Slide 1: FY15 Results Presentation
For personal use only Ingenia Communities Group FY15 Results Presentation 25 August 2015 CONJOLA LAKESIDE
Slide 2: Agenda
AGENDA For personal use only TOPIC PAGE Overview 3 Performance and Capital Management 6 Strategy 11 Operational review 18 Outlook 34 2
Slide 3: Our Business
OUR BUSINESS For personal use only Ingenia is a leading owner, operator and developer of affordable Retirement, Lifestyle and Leisure Communities 3
Slide 4: Investment Rationale
INVESTMENT RATIONALE For personal use only Value Proposition Strong and stable rental cash flow through a combination of Lifestyle and Leisure Communities, and Senior’s Rental Communities Substantial market opportunity to further capitalise on a fragmented industry, leveraged to an ageing population
Slide 5: FY15 Performance
FY15 PERFORMANCE For personal use only CATEGORY ACHIEVEMENT • Rental yielding assets - now 85% of $425m portfolio • Acquired or contracted six Lifestyle Parks – actively assessing 20 parks STRATEGY • Sale of non core assets at good value, providing capital for reinvestment and simplifying business m
Slide 6: Performance and Capital Management
PERFORMANCE AND CAPITAL MANAGEMENT For personal use only One Mile Beach, One Mile, NSW 6
Slide 7: Key Financials
KEY FINANCIALS For personal use only KEY FINANCIAL METRICS 30 JUNE 15 30 JUNE 14 CHANGE • Lifestyle Parks now largest Statutory profit 1, 2 $25.7m $11.5m 123% contributor to revenue driven by growing rental base and Revenue $76.0m $45.8m 66% momentum in development Underlying profit3 $17.5m $11.6m 5
Slide 8: Underlying Profit Growing
UNDERLYING PROFIT GROWING Lifestyle Parks now key driver of earnings growth For personal use only UNDERLYING PROFIT JUNE 15 ($m) JUNE 14 ($m) Core business performing well Continuing operations • Garden Villages - continuing to demonstrate strong, stable cash flows with organic growth • Garden Villa
Slide 9: Capital Management: Improved funding capacity
CAPITAL MANAGEMENT Improved funding capacity For personal use only $175 million facility established Feb 2015 Australian debt 30 Jun 15 ($m) • Additional funding ($45.5 million) on improved terms • Reduced funding cost – current all in cost of debt Total facility 175.0 4.6% Total debt drawn 63.9 • I
Slide 10: Capital Management: Steady growth in distributions
CAPITAL MANAGEMENT Steady growth in distributions For personal use only FY15 distribution 1.35¢ per security • Represents 17% increase on FY14 distribution • FY15 distribution 84.9% tax deferral • Payment to be made 16 September 2015 • DRP in place • Future distributions will be at a reduced tax def
Slide 11: Strategy
STRATEGY For personal use only 7.1 hectare site secured for $3.3 million Bethania, recent acquisition of partially developed MHE community, with option to secure adjacent land 11
Slide 12: Strategy Focused on a Deep and Growing Market
STRATEGY FOCUSED ON A DEEP AND GROWING MARKET WITH STABLE CASH RETURNS For personal use only Over 50's Cohort as a Percentage of Australia Australia’s population is rapidly ageing 40% 18.8m 20.0m 39% 16.1m 17.4m 18.0m • By 2061, the proportion of Australians aged over 50 is forecast to 14.9m reach a
Slide 13: Ingenia Meets Convergence of Ageing Population and Housing Affordability Crisis
INGENIA MEETS CONVERGANCE OF AGEING POPULATION AND HOUSING AFFORDABILITY CRISIS For personal use only MARKET DRIVERS OPPORTUNITY INGENIA 1. Australia’s population is rapidly Industry experienced Board ageing – more than 700 people and Management team are estimated to be entering the combined with si
Slide 14: Australian MHE Landscape
AUSTRALIAN MHE LANDSCAPE For personal use only 2,500 MHE sites across Australia 6% pure MHE sites 30% mixed MHE sites 64% tourism parks Source: Colliers. 14
Slide 15: High Quality Acquisitions
HIGH QUALITY AQUISITIONS Focus on urban and coastal markets For personal use only CONJOLA LAKESIDE South Coast, NSW Settling mid September 2015 $24.0m • Premier 21 hectare park on the NSW South Coast with significant development upside BETHANIA Brisbane, QLD Acquired July 2015 $8.2m • Established, b
Slide 16: Changing Business Mix
CHANGING BUSINESS MIX Rapidly growing cash yielding asset base in line with strategy For personal use only 30 June 2014 30 June 2015 Target allocation asset value1 asset value1 Garden Villages Garden DMF DMF Garden ~ 25% Villages 15% 20% Villages 33% 29% Continued $350.0m $424.9m growth NZ Students
Slide 17: Building a Scalable Platform
BUILDING A SCALABLE PLATFORM For personal use only Ingenia is progressively investing in a scalable platform to effectively manage and develop as a significantly larger business • Over the past 12 months considerable investment has been made in development and sales teams • Appropriately resourced t
Slide 18: Operational Review
