Southern Sun Limited · JSE:SSU

Southern Sun — Tsogo Sun Holdings — FY2015 Earnings Presentation

52 slides from Southern Sun's earnings presentation, May 2015

1. Slide 1: Presentation to Analysts and Investors

   Presentation to: Analysts and Investors May 2015

2. 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

3. Slide 3: Group Structure

   Group Structure Public 47.6% 52.4% 100% 100% Under consideration 3

4. Slide 4: Gaming Portfolio

   Gaming Portfolio 100% 100% 100% 100% 65% 100% 100% 100% 100% 100% 25% 100% 98% 70% 4

5. Slide 5: Hotel Portfolio

   Y Hotel Portfolio TSOGO SUN Luxury Full Service Select Service Budget Each hotel offers guests world-class style, unparalleled service and accommodation and signature touches that define luxury travel. With products and services that meet the needs of tomorrow's savvy global travellers, whether trav

6. Slide 6: Potential Reit Portfolio

   Potential Reit Portfolio ƒ Hotel Properties rental from Hotel OpCo ƒ Casino Tenant Revenue restaurants/retail ƒ Offices own use and third party ƒ Suncoast Mall 48 000 sqm retail development 6

7. Slide 7: Management and Board

   Management and Board ƒ TSH Board of Directors ● Executive Directors ƒ Marcel von Aulock – Group CEO ƒ Rob Huddy – Group CFO ● Non-Executive Directors ƒ Johnny Copelyn (Chairman) ƒ Marcel Golding ƒ Busi Mabuza ƒ Elias Mphande ƒ Rex Tomlinson ƒ Jabu Ngcobo ƒ Yunis Shaik 7

8. Slide 8: Management and Board

   Management and Board ƒ Group Executive Committee ● Corporate ● Gaming ƒ Marcel von Aulock – Group CEO ƒ Jacques Booysen – MD Gaming ƒ Rob Huddy – Group CFO ƒ Greg Lunga – FD Gaming ƒ Noeleen Bruton – Marketing Director ● Hotels ƒ Vusi Dlamini – Group HR Director ƒ Richard Weilers – COO and MD Offsho

9. Slide 9: Segmental Analysis

   ©Y TSOGO SUN Segmental Analysis

10. Slide 10: Group – Income and Ebitdar (Rm)

    Group – Income and Ebitdar (Rm) F’15 F’14 % Change Income Gaming 8 335 8 079(1) 3 Net gaming win 6 976 6 819 2 Other 1 359 1 260(1) 8 Hotels SA 2 506 2 184(1) 15 Hotels Offshore 552 550 - Corporate (intra-group-elimination) (50) (46) * Total Group 11 343 10 767 5 Ebitdar Gaming 3 265 3 266(1) - Hote

11. Slide 11: Tsogo Sun Segmental (Rm)

    Tsogo Sun Segmental (Rm) Income Ebitdar(1) Ebitdar Margin % F’15 F’14 % Change F’15 F’14 % Change F’15 F’14 Montecasino 2 510 2 415 4 1 133 1 088 4 45.1 45.1 Suncoast 1 581 1 517 4 732 717 2 46.3 47.2 Gold Reef City 1 270 1 298 (2) 479 514 (7) 37.7 39.6 Silverstar 676 648 4 248 263 (6) 36.7 40.6 The

12. Slide 12: Key Strategic Issues: Gaming

    Key Strategic Issues Gaming 12

13. Slide 13: Gaming Win (Rm)

    Gaming Win (Rm) F’15 F’14 % Change Gaming win 6 976 6 819 2 Tables 1 573 1 542 2 Slots 5 403 5 277 2 Drop/hold % – tables 21.8 22.0 (0.2)pp Handle/win % – slots 5.2 5.2 - F’15 F’14 % Change Gauteng 3 682 3 631 1 KwaZulu-Natal 1 873 1 801 4 Mpumalanga 611 580 5 Western Cape 431 402 7 Other 379 405 (6

14. Slide 14: Gauteng Gaming Tax Revenues

    Gauteng Gaming Tax Revenues Gold Reef Silver- Growth in Gaming win (%) Gauteng Montecasino City star Calendar years 2000 Monte vs Sundome 25.0 (4.9) 2001 Other casinos opened 5.8 20.9 2002 13.9 16.5 2003 11.0 9.6 2004 18.9 15.5 2005 11.1 13.2 2006 14.9 14.5 2007 13.1 12.6 2008 7.8 (6.8) (1.0) * 2009

