Well, a very good afternoon to you all, and welcome to Tabcorp's Investor Day. Before we start the formal presentation, I'd like to acknowledge the traditional custodians of the lands upon which we are meeting and pay my respect to elders past, present, and emerging. My name is Gerard Middleton, and I'm part of Tabcorp's team of presenters and co-host of the Big Sports Breakfast. It's a pleasure to be here today. A pleasure, as well, to see this Melbourne Cup trophy. A big thanks to our great partners at the Victoria Racing Club. They represent such an essence of what racing is all about, and we'd like to think we do the same. A huge thanks to them for donating for the afternoon, this Melbourne Cup trophy. A big thanks to our great partners at the Victoria Racing Club.
They represent such an essence of what racing is all about, and we'd like to think we do the same. A huge thanks to them for donating for the afternoon, this Melbourne Cup trophy. Of great significance, the 1950 Melbourne Cup trophy. Any aficionados here remember or know who won the Melbourne Cup in 1950? A rain man or woman who knows who won it on, in that year? Anybody. Not even Charles Moon knows this. I'm surprised. Comic Court! Comic Court won in 1950 for the Lee brothers of South Australia, trained by James Cummings. Of course, Jim was the great Bart Cummings' father. Bart was a strapper for Comic Court that day and said, "Gee, I'd like to win this race one day as a trainer." Went all right, didn't he? Ended up winning 12.
The great Bart Cummings, strapper for Comic Court that day. A very warm thanks again to the Victoria Racing Club for donating the 1950 Melbourne Cup today. This is our second Investor Day since the demerger in June last year, and our management team is certainly excited to take you through the next stage of Tabcorp's evolution, in particularly the progress we're making in delivering our TAB25 targets. I'm also delighted that one of our board members, sports administrator extraordinaire, the great David Gallop, is here today. Good to see you, David. Well, there's three components to today's session, and a formal presentation, starting with our Chief Executive and Managing Director, Adam Rytenskild, our Chief Customer Officer, Jenni Barnett, and also our Chief Data Analytics Officer, who I'm told is the doctor, Dr. Amy Shi-Nash.
Great to see you all here today. Unfortunately, our CFO Dan Renshaw is crook today, so Adam will present the finance component of today's session, and our Chief Operations Officer Paul Carew will be available for the Q&A session at the end. After the formal presentation, we encourage you to ask questions from the floor as well. We then ask you to join us in the TAB Lab, just across the way here, the hallway, as well. We'll have an interactive session with our Chief Technology Officer Alan Sharvin, Jack and Pat as well, from our product team here as well. We'll have some refreshments, and you'll have the opportunity to chat with today's speakers. It's a short walk across to Adelaide Oval. Origin one tonight. Money pouring in for the Blues, I see today as well.
AUD 1.80 into AUD 1.77 with TAB, the Maroons, AUD 2.05 out to AUD 2.10. I'm not sure who we're cheering yet, what the red result in the book is, but I'm delighted to announce as well that in the suite, we'll have Laurie Daley, Origin legend for New South Wales, is going to join us and give some of his thoughts on the match and maybe a tale or two from his time as playing and being a coach of New South Wales as well. Also, former Australian cricket captain, Michael Clarke, my co-host on the Big Sports Breakfast. Clarky averaged 94 at Adelaide Oval, had an outstanding record at one of the great grounds in world cricket, he'll be joining us as well. Without any further ado, I'll hand over to you, Adam.
Thanks very much, Gerard, and welcome everyone. Really appreciate you making the trip to Adelaide, and it's fantastic to see you all here. Now, 12 months ago, almost to the day, we stood in Investor Day and launched what I called Australia's biggest startup. It was a renewed board, a renewed executive team, and a renewed energy. I said we'd rip the cardigan off Tabcorp. We pledged a new app, new products, level playing fields, and that we would be responsible with your capital. I'm pleased to say that we've done exactly what we said we would do. We're delivering on our promises. Not only have we launched a new app, we've released eight updates since. Actually, make it nine. We released another one yesterday. Key products like Same Race Multi, upgraded Same Game Multi, and Bets Friends are now live.
Recently, we locked in a partnership with Racing and Sports to ensure we have the best form products across the app, retail, and Sky Racing. We have a level playing field in Queensland, the ACT, and Tasmania, and Victoria will be a level playing field next year. That's now certain. Our focus, though, is on winning the Australian market. Today, we're gonna talk to you about the next phase of our journey: delivering TAB25, our targets for FY 2025, and how we're gonna get there. We've been very deliberate to make you part of our three-year growth journey, and we'll continue to meet with you regularly, and we plan to have an Investor Day every year. Like last year, we'll not be providing guidance or a trading update. Sorry about that. At least six of you have already asked me. We won't be doing that.
No downgrades either, as I said. We'll be clear about our growth strategy and where this journey will take us by the end of FY 2025. We're going to introduce you to some of our team that Gerard's mentioned, who are leading the implementation. People like Amy Shi-Nash.
W ho has joined Tabs as Tab's very first Chief Data and Analytics Officer. Amy was previously Chief Data Scientist at NAB and Global Head of Data Analytics at HSBC, Amy is a fantastic example of the top-tier talent that we're attracting at Tabcorp. She's using the world's best technology, so we can understand our customers better, deliver a great experience for punters, and be more effective in our offers. I'm excited about the opportunities our new talent present as we focus our efforts on TAB25, I'm looking forward to my team sharing with you today how we'll reach those targets. Over the last 12 months, we've created a different company. We demerged the Lotteries business, which set us free to chart our own course, and that's exactly what we've done. We've disrupted ourselves, and now we're looking to disrupt the market.
We're reshaping the business to deliver customers market-leading promotions, pricing, products, and customer experience. We're faster, leaner, more nimble to deliver those outcomes, and in return, we're becoming a more valuable business to you, our shareholders. Since the de-merger, we're creating a strong foundation to grow. We've improved our product offerings and attracted new talent from a variety of sectors to bring the best skill set together to better reflect what is required as we transform the company. About 20% of our general managers are now new hires since the de-merger, bringing more advanced skills to our business, and we've done this without increasing the GM population. We can now compete on a level playing field with legislative changes in Queensland, now implemented along with the ACT in Tasmania.
We've simplified our business with the sale of eBet, we continue to pivot from gaming services to integrity services, we've launched Genesis, which will take makers leaner and nimbler to deliver faster outcomes for our customers. Sky Racing, which is aired across 50,000 screens in 4,000 venues, as well as in homes across the country, has been rebranded to more closely align with TAB, while our international media business is performing well as we deepen access to tote markets in Hong Kong and France. We're also looking to expand our global vision opportunities in growth markets like the United States. Our balance sheet is strong, with low levels of debt and more diverse sources of funding. While we're in the midst of change, we continue to embrace the foundations that make us strong. We're proudly an Australian business.
We remain synonymous with racing, and are the official wagering partner of Australia's 2 biggest racing carnivals, the Melbourne Cup Carnival and the Everest Carnival. We continue to be the only company with a complete wagering ecosystem, an integrated retail, media, and digital experience. This sets us up strongly to grow and to invest as the market changes to a level playing field. At the beginning of our journey, we said a key to our future growth strategy would be to secure these level playing fields. To refresh your memory, in some states, we were paying up to 2 the wagering fees and taxes of our foreign-owned competitors. It leaves us with a structural disadvantage, and we aren't able to compete on a level playing field by investing in the same level of promotions and offers.
Over the last year, we've been very public about the need for the foreign bookies to pay the same wagering fees and taxes as we do. I know some of you were skeptical about whether we could achieve this, and I'm pleased to report we've made substantial progress. Queensland, the ACT, and Tasmania have implemented level playing fields, as I've said. Victoria will have a level playing field when the new license commences next year. New South Wales has commenced a process towards a level playing field, and we are participating in the current review, while in South Australia, we've commenced discussions. These are strong outcomes in our business and substantial progress in just one year. A level playing field provides the opportunity for us to be more competitive across the country.
We'll keep you abreast of our progress, and we'll continue to publicly advocate strongly for a level playing field that will ensure a sustainable industry into the future. Now, before we look at TAB25, I'd like to give you an overview of the current market. We're operating in an environment where consumer confidence is softer and cost of living pressures are higher. There's increased community sentiment and regulatory emphasis on social responsibility, including the regulation of gambling, advertising, and the cost of capital is rising. With less disposable income, this has led to customers being more value-conscious, and generosities are important in this type of environment. It's clear that the largest competitor in the market has increased generosities recently to offset the downturn in spending.
