Good morning, and welcome, to Sun International's Q&A webcast for our interims, for June 2025. We hope you've all had a chance to have a look at our pre-recorded video, taking you through our results that we posted on our website this morning. If you haven't, or if you'd like, to find it, please let me know. It's investor.relations@suninternational.com. We hope you've had a chance to also post some Q&A, on the website, on the webcast, and we will go through them now. I'll ask the first question. Just given the increase in gambling taxes or changes to that, would that be a big risk for SunBet? I suppose that's to you, Ulrik. We already have quite high taxes with the gambling tax in combination with the VAT, which is quite unusual in international context, so we already have quite high taxes. In a scenario where there would be changes to that, most likely what we would have to do is go realign our cost base accordingly, which will then sort of affect hiring, investments, marketing, and spend on other services. Thank you very much. Another question: What is SunBet growth, growth driven by? Have you been able to acquire market share from other operators? Well, the SunBet numbers. First of all, we're very happy with the SunBet growth. Growing at 70%, very impressive number. The underlying KPIs from that is really, that the growth is driven by increased customer activity, so, active customers, but also increase in, in deposits. Lots of questions for you, Ulrik. Given your experience, with online, is this the direction that you are moving your strategy towards? Having been around the business and spent some time with all of the business areas, it's very clear to me that all of them have their distinct own opportunities, so there is opportunities across the business. Now, having said that, yes, there are opportunities in SunBet. I think the opportunity is to sort of build technology and product and evolve that in order to set us up to be able to scale and take market share over time. Thank you very much. Wallace, from Saïnt, could you provide some detail on how the economics on the Table Bay management agreement starting December 25 will compare to previous agreements? Yeah. Thank you, Wallace. So, as we know that we had a lease at the Table Bay, so the property owners decided that they wanted to take that lease back and actually have that asset on their balance sheet, and engaged with us on... Given our track record and experience on managing the Table Bay, that we continue managing it. So we've engaged with them, and over a long period of time, we came down to the commercials. Essentially, all the costs that would be incurred for the Table Bay would be for the owner's account. We will then. We have entered into an agreement where we would earn a management fee, and the management fee would be based on gross operating profit. So it is formula driven, and, you know, we kind of incentivized to maximize the gross operating profit, and we will get a fee on that. Again, to reiterate, in terms of the ZAR 1 billion capital expenditure that's invested into the Table Bay, none of that is Sun International's. We have not put our balance sheet at risk. We will purely be earning a management fee from that asset. Thank you. Patsy from All Weather. I wanted to ask if the CEO can please unpack realign cost base, some indication of what can be done, please? Repeat the question, please. Realigning the cost base. I suppose it's a quote from when we talk about our urban casinos. I'm just trying to find where it is, Patsy, if you don't mind, but some indication of what can be done around realigning our cost base. That's Norman. Okay. I think there's, you know, as Ulrik has mentioned, there's opportunities in, our various, businesses, and there's opportunities at the, corporate center as well. So, as we identify these opportunities, you know, there's, lots of aspects, that give rise to these opportunities. One is, the systems, our processes, and obviously, one of the options is to look at how we best optimize costs. You know, over the last, couple of years, we have been focusing-- we've been, have been focusing on costs, not simply cutting, cutting costs at the expense of us delivering our product, but we look at where-- how we become more efficient. So with the impact of technology on our business, there's always an opportunity to look at that, and this is certainly something in our target area, that we would be looking at how all of the opportunities are unpacked, and how that would translate to cost. So right now, that's where we are focusing and targeting on. ... Thank you. Thanks, Norman. I think from Patsy's side, it was just the CEO comment on higher tax risks for SunBet, that we are aligning to. That makes more sense. Well, in the scenario where taxes goes up, realigning cost base is reviewing, of course, everything we do across the business. And if you take the experience from many other countries in the world, where tax rates, over time tend to go up, marketing is most of the time, been the first one to go. So you decrease possibly spending in marketing, but also other services, that you buy