Sun International : 2022 Integrated Reporting Suite and Supporting Information

2022

INTEGRATED ANNUAL REPORT

STRATEGIC LEADERSHIP	SUSTAINABLE VALUE CREATION	FINANCIAL PERFORMANCE	CORPORATE DATA AND	1
ADMINISTRATION

CONTENTS

About this report

About this report

2

REPORTING FOOTPRINT AND NAVIGATION

Sun International's integrated annual report (IAR) is interactive. The user experience is aided by a navigation bar and interlinking of pages and information, both within the report and to other reports and external sources. Navigation is further aided by the icons below. All reports are also available online for viewing or downloading, where the online report generator function further enhances the user experience.

Strategic leadership	3
Chairman's message	3
Board of directors	4
Executive management	4
Chief executive's review	5
Our strategy	7
- Strategic objectives review	9
Operational overview	12

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DIRECTORS' APPROVAL

The board acknowledges its responsibility to ensure the IAR's information integrity, completeness as well as the reports' preparation in accordance with the International Framework (January 2021). The audit, risk and social and ethics committees were involved in the review and guidance of this year's IAR. The board is kept abreast of the reporting progress through various board committees' feedback and the audit committee recommends the IAR to the board for approval.

The board is of the opinion that the group's rigorous integrated reporting process includes relevant executive

- Urban Casinos	12
- Resorts and Hotels	15
- Sun Slots	17
- SunBet	18

T	S
S

Social media			Sun International's top six SDGs
Facebook	Twitter
YouTube	Instagram

oversight of the report's content, its accuracy, relevance and transparency and that the report is presented in compliance with the Framework (January 2021). The IAR was approved by the board on 29 March 2023.

SAM SITHOLE

ANTHONY LEEMING

Sustainable value creation	19
Our presence and group structure	19
Operating environment	20
Business model	22
Stakeholder engagement	23
Material matters	24
Enterprise risk management	26

Financial performance	32
Chief financial officer's review	32
Segmental review	36

Corporate data and

administration37

STAKEHOLDER

FEEDBACK

We welcome stakeholders' feedback on our reporting, particularly regarding our suite of reports. Feedback can be sent to investor. [e-mail] or group. [e-mail]

2022 SUN INTERNATIONAL Integrated Annual Report

Capitals

FC PC HC

Financial Productive Human

IC SC NC

Intellectual	Social and	Natural
			relationship
Strategic objectives
		People and culture
	SO1
			Operational excellence
	SO2

SO3 Customer centricity

Maximise shareholder

SO4 value

SO5	Environmental, social
and governance (ESG)

Key stakeholders

Communities

Employees

Gambling

boards

Regulators and industry bodies

Customers and guests

Equity partners

and debt funders

Partners and

suppliers

Top 10 risks1

R 1	Weak economic conditions
R 2	Utility supply and efficiencies
R 3	Political and civil unrest
R4	Relocation of casino licence
in the Western Cape
R5	Cyber threats and information
	security
R6	Playtech implementation
R7	Unsuccessful implementation
of online strategy

R8	Smoking legislation
R9	Ongoing changes in casino
licence conditions
R10	Economic and other serious
crimes

1 Top 10 risks as at 10 March 2023.

Chairman	Chief executive
31 March 2023	31 March 2023

FORWARD-LOOKING STATEMENTS

This report may contain certain forward-looking statements, other than the statements of historical fact, which cannot be construed as reported financial results. Investors are cautioned not to place undue reliance on any forward-looking statements contained herein, as they have not been reviewed or reported on by the group's external auditors. Such statements may include predictions of or indicate future earnings, objectives, savings, events, trends or plans based on current expectations, forecasts and assumptions.

As with any forward-looking statement, prediction or forecast, there are inherently unexpected events which could cause uncertainty and unexpected change which have not, and could not, be accounted for. Whereas the company has made every effort to accurately and reasonably ensure the accuracy and completeness of the information contained within this report, any forward-looking statements speak only as at the date that they are made. The actual results may vary materially from those expressed or implied, and the company undertakes no obligation to publicly update or alter these or to release revisions after the date of publication of this report.