We've tried to find the balance between creating enough generosity to maintain market share, but we've also listened to shareholder feedback by not using it to buy market share. While competition remains strong, this is resulting in a challenging outlook for subscale operators. You'll increasingly require scale to compete, and I expect companies without scale and a differentiated product to struggle to remain viable. We see this period as a great opportunity to transform ourselves into a stronger and more competitive company with a greater share of market and well-positioned for the long-term growth of the industry. There's rightly a greater focus from the community and government on the wagering sector.
We've looked to take a leadership position in our industry. That's why we're the first company to call for a reduction in free-to-air gambling advertising. We're well-placed to compete in an environment where advertising options will be restricted. We'll also continue to advocate for stronger, more nationally consistent regulation of the sector. You've seen over the past few months that there's been greater community focus on gambling advertising. I'm proud that we've led this debate. Families should not be bombarded with gambling advertising when they're watching television. As you can see, we've entered a challenging economic and regulatory environment. TAB25 remains our target. We're willing to invest ahead of the curve to reach our ambition. On to TAB25.
Our TAB25 targets, which we announced in February at our first half results, are designed to create a simpler and very different-looking company in FY 2025. We want to win the game by transforming the TAB brand and customer experience with the goal of achieving 30% digital revenue market share in FY 2025. We're implementing a simpler, leaner, more agile operating model with the aim of reducing our OpEx to between AUD 600 million to AUD 620 million, this is a very real and substantial reduction given inflation rates and the investments we're making at the same time. We want to grow with the aim of doubling our ROIC to 10%. We want to shape the game by leveling the playing field in every state so that Tabcorp and corporate bookmakers pay the same taxes and fees.
We're continuing to simplify our gaming services business by pivoting to integrity services, where we see opportunity as regulations for gaming continue to tighten. As a leader in customer care, we're well-positioned to respond to changing community sentiment and regulatory changes. That includes a partnership with globally recognized responsible gambling company, Mindway AI, who are using technology to identify changes in customer behavior faster, so we can help problem gamblers sooner. Let's look at how we plan to achieve our three major TAB25 targets of increasing market share, delivering OpEx reductions, and doubling our ROIC. Part of disrupting ourselves has been to put a light on the hill. This is where we want to be. Everything we do as a company is focused on TAB25, and it's given real clarity and focus to the business and everyone in it.
I'm not afraid of making our internal targets public. It's what drives us every day, and as I said, it's given us great clarity. Our TAB25 execution framework is built on three big bets and multiple levers to deliver on those bets, and we call these fields of play. They are: dominate racing, focus on the right sports, and delivering the best entertainment experience and customer care. Jenni and Eamonn will talk in detail about the specifics of how we'll go about doing this, but from an investor perspective, the measure of our success will be our turnover growth, our gross yield, and our net yield. Rest assured, our growth will be disciplined and profitable, and this will be amplified as level playing fields are implemented. This is why we place so much emphasis on our future operating model and execution excellence.
Our Genesis cost transformation program is designed to ensure we deliver a world-class business performance, and the measures of our success will be our OpEx levels and our ROIC. A part of TAB25, a big part, is the change in culture. Culture is infectious. We're on a three-year journey of changing our culture and disrupting ourselves. I'm pleased to see our people are already living our new values: spark change, play fair, and raise the game. I'll talk later about how the P&L will be significantly reshaped as part of TAB25 to accelerate our growth in FY 2025 and beyond. I'll now hand over to Jenni Barnett. That's Jenni Barnett, our Chief Customer Officer, to talk about how we're going to win the Australian market. Thanks.
Glad you know who I am. That's good. Thanks, Adam, and good afternoon, everyone, and really great to see many of you again. To start off with, I'd like to report back on what I said at last year's Investor Day, that we'd focus on and what we've delivered to date. We said we'd move faster and improve our ways of working, and we've done this by bringing our product, design, and tech teams together, just like you'd see in any digitally focused company. We said we'd speed up our app updates from 4 months to 4 weeks, and we've delivered 8 material updates since launching our new app in September. As Adam said, one yesterday as well, effectively, a new update every month. Pretty good when you consider prior to that, it was probably every 2-3 years.
We've achieved product parity. Our focus is now on innovation and leapfrogging the competition. We said we needed to invest in data and analytics. You'll be hearing today from Amy about the data and analytics game plan we have, and that we're implementing already. We said we'd need to sharpen our focus on customer acquisition, conversion, and retention. I'll talk shortly about our new data-driven customer segmentation and how we're leveraging that to run and manage the customer life cycle. We also promised to fix our customer digital journeys. Amy will speak shortly on improvements that we've made to our onboarding experience and early lifecycle customer conversion. We said we'd upweight our digital marketing and content. To this end, we've changed creative agencies, upweighted digital content and marketing, and have a new brand strategy.
Our strategy continues to be to maximize effectiveness, minimize waste, and sweat all our assets to drive shareholder value. We also said we'd invest in talent and capability to bolster particular areas. We've made a number of new hires in key areas, such as data and analytics, which you'll be hearing a lot about today. We've also set up a digital content function with two great new key leads in racing content and sport content, really focusing on digital. Actually, now would also be a very good time for me to introduce you to Vanessa Sanford without embarrassing her. Where is she? There she is, who's four weeks in as our GM of Brand, Marketing, and Media. Vanessa's a very senior and seasoned marketer, contemporary marketer, and comes to us from CommBank, and she's already making an impact.
Vanessa's going to take carriage of our new brand work, our acquisition, and our digital marketing, and leveraging our partnerships across media and industry much more. Of course, we have much more to do, and there remains latent demand. A huge thank you to the entire Tabcorp team, backed by Adam, the rest of the exec team, and the board. Everyone should be really proud of how far we've come in a year. Today, we're in a position to know much more about our customers than we ever have before. Our unique multi-channel ecosystem gives us great insight into customer behavior, from their digital browsing behaviors through to their call center engagement, all their transactions, of course, and the destinations they frequent. These insights have enabled us to create a new customer segmentation to identify growth opportunities and to how best capitalize on these.
Here it is. On the next slide, we show you how we approach customer acquisition, retention, and ARPU through our new customer segmentation. I'm not sure if any of you can see yourselves in any of those personas. Let's see. What you see here is a very high-level version of a deep and rich understanding of our customers that informs us where the opportunities lie for growth and ultimately to deliver market share. There's obviously a lot more detail underneath this: market sizing, how we stand in that regard, who customers are, what their preferences are. Effectively, the customer segmentation model really focuses on three things or three areas, punters, fans, and occasionals. Let's take a couple of examples. I'll talk through them in more details. Take Avi.
Avi's an avid all-rounder and punter, where betting is the game. He's 18-34 years old, and he's social and passionate. Avi represents around 8% of bettors, but he's the largest share of the revenue pie and has the highest ARPU. While over half of the avid all-rounders have a Tab account, it's likely to be 1 of 3 accounts, and currently, Tab has a share of his digital wallet below the group average. As such, the key growth opportunity will be to increase ARPU and share of wallet. How are we going to do this? Avi is going to value a range of betting options, he's a big content consumer who likes to study information and form to make decisions. A quarter of Avi's betting is in cash, and he bets using cash for its instant access. Let's jump over to Bax.
Bax is a sports backer. These are good names, aren't they? Try saying that 10 times fast. Well, the same age as Avi, he's a fan where betting adds to the game. He's tech-savvy and very curious and just loves stats and insights. Bax represents the largest portion of bettors and the fourth largest by revenue across the market. Tab's share of Bax's digital wallet is similar to Avi. However, only 1/3 of sports backers have a Tab account. The opportunity for Tab across the fan segment is to acquire and grow. We know Bax regularly checks sports news and updates, likes to secure his bet early, and access winnings very quickly. Around 1/3 of his betting is in cash, and it's mainly for some fun with friends.
These are just a couple of examples of how we're using a much better understanding of our customers to identify opportunities and strategies, to give customers a very tailored, relevant, and contextual, and fantastic customer experience, employing the full suite of assets that we have across our unique ecosystem. The opportunities for us are clear and inform where we will play. To win the Australian market, we're going to do four things: We're going to dominate racing, we're going to double down on the right sports, we're going to deliver the best social entertainment experience, and we're going to lead in customer care. First up, we plan to dominate racing, and we're gonna do this by giving customers the edge with the most comprehensive content, form, and insights.
Our recent deal with Racing and Sports, which Adam mentioned earlier, is one example of uplifting our form and premium content across the app, as well as Sky. Dominating racing is primarily focused on increased ARPU, as well as conversion of sports boosters and backers. Our strategic objectives are designed to give customers the offers and the experiences they value the most. For example, for a session lover such as Seb, there he is, we know he values vision, tips, and payout speed to get onto the next race. He also likes to bet in-venue, including cash socially. We're going to double down on the right sports. The primary focus is going to be on acquisition, but with a very targeted approach to markets and customers. We have validated a growth path for sports and are clear on what we need to focus on here.
