Slide 1: Results for the half year ended 31 December 2012
Goodman Group Results for the half year ended 31 December 2012 21 February 2013 Global partner + Global platform 1
Slide 2: Important notice and disclaimer
Important notice and disclaimer + This document has been prepared by Goodman Group (Goodman Limited (ABN 69 000 123 071), Goodman Funds Management Limited (ABN 48 067 796 641; AFSL Number 223621) as the Responsible Entity for Goodman Industrial Trust (ARSN 091 213 839) and Goodman Logistics (HK) Lim
Slide 3: Contents
Contents + Section 1 Highlights + Section 2 Results overview + Section 3 Operational performance + Section 4 Strategy and outlook + Appendices - Results analysis - Investment - Development - Management - Capital management 3
Slide 4: Section 1 Highlights
Section1+1+ Section Highlights Highlights Goodman Interlink, Hong Kong Erfurt, Zalando, Germany 4
Slide 5: Highlights
Highlights + Focused strategy delivering sustainable growth: – Operating profit¹ of $601 million, up 10% on FY2013 – Statutory accounting profit of $657 million – Operating EPS¹ of 34.8 cents², up 7% on FY2013 – Distribution per security of 20.7 cents, up 7% on FY2013 – FY2015 forecasting operating
Slide 6: Highlights
Highlights + Industrial property sector continuing to benefit from structural and cyclical changes – Logistics continues to be a major beneficiary of global growth in e-commerce – Customer demand in proven, quality logistics locations, with good fundamentals remains sound (developments 96% pre-commi
Slide 7: Highlights
Highlights + Occupancy maintained at 96% + Retention rate of 73% and WALE of 4.9 years Own + Like for like rental growth of 2.2% + Leased 3.0 million sqm across the platform equating to $347.2 million of property income across the Group and managed funds + WIP of $2.6 billion across 76 projects in 1
Slide 8: Section 2 Results overview
Section Section2+2+ Results Results Overview overview Stockyards Industrial Estate, Australia M7 Business Hub, Australia 8
Slide 9: Results overview
Results overview + Operating results above initial guidance: FY2014 – Stronger operating results from active parts of the business Operating profit ($M) 601.1 – Property fundamentals remain sound Statutory accounting profit ($M) 657.3 – Maintained liquidity and low gearing Operating EPS (cents)1 34.
Slide 10: Profit and loss
Profit and loss + Full year operating profit of $601.1 million: Income statement – Investments reducing in line with balance sheet initiatives with FY2013 FY2014 $m $m ROA >7% and total returns of 11% Investment (look through) 501.8 491.8 – Balance sheet initiatives include the sale of properties to
Slide 11: Balance sheet
Balance sheet + Strong balance sheet maintained: Balance sheet – Consistent approach to pre-sold developments FY2013 FY2014 $m $m – Managed fund equity raisings and balance sheet Stabilised investment properties 2,090 2,191 recycling Fund cornerstones1 3,086 3,434 + Fund cornerstones increasing due
Slide 12: Group liquidity position
Group liquidity position + Goodman Group has cash and available lines of credit of $1.5 billion at 30 June 2014: – $359.9 million cash – $1,112.9 million available lines + Significant covenant headroom maintained + Average debt maturity profile of 5.4 years + ICR at 5.9 times (3.6 times look through
Slide 13: Section 3 Operational Performance
Section 3+ Operational Performance Interlink, Berlin Goodman Fiege Brieseleang, Hong Kong Osaka Nanko, Japan
Slide 14: Investment
Investment + Property fundamentals remain stable reflecting quality of the Investment ($m) FY2013 FY2014 portfolio and customers: Direct 158.6 152.1 – Maintained occupancy at 96% Cornerstones 343.2 339.7 – Retention remains high at 73% Look through EBITDA 501.8 491.8 – WALE of 4.9 years Key metrics1
