Good day, and thank you for standing by. Welcome to Aristocrat Revised Segmental Disclosures conference call. At this time, all participants are in the listen-only mode. After the speaker's presentation, there will be a question-and-answer session. To ask a question during the session, you need to press *11 on your telephone. You'll then hear an automated message advising your hand is raised. Please be advised today's call is being recorded. I'll now like to hand the conference over to James Coghill, General Manager, Investor Relations. Thank you. Please go ahead.
Good morning, everyone, and thanks very much for joining us on the call this morning. Before we begin, I'm pleased to acknowledge the traditional custodians of the land upon which we meet today, the Wallumattagal Clan of the Eora people, and we pay our respects to elders both past and present. Our CFO, Sally Denby, is with me here in Sydney. As you will have seen towards the end of April, we completed our acquisition of NeoGames, and we shared that Aristocrat would be breaking out a third business segment in its management reporting, which will be known as Aristocrat Interactive. Ahead of the establishment of Aristocrat Interactive, we also conducted a detailed internal and external review of how we present our financial performance across the broader group, and we're sharing the outcome of that review today. We welcome further feedback after this call as you work through the numbers.
We're on a journey here at Aristocrat as we grow and transform our online R&D business, and we want this evolution to be as clear and straightforward for all the followers of our stock. I'll hand over to Sally shortly. We'll provide a short overview of the changes, after which there will be an opportunity to ask questions directly on the teleconference. Sally.
Thanks, James, and good morning, everyone. Thanks for your interest and for making the time to dial into the call today. As James highlighted, the objective of this call is to discuss the pro forma financials for the past two years that were released to the ASX this morning. These pro forma P&Ls present how Aristocrat Interactive will be disclosed alongside our other two segments, Aristocrat Gaming and Pixel United. We've also taken the opportunity to make a number of other changes to the reporting of our performance that I will address. Before I get into the detail, I would like to emphasize that these changes are focused on our management reporting of the P&L performance and do not impact the group's balance sheet, cash flows, or previously reported statutory P&L.
You will note in the performers that Aristocrat Interactive represents the business we previously referred to as Anaxi, which included our online RMG operations as well as our customer experience solutions business, which we refer to as CXS. Anaxi, including CXS, was previously included in our gaming segment and has now been presented as a standalone business to better align to our strategy, management structure, and growth expectations. And surprisingly, Aristocrat Interactive's revenues primarily reflect CXS revenues at this stage, as this casino systems business has been an important enabler of our gaming business in the Americas and the ANZ region for a number of years. The contribution to Interactive from our online RMG operation is currently minimal. The Aristocrat Interactive P&L for financial year 2023 represents the base from which we intend to grow our online RMG operations.
Similarly, our gaming segment will no longer capture the results or the startup costs associated with Anaxi. The first half of financial 2024, up to 31st of March, will be presented on this basis next week. Noting a step change in this segment occurred with effect from the 26th of April, 2024, the date from which NeoGames will be consolidated into the division. We felt it was appropriate to share a financial view of the existing business ahead of NeoGames joining the business in the second half of 2024. We intend to disclose revenues for three distinct operational divisions within Aristocrat Interactive to help you better understand the business and assist in your modeling, and we will share more about these operational divisions at our results next week. As you will appreciate, there's lots of work underway following the completion of the NeoGames acquisition a couple of weeks ago.
By the time we get to our investor day on June 26th, we will also share some further financial detail on these operational divisions to assist integrating NeoGames appropriately into your models and our new reporting structure. Now moving on to other changes we are making. We're fine-tuning our broader group reporting to better align to how Aristocrat is managed and take account of our changing growth profile. As we establish Aristocrat Interactive, we're taking the opportunity to ensure the rest of our business performance is communicated in a clear, relevant, and consistent manner. The most significant change is the establishment of North America as an operational division of gaming, reflecting its relative size, exceptional growth, and our success in the region in recent years. All of the gaming regions will be grouped under Rest of World. Summary P&Ls will be provided for these two segments going forward.
