Southern Sun Limited · JSE:SSU

Southern Sun — Tsogo Sun Holdings — FY2012 Earnings Presentation

37 slides from Southern Sun's earnings presentation, May 2012

  1. Slide 1: Presentation to Analysts and Investors

    Presentation to: Analysts and Investors May 2012

  2. Slide 2: Group Structure

    Group Structure Public 41.3% 39.7% 19.0% 100% 100% 2

  3. Slide 3: Gaming Portfolio

    Gaming Portfolio Gauteng KZN Western Cape Mpumalanga Eastern Cape Free State 100% 90% 100% 100% 65% 100% 100% 100% 85% 100% 25% 100% 100% 70% 14 Casinos 6 Provinces 3

  4. Slide 4: Hotel Portfolio

    Hotel Portfolio Deluxe Economy/ Budget Timeshare & Offshore Premier Economy Plus Resorts 94 Hotels 14,639 Rooms 4

  5. Slide 5: Management and Board

    Management and Board  TSH Board of Directors ● Executive Directors  Marcel von Aulock– Group CEO  Rob Huddy – Group CFO ● Non-Executive Directors  Johnny Copelyn (Chairman)  Jabu Mabuza (Deputy Chairman)  Marcel Golding  Andre Van Der Veen  Elias Mphande  Meyer Kahn  Graham Mackay  Malcol

  6. Slide 6: Management and Board

    Management and Board  Group Executive Committee ● Corporate ● Gaming  Marcel von Aulock – Group CEO  Jacques Booysen – MD Gaming  Rob Huddy – Group CFO  Greg Lunga – FD Gaming  Rob Collins – Chief Marketing Officer  Thabo Mosololi – Operations Director  Vusi Dlamini – Group HR Director Gamin

  7. Slide 7: Accounting Issues

    Accounting Issues  Accounting ● Current period results represent 12 months consolidated merge co ● Prior period results represent 12 months Tsogo with 11 months GRR equity accounted and 1 month consolidated  Deal closed on 24 February 2011 ● Exchange ratio 81% (TIH and SABSA) / 19% (Other GRR)  8

  8. Slide 8: Segmental Analysis

    Segmental Analysis ©YWTSOGO SUN

  9. Slide 9: Group – Revenue and EBITDAR (Rm)

    Group – Revenue and EBITDAR (Rm) F’12 F’11 % Change Revenue Gaming 7 113 4 630 54 Hotels SA 1 625 1 617 - Hotels Offshore 324 271 20 Corporate (intra-group-elimination) (31) (31) - Total Group 9 031 6 487 39 GRR (management accounts) - 2 133 * Total Group adjusted 9 031 8 620 5 EBITDAR Gaming 2 886

  10. Slide 10: Tsogo Sun Segmental (Rm)

    Tsogo Sun Segmental (Rm) Income EBITDAR EBITDAR Margin F’12 F’11 F’12 F’11 F’12 F’11 Montecasino 2 107 1 964 901 790 42.8 40.2 Suncoast 1 313 1 261 634 607 48.3 48.1 Gold Reef City 1 162 87 462 14 39.8 16.1 Silverstar 557 51 207 14 37.2 27.5 The Ridge 357 332 171 160 47.9 48.2 Emnotweni 292 268 130

  11. Slide 11: Tsogo Sun Segmental Adjusted (Rm)

    Tsogo Sun Segmental Adjusted (1) (Rm) Income Adjusted EBITDAR Adjusted EBITDAR Margin Adjusted F’12 F’11 F’12 F’11 F’12 F’11 Montecasino 2 107 1 964 901 790 42.8 40.2 Suncoast 1 313 1 261 634 607 48.3 48.1 Gold Reef City 1 162 1 083 462 362 39.8 33.4 Silverstar 557 597 207 204 37.2 34.2 The Ridge 35

  12. Slide 12: Key Strategic Issues: Gaming

    Key Strategic Issues Gaming 12

  13. Slide 13: Gauteng Gaming Tax Revenues

    Gauteng Gaming Tax Revenues Monte- Gold Reef Silver- Growth in Gaming win (%) Gauteng casino 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 Silverstar opened 7.

