AFRICAN SUN LIMITED
ANALYST BRIEFING
1
WEDNESDAY 24 JUNE 2009 Obudu Mountain Resort, Nigeria

AFRICAN SUN LIMITED
Open for Business In Africa
2
WEDNESDAY 24 JUNE 2009

GLOBAL TOURISM TRENDS
• In light of the Global Financial Crisis global tourism for 2008 marginally
increased by 2% compared to the 7% increase of 2007.
• Europe experienced a stagnation in arrivals.
• The Middle East surged by 11%.
• Americas recorded a growth of 4%.
• Africa recorded a growth of 4%
• Asia and Pacific recorded a growth of 2%
UNWTO: World Tourism Barometer, Volume 7 ,No 1 January 2009
3

GLOBAL ECONOMIC SLOWDOWN
IMPLICATIONS
• Decrease in discretionary spending on leisure products
• Decline in activity is accelerating
• Increase in domestic travel and short haul international travel
• Hotel pipelines are shrinking
• Hardening of capital markets
• Significant fall in Occupancies and RevPar
• Hotel stocks declined significantly in Europe by 51%
• Marked decrease in capital expenditure

DECLINE IN SHARE PRICES OF HOTEL COMPANIES IN
EUROPE
5

GLOBAL ECONOMIC SLOWDOWN
IMPLICATIONS ON ASL
• Projected GDP growth for Africa has declined to less than 4%
• Delays in hotel pipeline
• Delays in new openings
• Lack of funding for developers in Greenfield/new projects
• Hardening of capital markets
• Foreign Direct Investment into Africa has reduced significantly

ARRIVAL TRENDS INTO SOUTHERN
AFRICA
SOUTH AFRICA
Arrivals into South Africa went down in response to the impact of the
global financial crisis. For the third quarter of 2008, arrivals growth
decreased from 9% for the same period in 2007, to 1%.
Current information suggests that arrivals into SA have declined by
15%.
According to STR Global (February 2009) RevPar declined as shown
below:
City RevPar ($) Decline (%)
Sandton 61 (33.6%)
Cape Town 70 (30.8%)
Port Elizabeth 41 (23.8%)
Prospects of a gradual increase in arrivals are still high with the
Confederations Cup and the 2010 World Cup, though the impact of
global recession are still visible.

ARRIVAL TRENDS INTO SOUTHERN
AFRICA
ZIMBABWE
Despite the negative publicity that the country continued to receive
there was growth in arrivals from the following countries compared
with 2008:
Taiwan 10%
Malaysia 29%
France 5%
Mozambique 100%
Malawi 16%

ARRIVAL TRENDS INTO WESTERN
AFRICA
GHANA
• The foreign arrivals into Holiday Inn Accra Airport mainly came from
Europe which contributed 93% of all the international arrivals.
NIGERIA
• Of the total arrivals into African Sun hotels in Nigeria 17 678 which
accounts for 98% is made up of local arrivals for the six months to
March 2009.

UPDATE ON STRATEGIC
GOALS
10

RECAP OF STRATEGIC GOALS
• To grow rooms in Africa under African Sun management from the current 2
500 to 8 500 by 2012.
• To become an employer of choice by providing competitive remuneration,
an enabling and winning environment driven by personal learning and
development.
• To achieve a market capitalisation of US$1 billion
• To establish brand leadership where we dominate other brands and become
the benchmark for other players
• To seek a dual listing on a major bourse by 2012

PROGRESS ON STRATEGIC GOALS:
PIPELINE PROJECTS
• The Group still committed to achieving 8 500 rooms by 2012.
• Currently, 7 011 additional rooms are in the pipeline and are at
various stages of completion
• It is expected that 577 rooms will be added to rooms under
management within the next 12 months as follows:
• Holiday Inn Kano 200 rooms
• Holiday Inn Arusha 199 rooms
• Holiday Inn Gaborone 164 rooms
• Royal Chundu Lodge 14 rooms

PROGRESS ON STRATEGIC GOALS: HR
AND HTA UPDATE
• The Group has embarked on an aggressive recruitment drive as it seeks
– To attract the best skills
– Have appropriate skills as it advances the pipeline
• The Group endeavours to retain the best skills and is in the process of
realigning people to the business model
• 220 people within the Group have been enrolled under the following
programmes :
– TOPP
– Apprentice cooks
– Technical apprentices
– Graduate Development Programmes
• HTA continues to emphasize the “How May I Serve You” philosophy and the
African Sun Way.
• A training kitchen was established at Elephant Hills Resort aimed at training
apprentice cooks.