15. Slide 15: Gauteng Gaming Tax Revenues

    Gauteng Gaming Tax Revenues 130 Relative Growth (2008 = 100) Gauteng Total Industry / Tsogo Sun vs Non Tsogo Sun 125 120 115 Total Industry 110 Tsogo Sun 105 Non-Tsogo 100 95 90 C'2009 C'2010 C'2011 C'2012 C'2013 C'2014 140 Relative Growth (2008 = 100) Gauteng Total Industry / Montecasino vs Non Tso

16. Slide 16: Gauteng Gaming Tax Revenues

    Gauteng Gaming Tax Revenues 130 Relative Growth (2008 = 100) Gauteng Total Industry / Goldreef vs Non Tsogo Sun 125 120 115 Total Industry 110 Non-Tsogo 105 Goldreef City 100 95 90 C'2009 C'2010 C'2011 C'2012 C'2013 C'2014 130 Relative Growth (2008 = 100) Gauteng Total Industry / Silverstar vs Non T

17. Slide 17: KZN Gaming Tax Revenues

    KZN Gaming Tax Revenues KwaZulu- Growth in Gaming win (%) Natal Suncoast Golden Horse Blackrock Calendar years 2004 24.5 37.3 2005 24.7 22.5 2006 16.2 15.1 2007 19.6 15.6 2008 6.9 8.3 2009 4.6 5.0 1.4 5.5 2010 4.4 4.6 4.1 10.1 2011 7.3 5.3 9.2 10.8 2012 10.0 10.8 8.9 11.6 2013 5.3 6.9 (1.6) 7.3 2014

18. Slide 18: KZN Gaming Tax Revenues

    KZN Gaming Tax Revenues 150 Relative Growth (2008 = 100) KZN Total Industry / Tsogo Sun vs Non Tsogo Sun 145 140 135 130 Total Industry 125 120 Tsogo Sun 115 Non-Tsogo 110 105 100 C'2009 C'2010 C'2011 C'2012 C'2013 C'2014 150 Relative Growth (2008 = 100) KZN Total Industry / Suncoast vs Non Tsogo Su

19. Slide 19: KZN Gaming Tax Revenues

    KZN Gaming Tax Revenues 150 Relative Growth (2008 = 100) KZN Total Industry / Golden Horse vs Non Tsogo Sun 145 140 135 130 Total Industry 125 120 Non-Tsogo 115 Golden Horse 110 105 100 C'2009 C'2010 C'2011 C'2012 C'2013 C'2014 170 Relative Growth (2008 = 100) KZN Total Industry / Blackrock vs Non T

20. Slide 20: Other Gaming Tax Revenues

    Other Gaming Tax Revenues Growth in Gaming win (%) Province Unit Unit Unit Mpumalanga Ridge Emnotweni 6 months to September 2014 2.3 1.1 4.6 6 months to March 2015 7.2 6.1 13.9 12 months to March 2015 4.7 3.5 9.2 Western Cape Caledon Mykonos Garden Route 6 months to September 2014 11.5 7.2 10.4 0.6

21. Slide 21: Key Strategic Issues - Gaming: Montecasino

    Key Strategic Issues - Gaming ƒ Montecasino ● Additional 700 gaming positions approved. 106 slot machines and one baccarat table added ƒ An additional approximately 100 slot machines can be added on the existing gaming floor ● Acquisition of the remaining 49% minorities in the Pivot Offices for R144

22. Slide 22: Key Strategic Issues - Gaming: Silverstar

    Key Strategic Issues - Gaming ƒ Silverstar ● Additional 400 gaming positions approved and installed (316 slot machines and 6 tables) ● R560m redevelopment completed during October 2014 including additional dining options, outdoor events area, cinemas, ten-pin bowling alley, laser tag games, expanded

23. Slide 23: Key Strategic Issues - Gaming: Gold Reef City

    Key Strategic Issues - Gaming ƒ Gold Reef City ● Additional 400 gaming positions approved. 100 slot machines added and an additional 60 will be added during the development ● R630m refurbishment and expansion including casino offering, Privé expansion, cinemas, additional food and beverage outlets,

24. Slide 24: Key Strategic Issues - Gaming: Suncoast

    Key Strategic Issues - Gaming ƒ Suncoast ● Additional 900 machines and 16 tables approved ● Additional casino space and new Privé, 48 000sqm destination retail and additional restaurants, 2 000 pax multifunction venue, multi-storey parkade and Skypark resort swimming pools ● Construction to commence