as a company. So that's what we've seen normally being the consequence. Thank you. Just following on from SunBet, Leanne D'Angelo from Nedbank, wants to say that you've mentioned in the presentation that gaming will now report directly to yourself, Ulrik. What are your key focus areas to drive operational efficiencies and returns? And how is this different from what was previously the focus areas? Yes. So gaming, we've realigned the organization to have gaming reported as one, sort of, the revenue driver across the group into me. There are multiple aspects of the gaming portfolio, urban casino portfolio, that we're looking at. Obviously, market is down 3.75%, so we're fighting in a slight headwind. But aside from that, we've had some operational challenges. And if you start with the slots business, there is an opportunity to invest more and work with our machine mix to be more efficient. Also, the floor layout has some optimization work that we can work with. On the table business, there's a lot of operating procedures that I think we can improve on to make that business more efficient. Thank you. Warren from Bateleur Capital has this to ask, and I'll ask one, one question. Please provide further color on the operational shortfalls called out in land-based casinos. And then the second one is, GrandWest was particularly weak. Yeah. Did the majority of operational shortfalls occur here? No, the operational shortfalls, I think we have across the business. And like I just mentioned, on the slots side, there is an opportunity to be better at how we work and invest in our machine mix and optimize that. Also, the floor layout, as I mentioned. The tables business, again, operating procedures. There are some procedures that are taking unnecessarily long time. There's also pricing opportunity on the tables business that I think is uncaptured so far. But more generally as well, we can improve on how we actually convert and capitalize on the footfall that we have into our properties. So there are multiple aspects of this, and for that to be a little bit closer, we have decided to deploy an operating model where gaming reports as one vertical into me. Thank you. I think Warren wants to just go a little bit into that. Will you look to sell or exit smaller non-core casino assets? And then just on resorts and hotel, maybe, Norman, he wants just some color on the weakness at Wild Coast Sun's EBITDA. Maybe I'll take the first one, and you can comment on the Wild Coast, Norman. So on the smaller casinos, we're—I'm still reviewing our portfolio of assets. So I think it's a bit too early to have a clear view on that. So let me get back to you on that a little bit later, but rest assured, we are reviewing to make sure we have the optimal portfolio and the optimal setup. Yeah. In terms of Wild Coast, we've actually had weakness across the entire business. So if you look at our gaming business, activity was down. That was compounded by the win percentages on both slots and tables. So, you know, kind of amplified that weakness and softness in our gaming business at Wild Coast. Also, the footfall was also slightly down, and that was impacted by certain extraordinary factors. You know, we had serious amounts of rain in that area that caused damages to the road and to the golf course. So, you know, we had to deploy additional costs to get that remedied. So across the business and food and beverage and rooms, you know, we've kind of had weaknesses. It's something that has been identified. We're working with the team and putting remedial actions in place at the Wild Coast. Thank you. I think in general, there's quite a few people who've actually asked for some color. I think you've given some of that. But color on the EBITDA performance in the resorts and hotels division, in spite of considerable revenue growth. And then, you know, some also asking, as in sharp drop client decline, despite improved domestic and foreign tourism trends. So I think there's a few questions around resorts and hotels. Okay. Yeah. So let me pick up resorts and hotels holistically. So we saw good top-line growth in resorts and hotels, and that was really driven and underpinned by our performance at Sun City. So if you look at Sun City, you know, across the group, we've kind of indicated we had softness in our gaming business, and Sun City was kind of no different. We did see, I think at around a 2% decline, 2.1% decline in our casino income at Sun City. And again, that was a combination of, in terms of our slots business. We saw handle down around 11%, but slightly buoyed by the fact that we saw an increase in our margin by 1.2%. So that was our slots business. Our tables business, where is where, you know, we became a bit unstuck in Sun City. Our activity was down on our tables business, and that was compounded by the fact that our margin was also down in our tables business at Sun City. So, but we did see our rooms revenue improve. Certainly, our rooms revenue was up by 17.3% at Sun City, and our food and beverage 12% up. So overall, at Sun City, we saw income increasing by 7.6%, and that contributed positively to our resorts