational resilience. As we continue to expand the program, we're introducing new ways to secure access to systems, to reduce unnecessary data and then to implement data encryption technologies and further tightening our internal controls to ensure that our systems are resilient and recoverable and ultimately to ensure that TLC is ready and prepared to respond to any ongoing threats. So to sum up, we are proud to have robust and proven technology platforms that handle extraordinary traffic. Our bespoke technology is complex, yet scalable. It caters to very specialized requirements, and it's underpinned by the expertise of high-performing, highly skilled teams. We have a track record and a continuing ambition to deliver unique digital and retail experiences that meet our customer needs and drive growth. Our targeted technology initiatives are going to grow and enhance business operations by delivering seamless omnichannel experiences that grow our customer base and also by embedding that customer data platform to achieve personalization at scale. We're going to be growing the use of AI to enhance our business, and we're going to be delivering foundational infrastructure, optimization and cybersecurity programs. So thank you very much. And with that, I am going to call on Antony Moore, our Chief Channel Officer.

Thank you, Loren, and good morning, everyone. So I have the enormous privilege of leading our retail bricks and mortar network across 7,200 small businesses that make up our lotteries and Keno network. I've been with many of Australia's leading retail brands over my years, of deep retail experience, and I've been with the Lotteries business for over 13 years. So retail is a key foundation of our business, and it's built on strong relationships with our partners. Many of these relationships span many decades. We're one of the largest retail networks in the country, and this enhances our strong brand awareness and the community acceptance of our product. Our retail model is a low-cost model, and it enables us to scale efficiently and effectively, but it also provides us the flexibility to adapt to changing market dynamics as the market of retail itself changes. Our big focus and opportunity is to leverage our scale to improved -- deliver an improved customer experience through our digitized services. Small businesses in the communities in which they operate, maintaining strong partnerships with industry are very, very important to us. So as we said, we operate one of the largest retail operations in Australia. So for our Lotteries business, around 4,000 retail outlets. By way of comparison, Woolworths across Australia and New Zealand operates about 1,700 stores; Coles, about 1,100; Australia Post, about 4,300, and 80% of those are their license post service network or about 80% of their network. The estimated retail value -- or sorry, media value of our retail footprint is over $30 million annually. So you can see that the retail network is vitally important in making sure it retains the presence of our business. Our network operates across metropolitan, regional remote areas across the license state and territories in which we operate, and this is vital to the long-term sustainability of many of our retail partners. It's a mutually beneficial arrangement designed to encourage our franchisees to provide a positive and familiar customer experience and most importantly, to drive growth across both the physical and digital channels. Our retail distribution strategy focuses on prominent branding coupled with widespread availability. So in Australia, we operate what we call a select distribution model. And this is characterized by easily accessible network with strong brand identity, and we operate within-a-store, within-a-store network, and this balances the accessibility to the product. This delivers a high return for our retailers as a result of a high level of commitment and investment from them. What that does is it enables a continued high level of demand for people who want to join our network, our franchise network. We're really selective of who we select in terms of our franchisees and the nature of the business that we join up. We also want to make sure that we have the ongoing sustainability of our retail partners, and the quality and consistency of our offer is really, really important to us. And therefore, we get a better quality of experience across our customers. We operate a franchise business model and therefore, our operating costs on a per outlet basis are quite low as we don't have to fund everything. Having said that, making sure that we achieve an appropriate ROI for both franchisees and for TLC is vitally important to us. We have a very rigorous assessment process for applicants and locations, and this helps make sure that we can continue to diversify both the channel type and the locations in which we operate. Underpinning this is a sophisticated modeling tool that we use, and this helps us to make sure that we have a positive return on investment for our outlets before we enter into franchise agreement. Our low-cost model makes sure that we can have ongoing sustainability for both TLC and our franchisees. We continue that strong and successful formula across our network in terms of business management, training and compliance. The Australian rating franchise scale provides an independent and objective tool to help franchisees and their adviser measure different franchise systems. TLC has held the highest 5-star rating in this program since its inception in 2019, and we're proud to show up all of our trophies out in the trade area. We've also recently reviewed and optimized our retail operations team, and we've done this to better operate, support our diverse network that we operate. And this led to the provision of a more effective, efficient and productive way of supporting our franchisees in the more diverse network we operate. It's also consistent with our focus on achieving an appropriate ROI while making sure that our cost to serve is economical as it possibly can be. All of this is strongly underpinned by strong relationships with all of our partners. So stakeholder management is vitally and strategically important to us both for the retail network and for our retail partners. TLC has a number of industry partnership agreements in place to support that. We maintain viewing strong relationships absolutely critical to the success of all of our stakeholders in the ecosystem, and we work hard on these relationships with a win-win mindset. We also understand that we've got an important part to play in our communities through supporting small business, and this is an absolute priority for us. We have a highly engaged network. We have endorsed training outlets and retailer conceive groups, and they act as the voice of the retailer for TLC. We also have embedded in our team a retail experience executive, and they are the voice of the retailer internally for TLC. 43% of our network have rated us either 9 or 10 out of 10 for overall level of satisfaction, and this is up 4% from the prior cycle, and we're enormously proud of that result, particularly given the scale of the network. So let's hear from some of our key partners now. [Presentation]

And thanks to all our partners for joining us. We really do appreciate it. And as you can see, we have very close relationships with that win-win mindset. So as consumer preferences continue to change, accordingly, we need to make sure we're proactively adapting to make sure our network remains relevant. So a large part of why retail is so important to us, is the presence and scale of our brands in the local communities, whether they're metro or regional, and that helps underpin the trust and integrity of our brands. There's been quite a bit of shift in the construct of our distribution model over the last decade as a result of the news agent channel experiencing quite a decline due to the changes in print media. And accordingly, this has meant we've needed to evolve our distribution mix over time. So the average weekly sales in the Newsagent channel are still the strongest of all lotteries channels. And this is really because they're in strong locations around supermarket areas, high-traffic areas, coupled with an historical connection between lotteries and news agents. Whilst the number of newsagents in our channels declined about 15% over time, it's still our largest channel, and we expect this to remain that way for the foreseeable future. So about 2/3 of our network is generated -- the revenue is generated by newsagents, which represent about 55% of our physical footprint. There's about 3,200 newsagents that operate in Australia. We have a lotteries outlet in about 2,100, so we see that any further decline in that industry will come from outlets that don't have lotteries. So we position our product as a fast-moving consumer good. And accordingly, we make sure that we continue our journey of customer-led diversification, looking for host businesses that are well placed and strong performers in the FMCG sector. Our focus is really making sure that we're in and around areas where the customer wants us to be, and that's those hotspots in and around supermarket precinct. We do a lot of work in understanding our customer preferences not only through a product lens, but also to understand what their retail shopping preferences look like. We overlay this with what we see globally and domestically in the retail sector, and this is how we determine what's the most appropriate channel in place to locate our products. We've also experienced quite a shift in consumer behavior over the last few years as flexible working has evolved, and we've seen a lot of people move away from CBD and centralized locations into more communities and localized. So accordingly, our focus is all around convenience, convenient locations in trusted host businesses. So whilst we operate a large and diversified retail network, it is really important that customers have a consistent experience regardless of the channel that they go into. And we work very hard to ensure that our customers' expectations are met through a familiar look and feel, et cetera. So shortly, we're going to have a look at a fly-through of a number of different business types. And this will highlight that while our host businesses are very different, the lottery's experience is remarkably similar. The short flow-through, we'll look at in a minute, will take us through a convenience supermarket, a bottle shop, a newsagent and a convenience fuel outlet. Our in-store experiences are designed to help drive increased frequency and participation and average spend through a well-planned and well-placed distribution network. Our strong brand presence is achieved through a minimal but highly effective digital retail image, and this ensures that we have consistency of our message across the network. Over the last few years, we've significantly reduced the amount of floor space that retailers need for their retail emerge when we introduced our digital point of sale. And this has allowed retailers to either reinvest the floor space into other categories or actually downsize their retail footprint, and it's actually making it easier to accommodate lotteries into smaller new convenient locations. This has been very well received by our retail partners, and it hasn't impacted our lottery sales. We've taken a more customer-led approach in the way we integrate the lotteries counter with the host business in store as well. Let's have a look. [Presentation]