25. Slide 25: Key Strategic Issues - Gaming

    Key Strategic Issues - Gaming ƒ Emnotweni ● Expanded casino floor, additional covered parking and conference and events area completed in December 2013 ● Restaurants and link to mall completed during May 2014 ● Gaming win growth started slow but strong during the second half of F’2015 ƒ Golden Horse

26. Slide 26: Key Strategic Issues - Gaming: Western Cape

    Key Strategic Issues - Gaming ƒ Western Cape ● 40% of the SunWest International Property Limited and Worcester Casino Proprietary Limited to be acquired (from Sun International Limited and Grand Parade Investments) for R2.185 billion ● Subject to the fulfilment of conditions precedent which includes

27. Slide 27: Key Strategic Issues - Gaming: Systems Changes

    Key Strategic Issues - Gaming ƒ Gaming Systems Changes ● Golden Horse, Gold Reef City, Silverstar , Goldfields and Garden Route completed ● Mykonos scheduled during F’2016 27

28. Slide 28: Key Strategic Issues - Gaming: Regulatory

    Key Strategic Issues - Gaming ƒ Mpumalanga B-BEEE condition of licence ● Regulators seek to impose the achievement and maintenance of a prescribed BBBEE rating as a condition of licence ● Other gaming boards, including Western Cape, have indicated that they will take guidance from the outcome of the

29. Slide 29: Key Strategic Issues: Hotels

    Key Strategic Issues Hotels 29

30. Slide 30: Hotels – Portfolio Philosophy

    Hotels – Portfolio Philosophy Land Buildings Operations Management Brand PropCo OpCo ƒ Ideally own all components ● Tsogo Sun Hotels strategic advantage in scale ● More capital intensive but allows substantially higher return on effort ● Retains control of the assets providing extended tenure and re

31. Slide 31: Owned and Managed Portfolio and Statistics

    Owned and Managed Portfolio and Statistics Hotels Rooms Owned Managed Luxury 6 1 113 410 703 Owned includes leased hotels and Full Service 21 4 396 4 396 - associates Select Service 26 4 777 3 930 847 Portfolio as at 31 March 2015 Budget 23 1 690 1 690 - Excludes Redefine BDL portfolio Timeshare & R

32. Slide 32: SA System-wide Rooms Sold Annual History

    SA System-wide Rooms Sold Annual History 76.0% 3 250 000 74.0% 3 050 000 72.0% 2 850 000 70.0% 2 650 000 68.0% 2 450 000 66.0% 2 250 000 64.0% 2 050 000 62.0% 1 850 000 60.0% 1 650 000 58.0% 56.0% 1 450 000 54.0% 1 250 000 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'

33. Slide 33: Key Strategic Issues: Hotels – South Africa

    Key Strategic Issues : Hotels – South Africa ƒ Occupancy reduced 1.1pp to 62.8% on the prior year ● Post elections and fiscal austerity impacts on government travel ● Trading in all other market segments up on the prior year ƒ Average room rate growth of 6% on the prior year ƒ Group trading at RevPa

34. Slide 34: Key Strategic Issues: Hotels – South Africa

    Key Strategic Issues : Hotels – South Africa ƒ Major refurbishments ● SunSquare Cape Town (previously GC de Waal) completed. Hotel closed from April 2014 to August 2014 ● Palazzo completed ● SS Waterfront completed ● GC Marine Parade in progress ● GC Kings Beach in progress ● Sandton Sun in progress

35. Slide 35: Key Strategic Issues: Hotels – Offshore

    Key Strategic Issues : Hotels – Offshore ƒ Offshore hotels trading weaker in US$ (owned occupancies F’15 : 53.1%, F’14 : 66.1%) ● Impacted by Ebola, security concerns and a generally weaker market ƒ Currency positive impact on trading due to Rand weakness against US$ and Euro exchange rates ƒ Forex

36. Slide 36: Financial Overview

    YW TSOGO SUN Financial Overview

37. Slide 37: Group – Income Statement (Rm)

    Group – Income Statement (Rm) F’15 F’14 % Change Income 11 343 10 767 5 Net gaming win 6 976 6 819 2 Revenue Rooms 2 453 2 221 10 F&B 1 203 1 063 13 Other 711 664 7 Ebitdar 4 223 4 214 - Gaming 3 265 3 266 - Hotels – SA 830 752 10 – Offshore(1) 137 153 (10) Forex (losses)/gains (21) 33 * Corporate 1