and hotels. Again, in terms of our rooms revenue, occupancies increased by 9.3%, and our average daily room rate increased by 6.1%. So certainly, the overall business at Sun City had a good performance other than the kind of softness in our casino income. Our overall results in hotels EBITDA was slightly distorted because in the prior competitive year, we did receive a credit from the North West Gambling Board of ZAR 15.1 million. And if you kind of strip out that ZAR 15.1 million from the results, you would have seen that we would have increased our EBITDA by 2.2%. But be that as it may, the softness in our Wild Coast performance, you know, diluted that positive impact by Sun City, and then we've also had a good outcome and performance from The Maslow, largely driven by the corporate travel into the Sandton node. So overall, those were some of the reasons that detracted from the performance of resorts and hotels. Thanks so much, Norman. I just want to go through some follow-up questions on some of the online or SunBet comments that we've made. David from Peregrine Capital wants to has this to say: What is clear from his perspective and our own comments is that longer-term tax take from online has to go up. And given this backdrop, how would you look at acquisitions in this space, given this structural uncertainty? Thank you for that question. Yeah, I don't want to sort of preempt whether tax take is going to go up or not. I think it depends on many, many variables. So, that's one hypothesis. I also don't think that's necessarily a driver behind consolidation in M&A. The driver behind consolidation in M&A is, of course, that you have a very large fixed cost base, normally in an online business. So as you add scale and volume to a fixed cost base, that has some really good margin improvement opportunities attached to it. So I think that's what's driving that, it's the economy of scale, and of course, not only on the technology and product, but of course, also in the marketing. But if we are to learn anything from what has happened in other places, over time, you tend to see fewer dominant players, because of the reasons I just outlined. Thanks. I'll try and summarize some of the other follow-up questions on SunBet. There's a question from Euruson from Primary Research: What is SunBet's market share in online gambling market and the total gambling market? So, we find it a little bit difficult to pin down exact market share, but as has been mentioned on these calls before, we are hovering around 3% or so. And I think we are sort of, broadly speaking, performing in line with market, slightly above, slightly below. Obviously, over time, we do have an ambition to grow market share, and what we need to do is to make sure that the company is set up and that we have the right capabilities to actually do that. Capabilities in terms of people, technology, product, marketing, and so forth. So that's what we're working through at the moment. Thank you. Then on to some balance sheet questions. Will debt be reduced further? And what are the targeted debt covenants? That's from Euruson. And then PJ at Cantor wants to... No. Given Sun International was willing to run at net debt to EBITDA ratio of 3.5x with the Peermont acquisition, what is your capital allocation priorities, given a 1.5x ratio currently? Are share buybacks or special dividends an option? Maybe I'll take the capital allocation piece, and then Norman can expand on that. So in terms of capital allocation, we're making no changes of that at the moment. The dividend payout ratio remains. But of course, as we move through our plans, we are looking at all the opportunities that we see to invest in the business, and also looking at whether there are acquisition that makes sense to us. When we have a clear picture of that, of course, we will, if we need to, get back to everyone on if there are any adjustments to the framework that we have in place. Yeah, to add to what Ulrik said, I think you've covered it, but just to clarify, when we did engage with the Peermont transaction, our debt would have gone up to an estimated 2.7 times debt to EBITDA. And we were comfortable with that level because we would have de-geared with the additional EBITDA and cash flows that we would have brought with that acquisition. So currently, we're at 1.5 times debt to EBITDA, well within our bank covenants of 2.75 times, so we've got plenty of headroom. But as a management team and a board, we've kind of previously indicated that our optimum capital debt to EBITDA would be 2 times, and that's what we're kind of striving for. I think, you know, in the context of how we're looking at the business and, you know, with Ulrik's kind of response now, obviously, we will monitor that situation, and we've got a number of levers of how we allocate capital, and, you know, we'll deploy that in the various circumstances and scenarios that would prevail. ... Thank you. Warren from Bateleur wants to know, sports betting and live casino games were soft. Crash games were weak, down 45%, while slots were exceptionally strong. Can you talk to the drivers of mixed