Sun International Limited · JSE:SUI
Sun International — FY2022 Earnings Presentation
48 slides from Sun International's earnings presentation, March 2023
Slide 1: Results Presentation for the year ended 31 December 2022
um International RESULTS PRESENTATION for the year ended 31 December 2022
Slide 2: Contents
CONTENTS eS Key Urban Sun Slots SunBet Resorts Financial Strategic focus highlights casinos and hotels review and outlook
Slide 3: Key Highlights
KEY HIGHLIGHTS
Slide 4: Key Highlights
KEY HIGHLIGHTS SUSTAINABLE GROWTH * Group income recovered strongly to pre-Covid-19 levels with improved margins * Record growth and profitability for SunBet ahead of the previously communicated 5-year plan * Strong urban casino market share gains in Gauteng and KZN Ranked ist + Urban casino adjuste
Slide 5: Key Financial Highlights
KEY FINANCIAL HIGHLIGHTS Se GROUP GROUP GROUP ADJUSTED INCOME ADJUSTED EBITDA EBITDA MARGIN A 44% 496% A x 29.3% to R11.3 billion to R3.3 billion from 27.8% in 2019 US TEL TOTAL SOUTH AFRICAN DEBT (excluding le abi HEADLINE EARNINGS TOTAL DIVIDEND DECLARED A at 439 cps Vv R488 million A 329 cps from
Slide 6: South African Income Trend
SOUTH AFRICAN INCOME TREND Un Income recovered strongly post each Covid-19 wave R million Initial extended Second wave Third wave Fourth hard lockdown Adjusted Adjusted wave 1500 Alert level 5 and Alert level 3 Alert level 4 driven by trading restrictions and trading and trading Omicron restrictions
Slide 7: Urban Casinos
URBAN CASINOS Said Mig sae
Slide 8: Urban Casinos | Market Share
URBAN CASINOS | MARKET SHARE Continued focus on market share growth GAUTENG 40.9% EASTERN CAPE A15% KWAZULU-NATAL A 3.6% WESTERN CAPE A16%
Slide 9: Urban Casinos | Margin Improvement
URBAN CASINOS | MARGIN IMPROVEMENT Continue to drive margin improvements DRIVE COST EFFICIENCIES OPTIMISE * Income & 43% to R6 726 million OPERATIONS ° Adjusted EBITDA & 71% to R2 445 million * Achieved 96% of 2019 adjusted EBITDA * Adjusted EBITDA margin & 2.1% to 36.4% compared to 2019 Right-size
Slide 10: Urban Casinos | Focus Areas
URBAN CASINOS | FOCUS AREAS Our focus areas will ensure that we maintain our strong cash generation Market share Customer Customer Focus on behaviours and not spending acquisition growth and retention experience Drive Sun Playtech . omni-channel . Data mining International implementation offering Ap
Slide 11: Urban Casinos | Key Property Updates
URBAN CASINOS | KEY PROPERTY UPDATES Cen Continued focus on optimising casino assets to enhance customer acquisition and retention and drive income growth and margin enhancement Sibaya Privé Expand Dispose Development lounge GrandWest Hotel of surplus Completed Boardwalk of unused land and Royal Sib
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Slide 13: Sun Slots | Highlights
SUN SLOTS | HIGHLIGHTS Cen The Sun Slots business proved remarkably resilient with a strong recovery in trading & MARKET POSITION FINANCIAL PERFORMANCE FOCUS AREAS + 48.8% of GGR market share * Income up 20% to R1 491 million * Deliver superior service * Active LPMs* up 11% from 4 652 * Adjusted EBI
Slide 14: Sun Slots | Key Metrics
SUN SLOTS | KEY METRICS Can NUMBER OF LPMs NUMBER OF SITES 4040 4328 4481 4652 ae 840 882 913 935 noe 2017 2018 2019 2020 2021 2022 2017 2018 2019 2020 2021 2022 Rand AVERAGE GROSS GAMING REVENUE / LPM / DAY 1500 1200 900 a ie) Gauteng KwaZulu-Natal Mpumalanga Western Cape National (4 provinces) mPr
