Notes from IGT Investor Day. Nothing major yet.
2011: Deliverables
- Growing game ops: increased domestic install base, first time since 2007; drove yields up 9% YoY
- Improving profitability by decreasing COGS
- Improving their competitive positioning internationally by restructuring their organization into 3 regions and introducing localized content
- Increased their interactive presence - acquired Entraction: poker, bingo, & sports betting
- Improved FCF: returned $120MM to shareholder; very focused on cash flow generation
Over the past 10 years...
- Generated $2.5BN of cash flow over the decade while their competitors have generated almost none (BYI & WMS)
- Returned $4.3BN to shareholders through buybacks and dividends compared to $250MM by WMS and ~$600MM for BYI (and that's over the last 2 years)
- Generated $11.5BN of gaming operations revenues, which is the most valuable part of their business
- They've nearly doubled their international revenues. Have a +13,000 unit install base internationally.
Plan: "The World of Possible"
- Grow revenue from $2.0BN to $2.5BN - didn't disclose over what time period so pretty useless
- Grow international ship share from mid-teens to mid 20's
- Gross margins from 58% to north of 60% through managing their promotions and having the best products
- Operating margins of 27% to +30%
How will they achieve their goals?
- Product, product, product and then focusing on process e.g. Sony
- They need to enter new markets that they aren't participating in with more relevant products, particularly locally
- Energize interactive division
- Next generation platforms: leading the "cloud transformation" bringing new technologies to small facilities - first outside the US and then in the US; this will change the way content gets delivered.
- Continue to be ROI-focused and being good stewards of capital
