Slide 1: Sun International 2013 Results Presentation
SUN INTERNATIONAL 2013 RESULTS PRESENTATION
Slide 2: Highlights
HIGHLIGHTS 2
Slide 3: Key Highlights
KEY HIGHLIGHTS A K Q 8.1% 11.1% 21.2% GROUP REVENUE GROUP EBITDA FREE CASH FLOW R10,267m A R2,936m K R1,389m Q J 10 18.0% 10.4% ADJ DILUTED HEPS DPS 715 cps J 265 cps 10 3
Slide 4: Challenging Environment
CHALLENGING ENVIRONMENT Pressures on consumer spending Increased competitive environment Changes in legislation Inflationary pressures on costs Currency volatility 4
Slide 5: Strategic Review
STRATEGIC REVIEW 5
Slide 6: Key Strategic Focus Areas
KEY STRATEGIC FOCUS AREAS 1 2 3 4 5 Improve our existing Protect and leverage Growing our Governance & operations and guest our existing asset business into new Our people sustainability experience portfolio areas and products OPERATIONS EXISTING ASSETS GROWTH PEOPLE REPUTATION 6
Slide 7: Operations: Improving Existing Operations & Guest Experience
OPERATIONS: IMPROVING EXISTING OPERATIONS & GUEST EXPERIENCE • Challenging "status quo": • New COO: Stuart Wing • IT systems driving operational efficiencies: EGS, ERP • Reviewing all operational structures • Insourcing key services: Cleaning, houskeeping, F&B • Utilising gaming portfolio to drive c
Slide 8: Existing Assets: Protect & Leverage Existing Asset Portfolio
EXISTING ASSETS: PROTECT & LEVERAGE EXISTING ASSET PORTFOLIO • Interrogating existing core model to ensure efficient use of existing asset portfolio: • Re-evaluating licences to maximise value: • Morula relocation: R3bn development • Carousel development alternatives • Naledi • South Africa: • Secur
Slide 9: Growth: Growing Our Business into New Areas & Products
GROWTH: GROWING OUR BUSINESS INTO NEW AREAS & PRODUCTS • Track record of experience and delivering: • Global competence at operating in new markets • Expanding our asset portfolio in our core business: • Focus on gaming assets in high growth emerging markets with appropriate regulatory environment •
Slide 10: People: Investing in Our People
PEOPLE: INVESTING IN OUR PEOPLE • Strong focus on the “Sun International Culture”: • Driving improved communication • Managing talent • Accountability • Ethics • Talent and learning development programmes in place: • Improve succession planning • Stronger focus on performance management: • Alignment
Slide 11: Reputation: Governance & Sustainability
REPUTATION: GOVERNANCE & SUSTAINABILITY • New environmental manager appointed to drive environmental and carbon footprint strategy: • Maintain inclusion in the SRI Index • Launched Earthglow initiative • Focus on improving IT governance: • IT Governance committee review process • Holistic approach t
Slide 12: Financial Review
FINANCIAL REVIEW 12
Slide 13: Group Income Statement
GROUP INCOME STATEMENT R million 2013 2012 % change Revenue 10 267 9 494 8.1% EBITDA 2 936 2 642 11.1% Depreciation & amortisation (851) (818) Property and equipment rentals (104) (72) Profit from operations 1 981 1 752 Foreign exchange profits 18 35 Net interest paid (430) (455) Profit before tax 1
Slide 14: Gaming Driving Revenue Growth
GAMING DRIVING REVENUE GROWTH Growth in group revenue by category Rm 8.1% 69 99 340 265 9 494 10 267 FY 2012 revenue Translation FX Gaming Rooms F&B and other FY 2013 revenue • Foreign currency translation positively impacted revenue • Gaming grew 4.4% in constant currency (7.2% incl currency) contr
Slide 15: South Africa Remains the Largest Contributor to Revenue
SOUTH AFRICA REMAINS THE LARGEST CONTRIBUTOR TO REVENUE Growth in group revenue by geography Rm 8.1% 30 8 470 265 9 494 10 267 FY 2012 revenue Translation FX South African African Operations Monticello FY 2013 Revenue Operations • South African operations in constant currency grew 6.4% contributing
Slide 16: South Africa: Operating in a Tough Environment
SOUTH AFRICA: OPERATING IN A TOUGH ENVIRONMENT SA Revenue (Rm) SA Gaming Revenue First Half Second Half Full year 64 % % % Rm CY CY CY 93 change change change South Africa 3 286 7.2 3 171 2.9 6 457 5.1 GrandWest 913 5.3 921 4.3 1 834 4.7 Carnival City 538 10.2 493 (2.0) 1 031 4.0 313 Sibaya 509 9.2
Slide 17: Other African: Strong Margin Growth
OTHER AFRICAN: STRONG MARGIN GROWTH Africa Revenue (Rm) Occupancies for key properties Occupancy % ADR 5 1 24 % % 2013 2013 45 change change Zambia 39.8 (3.1) R1 827 11 Gaborone Sun 77.4 (1.0) R792 9 873 948 Federal Palace 67.6 6.3 R2 142 7 FY 2012 Translation Gaming Rooms F&B & other FY 2013 revenu
Slide 18: Monticello: Smoking Ban Impacting Strong Growth
