ANALYSTS BRIEFING Tuesday 24 June 2008

“From survival to growth”

GLOBAL TOURISM TRENDS

• Growth in global tourism retreated to 3% from 3.9% in the previous period. This was as a result of the slowdown in the USA economy, high fuel costs and a weaker US dollar.

• Europe and America fell below global average growth to 2.1% and 2.3% respectively.

• The Middle East, Asia & the Pacific and Africa experienced higher than average growth of 5.2%, 5,7% and 5.7% respectively.

• Continued strong expansion of emerging markets such as China, India, S. Korea and Brazil indicate that global tourism prospects remain encouraging in the medium term.

Source: UNWTO / World Travel & Tourism Council (WTTC)

ARRIVAL TRENDS INTO SOUTH AFRICA

● Tourist arrivals into South Africa increased significantly by 8.3% reaching the 9 million mark for the first time in the country’s history.

● SA tourism outgrew global tourism and prospects continue to be very promising.

● In the air markets the biggest rise was seen in visits from Asia and India recording increases of 12.9% and 16.9% respectively.

● Land arrivals from SADC countries have accounted for the majority of the arrivals since 2002 and have continued to show additional growth.

● Nigerian arrivals increased by 12.3%, Kenya by 14.7% and Angola by 10.2%.

Source: UNWTO / World Travel & Tourism Council (WTTC)

ARRIVAL TRENDS INTO ZIMBABWE

● Foreign arrivals into the country decreased by 47% compared to growth trend experienced in the previous period.

● Foreign arrivals into African Sun hotels marginally declined by 6%.

● Upon resolution of the current stalemate, tourism into the country is expected to rebound in keeping with the sub-region.

ARRIVAL TRENDS INTO AFRICAN SUN HOTELS ZIMBABWE

COUNTRY USA Australia Russia South Korea Botswana % INCREASE 7% 3% COUNTRY Canada Italy 542% 30% 42% China Malawi DRC % INCREASE 51% 173% 39% 300% 100% COUNTRY Malaysia South America Indonesia Greece New Zealand % DECREASE 97% 86% 84% 32% 23%

STRATEGIC OBJECTIVES

STRATEGIC OBJECTIVES

1 .

To grow rooms under management in Sub Saharan Africa to 4 000 in five years.

2.

To build and maintain human capital through: i) ii) iii) iv) training development alignment retention 3.

To list African Sun Limited on a regional bourse in the next three years.

4.

To grow ASL value to US$1 billion.

5.

To build brand leadership.

LOCAL

CAPACITY GROWTH

:

OPERATIONS

REGIONAL

● The Group is targeting to double rooms in Zimbabwe by the end of 2012.

● 4000 rooms targeted for regional expansion by 2012.

● To date 487 rooms have been secured for 2009/2010 and an additional 1392 are in the pipeline.

● As at March 31 the following hotels have been added to the Group’s portfolio: ▪ The Lakes, Benoni, Johannesburg ● Fothergill Island – 36 lodges undergoing refurbishment, soft opening expected 1 July 2008.

▪ Obudu Country Resort, Nigeria

THE LAKES – SOUTH AFRICA

OBUDU COUNTRY RESORT NIGERIA

POTENTIAL CATEGORY SUMMARY PER YEAR

Category Local & Regional

2008

Local Regional

2009 2010 2011 2012

Sub-Total Local Regional Sub-Total Local Regional Sub-Total Local Regional Sub-Total

A Existing

1,856 387 2,243 1,856 387 2,243 2,016 387 2,403 2,01 6 387 2,403 2,01 6 387 2,403

B Acquisition

0 243 243 0 243 243 0 243 243 0 243 243 0 243 243

C Secured D Pipeline

15 193 208 15 1,850 1,865 487 2,058 2,545 487 2,160 2,647 487 2,160 2,647 0 72 72 232 3,652 3,884 432 5,848 6,280 992 6,418 7,410 1,39 2 6,668 8,060

Total Rooms

1,871 895 2,766 2,103 6,132 8,235 2,935 8,536 11,471 3,49 5 9,208 12,703 3,89 5 9,458 13,353

Contribution %

68% 32% 100% 26% 74% 100% 26% 74% 100% 28% 72% 100% 29% 71% 100%

HUMAN CAPITAL

HUMAN CAPITAL

The Group aims to develop and maintain the highest quality of skills for Zimbabwe and the region.

● At least 80% of staff have gone through training in various disciplines.

