Slide 1: Strong growth in funds from operations
ASX Announcement 21 February 2018 STRONG GROWTH IN FUNDS FROM OPERATIONS UNDERPINNED BY GROWTH IN CUSTOMER VISITATIONS AND RETAILER DEMAND Scentre Group (ASX: SCG) today announced its results for the 12 months to 31 December 2017, with Funds From Operations (“FFO”) of $1.290 billion representing 24.
Slide 2: Creating extraordinary places
Creating extraordinary places During the year, the Group commenced over $1.1 billion (SCG share: $810 million) of developments including projects at Westfield Carousel in Perth, Westfield Plenty Valley in Melbourne, Westfield Kotara in Newcastle and Westfield Coomera on Queensland’s Gold Coast. West
Slide 3: Capital Management and Outlook
Capital Management In 2017, the Group announced that it will continue growing distributions at approximately 2% until it reaches a payout ratio of 85% of FFO. Once this target is achieved the distribution is expected to grow in line with FFO growth. For 2017 the Group retained $136 million which equ
Slide 4: Full Year Results – December 2017
FULL YEAR RESULTS – DECEMBER 2017 Westfield Garden City Westfield Newmarket
Slide 5: Results Overview
RESULTS OVERVIEW PETER ALLEN CEO Westfield WestfieldChatswood Chermside 2017 FULL YEAR RESULTS | 2
Slide 6: Results Overview
RESULTS OVERVIEW FULL YEAR 2017 RESULTS We are very pleased Funds From Operations (FFO) $1,290 million, 4.25% growth that our strategy to FFO per security 24.29 cents, 4.25% growth create extraordinary Distribution per security 21.73 cents, 2% growth places people want to visit has enabled Assets Un
Slide 7: Operating Performance
OPERATING PERFORMANCE 31 DECEMBER 2017 Comparable NOI 2.75% growth Strong NOI growth, Portfolio Leased > 99.5% underpinned by growth Lease Deals Completed Number 2,466 in customer visitation with retailer demand Lease Deals Completed Area 345,570 sqm maintaining occupancy Total Lettable Area > 3.6 m
Slide 8: Strategic Priorities
STRATEGIC PRIORITIES PROGRESS Our Purpose Own and operate the pre-eminent retail property portfolio in Australia and New Zealand • Delivered comparable NOI growth of 2.75% Creating extraordinary places, connecting and enriching • Maintained portfolio occupancy to > 99.5% leased communities • AUM inc
Slide 9: Strategic Priorities
STRATEGIC PRIORITIES PROGRESS Curate a diverse, engaging and constantly evolving product mix; build true retailer partnerships; deliver exceptional customer experiences Our Purpose • Launched our innovative customer experience net promoter system where we listen and Creating extraordinary places, re
Slide 10: Retailer In-Store Sales
RETAILER IN-STORE SALES COMPARABLE IN-STORE SALES GROWTH PSM1 3 MONTHS TO 12 MONTHS TO 31 DEC 2017 31 DEC 2017 In-store sales across the portfolio: Fashion 3.0% 0.9% ▪ Total specialty in-store sales were up 2.4% Footwear 2.6% 1.4% for the quarter and 1.5% for the year Jewellery (1.5%) (0.3%) ▪ Speci
Slide 11: Retailer In-Store Sales by Region
RETAILER IN-STORE SALES COMPARABLE SPECIALTY IN-STORE SALES GROWTH BY REGION1 58% 10% 19% 1% 5% 4% 3% of portfolio of portfolio of portfolio of portfolio of portfolio of portfolio of portfolio 6.0% 5.1% 3 months MAT 4.0% 3.9% 3.4% 2.0% 2.5% 2.4% 1.8% 1.4% 1.6% 1.5% 1.2% 0.5% 0.6% 0.1% 0.0% (0.1%) (0
Slide 12: Creating Extraordinary Places: Active Developments
CREATING EXTRAORDINARY PLACES ACTIVE DEVELOPMENTS TOTAL Key Highlights: PROJECT SCG ANTICIPATED COST SHARE COMPLETION ▪ Commenced $1.1 billion (SCG share: $’M $’M $810m) of developments in 2017. Carousel 350 350 Q3 2018 Developments forecast to complete in 2018 adding more than 106,000 sqm of Coomer
