Slide 1: Results Presentation for the Year Ended 31 December 2017
RESULTS PRESENTATION FOR THE YEAR ENDED 31 DECEMBER 2017
Slide 2: Disclaimer
Certain statements in this document subscribe for or purchase any securities, may constitute ’forward looking and nothing contained herein shall form statements’. Such forward looking the basis of any contract or commitment statements reflect the company’s beliefs whatsoever. This document does not
Slide 3: Revenue, EBITDA, adjusted operating profit and HEPS
REVENUE EBITDA 12% to 13% to R15.6 billion R4.0 billion ADJUSTED ADJUSTED OPERATING DILUTED PROFIT HEPS 41% to 7% to 298 cents R2.5 billion per share 3
Slide 4: Operational review
Operational review Difficult trading conditions due Challenging trading conditions South in Latam resulting in a subdued to the macroeconomic and Latam Africa performance political environment Consumers’ disposable income Monticello impacted by the impacted. Less to spend on shooting incident entert
Slide 5: Strategic objectives
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Slide 6: Strategic objectives: Improve guest experience
Strategic objectives Improve guest • Refurbishments at properties: experience - Carnival: improved the walkways and introduced new retail tenants including Candilicious, Rocco Mama, FoodFactory - Sun City: refurbished the Welcome Centre at Sun Central - Sibaya: changed out Krakatoa to Rockwood Theat
Slide 7: Strategic objectives continued: Efficiency and optimisation
Strategic objectives continued Efficiency and • Established an efficiency and optimisation team to drive: optimisation - System optimisation, and utilisation - Integration of key systems - Standardisation of process and enhanced information flow • Operating margins critically assessed and benchmarke
Slide 8: Strategic objectives continued: Protect and leverage existing asset portfolio
Strategic objectives continued Protect and • South Africa • Nigeria leverage - Closed Fish River and settled land claim - Exit Nigerian operations existing asset - Applied to the gambling board to • Latam portfolio restructure Boardwalk - Closure of Sun Nao Casino in - Approval received for Boardwal
Slide 9: Strategic objectives continued: Grow our business into new areas and products
Strategic objectives continued Grow our • Suspended International VIP Business business into new areas • Unlock value with land developments at Carnival City, Sibaya and Carousel and products • Increase equity interest in Sun Dreams from 55% to 65% – implementation subject to finalisation of 10 year
Slide 10: Strategic objectives continued: Our people
Strategic objectives continued Our people • Continue to invest in learning and development with the aim of building casino and hospitality functional knowledge and skills • Partnership with the International Hotel School to open a gaming school • Launched key projects to improve the organisational c
Slide 11: Strategic objectives continued: Governance and sustainability
Strategic objectives continued Governance • Remuneration practices aligned with shareholder interests and best and practices sustainability • Dedicated group ethics office established to reinforce ethical culture • Risk methodology and risk ranking revised • Focused group sustainability hub incorpor
Slide 12: Time Square update
Time Square update
Slide 13: Time Square update
Time Square update • 2 000-slots and 60 tables (commenced operations in April 2017) Operations • 8 500-seater arena (opened November 2017) • 238-key hotel (opening March 2018) • Revenue: R827 million • EBITDA: R184 million Financial • Casino revenue: R744 million • Operating profit: R26 million perf
Slide 14: Time Square Arena Line-Up
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Slide 15: Financial review
Financial review
Slide 16: Financial overview
Financial overview • Group revenue increased by R million 2017 % 2016 12% to R15.6 billion Revenue 15 609 12 13 884 • Growth attributable to the inclusion of: EBITDA 4 031 13 3 582 - Sun Slots from 1 April 2016 Adjusted operating profit 2 475 7 2 315 - Sun Dreams from 1 June 2016 Foreign exchange lo
Slide 17: Earnings reconciliation
Earnings reconciliation 2017 2016 R million Profit/(loss) attributable to ordinary shareholder (243) 136 • Impairment of assets of R92 million (Boardwalk R93 Impairment of assets 92 269 million, Peru R40 million, Fair value adjustment of Cape Town Convention Centre (CTCC) 43 - Fish River reversal R5
Slide 18: Segmental review
Segmental review
Slide 19: Segmental review
Segmental review South Africa Latam Nigeria Group R million 2017 2016 2017 2016 2017 2016 2017 2016 Revenue 10 882 9 894 4 584 3 827 143 163 15 609 13 884 EBITDA 2 926 2 622 1 097 964 8 (4) 4 031 3 582 Adjusted operating profit 1 926 1 784 571 574 (22) (43) 2 475 2 315 19
Slide 20: Revenue contribution by geography and category
Revenue contribution by geography and category (1%) (10%) (3%) 1% 9% 3% (12%) 14% (27%) 29% (8%) 8% (7%) 7% Revenue Geography category (72%) 70% (60%) 59% South Africa Latam Nigeria Tables Slots Sun Slots Rooms Sun Bet Food and Beverage Other ( ) prior year – on a proforma basis 20