For example, for a sports booster such as Bodie, this means delivering a highly social and active experience for a passionate sports fan. He'll be found at the game, on socials, and other digital platforms. He's looking to a Same Game Multi for a big potential return on a small stake that will make watching the game with friends much more exciting. Our venues. The importance of our venues, content, and app, and the integration of these into a unique customer experience, are at the core of providing the best social entertainment. This is not simply about cash betting. Our focus is on providing customers with a connected and immersive experience that adds to the social aspects of venues, and I'll talk to this in more detail shortly. For example, for a big eventer like Eve, or you could put me there, actually, that's me.
She values the social side of betting and the thrill and enjoyment it brings on the big occasions. She's unlikely to be doing any form, and appreciates guidance and a tip, and goes with well-known brands, and cash remains an important channel. Our social, digitally integrated in-venue and on-course experience provides Eve or myself with a unique, fun experience in the market. Very importantly, we're going to lead in customer care and community. We're the trusted ex- Australian brand, and we are absolutely committed to proactive care. There are a number of important initiatives, including leveraging AI to facilitate proactive harm minimization, intervention, and detection, which Amy will talk to shortly. We've also been very vocal, as Adam said, in advocating for the regulation of gambling advertising, and have been proactive in working with industry and community also.
Our work on our fields of play is all supported by a rigorous and detailed bottom-up build on the strategic initiatives and the projects attached to these. On this slide, gives you a flavor of the depth and detail of the work that we're executing to deliver on the targets across multiple initiatives and projects. We've laddered projects, initiatives, return back to strategy. Let's talk about our venues. As an example, if we drill down into the venue-related initiatives, we've clearly mapped the interdependencies across the organization, including things like our workforce model of the future, our commercial model, and our end-to-end customer experience. We've also used this bottom-up work to understand the value of the opportunity across the initiatives in order to prioritize and execute the right things in the right order.
Paul Carew, who is our Chief Operating Officer, who some of you might know, is leading this work. He's down the front here. This all ladders up again to our single objective of winning the Australian market. We're also looking to reshape our venue experience to create a more connected, personalized offering and better linking our key assets in venues, such as vision to the app, content, and how we show up in venue, including our brand. It's really going to be about converting eyeballs to TAB actives. We're taking a very modular and flexible approach to formats. On the top left, the discovery store, you'll see venues with all the bells and whistles, but you'd only expect to see a handful of these in really high impact places. On the bottom right-hand side, the essentials.
Think of these as venues having brand updates and utilization of our screens more effectively. Very low cost, but will give us the brand refresh we need by using the goodness of what we already have, the 50,000 screens in our venues. We've just got to sweat our assets that we already have. We'll be taking a really disciplined and phased approach. Locations and the rollout plan is being formulated by Paul and the team, with input from our customer segmentation work, data and analytics, and we'd expect to have probably around 50 venues rolled out across different formats over the next 6-9 months. I'd now like to spend a few minutes on some key enablers of our customer strategy, namely brand, digital content, and then we'll introduce Amy to outline our data and analytics game plan.
Let's just start with a short reel on where we're taking our brand. There you go. TAB, we're on! What do you think? Thanks. Actually, there was a really fun quote when we were testing some of this out. Someone said: "You know, you guys are the OGs of the category. You really know what you're doing, but you have become a little bit like a daggy dad." I'm sure there's no daggy dads in the audience, but you can get a flavor of where we're taking the brand. We are going to be modernizing the brand, positioning it as a champion of exhilaration, a brand that's inclusive, passionate, fun, modern, and made for Australians by Australians.
While, of course, we need to retain our incredibly important and valuable brand elements we have, such as our heritage, our expertise, and our reputation. This is going to involve scaling up the sociability component of what we do, it's inherently social, this category, and making it more shareworthy. We want to treat our customers as fans through their individual mix of passion for racing and sport, and importantly, always be entertaining. I also said a year ago, we needed to change our mix of marketing towards modern digital channels, and we've significantly uplifted our digital content, which some of you may have noticed. What our data clearly demonstrates is that betters who engage with our content are 3 times more likely to place a bet.
We are pivoting the way we make content and leveraging our broad set of media rights to give customers greater access and get them behind the scenes and closer to the action. This will better engage, inform, entertain, and ultimately convert our customers. We've recently signed quite a lot of new talent, reset our social strategy, and created new content, particularly in the last six months, which is really starting to pay off in social and digital platforms where we know younger audiences are. I also said a year ago, we needed to move faster in relation to product, and I'm really pleased to report that we've been releasing a lot of new product and features to our customers since last September.
There's a long list on this slide, and you'll get a chance to talk to Jack and Patty from our product team, as well as Alan Sharvin, our CIO, Suave Al, and interact with some of the new features and products, in a TABlab that we've got set up, next door later this afternoon. Finally, unlocking the power of data is another key enabler, which will allow us to win in the market. We're in a position to know more about our customers than ever before, with an abundance of highly valuable first-party data, combined with technology that's delivering us a single view of our customers and allowing us to deliver personalized, timely, and engaging experiences.
A key ingredient into tapping into this latent value is the upgrading of our internal capability in data and analytics, and as you've heard, we've made a number of new hires in the last 5 months to really amplify the current team. This, coupled with our clear data architecture, personalization strategy, the existing tech stack we have, which is really best in class in terms of digital personalization, will hold us in good stead. I'd now like to introduce Amy to you. Yes, Gerard, we do call her the doctor, who's been on board for 5 months and has had an immediate impact, and she's going to talk you through the data and analytics game plan and some of the things that we're already executing on. Amy, welcome.
Thank you. Thank you, Jenni, and good afternoon. It's very good to be here today to share with you how we're building our data analytics capability at Tabcorp. As Jenni mentioned, I've been here five months, and it's been a very exciting journey, and I'm having lots of fun, too. To build a data-led organization, in my experience, you need the backing from the top, you need lots of data to work with, and you need good people. The good news is, we have all these ingredients here at Tabcorp. We've got a really good data foundation, we've got a big ambition, and we have amazing backing from the executive team and the board. We are well-positioned to build a best-in-class analytics capability here. Here is our game plan. Know and grow customers, so get the basics right.
Personalization at scale, this is the secret sauce of creating the experience customers really love. Put the data at the heart of every day business, every business decision-making, and being the industry leader and creating best-in-class customer care. Build a culture of excellence, raise our own game, and do things differently. In terms of execution, we're going to uplift the maturity across all of these area, which I will talk you through very shortly. In addition, we also need to accelerate data and the tech, so modernizing our infrastructure, bring in real-time data feeds, and creating a connected data ecosystem. Alan and the technology team here are going to lead the transformation, and it's a really core enabler for us.
We need to change how we do things here as well, and embrace on the experimentation and the test and learn approach. This is new to us at Tabcorp, but we already started the journey. One good example would be the Spark Tank initiative we fairly recently launched. It's designed to create all the innovative ideas from everybody across the company, and take them through the test and learn approach. It's only been launched in a few weeks, and we're already seeing over 70, you know, good ideas coming through. Is, you know, a culture transformation as much as anything. We need to invest in our next generation capability. We can't achieve our ambition by doing more of what we're doing today.
The next generation, game changers, including the content and the retail experience that Jenni just mentioned earlier, we also launched the Next Lab, which is focused on AI. In fact, our Head of AI, Professor Dickson Lukose, he's going to start tomorrow. He's joining us from Monash University and have more than 25 years experience in AI. We're really excited to be able to attract talent like that. In summary, we have now a good foundation. We've got a plan. Let me now show you a few examples and bring those to life. Know and grow our customer. What do we know more about our customer now than before? Behavioral segmentation. You already heard a lot from Jenni on the reaching side of our customer segments.
We know the shape of our entire customer base now, the proportion of punters, the fans, and occasionals, and we also know their key behavior characteristics. For example, the punters, they're our biggest group. They have the highest retention rate, and they're also most valuable. The sports fans, they are our biggest, you know, growth proportion in the new accounts. Really good news for our sports strategy. We also know the key behavior drivers, so we can upgrade the segments along the way. Lifetime value. This is new to us. For the first time, and automatically, we can calculate every customer's every bet, the turnover revenue, and the true bottom line revenue, taking out the generosity and the tax and the fees and tax, associated with the products in space.
