Slide 1: FY17 Results Presentation
For personal use only FY17 Results Presentation STRENGTH IN DIVERSITY Stockland Wetherill Park, Sydney
Slide 2: Agenda
Agenda For personal use only TOPIC SPEAKER PAGE GROUP UPDATE Mark Steinert, Managing Director and CEO 03 GROUP FINANCE Tiernan O’Rourke, CFO 06 COMMERCIAL PROPERTY John Schroder, Group Executive and CEO, Commercial Property 11 RESIDENTIAL Andrew Whitson, Group Executive and CEO, Residential 20 RETIR
Slide 3: Communities strategy delivering strong results
Communities strategy delivering strong results For personal use only Australia's largest community creator FY17 FY16 CHANGE Statutory Profit $1,195m $889m 34.4% Customers at the heart of our success, 82% customer Statutory Earnings per security 49.8 cents 37.4 cents 33.2% satisfaction on avera
Slide 4: FY17 Achievements: Grow asset returns and customer base
FY17 Achievements For personal use only Grow asset returns and customer base RETAIL TOWN CENTRES (54%)1 COMMUNITIES (26%)1 Residential Retirement Living Comparable Operating Operating +3.5% FFO growth +17.4% profit growth +11.1% profit growth 75% Customer satisfaction2 83% Resident Liveability3 84%
Slide 5: FY17 Achievements: Operational excellence
FY17 Achievements For personal use only Grow asset returns and customer base, and operational excellence COMMERCIAL (20%)1 OPERATIONAL EXCELLENCE Most sustainable Global Sector and Regional Comparable Logistics and Business Parks +3.6% FFO growth #1 real estate Sector Leader- company globally Retail
Slide 6: Group Finance
Group For personal use only Finance Tiernan O’Rourke Aura Vision Centre, Qld
Slide 7: Strong FFO growth
Strong FFO growth For personal use only Communities achieved double digit FFO FUNDS FROM OPERATIONS growth COMP. FY17 $M FY16 $M CHANGE GROWTH Unallocated corporate overheads reflect Retail Town Centres 419 402 4.1% 3.5% growth across the Group Logistics & Business Parks 143 132 8.3% 3.6% Offi
Slide 8: Statutory Profit to FFO reconciliation
Statutory Profit to FFO reconciliation For personal use only $44m Commercial Property FY17 $M FY16 $M CHANGE maintenance capex incurred Statutory Profit 1,195 889 34.4% represents 0.5% of Commercial Adjust for: Property average book value Amortisation of lease incentives and lease fees 69 67 Stra
Slide 9: Strong operating cash flows
Strong operating cash flows For personal use only 1,800 (19) 1,600 71 94 (283)1 1,400 1,200 1,000 FY17 FY16 (506) $1,203m $937m 23% 800 Includes Residential cash flows as follows: 1,203 Sales 1,766 1,484 600 Current year stage costs (373) (248) Future Stage infrastructure costs (522) (500) (476) 4
Slide 10: Maintaining a strong balance sheet
Maintaining a strong balance sheet For personal use only KEY DEBT METRICS FY17 FY16 S&P A-/stable metrics maintained for over 10 years S&P rating A-/Stable A-/Stable Moody's has issued the Group a public credit rating of A3 in Drawn debt1 $3.5b $3.5b Aug 2017 (equivalent to S&P's A-); further di
Slide 11: Commercial Property
Commercial For personal use only Property John Schroder Shellharbour, NSW
Slide 12: Commercial Property: Solid recurring earnings
Commercial Property: Solid recurring earnings For personal use only ASSET FFO OCCUPANCY4 Sustainable profit growth VALUES (COMPARABLE WALE3 (STABLE ($M) CHANGE) (YEARS) ASSETS) WACR3 ROA Comparable FFO growth of 3.4% Retail Town Centres 7,127 3.5% 6.6 99.5% 5.9% 8.1% Key categories in comparab
Slide 13: Retail Town Centres: Enhancing our customer experience
Retail Town Centres: Enhancing our customer experience For personal use only Retailer mix – change in customer trends CHANGE FROM JUNE 2010 TO JUNE 2017 Continuing centre enhancements to improve customer Growth in MAT Growth in Stores experience and deliver on retail trends: Smart Phones & Communica
Slide 14: Retail Town Centres: Positive leasing spreads
Retail Town Centres: Continuing to achieve positive leasing spreads For personal use only Strong leasing momentum continues RETAIL LEASING ACTIVITY1 FY17 FY16 Positive leasing spreads of 2.9% Occupancy2 99.5% 99.3% Specialty retail leasing activity Tenant retention 69% 77% For new leases execute
Slide 15: Retail Town Centres: Accretive development pipeline
Retail Town Centres: Accretive development pipeline For personal use only TOTAL UNDER TOTAL INCOME STABILISED INCREMENTAL COMPLETION Retail Town Centre development activity CONSTRUCTION SPEND ($M) LEASED YIELD1 IRR2 DATE progressing well Green Hills, NSW 412 73% 7.0% ~11.9% End FY18 Wendouree, Vic 3
Slide 16: Developing and enhancing our portfolio
Developing and enhancing our portfolio For personal use only Artists impression Green Hills, NSW major regional development reflecting emerging retail trends Stockland FY17 Results Presentation 16
Slide 17: Office: Optimising returns
Office: Optimising returns For personal use only OFFICE FY17 FY16 80% of portfolio located in strongly Leasing activity executed 6,700 sqm 17,900 sqm performing Sydney market Leasing activity under HOA1 4,600 sqm 900 sqm Average rental growth on new leases and renewals (9.2%) 3.6% Portfolio occupa
Slide 18: Logistics & Business Parks: Active management