PROGRESS ON STRATEGIC GOALS:
MARKET CAPITALISATION
• The temporary suspension of the ZSE ended on the 19th of February
2009 and the ASL share price opened at 10 cents .
• The bourse is now trading in United States Dollars
• Current market capitalization at $ 138 million based on the share
price as at 24 June 2009 of 20 cents.

PROGRESS ON STRATEGIC GOALS: MARKET
CAPITALISATION
ASL EXTRAPOLATION CITY ASL ‐ 2012
CURRENT AT 48% OCC LODGE
ROOMS 2 926 2 926 4 773 8 500
OCCUPANCIES (%) 29% 48% 82% 63%
NET PROFIT ($) 0.5m 20 m 22 m ??
EBITDA ($) 1.1m 25 m 33.9 m ??
MARKET CAPITALISATION 138m ?? 300 m 1 billion
($)
• ASL has a current market capitalisation of $138 million with a 29% occupancy.
• ASL has both City hotels and resorts and has operations in 4 different countries.
• City Lodge is a purely South African player and specialises in city hotels only.
• Given an EBITDA multiple of 12 ASL should have a market capitalisation of $300
million by 2010.
• Based on current activity any 1% improvement in occupancy will result in a
$1.26million increase in EBITDA.
• For ASL there is room for improvement and the US$1 billion market capitalisation is
achievable.

PROGRESS ON STRATEGIC GOALS:
BRAND LEADERSHIP
• ASL is open for business in Africa.
• Brand growth making good progress
• Launched first African Sun mid-range city
brand, Amber Tinapa, Nigeria in December
2008
• ASL largest operator of Intercontinental
Hotels Group (IHG) brands in Africa
• Adding 4 more IHG branded properties in
Botswana, South Africa, Tanzania and
Nigeria

PROGRESS ON STRATEGIC GOALS:
BRAND LEADERSHIP
• In addition, ASL own brands will be used
to establish Brand leadership.
• Brands roll out at advanced stage as
follows:
Mulberry – Nigeria
Amber (focus on mid market city
hotels in line with business strategy)-
Zambia, South Africa, Mozambique,
Beitbridge
MyPlace – Ghana, Nigeria,South Africa
and Zambia
The Kingdom – Lagos Nigeria

PROGRESS ON STRATEGIC GOALS:
DUAL LISTING
• The Group is investigating the possibility of placing 20% of the
Group’s shares on the Africa Board.
• Work is still on course to list the company on a major bourse.

FINANCIAL PERFORMANCE

BUSINESS MODEL
2002 2009

ZIMBABWE BUSINESS
MODEL

Occupancies decline…

RevPar growing …

ADR stabilises….

Operating costs improve….

GROUP PERFORMANCE

GROUP FINANCIAL HIGHLIGHTS
REVENUE $13.6 million
OCCUPANCY 29%
REVPAR $28
ADR $96
EBITDA $1.1 million
PROFIT BEFORE TAX $0.5 million

SEGMENT REPORTING
REGION REVENUE ($)
SOUTHERN AFRICA 13 185 938
WESTERN AFRICA 433 795
TOTAL 13 619 733
REGION OPERATING PROFIT ($)
SOUTHERN AFRICA 272 807
WESTERN AFRICA 216 898
TOTAL 489 705

SUMMARY OF KPI’s
COUNTRY REVPAR ADR OCCUPANCY
US$ US$ %
ZIMBABWE 17 64 27%
SOUTH AFRICA 49 122 40%
NIGERIA 28 137 20%
GHANA 116 178 65%
GROUP AVERAGES 28 96 29%
BENCHMARKS 98 140 70%

YIELD COMPARISON
• From 12 October 2008, the Zimbabwe Tourism Authority (ZTA)
issued hotel prices denominated in United States Dollars, this
resulted in the ADR coming up to $85.
• RevPar for Zimbabwe and Nigeria is still below regional
benchmarks.
• Holiday Inn Accra Airport is currently performing above the
benchmark in respect of RevPar and ADR.
• The forecasted ADR and RevPar for ASL Zimbabwe’s is $90 and
$40 respectively, this is in line with South African benchmarks
which are $116 for ADR and $85 for RevPar.