38. Slide 38: Group – Income Statement

    Group – Income Statement Group Income by Nature % Slots 48 Tables 14 Rooms 22 F&B 10 Other 6 Total Hotel Ebitdar F’15 F’14 Hotels SA 830 752 Hotels Gaming 172 169 Hotels Offshore 116 186 Ebitdar 1 118 1 107 Group Ebitdar (%) 26 26 38

39. Slide 39: Group – Income Statement (Rm)

    Group – Income Statement (Rm) F’15 F’14 % Change Ebitdar 4 223 4 214 - LTI costs (95) (150) 37 Property rentals (210) (221) 5 Amortisation & depreciation (733) (648) (13) Exceptional items (143) (73) (96) Net finance costs (681) (373) (83) Associates and JVs 25 - * Taxation (680) (776) 12 Non-contro

40. Slide 40: Adjusted HEPS (Rm)

    Adjusted HEPS (Rm) F’15 F’14 % change Attributable earnings 1 672 1 877 (11) Capital asset disposal losses 3 2 Impairment of PPE 7 14 FV adjustment to associate - 6 Headline earnings 1 682 1 899 (11) Transaction costs 2 8 CBS loan impairment reversal (1) (1) SSME termination fees - 2 Impairment of l

41. Slide 41: Group Cash Flow (Rm)

    Group Cash Flow (Rm) F’15 F’14 Ebitdar per income statement 4 223 4 214 Property rentals (210) (221) Ebitda 4 013 3 993 Working capital adjusted for non-cash and exceptional items (145) (229) Dividend income from associates 7 3 Cash generated from operations 3 875 3 767 Interest paid (net) (715) (37

42. Slide 42: Investment Activities (Rm)

    Investment Activities (Rm) F’15 F’14 Investment activities 2 045 1 643 Acquisition of DAV/AWM/Suncoast minority 1 406 Acquisition of Garden Route minorities 51 - Acquisition of One Monte minorities 144 - Acquisition of Affirmed Investments minorities - 14 Investments in cinemas - 20 Monte Circle and

43. Slide 43: Interest Bearing Debt (Rm)

    Interest Bearing Debt (Rm) F’15 F’14 External debt (US$ based) 788 639 External debt (Rand based) 9 350 5 531 Bank overdrafts 2 165 247(1) Prepaid borrowing costs (44) (16) Gross IBD 12 259 6 401 Cash on hand (3 048) (1 962)(1) Net IBD 9 211 4 439 (1) Restated to reflect overdrafts amounting to R247

44. Slide 44: Strategic Priorities

    QW TSOGO SUN Strategic Priorities

45. Slide 45: Strategic Priorities: Sustainability

    Strategic Priorities ƒ Sustainability ● Beneficiaries ƒ Current shareholding and Corporate Social Investment and Enterprise Development programmes are effective ● Financial stability ƒ Strong cash flow, judicious use of gearing and adequate facilities ƒ Own most of our assets ● Product relevance ƒ A

46. Slide 46: Strategic Priorities: Growth

    Strategic Priorities ƒ Growth ● Organic ƒ Significant focus on getting more out of our existing businesses ƒ Continued cost focus ƒ Systems and values ● Inorganic ƒ New projects 46

47. Slide 47: Future Prospects

    (TSOGO SUN Future Prospects

48. Slide 48: Future Prospects: Group

    Future Prospects ƒ Group ● Strong cash generation ● Growth opportunities still being pursued but debt levels higher ● Upside potential from any economic recovery is significant ● Focus on costs remains to protect margins ● Reit structure aims to unlock third business segment for the group and enhanc

49. Slide 49: Future Prospects: Gaming

    Future Prospects ƒ Gaming ● Gaming win growth – medium term outlook uncertain ƒ Need consumers to get wealthier and, more importantly, feel wealthier ƒ Regulatory issues remain a threat ● Western Cape metropole ƒ Still an opportunity ● Mpumalanga fourth casino licence ƒ Likely to be a protracted pro

50. Slide 50: Future Prospects: Hotels

    Future Prospects ƒ Hotels ● Occupancy and rate still under pressure until transient Corporate demand recovers ƒ Government austerity likely to continue to affect volumes – but is in the base ● Focus on customer satisfaction, brand awareness, distribution through channels and Web and enhancement of B

51. Slide 51: Thank you

    es Thank you ©YWTSOGO SUN

52. Slide 52: Y TSOGO SUN

    Y TSOGO SUN

Tsogo Sun Holdings — FY2015 Earnings Presentation on 6ix