Slide 1: Cairn Homes plc 2018 Preliminary Results Presentation
Cairn Homes plc 2018 Preliminary Results Presentation Marianella, Rathgar
Slide 2: Table of Contents
2018 Preliminary Results Presentation Table of Contents Page Michael Stanley Chief Executive Officer & Co-Founder 01 Highlights 02 02 Financial 09 Tim Kenny Group Finance Director 03 Land Bank 13 04 Operations 18 05 Outlook 25 Declan Murray Head of Investor Relations 06 Appendices 27 1
Slide 3: Highlights
01 Highlights Parkside, Dublin
Slide 4: Financial Highlights
Financial Highlights ASPs €337m Sales Units Revenue Houses Apartments Overall 2018 804 €323k €505k €366k €294.2m Revenue 2017 418 €286k €552k €315k €131.5m (2017: €149.5m) 2019 – closed and forward sales 471 €322k €714k €428k €201.4m €69.1m / 20.5% €53.2m 4.4 cent Gross profit / Gross margin Operati
Slide 5: Operational Highlights
Operational Highlights Mature Quality and Location Enhancing Inherent Business Driving Sales Demand Land Value Active on 13 sites - c. 4,750 homes Selling on 9 sites - 5 sales launches 2,106 units – granted planning 5 upcoming site commencements, planned in 2018 including 4 large-scale multifamily S
Slide 6: Cairn's Sustainable Model
Cairn’s Sustainable Model Opportunity: Position: Fastest Growing Undersupply Best Located, Pipeline and Economy in the EU of New Homes Low Cost Land Bank Planning Maturity Average 5 year GDP Supply – 13,373 15,100 units 32 sites - 70% of our +10.7% sites are active or Demand – 35,000 Average unit co
Slide 7: Our Vision, Mission and Values
Our Vision, Mission and Values Our vision Our values Be the most trusted, respected and safest homebuilder in Ireland Agile & Honest & Innovative Straightforward Collaborative Our mission Building in great locations to create places and homes where people love to live Commercially Committed minded &
Slide 8: The Irish Multifamily PRS Market
The Irish Multifamily PRS Market Backdrop • Multifamily PRS 30% / €930 million of the Irish property investment market in 2018 - forecast to grow to c. €1.5bn in 2019 €’m • Prime residential yields in Dublin 4.0% and 2018 rental inflation 1000 €930m was 8.8% 800 • c. €7 billion of institutional equi
Slide 9: Illustrative Cash Generation 2019 – 2021
Illustrative Cash Generation 2019 – 2021 €’m NERATIO N Assumptions behind the Cash Generation CASH GE STRONG 600 Illustration to 2021 500 • Term bank debt remains constant at €150m 400 • Strategic / adjoining / JV land investment c. €75m 300 to FY 2021 200 • No HPI or build cost inflation 100 • Land
Slide 10: Financial
02 Financial Elsmore, Naas
Slide 11: Income Statement for the Year Ended December 2018
Income Statement for the Year Ended 31 December 2018 Commentary 2018 Unaudited 2017 Audited Before Before Exceptional Exceptional Exceptional Exceptional • Revenue of €337.0m from Items Items Total Items Items Total the sale of 804 units (€294.2m) and site sales (€41.7m) €m €m €m €m €m €m • Gross pr
Slide 12: Balance Sheet at December 2018
Balance Sheet at 31 December 2018 Commentary 2018 Unaudited 2017 Audited €m €m • Total assets of €1,005.8m PP&E and intangibles 2.2 2.2 (2017: €1,005m) Restricted cash - 17.0 Non-current assets 2.2 19.2 • Total equity of €756.5m (2017: €721.7m) Inventories 933.4 911.5 Other receivables 8.0 5.5 • Inv
Slide 13: Cash Flow Statement for the Year Ended December 2018
Cash Flow Statement for the Year Ended 31 December 2018 Commentary 2018 Unaudited 2017 Audited €m €m • EBITDA of €54.7m EBITDA 54.7 15.6 (2017: €15.6m) • Net cash from operating activities (Increase) in inventories (21.4) (184.3) €40.1m (2017: outflow €128.6m) Decrease in loan assets - 16.0 Other wo
Slide 14: Land Bank
03 Land Bank Donnybrook Gardens, Dublin 4
Slide 15: Characteristics of Housing and Apartments
Characteristics of Housing and Apartments Key Metrics and Characteristics Housing Apartments * Total Land Bank Capital Allocation 54% 46% 100% Total Units 10,700 4,400 15,100 Average Cost per Unit €37k €76k €49k Average Selling Price €309k €541k €377k (estimated) (ex. VAT) (no HPI) NDV €3.3bn €2.4bn
Slide 16: Composition of c.15,100 units
