Sun International Limited · JSE:SUI
Sun International — FY2020 Earnings Presentation
41 slides from Sun International's earnings presentation, Mar 16, 2021
Slide 1: Audited Summary Group Financial Results
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Slide 2: Disclaimer
DISCLAIMER Certain statements in this document may constitute or purchase any Sun International securities, and nothing ‘forward looking statements’. Such forward looking contained herein shall form the basis of any contract statements reflect the company’s beliefs and expectations or commitment wha
Slide 3: Contents
01 CONTENTS Overview 02 Impact of Covid-19 03 Strategic objectives 04 Financial review 05 Segmental review 06 Capital allocation 07 Borrowings and cash flow 08 Conclusion 09 Supplementary information Boardwalk 3 3
Slide 4: Overview
Sun City - Soho 01 Overview 4
Slide 5: Overview: income, EBITDA and debt headline figures
01 Overview CONTINUING INCOME DOWN 49% to R6.1 billion CONTINUING ADJUSTED EBITDA DOWN 72% to R0.9 billion CONTINUING ADJUSTED OPERATING LOSS DOWN FROM R2.2 billion to (R32 million) GROUP ADJUSTED DILUTED HEPS DOWN FROM 605 cents per share to (633) cents per share SA DEBT excl IFRS 16 DOWN FROM R8.8
Slide 6: Trading environment in 2020
01 Overview TRADING ENVIRONMENT IN 2020 TRADING IN 2020 BEFORE LOCKDOWN LEVEL 5 NATIONAL LOCKDOWN • Earnings growth Operations Communication • Margin improvement • Focused on cost reductions, Engaged and communicated • Optimising working capital, on an ongoing basis with: • Strong cash generation •
Slide 7: Key actions initiated during 2020
01 Overview KEY ACTIONS INITIATED DURING 2020 • Lockdown period was used to critically assess operational practices, systems, marketing and guest experiences Improved operational efficiency Customers Systems and cost optimisation • Improved our marketing and public relations • Approved new casino ma
Slide 8: Impact of Covid-19
Impact of Covid-19 ee International
Slide 9: Covid-19 impact on revenue and margins
02 Impact of Covid-19 COVID-19 IMPACT on revenue and margins Revenue as a % of 2019 120% 101.7% 100.5% 103.9% 104.9% 76.4% 77.1% 80% 68.5% 62.5% 53.2% 51.9% 75.3% 70.6% 36.1% 62.6% 64.9% 40% 53.7% 47.5% 1.6% 1.6% 3.7% 33.4% 0.0% 0.0% 1.1% 0% January February March April May June July August Septembe
Slide 10: Review of operations
02 Impact of Covid-19 REVIEW OF OPERATIONS • Trading impacted by curfew hours and the restrictions on serving of alcohol • Sun Slots has proved to be remarkably resilient with a strong recovery • Limited capacity resulting in every second machine being switched off in trading and only 4 positions pe
Slide 11: Total casino income as a % of prior comparative period
02 Impact of Covid-19 TOTAL CASINO INCOME as a % of prior comparative period UNITS - GrandWest, Sibaya, Time Square and Carnival City 100% 80% 60% 40% 20% 0% July August September October November December January February 2020 2021 Casino revenue as % of comparative periods (14 day rolling average)
Slide 12: Total Sun Slots income as a % of prior comparative period
02 Impact of Covid-19 TOTAL SUNSLOTS INCOME as a % of prior comparative period 125% 100% 75% 50% 25% 0% July August September October November December January February Mar 2020 2021 Alternate gaming revenue as % of comparative periods (14 day rolling average) Linear (Alternate gaming revenue as % o
Slide 13: Total SunBet income as a % of prior comparative period
02 Impact of Covid-19 TOTAL SUNBET INCOME as a % of prior comparative period 250% 200% 150% 100% 50% 0% July August September October November December January February 2020 2021 Online betting revenue as % of comparative periods (14 day rolling average) Linear (betting revenue as % of comparative p
