Slide 1: 1H16 Stockland Results Presentation
1H16 Stockland Results Presentation For personal use only Delivering sustainable growth
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 12 Residential Andrew Whitson – Group Executive and CEO, Residential 18 R
Slide 3: Strategy delivering strong results
Strategy delivering strong results For personal use only 1H16 1H15 Change All businesses contributing to growth, reflecting successful Statutory Profit $696m $462m 50.6% delivery of our strategy and supportive market conditions Statutory Earnings per security 29.4 cents 19.8 cents 48.9% FFO pe
Slide 4: 1H16 Achievements: Grow Asset Returns and Customer Base
1H16 Achievements For personal use only Grow Asset Returns and Customer Base Commercial Property Residential Communities Retirement Living Record 18% Increase in 4.5 VALUATION UPLIFT % OVER $433m Growth in comparable FFO 4,100 contracts on hand core ROA2 9.2% 18% operating profit Including $127m fro
Slide 5: 1H16 Achievements: Operational Excellence and Capital Strength
1H16 Achievements For personal use only Operational Excellence and Capital Strength Maintained credit rating Reduced average Marketing Campaign “Always on” driving FY16 cost of debt website traffic increase 25% A- by 50bp for over ten years #1 Global Stockland 1H16 Results Presentation 5
Slide 6: Group Finance – Tiernan O’Rourke
Group Finance – Tiernan O’Rourke For personal use only Stockland Baulkham Hills, NSW
Slide 7: Strong improvement in both FFO and Underlying Profit
Strong improvement in both FFO and Underlying Profit For personal use only Underlying Profit Funds from Operations Comp. Comp. $m 1H16 1H15 Change % Growth % 1H16 1H15 Change % Growth % Retail 183 174 5.0% 3.5% 197 188 4.6% 3.3% Logistics & Business Parks 60 57 5.8% 0.3% 66 63 5.2% 3.8% Office 2
Slide 8: Revaluations enhance Statutory Profit
Revaluations enhance Statutory Profit For personal use only $m 1H16 1H15 Change Group Funds From Operations (“FFO”) 342 307 11.3% Adjust for: Amortisation of fit out incentives (23) (22) Amortisation of L&BP and Office rent-free incentives (10) (8) Straight-line rent 6 4 Tax (expense)/benefit on Un
Slide 9: Strong operating cash flows
Strong operating cash flows For personal use only Cash Flow Summary 1,200 $ millions 2 1,000 2 (90) (33) 244 800 (271) 220 600 (119) Includes Residential cashflows of: 400 (218) 392 Sales 650 (16) SG&A costs1 (71) Current year stage costs (141) 200 Future Stages/Infrastructure (212) Total 226 279 17
Slide 10: Maintaining a strong balance sheet
Maintaining a strong balance sheet For personal use only Key debt metrics A-/Stable metrics; rating confirmed in September 2015 1H16 FY15 S&P rating A-/Stable A-/Stable Continued focus on diversifying funding sources Drawn debt1 $3.4b $3.1b Consistent interest cover ratio Cash on deposit $0.3b
Slide 11: Lower weighted cost of debt with swap termination
Lower weighted cost of debt with swap termination For personal use only 6.0% 5.6% 5.5% 5.3% Hedge Rate FY15 5.0% 5.0% 4.8% 4.7% 4.5% 4.5% Hedge Rate FY16 4.3% 3.9% 4.0% 3.8% 3.7% 3.5% FY16 FY17 FY18 FY19 FY20 1. Excludes fees and margins, combined hedged and fixed rate Stockland 1H16 Results Present
Slide 12: Commercial Property – John Schroder
Commercial Property – John Schroder For personal use only Wetherill Park, NSW
Slide 13: Commercial Property: Sustainable growth
Commercial Property: Sustainable growth For personal use only Sustainable profit growth Asset FFO Underlying WALE Occupancy2 WACR3 ROA values (comparable Profit (years) (stable Comparable FFO growth of 4.5% with good results across ($m)1 change) (comparable assets) change) all asset classes Retail
Slide 14: Retail: Continuing to achieve positive leasing spreads
Retail: Continuing to achieve positive leasing spreads For personal use only Retail leasing activity1 1H16 1H15 High occupancy maintained Occupancy2 99.5% 99.5% Tenant retention 61% 64% Strong rental growth of 3.1% on materially higher area of lease renewals Average rental growth3 2.6% 2.9% on t