  14. Slide 14: 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 5.2 5.4 3.0 6.4 12 months to March 2012 7.8 5.8 11.6 13.7 6 months t

  15. Slide 15: Other Gaming Tax Revenues

    Other Gaming Tax Revenues Growth in Gaming win (%) Province Unit Unit Unit Mpumalanga Ridge Emnotweni 12 months to March 2012 9.3 7.5 8.8 6 months to March 2012 10.3 8.4 11.0 Western Cape Caledon Mykonos Garden Route 12 months to March 2012 6.7 7.6 2.5 5.0 6 months to March 2012 9.0 6.5 5.8 7.3 East

  16. Slide 16: Key Strategic Issues - Gaming

    Key Strategic Issues - Gaming  Montecasino  Suncoast ● Satisfactory trading ● Additional 120 slots and 14 tables ● Good Privé support approved ● Bok town, Teatro and events attracting ● 24 slots and 6 tables installed, balance on strong footfall council approval of interior building plans ● Effici

  17. Slide 17: Key Strategic Issues - Gaming

    Key Strategic Issues - Gaming  Hemingways ● New licence issued April 2011, effective September 2011 ● ONLY Eastern Cape licences expire ● Ownership diluted to 65% ● New investment R400m  Expand hotel by 41 rooms  New Pavilion conference and banquet area  New and expanded casino floor ● R86m spen

  18. Slide 18: Key Strategic Issues - Gaming

    Key Strategic Issues - Gaming  Other units ● Good EBITDAR growth at Emnotweni, Golden Horse, Goldfields and Blackrock ● Western Cape still under pressure ● Sandton Convention Centre reduced EBITDAR following SWC ● Centralisation of certain functions 18

  19. Slide 19: Key Strategic Issues: Hotels

    Key Strategic Issues Hotels 19

  20. Slide 20: Hotels – Portfolio Philosophy

    Hotels – Portfolio Philosophy Land Building Operations Management Branding  Ideally own all components – Tsogo Sun Hotels strategic advantage in scale  Lease building on long term basis if Tsogo can’t own – but lose terminal value growth  In SA only manage if strategically important and no option

  21. Slide 21: Owned and Managed

    Owned and Managed Hotels Rooms Owned Managed Deluxe 6 1 113 410 703 Premier 19 4 058 3 380 678 Owned includes leased hotels, and Economy/Economy Plus 28 5 067 3 771 1 296 associates Budget (F1) 23 1 690 1 690 - Timeshare & Resorts 8 1 256 402 854 South Africa 84 13 184 9 653 3 531 Offshore 10 1 455

  22. Slide 22: SA System-wide Rooms Sold Annual History

    SA System-wide Rooms Sold Annual History Rooms Sold Occupancy 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

  23. Slide 23: Key Strategic Issues: Hotels – South Africa

    Key Strategic Issues : Hotels – South Africa  Corporate business remains weak  Good growth in government and leisure segments  Comparative to prior period affected by SWC in 2010. ● Lower occupancy in 1st Quarter by 4.3pp ● Increased occupancy in last 9 months by 4.7pp ● Lower Average Room Rate 

  24. Slide 24: Key Strategic Issues: Hotels – South Africa

    Key Strategic Issues : Hotels – South Africa  Distressed assets present an opportunity ● 54 on Bath  Purchased R85m  Office component R30m (10% yield)  73 Rooms ● Principles when pursuing distressed assets  Must fit core group product  Must be a long-term viable business  Cheap relative to re

  25. Slide 25: Key Strategic Issues: Hotels – Offshore

    Key Strategic Issues : Hotels – Offshore  Pursuit of management contracts continues – low risk entry to new markets  Africa hotels strong in US$ (occupancies F’12 : 72.2%, F’11 : 68.5%)  Currency positive impact to trading in F’12, due to Rand weakness against US$ and Euro exchange rates  Forex