Slide 15: Sun Slots | Ambition
SUN SLOTS | AMBITION Gen We will continue to grow our business... & GGR GROWTH MARGIN IMPROVEMENT RETURN ON CAPEX * Annual GGR of >R2 billion by 2026 * EBITDA margins of >25% * Return on capex over the next 5 years * Africa expansion under trial >35% ..to remain the preferred route operator in South
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Slide 17: SunBet | Highlights
SUNBET | HIGHLIGHTS SunBet continues its strong growth trajectory and remains an exciting value proposition for the group Appointment of a SunBet CEO, New strategy Appointment . approved of Nigel Payne Simon Gregory by the board to the board international online in November 2021 in May 2021* . gamin
Slide 18: SunBet | Ambition
SUNBET | AMBITION Se Growing value in SunBet to deliver 10% market share to GGR of R2 billion with a 20%+ margin by 2026 2022 estimated online betting market size: R9.8bn GGR R411m adjusted EBITDA R42m 2026 GGR AMBITION adjusted EBITDA margin 12 adjusted EE A margin 20%+ Current market share 4.2% 7
Slide 19: SunBet | Highlights
SUNBET | HIGHLIGHTS SunBet is well positioned for growth = Ww, S oii MARKET POSITION FINANCIAL PERFORMANCE * SunBet is well positioned in this fast-growing sector * Income A 86% to R339 million * Investment in people and marketing to capitalise on growth * Adjusted EBITDA & >100% to R42 million * Pr
Slide 20: SunBet | Driving Customer Numbers
SUNBET | DRIVING CUSTOMER NUMBERS Se SunBet has significantly grown its customer base 109 122 * Core strategy is to drive activity on the website * Customer numbers 109 122 for the year — up 3 times on 2021 * Slots has a much broader appeal * Current daily customer numbers circa 5 000 - 7 500 + Cust
Slide 21: SunBet | Key Metrics
SUNBET | KEY METRICS GROSS GAMING REVENUE R million 411 DRIVERS OF GGR * Gross gaming revenue up 109% * Driven by the introduction of slots in August 2022 197 * Live games also exhibiting strong growth 139 142 * Sports revenues up in a very competitive market 78 — = = 2017 2018 2019 2020 2021 2022 V
Slide 22: SunBet | Retention Drives Value
SUNBET | RETENTION DRIVES VALUE eS High levels of customer retention drives a valuable database R million QUARTERLY CUSTOMER RETENTION 160 120 80 Q12019 Q22019 Q3 2019 Q42019 Q12020 G2 2020 Q3 2020 Q42020 Q12021 G2 2021 Q32021 Q42021 Q12022 Q22022 Q32022 Q4 2022 mPre2015 m2015° «m2016 «m2017 «m2018
Slide 23: SunBet | Market Growth Opportunities
SUNBET | MARKET GROWTH OPPORTUNITIES We are on a focused journey to grow our current market and launch into new markets GROW CURRENT MARKET IN SOUTH AFRICA * Focus on growing our customer base * Core mid- to upper-market segments + Large lower income bracket cannot be ignored LAUNCH NEW PRODUCT OFFE
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Slide 25: Resorts and Hotels | Financial Performance
RESORTS AND HOTELS | FINANCIAL PERFORMANCE Cen Impressive recovery supported by domestic travel, conferencing and events Domestic leisure conferencing and sports and events revenues exceed 2019 levels Strong recovery Transient corporate . in international travel revenues market in latter part remain
Slide 26: Resorts and Hotels | Property Review