Slide 13: Creating Extraordinary Places: Future Developments
CREATING EXTRAORDINARY PLACES > $3BN OF FUTURE DEVELOPMENTS ▪ Albany (NZ) ▪ Barangaroo (NSW) ▪ Booragoon (WA)1 ▪ Knox (VIC) ▪ Marion (SA) ▪ St Lukes (NZ) Westfield Westfield Stirling Newmarket ▪ Stirling (Innaloo) (WA) ▪ Sydney (NSW) ▪ Tea Tree Plaza (SA) ▪ Warringah Mall – stage 2 (NSW) ▪ Whitford
Slide 14: Scentre Group Portfolio
SCENTRE GROUP PORTFOLIO Australia AS AT 31 DEC 2017 TOTAL 34 centres Centres 39 $35.0 billion1 Gross Lettable Area (sqm) 3.6m Assets Under Management (AUM) $51.0bn SCG share of AUM $36.2bn JV Partner share of AUM $14.8bn Customer Visits per annum > 530m WEIGHTED Cap Rates RANGE AVERAGE 2017 4.00% -
Slide 15: Finance Update
FINANCE UPDATE MARK BLOOM CFO Westfield Sydney Westfield Whitford City 2017 FULL YEAR RESULTS | 12
Slide 16: Financial Performance
FINANCIAL PERFORMANCE FUNDS FROM OPERATIONS 12 MONTHS TO 12 MONTHS TO $M 31 DEC 2017 31 DEC 2016 Net Operating Income 1,848.6 1,809.7 Management Income 45.4 46.3 4.25% Project Income 80.1 81.2 FULL YEAR 2017 FFO GROWTH Gross Income 1,974.1 1,937.2 Delivering 24.29 cents per Overheads (88.6) (86.4) s
Slide 17: Financial Position
FINANCIAL POSITION OPERATING BALANCE SHEET - PROPORTIONATE PLATFORM The Balance Sheet does $M 31 DEC 2017 31 DEC 2016 not include the value of Scentre Group’s unique operating platform Total Property Investments 36,228.8 32,288.8 Total Assets 37,536.0 34,100.2 $36.2BN PROPERTY Total Liabilities 14,0
Slide 18: Debt Management
DEBT MANAGEMENT DEBT METRICS 31 DEC 17 31 DEC 16 Total interest bearing liabilities $12.3bn $11.6bn Gearing (look through basis) Weighted average interest rate 32.1% 4.4% 33.3% 4.5% $3.7BN 32.1% Weighted average debt maturity 4.6 years 5.1 years BANK LOAN GEARING Liquidity $2.7bn $2.8bn FACILITIES I
Slide 19: Debt Management
DEBT MANAGEMENT $2.7BN 4.6 YEARS DEBT MATURITIES FACILITIES & LIQUIDITY1 LIQUIDITY 31 DECEMBER 17 % $BN Weighted average debt One bond maturity in Bonds maturity 2018 USD 24% 3.5 EUR 26% 3.8 MATURITY PROFILE1 GBP 10% 1.5 A$bn AUD 4% 0.6 3.0 Bonds Drawn Facilities Total 64% 9.4 Undrawn Facilities Ban
Slide 20: Outlook
OUTLOOK 2018 FORECAST Funds From Operations Growth approximately 4.0% growth We are very excited Distribution per security 22.16 cents, 2% growth about the year ahead, as we continue to grow Comparable NOI Growth 2.5% to 3.0% growth the business with the Weighted Average Interest Rate approximately
Slide 21: Overview
OVERVIEW - Creating places where customers want to go, with the customer’s experience at the centre of all decision making, driving growth in visitation and connection to brands We continue to - Growing the value of existing space through the curation of a diverse, engaging and constantly evolving p
Slide 22: Appendix
APPENDIX Westfield Warringah Mall Westfield Sydney 2017 FULL YEAR RESULTS | 19
Slide 23: Developments: Westfield Carousel
DEVELOPMENTS ACTIVE PROJECT WESTFIELD CAROUSEL, WA OVERVIEW Project Cost $350m (SCG share: $350m) Commencement Q1 2017 Completion Q3 2018 HIGHLIGHTS Incremental Project GLA 27,500sqm Completed Centre GLA 110,000sqm New Anchors David Jones, international mini-majors, new entertainment, dining and lei
Slide 24: Developments: Westfield Coomera