Slide 14: Key focus areas
The Maslow Sandton 03 Key focus areas 14
Slide 15: Near term priorities
03 Key focus areas NEAR TERM PRIORITIES Protect and leverage Preserve liquidity and Drive efficiency, optimisation Deal with Explore alternative gaming our existing portfolio minimise cash outflows and quality of earnings underperforming units growth opportunities • Drive revenue recovery • Agree ne
Slide 16: Financial review
The Table Bay 04 Financial review 16
Slide 17: Financial overview
04 Financial review FINANCIAL OVERVIEW R million 2020 % 2019 Income 6 089 (49) 11 836 Adjusted EBITDA 897 (72) 3 240 Adjusted operating (loss)/profit (32) <(100) 2 196 Foreign exchange loss (58) (71) (34) Net interest (941) (1) (930) Net external interest (732) 17 (881) Hedge interest (135) <(100) 2
Slide 18: Segmental review
Sun City – The Palace 05 Segmental review 18
Slide 19: Segmental highlights
05 Segmental review SEGMENTAL HIGHLIGHTS 55% Slots 12% Tables INCOME PER 15% Sun Slots CATEGORY 2% SunBet (SOUTH AFRICA) 6% Rooms 6% Food & Beverage 4% Other South Africa Sun Latam and Sun Chile Nigeria and eSwatini Total continuing group R million 2020 % 2019 2020 % 2019 2020 % 2019 2020 % 2019 Inc
Slide 20: South African segmental review
05 Segmental review SOUTH AFRICAN SEGMENTAL REVIEW Income Adjusted EBITDA Depreciation and amortisation Adjusted operating (loss)/profit R million 2020 % 2019 2020 % 2019 2020 % 2019 2020 % 2019 GrandWest 1 024 (52) 2 144 275 (67) 827 (117) - (117) 158 (78) 710 Sun City 699 (56) 1 604 (142) <(100) 1
Slide 21: South African quarterly trading
05 Segmental review SOUTH AFRICAN QUARTERLY TRADING Q1 2020 Q2 2020 Q3 2020 Q4 2020 12 months 2020 R million Actual % of 2019 Actual % of 2019 Actual % of 2019 Actual % of 2019 Actual % of 2019 Casino, hotels and resorts: Casino income 1 583 84% 7 0% 1 001 52% 1 430 71% 4 021 52% Rooms revenue 214 8
Slide 22: Capital allocation
Time Square 06 Capital allocation 22
Slide 23: Capital expenditure
06 Capital allocation CAPITAL EXPENDITURE CAPEX: SOUTH AFRICA R million 31 Dec 2020 31 Dec 2019 Capex as a percentage of revenue South African operations Refurbishment and ongoing 7% Sun City 103 249 GrandWest 62 108 Sibaya 51 86 5% Sun Slots 47 93 Other 148 202 Total South African capital expenditu
Slide 24: Borrowings and cash flow
Boardwalk 07 Borrowings and cash flow 24
Slide 25: Borrowings and cash flow
07 Borrowings and cash flow BORROWINGS AND CASH FLOW The South African lending group agreed to the suspension of debt repayments, waiver of covenant measures and debt rescheduling CERTAIN OF THE KEY TERMS NEGOTIATED INCLUDE: • Capital payments deferred until 30 June 2021 • Interest and preference di
Slide 26: Borrowings
07 Borrowings and cash flow BORROWINGS R million Debt IFRS 16 lease liability Total debt Minority share Sun share South Africa 6 963 751 7 714 1 143 6 571 Nigeria 643 - 643 366 357 Shareholder loans 991 - 991 564 550 Sun International inter-company debt (348) - (348) (198) (193) eSwatini 24 - 24 11
Slide 27: South African cash flow
07 Borrowings and cash flow SOUTH AFRICAN CASH FLOW R million 1 340 (2 094) 1207 (111) 834 (103) (95) (411) 225 (423) 308 273 175 (61) 23 (141) Generated Working Tax Capex Free Interest Other Cashflow Dividends Rights Repayment Latam Movement Other Cash at Cash at by capital paid cash paid investing
Slide 28: Conclusion
Golden Valley 08 Conclusion 28
Slide 29: Robust business fundamentals to deal with challenges ahead
08 Conclusion ROBUST BUSINESS FUNDAMENTALS TO DEAL WITH CHALLENGES AHEAD CHALLENGES AHEAD • Covid-19 and roll-out of vaccines • Restrictions on operations to remain in place for some time • Disposable income under pressure • International travel recovery not expected in 2021 • Business meetings and