As you've come in, you will have seen our trade show setup up there, so we're more than happy to have a chat with you in more tail and talk you through some of the things you've seen on the video. So as I've mentioned already, our retail network helps underpin the trust and integrity of our brands. Our strong partnership with our franchisees is a mutually beneficial arrangement, and this is designed to encourage our retail partners to provide a customer experience and drive growth right across the digital and retail channels. We have multiple levers that we can pull to drive the customer lifetime value, and the digitization of our customer experiences, coupled with our omnichannel remuneration model with our franchisees a few years ago, will help drive this lifetime value for customers. It helps us grow the registered customer base and the locations and business types are important to make sure our customers expect us to be to support that. Loren mentioned our DERM and Store Syndicates online initiatives, and these are great examples of omnichannel initiatives coming to life. We expect to have rolled out DigiPOS, our retail image to the majority of our network over the next couple of years, and this will help further enhance the customer experience in store whilst providing a higher level of consistency across our vast retail network. Over the next 2 to 3 years, we'll also roll out our new modern fleet of lottery point-of-sale terminals, and that will help further uplift our omnichannel approach in store while at the same time helping to reduce our cost to serve. The new point-of-sale terminals will facilitate more digitized customer experiences with things like the introduction of the shopping cart for retailers, an improved user experience, improved branding, improved security, a customer-facing scanner, which is important in the mobile phone age, and an improved ticket checker experience, all of these things designed to improve and enhance the customer experience. So our retail network is vital to the long-term sustainability of TLC, our retail partners and the communities in which we operate. The vast majority of our turnover goes back into the communities through retails commissions and lottery taxes. Of the $590 million we paid in retail lottery commissions last year, that helped them to support an estimated 20,000 jobs in lottery franchises. This high level of engagement helps drive much needed traffic into the small business network, and this helps retailers to cross-sell and upsell merchandise from their host business, many of those sales and much of that traffic can be attributed as a direct result of the Lotteries business. In many regional and remote communities, the lottery franchise is central to or, in some cases, the only hub in the community in which we operate, and we absolutely appreciate the significance that those businesses play as our representatives in those communities. So to wrap up, we see retail as a distinct competitive advantage for TLC, and we consider this will be the way moving into the future. Our large scale and cost-effective network of nearly 4,000 outlets helped enhance the profile and wide acceptability of our products with the importance of being connected to community as paramount. We will continue to adapt to changing market dynamics and consumer preferences, and we'll continue to leverage our scale to help improve customers' experiences through digitized services. And of course, we will continue to be strong supporters of small business and the communities in which they operate, whilst we maintain very strong relationships with our industry partners. We see a very bright future for our retail network. Thank you very much, and I'll hand you back to Chris.

Thanks very much, Antony. We'll now take a break. And for visibility for those joining virtually, we'll recommence at 11:15. [Break]

Let me know when you're on. Yes. Okay. So welcome back. I'll now hand you over to Callum Mulvihill for our next presentation.