OPERATIONAL REVIEW For personal use only Conjola Lakeside, Lake Conjola, NSW 18
Slide 19: Ingenia's Portfolio Is Dominated by Seniors Rental Communities
INGENIA’S PORTFOLIO IS DOMINATED BY SENIORS RENTAL COMMUNITIES For personal use only Ingenia has 61 Australian communities and growing 22 LIFESTYLE PARKS • 1,522 permanent sites • 593 annual sites • 1,114 short term sites • 1,500 + development sites Largest owner/operator of Growing presence in NSW
Slide 20: A Rapidly Growing Portfolio of Sticky Rental Contracts
A RAPIDLY GROWING PORTFOLIO OF ‘STICKY’ RENTAL CONTRACTS For personal use only Long-term rental Short-term rental Characteristics Active Lifestyle Garden Villages Active Lifestyle All age rental Active Holiday Estates Estates Parks Residential site Annual (Occupation Lease type Residential lease Res
Slide 21: Active Lifestyle Estates
ACTIVE LIFESTYLE ESTATES Book value: $204.2 million For personal use only • Ingenia’s Active Lifestyle Estates business provides exposure to a growing demand from Australia’s ageing population for affordable seniors housing • The portfolio is underpinned by rental revenue, community expansion and re
Slide 22: Active Lifestyle Estates: $204.2 million portfolio
ACTIVE LIFESTYLE ESTATES $204.2 million portfolio dominated by rental returns For personal use only • Revenue increasing as business rapidly expands KEY DATA 30 June 15 30 June 14 Total properties 20 15 • Portfolio quality and scale enhanced Permanent sites 1,468 1,093 • Benefit of development, sale
Slide 23: Active Lifestyle Estates: Highest and best use drives mix
ACTIVE LIFESTYLE ESTATES Highest and best use drives mix For personal use only In select iconic coastal parks, tourism generates significantly higher returns than permanent sites Tourist cabin – 72 m2 Permanent site - 135 m2 Average rent $127 p/n Rent from senior $133 p/w @ 68% occupancy = $6,900 pe
Slide 24: Active Lifestyle Estates: Short-term sites
ACTIVE LIFESTYLE ESTATES: SHORT-TERM SITES A deep market with significant cross selling potential For personal use only Tourism assets often provide first exposure to Ingenia’s Lifestyle Parks offering and the MHE model Key markets account for majority of visitation, providing strong cross selling o
Slide 25: Active Lifestyle Estates: Short-term rental
ACTIVE LIFESTYLE ESTATES – Short-term rental For personal use only Portfolio location FY15 KEY ACHIEVEMENTS (by site numbers) Significant revenue growth, reflecting increasing scale and Metropolitan leverage of marketing platform 10% Investment in digital platform and marketing strategy delivering r
Slide 26: Active Lifestyle Estates: Development
ACTIVE LIFESTYLE ESTATES – DEVELOPMENT Material uplift in sales delivered For personal use only Development June 15 June 14 Change FY15 KEY ACHIEVEMENTS portfolio Development pipeline expanded to 1,135 potential sites Total active development projects 8 4 • Addition of 290 potential sites, including
Slide 27: Sales Platform
SALES PLATFORM Momentum building For personal use only Strong growth in sales and settlements • Ettalong sold out • Lake Macquarie and Stoney Creek building demand Additional projects to launch FY16 FY15 Contracted, Reserved & Settled FY16 Homes Contracted & Reserved Homes Settled 25 Ettalong 21 Bea
Slide 28: Building Platforms for Scalable Growth
BUILDING PLATFORMS FOR SCALABLE GROWTH For personal use only • A clear focus on customer experience, Ingenia Care Assist and social programs will continue to drive customer advocacy and referrals • Customer experience underpinned by investment in CRM system People • A standard suite of products, spe
Slide 29: Active Lifestyle Estates: Ongoing focus on portfolio expansion
ACTIVE LIFESTYLE ESTATES Ongoing focus on portfolio expansion and sales delivery For personal use only FOCUS • Continue to expand portfolio with high quality acquisitions in capital cities and accessible coastal locations • Seed new clusters where demographics and market opportunities remain attract
Slide 30: Garden Villages (Seniors Rental)
GARDEN VILLAGES (SENIORS RENTAL) Organic growth opportunity For personal use only • Ingenia is the largest owner / operator of seniors rental accommodation in Australia • Stable, recurring cash flows underpinned by Government payments (pension and rent assistance) • Growth being delivered through oc
Slide 31: Garden Villages: Enhanced portfolio
GARDEN VILLAGES (SENIORS RENTAL) Enhanced portfolio For personal use only KEY ACHIEVEMENTS FY15 Adding value through operating excellence Three non core assets sold at premium to book value Village/ Occupancy Purchase June 15 Increase Acquired price Valuation Acquired Jun 15 Significant uplift in va
Slide 32: Garden Villages: Continuing to deliver growth