STRATEGIC LEADERSHIP	SUSTAINABLE VALUE CREATION	FINANCIAL PERFORMANCE	CORPORATE DATA AND	2
ADMINISTRATION

REPORTING SUITES AND REPORTING FRAMEWORKS

ABOUT THIS REPORT

Welcome to Sun International Limited's (Sun International) 2022 IAR.

REPORTING SCOPE, STRUCTURE AND BOUNDARY

The group's suite of reports is guided by various frameworks, as depicted below. Our IAR is primarily guided by the International Financial Reporting Standards (IFRS) Foundation's Integrated Reporting and Connectivity Council's recommendations for integrated reporting (the Framework). Our AFS follow IFRS and are externally assured by Deloitte & Touche.

Certain sustainability information is externally assured by IBIS Consulting (link to assurance statement). A detailed register of our King IVTM application of governance principles is available online. The group also embraces the United Nations Sustainable Development Goals (SDGs), which encourage companies and individuals to take the necessary action to achieve the SDGs by 2030.

Sun International reports in a holistic, transparent and integrated manner to assist our stakeholders to make informed decisions about our business. We aim to provide our stakeholders with a focused and balanced report that demonstrates our integrated thinking and our ability to create and preserve value, but also highlights the areas where we eroded value for the year under review. This report covers the financial period 1 January 2022 to 31 December 2022 and incorporates all Sun International's subsidiaries and operating units in the geographic locations where we operate

- South Africa and Nigeria.

The tourism and entertainment industry has rebounded as lockdowns at various alert levels were lifted in 2022. Our integrated thinking, regular stakeholder engagement, risk and opportunity identification, capital resource prioritisation and the ability to take decisive action continue to stand the group in good stead. Our strategic progress, driven through our business model, continues to position the group for growth opportunities and value creation over the short, medium and long term.

This report is structured around our leadership overviews, operational overview, our strategic performance and outlook, our governance transparency and accountability, and our financial performance. The other suite of reports includes the group's and company's annual financial statements (AFS), statutory information as well as remuneration and our environmental, social and

Our IAR's content covers the reporting period's most material matters and where applicable, content includes the period up to the report's finalisation on 31 March

2023. Sun International's material matters are topics that could substantively influence the assessment of providers of capital and other stakeholders regarding the group's ability to create, preserve and erode value over the short, medium and long term. The process of determining materiality, outlined in the materiality section of this report, involves reviewing and assessing our risks (strategic, financial, operational, ESG, reputational and regulatory), opportunities, the external environment, capital resources and stakeholder concerns. This process is dynamic and evolves annually to ensure our material matters remain relevant and enable the group to achieve its strategic objectives, vision and purpose.

Our South African operations are the group's single biggest income contributor and gaming remains the group's primary income generator.

Contribution to group income

3

13

https://corporate.suninternational.com/investors/investors-results-reports/

2022

2022

ANNUAL STATUTORY

GROUP AUDITED

2022

2022

REPORT

CONSOLIDATED

ENVIRONMENTAL, SOCIAL AND

FINANCIAL STATEMENTS

INTEGRATED ANNUAL REPORT

GOVERNANCE REPORT (ESG)

for the year ended 31 December 2022

Group audited

Environmental, social

Integrated annual

and governance

Annual statutory

consolidated financial

report

report (ESG)

report

statements

International Framework

IFRS

Companies Act

King IVTM

JSE Listings Requirements (LR)

JSE Sustainability Disclosure

Guidance

SDGs

Global Reporting Initiative (GRI)

AA1000AS

governance (ESG) information.