Good morning and welcome back, and congratulations to all our winners in the studio. I'm Callum Mulvihill, and I've been with the business for 18 years. I think the challenges and opportunities in front of us today are as exciting and diverse as they were when I joined the business back in 2006. During this time, we've seen the lottery business consolidate under our national operating model. We've expanded our digital reach and sophistication whilst maintaining our important retail footprint, which Hanson has taken you through. And we've continued to develop our product portfolio with some world-leading initiatives set for life and the Powerball repositioning being two of these. In all of that, we've evolved and developed our customer care programs and tools to ensure we stay in front of and uphold society's expectations of us. Now in this time, we've also seen other sectors of the industry face intense challenges. Now we don't intend to cover the dynamics of these sectors today other than to say we remain alert to the lessons learned, lessons learned from those sectors from community standards to competitive forces. Now I've enjoyed my role since joining the industry, and I've always been connected to the core drivers of the business being the product portfolio and our underpinning license instruments. So I'll spend a little bit of time talking to you about today. First up, some insights into our all-important product portfolio. A slide in the representation you probably haven't seen before. I thought I'd share this view. It's the 52-week average turnover view, and it's designed to smooth out the short-term volatility and show product and portfolio trends. Whilst we optimize gain performance for the short and medium term, long-term sustainable performance across the portfolio is always our ultimate goal. The structural levers of game design and pricing strategy are carefully planned and work hand in hand with the shorter and medium-term strategies, which I'll take you through shortly. Now clearly, Powerball in the middle of this chart has been a significant and prominent part of our recent history, but you hear us talk a lot about the overall portfolio approach. As you've seen, about one change a year to the portfolio has been well adopted by customers and our regulators, and continue to renew and refresh products and pricing to support growth. This timing works well as despite the research and testing in advance of changes, real -- assessing real-world impacts informs our future development road map. I'll go through some levers to manage short and medium term in a moment but some reflections from me on this chart. Now there are so many stories to tell in this chart with so many product changes, but I'm going to focus on three key products during the COVID-19 period. COVID-19 was a particularly peculiar period for a lot of industries and businesses and as with no exception. Off the back of the 2018 Powerball change, we saw that game elevated in its performance, significant additional liquidity was running through all of our products at this time. And you'll notice from the bar in the middle of this chart during the COVID period, Powerball effectively flatlined from its step-change growth driven by the 2018 change. Now effectively, the story behind that was that whilst we had good like-for-like across -- throughout all of our games, and particularly with Powerball, the extra participation in that game in particular, really increased the win rate. And we took, there was 126 weeks between $100 million jackpot events. So whilst the performance of the product was performing very well, it was struggling to find the high notes that it had been designed to deliver, i.e., $100 million and above jackpots. What I particularly like about the story though is the fact that Powerball didn't play the significant role. And we followed through with some changes during that period to our Saturday product in March of 2020 and Simple Life in October 2020. Pricing and structural changes to those products, our important base game portfolio, really picked up where the jackpot games have here in the preceding couple of years. So it's just a really interesting dynamic to show that the portfolio can quite often complement where some products taper off, other products will pick up. It's part of our diverse portfolio offering and suits the player motivations and needs. Whilst big jackpots grab attention, we value the role of our base games, and I really like this one as one of the unique examples in the power of our portfolio dynamics. Importantly, also in this chart, structural changes can take time for the benefits to play through, and I'll show you a little bit more about that in the Powerball slides in the future. As we've seen, Powerball 2018 changes are still heading new records and Oz Lotto took 12 months to hit some of its designed high notes. Moving into some of the more active short-term management. Whilst product changes and new products are critical ingredients to establish our longer-term footings, equally important is our ability to sequence and optimize offers and utilize game reserves in the effective management and health of each game and the portfolio as a whole. As Andrew indicated, our products are designed to deliver to a wide range of player motivations through the scale and wide participation and can create some of Australia's most exciting events. And you heard Andrew and Antony mentioned the keys of P with the $200 million event, and not just the $200 million, we still managed to get queues out of venuses these days, which is incredible. Then there's the disciplines around the effective utilization of our game reserves across the various games. Our price reserve funds form part of the price structure, so actually players funds. They are fundamentally there to ensure we can guarantee Division 1 prize pools and short-term game fluctuations, but this extends into the very noticeable jackpot sequencing. And I would break these into three parts. What I would call a normal sequence where participation levels largely fund the predicted jackpot offers, and occasionally, we can also slow down sequences to avoid clashing such as end over mega draws and events like that. But more noticeable perhaps are our accelerated sequences where we tactically utilize reserves to drive activity. To bring this one to life, I'll profile the mechanics shortly of our record $200 million event in February that only came about due to one of these accelerations, and we're actually in one of those accelerations right now in the Powerball game. All of these principles and practices are constantly monitored and managed to adjust for positive and negative market conditions. So how do we continue to cultivate Australia's best water caller worthy events? Each of our games has its unique stamp, and part of their character are event draws. It's event draws. For some, it's a unique game proposition that appeals to a subset of our players, double dividends for weekly windfall, for example. And for products like Saturday are now more prominently Powerball, these event draws serve as a gateway to the category, where players come and try and then opt to experience our broader offers. Our game management and marketing teams work extremely closely in short, medium and long-term demand forecasting, annual plans, optimize and place event draws like Saturday Lotto Super draws through key holiday periods and key retail selling periods, promotional programs are then overlaid and some promotions we leave flexible to adapt to market conditions. You'll notice will occasionally drop, an event draw at the back of a large jackpot sequence for the like to pick up that extra participation that's in the market. To give a sense of scale, in FY '24, the planning resulted in the following activities to maximize our portfolio results. The 52-week calendar involves the planning, promotion and conduct of more than 800 draws, slightly more sophisticated than the one we saw out here. And far more when you include Keno withdrawals. Throughout that period, 35 promotional and special event draws and periods were plotted against this calendar to optimize and stimulate customer demand. And then, of course, there is the science and art of setting our jackpot sequences. I mentioned science and art for a reason. Many elements are in our control. Markets usually respond predictably, but we definitely have to manage many up and downside scenarios as the balls fall where they fall. To this end, we had 5 sequence changes during FY '24 to optimize the portfolio as well. Now for one sequence in particular, and one that I hope you'll find interesting, it's much talked about is what are the -- what's the magic formula behind the most recent record $200 million event. In short, the top chart illustrates the turnover benefits from accelerating the jackpot offers and the chart below the relative impact on our price reserve fund of a winning entry at each jackpot level. If only we could prescribe the formula more often, the choice between $750 million or $1 billion over a 7-week cycle is an easy choice. It's clearly not quite that easy. And the aim, of course, here is to drive for material, $100 million and potentially $150 million events through the effective return of players reserve money. As you can see from the drawdowns on the bottom left, the accelerated sequence we are spending reserves at each level with the highest at $100 million. So it's unsustainable in the long term. On the benefit side, we see short-term sales flow and participation in Powerball and other games, new customer acquisition and high-profile free media. We balance that against the price reserve fund spend, key risk levels, impact on other events and, of course, jackpot fatigue. In short, this sequence ran four times from November last year. It was one at $20 million and $30 million costing the price reserve fund during that period. On the fourth attempt, not only did it deliver $100 million and $150 million that it was structured to, but it also delivered a one in 7-year event and a new Australian record $200 million, delivering record top line results and actually building reserves at that sales level for future utilization. Following on the Powerball theme. Now he's one that -- I know you're probably wondering why I'm showing it to you again because we made this change some time ago. It's a good one for me to reflect on for a range of reasons. As indicated earlier, some changes take a while to mature and settle, and this fundamental product repositioning has done a number of things. It's underpinned growth over a period of years, still stretching its legs 6 years on with a new record high. It's not materially impacted other core games in the portfolio. It's played an ever in gateway to category role with new customer attraction and cross participation. It's proven extremely elastic when it comes to pricing as its offer is compelling. Whilst jackpot fatigue is a thing, we've been able to manage it within the game but also the broader portfolio. And yes, it's introduced some additional volatility, but I'd frame this as positive volatility as we look at the long-term trends in performance. With all this being said, there is still opportunity for this game. It's a category leader, is showing great resilience and adaptability and good price elasticity. Now a slight change of tact from revenue driving and growth activity. Whilst we're extremely proud of our growth story, we're equally proud of our ability to maintain a balanced position in society and staying true to what this business model was established to deliver. Our growth has been achieved over a period that's maintained our total industry share at circa 12% per the latest Australian Gambling Statistics data that was released last month. Barring a few anomalies during the COVID period, 12% is sort of where we've tracked over the longer term, and we still managed to achieve a fantastic growth rate. Important in maintaining balance is our ability to deliver our products in ways that help reduce the risk of player harm and produce our players access to the right information and tools to manage their play. We acknowledge that all gambling products have the potential to be harmful when used excessively. However, the lion's share of products in our portfolio that is Lotteries, Instant Scratch-its and In-Venue Keno are on any objective measure at the lower end of the harm spectrum. This stands to raise when you think about traditional lottery products. There's very low incidence of problem gambling for people who only play Lotteries. It's intuitive, lotteries are drawn in frequently and are typically low spend. So Lotteries are a differentiated proposition to other gambling formats. And this is important to note as you consider potential risks around future regulation of the gambling industry. Whilst the vast majority of that business has inherently lower risk profile to other forms of gambling. We have a long-standing commitment to programs that responsibly promote our products, educate staff and players, and provide information and tools that work together to ensure our players can sustainably enjoy our products. Our program is pleasingly recognized independently by the World Lottery Association as industry best practice. We have a range of risk-based tools to help manage their play, which we've expanded recently with the introduction of mandatory spend limits for those playing online Keno. This complements existing player tools like deposit limits and take-a-break functionality. We're also proud of the work we've done in our early intervention models, which have been developed with the support of behavioral and data scientists. These models identify potential at-risk behavior by players, and we commenced reporting the volume of interventions made as part of our enhanced disclosures in our recently released sustainability report, and I think some of those statistics are in Sue's presentation earlier on. The success of these tools is enabled by a known player base, an enormously powerful asset of TLC in both the efficient and effective in servicing our players now and into the future. To assess the effectiveness of our programs and inform future development, I work closely with the executive team and chair our Responsible Play Committee, that reports through to our Board committees. It draws on experience and specialist skills from my team, but also the various functional SMEs and experts all across the disciplines in our organization. We never say lotteries are no harm. And we know that other prior portfolio have a different risk profile for vulnerable players, namely Online Keno. We continue to use research and player data as evidence to support ongoing enhancements to up to our responsible play programs, both across Lotteries and Keno, and we take a risk-based approach and use the best evidence available to us to minimize potential harm to our customers and ensure the long-term sustainability of our business. With this in mind, I'll note we actively engage with our regulators and governments on our experience and learnings and contribute to public policy considerations. The current federal government review into foreign-matched lotteries and digital Keno is no exception, and we are constructively contributing to this review. If I can round out this section with a brief story, and I think it speaks to the culture within TLC, we have a partnership with relationship to Australia, a care service and advocacy group that provide help across a range of societal issues and gambling issue being one of them. In this partnership, we enable them to come into the organization and talk to staff, and we invite all their staff. And they, we have -- they help service providers, but we also have the live experience from a number of people sharing their experience with gambling harm. They're enormously powerful sessions. And what I'm really pleased with is the level of participation that we get throughout the organization, a completely voluntary session. And I've got to say they are the most well attended sessions that we hold internally, and I think it speaks to culture. And I think it's a culture that goes beyond just compliance. We do these things to preserve our social license and because we believe. Speaking of social license, our actual licenses are the group's most valuable asset. These licenses both individually and collectively afford us the scale and trusted position in market to deliver against our core purpose. Our commitment to preserve and enhance the value entrenched in the licenses runs deep and is multifaceted. As I've talked about our commitment to responsible promotion and harm minimization is embedded, in addition, we're proud of our support for the 50-50 Foundation and the planned expansion for play for purpose through the reach of The Lotto app. This further enhances our commitment to supporting our communities. We deal with seven state and territory governments and their respective regulators. We have comprehensive and ordinated approach in maintaining constructing -- constructive working relationships with all. This program allows us to maintain and uphold our compliance obligation but also have constructive policy discussions in the best interest of industry sustainability. We view our custodianship of these licenses as a privilege to preserve and to build upon. Critically, we also need to ensure that we're on top of market changes, customer expectations and new competitive models. We balance this with constructive public policy advocacy whilst also utilizing as a source and motivation for innovation. Finally, we have a strong domestic and international partnerships that also serve us well from our colleagues at Lottery West to the World Lottery Association and many in between. So how do we drive all this activity? I lead and manage this program and have the support of a large cross-functional team and group of experts that have met twice weekly since demerger, more formally on a monthly basis. This is managed as part of a program of coordinated levers and progress reported on and discussed with our Board. Not all levers are in play at any one time, but we are ready to adapt as needed. As you'd expect from an ASX 50 company that's highly regulated and operates government-issued licenses, we have a comprehensive stakeholder engagement program. At its core, this is about advocating for the sustainable lotteries and Keno industry. It's in government's interest for a sustainable and commercially successful lottery industry with circa 2% of state government tax revenues on average coming from lottery taxes and duties. There's been a substantial focus on gambling reform in recent years. That's understandable as the growth in sports betting, advertising, online turnover and levels of problem gambling has been out of balance with community expectations. If something goes too far one way, you get a reaction, and that's what we've seen so far. However, it's important to note that in all recent major gambling reforms and inquiries made by governments and parliaments, lotteries have been excluded. This is true for the credit card bans coming into effect in December 2023 for online gambling. And it's also true for the Peter Murphy chaired inquiry into online gambling, which called for further gambling advertising restrictions. Lotteries were excluded because those governments and communities understood that lotteries are sufficiently low harm to be exempt. This is a sensible policy and was in line with our advocacy as well as that of our partners such as Lottery West and our retail associations. As mentioned earlier, we're also participating in the review into the impact of foreign-matched match lotteries and online Keno and are engaging with the Federal Department of Communications. If I can leave you with three key takeaways: scale, integrity of operations and trusts, both of our consumer and of our stakeholders. These are the platforms when coupled with our license strength, our operational know-how and our ability to adapt that have underpinned our strong performance and resilience to date, and I believe we'll continue to underwrite it into the future. Thank you. I look forward to your Q&A. I'm now going to pass over to Andrew and Antony to take you through some Keno. Thank you.