Slide 30: Supplementary information
Carnival City 09 Supplementary information 30
Slide 31: Timeline of Covid-19 regulations
09 Supplementary information TIMELINE OF COVID-19 REGULATIONS Declaration of National State of Disaster and declaration of nationwide lockdown commencing Amendment to Level 3 restrictions to allow for Lockdown regulations published prohibiting all non-essential activities softening of restriction on
Slide 32: Timeline of Covid-19 regulations continued
09 Supplementary information TIMELINE OF COVID-19 REGULATIONS continued Amendment to regulations to reflect softening of various restrictions during Level 1 lockdown • Hotels: permitted to operate up to a maximum of 50% of available accommodation capacity, Implementation of Adjusted Level 1 lockdown
Slide 33: Timeline of Covid-19 regulations continued
09 Supplementary information TIMELINE OF COVID-19 REGULATIONS continued Amendment to Adjusted Level 3 regulations to clarify restrictions on short-term accommodation, conferencing, dining and entertainment and ostensible adjustment to Adjusted Alert Level 3 • CASINO CAPACITY: Maximum prescribed indo
Slide 34: Timeline of Covid-19 regulations continued
09 Supplementary information TIMELINE OF COVID-19 REGULATIONS continued Amendment to Adjusted Level 3 regulations to soften restrictions on, amongst others, curfew and the sale and consumption of alcohol • CURFEW: 23h00 to 04h00 [Casinos required to close by 22h00] • ALCOHOL: The sale of liquor for
Slide 35: Earnings reconciliation
09 Supplementary information EARNINGS RECONCILIATION Audited 12 months ended Audited 12 months ended R million 31 Dec 2020 31 Dec 2019 R million 31 Dec 2020 31 Dec 2019 Loss/(profit) attributable to ordinary shareholders (1 829) 653 Headline (loss)/earnings (410) 761 Profit on sale of management con
Slide 36: Group effective tax rate (ETR)
09 Supplementary information GROUP EFFECTIVE TAX RATE (ETR) R million South Africa Nigeria Sun Latam & Sun Chile eSwatini Total continuing Loss before tax continuing operations (1 132) (314) (158) (49) (1 653) Depreciation on non-qualifying buildings 52 - - 1 53 Impairment of assets and fair value a
Slide 37: Group effective tax rate continued
09 Supplementary information GROUP EFFECTIVE TAX RATE | continued Note 1: Other non-deductible expenses Amount Amortisation of bid expenditure 4 CSI expenditure not qualifying under s18A 7 Interest – non deductible 18 Non-deductible legal or professional costs 34 Equity settled Share Based Payment e
Slide 38: Borrowings by subsidiary
09 Supplementary information BORROWINGS BY SUBSIDIARY 2020 2019 Attributable Attributable IFRS 16 Total Minority to Sun IFRS 16 Total Minority to Sun R million Borrowings Lease liability borrowings shares International Borrowings Lease liability borrowings shares International South Africa 6 963 751
Slide 39: Group structure
09 Supplementary information GROUP STRUCTURE South Africa Economic interest %* Slots Tables Rooms Gauteng Carnival City 91.2 1 399 48 105 The Maslow Sandton 100.0 - - 281 Time Square 82.3 1 722 60 238 Western Cape GrandWest 61.6 2 563 72 39 The Table Bay 61.6 - - 329 Golden Valley 61.4 227 6 98 SunB
Slide 40: Analysis of minority shareholders
09 Supplementary information ANALYSIS OF MINORITY SHAREHOLDERS Profit after tax % Shareholding Minority portion including SIEST R million 2020 2019 2020 2019 2020 2019 South Africa (782) 972 57 (350) SunWest 50 501 61.6% 61.6% (17) (192) Sibaya 107 290 87.2% 87.2% (10) (77) Carnival City (12) 81 91.
Slide 41: Audited Summary Group Financial Results
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