Sun International Limited · JSE:SUI
Sun International — H1 2021 Earnings Presentation
36 slides from Sun International's earnings presentation, 2021
Slide 1: Unaudited Interim Results Announcement
UNAUDITED ; —~ INTERIM RESULTS International : : \% «) ANNOUNCEMENT
Slide 2: Disclaimer
DISCLAIMER Certain statements in this document may constitute ‘forward an offer or invitation or inducement to subscribe for looking statements’. Such forward looking statements reflect or purchase any Sun International Limited securities, the company’s beliefs and expectations and involve known and
Slide 3: Contents
CONTENTS 01 Key highlights 02 Review of operations 03 Financial review 04 Segmental review 05 Capital allocation 06 Borrowings and cash flow 07 Conclusion 08 Supplementary information Boardwalk 3 3
Slide 4: Key highlights
Sun City - Soho 01 Key highlights 4
Slide 5: Key highlights
01 Key highlights CONTINUING CONTINUING GROUP TOTAL GROUP DEBT GROUP INCOME ADJUSTED EBITDA R7.6 billion R3.8 billion R739 million Down from R11.1 billion in H12020 Increase of 51% compared to H12020 Increase from R60 million in H12020 Reduction included a repayment of R2.7 billion in SA EBITDA marg
Slide 6: Overview
01 Key highlights OVERVIEW • Resilient performance for the half year ended 30 June 2021 • Focus on ensuring that the group remains in a strong financial position - Businesses operating under significant and varied restrictions and - Casino businesses, proven their resilience and will continue to see
Slide 7: Timeline of Covid-19 regulations
01 Key highlights TIMELINE OF COVID-19 REGULATIONS Amendment to Adjusted Level 3 Regulations Adjusted Alert Level 4 lockdown regulations Adjusted Alert Level 4 lockdown regulations amendment to implement stricter restrictions on, amongst others, curfew • CURFEW: 21h00 to 04h00 • CURFEW: 21h00 to 04h
Slide 8: Revenue trend
01 Key highlights Revenue trend Initial extended hard lockdown Second wave Third wave 1 000 Alert level 5 Adjusted Alert level 3 Adjusted Alert level 4 800 600 400 200 - Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul 2020 2021 Total revenue Casino revenue 8
Slide 9: Review of operations
Vacation Club – Sun City 02 Review of operations 9
Slide 10: Casinos
02 Review of operations CASINOS Key focus • Gaming system change to Playtech on track Key trading • Trading impacted by curfew hours and the restrictions on the serving • Market share gains of alcohol areas highlights • Efficiencies and margin growth • Limited capacity - machines switched off and on
Slide 11: Resorts and Hospitality
02 Review of operations RESORTS AND HOSPITALITY Key focus • Costs and efficiencies Key trading • Hotel industry continues to be impacted by the effects of the pandemic areas • Repairs and maintenance highlights • Leisure and gaming markets resilient • Leisure and gaming markets for Sun City and Wild
Slide 12: Sun City
02 Review of operations SUN CITY Key focus • Iconic resort, entertainment and leisure destination Key markets • Domestic leisure areas • Remains a key strategic asset and sales • Gaming • Achieved sustainable cost savings of R180 million initiatives • International groups (MICE) - Savings on the 201
Slide 13: Sun Slots
02 Review of operations SUN SLOTS Key strategic • Type B licences in KwaZulu-Natal, Mpumalanga and Western Cape Key trading • Sun Slots proved to be remarkably resilient focus areas • Trial of machines in key African markets highlights • Quick to open sites • Additional services to site owners • 97%
Slide 14: SunBet
02 Review of operations SUNBET Key strategic • Strong growth potential Key trading • Continued growth in new player acquisition and deposits focus areas • New games added - Lucky Numbers, Bet Games and Virtual Games highlights • Overall income was up 78% compared to 2020 • Launched Live Games in ear
Slide 15: SunBet appointment of independent non-executive director
02 Review of operations SUNBET APPOINTMENT OF INDEPENDENT NON-EXECUTE DIRECTOR NIGEL PAYNE Nigel is a well-renowned global sports betting and alternate gaming expert with more than 30 years of board experience, involving FTSE, AIM and private companies in the UK, covering a wide range of industries
Slide 16: Financial review
The Table Bay 03 Financial review 16
Slide 17: Financial overview
03 Financial review FINANCIAL OVERVIEW R million 2021 % 2020* % 2019* Income 3 760 51 2 482 (32) 5 542 Adjusted EBITDA 739 >100 60 (50) 1 485 Adjusted operating profit(loss) 288 >100 (448) (68) 901 Foreign exchange (loss)/profit (6) <(100) 9 45 (11) Net interest (233) 58 (560) 54 (502) Net external
Slide 18: Segmental review