We've never had that view before. It's a super eye-opening and powerful in our decision making. Digital in venue, multi-channel. Retail has always been a really important channel for us, and we know customers use our app on the web, and they go to venue, they worth twice as much. How do we use data to drive our digital in venue? For example, we know sports fans have much higher proportion going to venue. They love multis, and we know the popular teams and the players, they bet on. This insight has translated into the below the line campaign, which we can engage our sports fans in venues in a much more targeted and meaningful way.
We're building a geolocation capability, which can putting 4,000 venues all on the map, so our retail team can easily understand where is the football, the catchment area, where is the performance, as well as identify the greenfield locations. Digital, this is also new to us. We have 45 million digital interactions through our app and the web, and they were generated by 760,000 unique digital visitors every week, and the TAB appears in 25 million impressions in social and the search.
Not only now we know the top-line traffic, we also know every time when you use our app or visit our website, we know which page you've gone to, how long you stayed there for, and most importantly, we know the conversion, so either through a deposit or on a bet. This is actually a key milestone for us. For the first time, we're able to connect our digital data with the customer information and the transaction. It's taking a lot of effort and a long time to get to where we are today, but we are one step forward in personalize that digital experience. All right, now, I'm going to talk about how we're approaching customer engagement through a lifecycle-based approach. We call them lifecycle-based approach, is basically following the customers.
You know, starting from the acquisition to the early stage to maturity, lapsed, and dormant. Throughout this lifecycle, we can identify the key behavior indicators, so we know which life stage customer are at, and we have a very clear objective to engage them with. Our goal is to maximize the active customer base by improving our onboarding and the conversion and preventing churn. For the customers at the active stage, we'll drive up the activity and share of wallet through personalized engagement. This is something we use, behavior trigger and automated style, and the program we're developing, we call them Leave No Customer Behind. It involves a fairly sophisticated analytical capability as well as automation.
Let me give you kind of a zoom into the early life, and I'll just give you a few of what that involves. This black line, that's your customer onboarding journey, and we can identify the key signals, the key steps, and the milestones along this journey, and then sending out automated helps or reminders or engagement at the right time. This is going to significantly remove the customer onboarding friction and improving our conversion. What else do we do in the early stage? We can identify early segments in the first week of your joining, so we can differentiate the big eventers from the potential high-value customers, so giving people that more tailored experience. Also, we developed a early life lifetime value model.
This is to predict a 12-month worth of revenue in the first 10 days. That machine learning model has been implemented in our Search Engine Optimization, which will drive more quality leads and reducing our cost per acquisition. In fact, Tabcorp was awarded the prestigious Google Google Owner Award for the Best In-House Team of the Year, which is a great recognition for the in-house capability. All of these engagements, they are behaviorless, they are automated, they're triggered at the right time with the tailored experience. This is what we meant by lifecycle-based engagement, Leave No Customer Behind. Okay, now we talk about how do we use data in our decision making and improving the generosity spend and the campaign efficiency.
We spend significant amount of money in generosity, and there has not been always optimal. Our offers tend to be very generic, and they go through above-the-line channels, which means a higher proportion of the generosity gone to the non-profitable customers. Also, the fear of missing out means we tend to do everyone else doing in the market, which is never a winning strategy. In the last few months, we've changed into a more data-driven framework. What that mean? We are putting in a combination of customer segments and lifetime value together. Our business teams are creating over 30 different offers and then send them through below-the-line channels, either SMS or emails or the banner. We also created a new campaign evaluation framework, which will deliver a next-day reporting automatically.
Now our business teams can see what campaigns are working, what's not working, and what need to be changed in a very timely fashion. In addition to that, we also created a top line, we call it hero metrics, for the generosity. This is the top-level spending, about where the generosity gone and the profitability of it. This really given us the indication we can connect those to our top-line targets, such as turnover revenue and the market share, so we know whether we spend the generosity in the right place and whether it moves the needle or not. In the last two months, we've been doing this week on week. We've seen a very consistent uplift in our campaign performance, in our generosity, efficiency. Our hero metrics also has significant improvement.
We halved the proportion go to the non-profitable customers. All of these are really encouraging. Our teams really feel the confidence. I think we got the plan. The last one is about a contextual experience. We also started to experiment, really contextual experiment, which giving you, at the right time, in the right location, some very personalized messages, whether they are welcoming messages or celebration. We've seen a tremendous response from the customers. We know customers really love them, and this is one of the key agenda items on our roadmap. Overall, we are changed into a disciplined, data-driven approach through personalization, automation, and measurement. We've feel the change.
We feel the confidence, you know, even in the last couple of months, and people really feel, you know, we got the plan here. Right, proactive customer care. As you heard from Adam and then Jenni earlier, we are committed to be the leader in the proactive care, and we're excited to work with Mindway AI on this. This is a very unique partnership. Mindway AI is a world-leading responsible gambling leader here. They use a combination of neuroscience, AI, and human experts, and they build the player's profile, which learned from thousands of different responsible gambling patterns, well, problem gambling patterns, such as chasing the losses or binge gambling. The player profile they created are more holistic. They're also earlier. They're easy to understand and intervene.
Our work is already underway to map out our data sources, and we're going to use our first-party data to retrain these models, so they take in our context and needs into account. This capability is also, it's a great add-on to our already pretty strong in-house capability, and we have 2 PhDs in behavioral psychology and game design. They're working with our customer care squad and building out how do we translate these signals into interventions and with our communication strategy. Thank you for listening, and I hope that give you a bit of a flavor of what we're doing in building the capability and how do we do things differently. We've got a clear plan, and the teams are really focused on delivery, and we're already seeing the difference.
Now I'm going to hand back to Adam. Thank you.
Thanks, Amy. We wanted to give you a bit of an insight into what we're actually doing every day, you know, to me, it's really exciting. We really are a different company to what we were a year ago, that gives you just a bit of a flavor. We've got more PhDs at Tabcorp than we've ever had before. I'm the least smart person there, so that's good news for all of you. We're gonna talk a bit about world-class business performance, another key part of our TAB25 objective and reshaping the business for growth. As I said in my opening remarks, TAB25 is about transforming the company to be a very different-looking company, more competitive business for our customers and for you, our shareholders.
If there's just one message that I leave you with today, is that we're reshaping this P&L into one that's set up for growth. You've heard today from Jenni and Amy on the significant improvement in the customer offering. We're making progress on obtaining level playing fields across the country, and in a moment, I'll update you on our Genesis cost program and capital investment. How do we translate TAB25 into EBIT and ROIC expansion? Importantly, it's the combination of the TAB25 components working together that reshapes our P&L and provides a powerful and significant change to our earnings growth potential. To illustrate, at the moment, without a level playing field, where we don't have one, we need 18% more turnover than our competitors on every AUD of generosity to break even on that spend.
This is a significant disadvantage that means during periods when we're in an offer-driven market, we're investing without being able to translate it efficiently to profit as much as we'd like. As we level the playing field, this differential neutralizes. At the same time, Amy and her team is working to increase the ROI on generosity, as we've just heard, to compound the benefit. Combined with that, Jenni is doing on customer, what Jenni's doing on customer. We've put these pieces together, you can see that we begin to generate a virtuous loop of growing market share, revenue, and VC. If we combine this with OpEx and capital discipline, this will grow EBIT and expand ROIC. Each of these three big bets in our execution plan are about delivering on our TAB25 targets and releasing the business for substantial growth over the long term.
I'll now spend some time on our third big bet, world-class business performance and delivering cost-efficient growth. At the first-half results, or at the half-year results, we spoke about Genesis. Put simply, Genesis is about generating cost savings and creating capacity to reinvest in our growth initiatives. Will it be investing into those areas that will drive revenue, VC, and market share? I'm pleased to report that we remain on track to deliver a decline in OpEx to between AUD 600 -AUD 620 million by FY 2025, and we're establishing the next-gen Tabcorp operating model that enables agile, contemporary ways of working. In a moment, I'll spend a few minutes on our integrated venue transformation pillar to deliver a low-cost, omni-channel retail network.
In the session next door, after this presentation, you'll have the chance to speak to Alan Sharvin, our Chief Technology Officer, on how he is transforming and simplifying our technology to move faster and be more efficient. As I said, nine updates after our app release, two years before that, I don't think we had any updates, so that's a significant change. We continue to execute on property and procurement savings across the organizations. As an example of the Genesis program, let's look in more detail at the integrated venue transformation pillar. You heard earlier from Jenni and Amy Shi-Nash about the work we're doing to create a differentiated and engaging customer experience in venue. Our physical venue channel remains an important component of customer acquisition and retention strategy, and it goes beyond simple cash betting.