Slide 15: Retail: Accretive development pipeline
Retail: Accretive development pipeline For personal use only Retail development activity progressing as planned Under construction Total Stabilised Incremental spend ($m) yield1 IRR2 Wetherill Park (Sydney): Stage Two opened in December 2015, three months ahead of schedule, trading Wetherill Park
Slide 16: Logistics & Business Parks: Implementing growth strategy
Logistics & Business Parks: Implementing growth strategy For personal use only Strong leasing activity with a total of 233,000 square Logistics & Business Parks 1H16 1H15 metres, 18.5% of the portfolio, executed or underway Leasing activity executed 182,000 sqm 45,600 sqm Lower underlying profit
Slide 17: Office: Maintained tactical allocation, optimising returns
Office: Maintained tactical allocation, optimising returns For personal use only Continued strong occupancy at 95.4%, following leasing Office 1H16 1H15 momentum in all Sydney markets Leasing activity executed 6,800 sqm 16,600 sqm Completed sale of Waterfront Place and Eagle St Pier (Brisbane),
Slide 18: Residential – Andrew Whitson
Residential – Andrew Whitson For personal use only Willowdale, NSW
Slide 19: Residential: Delivering higher returns
Residential: Delivering higher returns For personal use only Material improvement in profitability driven by new projects Residential 1H161 1H15 Change and market conditions Lots settled 2,771 2,747 0.9% Revenue: Retail $596m $528m 12.9% Record contracts on hand, full year settlements expected
Slide 20: Residential: Operating profit margin improvement
Residential: Operating profit margin improvement For personal use only Margin increase reflects higher volumes and price Residential 1H16 Core Workout1 Total growth above feasibility assumptions, in Sydney and Lots settled 2,624 147 2,771 Melbourne Revenue $603m $54m $657m Revenue 92% 8% 100% Ma
Slide 21: Residential Communities - Strong Pipeline for growth
Residential Communities - Strong Pipeline for growth For personal use only Significant progress in reshaping our landbank, now over Core projects Capital 80% of our capital is employed in projects actively selling employed1 Delivering 30 Active Projects $1.5b Bringing to market four additional p
Slide 22: Residential Communities: Market overview
Residential Communities: Market overview For personal use only 1H16 Stockland Summary 2016 market outlook State 1H16 Comments on Vacant land Vacant Comments on settlement our settlements sales land market outlook volumes in 1H16 volumes prices (%change over 1H15) NSW 186% Driven by Elara settlement
Slide 23: Retirement Living – Stephen Bull
Retirement Living – Stephen Bull For personal use only Cardinal Freeman, NSW
Slide 24: Retirement Living: Delivering growth
Retirement Living: Delivering growth For personal use only Continued growth in operating profit and established Total Portfolio settlements 1H16 1H15 Change EBIT $20m $19m 6.8% ▲ Record level of development reservations on hand Operating Profit $18m $16m 9.2% ▲ Occupancy slightly lower post in
Slide 25: Retirement Living: Progressing our strategy
Retirement Living: Progressing our strategy For personal use only Increasing our development activity 470 homes under construction or ready for sale A further 2,500 homes in planning on our land Progress on our Continuum of Care strategy, five sites under construction or agreed for sale with
Slide 26: Summary and Outlook – Mark Steinert
Artist impression Summary and Outlook – Mark Steinert For personal use only Arve, Vic
Slide 27: FY16 Outlook
FY16 Outlook For personal use only Tightened FY16 guidance for EPS growth to 6.5-7.5% and FFO per security growth to 9-10%, assuming no material change in market conditions, underpinned by: Settlements slightly above our through the cycle range of 5,000 - 6,000 lots Residential margins above m
Slide 28: Important Notice
For personal use only Important Notice Stockland Corporation Limited ACN 000 181 733 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 int