Business SummaryAristocrat Leisure Limited (ALL) operates as a developer, manufacturer anddistributor of gaming content, platforms and systems in Australia, NewZealand, Americas, Japan and Rest of World. ALL also operates within theon-line social gaming and real money wager markets.

Games: Games are developed on a continuous basis. Some of the latestgames include 5 Dragons Legends, Queen Of The Nile Legends, PandaParadise Quick Fire, The Red Empress, Sparkling Royal Jackpot Streak,Electric Boogaloo Quick Fire, Sun King, The White Wizard, and Superman.

Systems: (i) Oasis 360 is the casino management system which managesslot accounting, pit accounting and player tracking. The system providescustomers with: online real-time tracking of events; a graphical user interfacethat provides a visual representation of the casino floor; and fasterperformance, with immediate access to information for improved customerservice. (ii) System 7000 Prime comprises of flexible gaming managementmodules that provides a comprehensive cohesive integrated functionalitysupporting Cage, Table and EGM Management operations.

Online: ALL have extended its product strategy into mobile, both via Oasis360/ nLive as well as through the acquisition of Product Madness, a leader inthe fast-growing online social casino market. Its digital strategy includes: (i)nLive solution offers land-based operators a turn-key solution for providingtheir players with a 'virtual casino' online; (ii) to distribute its content in theNorth American and European real money gaming markets through nCube,the remote game server, and through selected platform partners; and (iii)social and mobile gaming via Product Madness enables the group todistribute virtual currency content.

Acquisition: Aristocrat Leisure Limited has acquired an social gamingcompany Big Fish Games from Churchill Downs. Big Fish is a provider ofsocial casino content and meta-game applications.

Latest ResearchWell attended investor day a perfect warm up for the 1H result

Investor day well attended – Whilst ALL’s investor day in Sydney camewithout specifics around financials/guidance (not that we were expectingany), commentary around group strategy, end markets, digital insights andexposure to divisional

mgmt was sufficient to appease the sizable crowd in our view - if ever therewas a time when investor turnout was positively correlated to outlook, thiswas it.

For more information see research 02 May 2018.

GICS - Consumer Serv

Aristocrat Leisure Limited

ASX Code: ALL Price: $32.19 12 Mth Target Price: $36.00 Rating: Buy

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Snapshot

DateMarket Cap.Shares on issue12 Month High12 Month Low

6 August 2018$20,555m638.5m$33.06$19.92

RatingRating12 Mth Target Price

Capital GainGross Yield

Implied Total Return

Buy$36.0012.5%3.1%15.6%

Investment FundamentalsFYE 30 Sep 2017A 2018F 2019F 2020F

Profit $m 543.0 779.0 966.0 1,146.0Profit (norm)* $m 543.0 779.0 966.0 1,146.0

EPS* ¢ 85.0 122.0 151.0 179.0EPS Growth % 37.1 43.5 23.8 18.5P/E* x 37.7 26.2 21.2 17.9P/E Relative % 0.0 0.0 0.0 0.0

DPS ¢ 34.0 48.0 92.0 107.0Yield % 1.1 1.5 2.9 3.3Franking % 59.0 25.0 25.0 25.0* Adjusted for goodwill and unusual itemsSource: Based on Citi estimates

Share Price Chart

Total Return on $10,000 Investment

Profit & Loss ($M)2013A 2014A 2015A 2016A 2017A

Sales Revenue 809 848 1,576 2,129 2,454Total Revenue ex. Int. 810 848 1,594 2,130 2,454EBITDA 183 246 516 876 1,064Depreciation & Amort. -43 -44 -161 -279 -283Goodwill Amortisation -- -- -- -- --EBIT 140 202 354 597 781Net Interest -6 -3 -75 -90 -53Profit Before Tax 134 200 280 507 728Income Tax -27 -36 -88 -157 -233Outside Equity Int. -- -- -- -- --Profit after Tax 107 118 221 350 495Significant Items after Tax -- -134 -35 -- --Reported Profit after Tax 107 -16 186 350 495Preferred Dividends -- -- -- -- --

Cash Flow ($M)2013A 2014A 2015A 2016A 2017A

Receipts from Customers 758 905 1,620 2,252 2,469Funds from Operations 118 192 543 832 970Net Operating Cashflow 98 159 438 680 799Capex -45 -90 -140 -193 -214Acquisitions & Investments -10 -12 -1,446 -30 -23Sale of Invest. & Subsid. 1 14 -6 14 --Net Investing Cashflow -53 -86 -1,592 -209 -236Proceeds from Issues -- 406 -- -- --Dividends Paid -51 -86 -101 -121 -185Net Financing Cashflow -39 183 1,190 -506 -297Net Increase Cash 6 256 35 -35 266Cash at Beginning 23 30 286 333 283Exchange Rate Adjust. 1 0 11 -14 -2Cash at End 30 286 333 283 547

Ratios and Substantial Shareholders2013A 2014A 2015A 2016A 2017A

Profitability RatiosEBITDA Margin % 22.63 29.08 32.73 41.17 43.38EBIT Margin % 17.34 23.88 22.49 28.05 31.84Net Profit Margin % 13.26 19.30 12.15 16.47 20.18Return on Equity % 28.25 23.17 20.87 32.59 36.79Return on Assets % 13.57 15.59 7.90 14.08 16.37

Debt/Safety RatiosNet Debt/Equity % 55.45 -24.26 158.12 93.41 48.48Interest Cover x 22.61 75.67 4.73 6.64 14.71

No Substantial Shareholders

Balance Sheet ($M)2013A 2014A 2015A 2016A 2017A

Cash & Equivalent 30 286 329 283 547Receivables 352 329 440 433 512Inventories 65 76 102 124 116Other Current Assets 18 11 12 35 19Current Assets 464 701 898 875 1,195Prop. Plant & Equipment 107 121 203 218 241Intangibles 144 130 1,942 1,736 1,688Other Non-Current Assets 89 85 98 132 126Non-Current Assets 409 411 2,320 2,113 2,098Total Assets 873 1,113 3,219 2,988 3,293Interest Bearing Debt 238 115 1,780 1,288 1,199Other Liabilities 260 292 522 624 748Total Liabilities 498 407 2,301 1,912 1,947Net Assets 375 706 917 1,076 1,346Share Capital 233 642 694 694 715Reserves -78 -58 16 -56 -117Retained Earnings 224 123 208 437 747Outside Equity Int. -4 -- -- -- --Total Shareholders Equity 375 706 917 1,076 1,346

Current Analyst Recommendations *

* Source: Morningstar. This chart shows the spread of recommendations from thosebroker analyst's in Australia with research coverage of this stock.

Principals & DirectorsPrincipals

Company Secretary Mr Richard Bell

Directors

Mr Neil Gregory Chatfield(Non-Executive Director)Dr Ian David Blackburne(Non-Executive Director,Non-ExecutiveChairman)Ms Kathleen Marie Conlon(Non-Executive Director)Mrs Arlene May Tansey(Non-Executive Director)Mr Stephen Morro(Non-Executive Director)Mrs Sylvia Summers Couder(Non-Executive Director)Mr Pat Ramsey(Non-Executive Director)Mr Trevor John Croker(Chief Executive Officer,Managing Director)

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Aristocrat Leisure Limited

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