2016 Full year results presentation to analysts

OVERVIEW

CEOTENDAI

MADZIWANYIKA

STRATEGY AND OPERATIONAL

REVIEW

CEO TENDAI

MADZIWANYIKA

FINANCIAL REVIEW

FDNAPOLEON MTUKWA

AGENDA

OVERVIEW

BY

TENDAI MADZIWANYIKA

TOURISM OPERATING ENVIRONMENT OVERVIEW

KEY FACTORS 2015 2016 GROWTH

Global Tourism Growth % 3.6 3.9 8%

Africa arrivals (million) 53.8 58.2 8%

Domestic GDP Growth % 3.8 0.6 -84%

Zimbabwe tourist arrivals (000) 2 056 2 168 5%

International Tourism Receipts into Zim USD (million) 886 819 -8%

National Average Occupancy % 47 46 -2%

RTG Market share % 28 28 0

RTG Occupancies 55 55 0

HIGHLIGHTS International tourist

arrivals grew by 3.9% to reach a total of 1.235 billionin 2016 compared to 2015 (source –UNWTO).

Tourism receipts declined in 2016 owing mostly to the ongoing economic and financial challenges.

Depressed local market conditions led to reduced occupancies for 2016.

* Local statistics are from ZTA.

INDICES RTG INDUSTRY

Growth in Tourist arrivals 10% 5%

Foreign revenues 20% -8%

Occupancies (national) 55% 46%

Victoria Falls occupancies 66% 40%

RTG vs INDUSTRY FY16 ANALYSIS

KEY INDICESH1 2017

Forecast

H1 2016

Actual

APRIL

2017

ACTUAL

APRIL

2016

ACTUAL

APRIL

2015

ACTUAL

REVENUES(US$ million) 12.7 11.8 8.7 8.4 7.6

Occupancies % 58% 54% 58% 63% 60%

RevPAR 36 36 41 46 42

APRIL 2017 AND H1 2017 FORECAST

2012 2013 2014 2015 2016

Occupancy 48% 54% 56% 55% 55%

RevPAR 40 43 43 41 36

Revenue ($000) 21 467 24 299 27 794 26 909 24 136

EBITDA : Value ($000) -502 3 574 88 3 789 427

Margin (%) -2% 15% 0% 14% 2%

Procurement Savings

(Savings on Savings)

($000) - 486 603 515 215

Procurement Saving % 15% 25% 10% 5%

Cost Of Sales : Food 26% 24% 23% 22% 23%

Beverages 28% 25% 24% 23% 23%

Rooms Profit % 78% 80% 80% 81% 82%

Food and Beverages Profit

% 32% 40% 42% 43% 45%

Conferences &

Banqueting Profit % 61% 65% 66% 67% 66%

Staff Costs ($000) 13 895 10 556 12 618 10 914 10 669

Market Share 24% 26% 27% 28% 28%

HIGHLIGHTS Occupancies

have grown by 14% over the 4 year period.

Payroll costs were reduced by 23% over the period

Operating margins have expanded by an average of 10% which reflects that the business is now efficient.

LIKE-FOR-LIKE TREND ANALYSIS 2012-2016

KEY PERFORMANCE INDEX 2016 2015

Occupancies 55% 55%

RevPAR $ 36 41

Revenue $ 24 136 744 26 933 478

Finance costs $ (1 868 121) (1 814 375)

(Loss)/ Profit from continuing

operations $ (3 113 729) 781 308

Loss from discontinued operations (1 572 640) (810 612)

Total comprehensive income for

the year $ (4 671 269) (29 304)

KEY PERFORMANCE HIGHLIGHTS FOR THE YEAR _______________________________________________________________________________________________________________

TODAY WE STAND ON A KEY LANDMARK:

WE HAVE PUT CLOSURE TO LEGACY ISSUES

WE ARE READY TO GROW!

FOCUS AREA WHAT WE DID BENEFIT

1. Human Resources • Aligned HR costs to

business cash flows

• Reduced head

count from 1143 to

670

• Staff costs reduced

from $13.9m to

$10.6m

2. Procurement costs • Centralised

procurement

• Reduced

procurement costs

by $2m

3. Debt reduction • Paid off

development

financial institutions

Afreximbank

PTA Bank

• Paid Afrexim Bank

$7m

• Paid PTA Bank $3.5m

4. CAPEX • Refurbished hotels • Outlaid $6.5m on

product upgrades

RTG SUCCESSES OVER THE PAST FOUR YEARS

FOCUS AREA WHAT WE DID BENEFIT

5. Exit from loss making

hotels

• Finalised the exit

from Zambia

• Exited Mozambique

• Exited Beitbridge

• Liquidated Matetsi

Water Lodge

• Received $2m court

judgment award

• Cut losses of

$500,000 annually

• Cut losses of

$700,000 annually

• Staff paid 50c in the

$1

• Cut potential $2m

losses

• Received $240,000

6. Foreign revenue

growth

• Invested in key

source markets

• Grew revenue from

$5.3m to US$8.1m

• Grew E- Commerce

revenue from

$300,000 to $1m

RTG SUCCESSES OVER THE PAST FOUR YEARS contd.