Thanks, Callum. Now time to talk a bit about Keno. Keno, we have had fantastic consistent growth over the long period, which is really impressive. The reason for this, we really see it as a complementary product to sit nicely alongside Lotteries. So what we find is that Keno, it's all about enhancing a night out. It is part of the entertainment budget from a consumer point of view. So it's complementary to Lotteries in the sense that Lotteries is more of that household budget day-to-day. So that's why we see Keno. It is a lottery product, but it sits nicely as a complement in a consumer sense. Majority of turnover is coming from the retail side. It is focused on smaller prices, enhancing your night out. And the digital side is really focused on Victoria and the ACT licenses with our integrated omnichannel offering. Our focus here on the digital side is really about responsible advertising, doing that in a sustainable way to promote the business and complement our retail network. As Antony said, our greatest point of difference is our retail network. And having that working with digital in an omnichannel sense is the best way to move forward. We have enjoyed very resilient demand over the long term, thanks to that strong retail performance post-COVID. We have seen record traffic in our stores across pubs and clubs, particularly in Queensland and New South Wales, there is a very strong culture of pubs and clubs in Queensland and New South Wales. And we also feel that in a tightening economy, there's been a bit of a downshift from restaurants to pubs and clubs driving record venue traffic, which our local area marketing has taken advantage of to drive strong Keno sales. Majority of turnover is coming from New South Wales and Queensland. And yes, we've -- it is all about the [ LAM ]. I'm now going to talk about the new campaign. It is all about social occasion for Keno. And it really does underpin our social license, and we see this as the way to be promoting responsibly, promoting around social play. It is intentionally positioned as a lottery-style product to increase that social permissibility and social license. You'll see that the campaign, it does focus on the fund being in the playing with social connection, really focusing a bit like lotteries in terms of the fact that it's easy to play. There's simple mechanics like quick picks to purchase. There's low cost and frequent wins. The social connection really means that where we see the sales peaks is generally Thursday to Sunday and mostly 5 to 8 p.m. in the retail sense. So the campaign platform is about together we play. It really brings together the fact that it's a social game brings everyone together for a bit of lighthearted fun where the real win is in the plan. We see this as being a key differentiator in the market. The creative idea that agency developed here was really to bring friends together to bond over a game of Keno where everybody has a role. So whether you're the social organizer or whether you're the person that's helping to choose the numbers or buy the tickets or check the wins, it's all about that fun playing together. So we'll now show that our new Keno TV commercial. [Presentation]

And now Antony is coming up to join us.