GGR? Where is the biggest scope to grow in those verticals, and where is SunBet weak? Well, first of all, I think on the crash game piece, it's a very volatile business, so take that with a grain of salt. But overall, I think it's clear to me that we have a continued opportunity to grow in our slots business. We have incredible traction, the product is in an okay state. But the big opportunity for us, if you look at our mix, is probably in sports betting, where we are under punching at the moment. But I wouldn't just tie myself to that. I think there are multiple opportunities across the product and the product experience and the product quality more broadly than just looking at the individual verticals. Thanks. Just following up from that, Dirk wants to know: Please, can you unpack the strategy for SunBet and SunSlots in Africa? Which markets are you active in today, and what is your timeline for further market expansion? Would you look to enter other markets outside of Africa, leveraging the existing platform? If I'm not mistaken, Norman, we are only active in Botswana. We just recently launched in Botswana. Numbers there are not significant enough to talk about at this point in time. We have a few other licenses that we have not activated. I think it makes complete sense for us to look at other African markets for expansion when the time is right and when the platform and the product is ready, and the team is ready for that. Outside of Africa, I think that's out of scope for the time being. Let's focus on closer to home, where we have a legitimate reason to sort of play and be successful. Thank you. Garrison wants to know: Could management expand on the mall additions to GrandWest? What are the key dates and targets to keep in mind? Yeah. So, just to give some color to that, you know, it is a strategic presence to have the mall adjoining our current property. Yeah, primarily driving footfall into GrandWest, and then essentially converting that footfall into the casino. The way we've structured it, we are in partnership with Flanagan & Gerard. They are partners at our Boardwalk mall. They have a proven track record on mall development and management, and, you know, we can be rest assured that they would run that mall kind of successfully. In terms of how we unpack that deal, we did dispose of some of our retail space into a partnership. We, at Sun International, have a one-third interest in that partnership, two-thirds with Flanagan and Gerard, and, and, you know, to make sure that we, you know, kind of have a vested interest into that mall. So the total cost of that mall development is. So for our disposal of our property, we've received proceeds. We will use those proceeds to fund our one-third investment, our equity investment into that mall. We would then raise ring-fenced, you know, project finance to fund the construction of that mall, so around ZAR 150 million or so, debt that would be ring-fenced in our balance sheet and would be funded out of the proceeds, that come out of that mall. We are busy with some of the regulatory aspects in terms of, zoning, et cetera, and that's in flight at the moment. Yeah, we anticipate to get that in the next, you know, by Q4. Yeah, on that basis, getting all the regulatory approvals, there's pre-work that's begun, pre-construction work that's already been—has already started. And, you know, full construction, we anticipate, should commence in Q1 of next year, Q1 of next year. And then, you know, ready for full operation, probably 12 months later. Thank you, Norman. Keenan from Investec wants to know: Looking at growth in the online business, are consumers reallocating entertainment spend, or do you have an indication of what categories of household consumption more broadly substituted for increased gaming spend in general, particularly in online betting? And it's a very- Yeah. It's a difficult one to answer. I mean, obviously, to start with, we see a decline in the land-based gaming as we stand here today, and it's been like that for a few quarters. So some of that is, of course, reallocated to online. The opportunity for online, I think, is more is broader than that. It's actually to expand the attractiveness of gaming and also bring that back into the into the land-based environment. Gaming has the advantage of being able to supply new bet types, new types of engagement, attracting new target groups that we want to capitalize on in a more total ecosystem, and that's how we sort of look at it when we talk about being an omni-channel operator. It goes both ways. So the purpose of online, of course, growing that business, but also to grow the market and the universe. Thank you very much. I do not have any further questions online. Anybody who has not had a chance to ask a question or has a question that comes up later, please email investor.relations@suninternational.com, and I will get back to you. Please remember, we do have a prerecorded presentation online. I don't see any further questions, so I would like to thank Ulrik and Norman, and everybody online. That brings to the conclusion our Q&A webcast. Thank you very much. Thank you.