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Presentation to Joint Committee on Finance, Public Expenditure & Reform

Presentation to Joint Committee on Finance, Public Expenditure & Reform. Donal Connell, Chairman, An Post National Lottery Company December 2011. Donal Connell. Appointed Chief Executive of An Post and Chairman of the An Post National Lottery Company in 2006

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Presentation to Joint Committee on Finance, Public Expenditure & Reform

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  1. Presentation to Joint Committee on Finance, Public Expenditure & Reform Donal Connell, Chairman, An Post National Lottery Company December 2011

  2. Donal Connell • Appointed Chief Executive of An Post and Chairman of the An Post National Lottery Company in 2006 • Bachelor of Engineering ( U.C.D.), Chartered Engineer, Fellow of the Institution of Engineers of Ireland • Held senior management positions in major multinational companies 3COM Corporation, Maxtor Corporation, Unitrode Corporation Strictly Confidential - Limited Distribution

  3. Donal Connell • Vice President of 3COM Corporation , responsible for the company’s manufacturing, distribution and retail businesses in the Europe, Middle East and Africa region. Similar role with Maxtor Corporation • Track record of consistent achievement at the An Post National Lottery Company and An Post itself Strictly Confidential - Limited Distribution

  4. General Overview

  5. Company Structure • An Post National Lottery Company (NLC) is a subsidiary of An Post. • 80% of shares owned by An Post, 20% owned by Minister for Public Expenditure and Reform. • NLC was established in 1986 under the terms of the National Lottery Act (1986). • Commenced trading 23rd March 1987. Strictly Confidential - Limited Distribution

  6. National Lottery Licence • Extension of 18 months up to 30th June 2013 recently announced by DPER • Key Licence Conditions: • All NLC games require approval by the Minister for PER • Operating Cost % and Prize %, number of Agents are controlled • Management fee paid to An Post • Minister owns the assets of the business including all intellectual property Strictly Confidential - Limited Distribution

  7. The Board • The Board consists of 7 Directors appointed by the Minister for Public Expenditure and Reform. • 3 Directors and chair nominated by An Post. • 3 Directors nominated by the Minister for Public Expenditure and Reform. Strictly Confidential - Limited Distribution

  8. Company Overview • 2.2 million adults (63%) are National Lottery players. • 1.5 million adults (42%) participate each week. • The National Lottery has 103 employees. • 3,800 retail sales agents • €420m (55%) prizes • €244m (31%) good causes • €48m (6%) Agent commission • €60m (8%) other operating costs Strictly Confidential - Limited Distribution

  9. Big numbers…. Winners Good Causes

  10. Promoting Beneficiary Funding • National Lottery funding is distributed by Government to the following areas: • Sport & Recreation • Health & Welfare • Arts & Culture • Irish Language • Awareness of beneficiary funding is an important motivating factor for people to play our games. Strictly Confidential - Limited Distribution

  11. Irish Guide Dogs Everton Football Club, Cork Irish Kidney Association Irish Kidney Association Strictly Confidential - Limited Distribution

  12. Wexford Festival Opera RaidióRí-Rá Carlow Gymnastics Club Limerick Youth Service Strictly Confidential - Limited Distribution

  13. Financials

  14. Games…percent of sales • Lotto ‘Family’ 56% • Scratchcards / Internet Instant Win20% • EuroMillions Games 17% • Monday Million & Monday Million Plus 3% • Other Games 4% Strictly Confidential - Limited Distribution

  15. 2010….figures • Sales €772m • Prizes €420m • Agent commission €48m • Other operating costs €60m • Contribution to Good Causes €244m Total Return to Community €718m As % of Sales 93.0% Strictly Confidential - Limited Distribution

  16. International Comparisons

  17. Per Capita Sales • Our flagship Lotto is ranked 5th, within Europe, ahead of the bigger European lotteries such as France and UK • Lotto is also ranked 8th in the world with per capita sales of €129 in 2010. • Compared to Camelot in the UK, NLC sales per capita are consistently 47% and more ahead. Strictly Confidential - Limited Distribution

  18. Funds for Good Causes • NLC ranks highly when compared to our European counterparts with per capita contribution of €54 in 2010. • NLC ranked 8th of 41 European Lotteries, considerably higher than the EU average of €44 and the European average of €29. Strictly Confidential - Limited Distribution

  19. Sales per employee • One of the key indicators of efficiencies is sales per employee. • For 2010, NLC generated sales of €7.5m per employee which compares favourably with our European counterparts. • NLC ranked first on the sales per employee metric when compared to lotteries in European countries of similar population to Ireland (i.e. in the 3 to 6 million range) Strictly Confidential - Limited Distribution

  20. Future Opportunities

  21. NLC Product Roadmap 2003 - 2010

  22. National Lottery Play Online • Currently offers Lotto, EuroMillions and a range of Instant Win Games Lotto Online Playslip

  23. National Lottery Mobile • Over 120,000 downloads of iPhone App since launch in 2010 Number Generator Number Checker Prizes & Results Homepage Limited Distribution – Company Confidential

  24. Internet & Mobile Phone Games • Key components for future growth. • Built technology: • Provide Lotto, EuroMillions via online/mobile phone. • An appropriate selection of instant games. • Focus on attracting new generation of adult players. • Working closely with the Department in the development of this channel consistent with our Responsible Gaming Policy • We plan to broaden the selection of games on offer as well as providing improved convenience for our customers Strictly Confidential - Limited Distribution

  25. World Game • As part of EuroMillions group we are currently working to develop a new worldwide lottery game concept • World Game to launch in 2014 • This exciting project will deliver a compelling game with a prize structure that no single lottery could deliver on their own or as part of existing Multi-jurisdictional communities. • And it will generate incremental revenue for Good Causes • Lotteries from Europe, North America, Australia are collaborating in planning this unifying concept Strictly Confidential - Limited Distribution

  26. Social Media • Facebook page to launch in January 2012. • Social media strategy will strengthen our interaction with players using these new media channels. Strictly Confidential - Limited Distribution

  27. Digital Signage • Utilising our existing nationwide broadband network to our 3,800 agents we have commenced a programme to install realtime Digital messaging. • By January 2012 1,000 of our top agents will have Screens featuring jackpot amounts, latest game promotions, good cause information and responsible gaming messages. Strictly Confidential - Limited Distribution

  28. Summary

  29. Summary • Money for Good Causes 1987-2010…€3.7bn • More than a €1billion in the last 4 years • Track record of innovation and efficiency • Successful strategy formulation and implementation Strictly Confidential - Limited Distribution

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