Slide 15: Development
Development + Development demand driven by structural changes: Development ($m) FY2013 FY2014 – E-commerce, supply chain efficiencies, building Revenue 207.8 276.5 obsolescence, 3PL consolidation EBITDA 165.8 214.5 + Development volumes increasing, reflecting our development led investment strategy
Slide 16: Management
Management + External assets under management (AUM) of $22.4 Management ($m) FY2013 FY2014 billion, up 15% on FY2013 Management income² 181.5 205.9 + Development completions have organically grown AUM EBITDA 108.6 117.1 + Size and scale has resulted in strong margins across the management business K
Slide 17: Management - AUM
Management - AUM + Major new initiatives completed during the year include: – Raised €550 million for GELF, with Goodman selling a further €110 million of its cornerstone investment to meet investor demand – Establishment of KWASA Goodman Germany partnership, with EPF on a 70:30 split with an initia
Slide 18: Management platform
Management platform GAIF GTA GELF GHKLF GMT1 ABPP EPF GCLH GJCF2 Total assets $5.7bn $3.4bn $3.2bn $2.9bn $2.0bn $1.6bn $1.1bn $1.1bn $1.0bn GMG co-investment 27.5% 19.9% 20.4% 20.0% 17.6%3 43.1% 38.0% 20.0% 23.0%3 GMG co-investment $0.9bn $0.4bn $0.4bn $0.4bn $0.2bn3 $0.4bn $0.2bn $0.2bn $0.1bn3 Nu
Slide 19: Section 3 Capital Management / Section 4 Outlook and Initiatives
Section 3+ Section 4+ Capital Management Outlook and Initiatives Summary Pudong International Airport Logistics Park, China Pudong International Airport Logistics Park, China
Slide 20: Strategy and outlook
Strategy and outlook + Australian listed, leading global industrial property operator and fund manager + Focus on execution of a consistent and clearly enunciated strategy + Customer service focus and asset management capabilities are key to business model + Capabilities in major markets with focus
Slide 21: Appendix 1 Results analysis
Appendix 1+ Results analysis Westney Pinnacle Industry Corporate Park, Park, New Zealand Australia Banfield Distribution Centre, Australia Kobe, Japan
Slide 22: Sustainable growth
Sustainable growth + Consistent and sustainable operating earnings growth over five years + Growth in development remains sustainable with entry into new markets and ongoing structural changes within those markets + AUM organically growing on the back of development completions. Supported by $4.5 bi
Slide 23: Profit and loss
Profit and loss Total income by business segment for the year ended 30 June 2014 Category Total Investment Management Development Unallocated Non- operating items $M $M $M $M $M $M Gross property income 207.7 212.2 - - - (4.5) Management income 205.5 - 205.5 - - - Development income 767.6 - - 767.6
Slide 24: Profit and loss (cont)
Profit and loss (cont) Category Total Investment Management Development Unallocated Non-operating items $M $M $M $M $M $M EBIT – per statutory accounts 786.0 386.2 117.1 214.5 (55.9) 124.1 Net gain from fair value adjustments on investment properties (48.6) - - - - (48.6) Share of net gain from fair
Slide 25: Reconciliation non-operating items
Reconciliation non-operating items Non-operating Items in statutory profit & loss Year ended 30 June 2014 $M $M Property valuations Net gain from fair value adjustments on investment properties 48.6 Share of net gain from fair value adjustments on investment properties in associates and joint ventur
Slide 26: Financial position
Financial position As at 30 June 2014 Direct Investments Developments Other Total Assets $M $M $M $M $M Cash - - - 359.9 359.9 Receivables - 32.8 259.8 240.7 533.3 Inventories - - 1,130.1 - 1,130.1 Investment properties 2,190.7 - 342.2 - 2,532.9 Investments accounted for using equity method - 3,388.