  26. Slide 26: Financial Overview

    Financial Overview rh @Y TSOGO SUN

  27. Slide 27: Group – Income Statement (Rm)

    Group – Income Statement (Rm) F’12 F’11 F’11 % Change Actual Actual Adjusted(1) on Adjusted Group income 9 031 6 487 8 620 5 Gaming win 6 111 3 804 5 717 7 Revenue Rooms 1 615 1 591 1 626 (1) F&B 752 677 755 - Other 553 415 522 6 EBITDAR 3 501 2 477 3 261 7 Gaming 2 886 1 833 2 617 10 Hotels – SA 51

  28. Slide 28: Group – Income Statement (Rm)

    Group – Income Statement (Rm) F’12 F’11 F’11 % Change (1) Actual Actual Adjusted on Adjusted EBITDAR 3 501 2 477 3 261 7 LTI costs (55) 13 5 * Rentals (190) (171) (178) (7) Depreciation & amortisation (623) (447) (641) 3 Exceptional items 385 (420) (507) * Finance costs (420) (391) (494) 15 Associat

  29. Slide 29: Adjusted HEPS (Rm)

    Adjusted HEPS (Rm) F’12 F’11 % Change Attributable earnings 1 717 583 Capital asset disposal profits (2) (5) FV adjustment of GRR - 299 FV adjustment of Formula 1 (179) - Impairment of PPE (Grayston) - 8 Masa JV impairment 2 - Headline earnings 1 538 885 Pre-opening costs - 7 Debt break costs (Assoc

  30. Slide 30: Long Service Restatement

    Long Service Restatement Retained Deferred Income Taxation Minorities Provisions F’11 Opening 39 15 1 (55) F’11 Income statement 23 9 1 (33) F’11 Closing 62 24 2 (88) F’12 Income Statement 12 5 1 (18) F’12 Closing 74 29 3 (106)  Long service awards were previously cash accounted  Restated to accou

  31. Slide 31: Group Cash Flow (Rm)

    Group Cash Flow (Rm) F’12 F’11 Cash flow generated from operations 3 256 2 319 Move in working capital adjusted for non-cash items 144 3 Share scheme recovery (GRR) - 53 Merger costs - (93) Dividends received 5 56 Cash flow from operations 3 405 2 338 Interest paid (net) (455) (393) Taxation – norma

  32. Slide 32: Investment Activities

    Investment Activities F’12 F’11 Acquisitions Ripple Effect/Suncoast minority (510) - Ripple Effect minority loan assumed on acq. 99 - Formula 1 (300) - Millennium contingency part settlement (24) - Expansion Capex (299) (99) Hemingways bid/expansion (84) (13) GC Milpark (95) - SE Pretoria (11) - 20

  33. Slide 33: Interest Bearing Debt (Rm)

    Interest Bearing Debt (Rm) F’12 F’11 Non-controlling interests funding 32 99 Preference funding 1 000 1 000 External debt (amortising and bullet) 4 595 4 011 Gross IBD 5 627 5 110 Cash on hand (1 443) (956) Net IBD 4 184 4 154 Dividend of R549m (50c per share) declared May 2011, paid June 2011 Divid

  34. Slide 34: Future Prospects

    Future Prospects @Y TSOGO SUN

  35. Slide 35: Future Prospects

    Future Prospects  Group ● Strong cash generation ● Growth opportunities still being pursued  Gaming ● Gaming win growth – medium term outlook positive  Need consumers to get wealthier and, more importantly, feel wealthier  Regulatory issues remain a threat  Tax – national/provincial ● Site deve

  36. Slide 36: Thank you

    Thank you

  37. Slide 37: Y TSOGO SUN

    Y TSOGO SUN

Tsogo Sun Holdings — FY2012 Earnings Presentation on 6ix