Venues are vibrant, social places that offer rich betting environments, however, they are evolving. In conjunction with the improved in-venue customer experience, we're also lowering our operating costs and creating a more efficient acquisition channel. We're reviewing our agency footprint and refocusing the offering on our most profitable locations, and as part of this, we'll close 31 agencies in FY 2023. At the same time, we continue to bring down our cost to serve through renegotiating leases and optimizing our field services delivery. We're also implementing digitally aligned commercial models with venue partners and reviewing, with the help of Amy and her team, optimization opportunities to convert venues to a digital-only model and expand the network through greenfield digital sites. We'll continue to invest in our retail network to ensure it's a thriving and differentiated channel, a great experience for our customers, and a valuable partnership for venues.
On capital, we remain disciplined and rigorous in our approach. ROIC has been included in TAB25, management incentives to ensure we focus on growing shareholder value. Our balance sheet is well positioned to invest in our TAB25 initiatives, we continue to change the mix of CapEx spend, just like OpEx, towards growth initiatives. Our forecast FY 2023 CapEx is unchanged at less than AUD 150 million. As you can see, we're pretty energized at Tabcorp. There's never been a more exciting time to be part of this company, we've come a long way in just one year. We really are a different company, we haven't started. Frankly, we're just getting going. Actually, we have started, we haven't finished, we're just getting going.
I know some of you are skeptical about whether we could deliver on our plans as a new company. You were right to, because Tabcorp didn't have a great track record of execution and hadn't performed as it should have in the past. What the last year has shown is that we're now a company that is delivering on what we say we will do. A new app, new products, and level playing fields are proof points of that. Our laser focus is now on TAB25 and delivering on those goals. What we've shown you today is that we have a solid foundation, a clear growth strategy, and an ability to deliver on our promises. We can do that because we're investing in our people and our capability. We've attracted some fantastic talent. We've closed our product gaps.
We've restructured the company to increase investment where we need to and reduce costs in other areas that don't align with our targets. We're creating a leaner and more efficient company that's more agile to compete. After being disrupted, we're now looking to disrupt, and you're on that journey with us, and that's something that's very deliberate. It's a three-year journey, and as I said, this is just the beginning. We've built strong momentum to deliver in FY 2025 and set the company up for long-term growth. Thank you for your support. Thanks for being here, and I'll now hand over to Gerard before we take your questions. Thanks.
Thanks very much, Adam, and also to Amy and Jenni as well. I'll ask Amy and Jenni and Adam to come to the front, as we'll now move to our Q&A, and I'll be joined as well, on stage by our Chief Operating Officer Paul Carew, and also our Chief Information Officer Alan Sharvin. If we can get our speakers to come up to the stage shortly as we get these chairs on stage. We have some roaming microphones as well. Roaming Brian, for all the AFL fans here. We've got some roaming microphones, so when you've got a question, please put your hand up. One of our staff will give you the microphone so everyone can hear, obviously, your question.
Please, if you could, as well, state the name of your organization before asking a question as well. Your name and your organization before asking the question. After the Q&A, if I can encourage everyone to move next door as well to the TABlab, just across the hallway here, where our Chief Information Officer, Alan Sharvin, will give you an overview of our IT platform. Jack and Pat from the product team as well, will give a demonstration of our new product. I'm sure you won't be shy. Q&A, go for it.
Hi, it's David Fabris here from Macquarie. Just talking about leveling the playing field, there's a slide on there that spoke about the states that have been done and the ones that are coming. I think Queensland might have been done in December, so maybe there's five months of level playing field there. Can we maybe hone in on that state and talk about business performance, what you've learned, and if you can maybe talk about market share and other bits and pieces as well?
I'll talk more broadly, and then you can talk about Queensland. How, how does that? You've seen our first half, and the second half has been interesting 'cause the market softened, and we've seen some different strategies in generosity throughout the market by our competitors. We sat out of the increase in generosity. In fact, we reduced our generosity in the first part of the second half, and we experimented with that somewhat, and then more recently, in conjunction with some of the changes Amy's been making around efficiency, we've increased our generosity, and, you know, we measure the results of that and measure our market share as part of that. It has been a interesting market.
I think what's important from my point of view, is these, putting that light on the hill with the market share target and those other targets, has actually been a game changer for us as an organization. We talk about it in every meeting, every day. We focus on digital share, we focus on our cost performance, and we focus on EBIT, because that's what drives ROIC. That's very different. We're not just talking about sponsorships and other arrangements, and, so that's a game changer, and it's really focusing our attention on what we do in year one and two in the pathway to FY 2025. Do you want to talk about Queensland?
Yes. Queensland's our strongest performing state in terms of growth in turnover and rev and margin. Pleasingly, we're seeing quite a lot of active customer growth in Queensland. We haven't really raised generosity spend that much. It's just proportionate to what you'd expect, but it's performing very strongly as a state, particularly post the level playing field.
I think it's our strongest performing state, BC, turnover, revenue growth.
Great. Thank you, and just another question as well. Just the venue reshaping. I mean, Tatts did something similar before you acquired them. Can we maybe talk about what you have learned from what Tatts did, and why you think it's a good strategy to follow something similar, if that's what I'm kind of seeing? The second point there is this all included in the BAU CapEx, or is there incremental CapEx associated with this, venue changes?
Venues?
Yep, you can do the CapEx. What we're doing, we're working very closely with Amy and her team. Our retail footprint, we think, is one of our strengths. We've looked at where it's performing and where it's not, coming out of COVID, you don't need to be Einstein to work out that some of those didn't come back as well. We've made some hard and fast decisions on that. We now understand where our customers are, we understand how they cross over, and we understand that those DIV customers are much more valuable to the organization, to the tune of 2 to 2 and a half times more valuable, so we know where they are. We're starting to personalize offers to get them back into venues.
Our footprint, work that we're doing will have the short-term benefit from an EBIT perspective, 'cause we're taking cost out, but will actually bring us closer to the customers and where they are. If you think about the age profile of a lot of our agencies, they sit in areas that the demographics have changed considerably. From that perspective, again, the data work we'll do and understanding the customers and the segmentation of the customers, will make the decisions on where we put each type of offer a lot sharper.
I'd just add from my point of view, again, setting that strategy at the top, that has the different pillars associated with it, around both share growth and having a real anchor in ROIC and cost, means we're making very conscious, deliberate decisions about how we invest our capital. In terms of overarching, CapEx, there's no incremental CapEx required to execute the retail plan. It's within that envelope of less than AUD 150.
The only other thing I'd say on venues is, the slide that we had up there around, you know, the look and feel, we're going to be really deliberate about how we roll that out. Most venues will have an uplift of sort of the brand refresh, but we can do a lot of that through the screens. We've got 50,000 screens across all our venues, which we really haven't been capitalizing on. There's a huge opportunity, and that's low cost. It doesn't cost us anything. You know, we'll update some of the signage.
The majority of venues will have that approach, and then we'll be very specific about where we roll out the other venue types, and there'll be a couple of, you know, what I call discovery stores or marquee kind of stores, or experiences, you know, in really high impact places. We're gonna be really thoughtful about that, 'cause, I mean, there's no way we would or afford to do all of that for 4,000 venues. It's just not gonna happen. We're really conscious of that.
Simon Thackray from Jefferies. I'm probably coming from a position of ignorance, which is pretty usual for me. With respect to the technology, the AI technology, the digital technology, are you bringing yourselves up to speed to benchmark against your competitors, or are you looking to create technology and competency that exceeds your competitors?
Yeah, I can start with. We definitely benchmark our technology as a maturity, but not within the categories. You know, we are looking at, what is the maturity for any digital organization, for example, and how do we bring in the technology enabling our algorithms to be, you know, going up? The short answer is, absolutely, we benchmark, but we go beyond the category.
Sorry, just to add to that. We want to build best-in-breed customer experiences and products, and we're looking at the technology that will achieve that, as opposed to, you know, finding the best technology. We have a lot of great technology already in our landscape across data, across our marketing tech, and recently, you know, what we've introduced with our mobile app has enabled us to move a lot faster and deliver a lot more experiences, you know, faster than many others. We are introducing that, but the reason's being to build great customer experiences.
I'll just add to that, which is, someone said a great quote to me the other day, which is, "Jenni, you've got a Ferrari, but you just need to learn how to drive it." The martech we have in this organization, I wish I'd had in my previous organizations, it's all there. For some of you might know this, we've got the Adobe stack. It's, it's pretty much best-in-class in terms of digital optimization. I don't know, actually, that was a decision made 3 years ago. Whoever did that, made that decision, it was a good one. Was it you, Adam? I don't know. He'll take it.
