Sun International Limited · JSE:SUI
Sun International — FY2016 Earnings Presentation
34 slides from Sun International's earnings presentation, September 2016
Slide 1: Results Presentation for the Year Ended 30 June 2016
RESULTS PRESENTATION FOR THE YEAR ENDED 30 JUNE 2016
Slide 2: Disclaimer
Certain statements in this document may constitute ’forward looking statements’. Such forward looking statements reflect the company’s beliefs and expectations and involve known and unknown risks, uncertainties and other important factors that could cause the actual results, performance or achieveme
Slide 3: Key indicators
Key indicators R12 186m R3 356m R3 181 628 cents 225 cents 15% 6% 4% 20% 21% Group revenue Group EBITDAR Group EBITDA Diluted adjusted Dividends per share HEPS 3
Slide 4: Strategic Overview
STRATEGIC OVERVIEW
Slide 5: Key strategic focus areas
Key strategic focus areas EXISTING OPERATIONS ASSETS GROWTH PEOPLE REPUTATION Improve our existing Protect and leverage Grow our business Our people Governance and operations and guest our existing asset into new areas and sustainability experience portfolio products 5
Slide 6: Operations: improve existing operations and guest experience
Operations: improve existing operations and guest experience Gaming marketing and sales initiatives • Bally BI rolled out at all properties • Centre marketing campaigns launched and working well • Footfall and games played generally up across all properties • Plats/Golds showing improvement. • Signi
Slide 7: Existing assets: protect and leverage existing asset portfolio
Existing assets: protect and leverage existing asset portfolio Time Square at Menlyn Maine Boardwalk • All approvals achieved and legal settlements paid to • Application for mall/licence extension declined by ECGB Peermont and Goldrush (R748m) • High Court action launched against EBTs in catchment a
Slide 8: Growth: grow our business into new areas and products
Growth: grow our business into new areas and products Dreams merger • Implemented on 1 Jun 2016 (SIL shareholding 55%) • Bidding for Chilean municipal licences commences November 2016 • Opportunity to acquire further shares (20%) from exiting fund • Opportunities been considered in Peru and Argentin
Slide 9: People: investing in our people
People: investing in our people Improve our culture • Employee engagement survey completed • Units implementing plans to work on identified issues SA wage negotiations in progress Transformation goals on track • Recent senior management appointments Employee wellness • Staff loan scheme with Nedbank
Slide 10: Reputation: governance and sustainability
Reputation: governance and sustainability Change of year end to 31 December (aligned with Chile) Gaming Board BEE considerations Revised codes Gauteng gaming tax increase • CASA challenging legal basis of proposed tax increase CEO Sleepout • Raised over R30 million (largest fundraising event in SA)
Slide 11: Financial Review
FINANCIAL REVIEW
Slide 12: Group income statement – management format
Group income statement – management format Six months ended 31 Dec Six months ended 30 Jun Year ended 30 June % % % R million 2014 change 2015 2015 change 2016 2015 change 2016 Revenue 5 403 11,7 6 034 5 454 20,2 6 555 10 857 16,0 12 589 Casino 4 339 5,5 4 578 4 314 12,7 4 861 8 653 9,1 9 439 LPM 23
Slide 13: Group proforma segmental review
Group proforma segmental review Six months ended 31 Dec Six months ended 30 Jun Year ended 30 June % % % R million 2014 change 2015 2015 change 2016 2015 change 2016 Revenue South Africa 4 360 6,8 4 658 4 217 6,1 4 476 8 577 6,5 9 134 IRB (11) 21 165 21 633,3 154 GPI Slots 393 19,1 468 405 15,3 467
Slide 14: Determination of diluted adjusted HEPS
Determination of diluted adjusted HEPS ADJUSTED HEPS for the year ended 30 June 2016 R million 2016 2015 % Change Attributable (loss)/earnings (414) 890 (146.5) Net profit on disposal of property, plant and equipment 5 149 Profit on disposal of shares in subsidiaries and associates 29 (449) Headline
Slide 15: Revenue growth by category and geography
Revenue growth by category and geography R million 13,000 12,500 314 12,186 380 12,000 113 11,500 536 291 11,000 10,553 10,500 10,000 9,500 FY 15 Translation FY 16 Revenue FX Gaming Rooms F&B Other Revenue South Africa 8 598 186 105 323 71 9 283 GPI Slots - - - - - 238 238 Monticello 1 597 212 80 1
Slide 16: Revenue contribution by category and geography
Revenue contribution by category and geography Category Geography 10% 2% 1% (7%) (1%) 9% (9%) 33% 4% (32%) (4%) 66% 75% (67%) (80%) Gaming LPM Rooms F&B Other South Africa Latam Nigeria ( ) prior year 16
Slide 17: EBITDA and operating profit contribution by geography
EBITDA and operating profit contribution by geography Operating profit EBITDA -1% 0% (0%) (1%) 30% 32% (24%) (28%) 71% 68% (76%) (71%) South Africa Latam Nigeria South Africa Latam Nigeria ( ) prior year 17
Slide 18: Group statement of financial position
