Slide 1: Southern Sun Investor Presentation November 2022
F’23H1 • Occupancy at 46.0% • Total Ebitdar at R468m • Total adjusted headline profit: R26m • Net debt reduced to R2.5bn SOUTHERN SUN INVESTOR PRESENTATION November 2022
Slide 2: Disclaimer
DISCLAIMER Certain statements in this document may constitute ‘forward looking statements’. Such forward looking statements reflect the company’s beliefs and expectations and involve known and unknown risks, uncertainties and other important factors that could cause the actual results, performance o
Slide 3: Group Structure
GROUP STRUCTURE Public 41% 59% 100% 100% SOUTH AFRICA OFFSHORE • Owned, managed • Owned, managed and leased hotels and leased hotels • UK Investments 26% • Manco 3
Slide 4: Board of Directors
BOARD OF DIRECTORS Executive Directors ▪ Marcel von Aulock – CEO ▪ Laurelle McDonald – CFO Non-Executive Directors ▪ Johnny Copelyn – Chairman ▪ Rob Nicolella Independent Non-Executive Directors ▪ Mohamed Ahmed – Lead Independent ▪ Chris Gina ▪ Moretlo Molefi ▪ Jabulani Ngcobo ▪ Cornelia September 4
Slide 5: Operated Portfolio
OPERATED PORTFOLIO Luxury 54 Arabella HOTEL, GOLF & SPA TH wo BEVERLY HILLS e « — SANDTON SUN = SANDTON TOWERS Full Service Economy Y SouthernSun Y stayeasy © SouthernSun ‘SUNL RESORTS: SUN SQUARE Y MOUNTGRACE Quy ateS Garden ve - ‘ Court Y Convention Centre SANDTON CONVENTION CENTRE Southern Sun
Slide 6: Portfolio by Rooms
PORTFOLIO BY ROOMS PORTFOLIO BY NUMBER OF ROOMS, BRAND AND REGION (EXCLUDING RBH AND IHL IN THE UK) Land & Managed Freehold & Building Sandton Owned Tsogo Sun for 3rd party Brand Land lease Lease Consortium Total Gaming Owner Total Internally managed Luxury Portfolio 430 - 557 987 411 138 1 536 Sout
Slide 7: Group Financial Structure – Hotel Ownership
GROUP FINANCIAL STRUCTURE – HOTEL OWNERSHIP Freehold title, Land lease or Land & building lease ▪ 75 hotel income statements contribute to group revenues and expenses – has increased to 77 following the acquisition of the Southern Sun and StayEasy Mbombela hotels ▪ Internal management fees are paid
Slide 8: Group Financial Structure – Hotel Ownership Continued
GROUP FINANCIAL STRUCTURE – HOTEL OWNERSHIP CONTINUED Leased by third-party management companies ▪ 4 hotels managed by external parties remain investment properties on the group balance sheet as at 30 September 2022 ▪ Ebitdar from these 4 hotels is reflected as rental income in the group consolidate
Slide 9: Group Financial Structure – Hotel Management
GROUP FINANCIAL STRUCTURE – HOTEL MANAGEMENT Tsogo Sun Gaming ▪ 17 hotels owned by Tsogo Sun Gaming and run for their account ▪ Following the implementation of the separation agreement with effect from 30 September 2022, Southern Sun acquired the Mbombela hotels and the management contracts over 7 h
Slide 10: Corporate Activity
CORPORATE ACTIVITY TSG Transaction ▪ On 26 May 2022, the group concluded the separation agreement with the Tsogo Sun Gaming Limited group (TSG), which gave TSG the right to terminate (on one months’ notice) the various management and licensing agreements in respect of 15 hotels owned by TSG, for a o
Slide 11: Corporate Activity
CORPORATE ACTIVITY Ikoyi Hotels Disposal ▪ The group entered into a Sale Agreement with Kasada Albatross Holding (the Purchaser) in terms of which the group committed to disposing of its entire 75.55% shareholding and shareholder loan claims in Ikoyi Hotels Limited (Ikoyi) which owns the group’s Sou
Slide 12: Financial Overview
FINANCIAL OVERVIEW Southern Sun
Slide 13: Quarterly Performance (Rm)
QUARTERLY PERFORMANCE (Rm) Q1 Q2 H1 Continuing Discontinued Continuing Discontinued Continuing Discontinued operations operations Total operations operations Total operations operations Total Revenue F’23 H1 956 33 989 1 126^ 34 1 160 2 082^ 67 2 149^ F’22 H1 451 18 469 468 22 490 919 40 959 Change
Slide 14: South Africa System-wide Portfolio – Trend in Rooms Sold
SOUTH AFRICA SYSTEM-WIDE PORTFOLIO – TREND IN ROOMS SOLD 300 000 100% 90% 250 000 80% 70% 200 000 60% Rooms sold 150 000 50% 40% 100 000 30% 20% 50 000 10% 0 0% Apr May Jun Jul Aug Sep Oct Apr May Jun Jul Aug Sep Oct F'20 F'20 Actual Actual 239 239377377 237 237090090 251 251186186 262 262886886 263
Slide 15: Income Statement | F'23 H1 vs F'22 H1 (Rm)
INCOME STATEMENT | F’23 H1 VS F’22 H1 (Rm) ` F’23 H1 F’22 H1¹ Change on 1 Restated for discontinued operations Income 2 082 919 1 163 2 The Separation Payment of R399 million has been excluded from other income and disclosed as an exceptional item so as not to Rooms revenue 1 318 524 794 distort the
Slide 16: Income Statement | F'23 H1 vs F'22 H1 (Rm) Continued
INCOME STATEMENT | F’23 H1 VS F’22 H1 (Rm) CONTINUED F’23 H1 F’22 H1¹ Change on Profit/(loss) before interest and taxation (b/f) 570 (52) 622 Finance costs (net) (175) (175) - Finance costs (net) (112) (114) 2 Finance costs – IFRS16 (63) (61) (2) Share of earnings of associates & joint ventures 27 6
