Southern Sun Limited · JSE:SSU
Southern Sun — FY2023 Earnings Presentation
21 slides from Southern Sun's earnings presentation, May 2023
Slide 1: Southern Sun Investor Presentation May 2023
F’23 • Occupancy at 51.5% • Total Ebitdar at R1 436m • Total adjusted headline profit: R443m • Net debt reduced to R1.3bn SOUTHERN SUN INVESTOR PRESENTATION May 2023 1
Slide 2: Disclaimer
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 o
Slide 3: Group Structure
GROUP STRUCTURE Public 41% 59% 100% 100% SOUTH AFRICA OFFSHORE • Owned, managed • Owned, managed and leased hotels and leased hotels • UK Investments – 26% • Manco 3
Slide 4: Board of Directors
BOARD OF DIRECTORS EXECUTIVE DIRECTORS INDEPENDENT NON-EXECUTIVE DIRECTORS Marcel Nikolaus von Aulock Laurelle McDonald Mohamed Haroun Ahmed Lynette Moretlo Molefi Chief Executive Officer Chief Financial Officer Lead independent Independent non-executive director non-executive director NON-EXECUTIVE
Slide 5: Southern Sun at a Glance
SOUTHERN SUN AT A GLANCE 90 OVER HOTELS & RESORTS in South Africa, 16,000 rooms OVER Africa, the Seychelles and Total Total Middle East from luxury to economy Hotels Rooms Luxury Western Cape 17 3 352 KwaZulu-Natal 14 2 869 Gauteng 30 5 167 Eastern Cape 5 772 Full Service Mpumalanga 8 675 Other 6 71
Slide 6: Operated Portfolio
OPERATED PORTFOLIO Luxury 54 Arabella HOTEL, GOLF & SPA wo BEVERLY HILLS e « — SANDTON SUN = SANDTON TOWERS MOUNT GRACE Qe wine Se HOTEL © SPA w ©) Southern Sun Full Service © Southern Sun HOTELS @Y SouthernSun RESORTS Y SUN SQUARE Y Garden Court Economy © stayeasy Convention Centre SANDTON CONVENTI
Slide 7: Cash Flow (Rm)
CASH FLOW (Rm) F’23 F’22 Ebitdar per income statement1,2 1 436 590 Property rentals (288) (146) Move in working capital adjusted for non-cash and exceptional items 52 59 Dividend income from associate 3 5 Cash generated from operations 1 203 508 Net finance costs paid (excluding IFRS16 adjustments)
Slide 8: Cash Flow (Rm) Continued
CASH FLOW (Rm) CONTINUED F’23 F’22 Free cash inflow from operations (b/f) 753 223 Separation payment 399 - Disposal proceeds 548 1 Investment activities – expansion capex (166) - Share buy-back (45) - Net cash surplus 1 489 224 Opening net IBD (2 830) (3 069) Prepaid borrowing costs and accrued inte
Slide 9: Investment Activities (Rm)
INVESTMENT ACTIVITIES (Rm) F’23 F’22 Investment activities 166 - Acquisition of Southern Sun and StayEasy Mbombela hotels 142 - Radisson Waterfront 24 - Maintenance capex 104 43 Externally managed – Investment properties 6 7 Internally managed Western Cape 17 4 KwaZulu-Natal 19 7 Gauteng 13 6 Other
Slide 10: Interest Bearing Debt (Rm)
INTEREST BEARING DEBT (Rm) F’23 F’22 External debt – Offshore (US$ based) 468 667 External debt (Rand based) 1 500 2 831 Prepaid borrowing costs (4) (3) Gross IBD 1 964 3 495 Cash on hand – Hotels SA (529) (584) Cash on hand – Hotels Offshore (124) (81) Net IBD 1 311 2 830 Cash held as security for
Slide 11: Debt Facilities, Liquidity and Covenants
DEBT FACILITIES, LIQUIDITY AND COVENANTS In December 2022, the group successfully concluded the refinancing of its debt package with the aim of simplifying the security structure, further extending the facility tenures to between three and five years and reintroducing normalised covenants Total
Slide 12: Review of Operations
REVIEW OF OPERATIONS Trading levels continued to recover, particularly in the second half of the financial year, as local and international travel patterns normalised and demand for conferencing and events increased. All regions performed well and exceeded FY20 (pre-Covid-19) levels except the San
Slide 13: Review of Operations
REVIEW OF OPERATIONS Luxury hotel guests have proven more resilient to prevailing economic pressures such as inflation and rising interest rates, being influenced more by location and personal preference rather than price Having reduced the group’s operational gearing through the cost restructur
Slide 14: Review of Operations
REVIEW OF OPERATIONS The group has spent R41 million on diesel in FY23 to power its owned hotels compared to R10 million in FY22 and R11 million in FY20 While not specifically tracked, the group has also seen consistent increases in repairs and maintenance, some of which would relate to generato
Slide 15: Quarterly Performance (Rm)
QUARTERLY PERFORMANCE (Rm) Q1 Q2 H1 Q3 Q4 H2 Total Revenue F’23¹ 989 1 160 2 149 1 531 1 401 2 932 5 081 F’22² 469 490 959 845 904 1 749 2 708 Change on F’22 520 670 1 190 686 497 1 183 2 373 F’23 Occupancy % 43.0 48.9 46.0 58.8 55.0 56.9 51.5 Ebitdar F’23¹ 159 309 468 512 456 968 1 436 F’22² (39) 1
Slide 16: Occupancy
SOUTH AFRICA SYSTEM-WIDE PORTFOLIO – ROOMS SOLD SINCE 1994 3 500 000 Rooms Sold Occupancy 80.0% 3 000 000 70.0% 60.0% 2 500 000 50.0% Rooms Sold Occupancy 2 000 000 40.0% 1 500 000 30.0% 1 000 000 20.0% 500 000 10.0% 0 0.0% F'94 F'95 F'96 F'97 F'98 F'99 F'00 F'01 F'02 F'03 F'04 F'05 F'06 F'07 F'08 F
Slide 17: Income Statement (Rm)
INCOME STATEMENT (Rm) Change F’23 F’22 on Income 5 081 2 708 2 373 Rooms revenue 3 314 1 641 1 673 Food & beverage revenue 1 304 731 573 Property rental income 195 90 105 Other income¹ 268 246 22 Owned stats F’23 F’22 F’20 Overheads (3 645) (2 309) (1 336) Occupancy (%) 51.5 30.6 59.3 Insurance proc
Slide 18: Reconciliation to Adjusted Headline Earnings (Rm)
RECONCILIATION TO ADJUSTED HEADLINE EARNINGS (Rm) F’23 F’22 Net of tax Net of tax Attributable profit/(loss) 1 014 (156) Separation payment (313) - Profit on disposal of subsidiary (259) - Cash flow hedges reclassified to profit or loss (21) - Fair value adjustment of investment properties (3) (43)
Slide 19: Segmental Analysis (Rm)
SEGMENTAL ANALYSIS (Rm) Income Ebitdar Ebitdar margin % F’23 F’221 F’23 F’221 F’23 F’221 Continuing operations Externally managed – Investment properties 153 58 149 58 97 100 Sandton Consortium 521 215 147 1 28 - Internally managed 3 971 2 129 1 131 397 28 19 Western Cape 1 453 569 512 62 35 11 KwaZ
Slide 20: Prospects
PROSPECTS We are encouraged by trading levels over the last six months which have continued into April and May 2023 The impact of a winter with a severely constrained electricity system is unknown Having successfully strengthened the group’s balance sheet over the past year, we are able to wit
Slide 21: Follow the Sun - Thank You
Follow the Sun THANK YOU 21