These include in-house and structured courses affiliated with local tertiary institutions listed below: ▪ Deputy General Management Programme 8 ▪ Graduate Development Programme ▪ Advanced Hotel Management Diploma ▪ HND Hotel & Tourism Management ▪ Management Development Programme ▪ Supervisory Development Programme 24 9 9 10 9 ▪ Apprentice Cooks ▪ Technical Apprentices ▪ Housekeeping, Front Office, F&B 75 24 36

HUMAN CAPITAL

● Average length of service stands at 7 years throughout whilst average age is 35 years indicating: ▪ High degree of employment stability; ▪ Experienced and trained staff; ▪ Capacity to drive regional expansion.

● Staff turnover was 19% in the last 12 months to 31 March 2008, the bulk of which is junior staff against an international benchmark of 25%.

1.

STRATEGIES TO MANAGE SKILLS CAPACITY

HTA growth plan 2.

Training programmes continue to be enhanced.

3.

Mentorship programme to reinforce Group DNA transfer from the top.

4.

Reward strategy to be benchmarked to the sub-region.

5.

“Brain drain to brain gain” – the Group has a database of 50 managers in the region to draw from to staff pipeline projects in the next 12 months.

6.

Role profiling and brand alignment.

BRAND LEADERSHIP

BRAND ROLL-OUT STRATEGY

1.

Develop own brands.

2.

Extend footprint leveraging on own brand and existing own brand.

3.

Own brand summary follows below.

5 STAR BOUTIQUE

5 STAR CITY

3 – 4 STAR RESORT BRAND

MID-RANGE CITY BRAND

LONG STAY BRAND

VALUE BRAND

FRANCHISE BRANDS

MARKET CAPITALISATION

MARKET VALUE

The Group has as its target a market capitalization of

● This imputes to an EBIDTA Multiple of 10 times, having converted profits at the average OMIR for the period.

● Companions in the industry operating a similar model as African Sun are valued at multiples of 17 (City Lodge) and 25 (Four Seasons) e.g.

● We view African Sun as both a hedge and growth stock.

● Hedge, because of the imbedded hedge from Exports and the residual stake in Real Estate (Dawn). Expansion into Africa, will increase hard currency earnings, and enhance quality of earnings by reducing concentration in a particular country.

● Growth, because of the regional expansion that is set to increase hard currency earnings footprint (at improved Revpars), and the immediate upside potential which will follow a Zimbabwe recovery

MARKET VALUE

BUSINESS MODEL

● The Group’s strategy will be primary and growth cities in Africa, such as resources (oil and minerals) and leisure enclaves.

● Focus will be on the profitable core (Rooms and Food and beverage, conferencing, entertainment and allied activities), and any linkages that will anchor the profitable core ● A franchise business will be created from own brands, whilst leases and management contracts will be the anchor in the meantime.

● Ownership, whole or in part, of hotels will be considered in key strategic locations such as Cape Town, JHB, Accra, Lagos etc ● In order to gain entrance into other stabilised markets, growth through mergers and acquisitions will be pursued.

MIGRATION PATH

US $1b $119m 2008 2009 2010 2011 2012 2013

DUAL LISTING

● ● ● To unlock value, raise additional capital for further expansion and bring about a cross section of African Investors making African Sun truly Pan-African, 3 - 5 years.

the Group is therefore considering a secondary/dual listing on a regional/international bourse in the next Selection of appropriate stock exchange will be made after taking into account the Exchange’s accessibility, depth, liquidity and public profile of the Exchange.

The following stock exchanges being considered: ▪ Johannesburg Stock Exchange ▪ Botswana Stock Exchange ▪ Mauritius Stock Exchange ▪ London Stock Exchange

BUSINESS MODEL

BUSINESS MODEL

A further synopsis of the business model and returns: ● Model type ● Investment Approach ● Returns ● Zimbabwe - Inherent Potential

Franchise

No investment by Franchisor

Manage

Manager makes 5% Equity Investment

Ownership

Owner owns 100% of the property

OPERATING MODELS DISCUSSED

No investment by tenant – fixed lease (8% ROIC) Tenant owns FF&E – Fixed lease (8% ROIC) No investment by tenant – variable lease (25% of total sales)

CORE

Buying and managing existing high quality, stabilised properties

VALUE ADD

New developments/ re-developments/ turn-around targets/ repositioning and taking risks in leasing And other locations

OPPORTUNISTIC

Typically involves extremely high leverage in conjunction with a depressed market, a depressed property or non-performing assets.

RISK RETURN MATRIX

PERFORMANCE METRICS Indicator

ADR (US$) Occupancy(%) RevPar(US$)

African Sun

40 47 19

Regional

113 75 85

On average the Group/ country is achieving below the regional average in terms of ADR, occupancy and Revpar Indicating potential for improvement in yields that is imbedded in Zimbabwe operations. In South Africa, for example on average country ADR went up 20 % compared last year.