So our Keno operation, not dissimilar to Lotteries is one of the largest retail networks as well. So we've got about 3,200 iconic pub and club venues that operate the Keno game. The other purpose of the slide that you see there is to really showcase the power of the relationships that we have and the Keno has across a number of our industry bodies, association and key retail partners. When we look at key accounts, the investment that we've made in time in those relationships has been fantastic. With over recent years, we've actually gotten about 3% greater growth from the key accounts and the rest of the Keno network as a result of those partnerships. So again, the same theme as in Lotteries, our stakeholder management is absolutely essential and strategically important to help us with the ongoing success of our licensed venue network, and I think when you think about Keno in the way that it's a very small percentage of the revenue for Pub and Club, so those relationships become even more important. It's absolutely successful or imperative that we operate these relationships and partnerships with the same win-win mindset that we talked about in lotteries. So accordingly, once again, we have partnership agreements in place with all of our key industry bodies across the Keno network. Let's hear from a couple of our key partners now. [Presentation]

And in terms of those local area marketing events out in the trade show, we've got some examples of what they look like out there, and they are absolutely critical to the success. So just the key takeaways in terms of Keno. We will continue to drive the performance of Keno in a responsibly sustainable way, making sure we continue to differentiate ourselves from other operators in the market. Responsible play will be absolutely critical as we continue to build our social license. We'll continue to build our omnichannel approach with the product offering focused in line with social occasions. And most importantly, we'll continue to enhance our partnership with industry stakeholders and venues, aligning our shared interest to drive value creation for both our customers and the community in which Keno operates. So with that, I'd like to hand over to Adam Newman, our CFO.

Thanks, Antony. Welcome, everyone, and thanks for joining us on our very first Investor Day, which is an exciting milestone for our company. As Antony said, my name is Adam Newman, and I'm the CFO here at The Lottery Corporation, and I'm proud to be talking to you today about how we drive value through a strong focus on financial discipline. My key message is that TLC is well positioned to deliver shareholder growth and long-term value through disciplined capital allocation, through strong cash flow generation, through digital transformation and operational efficiency. I've been involved in shaping our financial direction and ensuring that we maintain a disciplined approach as we move forward. We are focused on 3 key areas. And as Callum mentioned, maintaining the long-term value of our licenses, continuing to evolve our business as efficiently and as cost effectively as we can, and delivering long-term value to our shareholders. So let's now dive into how we do -- how we're achieving this. We're committed to maximizing shareholder returns through a clear and disciplined capital allocation framework. Our capital allocation is anchored by strong cash flows from both our lottery licenses and the low-capital intensity of the business. Our investment-grade credit rating ensures that we've got a flexible and robust balance sheet, and we are committed to providing consistent and reliable dividends to our shareholders. Since our results, we have reaffirmed our existing bank debt facilities, extending each of the existing tranches by 2 years on improved terms with our existing banking syndicate. Some of them are here today, and we thank you for your support, and it's a great demonstration of the confidence that our business partners have in our company. Importantly, we chose to maintain the existing $950 million facility to ensure that we've got flexibility for any future domestic license opportunities should they present. Our framework is designed in order for us to be able to return value to its shareholders in a tax-efficient manner, if funds aren't required for both license opportunities or other opportunities as that may be. If we can now focus on the variable nature -- wrong slide, my apologies. Let's just take a closer look at the composition of a typical lottery ticket. And so we can see how our stakeholders benefit and where upside exists. 60% of the subscription prices returned to players in the form of prices, where 30% or more goes to government through taxes, and this contributes to both community support and essential services and underpins our social license to operate. Commission of around 12% is paid by customers on top of the subscription price and is through our many retail partners, and it's why the totals that you'll see here exceed over 100%. For most digital sales, TLC retains the commission such that digital margins are over 2x that of a retail margin. As you can see, our digital mix has been growing steadily as a key driver of our margin expansion. However, all stakeholders, and that's governments, retailers and players benefit from our long-term licenses. It also enables us to take a long-term investment horizon and reinforces the sustainability of our business model. If we can now focus on the variable nature of our cost base and cash flow generation, which are key strengths of our business. I love this slide. It nets together the information that we discussed about the composition of a typical lottery ticket and transposes it, if you like, into what you see on our financial statements. And I probably should point out this is at a group level. So it includes Keno, so some of the numbers are a little bit different to the numbers that we looked at on the prior slide. To start with our turnover, once again, at a group level, 63% gets returned to players in the form of [ prices ]. 32% of our turnover is linked to VC like taxes and commissions. This variability gives us flexibility, allowing us to adjust based upon turnover fluctuations as they may occur such as jackpot-related movements. Despite the fact that our costs since demerger have risen, and this is particularly driven by the technology separation, OpEx remains a relatively small proportion of our overall business, representing 3% of turnover, which is lean for a business of our size and scale. Based upon our benchmarking, and then when we look at total OpEx to sales, which we believe is a better indicator of activity and then costs and revenue per employee, we sit in either the first or the second quartiles. Do appreciate that benchmarks are only really directional in nature. And there's many differences that occur between companies, between markets and between products that make them sort of not definitive from a comparability perspective. As Sue mentioned earlier, the management team remains focused on managing our operations as efficiently and cost effectively as we can, ensuring that we're able to maintain financial discipline as well as grow the topline and deliver value back to shareholders. The separation now complete, we remain firmly in control of our cost base, which marks an important transition for TLC and where we can focus on optimizing our structures and reinvesting back for growth. We've implemented a multi-year optimization program, and to date, that's focused on areas such as vendor contracts, shrinking our property footprint, some of our technology platforms. You heard Loren talk earlier about the replacement of our ERP and continued refinement of our operating model. Now that we're fully independent with the agility to adjust, our operations more efficiently and effectively and ensure that every dollar we spend is spent with a clear return in mind. Cost management is embedded at all levels of the organization from the ELT down, and we're aligned on maintaining cost discipline. As we've mentioned previously, we'll seek to reduce OpEx growth to below normalized revenue growth. And then optimization, we're focused on releasing funds back into the business in order for us to be able to continue to grow our topline. So for me to wrap up now, there's 4 main areas for my points that I want to leave you with. First of all, our cash generation remains strong, underpinned by our long-term licenses and our disciplined approach to capital allocation. We have a clear ongoing opportunity for margin expansion, especially through the increasing digital sales. Our cost base is flexible, and we continue to focus on efficiency and optimization, enabling us to reinvest back into the business to grow our topline and deliver value. We're confident that our approach will continue to generate shareholder value, driven by efficient operations and strategic reinvestments. We look forward to continuing this journey of growth and value creation together. We thank you for your trust, and we thank you for your ongoing investment in The Lottery Corporation. With that, I'm now going to hand back to Chris.

Thanks very much, Adam. Can you just give us a moment? We'll take the screen up, and we'll now set up for Q&A, and I'll ask the presenters to please come up to the front and take their seats.