It's not like we're gonna have to invest millions of dollars to kind of unlock what Amy described there. I'm really comfortable and confident in the martech we've got. The bit that we need to do is stitch all the data pipes together, so we can get that single view of customer. If we know the transaction data with the behavioral data and the other data we bring in, and we're creating experiences around that's the bit that we have to really do. The secret sauce is doing those real-time contextual alerts. You know, tonight, when we walk into a stadium, send me something contextual. If I walk on a race course, you know, welcome...
Like, send me something based on my context, the real-time nature of that is the bit that we have to hone. Hopefully, that answers your question.
Yeah, it does.
We're not gonna have to spend a squillion AUD on martech to do what Amy suggests.
Yeah, no, it absolutely does. In terms of that digital plumbing, if I can use that.
Yes.
-expression, when does that complete, in your view, so that you get to that seamless single view?
I don't know if anyone noticed some of the. There was a few strategic enablers on all those fields of play. One of them was single view of customer real-time. It's our highest priority. I expect to have a real step change there, hopefully for spring, within six months, we will have nailed it. Hopefully. It's progression. It's, you know, you can't do these things big bang. It's like, it's just chipping away, but we know exactly what we need to do.
Yeah. we currently just connected the digital with customer information and transaction. This is actually the most difficult, because they're coming from different systems, to plug them in together and interpret the digital in a way which is more meaningful, and that is really hard. I think we're the way on that journey.
I think, just to add, you know, in most things we do, we're looking at the shortest path to value. We're looking at what is the use case or what can we unlock from what we have, get that out to customer, get the value, and then iterate on that, as opposed to these big builds and plumbing and coming together at some date in the future. We want to constantly look at that path to the shortest path to get value.
Yeah, spot on. Yeah. That was in fact the what Jenni described, that contextual experience is our first user case, and that was what driving a lot of this connection.
Hi, Darshana from Goldman Sachs. In your TAB25 outlook, you obviously have set out a target for your market share in digital. Can you give us a sense of what you expect your retail business to be bigger or otherwise, when you're thinking about TAB25? What's your, you know, vision about that? What do you expect some of these changes, like the marquee venue changes, et cetera, to bring about to the TAB brand?
Do you want me to go? Two words for me: it'll be smarter, and it'll be more connected. We won't operate in isolation, as you saw what we put up there. We'll know more about our customers, we'll know where they go, we'll know where they live, we'll be able to plan our retail around that, and the specific offers that we'll have will be tailored to each segment. The good news for me is, in the retail world, is our highest grossing segments of customers are represented the highest in retail. We've got them there. We just haven't been able to market to them properly in the past. Now we can.
Okay, with that in mind, you obviously said your OpEx picture is likely to change. Can you give us a sense of? Obviously, because you've also done a lot in terms of, you know, customer segmentation and improving your analytics, et cetera. How should we think about, say, buckets like, you know, what sort of cost increases we should expect from that, and also the venue reconfiguration? How should we think about what's it likely to look like in 3 years' time?
The cost out program, just saying the number in AUD 600 to AUD 620 million doesn't really give you an accurate picture of the story. Because we really are reshaping the OpEx buckets within that. For example, Jenni's getting an increase in her available buckets in terms of the capability she needs above-the-line marketing and also generosity spend, where we've made those decisions to be competitive in the market. Not only are we reducing the cost of base in a real sense, but we're showing we're investing in the areas that matters. That requires some real restructuring of the way we're set up and the way we operate. There's a when we talk operating change, operating model change, we talk about being more efficient, more agile. It also means less people.
There's an element of efficient means a smaller workforce in time. We're stopping doing a lot of things. The thing that I'm trying to get across to you today, where we've got this strategy that we published 6 months or so ago, and we've got these pillars around winning the Australian market and structural reform, et cetera. There's key initiatives under that, and then there's key action plans under each one of those. That's really important. That's how we manage the business. Every time we meet as a team, we look at those. The team talks about how we're tracking against those, what are the blockers, what's going well. The GMs, that's their accountability. That's really going to ramp up now into FY 2024. What's really important in that is what we're not doing.
There's about 200 initiatives in the organization that we said, "No, we're not doing any of those anymore," and they weren't really generating value. That, to me, frankly, those targets and, you know, how we track to those targets and beyond, the value in them is much more than whether we hit them or not. The value is what we focus our time on, what we focus our energy on, what we focus our decisions on, and that is ultimately creating a very different looking P&L.
Can I give one example?
Sure.
I don't think I've told you this one yet. As part of the transformation work, we're looking at how do we triage calls as they come into a service support center, as opposed to sending a technician. In the first week of that trial, we reduced calls by 4.9% out to venue. That's just by asking the right questions when the service call comes in. That makes us more efficient, enables us to deploy resources where they need to go. If we can extrapolate that out over a 12-month period, it's a big number. They're the sort of little things we're doing that all add up to give Jenni more bucks to spend on customer.
Dash, the other one I'd just. We're trying to be quite thoughtful in terms of, can we repurpose roles or slightly reshape roles? Just to give you an example, I mentioned the digital content function that we set up, and the original ask that came to me was, "Jenni, can I have another 15 headcount?" I said, "No, go away and have another think, because we own a media company. Go and talk to the media company and see if we can solve this together." The revised ask came back as, "I actually just need 2." Right.
I think it's just a mindset, using the goodness of the company that we've got, overall, and just try and think about things a bit differently, yeah, to create the right outcomes that we need on cost and growth.
Hi, guys, Justin Barratt from CLSA. Just wanted to ask your additional ownership in Dabble that you completed relatively recently. I just want to see if there's any learnings from that we've heard about today, or if there's anything in addition to today that Dabble has helped you with.
Oh, yes. Okay. I'm just looking for Jack and Patty. Maybe they've gone into the other room already, but, I'll let Adam comment on the broader business strategy there, but we've been talking to them a lot on their speed to market, innovation. They've got a really good. Like, it's an inherently social platform and really engaging, and they've also very good at attracting younger audiences, and we're typically under indexed there, as I'm sure most of you know. Under indexed in under 35 plus sports. We're actually, from my perspective, in my area, we talk to them quite a lot in terms of some of the things they think about with their product design and also their execution strategy.
It's been quite useful, actually, just from my perspective, to get, you know, different views. They're very agile, young, startup-type mindset, which I think is good for us. Yeah.
I'd just say more broadly, we're really happy with that investment. They're going well, and they're, you know, they've got a good culture themselves. The way they're thinking about the market, I think, is different to anyone else in the way they approach it. We're really happy. We sit on their board. Angus sits on their board for us, and we're close to them, and we're happy with that investment. Really good.
Thanks very much. Really appreciate the, I guess, just additional commentary on, I guess, balancing your market share growth with earnings growth. I just wanted to sort of come back to the digital business. I mean, I appreciate that it's very or digital aspect, but appreciate that it's very early days in that process. Is there any kind of quantitative or numbers that you can put, you think, to the digital approach and how it could actually improve the effectiveness or efficiency of your Generosities that you offer at all?
Yeah, I'll hand over to you in a minute.
Yeah.
Is that right? That's to Jenni. I think, remember, we're on a three-year journey here. The first thing I wanted to do was hold share, 'cause we've never held share before. We've never found a way to stop losing share. We've also got a brand that needs to be attractive to a different type of customer. The brand refresh we do is really aiming to be relevant to a younger customer that we don't have today. These things take time. I think we're about a third of the way in to our transformation, this is really very much on the journey. The share growth gains will come. We're very focused on it.
We've got a plan for it, and we've got a fantastic team who are passionate about it. We're a third of the way in. That goes for culture, cost programs, share growth, et cetera. We've made great progress, and we've got a plan for that to continue. Adam, more specifically?
Yeah, maybe we'll just add one, then before Jenni can talk about the digital shares and stuff. I think our generosity, at the moment, we got a huge opportunity in digital space. We haven't really leveraged our digital capability as much as we'd liked, 'cause now we know more about our customer, we know their content, we know individually, if we can, you know, contact them and engage them through the digital channel, it'll be much more efficient. I think that's partially, you know, on of our next phase, is really looking at how do we get to the digital channel and make them more tailored and based on your experience.
I think that would help us in terms of how much we spend and how often and how kind of effective those contextual experience they need to come from digital, and that's basically on our roadmap. Jenni, do you want to comment on the-
Um-
Anything else?