Slide 17: Reconciliation to Headline Earnings (Rm)
RECONCILIATION TO HEADLINE EARNINGS (Rm) F’23 H1 F’22 H1 Continuing Discontinued Continuing Discontinued operations operations Net operations operations Net Attributable profit/(loss) 325 9 334 (161) (1) (162) Loss on disposal of PP&E 5 - 5 1 - 1 Impairment of trademark 6 - 6 - - - Headline profit/(
Slide 18: Segmental Analysis (Rm)
SEGMENTAL ANALYSIS (Rm) Income Ebitdar Ebitdar margin % F’23 H1 F’22 H1 F’23 H1 F’22 H1 F’23 H1 F’22 H1 Continuing operations Manco total 496 41 70 145 14 354 Manco 97 41 70 (5) 72 (12) Separation Payment 399 - - - - - Business interruption insurance - - - 150 - - Rental income 58 7 58 7 100 100 Tra
Slide 19: Review of Operations
REVIEW OF OPERATIONS ▪ Trading levels during the first six months of the 2023 financial year have been encouraging with occupancy increasing to 46.0% from 21.9% in the prior comparative period and the group returning to profitability with adjusted headline earnings of R17 million from continuing ope
Slide 20: Review of Operations
REVIEW OF OPERATIONS ▪ The continuous load shedding has a significant impact on the group’s operating costs and in the first six months of the 2023 financial year, the group has spent R13 million on diesel in our owned units. In comparison to the R1 million spent on diesel in the prior comparative s
Slide 21: Review of Operations
REVIEW OF OPERATIONS ▪ Other revenue ended R405 million above the prior period at R528 million and apart from the overall improvement in trading levels with management fee, conferencing, parking and spa income all increasing compared to the prior period, other revenue also includes the Separation Pa
Slide 22: Cash Flow (Rm)
CASH FLOW (Rm) F’23 H1 F’22 H1¹ Ebitdar per income statement (continuing operations)* 449 139 Property rentals (131) (72) Move in working capital adjusted for non-cash and exceptional items 44 104 Cash generated from continuing operations 362 171 Net finance costs paid (excluding IFRS16 adjustments)
Slide 23: Cash Flow (Rm) Continued
CASH FLOW (Rm) CONTINUED F’23 H1 F’22 H1¹ Free cash inflow from continuing operations (b/f) 191 40 Dividends paid to NCI (1) - Disposal proceeds 1 1 Investment activities – expansion capex (142) - Separation Payment 390 - Associates, joint ventures, loans and investments - 2 Net cash surplus 439 43
Slide 24: Investment Activities (Rm)
INVESTMENT ACTIVITIES (Rm) F’23 H1 F’22 H1 Investment activities 142 - Acquisition of Southern Sun and StayEasy Mbombela hotels 142 - Maintenance capex 34 13 SA Hotels 30 10 Offshore hotels from continuing operations 2 3 Offshore hotels from discontinued operations 2 - Total investment activities 17
Slide 25: Group Trading Update – October
GROUP TRADING UPDATE – OCTOBER F’23 F’20 October October Change on Income 512 420 92 Overheads (338) (267) (71) Ebitdar 174 153 21 SA Hotels 160 133 27 Offshore Hotels 14 20 (6) Ebitdar margin (%) 34 36 (2) Adjusted earnings 70 50 20 Weighted average number of shares in issue (million) 1 478 1 061 4
Slide 26: Interest Bearing Debt (Rm)
INTEREST BEARING DEBT (Rm) F’23 H1 F’22 H1 External debt – Offshore (US$ based) 827 698 Continuing operations 596 504 Discontinued operations 231 194 External debt (Rand based) 2 200 2 831 Prepaid borrowing costs (2) (5) Gross IBD 3 025 3 524 Cash on hand – Hotels SA (383) (427) Cash on hand – Hotel
Slide 27: Financial Covenant Waivers and Facilities
FINANCIAL COVENANT WAIVERS AND FACILITIES ▪ The group has comfortably met revised Ebitdar and liquidity covenants for the June 2022 and September 2022 measurement periods ▪ In March 2022, the group extended debt facilities and corporate bonds maturing prior to 31 March 2023 by 12 months to ensure th
Slide 28: Debt Facility Refinancing
DEBT FACILITY REFINANCING ▪ The refinancing of the group’s debt package in order to simplify the security structure, extend facility tenure and reintroduce normalised covenants, which take into consideration that the group is still in the recovery phase following the impact of Covid-19, is being fin
Slide 29: Group Facility Profile Post Refinancing
GROUP FACILITY PROFILE POST REFINANCING (1) (1) 600 (1) 333 300 500 500 500 444 231 100 117 33 SS SSIkoyi IkoyiUSD USD SSU SSUZAR ZARGBF GBF SSA SSAUSDUSD SS SSMozMozMZM MZM SSU SSUZAR ZAR SSU SSUZAR ZAR SS SSMozMozUSD USD SSU SSUZAR ZAR SSU SSUZAR ZAR Facility Sep-23 Facility Nov-23 Facility Facili
Slide 30: Prospects
PROSPECTS ▪ In the short term, the group remains optimistic that trading levels will continue to improve throughout the summer season – having recently completed our SunBreaks campaign, some interesting trends were highlighted ▪ Sale bookings for Cape Town exceeded 2019 levels which we believe is du
Slide 31: Thank You
Y THANK YOU Southern Sun