[Operator Instructions] We have 2 roaming mics, one on each side. So please just put up your hand, and we'll try and get to you. I'd also ask you to please identify yourself before asking your question to help for those watching online to know who's asking the question. Some hands starting to come up here. So with that, we'll start the questions and turn it over to the panel. Thank you.

It's Justin Barratt from CLSA. So at the top of your presentation, you highlighted that you do think digital is likely to become the largest contributor to turnover over time. As you see it right now, is there a ceiling to that share of turnover as you see it? Or is it something that can continue to really push higher over the very long term?

Yes. Look, I think from our point of view, and it came through a little bit in Andrew's presentation and in mine, what we're focused on is that whether there's a ceiling or not is really about whatever the customer chooses. So for us, we think the best value that we can get out of our strategies is to focus on that long-term lifetime customer value. And we want people playing over the long term. We want them playing across channel for all of the reasons that we showed and the metrics that we showed that support that, that is the best strategy for us. So I think what we want to do is keep delivering products and keep delivering our offer in a way that really makes it as easy for people as possible to play across channel and to make that choice themselves. So we're not setting a particular target around digital. We really are saying our focus is on customer, and our focus is on best experience we can deliver to customers, and where all that settles will be a fallout of that.

Great. We have Adrian.

Adrian Lemme from Citi. Andrew, you talked about the buzz that you saw on that $200 million draw. And I'm just wondering, we can see in the like-for-likes, the $100 million draws, I'm guessing aren't generating the same buzz they used to. So with these game changes you're looking to do down the track, is it an objective to try to get these larger draws, $200 million, $300 million or whatever to just get that excitement of the players?

Yes. If we just reflect firstly on your observation on the $100 million, we came off the last one in February off the back of the $200 million. So we went $100 million off the back of Megadraw, December into $100 million to $150 million to $200 million first week of February. We then had a next one in May, very close proximity. So that was slightly softer. But the most recent $100 million was a lot stronger than that previous one. So we are seeing like-for-like growth at that level. Your point about the hype that we get the first time we go to a record, it's not possible to regenerate that level of excitement the first time when you get a record. So when we went to $200 million, we generated $10 million in that 1 week just in free publicity about the jackpot amount and then the $2 million in winners follow-up. So it's $12 million in free publicity just in that week. The next time you do that, when it's not a record, it's not possible to get the same level. So the market moves over time, and we manage that market expectation, but it doesn't mean that we go after -- we're just trying to get a record every single time. So there -- we're not seeing fatigue. We're seeing growth at those levels, but it's not possible to generate the same participation awareness that you do the first time you go to a record.

Just adding to that, I think one of the things that we've done very well in Australia is developing this very diverse portfolio of products. And Andrew showed that what we call that market motivational map, which is about having each of the products very strong in terms of positioning against the reasons that people would choose to play the products. And so I think for us in terms of this overall overarching goal, which is long-term sustainable growth, we're in a very strong position because we've made sure that we've got this broad appeal in terms of portfolio of products and that we manage them well to ensure that each one has a strong position, and then each one is performing. And that then goes to our product innovation, which is about continually refining those products within that portfolio to make sure that we're always making sure each of them have that strong appeal and can deliver the growth into the overall portfolio growth?

The other thing I'd just add, Adrian, is it's a fast-moving consumer good. It's a low involvement purchase decision, and it's amazing. The more people that we get registered, the more reminders we get out there, the more participation and spend that we drive. So we are moving, we're growing that in a major way.

If I can add one more element to that, it's a complex one, and I probably should have put it on my sort of 6-year journey on Powerball. One of the learnings that we've had since we introduced that change in 2018, which was a step-change, we've had numerous periods of high jackpots, and successive high jackpots where we've had 100s and 150s on top of each other. And then we've had large absences. And sometimes what those large absences give you is a bit of breathing space with the consumer, and you can bring back another $100 million or $150 million event and the market, I'll call it, recovers. And then it's equally stimulated. So whilst we carefully manage the records because, as Andrew said, the records are critically important because we like to claim the record and it does create that buzz but equally the market can recover, and we've proven that over that sort of 6-year journey with the game. So there's been lots of learnings since we've made that.

If I may jump in as well, look, I mean we talked about the estimated retail or media value of the retail network. And when we get to those $100 million pluses, we've got a really comprehensive program where we support retailers with collateral balloon streams, all that sort of thing, and that's about activating customers when they see those outlets, but it's about activating excitement in the retailers as well. And certainly the first half of this year, the retail sector has been tough. So giving them some hope and optimism through our brands and businesses and getting them excited, getting the customer excited is a really important part of the journey that Andrew and Sue also outlined as well.

You tell we're very passionate about our products.

Daniel Seeney, QValue. I just wanted to touch on registered customers, which is obviously a key part of that personalization marketing journey. It seems to have been relatively flat over the past 2 years or so at about half of the active customers. Just wondering when you think you'll start to see a bit of a step-change there and what the key initiatives are that will drive that?

I might get Andrew, I mean we talked a little bit about customer data platform, that personalization journey and continuing to get better and smarter at the way we do that. And I think that would be good to cover, Andrew.

I didn't understand what you meant, Daniel, by saying it was flat. Which component was flat?

Sorry, I'm just looking at your disclosures, which you disclosed active -- total active customers and then active registered customers. And if you look at that as a percentage, it's tracked around half for the last 4 halves at about 50%.

Registered versus total customers.

Yes. Okay. So total registered customers overall started -- has grown. Which period are we talking?

I think those disclosures have been in place for the past 5 halves, just looking at that period of time.

So I mean, basically, it's saying that we are having success in building the overall customer base, and we're managing to track I guess, consistently with that, the proportion of that, that we're bringing in to be active registered. I think then besides the numbers, of course, is the fact then we get the benefit from the average spend of those active registered customers being much higher than the unregistered. So it's looking at the numbers as well as the value of those customers. I think you look at those 2 things together, we're keeping pace in terms of the percentage of total customers that we have as registered, but we're getting more value from those active registered customers.

Yes, I would just add that we are growing the total base, and we're growing registered, and we're growing registered at a faster rate. The DERM project that we launched a few weeks ago, we've had good take-up with SMS and people being able to sign up quickly, and it's going to be a great platform for future engagement with price payments.

And sorry, just an extension of that question, is there a strategic target about how many of the active customers you think will be registered in, say, 5 years' time?

Look, we haven't -- we considered targets and whether we set targets and talked about targets today. I think in the end, and I actually sought feedback from all investors through the results meetings that we had at year-end results. Ultimately, as you know, our revenue is very widely known because there's a number of very good analysts who write about what our revenue is by reverse engineering from the prices paid. So we chose not to set targets because there is really that visibility already. I think ultimately, our objective is to get as many of those total customers active registered for all the reasons that we've spoken about.

Any more questions?