REGIONAL METRICS Indicator

ADR (US$) Occupancy (%) RevPar (US$)

5 star

197 73 143

4 star

113 70 79

3 star

80 69 55

● ● The table above shows regional benchmarks of the categories of hotels which the Group operates.

It can be ascertained that the benchmarks are way ahead of what the Group is currently achieving, again an indication of the potential that exists.

● In fact upon a rebound, we anticipate that yields for Victoria Falls will improve, even to exceeding regional competitors.

PERFORMANCE

TRENDS IN REVENUE DRIVERS

:

GROUP OCCUPANCIES & SALES MIX

Average Occupancy Foreign Mix (% of total rooms sold) Contribution of foreign revenue to total revenue

●

6 MONTHS TO 31 MARCH 2008 47% 31% 58% 6 MONTHS TO 31 MARCH 2007 38% 40% 75%

Average occupancy for the Group increased on the back of increased domestic volumes , albeit at constrained due to price controls.

● Foreign arrivals declined due to cancellations from foreigners due to the travel warnings issued by most of the source markets.

GROUP PERFORMANCE

● Revenue for the 6 months amounted to $97.8 trillion, an increase of 155 363% ahead of the increase in operating costs of 102 587% compared to the prior year.

● Local operations contributed 84% to Group revenue from 81% in the prior reporting period, whilst regional operations contributed 16% .

● Contribution from regional hotels is set to accelerate much faster with the addition of other properties, with The Lakes it increases to 25%, for example.

GROUP PERFORMANCE

● The Group posted an operating profit of $46 trillion, an increase of 370 467% despite the challenging trading environment.

● The surge is attributable to procurement strategies, for the Group’s cost containment and example bulk purchasing, toll manufacturing arrangements, elimination of the middle man and negotiation of IHG franchise fees.

● Net profit amounted to $361.8 billion.

● However, the net profit margin declined to 19% from 23% achieved in light.

FINANCIAL POSITION

● Non-current assets stood at $592 trillion in comparison to $10 trillion in the prior reporting period.

● The investment in Dawn Properties was valued at $405 trillion which is 68% of non-current assets and 48% of total assets.

● The market value of the Group’s shareholding in Dawn Properties however amounted to $900 trillion at 31 March 2008.

WORKING CAPITAL

● The Group generated $73 trillion from operating activities.

● $12 trillion was used for various capital expenditure projects.

● In spite of the price controls the Group closed the period in a positive net cash position of $77.5 trillion.

● The Group had debtors worth $169 trillion, this emanated mostly from foreign debtors and repayments to suppliers so as to lock value where applicable.

● Inventory was valued at $20 trillion, but its replacement cost was higher than its book value due to bulk buying and negotiations done by the Group.

● Cash and cash equivalents were mainly from foreign currency balances.

PERFORMANCE UPDATE Indicator

ADR (US$) Occupancy (%) RevPar (US$)

African Sun

52 35 18

Regional

113 75 85

Occupancy dipped due to cancellations which amounted to 9955 room nights, accounting for approximately 3% of capacity, and 12% of revenues.

NIPC lifted price controls on the Industry effective May 2008 hence the slight improvement in ADR from US$40. The Group has remained cash neutral in spite of the cancellations.

DIVIDEND DECLARATION

● An Interim Dividend, number 17 of 5 564 cents (interim 2007:1869 cents) (final 2007:nil) per share payable out of the profits of the company for the six months ended 31 March 2008 has been declared.

● The dividend will be payable in the currency of Zimbabwe to shareholders registered in the books of the company at the close of business as at 11 July 2008.

● The share register will be closed from 12 July 2008 to 14 July 2008, both dates inclusive.

● Shareholders will be able to elect to receive a dividend wholly in cash or take a scrip dividend in the form of ordinary shares.

● The offer price will be determined by taking the closing price of the African Sun Limited shares on 31 March 2008, the day the dividend was declared.

● Dividend warrants will be posted and payments made to shareholders on or about 8 August 2008.

OUTLOOK

OUTLOOK

●

Additional hotels within the next 12 months

: ▪ Arusha ▪ Clear Essence & Wellness Centre ▪ Kano ▪ Pretoria ▪ Tzaneen ▪ Cape Town ▪ Lusaka 858 rooms ●

World Cup Soccer Tournament 2010

▪ Packaging of our properties and products ▪ New capacity in the sub-region

OUTLOOK

●

Going Green Initiative

▪ Environmentally friendly ▪ Cost savings in procurement and operations ●

Funding

▪ Funding at project level ongoing.

▪ Funding to adequately capitalise the Group.