Yeah. I mean, all I'd say is I see a lot of latent growth and a lot of growth opportunities still in digital. Just to give you an example, so one of the things Vanessa is gonna do very early on is just look at our off-platform strategy, so our sort of digital marketing strategy, cost per acquisition, get a bit smarter there in terms of the way we do that. You know, another example, we've got a lot of customers on our books that we could reactivate. Now, to reactivate, we make you call the call center, then we make you go into one of the stores to show your ID. I mean, like, who does that? In this day and age? Like, it's a standard e-commerce pattern.
The product team's onto that, but there's just upside there, in terms of the digital experience. Then all the work, you know, I know we've talked a lot today about personalized experiences in data and analytics, but it really does allow us to create the conversion uplift that we need. The strategy is going to be, you know, we've got to top up the funnel with younger audiences as well. Then we need to nurture our existing customers and really drive up who and give them reasons to return. Content will play a role in that. Obviously, generosity is one piece, but if we, if all we do is focus on that, it's just a race to the bottom.
Yeah, we're very focused on every single touch point with customers to drive that incremental growth, and then the sum of the parts will help us lift.
Thanks very much.
Thanks. Andre Fromyhr from UBS. I was wondering if you could reconcile the two ideas of segmentation and then personalization at scale. What I mean by reconcile is, you know, segmentation, you put up seven archetypes, which is a simplification of your customer base. I can imagine if you're doing personalization, if, if that's all working properly, you've actually got thousands of, you know, permutations of what a customer looks like and what they want. What are the implications that you're taking out of, you know, one or both of the other, organizationally or in your products?
Yeah, I can take this one. I think this is our steps, essentially, the maturity. Segmentation is just a representative of a larger group of people, so we know enough, then at least they're different. The real game is in the personalization. Each individual, they all behave differently. They want different things. At the moment, I think if we use the traditional stuff, we could do segmentation, and if we wanna do real one-to-one, we need to go AI. That means we need a lot more data and a lot more live data, and we need to convert the content and the images and the text and stuff, understand, you know, what they're really interested in, and that would create that connection and become the recommendation, becoming the contextual engagement.
That's kind of the, our mature stage, when we're going from segments to a contextual and a personalization at scale.
Just one more, coming back to the costs question. I appreciate you described that there's a change in sort of the composition of the cost base. In doing so, you've got plenty of costs coming in. I imagine PhDs are expensive. Can you give a sense of what the gross kind of cost out is? Like, what is the task of what you're taking out, you know, that you're reinvesting to get back to your target?
These are round numbers, but to give you a indication, to get to the AUD 600-AUD 620, I think we started around AUD 650, we need to pull AUD 100 million of cost out to get to that number and do everything else we're doing. That's we've got a plan for that.
Thanks.
Jack McNally at Ellerston Capital. I just had a question around, and it wasn't touched on as much today, but just around the balance sheet. If you look at the debt targets as well as potentially with the Victoria license, but even with not, there's excess capacity from the payout ratio, as well as just the excess free cash flow generation beyond your NPAT. How do you see capital allocation beyond this the TAB25 program? Is it reinvestment in the business, or is there potential for greater shareholder returns?
We've got a lot to occur in the market. We've got big license outcomes, so we'll see how that go, see what the outcome is there. Potentially, we've got potential. We're looking to create a level playing field nationally, which potentially there'll be other commercial outcomes associated with those. I think that we feel like we've got plenty of debt capacity, or we've got enough debt capacity for what we want to do. And we, you know, beyond that, I think any investments we make outside of that will be totally aligned with winning the Australian market at this stage. There's nothing more planned beyond that.
If there is additional capacity, is that just comes through dividends as well, or?
Too early to say.
Too early.
I think our focus is on growth. As I said, we've got a few big things. You know, if we, depending on Victoria, and what the outcome is there, and potential other markets where we're looking to level the playing field, we, as I said, we've got plenty of capacity for that. We don't need to raise equity or don't feel we need to raise equity. That's not in our, in our frame at the moment. We haven't thought beyond that in terms of how we deploy capital beyond that, beyond FY 2025 at this stage.
Thank you.
Thanks. It's Alex Mees at Morgans. Just with regard to the TAB25 targets, I appreciate it's not always about the destination, but it's part of the journey as well. I'm just wondering how you embed TAB25 into your executive management incentives and what the accountability is. If they're not achieved, what happens?
I think embedding is really important, so we're putting some systems in place around that. When that goes right through to, 1, being clear about the strategy, 2, being clear about the fields of play. We've talked about that. Each of the initiatives and projects under those, the accountability for those is very clear in terms of which GM owns each of those initiatives, what their targets are. Every initiative will have a ROIC target, for example. Whatever, whether it's market share or ROIC or cost target, depending on the initiative, and then we manage to those, and people's incentives are framed around those targets.
Thanks. Just on the level playing field, you mentioned that here in SA, you've commenced discussions. I'm just wondering how advanced are those discussions and what will happen next?
Oh, look, I can't talk specifically about the discussions we've had in South Australia. We've certainly had numerous discussions, and we'll continue to do so. I think South Australia, a level playing field would be very good for South Australia in terms of the racing industry, and we've got a solution for them in that regard, and we continue to talk to them. There's no catalyst for timing outside of those discussions.
Great. Just finally, Jenni, I think you mentioned that you were looking to double down on the right sort of sports. I'm just curious as to how you define what a right sport is, as opposed to a wrong one?
Good question. We've just looked at sort of what our sports strategy should be, because we are under-indexed in sport. We all know that. No surprises, it's domestic sport, and the investments we made in US sport were the right ones, basketball in particular. What we need to do is do more with that. We've got these great assets, but we need to do more with them. We will create a connection with the NRL and the AFL. We don't need vision rights to do that. Some of you might have seen the way we're thinking about that with some of our content partnerships, for example, with the Cowboys, with a couple of other things. The content, you know, content's really meaningful for all of us, but younger audiences in particular.
When I say the right sports, just take that as we can't be all things to all people, so we need to focus on where the biggest opportunities are. Yeah.
Amar from L1. Can you please outline a bit more on the LTV dynamics you spoke about? Am I correct in saying so you had no LTV calcs as of a few months ago? How sophisticated are the current calcs? Anything you can share in terms of customer acquisition with versus LTV and how the last few months have looked maybe versus 6 or 12 months ago?
Yeah. The lifetime value is really hard to do actually anywhere. I think in the last few months, we really just focused on how do we measure things first. You know, the clear definition from the turnover to net revenue and the bottom line revenue. That was, you know, one of the clear definition we need to get into it. Then we moved on to the prediction. Prediction for the entire lifespan, which we anticipated, and if we use just the average, it's going to be very different. We're actually taking a segment-based approach in the retention rate of those number of years and what's the likely revenue is going to be. Building the lifetime value, essentially taking the segmentation into account.
In terms of the acquisition and retention, each of the segments, they behave quite differently, as well as when we look at more efficiency of the generosity, you know, there is definitely a very encouraging sign as we can change some of these key value base of segments moving forward. We haven't been long enough to give you know, a good kind of shift in terms of our lifetime value, et cetera. Clearly, each segments, we got a very clear benchmark now. We know what's their acquisition retention and what's the lifetime value.
All of these, market share, or the revenue target, for example, we can convert into the type of, active customers we need in that segment and what's the, value we anticipate to bring in. That's kind of how we evolved from thinking about a concept to using it. Not sure if that answer your question? Cool. Thank you.
It's Vid Rangeswamy from Tanarra Capital. This one's probably for you, Adam. Are there any conflicts or tensions potentially between your market share aspirations and your ROIC targets? If so, what do you prioritize if there is one?
It'll be a lot easier to get the market share if I didn't have a ROIC target. Yes, there's tension there. I think we're really, that's why leveling the playing field is so important to do at the same time as all of the win the customer initiatives that we have. When we've got the same margins as everyone else, this all translates into a very different looking P&L. Everything we're doing today is to try and manage those things as well as we can, whilst, you know, initially stabilizing share and then growing share and setting ourselves up really for a level playing field market. That's what we're shooting here for.
Once we have a level playing field market right across the country, especially in the biggest markets, everything we're building today makes a massive difference, in fact, double the difference. Until we achieve that, there is a tension, because if we were willing to just, you know, not be ROIC focused through this period, you know, growing share is easy if you're happy to tear up profit to do it. Everything that Amy is talking about is really important by increasing the efficiency and the performance of the spend that we have.
Yeah. Hi, Andy Orbach from Taylor Collison. It was never really clearly delineated what would happen to the assets of the joint venture in Victoria upon termination. I'm just wondering if you've got a view on the customer there. A second question in relation to the Victoria Racing Club and the speculation over AUD 100 million vision in relation to the Spring Carnival. I'm wondering how we should interpret that. Have there been sort of firm commitments made or, you know, I guess, high-level plans from a technical perspective in that respect?