LIQUIDITY
• Liquidity was a serious challenge during the period under review
as the Group had to predominantly rely on internally generated
resources.
• However the group managed to end the period with a favourable
cash position of $1.3million.
• A $1 million debenture investment in Ghana was made to
facilitate the management contract for the Holiday Inn Accra
Airport.
• Long-term borrowings surged by $0.67 million to address
refurbishment of regional properties and to service management
contract investments
• Short-term borrowings increased by $0.4 million to address
working capital.
• Capital expenditure remained suppressed due to the operating
environment to increase by $0.5 million

CHALLENGES IN FINANCIAL
REPORTING
• The last quarter of 2008 was riddled by:
• Chronic hyperinflation,
• Multiple exchange rates and
• Unbearable input costs
• This rendered financial reporting in Zimbabwe dollar meaningless.
• Unavailability of CPI from the relevant authorities
• Economy unofficially dollarised by October 2008
• Group’s approach to dollarisation of financials (refer to press release)

OUTLOOK: FUNDING
• Negotiations underway to raise hard currency
capital primarily to fund the various hotel projects
in the pipeline and refurbish Zimbabwe properties

OUTLOOK: FORWARD BOOKINGS
Resort March In system
Occupancies bookings
The Victoria Falls Hotel 11% 48%
The Kingdom Hotel at Victoria Falls 9% 18%
Caribbea Bay Resort 9% 20%
Elephant Hills Resort 6% 7%
• In system bookings are from July – Sept 2009
• The Group was mainly sustained by city hotels in the first six
months as resort properties occupancies were depressed.
• Resort hotels are expected to improve as shown in the table above
especially in the Victoria Falls area

CHANNEL MANAGEMENT
PACRO 30 - 40 % of total bookings
WEBSITE 20% of total bookings
GDS 15% of total bookings
TPI 5 - 7 % of total bookings

OUTLOOK: EFFECT OF
CAPITALISATION IN THE GROUP
• The Group is in need of funding to finance the expansion drive.
• Such funding will result in :
Increased room nights from current to 8 500
An increase on EBITDA margin from the current 8% to
about 33%.
Significant surges in Revenues
• Funds are also required for the refurbishment of Zimbabwean
properties

OUTLOOK: 2010 FIFA WORLD CUP
• The hosting of the 2010 Soccer World Cup by South Africa will result
in a number of benefits to our South African Hotels as well as
indirectly to Zimbabwe.
• Rooms demand for the 2010 FIFA World Cup projected at 50 000
rooms
• To date FIFA has signed deals for 31 926 rooms representing 64% of
the total rooms required.
• This creates a deficit of 18 074 rooms.
• A simple analogy to the benefits that accrued to Germany for hosting
the 2006 FIFA World Cup:
• Growth in the tourist industry was 3% above the world average
• Growth in inbound tourist arrivals was still experienced in 2007 after
the World Cup.
• Germany is now perceived as a safe destination after successfully
hosting the 2006 FIFA World Cup

OUTLOOK: 2010 FIFA WORLD CUP
• Event will act as a stimulus for national branding of
Zimbabwe as a destination
• Opportunity to reach new distribution channels through new
tour operators including MATCH
• Opportunity to create new packages that will be sold
through the Soccer bodies in the qualifying countries –
trickle down effects to entourages that travel with the
teams
• Teams are only allowed in South Africa 10 days before kick
off – Opportunity for Zimbabwe to be used as a venue for
acclimatisation
• Opportunities for future plans to market Zimbabwe as a
destination beyond 2010 to qualifying countries and others

OUTLOOK: PIPELINE OPENINGS
The Kingdom, Lagos

OUTLOOK
DIVIDEND DECLARATION
• In light of the current operating environment, the
company’s subdued performance and the need to
conserve cash, the Board has resolved not to
declare an interim dividend.