Slide 1: Results Presentation 2014
RESULTS PRESENTATION 2014 Sun International Limited
Slide 2: Overview: Group highlights
OVERVIEW Group highlights Sibaya 2
Slide 3: Key indicators
Key indicators R10 825m R3 052m 655 cps 245 cps GROUP REVENUE GROUP EBITDA DILUTED ADJ HEPS DPS +5.4% +4.5% (7.3%) (7.5%) First half +3.6% First half (5.2%) First half (18.5%) Final div unchanged Second half +7.4% Second half +15.8% Second half +8.1% at 155 cents 3
Slide 4: Strategic Review
STRATEGIC Group highlights REVIEW Boardwalk 4
Slide 5: Key strategic focus areas
Zambezi Sun Key strategic focus areas Improve our Protect and Grow our existing leverage our business into new Governance Our People operations and existing asset areas and & Sustainability guest experience portfolio products EXISTING OPERATIONS GROWTH PEOPLE REPUTATION ASSETS 5
Slide 6: Operations: Improving existing operations and guest experience
Operations: Improving existing operations and guest experience • Improve marketing and sales capability: – Roll out new brand – Launch Sun Rewards program – Improve Sun International website: Enhance ability to book online Improve website ranking ‒ Improve promotional ROI ‒ Leverage our MVG data
Slide 7: Existing Assets: Protect and leverage existing asset portfolio
Update Royal Livingstone Existing Assets: Protect and leverage existing asset portfolio • GrandWest: • Africa: – Complete GPI/Tsogo transaction – Implement Minor transaction • Morula Relocation: – Nigeria: – Agree conditions of licence with the GGB Resolve shareholder issues – Deal with objections
Slide 8: Growth: Growing our business into new areas & products
Growth: Growing our business into new areas & products • Online gaming and betting: – Further online gaming strategy • LPMs and EBTs: – Conclude acquisition of GPI slots – Monitor EBT developments – Evaluate other opportunities • International VIP: – Finalise North West legislation – Source VIPs • P
Slide 9: Allocating our capital
Sibaya Allocating our capital Medium term projects Acceptable country risk Morula relocation Sound gaming legislation Internet gaming Other EM opportunities Ability to operate ethically Capital requirement 2015 Competitive advantage Ocean Club 463 Colombia 315 5% EBITDA contribution GPI slots* 280 <
Slide 10: People: Investing in our people
People: Investing in our people • Employee culture and values: • Transformation goals: – Rebuild following s189 restructure – Establish new targets post s189 restructure • High performance culture: – Develop 5 year EE plan – Embed performance management • Succession planning: – Significantly improve
Slide 11: Reputation: Governance and sustainability
Update Update The Palace Reputation: Governance and sustainability • Corporate responsibility: – Finalise carbon footprint strategy – Embed group compliance with specific focus on gaming compliance – Improve SED initiatives • Improve stakeholder engagement: – Build relationships and trust with gamin
Slide 12: Financial Review
FINANCIAL REVIEW Monticello 12
Slide 13: Income Statement - Management
Income Statement - Management Six months ended Six months ended Year ended 31 December 30 June 30 June % % % Rm 2013 change 2012 2014 change 2013 2014 change 2013 Revenue 5 407 3.6% 5 221 5 418 7.4% 5 046 10 825 5.4% 10 267 Casino 4 221 0.3% 4 208 4 248 6.5% 3 987 8 469 3.3% 8 195 Rooms 558 25.7% 44
Slide 14: Revenue by category
Revenue by category Growth in group revenue by category Rm 12% (11%) 116 10 825 10% 135 (9%) ( ) 2013 303 comparative 116 78% (80%) 10 267 (112) FY 2013 Translation Gaming: Gaming Rooms F&B& FY 2014 FX Monticello South Africa other Revenue Gaming Rooms F & B & Other and Rest of Africa • Revenue up 5
Slide 15: Revenue by geography
Revenue by geography Growth in group revenue by geography Rm 75 491 13% 10 825 (15%) (124) 10% (9%) ( ) 2013 comparative 116 77% (76%) 10 267 FY 2013 Translation FX South African Rest of Africa Monticello FY 2014 South Africa Other African Monticello Revenue Operations operations Revenue • South Afr
Slide 16: Group EBITDA
Group EBITDA Growth in group EBITDA by geography Rm 9 135 10% 3 052 (11%) 6% (28) (6%) ( ) 2013 comparative 16 84% 2 920 (83%) FY 2013 Translation FX South African Rest of African Monticello FY 2014 South Africa Other African Monticello EBITDA Operations operations EBITDA • Group EBITDA at R3.1bn up
Slide 17: South Africa: Revenue & cost saving initiatives showing signs of delivery
South Africa: Revenue & cost saving initiatives showing signs of delivery SA Revenue SA Gaming Revenue Rm 99 8 311 First half Second half Year to June % % % 110 Rm CY change CY change CY change 281 South Africa 3 371 2.6 3 367 6.2 6 738 4.4 GrandWest 984 7.8 1 007 6.2 1 991 8.6 Sibaya 541 6.3 529 5.