Logistics & Business Parks: Active management For personal use only LOGISTICS & BUSINESS PARKS FY17 FY16 • Asset repositioning and tenant retention driving Leasing activity executed 411,800 sqm 306,500 sqm strong occupancy increase Leasing activity under HOA1 91,600 sqm 26,300 sqm Average rental gro
Slide 19: Logistics & Business Parks: Reshaping our portfolio
Logistics & Business Parks: Ingleburn, Sydney For personal use only Reshaping our portfolio Fully integrated management team, strong leasing activity, enhancing assets • Oakleigh (Melbourne) and Ingleburn Development (Sydney) now completed and fully leased, average FFO yield momentum across the port
Slide 20: Residential
Residential For personal use only Andrew Whitson Altona North, Melbourne 20
Slide 21: Residential: Delivering strong growth
Residential: Delivering strong growth For personal use only RESIDENTIAL FY17 FY16 CHANGE Well positioned for FY18 Total lots settled 6,604 6,135 7.6% Increased ROA as we execute on strategy and benefit from Total revenue $1,767m $1,482m 19.3% supportive market conditions - Including Superlot rev
Slide 22: Residential: Driving returns
Residential: Driving returns For personal use only RESIDENTIAL CORE WORKOUT 1 TOTAL Operating profit margin in line with FY16 Lots settled 6,262 342 6,604 Project mix reflects timing of settlements across projects Revenue $1,631m $136m $1,767m Revenue 92% 8% 100% Project rate reflects broadening
Slide 23: Residential: Growing assets and customers
Residential: Growing assets and customers For personal use only Core Capital projects employed1 88% of portfolio actively selling Delivering 32 Communities current earnings ~59,200 Lots (includes~1,500 MD dwellings) $1.6b Significant restocking in priority metropolitan corridors, targeting Melbo
Slide 24: Residential: Market overview
Residential: Market overview For personal use only FY17 STOCKLAND SUMMARY FY18 MARKET OUTLOOK FY17 SETTLEMENT VACANT LAND VACANT VOLUMES COMMENTS ON SALES LAND STATE (% CHANGE OVER FY16) OUR SETTLEMENTS IN FY17 STATE VOLUMES PRICES COMMENTS ON MARKET OUTLOOK Increase mainly driven by Elara in conjun
Slide 25: Residential: Broadening customer choice
Residential: Broadening Ingleburn, Sydney For personal use only customer choice Launched “50 homes in 50 50 days” – First Home Buyer initiative in Queensland 75 75 per cent of customers are owner occupiers Leading in North Lakes, Brisbane housing choice and The Grove, Victoria affordability Launched
Slide 26: Retirement Living
Retirement For personal use only Living Stephen Bull Cardinal Freeman The Residences Sydney
Slide 27: Retirement Living: Delivering growth
Retirement Living: Delivering growth For personal use only TOTAL PORTFOLIO FY17 FY16 CHANGE Four years of continuous improvement in EBIT $69m $64m 8.3% operating profit Operating Profit $63m $57m 11.1% Occupancy 95.0% 94.9% 6.1% growth in total sales volumes Cash ROA 6.2% 5.8% ESTABLISHED
Slide 28: Retirement Living: Transforming our business
Retirement Living: Transforming our business For personal use only CARDINAL FREEMAN THE RESIDENCES BIRTINYA RETIREMENT BURNSIDE RETIREMENT LIVING ASPIRE AT ELARA Part of our masterplanned communities 1st Enhancing 1st 1st vertical brownfield our established Seniors Non greenfield development village
Slide 29: Retirement Living: Strong customer focus driving growth
Retirement Living: Strong customer focus driving growth For personal use only Four years Total Portfolio FY13 FY17 Over Four Years of continued $63m improvement Operating $35m1 16.0% Profit CAGR Total sales 851 1,050 5.4% CAGR Cash +190 ROA 4.3% 6.2% bp FY13-17 Resident satisfaction scores 8.5/10 co
Slide 30: Summary and Outlook
Summary For personal use only and Outlook Mark Steinert Bells Reach, Qld
Slide 31: Retail trends
Retail trends For personal use only Australian prime retail town centre landscape less exposed to online retailing risk than US and UK 1 Australia USA 6.0 60% more Australia has Australia 5.1 proactive in Australia Australia a lower supply 5.0 50% Canada Australia remixing of floor space 4.0 40% 3.0
Slide 32: Clear strategy to deliver superior shareholder returns
Clear strategy to deliver superior shareholder returns For personal use only Strategic focus, Australia's largest creator of communities Proven track record Convenient, experiential town centres Change from June 2013 to June 2017 Good earnings visibility Reliable cash flow +11.9% +3.7% Recor
Slide 33: FY18 outlook
FY18 outlook For personal use only Targeting FY18 FFO per security growth of 5-6.5%, with growth Our Purpose: We believe there is a better way to live skewed to 1H18, assuming no material change in market conditions Underpinned by: Residential settlements above 6,000 lots, margins around 17%,
Slide 34: Important Notice
For personal use only Important Notice While every effort is made to provide accurate and complete information, Stockland does not warrant or represent that the information in this presentation is free from errors or omissions or is suitable for your intended use. This presentation contains forward-