Slide 27: Net tangible asset bridge
Net tangible asset bridge + For year ended 30 June 2014¹ 1. Calculated on 1,727.7 million securities being closing securities on issue 27
Slide 28: Cash flow
Cash flow + Cash flow from operating activities growing in excess of underlying operating profit + Reinvestment into development consistent with investment strategy and rotating into long term managed fund cornerstone investments + Non cash share of equity accounted income remains steady given DRP a
Slide 29: Property valuations
Property valuations + The year to June 2014 has seen the industrial market remain active with transactional activity across all regions and the WACR firming to 7.5% + Pre-commitments on development work in progress also contributing to firming cap rates + Valuation gains driven by firming cap rates
Slide 30: Appendix 2 Investment
Appendix 2+ Investment Goodman Interlink, Hong Kong
Slide 31: Leasing
Leasing Across the Group and Funds platform: + 3.0 million sqm leased during the year + Reversions of 5.8% on new leasing deals, with like for like NPI growing at 2.2% + Occupancy Regionmaintained at 96% Leasing area (sqm) Net annual rent ($M) Average lease term (years) Australia 1,249,649 160.0 4.6
Slide 32: Customers
Customers Top 20 global customers Customer Toll Amazon Deutsche Post (DHL) Wesfarmers Kuehne + Nagel Metcash Linfox Zalando Schenker Recall Woolworths Intermarche Hammer Coca-cola Amatil Ceva Logistics Grays Nippon Express Accolade Wines Fiege Group Equinix Inc | © vd io N © & ~ Sn a a ai eo @ 9 9 ©
Slide 33: Geographic exposure
Geographic exposure oodma Top 20 sub regions (by AUM) % Hong Kong —=—ESG Melbourne fF 9.7 Germany LL] 8.5 Auckland Yd South, UK DE ss Brisbane a: Greater Shanghai || 3.2 France || 3.0 Osaka || 24 Adelaide Be Midlands, UK Bic Poland Bs Spain Bie The Netherlands Be Beijing / Tianjin Bz Greator Tokyo |
Slide 34: Direct portfolio detail
Direct portfolio detail Portfolio snapshot Key metrics Total assets A$2.2 billion + 38 properties with a total value of $2.2 billion located across key Australian and UK markets Customers 283 + Leasing deals remain strong across the portfolio: Number of properties 38 – 272,298 sqm ($33.6 million net
Slide 35: Appendix 3 Development
Rheinberg Logistics Centre , Germany Appendix 3+ Development Bungarribee Industrial Estate, Australia
Slide 36: Developments
Developments FY14 Developments Completions Commencements Work in progress Value ($M) 2,227 2,488 2,589 Area (m sqm) 1.6 2.1 2.2 Yield (%) 9.0 8.4 8.3 Pre-committed (%) 96 57 53 Weighted average lease term (years) 8.9 9.8 10.0 Development for third parties or funds (%) 93 86 91 Australia / New Zealan
Slide 37: Developments (cont)
Developments (cont) + Maintained development pipeline in excess of $10 billion – Development pipeline restocked (North America, China and Japan landbanks) – Forecast GLA over 7 million sqm – Development pipeline allocated as Asia Pacific 36%, Europe 42% and Americas 22% + The Group’s development fut
Slide 38: Appendix 4 Management
Appendix 4+ Management Senec Logistics Centre, BirminghamBusiness Slovakia Park, U.K Interlink Industrial Estate, Australia
Slide 39: Global platform
Global platform ’ + Greater C! , . GMG Managed Funds Europe/UK AS0.3bn in assets A$4.1bn in assets 358 people 29 properties A$1.2bn in assets 10 properties 273 people i japan CDA Ea A$5.6bn in assets 61 people 159 properties 30 people A$0.9bn in assets 11 properties AS1.7bn in assets’ : A$1.6bn in a
Slide 40: Goodman Australia Industrial Fund
Goodman Australia Industrial Fund Key events Key metrics¹ + Acquired four investment properties totalling $417 million (pre- Total assets A$5.7bn costs), three with active asset management opportunities Interest bearing liabilities A$2.1bn Gearing2 36.4% + Completed the sale of three investment prop
Slide 41: Goodman Trust Australia
Goodman Trust Australia Key events Key metrics¹ + Refinanced $600 million of the Australian Syndicated Total assets A$3.4bn Debt facility extending the tenor by 2.3 years Interest bearing liabilities A$1.2bn Gearing2 34.9% + Urban renewal opportunity realised with the sale of Customers 270 Global Bu
Slide 42: Goodman European Logistics Fund
Goodman European Logistics Fund Key events Key metrics¹ + Acquisition of property assets totalling €374.4 million over Total assets A$3.2bn the last 12 months from: Interest bearing liabilities A$1.2bn – GMG: €182 million Gearing2 37.8% – Third party: €192 million Customers 104 Number of properties