DEVELOPMENTS ACTIVE PROJECT WESTFIELD COOMERA, QLD OVERVIEW Project Cost $470m (SCG share: $235m) Commencement Q2 2017 Completion Q4 2018 HIGHLIGHTS Completed Centre GLA 59,000sqm New Anchors Event Cinemas, Kmart, Target, Coles, Woolworths, new dining and leisure precinct Specialty Retail approx. 14
Slide 25: Developments: Westfield Kotara
DEVELOPMENTS ACTIVE PROJECT WESTFIELD KOTARA, NSW OVERVIEW Project Cost $160m (SCG share: $160m) Commencement Q3 2017 Completion Q4 2018 HIGHLIGHTS Incremental Project GLA 6,250sqm Completed Centre GLA 82,000sqm New Anchors H&M, Zara, new Kmart, Toys R Us, JB Hi Fi Specialty Retail approx. 30 new st
Slide 26: Developments: Westfield Newmarket
DEVELOPMENTS ACTIVE PROJECT WESTFIELD NEWMARKET, NZ OVERVIEW Project Cost NZ$790m (SCG share: NZ$400m) Commencement Q1 2018 Completion Q4 2019 HIGHLIGHTS Incremental Project GLA 52,000sqm Completed Centre GLA1. 88,150sqm New Anchors David Jones, Farmers, Countdown, Event Cinemas, dining and leisure
Slide 27: Developments: Westfield Plenty Valley
DEVELOPMENTS ACTIVE PROJECT WESTFIELD PLENTY VALLEY, VIC OVERVIEW Project Cost $80m (SCG share: $40m) Commencement Q1 2017 Completion Q1 2018 HIGHLIGHTS Incremental Project GLA 10,300sqm Completed Centre GLA 63,500sqm New Anchors Village Cinema, new dining and leisure precinct Specialty Retail appro
Slide 28: Developments: Westfield Tea Tree
DEVELOPMENTS ACTIVE PROJECT WESTFIELD TEA TREE, SA OVERVIEW Project Cost $50m (SCG share: $25m) Commencement Q3 2017 Completion Q4 2018 HIGHLIGHTS Incremental Project GLA 3,500sqm Completed Centre GLA 99,000sqm New Anchors Expanded Hoyts Cinema Specialty Retail approx. 11 new restaurants 2017 FULL Y
Slide 29: Leasing & Retail Solutions
LEASING & RETAIL SOLUTIONS 31 DECEMBER 2017 SPECIALTY STORE RENT GROWTH Portfolio Leased > 99.5% Average Specialty Store Rent (psm) $1,622 The majority of specialty Specialty Occupancy Cost 18.0% Lease Deals store rent growth is Contracted Annual driven by contracted Lease Deals Completed Number 2,4
Slide 30: Profit & FFO
PROFIT & FFO RECONCILIATION FROM PROFIT TO FFO $M PROFIT FFO FFO FINANCIAL 12 MONTHS TO ADJUSTMENTS1 12 MONTHS TO STATEMENT 31 DEC 2017 31 DEC 2017 NOTES A B C=A+B Net operating income 1,794.8 53.8 1,848.6 Note 2(iv) Management income 2 45.4 - 45.4 Project income 3 80.1 - 80.1 Gross income 1,920.3 5
Slide 31: Balance Sheet
BALANCE SHEET BALANCE SHEET - PROPORTIONATE1 $M CONSOLIDATED EQUITY ACCOUNTED 31 DEC 2017 A B C=A+B Cash 174.0 2.6 176.6 Property Investments - Shopping centres 32,761.5 2,625.9 35,387.4 - Development projects and construction in progress 732.1 109.3 841.4 Total property investments 33,493.6 2,735.2
Slide 32: Cashflow
CASHFLOW CASH FLOWS FROM OPERATING ACTIVITIES – LOOK THROUGH BASIS $M 31 DEC 2017 Receipts in the course of operations (including GST) 2,792.8 Payments in the course of operations (including GST) (900.9) Net operating cash flows from equity accounted entities 126.3 Income and withholding taxes paid
Slide 33: Interest Rate Hedging Profile
INTEREST RATE HEDGING PROFILE $ FIXED RATE DEBT DERIVATIVES $ DEBT PAYABLE $ SWAP PAYABLE NZ$ SWAP PAYABLE NZ$ COLLAR PAYABLE 31 DECEMBER1 $M FIXED RATE $M FIXED RATE NZ$M FIXED RATE NZ$M STRIKE RATE 2017 (580.0) 3.25% (8,528.5) 2.88% (500.0) 3.28% (70.0) 3.39%/5.25% 2018 (580.0) 3.25% (8,115.0) 2.8
Slide 34: Important Notice
IMPORTANT NOTICE All amounts in Australian dollars unless otherwise specified. The financial information included in this document is based on the Scentre Group’s IFRS financial statements. Non IFRS financial information included in this document has not been audited or reviewed. This document conta