Chairman's message	Page 3
Chief executive's review	Page 5
Our strategy	Page 7
Strategic objectives review	Page 9
Operational reviews	Page 12
Our business model	Page 22

Income %

per

23 segment/ category

61

11	1

14

Adjusted

EBITDA

contribution %

by segment

	74
Urban Casinos	Resorts and Hotels
Sun Slots	SunBet

INTEGRATED REPORTING PROCESS

	Report content is guided by the International Framework
REPORT	(January 2021) and several other reporting frameworks/codes (see
CONTENT	above), various management discussions, a review of board reports
	and minutes. All content is informed by the group's material
	matters, risks and opportunities as well as stakeholder feedback.
	Report integrity is provided throughout the reporting
REPORT	process by various executive and management oversight.
INTEGRITY	Our combined assurance model also supports the integrity
	of the information.
	Report approval is based on the group's robust governance
REPORT	framework, with the audit, remuneration, risk and social and
APPROVAL	ethics committees providing valuable oversight. The board,
based on recommendations from the audit committee,
	approves the report.
INTEGRATED
ANNUAL
REPORT

COMBINED ASSURANCE MODEL

Sun International's combined assurance strategy and framework ensures optimal, cost-efficient and integrated assurance coverage group-wide.

Page 26

Our hybrid top-down and bottom- up approach, which aligns with the King IVTM outcomes, ensures adequate assurance on key business risks and processes. This model also enables an effective internal control environment

and supports the integrity of information that management, the board and other stakeholders use in decision-making.

2022 SUN INTERNATIONAL Integrated Annual Report

STRATEGIC LEADERSHIP	SUSTAINABLE VALUE CREATION	FINANCIAL PERFORMANCE	CORPORATE DATA AND	3
ADMINISTRATION

Chairman's	Board of directors
message	Executive management

Chief executive's

review

Our strategy

Operational reviews

CHAIRMAN'S

MESSAGE

SAM SITHOLE

Chairman

In my report last year, I indicated the sense of excitement on how well the group was positioned for the future. Despite the tough macro environment in 2022, the group has validated this assessment by delivering exceptional results for the year in all the key strategic areas of the business, leaving it well placed to become a consistent performer achieving superior returns for its stakeholders.

There were several notable highlights during the year. The group achieved an exceptional financial performance, despite the limitations of international tourism and operating under Covid-19 restrictions for the first half of the year. Sun City's turnaround both at EBITDA and service levels was impressive and there was significant investment in upgrades and refurbishments as well as excellent progress on the Sun City Vacation Club expansion strategy.

The investment in the group's online and sports betting business has yielded positive results as SunBet continues to grow rapidly in this fast-growing online gaming market, well ahead of its five-year strategic plan. SunBet's new top management has also provided a solid leadership foundation for us to keep growing.

In an industry where core skills are scarce, the group has retained its skills base through external hires and internal promotions. We remain underpinned by a strong, cohesive and dynamic management team that will take the business forward. The business is right-sized and well positioned for growth, evidenced by our margin improvements and market share gain in all provinces.

Enhancing our customer experience remains a key focus and good inroads were made during the year - evident in the material growth in our online market share (SunBet) and the positive feedback from the turnaround at Sun City, The Palace refurbishments included the addition of a spa and a complete makeover of the Salon Privé in the Sun City Hotel, with the Cascades upgrade commencing in 2023. Sun International's new chief marketing and sales officer has made positive headway in developing a new customer relationship management strategy, to boost our customer attraction and retention and enhance the customer experience.

Good feedback was received from investors around our business model, having right-sized the group and strategically positioned the four business segments (Urban Casinos, Resorts and Hotels, Sun Slots and SunBet). Going forward, the group's focus will be on capital allocation and how to maximise shareholder value through growth and dividends.

Some of our iconic properties celebrated milestones during the year - The Palace of the Lost City celebrated 30 years in November 2022, The Table Bay celebrated 25 years in May 2022, Flamingo and Meropa celebrated their 20th birthdays in March 2022 and Time Square celebrated five years in April 2022.