Slide 43: Goodman Hong Kong Logistics Fund
Goodman Hong Kong Logistics Fund Key events Key metrics¹ + The Fund’s portfolio comprising of 13 properties and Total assets A$2.9bn one container terminal offering customers 1.4 million Interest bearing liabilities A$0.7bn sqm of quality logistics space Gearing2 21.0% Customers 217 + The divestment
Slide 44: Goodman Property Trust
Goodman Property Trust Key events Key metrics1 + Active portfolio management: Total assets A$2.0bn Interest bearing liabilities A$0.7bn - Over 150,000 sqm of space leased to new or existing customers during the 12 months ended 31 March 2014 Gearing2 36.0% - WALE of 5.5 years and 97% occupancy rate C
Slide 45: Arlington Business Parks Partnership
Arlington Business Parks Partnership Key events Key metrics¹ + Completed £38 million new 21,524 sqm warehouse for Total assets A$1.6bn PCL Logistics and Arla Foods Ltd Interest bearing liabilities A$0.3bn Gearing2 27.3% + Completion of 38,500 sqft turnkey warehouse Customers 114 development to Toolb
Slide 46: EPF Mandate
EPF Mandate Key Events Key metrics1 Total assets A$1.1bn + KWASA-Goodman Industrial Trust (KGIT) was Interest bearing liabilities A$0.5bn established in June 2012 in partnership with the Gearing² 40.9% Employees Provident Fund (EPF) Customers 32 Number of stabilised properties 18 + KGIT invested in
Slide 47: Goodman China Logistics Holding
Goodman China Logistics Holding Key events Key metrics¹ + Secured a 5-year joint venture extension to 30 June 2019 Total assets A$1.1bn Interest bearing liabilities A$0.1bn + Total equity commitment of $1.5 billion Gearing1 4.1% Customers 49 + GCLH portfolio continues to expand with 16 stabilised pr
Slide 48: Goodman Japan Core Fund
Goodman Japan Core Fund Key events Key metrics¹ + Up to August 2014 ¥39.25 billion (A$400 million) of over Total assets A$1.0bn subscribed capital raisings from new and existing Interest bearing liabilities A$0.5bn investors to acquire new assets and fund future growth Gearing2 47.5% Customers 21 +
Slide 49: Appendix 5 Capital management
Appendix 5+ Capital management Torun Logistics Centre, Poland
Slide 50: Group financial covenants
Group financial covenants Covenants Test Covenant Result Headroom Net liabilities1 as a percentage of net tangible assets is Gearing ratio 55.0% 28.0% 27.0% not more than 55.0% Interest cover ratio EBITDA to interest expense at least 2.0x 2.0x 5.9x 3.9x Secured debt as a percentage of total tangible
Slide 51: Currency mix
Currency mix joodmai Currency mix — outstanding debt EUR JPY 2% 6% Lf NZD 7% USD 64% Currency mix — including the impact of Capital Hedging FX Swaps JPY NZD 4% 7% HKD EUR 9% USD 14% 51
Slide 52: Financial risk management
Financial risk management Financial risk management in line with Group Board policy + Interest risk management: - 94% hedged over next 12 months - Weighted average hedge maturity of 4.8 years - Weighted average hedge rate of 4.27%1 vs spot 1.60%2 + Foreign currency risk management: - 88% hedged as a
Slide 53: Financial risk management (cont)
Financial risk management (cont) Interest rate + Interest rates are hedged to 94% over next 12 months + Weighted average hedge rate of 4.27%1 vs spot 1.60%2 - NZD – (hedge 4.69%, spot 4.43%) - JPY – (hedge 1.30%, spot 0.26%) - HKD – (hedge 1.55%, spot 1.81%) - GBP – (hedge 6.75%3, spot 2.10%) - Euro
Slide 54: Financial risk management (cont)
Financial risk management (cont) Interest rate hedging profile Euro payable GBP payable HKD payable NZD payable JPY payable USD payable AUD receivable Fixed Fixed1 Fixed Fixed Fixed Fixed A$M Fixed rate rate rate rate rate rate Rate As at €M % £M % HK$M % NZ$M % ¥M % US$M % % June 2015 (835.3) 2.00
Slide 55: Financial risk management (cont)
Financial risk management (cont) Foreign currency denominated balance sheet hedging maturity profile Currency Maturity Weighted average Amount receivable1 Amount payable1 exchange rate NZ$ 2017 / 2018 1.2530 A$79.8m NZ$100.0m HK$ 2016 / 2018 7.8154 A$332.5m HK$2,590.0m ¥ 2016 / 2017 / 2019 86.7772 A
Slide 56: Exchange rates
Exchange rates + Statement of Financial Position – exchange rates as at 30 June 2014 – AUDGBP – 0.5511 (30 June 2013 : 0.6072) – AUDEUR – 0.6883 (30 June 2013 : 0.7095) – AUDHKD – 7.3034 (30 June 2013 : 7.0739) – AUDBRL – 2.0820 (30 June 2013 : 2.0250) – AUDNZD – 1.0772 (30 June 2013 : 1.1871) – AUD
Slide 57: Thank you
Strength in numbers