Group statement of financial position R million 2016 2015 Assets 20 590 12 994 Property, plant and equipment 16 800 11 244 GPI Slots goodwill R456m GPI Slots intangible assets R160m Intangible assets 3 303 738 Dreams goodwill R603m Equity accounted investments 15 591 Dreams intangible assets R1 292m
Slide 19: Capex
Capex YTD R million Jun 16 Expansionary Sun Nao Casino, Colombia 29 Sun City 268 Time Square 1 221 Other operations 22 1 540 Refurbishment Sun City 138 Sibaya 9 Carnival City 30 Other refurbishments 28 205 Other ongoing asset replacement* 751 Enterprise Resource Planning 42 Total capital expenditure
Slide 20: Debt funding and debt to EBITDA ratios
Debt funding and debt to EBITDA ratios Group debt Share of debt Currency Average Sun R million of loan interest rate Total debt Minorities International South Africa Subsidiaries Rand 3 161 1 378 1 783 Time Square Rand 2 040 510 1 530 Central office Rand 4 352 4 352 9,3% 9 553 1 888 7 665 Nigeria (Y
Slide 21: Financial Review: South Africa
FINANCIAL REVIEW SOUTH AFRICA
Slide 22: South Africa income statement – management format
South Africa income statement – management format Six months ended 31 Dec Six months ended 30 Jun Year ended 30 Jun % % % R million 2014 change 2015 2015 change 2016 2015 change 2016 Revenue 4 446 8,3 4 814 4 350 6,1 4 615 8 796 7,2 9 429 Casino 3 552 1,0 3 586 3 410 0,6 3 430 6 962 0,8 7 016 Rooms*
Slide 23: South Africa segmental analysis
South Africa segmental analysis Total revenue Casino revenue EBITDA Operating profit % % % % R million 2015 change 2016 2015 change 2016 2015 change 2016 2015 change 2016 Core operations 8 251 4,5 8 625 6 438 0,8 6 491 2 575 (5,4) 2 437 1 896 (8,4) 1 736 GrandWest 2 152 1,2 2 178 2 114 (0,8) 2 097 9
Slide 24: GPI Slots
GPI Slots Six months ended 31 Dec Six months ended 30 Jun Year ended 30 Jun % % % R million 2014 change 2015 2015 change 2016 2015 change 2016 Revenue 393 19,1 468 405 15,3 467 798 17,2 935 Gross profit 157 19,1 187 168 14,9 193 325 16,9 380 Indirect costs (63) (12,7) (71) (72) (11,1) (80) (135) (11
Slide 25: Financial Review: Latam
FINANCIAL REVIEW LATAM
Slide 26: Monticello
Monticello Six months ended 31 Dec Six months ended 30 Jun Year ended 30 Jun % % % R million 2014 change 2015 2015 change 2016 2015 change 2016 Revenue 892 8,1 965 907 5,8 960 1 799 7,0 1 923 Casino 800 6,4 851 812 5,0 853 1 612 5,7 1 702 Rooms* 8 12,5 9 8 0,0 8 16 6,3 17 Food & beverage 67 34,3 90
Slide 27: Ocean Sun Casino – Panama
Ocean Sun Casino – Panama Six months ended 31 Dec Six months ended 30 Jun Year ended 30 Jun % % % R million 2014 change 2015 2015 change 2016 2015 change 2016 Revenue 56 175,0 154 123 8,1 133 179 60,3 287 Casino 50 176,0 138 111 5,4 117 161 58,4 255 Food & beverage 6 166,7 16 12 33,3 16 18 77,8 32 G
Slide 28: Chile – Municipal licence bidding process
Chile – Municipal licence bidding process Project must fulfil the requirements for each city eg • Iquique: Casino, Hotel of 120 rooms, Convention centre & 600 parking bays • Vina del Mar: US$7,6m minimum investment • Puerto Varas: Casino, Hotel of 50 rooms, Convention centre, restaurants Maximum poi
Slide 29: Dreams
Dreams Six months ended 31 Dec Six months ended 30 Jun Year ended 30 Jun % % % Clp million 2014 change 2015 2015 change 2016 2015 change 2016 Revenue 1 204 11,1 1 338 1 339 4,3 1 397 2 543 7,6 2 735 Casino 983 10,7 1 088 1 098 5,7 1 161 2 081 8,1 2 249 Hotel 67 37,3 92 108 (1,9) 106 175 13,1 198 Foo
Slide 30: Financial Review: Appendix
FINANCIAL REVIEW APPENDIX
Slide 31: Minorities share of earnings
Minorities share of earnings 2016 2015 * Minority Minority * Minority Minority R million Adj HE interest Adj HE Adj HE interest Adj HE South Africa SunWest 500 38,4% 153 527 28,4% 149 Afrisun KZN 207 37,4% 77 216 37,4% 82 Afrisun Gauteng 154 8,8% 14 158 8,8% 14 Emfuleni (31) 18,4% (5) 4 18,4% 1 Wild
Slide 32: Reconciliation to management accounts taxable income
Reconciliation to management accounts taxable income SA Nigeria Chile Panama Colombia Dreams Total Profit before tax 1 367 (74) 324 (200) (79) 26 1 364 Preference share funding 107 107 Depreciation on non-qualifying buildings 75 75 Non-deductible expenditure 18 5 23 Tax Incentives (11) (11) Foreign
Slide 33: Reconciliation to statutory accounts taxable income
Reconciliation to statutory accounts taxable income SA Nigeria Chile Panama Colombia Dreams Total Loss before tax and discontinuing operations 665 (409) 7 (188) (100) 1 (24) Preference share funding 107 107 Depreciation on non-qualifying buildings 75 75 Non-deductible expenditure 76 76 Tax Incentive
Slide 34: Tables GGR: Market share – Eastern Cape
Market share – Eastern Cape Sun International Rest of Eastern Cape Market share% EC Boardwalk Wildcoast Total SI Rest of EC EBT's Boardwalk Wildcoast Rest of EC EBT's GROWTH % Current Prior Current Prior Current Prior Current Prior 3 months 7.1% (6.6)% 14.8% 1.6% 16.7% 56.9% TOTAL GGR 34.2% 39.2% 26