The group's success is in large part due to having the right people in the right roles, including confidence in management's ability to execute Sun International's strategy. The board composition also enables its strategic focus and having the calibre and experience of Nigel Payne has significantly boosted the group's SunBet strategy. Credit must go to Anthony Leeming and his team, who worked tirelessly during the challenging 2020/2021 operating environment. Their decisive leadership and dedication have resulted in the group reaching new heights with a clear strategy and strong balance sheet and has made Sun International an exciting place to work.

The board is satisfied that it continues to deliver on its strategy and that there are opportunities to optimise the group's portfolio to provide shareholder returns, through responsibly allocating capital. We acknowledge that the operating environment remains tough and there is a need for continued improvement, with no room for complacency. There will be a very disciplined approach towards our strategic choices and capital allocation decisions so that our stakeholders continue to enjoy superior returns.

Being in the gaming industry, it is important to promote ethical and responsible gambling to avoid customers becoming over-indebted. Being ethical and responsible is part of our DNA and the board takes this ethos seriously. Sun International fully supports responsible gambling through the South African National Responsible Gambling Programme (NRGP) by annually contributing to this programme and by promoting responsible gambling at all our gambling properties through various measures, including advertising, brochures, surveillance and security. All gaming employees receive responsible gambling training from the NRGP and we have also ensured this extends into the online space. Playtech, the new gaming system, will provide an integrated customer experience that will have tools embedded within to manage responsible gambling.

The group's ESG journey predates 2016 and continues to evolve rapidly as ESG reporting frameworks and best practice reporting trends increase and place pressure on corporates to demonstrate how they are being good corporate citizens as opposed to greenwashing. For Sun International, doing business sustainably is a competitive business necessity and our ongoing commitment to sustainability ensures we maintain our operational and social licence to operate. We integrate our business decisions and operate in line with our ESG strategy, to create long-term shared value and ultimately create lasting memories for all key stakeholders. ESG has become a standalone strategic agenda for the board going forward, and we look forward to more traction in this area.

To demonstrate our commitment to Sun International's ESG journey, we signed a R2.4 billion sustainability linked loan on 7 December 2022, the first in the South African hospitality sector. This loan aims to promote the achievement of key sustainability performance targets, to demonstrate Sun International's commitment to being a responsible corporate citizen and further cementing our position as an ESG leader in the South African travel and leisure industry. We have set ambitious

key performance indicators (KPIs) that align with our ENVIRO-AMBITION 2025 and enterprise and supplier development strategies, to address key environmental and social challenges within South Africa, including reducing airspace in landfills, securing electricity supply and local procurement, specifically to empower black women-owned businesses.

To objectively measure our ESG progress, we take part in various surveys by local and international rating agencies such as the FTSE Russell, CDP Climate Change reporting, S&P Global Corporate Sustainability Assessment and IRAS Sustainability Data Transparency Index (SDTI). IRAS, an independent integrated reporting and assurance services company, compiles an SDTI for JSE listed companies that focuses

on environmental, social and governance information reported on in companies' integrated annual reports. For the second consecutive year, Sun International was rated the best ESG reporting company in the travel and leisure industry and was placed 17th overall out of 270 companies reviewed.

It is important that we have the right skills at board level to navigate the group, from a gaming and hospitality viewpoint as well as the business environment, which incorporates online and digitisation skills. As a board we pay tribute to Peter Bacon, who retired effective 31 March 2022, for his invaluable support and contribution during his tenure, particularly

in the hospitality industry, a gap we are still looking to fill. Enrique Cibie retired effective 31 December 2022 as we exited our Latam investment, and we continue to engage with him on certain matters. Boitumelo Makgabo-Fiskerstrand retired from the board effective 10 May 2022. Both Enrique and Boitumelo were vital cogs of the Sun International board and added tremendous value during their tenure. We wish all three outgoing directors all the best in their new endeavours. Other skills gaps identified include general IT skills and going forward we will focus on identifying suitable candidates to fill these gaps. We welcomed Dawn Marole, who was appointed to the board effective 12 May 2022, and look forward to her invaluable contribution to the board.