Slide 18: Other African: Positive growth in gaming and rooms
Other African: Positive growth in gaming and rooms Other African revenue Occupancies for key properties Rm 34 1 071 Occupancy % ADR 19 % % FY 2014 change FY 2014 change 22 Zambia 43.1 3.3 R1 965 7.5 48 Gaborone Sun 71.6 (5.8) R889 12.2 Federal Palace 63.8 (3.8) R2 486 16.1 948 Kalahari Sands 66.3 12
Slide 19: Monticello: Strong recovery in second half
Monticello: Strong recovery in second half Monticello Revenue Revenue: month on month analysis Rm CLPm 70 9,000 FY 13 FY 14 8,000 7,000 6,000 1 498 5,000 4,000 3,000 (112) 1 444 2,000 (12) July Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun FY 2013 Translation FX Gaming F&B & other FY2014 Revenue Reven
Slide 20: Operating expenditure
Operating expenditure Operating expenditure split Operating expenditure as % of revenue Cons & serv 28.2% EBITDA margin 28.4% Depreciation 10% 14% 11.1% 6% Emp costs Consumables and services 11.0% 2% Casino taxes* 11% 8.8% 8% Depreciation and amortisation Promo & Marketing 8.3% costs Rentals 22.0% E
Slide 21: Group statement of financial position
Group statement of financial position Year ended 30 June 2014 2013 Rm Reviewed Restated Movement ASSETS Property, plant and equipment 11 380 10 594 786 Intangible assets 721 494 227 Accounts receivable and other 614 557 57 Cash and cash equivalents 958 1 024 (66) Other non-current assets 352 304 48
Slide 22: Monticello acquisition
Monticello acquisition Monticello valuation for transaction CLPm Rm SFIR 174 433 3 339 Bank debt (29 064) (556) Cash 2 448 47 Intercompany loan (29 225) (559) 118 592 2 271 Monticello acquisition consideration Novomatic 44.2% 52 425 1 004 Chilean Enterprises 10.4% 12 390 237 54.7% 64 815 1 241 Holdi
Slide 23: CAPEX
CAPEX Ongoing CAPEX Project CAPEX: Current and future Rm Actual ongoing 2014 Rm EGS 268 Total Spend 30 June to date 2015 2016 Other ongoing 427 Ocean Club Casino 1 135 672 463 - ERP 63 Sun City Vacation Club 300 179 121 - IT 126 Sun City Casino 50 - 50 - Sun City Cabanas 100 - 40 60 Slots 325 Table
Slide 24: Capital funding slide
Capital funding slide Year ended 30 June Rm 2014 2013 % change Net finance cost Interest expense 511 468 9.2% Less: Interest income 25 31 (19.4%) 486 437 11.2% Average cost of debt 7.2 7.3 0.7% Net financing cost: EBITDA (cover) 6.3 6.7 (6.0%) Debt Fixed interest rate 1 295 927 39.7% Floating intere
Slide 25: Outlook
OUTLOOK Meropa 25
Slide 26: Outlook
Monticello Outlook GAMING ROOMS EFFICIENCIES GROWTH • Pressure on consumer • Impact of Ebola • S189 restructure to • Ocean Club: Panama spending unknown conclude in September opening in September • Gaming marketing team • Visa and birth • ERP implementation • LPMs rebuilt certificate • Marketing and
Slide 27: Annexure
ANNEXURE GrandWest 27
Slide 28: Income Statement – Statutory
Income Statement – Statutory Six months ended Six months ended Year ended 31 December 30 June 30 June % % Rm 2013 change 2012 2014 change 2013 2014 % change 2013 Revenue 5 407 3.6% 5 221 5 418 7.4% 5 046 10 825 5.4% 10 267 Casino 4 221 0.3% 4 208 4 248 6.5% 3 987 8 469 3.3% 8 195 Rooms 558 25.7% 444
Slide 29: Adjusted headline earnings and minorities
Adjusted headline earnings and minorities For the year ended 30 June R million 2014 2013 A dj Headline earnings Adj Headline earnings PA T (Stat) A dj HE adj Total Minorities Group PAT (Stat) Adj HE adj Total Minorities Group South A frican operations 784 130 914 (231) 683 945 24 969 (227) 742 Grand
Slide 30: www.suninternational.com
(“Sun International” or “the group” or “the company”) Registration number: 1967/007528/06 Share code: SUI ISIN: ZAE 000097580 www.suninternational.com