Composition of c.15,100 units Targeted Capital Allocation 10% 29% 19% • GDA – 95% Unit Buyer 51% capital allocation Type Profile • 90% of units • 100% of active 71% developments 20% FTB (from €275k – €375k) Units Investment Houses Allocation Trade Up / Mover (from €375k – €550k) Dublin - within M50
Slide 17: Land Bank in Numbers
Evolution of our Landbank 2015 / 2016 2017 2018 Balance Sheet Land acquisitions €693m* €150m €34m Land (at cost) at year end €690m* €789m €751m Construction work in progress (at cost) €37m €104m €181m Significant ongoing enhancement of the value • €751m invested in land of 15,100 of our land bank 1,
Slide 18: Planning
Planning Land Bank Planning Status Efficient Planning Processes 2% • The Strategic Housing Development (SHD) and Strategic Development Zones (SDZ) processes 28% covers our entire residentially zoned land bank: 33% Full Planning Permission SDZ (effective FPP) Planning In Planning (SHD process) Status
Slide 19: Operations
04 Operations Gandon Park, Lucan
Slide 20: 2018 Revenue and 2019 Closed and Forward Sales Analysis
2018 Revenue and 2019 Closed and Forward Sales Analysis Product Mix Units ASP Revenue Housing – Starter Homes 532 €307k €163.5m Housing – Trade Up / Down 80 €421k €33.7m Apartments 192 €505k €97.0m Total 804 €366k €294.2m 2019 Closed and Forward Sales (as at 6 March 2019): Product Mix Units ASP Reve
Slide 21: Strong Sales Rates
Strong Sales Rates Sales Spring selling season • Average 2018 weekly sales rate of 2.8 units per active • Positive start with 7 launches to date sales outlet (2017: 2.4 units) • Mariavilla (Maynooth) recently launched • New show units launched for next phase in Shackleton Park (Lucan) Average Weekly
Slide 22: Continued Revenue and Volume Growth
Continued Revenue and Volume Growth On track to deliver medium term target of Unit Sales c. 1,400 – 1,500 units by 2021 Revenue Closings €’m 1,600 600 1,400 550 1,200 500 1,000 800 450 600 400 400 350 200 0 300 2018 2019 2020 2021 Houses Apartments Range Revenue Note - Excluding HPI, including site
Slide 23: Our Construction Model
Our Construction Model Central procurement and site management leverages our scale and established subcontractor base Procurement – current committed order book on active sites €250m Top 15 subcontractors 60% Average total contact value awarded to Top 15 subcontractors €18m Average number of sites o
Slide 24: Procurement Advantages and Key Suppliers
Procurement Advantages and Key Suppliers Procurement Advantages Key Suppliers • Scale • Continuity of workload • Standardisation • Payment security • Development pipeline visibility • Quality and integrity of procurement process • Safe and supportive working environment • Cairn culture and values St
Slide 25: Cairn Brands
CAIRN DESIGNED FOR LIVING Cairn Brands tas ©) Se ‘@) DONNYBROOK nid GARDENS OAK PARK SIX HANOVER QUAY Q SHACKLETON PARK x Park mm Churchfields st EDENBROOK Side MARIAVILLA x ADs @ GLENTIERON — ALBANY GANDON PARK 24
Slide 26: Outlook
05 Outlook Mariavilla, Maynooth 25
Slide 27: Outlook
Outlook 5 new site commencements this year Continue to leverage significant and strong forward sales pipeline demand for competitively priced starter underpins medium term target of c. homes, build to sell apartments and 1,400 – 1,500 units by 2021 multifamily PRS units Strong cash generation – Inte
Slide 28: Appendices
06 Appendices
Slide 29: Macroeconomic Drivers for Cairn
Macroeconomic Drivers for Cairn Supply Population 18.1k new homes Annual Housing +1.3% (+ 64,500) in 2018 – only demand in the year to April 2018 13.4k in multi unit ESRI Estimate (3x EU average) developments of which 35,000 9.4k are in the GDA GDA annual demand – c. 20k Employment Shortfall in & Wa
Slide 30: Well Located Housing Sites
Well Located Housing Sites (c. 10,700 units) with excellent public Active Units transport links and no planning risk 1 Parkside, Malahide Road 395 2 Churchfields, Ashbourne, Co. Meath 397 3 Elsmore, Naas, Co. Kildare 500 4 Shackleton Park, Lucan 768 5 Glenheron, Greystones, Co. Wicklow 393 6 Mariavi
Slide 31: Prime Apartment Sites