2013 2014 2015 2016 TOTAL

Loan repayment

US(000)657 1,655 2,866 2,115 7,293

Interest US(000) 1,776 2,109 2,179 1,865 7,929

Total loan

servicing US(000)2,433 3,764 5,045 3,980 15,222

CAPEX US(000) 1,708 1,818 1,979 960 6,465

Total application

of funds from

operations

US(000)

4,141 5,582 7,024 4,940 21,687

Application of cash flows from operations (2012-2016)

FINANCIERSDec 2012

Actual

(000)

Dec 2013

Actual (000)

Dec 2014

Actual

(000)

Dec 2015

Actual

(000)

Dec 2016

Actual

(000)

Movement

2012-2016

(000)

Afreximbank 7,125 4,875 3,305 1,928 1,100 6,025

PTA 3,038 2,049 1,290 662 113 2,925

NSSA 5,000 12,955 13,616 13,640 13,640 (8,640)

CBZ, Stanbic

& FBC9,367 3,994 4,007 3,122 2,384 6,983

Total 24,530 23,873 22,218 19,352 17,237 7,293

DEBT REDUCED BY $7.3 MILLION

RTG STRATEGIES GOING FORWARD

• Organic growth model

Expansion of the Victoria falls properties

Increase Rainbow Towers Hotel capacity

• Grow RTG Virtual Business Model

Signing on new partners

• Expansion of Food and Beverage business

Grow RTG mobile (target home deliveries)

• Tap into Diaspora market

Offer top class tourism packages

• Reposition RTG as an Afro- centric brand

Explore the rich historical background associated with our

properties

• Harness the use of ICTs for growth

Activate the power of ICTs and foster business re-

engineering

WE WILL TRANSFORM RTG INTO A DIGITAL MARKETING

POWERHOUSE THEREBY CREATING NEW REVENUE STREAMS

We will leverage the RTG brand to exploit opportunities using information technology platforms

RTG will be a gateway to a world of tourism and hospitality experiences

We will generate revenues beyond the infrastructure that we own/ manage as RTG

We will harness the power of the diaspora earnings/ remittances

TRANSFORMATION vs EVOLUTION

FINANCIAL REVIEW

BY

NAPOLEON MTUKWA

US$ FY 2016 FY 2015Change

Revenue (000) 24 137 26 933 -10%

Gross Margins 67% 67% 0%

EBIDTA (000) 426 3 641 -88%

Cash generated from operations

(000) 3 070 4 352 -29%

Total debt (000) 17 303 19 352 -11%

SALIENT FEATURES

STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME

FY 2016 FY 2015

(US$ 000) (US$ 000)

Revenue 24 137 26 933

Cost of sales (7 627) (8 965)

Gross profit 16 510 17 968

Other operating income 645 961

Operating expenses (16 730) (15 288)

Earnings before interest, tax, depreciation and

amortisation 427 3 642

Depreciation and amortisation (2 352) (2 155)

(Loss)/profit from operations (1 925) 1 487

Finance expense (1 868) (1 814)

Loss before tax (3 793) (327)

Income tax 680 1 108

(Loss)/profit after tax from continuing operations (3 114) 781

Loss from discontinued operations, net of tax (1 573) (811)

Loss for the year (4 686 ) ( 29 )

Item $000

Actual EBITDA 400

Impact of Rainbow Tower Hotel lost

revenues

2,400

Retrenchment cost 600

Revised EBITDA $3,400

EBITDA OF $3.4 MILLION

The growth in operating costs from $15.3 million to

$16.7 million was due to the following;

• Impairment of Mozambique investment in RTG

books -$500,000.

• Impairment of credit losses - $325,000

• Retrenchment cost during the year - $600,000.

OPERATING COSTS ANALYSIS

All figured are in US million 2016 2015

ASSETS

Non-current assets 37,9 40,3

Current assets 8,7 9,4

TOTAL ASSETS 46,6 49,7

FUNDING

Total equity 12,4 17,0

Non-current liabilities - 13,6

Current liabilities 34,3 19,1

Total liabilities 34,3 32,7

TOTAL EQUITY AND LIABILITIES 46,7 49,7

Current ratio 0,25 0,49

Gearing ratio 60% 56%

STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER 2016

Item 2012 2016 Variance Comments

Accounts Payable 4,311,402 3,133,235 (1,178,167)Includes all our operating suppliers

Statutory creditors 5,066,244 6,880,538 1,814,294

Bank Loans 5,206,224 2,383,790 (2,822,434) Local banks

Afreximbank 7,125,000 1,100,000 (6,025,000)

PTA 3,037,903 113,579 (2,924,324)

NSSA loan 10,000,000 13,640,349 3,640,349

Other liabilities 2,370,618 4,234,888 1,864,270

Included are NSSA interest, RBBH rentals, other hotels rentals and Medical Aid arrears

Sub-total 37,117,391 31,486,379 (5,631,012)

Provision - 2,795,766 2,795,766 Capital bank $1.9 million and Savoy hotel $0.8 million

Total Liabilities as per Financial Position 37,117,391 34,282,145 (2,835,246)

The total debt was $42 million in 2012 before the rights issue of $4.5 million

TOTAL LIABILITIES MOVEMENT 2012- 2016

-4,000,000

-3,000,000

-2,000,000

-1,000,000

0

1,000,000

2,000,000

3,000,000

4,000,000

5,000,000

Opening cash Cashgenerated

fromoperations

Cash used forcapex

Cash used forloan

repayments

closing cashposition

2016 2015

CASH FLOWS

Thank You!