You will recall that we previously presented gaming as the Americas, ANZ, and international. So to be clear, Rest of World now includes all our operations in ANZ, EMEA, Asia-Pacific, and Latin America, noting that Latin America was previously included within the Americas. I understand that many of you track ANZ closely and are keen to ensure continuity in your modeling. While our growth offshore continues to reduce the relative contribution of ANZ gaming to the group performance, we will continue to disclose ANZ revenue and all revenue operating metrics driving this business for you to understand the performance of this business through this period of change. A few of the changes to gaming worth mentioning. We're disclosing unit sales for adjacencies, which are included in outright sales as a new data point, given the significance of these markets for North America's growth.
We are no longer disclosing conversions in our outright sales business. Their contribution to revenues compared to the sale of new platforms is not sufficiently material to continue to disclose conversions as a modelling variable. In summary, our gaming segment will effectively reduce from three to two reported operational divisions, better reflecting our business operations and reducing complexity across the broader group as we build out our third new business. Now let me briefly touch on Pixel United, where we are making minimal changes. The three genres will continue to be reported as before with consistent operating metrics. We will also share the exact dollar value of bookings across major games versus providing previously the percentages only. You will also observe a new data point, direct-to-consumer revenues. These are generated by the Plarium Play platform.
As we expect this to be a growing source of revenues for Pixel United over time, we felt it was important to share the exact number rather than an approximate indication. We intend broadening disclosure in the future as other forms of revenue that we generate outside the two major platforms become more material. With that, we're happy to open the lines for any questions on the segmental disclosure changes that we shared today.
Thank you. We will now begin the question-and-answer session. As a reminder, to ask a question, you need to press *11 on your telephone. Please stand by while we compile the Q&A roster. One moment for the first question. Our first question comes from Justin Barrett from CLSA. Please go ahead.
Hi guys. Thank you very much for your time this morning. Much appreciated. You highlighted, Sally, that Aristocrat Interactive was previously disclosed within, I guess, your broader gaming segment, but I just was wondering if you're willing to share for our benefit whether it was reported in Americas or whether it was shared across Americas and international?
It was largely in Americas with a CXS business also within our ANZ organization, yes.
Yeah, okay. And then two.
It was in two regions.
Yep. Okay. Not a problem. And then just the final comment that you made around, I guess, Pixel United and direct-to-consumer revenues. You mentioned in your, I guess, March update that you are looking at providing or creating a new direct-to-consumer channel. Could we expect that to be reported separate to Player X Player in the future, or do you think that it's likely to be all recorded as, I guess, a direct-to-consumer revenue source?
Look, I think that's evolving, probably direct-to-consumer in totality, but we'll work through that as that continues to develop and grow.
Okay. Thank you.
Thanks.
Thank you for the questions. As a reminder to ask a question, you can press *11 and wait for a name to be announced. Our next questions come from the line of Matt Ryan from Barrenjoey. Please go ahead.
Well, thank you. Just with Aristocrat Interactive, can we get a split of the operating costs between iGaming and CXS?
Thanks for the question, Matt. I mean, what we've done is we've been providing D&D over the last 18 months. I think operationally, we're providing the revenues. We're not splitting the actual cost base underneath. Obviously, as that business continues to grow, a larger portion of that will be relative to iGaming rather than CXS. But at this point, we've chosen to share revenues, and obviously, we will land on D&D going forward.
Was there much operating costs for iGaming in the FY22 period?
It would be very small because it only ramped up in the second half.
I guess reversing the numbers out, you could probably assume that the operating costs within iGaming would be AUD 60-70 million if there's nothing in the FY22 year. Is that fair?
There would be some in FY22, Matt, but we only started building the business in the second half. So what I would say is proportionately, it would be different now to what it was in FY22.
Right. Okay. And then with the adjacencies, can you sort of clarify exactly what's in there? Presumably, things like Video Class II and VLT and Bartop and the like that you've talked about previously, but can you just be very specific in terms of what exactly is going to those adjacencies, please?
I mean, I'm probably not going to be able to call all of them out now, but you would have Bartop in there. You would have Historical Horse Racing . You would have the VLT. Obviously, going forward, Georgia COAM would be in there. What about Washington CDS ? There would be all the big ones off the top of my head, Matt.