RESORTS AND HOTELS | PROPERTY REVIEW SS A key priority of the group is to ensure properties are optimised and well maintained to meet the high standards promised to our customers SUN CITY Completed: + Palace Hotel refurbishment and Spa at R187 million * Sun City Casino Privé completed at R16 million
Slide 27: Resorts and Hotels | Focus Areas
RESORTS AND HOTELS | FOCUS AREAS Our iconic properties continue to uphold the high standards synonymous with our brand SUN CITY WILD COAST SUN THE TABLE BAY HOTEL * Ensure Sun City is contributing to the group + Pursue an adjusted EBITDA margin of >23% * Pursue greater adjusted EBITDA margin * Provi
Slide 28: Financial Review
FINANCIAL REVIEW
Slide 29: Financial Review | Segmental Highlights
FINANCIAL REVIEW | SEGMENTAL HIGHLIGHTS SS The 12-month period ended 31 December 2022 reflects strong income growth of 44% and adjusted EBITDA up 96% compared to the prior comparative period R million 44% A43% 11127 . A 7702 6726 65% . 4720 ¥ 86% ll 2571 ll 1558 v 182 339 a = a Urban casinos* Resort
Slide 30: Financial Review | Group Debt
FINANCIAL REVIEW | GROUP DEBT Cen We are proud of our ongoing successes in substantially decreasing our debt levels GROUP AND SOUTH AFRICAN DEBT Rmiltion (excluding IFRS 16 lease liabilities) 13327 11079 7630 7556 7089 6618 6647 8790 6389 5904 5901 Dec 2019 Jun 2020 Dec 2020 Jun 2021 Dec 2021 Jun 20
Slide 31: Financial Review | Capital Expenditure
FINANCIAL REVIEW | CAPITAL EXPENDITURE eS Investment into several of our strategic priorities is critical in sustaining and growing our business and ultimately maximising shareholder returns ONGOING AND MAJOR REFURBISHMENT CAPEX AS A % OF INCOME 71% 6.8% 6.8% 7.0% 2019 2020 2021 2022 EXPANSIONARY ON
Slide 32: Financial Review | Cash Flow
FINANCIAL REVIEW | CASH FLOW R million 3638 38 (436) HE ... 2.206 (480) i a 1264 (265) a) [ew 049) sag) — ll Generated Working, Tax Capex Free Interest Other Cashflow Dividends Dividends Share Repayment Movement Cash at by capital paid cash paid investing prior to to minority to SIL buy-backs of cap
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Slide 34: Capital Allocation
CAPITAL ALLOCATION We have established a set of fundamental principles that guide our choices and enable effective utilisation of capital ey OPTIMISE MAXIMISE AND PROTECTAMD Ut DEBT . SHAREHOLDER : RETURNS ASSETS LEVELS F 2 Principle Principle * Target returns of WACC plus 3% on low risk * Targeted
Slide 35: Capital Allocation | Non-Core Assets
CAPITAL ALLOCATION | NON-CORE ASSETS Cen Approximate value of R5 per share in non-core assets after taking into account estimated tax and minority interests R million Non-core assets available for sale Total 2023 2024 2025+ eSwatini 82 82 - - Carousel land 82 82 - - Time Square land transaction 48 -
Slide 36: Environmental Social and Governance
ENVIRONMENTAL SOCIAL AND GOVERNANCE Se Committed to being a good proactive corporate citizen + Environmental strategy is integral to our business strategy + Committed to protecting our pristine environments * Minimising our environmental footprint Enviro-Ambition 2025 sets targets and plans to reduc
Slide 37: Outlook
OUTLOOK Se We continue to prioritise increasing free cash flows and disciplined capital allocation to maximise stakeholder value within a set of fundamental capital allocation principles RESORTS AND HOTELS * Strong start to 2023 with ongoing revenue growth anticipated * International business recove