Thinking ahead, we continue to look for new growth opportunities in the online and sports betting space, which will afford the group an opportunity to diversify the business geographically through our online product sets.

As always, we relentlessly focus on enhancing the customer experience by optimising our portfolio, delivering memorable experiences for our guests and providing attractive returns to our shareholders.

Thank you to all our employees - the greatest assets of this group - who continue to show passion every day. To our management team, your stewardship remains exemplary and your decisive action has placed Sun International in a strong and exciting position, well poised for profitable growth. Thank you to our guests for returning to our properties and enjoying Sun International's hospitality and entertainment. Finally, to my fellow board members, thank you for your wisdom and unwavering support. I am confident in our collective ability to steer the group into the future.

We remain optimistic about the group's future and confident in our ability to continue creating value and lasting memories for our guests and customers.

SAM SITHOLE

Chairman

31 March 2023

2022 SUN INTERNATIONAL Integrated Annual Report

STRATEGIC LEADERSHIP	SUSTAINABLE VALUE CREATION	FINANCIAL PERFORMANCE	CORPORATE DATA AND	4
ADMINISTRATION

		Chairman's	Board of directors		Chief executive's		Our strategy
		message	Executive management		review
BOARD OF DIRECTORS as at 31 December 2022
			Committee
Board member	Title	Qualifications	Appointed memberships	Experience

Operational reviews

EXECUTIVE MANAGEMENT

Title

Qualifications

Experience

S (SAM) SITHOLE (50)

GW (GRAHAM)

DEMPSTER (67)

AM (ANTHONY) LEEMING

(53)

1. (NORMAN)
   BASTHDAW (55)

1. (ENRIQUE)
   CIBIE (69)

CM (CAROLINE) HENRY

(56)

SN (SINDISIWE) MABASO-KOYANA (53)

MLD (DAWN)

MAROLE (62)

TR (TAPIWA)

NGARA (41)

NT (NIGEL)

PAYNE1 (63)

Non-	BAcc (Hons),	2018	Chairman:	• Finance and investment industries expertise
executive	CA(SA), ACA, CA(Z),									• Sound business and leadership experience
chairman	PLD (Harvard		Member:
	Business School)
	Advanced Diploma
	in Banking (UJ)
Lead	BCom, CTA,	2017	Chairman:	• Banking and finance (local and international)
independent	CA(SA), AMP									• Sound business and leadership experience
non-	(Harvard)		Member:
executive
Chief	BCom, BAcc,	2013	Chairman:	• Gaming and hospitality
executive	CA(SA)									• Financial and corporate finance
			Member:	• Governance and IT
Chief	BCompt (Hons),	2017	Member:	• Corporate finance advisory and private equity
financial	CTA, CA(SA),									• External and internal audit
officer	MCom, HDip									• Financial management expertise
	(Company Law)
Independent	BA, CA (Pontificia	2014	Member:	• International gaming
non-	Universidad Católica									• Sound business experience
executive	de Chile),
	MBA (Stanford)
Independent	BCom, BCompt	2016	Chairman:	• Finance and investing experience
non-	(Hons), CA(SA)									• Treasury, debt capital markets and retirement funds
executive			Member:	• Sound business experience
Independent	BCom (Hons),	2020	Chairman:	• Finance and investing expertise including private
non-	CA(SA)									equity
executive			Member:	• Sound business and leadership experience
			• Auditing and risk management expertise
Independent	BCom (Accounting),	2022	Member:	• Finance and investing
non-	MBA (North Eastern									• Financial regulation
executive	University, Boston)									• Sound business and leadership experience
Non-	BBusSc, PGDA	2019	Chairman:	• Finance and investing expertise
executive	(UCT), CA(SA),									• Capital allocation expertise
	MBA (London		Member:	• Sound business, investor relations and leadership
	Business School)									experience
Independent	Economics and	2021	Member:	• Global sport betting and alternate gaming expertise
non-	Accounting (Hons),									• Sound business and leadership experience
executive	Executive MBA									• Group finance, business development and IT