Slide 21: South African segmental review
South African segmental review Revenue EBITDA Operating profit R million 2017 % 2016 2017 % 2016 2017 % 2016 GrandWest 2 155 0 2 154 850 (2) 866 721 (2) 733 Sun City 1 831 7 1 708 318 58 201 115 >100 12 Vacation Club adjustment (100) 26 (136) (81) 28 (112) (89) 25 (118) Sibaya 1 269 10 1 157 439 16
Slide 22: South African comparable 2016 to 2017 half-year results
South African comparable 2016 to 2017 half-year results R million H1 2017 % H1 2016 H2 2017 % H2 2016 2017 % 2016 Revenue 4 266 (1) 4 319 4 597 2 4 492 8 863 1 8 811 EBITDA 1 038 (9) 1 145 1 258 15 1 093 2 296 3 2 238 The above results exclude Sun Slots, Time Square, International VIP Business and M
Slide 23: Latam segmental review
Latam segmental review Revenue EBITDA Operating profit R million 2017 2016 2017 2016 2017 2016 Monticello 1 674 1 861 417 562 265 427 Dreams SCJ licences 1 532 1 547 586 590 551 559 Dreams municipal licences 834 853 303 319 256 270 Central office - - (132) (170) (277) (254) Chile total 4 040 4 261 1
Slide 24: Capital investment
ca» International Capital investment
Slide 25: Capex
Capex Capital expenditure incurred during the period R million 2017 Expansionary Time Square 1 594 Meropa 50 Sun City 28 Latam 230 1 902 Refurbishment and replacement Sun City 71 GrandWest 128 Sun Slots 95 Sibaya 81 Latam 178 Other refurbishments 127 680 Nigeria operation 10 Total capital expenditur
Slide 26: Borrowings and cash flow
International Borrowings and cash flow
Slide 27: Borrowings
Borrowings Attributable to Sun R million Total debt Minorities International South Africa Operating subsidiaries* 2 990 708 2 282 Time Square 4 669 665 4 004 • The increase in debt Central office 3 765 - 3 765 mainly relates to 11 424 1 373 10 051 capital investment in Nigeria Time Square Shareholde
Slide 28: Impact of 1% increase in VAT
Impact of 1% increase in VAT 2017 2017 (VAT increase) Δ Total casino revenue 8 471 8 471 South African casino revenue excluding VAT 7 431 7 366 VAT and Levies 1 960 2 014 54 VAT 1 040 1 105 65 Levies net of VAT 920 909 (11) Levies before VAT 1 069 1 069 VAT on levies 150 160 Corporate tax 15 Net imp
Slide 29: South African cash flow
South African cash flow R million 156 568 2 987 1 102 509 964 1 672 254 278 806 11 169 279 540 Generated Working Tax Interest Capex Free Project Other Cash flow Dividends Borrowings Other Beginning Cash at by capital paid paid cash capex investing prior to to minority financing of period end of oper
Slide 30: Sun Dreams cash flow
Sun Dreams cash flow R million 76 205 1 018 74 407 408 81 387 774 327 114 303 313 16 Generated Working Tax Interest Capex Free Project Cash flow Dividends Borrowings EDS Other Beginning Cash at by capital paid paid cash capex prior to to minority payment financing of period end of operations funding
Slide 31: Group tax
Ge. International ) Group tax
Slide 32: Group effective tax rate
Group effective tax rate South Africa Other Africa Latam Total R million Profit before tax and exceptional items 1 033 (57) 382 1 354 Exceptional Items (496) (3) (324) (819) Profit before tax 537 (60) 58 535 Adjustments Preference share funding 99 - - 99 Movement in put option 223 - - 223 Goldrush s
Slide 33: Supplementary information
Supplementary formati ion in
Slide 34: Group structure
Group structure Economic interest % * Slots Tables Rooms South Africa Gauteng Carnival City 91 1 568 47 105 Maslow 100 - - 281 Time Square 83 2 000 60 - Western Cape GrandWest 61 2 563 64 39 Table Bay 61 - - 329 Worcester 61 220 6 98 Sun Bet 100 - - - KwaZulu-Natal Sibaya 63 1 214 48 154 Limpopo Mer
Slide 35: Analysis of minority shareholders
Analysis of minority shareholders Profit after tax % Shareholding Minority portion including SIEST R million 2017 2016 2017 2016 2017 2016 South Africa 611 839 (314) (346) SunWest 502 492 61.60% 61.60% (193) (177) Sibaya 255 200 62.65% 62.65% (94) (76) Carnival City 76 129 91.15% 91.15% (7) (11) Boa
Slide 36: Comparing H1 2016 to H1 2017
Comparing H1 2016 to H1 2017 Revenue EBITDA Margin R million H1 2017 % H1 2016 H1 2017 % H1 2016 H1 2017 % H1 2016 GrandWest 1 031 (2) 1 049 391 (8) 426 37.9% (7) 40.6% Sun City* 808 10 736 95 86 51 11.8% 70 6.9% Sibaya 613 6 576 207 8 192 33.8% 1 33.3% Carnival City 471 (14) 548 117 (32) 173 24.8%
Slide 37: Comparing H2 2016 to H2 2017
Comparing H2 2016 to H2 2017 Revenue EBITDA Margin R million H2 2017 % H2 2016 H2 2017 % H2 2016 H2 2017 % H2 2016 GrandWest 1 124 2 1 105 459 4 440 40.8% 3 39.8% Sun City* 923 10 836 142 >100 38 15.4% >100 4.5% Sibaya 656 13 581 232 25 186 35.4% 10 32.0% Carnival City 509 (3) 526 137 (3) 141 26.9%
Slide 38: Borrowings by subsidiary
Borrowings by subsidiary 2017 2016 Attributable Attributable Total Minority to Sun Total Minority to Sun R million Borrowings Share International Borrowings Share International South Africa 11 424 1 373 10 051 10 617 1 745 8 872 SunWest 869 305 564 931 358 573 Afrisun Gauteng 580 31 549 626 55 571 A
Slide 39: Results Presentation for the Year Ended 31 December 2017
RESULTS PRESENTATION FOR THE YEAR ENDED 31 DECEMBER 2017