MONTICELLO: SMOKING BAN IMPACTING STRONG GROWTH Monticello Revenue (Rm) Share of Santiago gaming market1 3 6 33.1% 219 66.9% 1 270 1 498 Monticello Other FY 2012 Translation FX Gaming Other FY 2013 revenue revenue 1 Source: SCJ (Chilean Gaming Board) • Monticello gaming revenue growth was flat yoy i
Slide 19: Operating Expenditure
OPERATING EXPENDITURE Operating expenditure split Key expenditure items 10% 13% Cons & serv 2012 Cons & serv 1 076 6% Depreciation 2013 Cons & serv 1 130 2% Emp costs 10% 9% Casino taxes* 2012 Emp Costs 2 103 Promo & marketing costs 2013 Emp Costs 2 256 PPE rental Property costs 2012 Casino taxes* 1
Slide 20: Group EBITDA Margin Expanded 0.8ppt to 28.6%
GROUP EBITDA MARGIN EXPANDED 0.8PPT TO 28.6% Group EBITDA Rm 11.1% 9 58 170 57 2 642 2 936 FY 2012 EBITDA Translation FX South African African Operations Monticello FY 2013 EBITDA Operations • Strong focus on cost containment to drive EBITDA margin expansion • Africa EBITDA up 54.3% yoy in constant
Slide 21: Adjusted Diluted HEPS Increased 18.0% YoY
ADJUSTED DILUTED HEPS INCREASED 18.0% YOY Movement in adjusted diluted HEPS Cents (31.9) 54.1 13.5 (31.9) (15.5) 25.1 66.7 (124.6) 18.0% (30.3) 183.6 606.1 714.9 2012 Adj SA EBITDA Africa Monticello Depreciation PPE rental FX reduction Net interest Tax Minorities Other 2013 Adj HEPS EBITDA EBITDA pa
Slide 22: Group Statement of Financial Position
GROUP STATEMENT OF FINANCIAL POSITION R million 2013 2012 Movement Assets Property, plant and equipment 10 594 9 595 999 Intangible assets 494 479 15 Accounts receivable and other 557 543 14 Cash and cash equivalents 1 023 752 271 Other non-current assets 304 257 47 Other current assets 93 95 (2) To
Slide 23: Property, Plant and Equipment and Intangibles
PROPERTY, PLANT AND EQUIPMENT AND INTANGIBLES Property plant and equipment Intangibles FY 2012 net book value 9 595 FY 2012 net book value 136 Net additions 1 257 Net additions 31 Depreciation & OE (840) Amortisation (27) usage Foreign exchange 598 Foreign exchange 1 Other (16) Other 10 FY 2013 net
Slide 24: Capex Increased 13% YoY
CAPEX INCREASED 13% YOY Capital expenditure incurred during the year Rm Other asset replacement 670 IT 557 Slots 34 218 Other 217 Wild Coast Sun 236 Royal Livingstone Sun City Monticello* 306 73 216 Maslow Boardwalk Expansionary Refurbishment Other Asset replacement *The Monticello expansionary cape
Slide 25: Net Debt Variance: Net Debt Decreased 4.0% YoY
NET DEBT VARIANCE: NET DEBT DECREASED 4.0% YOY 4.0% 207 16 (65) (181) 480 (75) 535 120 1 300 498 (3 080) 6 078 5 833 Net Debt FCTR Cash Tax paid Settlement Capex Other Dividends Interest Other Exchange Net debt Net Debt June 2012 generated of long Investing paid paid financing rate movement June 201
Slide 26: Capital Funding Structure
CAPITAL FUNDING STRUCTURE Group net finance costs 2013 2012 % change Interest Expense 486 521 (6.7) Less Interest Income 31 37 (16.2) Net finance costs 455 484 (6.0) Average cost of debt (%) 8.1 8.2 (1.3) Net financing cost: EBITDA (cover) 6.5 5.5 18.2 R million 2013 2012 % change Fixed interest bea
Slide 27: Medium Term Outlook
• Chilean smoking ban to impact gaming MEDIUM TERM OUTLOOK revenue: • Smoking decks to soften impact and GAMING lead to recovery • Slowdown in consumer spending negatively impacting gaming • Room revenues expected to achieve ROOMS moderate growth off a low base • Continued focus on driving margin EF
Slide 28: Key Strategic Focus Areas
KEY STRATEGIC FOCUS AREAS Improve our existing Protect and leveraging Growing our business Governance & operations and guest our existing asset into new areas and Our people sustainability experience portfolio products Integrate gaming & Secure Grandwest Actively seek Improve organisational
Slide 29: Annexures
ANNEXURES 29
Slide 30: Shares in Issue
SHARES IN ISSUE HEPS SHARES ADJ HEPS SHARES Total listed shares in issue 114 129 455 114 129 455 Less treasury shares held by subsidiary (10 549 477) (10 549 477) Net listed shares 103 579 978 103 579 978 Less deemed treasury shares: (6 919 415) Dinokana and Employee Share Trusts (5 890 101) Share a
Slide 31: Location of EBTs and LPMs: Carnival City Catchment
LOCATION OF EBTS AND LPMS: CARNIVAL CITY CATCHMENT 31
Slide 32: Location of EBTs and LPMs: Monte Casino Catchment
LOCATION OF EBTS AND LPMS: MONTE CASINO CATCHMENT 32
Slide 33: Sun International Limited
Sun International Limited www.suninternational.com (“Sun International” or “the group” or “the company”) Registration Number: 1967/007528/06, Share Code: SUI, ISIN: ZAE 000097580