Slide 38: Thank You
um International by = Cen Slots > THANK YOU OnOOn www.suninternational.com 2023 © Sun International
Slide 39: Supplementary Information
SUPPLEMENTARY INFORMATION “ ay
Slide 40: Financial Overview
FINANCIAL OVERVIEW un R 2022 % Income 11274 44 Adjusted EBITDA 3306 96 Adjusted EBITDA margin 29.3% 8 Depreciation and amortisation (828) 4 Adjusted operating profit 2478 >100 Foreign exchange losses (1) 50 Net interest (495) 12 Adjusted profit before tax 1982 >100 Taxation (628) <(100) Adjusted pro
Slide 41: Segmental Review
SEGMENTAL REVIEW un Urban casinos 6726 43 4720 2445 71 1433 (518) 6 (550) 1927 >100 883 GrandWest 1830 43 1281 613 54 399 (116) - (116) 497 76 283 Time Square 1451 49 977 507 85 274 (186) 2 (189) 321 >100 85 Sibaya 1345 49 904 481 59 302 (45) 8 (49) 436 72 253 Carnival City 901 40 642 233 69 138 (56
Slide 42: Earnings Reconciliation
EARNINGS RECONCILIATION aad R million Cents per share 2022 2021 Profit attributable to ordinary shareholders 555 263 Earnings per share Net loss on disposal of property plant and equipment 15 22 Basic 105 Net gain on deconsolidation of subsidiary 2 (12) Diluted 105 Tax relief on above items (9) (5)
Slide 43: Group Effective Tax Rate
GROUP EFFECTIVE TAX RATE Un Nigeria Rm South Africa and other Profit before tax (statutory) 1482 (114) 1368 Depreciation on non-qualifying buildings 61 - 61 Other non-deductible expenditure (Note 1) 149 - 149 Movement in put option liabilities 510 - 510 Exempt income - dividend (13) - (13) Exempt in
Slide 44: Borrowings
BORROWINGS GROUP DEBT (excluding IFRS 16 lease liabilities) IFRS 16 Total Minority Sun R million R million Debt lease liabi debt share share ' 13327 South Africa 5901 805 6706 1304 5402 11079 Nigeria 746 ~ 746 378 368 Total debt as at 31 December 2022 6 647 805 7452 1682 5770 7630 7556 7089 «gig. «6
Slide 45: Borrowing by Subsidiary
BORRROWING BY SUBSIDIARY IFRS 16 Total Minority Sun R million Debt debt share share South Africa 5 901 805 6706 1304 5 402 SunWest 475 82 557 195, 362 Carnival City 363 1 364 19 345 Sibaya 128 1 129 12 a7 Boardwalk 614 2 616 125 491 Wild Coast Sun 163 57 220 110 110 The Maslow Sandton 300 454 754 -
Slide 46: Capital Expenditure
CAPITAL EXPENDITURE 31 December 31 December SOUTH AFRICA CAPEX Ongoing and major refurbishment as a percentage of income R million 2022 2021 South Afric: ations Expansionary 255 61 GrandWest 19 - Sun City — Vacation Club 45 - Sun Slots 92 - Boardwalk Mall 99 61 Major refurbishment 168 54 Sun City 14
Slide 47: Group Structure
GROUP STRUCTURE Economic interest % Slots Tables Gauteng Carnival City 91.2 1100 37 The Maslow Sandton 100 - - Time Square 82.3 1550 55 Western Cape GrandWest 61.6 2302 46 The Table Bay Hotel 61.6 - - Golden Valley 61.4 190 4 SunBet 100 = = = KwaZulu-Natal Sibaya 87.2 1213 51 154 Limpopo Meropa 67.6
Slide 48: Analysis of Minority Shareholders
ANALYSIS OF MINORITY SHAREHOLDERS Profit after tax % Shareholdi Minority portion including SIEST South Africa 1399 231 (264) (89) SunWest 381 141 61.6 616 (133) (54) Sibaya 310 174 87.2 87.2 (29) (22) Carnival City 107 34 91.2 91.2 (6) (3) Boardwalk 21 (28) 76.2 81.6 (4) 5 Wild Coast Sun 32 (6) 50.1