So it's Matt Ryan from Barrenjoey. So I think you might have just alluded to my question. So I think what we've learned over the last couple of years since you've been demerged is that the market is actually trading your company very short term and it tends to trade at around these jackpot runs. I just wondered how much you guys think about that as an issue. Clearly, there's a very long-term trend to growth. But what sorts of things can you guys do, I guess, during a period to maybe allude that volatility? So obviously, the jackpot reserve is one thing, but are there other things that you guys think about in terms of maybe creating more sustainable growth every year rather than having these more wild swings in shorter-term periods?

I think for us, you've heard me talk before about wanting to have a balance in the portfolio. So a part of managing that long-term sustainable growth is making sure that we have this strong part of our product portfolio, which is what we call our base game, Saturday, Monday, Wednesday, instance, et cetera. That certainly got a much more predictable revenue path. And then having the jackpot games and driving those as well and taking, I guess, what we can from those -- from the upside of the big jackpot roles. And that's part of it. Part of it is our story, which is about long-term sustainable growth. I think we're trading at a very positive multiple, and we should be, I think, for the sort of attributes that we have as a business. We're still pretty early on in that listed life as we spoke about. I think having this session today is about educating the market as well, more on what we're doing in the business to drive performance and all the levers that we have available to us. So giving more insight into that, I think, is also part of it. Anybody want to add anything?

I was just going to add, Matt, the Weekday Windfall, and we have focus on base week games to take that volatility out of the market with Powerball, then the change to Monday, Wednesday, Friday, with Weekday Windfall, consumers were asking, I just want to win $1 million, ease me from -- into more financial security. So we took that $1 million offer for up to 4 winners to $1 million winner up to 6, three times a week. So, we went from potentially 8 to 18 with a small price increase. That's been very, very positive in terms of uplift. And then the next change we've got is Saturday Lotto coming in the last quarter of this financial year. So there has been a flow back in terms of product development, especially focused on those base week games, which is -- would you Callum, are you going to add something?

Yes. The only other thing that I'd add, Matt, I guess we're constantly learning from not only our own experiences, but from others around the world, particularly as I talk about pricing strategies on some of our products and the elasticity across the portfolio. So I think whilst the base games are super important to us and hopefully, that chart that I showed earlier, demonstrates the interplay between some of the products. I think some of the strategies and thinking that we have today even differs from where we were 5 or 10 years ago through some of the learnings that we've had ourselves and also from around the world.

Justin Barratt from CLSA again. I guess a bit of a follow-up from Matt's question. I mean we've seen Powerball grow as a percentage of turnover from 30% up to sort of circa 40% now. But you obviously continue to talk about the importance of a balanced portfolio. At what point -- a lot of growth has come from Powerball. At what point does that sort of become too big and you lose the benefit of that bulk balanced portfolio?

Do you want to talk to that?

Yes, it's a good question. I don't -- I think I have a really crisp answer for you. It's -- we've always tried to maintain a fairly even split between base games and our jackpot games and the repositioning of that product came with risk and opportunity. It sat very similarly to Oz Lotto side by side and that repositioning that's fundamentally worked. But as I indicated, we think there is still more room to grow, but that, what other levers do we need to pull through the other games within the portfolio to counteract and balance that. So there are always different levers, whether they be price or structure, but we definitely are thinking about that and what is too high. I think of its peak in '24 of the statistical 1 in 7-year event, we've got to 40-odd percent of the portfolio, it's probably over-indexed slightly. But yes, it's definitely a consideration as we don't want that to be -- it's certainly the preeminent game now, but we don't want that to be too much of a lion share, if that makes sense.

Matt, I would also add that historically, Saturday Lotto was the gateway to the portfolio and for the younger generation, our Powerball, if your under 40s, Powerball has become the gateway to the lottery portfolio. So now that we're getting people registered and we can cross-sell and upsell into the other products, so we have been very successful over the last 3 or 4 years in whichever brand they've come through been at a cross-sell and upsell to other brands. So that's an important point as we get more and more customers registered.

I guess the other one, just to highlight and it's only come out, the change has been there for a while, but we look around the world constantly for learnings. Obviously we have our own learnings, we do our own research, but the recently announced Mega Millions, change in price over in the U.S. going from $2 to $5 will be a fascinating one to watch that play through. I always say the benefit that we have in Australia and within our business is that we have control of the entire portfolio, many lotteries around the world don't. Those in EuroMillions don't have full control of their portfolio. Those over in the U.S. don't have full control, and you end up with these slight horsepower rates with some products. So that will definitely be an interesting one for us to watch and learn from and we take learnings from wherever we can get them.

[indiscernible] from Macquarie. Just a question around retail distribution. How fast do you expect with the likes of the BWS pilot program to scale up as well as does this change in terms of retail distribution? Does it have a skew in terms of the products that will benefit as a result?

Yes. So in terms of BWS or any other channel, we do thorough assessments. So I guess being a franchise, we've got to be cognizant of the franchising code and the other franchisees that are already in the network, and we've got to make sure they can continue to benefit from the -- their franchise agreement as well as the new franchisees. As I mentioned, we have a sophisticated model that we use on a per outlet basis, to say it's just going to add incremental value for TLC and the franchisee. So we would probably very unlikely we'd ever get into a situation where we say, in the example of BWS, we're going to go into all outlets because there'll certainly be outlets that won't give us that return or BWS a return or they'll redistribute from an existing franchisee. So we don't think we'll get beyond what we've communicated with BWS this financial year of those 10 outlets, but we're certainly working with them on what that looks like beyond that as we are with a number of other individual mom and dad operators and other groups, like, for example, Australia Post, we've got 300-odd outlets in the Australia Post network, and we're working with them. They've obviously got their challenges at the business at the moment, and they understand the value of having lotteries in a post outlet, particularly in those remote areas. So there's lots of balls in the air to continue that growth. But primarily, we want to make sure it's customer led, and we're in and around those high-traffic supermarket precincts.

Any further questions?

Paul Mason from Evans & Partners. So I just wanted to ask about your segmentation information that you provided and sort of how you think about Powerball versus foreign-matched lotteries in that regard? Whether you think they're sort of part of the same segment of buyer interest or whether there's actually a whole new category you guys could explore there?

Do you want to talk about the product side?

Yes. So Paul, we looked as that are purchasing those foreign-matched lottery products. So we can track which customers have gone to their website versus our website. We can do Venn diagrams on that. There's not a huge overlap. It's a small overlap with our player base. So what we're seeing is some incremental turnover being generated there. I think there's a lot of confusion about that product and what people understand that product to be. So yes, sorry, sue.

No. Look, I think we are very much as you know focused on our brands and building the trust and the integrity that attaches to both The Lott brand as the overarching channel brand and our individual game brand. So I think customers, our customers understand our brands that understand who that comes from and what they're getting when they buy that product. And we're making sure that, obviously, we make that very clear out in the marketplace.

Daniel Seeney, QValue, again. I just wanted to touch on Instant Scratch-Its, because they don't really work in a digital environment. And we've seen turnover in that channel go sort of backwards slowly over the past couple of years. And it's not insignificant, it's sort of similarly sized to Monday & Wednesday Lotto. I just wanted to understand how you're thinking about that category strategically over the next few years. Is it in permanent structural decline? Or is there something you can do to reenergize that channel?