Prime Apartment Sites (c. 4,400 units) in and near Dublin City Active PRS Opportunity Units 1 Marianella, Rathgar, Dublin 6W 208 2 Hanover Quay, Dublin 2 120 6 3 Greenfields, Donnybrook, Dublin 4 86 SCALE 1 km 4 Shackleton Park, Lucan 60 Planned 2019 / 20 5 Montrose, Dublin 4 6 Griffith Avenue, Dubl
Slide 32: The Profile of our Competitively Priced House Buyers
The Profile of our Competitively Priced House Buyers Profile: Outlook: • Individuals earning in excess of €70k (or combined for couples) with a • Demand is at it’s strongest in this segment The First preference for 3 bedroom houses (60% of Cairn FTB’s) of the owner occupier market • Significant supp
Slide 33: The Profile of our Apartment Buyers
The Profile of our Apartment Buyers Profile: Outlook: • Very strong demand in this segment but • Individuals earning in excess of €80k, city limited number of new apartments being built centre location focused - want to live near near where they work The Young where they work in 1 and 2 bedroom • Gr
Slide 34: GDA Supply – Lagging Demand
GDA Supply – Lagging Demand Cairn GDA Supply Forecast 2018 GDA 21,000 10,245 completions include 830 (8%) one off houses GDA Demand – 20,000 Units 19,000 17,000 Estimated undersupply GDA supply is c. 50% below demand levels 2018 – 2023: c. 53,000 units 15,000 13,000 Only 1,833 apartments built 11,00
Slide 35: Undersupply of Apartments
Undersupply of Apartments In Dublin’s Central Business District (CBD) there is a critical undersupply of apartments • Despite the large number of apartment • This is a critical undersupply for a capital city that is growing schemes that are through planning or in at the pace of Dublin and attracting
Slide 36: Undersupply of Apartments (continued)
Undersupply of Apartments (continued) Percentage of Population Living in Apartments Dublin Properties to Rent Ireland 9,000 8,000 7,000 6,000 5,000 EU–28 4,000 3,000 2,000 1,000 0 Q4 2006 Q2 2007 Q4 2007 Q2 2008 Q4 2008 Q2 2009 Q4 2009 Q2 2010 Q4 2010 Q2 2011 Q4 2011 Q2 2012 Q4 2012 Q2 2013 Q4 2013
Slide 37: Snapshot of Recent Multifamily PRS Transactions
Snapshot of Recent Multifamily PRS Transactions Reported Property Buyer No. of Apartments Price Neptune Building, Dun Laoghaire International institutional investor 197 €72.5m Leona & Charlotte Buildings, Dun Laoghaire International institutional investor 319 €132m Hampton Wood, Finglas, Dublin 11 R
Slide 38: Depth of FTB Market
Depth of FTB Market What would a couple have to earn to afford a new home: Maximum Mortgage Can Afford a House Joint Income (€) Number of Couples (3.5x Income) (€) at this Price (€) 72,500 221,000 253,750 282,000 Irish Revenue statistics 93,000 133,000 325,500 362,000 indicate that there are: 114,00
Slide 39: Depth of FTB Market (continued)
Depth of FTB Market (continued) If we assume that 25% of these couples and individuals own their own homes (less than 15% of all people aged under 49 own their own home), our addressable market (those who can afford to buy a new Cairn home, subject to having a deposit and mortgage approval) is: Hous
Slide 40: Positive Outlook for Affordability
Positive Outlook for Affordability Wage inflation outstripping Consumer Price Index Strong labour market 418k new jobs created 4.0% 2400 in Ireland since 2012 16.0% 3.0% 2200 12.0% 2.0% 2000 8.0% 1.0% 1800 0.0% 1600 4.0% 2007Q1 2007Q3 2008Q1 2008Q3 2009Q1 2009Q3 2010Q1 2010Q3 2011Q1 2011Q3 2012Q1 20
Slide 41: Mortgage Market Conditions
Mortgage Market Conditions New entrants making the market more competitive Mortgage drawdown growth is driven by FTB’s €’m # Loans FTB’s = 60% of mortgage 1,500 drawdowns and approvals in 2018 15,000 1,200 12,000 900 9,000 600 6,000 300 3,000 ? 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2
Slide 42: Disclaimer
Disclaimer This presentation document (hereinafter “this document”) has Certain information contained herein constitutes “forward- been prepared by Cairn Homes plc (“Cairn” or the “Company”). looking statements”, which can be identified by the use of terms such as “may”, “will”, “should”, “expect”,
Slide 43: www.cairnhomes.com
www.cairnhomes.com 7 Grand Canal Grand Canal Street Lower Dublin 2 Ireland D02 KW81 +353 1 696 4600 investors@cairnhomes.com Glenheron, Greystones 42