Video Class II.
The ones that we've actually previously talked about. No, video Class II falls into Class II.
Okay. Steppa?
Stepper would be in the core Class III.
Okay. And nothing in participation?
Pardon? Sorry, I didn't get that last bit.
There'll be nothing in participation going into the adjacencies. I just want to be clear on that.
Yeah. That's correct.
Okay. Thank you.
Thank you for the questions. As a reminder to ask a question, please press *11 on your telephone. One moment for the next questions.
It's starting again.
Follow-up questions from Matt Ryan from Barrenjoey. Please go ahead.
Thank you. I thought it might have taken a bit longer to get from the back of the queue to the front again. Must be a quiet day for some. So NeoGames, so can you just talk about what happens? Obviously, we'll get numbers in a few weeks. What should we be expecting to see when they land in terms of disclosure and maybe previous years?
I think we're still working through that. I think you can appreciate we've only had the keys for a couple of weeks, and there's a lot of work going on at the minute. Our plan, as I said, is at the half-year results next week to talk about the segments that we'll disclose. And then by the time we get to the investor day in June, we'll have a bit more clarity and provide some more financial performance numbers and also potentially some metrics as well. So we're working on it next week. We'll be about the three segments that we're going to come to market with. And then by the time we get to the June investor day, we'll share more information then.
Okay. So at a high level, this interactive disclosure that you've given today, we'd basically take that and then add NeoGames into that to form the historical period?
Yeah. That's correct, Matt. What we were trying to do today was give a clear view of our organic starting base so that we've provided transparency. And then obviously, Neo will bolt on top of that during the second half. Today was really about giving you transparency of the existing business today to enable us to move forward and bring Neo in. And so everybody's got a clear, transparent view of how the business is coming together.
Okay.
So Matt, to add to that, you've effectively got two subsegments below Aristocrat Interactive and all the comparators for two years. You'll obviously get another half-year next week. We'll also outline the three new segments and names for which revenue will be provided into the future in a similar way to the way we've disclosed these two divisions today below Aristocrat Interactive. But there'll be three into the future.
Yep. Okay. Appreciate it. Thank you.
Thank you for the questions. One moment for the next questions. Our next question comes from the line of Rohan Gallagher from Jarden Group. Please go ahead.
Good morning, Sally. Good morning, James. First of all, compliments for the transparency and the detail. Appreciate that, and particularly the timing ahead of the first-half result. Questions largely been answered by Matt. But just in terms of corporate allocations and D&D, has there been any changes, or are there expected to be any changes on a go-forward basis in terms of how you allocate?
No. I mean, we have underlying allocation models or sorry, morning as well, by the way. We have underlying allocation models, and they're driven by a number of different factors. So there's actually no changes to the way in which we do allocation. I think from a D&D perspective, we've provided transparency over the last couple of cycles around an allocation of how we think about those businesses. But what I would like to reinforce is that from a holistic organizational point of view, we do look at D&D as one spending totality. So we've provided that detail to help provide some transparency. But the way we actually think about that is the absolute dollar numbers that we're actually spending on D&D across the organization.
Thank you very much, Sally.
Thanks, Ron.
Thank you for the questions. Once again, to ask a question, please press star 11. At this time, there are no further questions from the line. I'd like to hand the call back to Sally for closing remarks.
Okay. Thank you. And thanks for everyone for taking the time to dial into the call today and for your questions. As we close, I would like to reiterate what James said earlier on the call, that we are on a journey as we establish Aristocrat Interactive and incorporate NeoGames into Aristocrat's reporting. We want you to understand how we are approaching this, what information you can expect from us, and when we intend sharing it. We would like to ensure our communication is helpful and clear and presented in a transparent and relevant manner. And accordingly, we will welcome all feedback. Thanks again for your time today. We do appreciate it, and we look forward to presenting our revamped investor materials next week and speaking to many of you again at that time. Thank you.
This concludes today's conference call. Thank you for participating. You may now disconnect.