Yeah. I've lost a bet because it took this long to get to a question on the Victorian license, so. Which gives me an opportunity to tell you I can't really talk about it. Look, just in relate, I can't talk to you about the assets of the joint venture, including the customer data. I will say more broadly about customer data in general, is that we've got a responsibility that we take very seriously for our customers to protect that data and the privacy of that data, we wouldn't do anything with their data unless they gave us consent to do it, whether that's in Victoria or any other state. In terms of the VRC, you know, we've been partners with the VRC from the very beginning.
They're very, we really value that partnership. We want to do more with them in time to not just grow as part of the Melbourne Cup Carnival, but to grow Flemington and for them to help us grow. It's a really in a partnership where we're looking to take 1 plus 1 and make about 6. The potential deal around media rights for the Melbourne Cup Carnival is one of those. You know, the VRC are thinking about it in that way because of, 1, our partnership, 2, our capability and what we might be able to do with that. We've already got their international rights. Domestic rights for the Melbourne Cup Carnival is an opportunity for us to grow. That's how we're thinking about it.
Okay, one really quick final one. It can just be a one-word answer. Just in terms of the Queensland market, you said it was your best performing market. Are we to take from that you are gaining net wagering revenue share?
Sorry, I missed that.
Are we to take that you're gaining share, as in net wagering revenue share in that market, if it's your best performing?
You can take it that it's our best performing market. We're not giving guidance here today. Our performance has improved since it was a level playing field in all metrics. I think the other thing I'd say about Queensland, the good thing about it being a, you know, reasonable size market, having a level playing field there over the last five months, this team's still learning about how to really take share in a level playing field environment. Jenni, and Amy, and the rest of Jenni's team, and with Paul, are looking at able to test and learn in that market, and so far, it's been good.
Thank you.
Hi, guys, Sean from Firetrail, at the back here. You've got a pretty significant media business. Just trying to get a sense of whether that can grow into 2025, or should we just be thinking about that as supporting wagering? Are the actual earnings from media going to grow?
Yes, we do have a fantastic media business. We really value Sky Racing. You know, you've heard about content and customer experience, so we're gonna be using that asset more and more. In fact, next time, we should unpack that business. In Australia, we see that as a real enabler for TAB growth. That makes absolute sense when you've got a level playing field. For every customer we get, we double the margin, we can reinvest that into that virtuous loop. The economics for Sky Racing really makes sense if they're an engine for TAB growth. That's how we think about it. The earnings beyond that are in, we've got deals with some of the corporate bookmakers, sell Sky Racing. We're happy with those deals, we receive revenue from those.
The real enabler for us is around using that in a stronger way as we build out this other capability as a differentiated growth TAB.
'Cause I guess that's what I'm getting at, right? Is you've got deals with Sportsbet, for example.
Yeah.
It sounds like the media business is really about enabling your wagering business. As this content becomes somewhat commoditized, I mean, how do you balance that?
We've got Sky is gets more eyeballs than just about any media business in the country. Through free to air or anything else, the reach is phenomenal, and that's because it's a wall-to-wall betting channel for racing that is made possible because of our breadth of rights, and no one else has those breadth of rights. We do sell some content to others, such as Ladbrokes, for particular streams. No one else pulls together the wall-to-wall channel, that's not gonna change in the near term. That's why Sky Racing is really valuable to Sportsbet. We've also got deals with some other corporates, that will continue. Beyond that, there's things that we can do with that content that, you know, we wanna use to enrich our experience.
Both are important, and we, you know, we wanna provide a really good service to Sportsbet. They're a customer, they pay for that channel. That will continue. You know, we want that to be served up to them in a way that's appropriate for their business, for the fee they pay. What's important is, what do we do with that content over and beyond to differentiate the TAB experience? That's where Jenni, and Paul, and the team are focused.
Hi, it's David here again from Macquarie. You spoke earlier about the regulatory framework tightening. We think about the restrictions on marketing, advertising on free-to-air TV and whatnot, but what if we think about deregulation? In-play betting, for example, with doubling down in sport, is there something you can do differently in venue or something like that, to see in-play sport become more prominent here in Australia?
Do you wanna talk about in-play?
Talk about the pump stations and stuff.
There is, but we're waiting for regulatory approval on hardware that we've got sitting in a warehouse to enable us to do that.
Can you elaborate on that a little bit further?
There's things we can. The answer is yes. We've currently got approval to, for in-play betting in the venue through cash. The other way is through, like everybody can, through the contact center. Every operator's done everything they can to make that as seamless a pathway to the contact center, you know, which is, according to some of the regulations, almost too seamless a pathway at times for in-play. Paul does have some plans around how we leverage that in-venue approval in a way that amplifies in-play betting, but it does still need regulatory approval. He doesn't have the regulatory approval yet. That's what he's saying.
Got it. I can assume that would allow you to use your mobile device if you're in venue?
Potentially. Yeah.
Thank you all for your questions. We've just got another question. Can you go for it?
Yeah, I want just a similar question to the one from everyone, just around generosities. Can you give us some more color? I mean, you said that you're kind of being more targeted and increasing your return on invested capital. Can you give us a bit more color as to what that actually means in terms of what you were achieving before from your generosities to what you're achieving now?
Do you wanna-
Yes.
It basically means. You know, we're spending, call it AUD 300 million a year on generosity, which is the percentage of turnover is lower than our competitors. On top of that, we weren't getting as great a return from that spend as we could, because, for example, we were taking a constantly improving but still quite a generalized approach to the way we've share that with customers. By landing it with customers in a way that's meaningful for them on products that are meaningful for them, at times that are meaning for them, we expect to get more growth from the same level of spend, basically.
Yes. I describe it as, you know, a strategy going from spray and pray, like, hope for the best, to just really thoughtful about, you know, how you utilize that generosity investment. That's the way that I sort of think about it. You know, Amy Shi-Nash, Vanessa, and myself have had experience in our last organizations on the conversion uplift when you do this stuff really well at scale. You know, it's anywhere from 3 to 10 times conversion rate, just by being targeted, being very contextual, targeting the right customers. You know, we're really early in this journey because we've only just connected the data. You know, we need to build more places that you can personalize messages within the app. We haven't even got to web yet.
Believe it or not, that's still a, quite a sizable piece of the puzzle for us. All I can say is the early experiments that we're doing, we're seeing really good uplift, so up to 3 or 4 times conversion. They're small, you know, they're small scale, we're experimenting, we learn first. I expect once we do this really well and at scale, it will allow us. You know, maybe we will spend the same amount of money, we'll create a better outcome. Maybe we'll be able to reduce generosities and get the same outcome. It's all about the right customer, right time, and being really smart about where we place them.
I would only add, I think we're just doing the basics at the moment. Getting the basics right is really important because we need to know where we spend and what is the actual return at the campaign level. That's what we've been focused on, and I think we achieve that by each of the campaigns we can manage to see the response, the uplift from every metrics we can think of. Now, what we're looking at is how to roll it up to the top at the top level, so we know where we spend at the bucket is the right, but we haven't gone, you know, long enough to see how does that lead into some of the really moving the needles and stuff like that. I think we are, we are getting there. The basics now, right?
We can look at a bigger scale experiment and a different, much more creative, doing things differently, because if we do, all these similar offers and stuff, we just can't get the return. What else can we do to be more confident in terms of pulling up or down? I think that's what we learned fairly recently, is if we know how to measure it, we can tune it up, we can tune it down, we can do something very differently, but very quickly pivot if it doesn't work.
Thanks very much, everyone, and thank you to our speakers. Thank you very much. Really appreciate it. That concludes our formal Investor Day presentation. Shortly, ladies and gentlemen, you can make your way across, and we'll give a display of our IT platform over there in the TAB Lab, just across the hallway. Also, the 1950 Melbourne Cup will be there, so please feel free to get a photo with that piece of history as well.
Just make sure it's there when-
Yeah. Okay, right. No one... Yeah, take it with you. Fair enough. No level playing field as far as go the blues, though. Had to give that one in as well tonight. Thanks so much for your presence here this afternoon. Also, heading to Adelaide Oval, of course, and we'll hear from Michael Clarke and Laurie Daley there to get a tale or two from them as well, ahead of the big game tonight. Of course, next door, you'll have the opportunity to speak directly with our executive team here today, and they're happy to provide some more detail as well about our strategic growth plans and look forward to chatting with you there in the TAB Lab as we have that presentation as well. Thank you for joining us for the formalities.
Enjoy the rest of your evening, with us here at Tabcorp, where we're raising the game. Thank you.