So Daniel, Instant Scratch-Its, yes, it's been an interesting few years over the COVID period. We saw some quite a bit of uptick in terms of turnover, some very solid growth. More recently, post-COVID has slowed slightly. We're changing the product mix to reflect the current economy. So you'll see tickets out there like loaded, which are loaded with 10s, 20s, 50s and 100s and that's been very successful in getting some uptick. The strategy more recently has been very focused, I'm working very closely with Antony and the channel team on gifting. So gifting for all occasions. And getting the current loyal target market to go and find others that share similar interests. So the gifting strategy has been very, very successful particularly at Christmas, we've seen huge high percentage increases year-on-year with Christmas gifts, so this is the bundling of Instant Scratch-Its to give as presents, which then gets consumers finding other similar consumers. So to answer your question, no, it's not a structural decline. There's sort of some post-COVID reaction there. But no, we don't see it as being solid decline, but the strategy moving forward is very focused on belief and winning and strong gifting strategy as well as changing the product mix such that it reflects the current motivational drivers in the economy.

Probably just off the back of that, as we get deeper into the convenience channel, Instance tend to over-index a little bit in that channel versus other channels. So we are seeing stronger results in that product. And given it's a retail-only product, that's going to be important to that category.

Interestingly, so Scratch-Its was one of the products that benefited through COVID. Because as you know, we managed to keep our overall retail network open as they were deemed an essential service. And through that time with other gambling options not available to people, that was one of the few times, really, we've seen some positive flow on come back into lotteries from that because usually, being such distinctly differentiated products, that's not normal in terms of a pattern. So some of that was just, as Andrew is saying, resettling back to probably what would have been a normal trend, had COVID not occurred through that time and had those restrictions not been in place for other products. But I think Scratch-Its is a great product in the sense that it's a physical product. Obviously, retailers like it because it's a product that only they have. And it's just -- it's a very differentiated product in terms of why people play it, what we can do with it in terms of different tickets. And it's a product where we can more quickly innovate around, within the actual product itself because we're printing tickets all the time. So we can see and test different gameplay mechanisms, different price structures and then reflect those into the next tickets that are coming down the line. And certainly, through into FY '25, we had quite a good Father's Day campaign this time around. So that's been a positive sign for Instants.

It's also been strategically important for bringing younger users into the category as well adding to '24 bracket.

Okay. Ben Wilson from Wilsons Advisory. Just interested in potential growth in the age cohorts below 55. I think all those cohorts grew at faster than the over 55s in the last 4 years. But just interested in further growth there. If you look at the skew of participation across the game, you set out on Slide 24 it's actually highest in Instant Scratch-Its. So it looks like potentially there's more growth, you can get more sort of penetration of those younger age cohorts.

I would total -- Yes. I totally endorse that position. Yes, I think there's strong potential upside for us to continue targeting that younger age group, create exciting products to get them to sign up and become registered. And yes, I think what we've shown over the last 4 years is that we have growing that younger sector. Interestingly, they spend at a lower rate, and their purchase frequency is a lot lower. So as people, life stage goes on, life stage does become triggers for purchase as people get car loans and mortgages and face the realities of life, the opportunities to dream about life possibilities get greater. So we do see more people signing up and people purchasing a lot more often. So you ask people rationally, "oh have you purchased?" and they'll say, "Oh, I didn't know it was $20 million." So it's just getting as many people registered and signing up as possible. So to answer your question, you're absolutely right. We do have opportunity to continue to grow that younger base, but to then grow frequency and average spend as well. And we have had some great success with that group more recently on the digital front, and personalizing the offers to the average spend that they're used to and then putting a product offer to them at that price point, the conversion rates are very, very strong.

I think further to that, when you look at our physical footprint, businesses like BWS example, their core customer base is in that sort of 20 to 30 range, which is the sweet spot for building that group up. So when they go into those businesses and see our products, they may not have seen them or take a notice of them before, so that helps activate those customers and get to them on the journey as well. So it's really important that we do have that diverse physical that complements the digital and the marketing campaign.

Rohan Sundram from MST. Callum, you mentioned earlier, you made an interesting point how sequencing can work both ways. So just curious, in the scenario where you have both 2 major games, sequencing or jackpotting simultaneously towards a big number at the same time, is it a straight forward process or much science is there behind? how -- and the key considerations as to how you go about managing that?

Straightforward, no. And it's not just the -- it's nice to have counteracting forces within the portfolio, but sometimes they invariably clash. And I guess some of the modeling and the intense modeling that happens on a daily and a weekly basis is really trying to assess the impacts. So sometimes we will be required to pull back a sequence. So we might have one lever set on one game and there might be on a collision course with another one. And so we need to ready ourselves and work across the marketing and retail teams to get the network ready to respond and react. Fortunately, those clashes tend not to happen all that often. But the hard ones are around our Christmas period, where we have a Megadraw. It's a critical sales period for that product and for our portfolio and our annual plan. And we try and preserve that territory for that game as much as we possibly can. But it's a pretty dynamic and sophisticated process. It involves Lotterywest, they're our trading partner over in WA. All these decisions are taken collectively. And whilst we manage the process within TLC, it's incredibly dynamic and complex process. We've managed to avoid some of those conflicts as much as possible. Sometimes they do clash but typically what we'll do is set those product up so that can absorb, all the reserves can absorb it. Net-net, we're always looking at what's the total portfolio impact. Reserves are important, but what's the total portfolio impact, and we're trying to maximize that. And sometimes some products will take a hit. I guess you all say that in your own analysis where some outcomes will be slightly softer than their peer comparisons, purely because there's been a collision. So it would be nice that you could beautifully align them in. But as I said in my presentation, sometimes the balls fall where they fall and you get those clashes.

That might be it. Any further questions, going, going? Gone. Okay. Thank you very much, panel. I'll now -- you can step down if you wish. And I'll ask Sue to come up for some closing remarks. Thanks very much.

Just waiting for this screen to come down. I did get told to make sure I didn't walk near it and get hit on the head. I succeeded. All right. Well, really, I just want to thank you all for joining us today, and thanks for the questions because we do like to have that interactivity. Thank you to presenters as well for their presentations today. I hope that you really have gained a deeper insight into our business and really now can see why we are the leader in Australia's Lotteries and Keno market and also why we are one of the highest performing lottery businesses globally. Our broad participation and low spend model, our diversified portfolio of powerful brands we've spoken about, we've given you insight into our significant retail distribution and the digital upside that we see. And also, of course, our defensive qualities that we've spoken about, strong cash flow generation and the privileged market position that we hold and how we work very hard to maintain that market positioning. So those are some of the key attributes that we think make our business an attractive investment proposition. Our Board and leadership team are very much focused on continuing to build on that proven track record and continuing to deliver value for our shareholders long into the future. So thank you, again. We're going to call to an end the formal proceedings for today. We do have a light lunch outside and some refreshments for you, and we'd love you to join us and stay and keep talking to the team. Thanks, everyone.