Sun City – The Palace 04 Segmental review 18
Slide 19: Segmental highlights
04 Segmental review SEGMENTAL HIGHLIGHTS 59% Slots 10% Tables 63% Casino operations 16% Sun Slots INCOME PER INCOME PER 18% Resorts and Hospitality SEGMENT CATEGORY 2% SunBet 19% Alternate Gaming (SOUTH AFRICA) (SOUTH AFRICA) 4% Rooms 5% Food & Beverage 4% Other Total Continuing Casino operations* R
Slide 20: South African segmental review
04 Segmental review SOUTH AFRICAN SEGMENTAL REVIEW Income Adjusted EBITDA Depreciation and amortisation Adjusted operating profit/(loss) R million 2021 % 2020 2021 % 2020 2021 % 2020 2021 % 2020 Casino operations 2 328 53 1 525 672 >100 129 (292) 6 (312) 380 >100 (183) GrandWest 635 46 434 192 >100
Slide 21: South African quarterly trading
04 Segmental review SOUTH AFRICAN QUARTERLY TRADING Quarter 1 Quarter 2 6 months R million 2021 % 2020 2021 % 2020 2021 % 2020 South African operations Income 1 763 (26) 2 392 1 954 >100 58 3 717 52 2 450 Adjusted EBITDA 359 (27) 489 390 >100 (400) 749 >100 89 Adjusted EBITDA margin % 20% - 20% 20%
Slide 22: Capital allocation
Time Square 05 Capital allocation 22
Slide 23: Capital expenditure
05 Capital allocation CAPITAL EXPENDITURE CAPEX: SOUTH AFRICA R million Jun 2021 Actual Jun 2020 Actual Jun 2019 Actual Capex as a percentage of revenue South African operations Refurbishment and ongoing 8% Sun City 42 37 55 GrandWest 5 28 77 Sun Slots 53 8 48 Sibaya 34 30 24 5% 5% Carnival City 15
Slide 24: Borrowings and cash flow
Boardwalk 06 Borrowings and cash flow 24
Slide 25: Borrowings
06 Borrowings and cash flow BORROWINGS KEY TERMS OF RENEGOTIATED FUNDING ARRANGEMENTS INCLUDE: • Capital payments deferred until 30 June 2021 • At 30 June 2021 applied the proceeds of the disposal of Sun Dreams to - Settle interest and dividends, that were waived, totalling R266 million - Paying R1.
Slide 26: Borrowings: group debt
06 Borrowings and cash flow BORROWINGS GROUP DEBT R million Debt IFRS 16 lease liability Total debt 13,327 South Africa 6 926 850 7 776 11,079 Nigeria 630 - 630 7,630 7,556 Shareholder loans 971 - 971 Sun International inter-company debt (341) - (341) Total debt as at 30 June 2021 7 556 850 8 406 To
Slide 27: South African cash flow
06 Borrowings and cash flow SOUTH AFRICAN CASH FLOW R million 743 (93) (221) (201) 228 (301) 273 117 (47) 26 (66) (41) (2) Generated Working Tax Capex Free Interest Other investing Cashflow Dividends Repayment of Movement in Cash at Cash at by capital paid cash paid activities prior to funding to mi
Slide 28: Conclusion
Golden Valley 07 Conclusion 28
Slide 29: Robust business fundamentals to deal with challenges ahead
07 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 during 2021 OUTLOOK • Gaming inc
Slide 30: Supplementary information
Carnival City 08 Supplementary information 30
Slide 31: Earnings reconciliation
08 Supplementary information EARNINGS RECONCILIATION R million 30 Jun 2021 30 Jun 2020 Loss per share 30 Jun 2021 30 Jun 2020 Loss attributable to ordinary shareholders (80) (1 128) Loss per share Net loss on disposal of property, plant and equipment 17 - Basic (32) (894) Net profit on derecognition
Slide 32: Group effective tax rate (ETR)
08 Supplementary information GROUP EFFECTIVE TAX RATE (ETR) R million South Africa Nigeria and Chile eSwatini** Total continuing Profit/(loss) before tax continuing operations 72 (49) 12 35 Depreciation on non-qualifying buildings 26 - - 26 Other non-deductible expenditure (note 1) 41 - - 41 Movemen
Slide 33: Borrowings by subsidiary
08 Supplementary information BORROWINGS BY SUBSIDIARY R million Borrowings IFRS 16 Lease liability Total borrowings Minority shares Attributable to Sun International South Africa 6 926 850 7 776 1 371 6 405 SunWest 536 113 649 228 421 Carnival City 540 4 544 29 515 Sibaya 282 3 285 27 258 Boardwalk
Slide 34: Group structure
08 Supplementary information GROUP STRUCTURE Licensed by gaming board South Africa Economic interest %* Slots Tables Rooms Gauteng Carnival City 91.2 1 400 43 105 The Maslow Sandton 100.0 - - 281 Time Square 82.3 1 721 60 238 Western Cape GrandWest 61.6 2 563 75 39 The Table Bay Hotel 61.6 - - 329 G
Slide 35: Analysis of minority shareholders
08 Supplementary information ANALYSIS OF MINORITY SHAREHOLDERS Profit after tax % Shareholding Minority portion including SIEST R million 2021 2020 2021 2020 2021 2020 South Africa 48 (708) (34) 74 SunWest 65 (10) 61.6 61.6 (26) 4 Sibaya 77 14 87.2 87.2 (11) (2) Carnival City 11 (40) 91.2 91.2 (2) 3
Slide 36: Unaudited Interim Results Announcement
UNAUDITED ; —~ INTERIM RESULTS International : : \% «) ANNOUNCEMENT