GARDEN VILLAGES (SENIORS RENTAL) Continuing to deliver growth For personal use only FOCUS • Grow rents above pension or CPI • Continue to increase occupancy towards target of 93% over next 2 years • Capitalise on growing benefit from community engagement to position Ingenia as preferred accommodatio
Slide 33: Settlers Villages (DMF)
SETTLERS VILLAGES (DMF) Sell down continues while reducing investment For personal use only KEY ACHIEVEMENTS FY15 KEY DATA June 15 June 14 • Strong uplift in accrued DMF income driven by rising prices Total properties 8 9 in WA assets Total units 838 980 • Development profits moderating as stock lev
Slide 34: Outlook
OUTLOOK Strong outlook as Lifestyle Parks rental income and development ramps up For personal use only ► Lifestyle Parks market competition increasing but Ingenia remains well positioned to lead sector consolidation ► Ageing population driving demand for affordable seniors accommodation ► Continuing
Slide 35: Appendices
APPENDICES For personal use only Ingenia home under construction for Stoney Creek 35
Slide 36: Appendix 1: Underlying Profit
APPENDIX 1: UNDERLYING PROFIT Lifestyle Parks becoming established as key driver of earnings growth For personal use only FY15 FY14 Underlying profit (A$m) (A$m) Comments (FY15) Continuing operations - Garden Villages 11.0 9.9 Occupancy and rate growth continue to drive earnings - Settlers Lifestyle
Slide 37: Reconciliation to EBIT and Underlying Profit
APPENDIX 2 Reconciliation to EBIT and Underlying Profit from continuing operations For personal use only Active Lifestyle Garden Settlers Corporate TOTAL Estates Villages (DMF) (A$m) (Lifestyle Parks) (Rental) Rental income 19.9 24.4 0.7 - 45.0 Accrued DMF fee income - - 6.8 - 6.8 Manufactured home
Slide 38: Underlying Profit and operating cash flows
APPENDIX 3 Underlying Profit and operating cash flows For personal use only FY14 to FY15 Underlying profit reconciliation 20 4.5 (1.4) 0.4 0.4 (0.6) (0.3) 15 1.8 1.1 $m 10 17.5 11.6 5 0 Underlying Garden Villages Settlers Active Lifestyle Corporate costs Net finance Income tax NZ Students US Seniors
Slide 39: Cashflow in detail
APPENDIX 4 Cashflow in detail For personal use only 30 June 30 June (A$m) 2015 2014 Opening cash at 1 July 14.6 37.6 Rental and other property income 57.0 39.9 Net cashflow associated with manufactured home (3.6) (0.5) development Net borrowing costs paid (3.9) (3.9) Income tax received/(paid) 0.8 (
Slide 40: Balance sheet
APPENDIX 5 Balance sheet For personal use only 30 June 30 June (A$m) 2015 2014 Cash 15.1 12.9 Inventory 13.2 2.2 Investment property and property under development 539.7 498.9 Other assets 15.7 7.9 Assets held for sale 61.6 5.4 Assets of discontinued operations - 47.6 Total assets 645.3 574.9 Borrow
Slide 41: Quality acquisitions delivering on strategy
APPENDIX 6 Quality acquisitions delivering on strategy For personal use only Ingenia’s acquisitions have focused on key metro and coastal locations Purchase Potential Long-term Annual Short-term price Yield Development sites1 sites sites ($m) sites2 Significant White Albatross, Nambucca Heads, NSW 2
Slide 42: Intimate knowledge of our customers and their buying decision
APPENDIX 7 Intimate knowledge of our customers and their buying decision For personal use only • A strong program of qualitative and quantitative research is used to gain more in-depth insights to the push/pull factors behind the buying decisions of our customers in different locations • Identify pr
Slide 43: Achieved sales in FY15
APPENDIX 8 Achieved 100 sales in FY15 For personal use only Active Lifestyle Estates - Sales Available Settled Settled Homes Under Average Sales 1 July to 30 Jun 2015 Reserved Contracted Completed (New Homes) (Refurb / DMF) Construction Price Achieved Stock All Sites (100 Sales) 51 5 28 16 43 44 Ava
Slide 44: Competitor Landscape – Lifestyle and Tourism Parks
APPENDIX 9 Competitor Landscape – Lifestyle and Tourism Parks For personal use only Major operators represent <10% of market opportunity Major Operators No. of parks Locations Capital strategy Active Lifestyle Estates 22 NSW and SE QLD Acquire existing lifestyle and tourism parks. (Ingenia) Tourism
Slide 45: Contact Information
CONTACT INFORMATION For personal use only SIMON OWEN CEO & Managing Director Tel: +61 2 8263 0501 Mob: +61 412 389 339 Email: sowen@ingeniacommunities.com.au DONNA BYRNE Group Investor Relations Manager Tel: +61 2 8263 0507 Mob: +61 401 711 542 Email: dbyrne@ingeniacomunities.com.au INGENIA COMMUNIT
Slide 46: Disclaimer
DISCLAIMER For personal use only This presentation was prepared by Ingenia Communities Holdings The forward looking statements included in this presentation involve Limited (ACN 154 444 925) and Ingenia Communities RE Limited subjective judgment and analysis and are subject to significant (ACN 154 4