ANTHONY	Chief executive	BCom, BAcc, CA(SA)	• Gaming and hospitality
LEEMING			• Financial and corporate finance
(53)			• Governance and IT
NORMAN	Chief financial	BCompt (Hons), CTA,	• Corporate finance advisory and private equity
BASTHDAW	officer	CA(SA), MCom,	• External and internal audit
(55)		HDip (Company Law)	• Financial management expertise
GRAHAM
Chief operating	BCom, BCompt (Hons),	• Strategic leadership
WOOD	officer: Resorts and	CA(SA)	• Commercial and operational expertise in the
(53)	Hospitality		gaming, hospitality and tourism industry
ANDREW
Director: Corporate	BA, LLB, FCIS, PGDip	• Legal, secretarial, compliance, sustainability and
JOHNSTON	services and group	(Environmental Law),	corporate and remuneration governance
(57)	company secretary	Certificate in Advanced	• Corporate finance and investor relations
		Corporate Law and	• Admitted attorney and certified ethics officer
		Securities Law
VERNA	Director:	BProc, Certificate	• Management of labour risk
ROBSON	Group human	in Advanced	• Human resources
(51)	resources	Human Resources	• Organisational restructure
		Management,	• Management of B-BBEE compliance
		MBA Core
MIKE	Director:	BCom, BCom (Hons),	• Business finance
WILSON	Business support	PGDA, CA(SA)	• Business process optimisation
(52)	management		• Project management
			• Shared service centre
KHATI
Director:	BCom, BAcc, ACMA,	• Financial management
MOKHOBO	Strategic projects	CA(SA)	• Forensic investigations
(57)			• New business development
			• Commercial project execution
			• Gaming and hospitality
			• Stakeholder management
PRAGASEN	Chief information	BCom: Business	• IT strategy
PATHER	officer	Management	• Information management and cyber security
(47)			• IT governance risk and compliance
			• Business continuity management
			• Project execution
BOTLHALE	Director:	BCom, BCom(Hons),	• Financial and corporate finance
MADITSE	SIML Finance	CA(SA), MBA	• Shared services
(43)			• Auditing and risk management expertise
			• Financial management
			• Commercial expertise
HELEN	Chief marketing and	PR and Communications	• Marketing and brand strategist
STEWART	sales officer	Diploma (Wits),	• Digital marketing
(57)		Business Coach,	• Social media strategy

Z (ZIMKHITHA)	Independent	BCom, HDipAcc,	2018	Chairman:	• Expert in entrepreneurship and strategic insights
ZATU MOLOI	non-	MSc Corporate				• Strong financial and operational expertise
(39)	executive	Finance, CA(SA)		Member:	• Consulting in commercial and business practices
						• Sound governance, business and leadership experience

• Driving innovation in financial services

		International Coaching	• CRM and loyalty expertise
		Federation (ICF), EDP
		• Business coach and mentor
		(Wits)
MUXE
Director:	BAcc, CA(SA), CIA, MBA	• External and internal audit
MAMBANA	Internal audit		• Financial management
(37)			• Forensics
			• Corporate governance, risk and compliance

Total collective skills matrix

Strategy

11

(2021:

12)

Finance

10

(2021: 9)

Commercial

Executive

9

(2021:

7)

3

(2021: 3)

management

Gaming and

Community/

3

(2021:

3)

2

(2021: 2)

hospitality

stakeholder

Risk

engagement

3

(2021:

2)

International

2

(2021: 2)

Policy

2

(2021:

1)

COMMITTEE MEMBERSHIP KEY:

Social and ethics committee Nomination committee Audit committee

Risk committee

Remuneration committee

Investment committee Executive committee

1 British

• Diverse industry experience

Please refer to the corporate website link for the detailed CVs of Sun International's general managers, who are all standing invitees: https://corporate.suninternational.com/about/general-management/

2022 SUN INTERNATIONAL Integrated Annual Report