Stockland · ASX:SGP
Stockland — FY2016 Earnings Presentation
27 slides from Stockland's earnings presentation, Aug 17, 2016
Slide 1: FY16 Results Presentation
Slide 2: Agenda
Agenda 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 ai Residential Andrew Whitson, Group Executive and CEO, Residential 7 Retirement Living Stephen Bu
Slide 3: Strategy delivering strong results
Strategy delivering strong results FYI6 FYI5 Change * Growth in FFO per security of 11.1% and Underlying Earnings per Statutory Profit! 889m 903m 16% security of 7.3%, reflecting consistent implementation of our statutory Earnings per security 374cents 38.5cents 2.9% strategy, together with supporti
Slide 4: FY16 Achievements
FYI6 Achievements w Asset Returns ai Commercial Property ch : 4 - 5 Growth Over 1 3 5 in comparable FFO and 10 years Retail: $1b L&BP : $400m Your Way Stockland FY16 Results Presentation
Slide 5: FY16 Achievements
FYI6 Achievements Established Employee Advocacy groups Disability and Flexibility Gender Equity Parents and Carers Wellbeingand Cultural Inclusion Employee Equal to the Engagement Global High Score Performing norm 83% and above Australian norm Established Stockland ROE Support Centre improved to 11%
Slide 6: Stockland Cardinal Freeman The Residences, Sydney
Stockland Cardinal Freeman The Residences, Sydney
Slide 7: Growth in both FFO and Underlying Profit
Growth in both FFO and Underlying Profit Funds from Operations Underlying Profit $m FYI6 FYIS. Change% groueinb, FYI6 FYIS Change% G,gver'be Retail 402 379 6.1% 37% 371 351 5.8% 3.2% Logistics & Business Parks 132 131 0.5% 3.7%me 9 120 (1.3%) 1.0% Office 68 78 (13.0%) 9.9% Ae 53 64 (17.0%) 5.9% me C
Slide 8: FFO, Underlying and Statutory Profit Reconciliation
FFO, Underlying and Statutory Profit Reconciliation $m FYI6 FYI5 Change % Group Funds From Operations (“FFO”) 740 657 12.5%A Adjust for: Amortisation of fit out incentives (49) (45) Amortisation of rent-free incentives (18) (16) Straight-line rent 8 8 Tax (expense)/benefit on Underlying Profit (21)
Slide 9: Strong operating cash flows
Strong operating cash flows Cash Flow Summary $ millions 1,800 1,600 335 107) 1,400 - 1200 232 1,000 ES) ris MIS 00 ‘Operating Cash flow a Pre land acquisition 973m $781 24.5% 4 . 973 600 FYIG includes Residential: Revenue 1484 (448) 400 SGRA costs! (153) . ‘Current year stage costs (248) 200 Future
Slide 10: Maintaining a strong balance sheet
Maintaining a strong balance sheet + A-/stable metrics maintained for over 10 years + Maintaining diversified funding sources + Improved interest cover ratio + 11.5 year USPP settling August 2016, contributing to extended pro forma weighted average debt maturity of 5.9 years * Executed new swaps, lo
Slide 11: Stockland Harrisdale, WA
Stockland Stockland Harrisdale, WA
Slide 12: Commercial Property: Solid recurrent earnings
Commercial Property: Solid recurrent earnings Sustainable profit growth * Comparable FFO growth of 4.5% with strong results across all asset classes Retail sales growing + Total MAT up 4.6%, driven by 6% growth in specialties * Key categories in comparable specialty sales include: * Fast casual dini
Slide 13: Retail: Accretive development pipeline
Retail: Accretive development pipeline Retail development activity progressing as planned $681m development under construction: Harrisdale (WA) opened three months ahead of schedule; Wetherill Park (NSW) stage three opened $372m Green Hills (NSW) development commenced with completion in late FY18, a
Slide 14: Retail: Continuing to achieve positive leasing spreads
Retail: Continuing to achieve positive leasing spreads Strong leasing momentum continues: Retail leasing activity’ FYI6 FYIS * Maintained positive leasing spreads Occupancy? 99.3% 99.5% * 764 leases executed Dick Smith closures Tenant retention TI% 64% reduced stable * No incentives on renewals occu
Slide 15: Logistics & Business Parks: active management
Logistics & Business Parks: active management Over 330,000 sqm of leasing activity, over 25% of the portfolio Benefits of active management and portfolio reshaping reflected in improving performance relative to MSCI benchmark’ Disciplined acquisition strategy: Wonderland Drive (NSW) on an 8.0% yield
Slide 16: Lease expiry profile
Vacant FY17 FY18 FY19 FY20 FY21+
Slide 17: Stockland Newport, Qld
Artist's Impression Stockland Newport, Qld
Slide 18: Residential: Driving sustainable returns
Residential: Driving sustainable returns Continuing growth in operating profit and ROA, driven by implementation of our strategy, market conditions and further activating our Residential land First settlements at new projects in FY16 at: Altrove (Sydney), The Grove and Cloverton (Melbourne) and Aura
Slide 19: Residential: Operating profit margin improvement
Residential: Operating profit margin improvement * Higher margin driven by improved project rate, reflecting price Residential Core Workout! Total growth above feasibility assumptions in some locations and cost Lots settled 5,736 309 6135 savings Revenue $1,339M $143m $1,482m * Operating profit marg
Slide 20: Residential: Growing assets and customers
Residential: Growing assets and customers Significant progress in activating our portfolio: * 90% of net funds employed (NFE) in projects actively selling, up from 60% in FY13 * Ontrack for first settlements from Newport and Pallara (Brisbane), and Arve (Ivanhoe, Melbourne) in FY17 * Owner occupier
Slide 21: Residential: Market overview
Residential: Market overview FY16 Stockland Summary FYI7 Market Outlook FYI6 settlement State volumes Comments on State Vacant land Vacant land Comments on market outlook 0, our settlements in FYI6 sales volumes _ prices (% change over FY15) Demand recovered in the June quarter of 2016 and . . avail
Slide 22: Cardinal Freeman The Residences, Sydney
Cardinal Freeman The Residences, Sydney
Slide 23: Retirement Living contracts on hand
984 1,013 245 297 739 716 251 222 119 67 132 155 On hand Jun 2015 Net new reservations FY16 turnovers / settlements On hand Jun 2016
Slide 24: Retirement Living: Growing returns
Retirement Living: Growing returns Development remains a key focus for improving returns 400 homes under development First apartment buildings at Cardinal Freeman The Residences (Sydney), completed and sold, next building of 40 apartments due for completion in 2H17 New developments at Willowdale (Sy
Slide 25: Stockland Pitt Street Mall, Sydney, NSW
Stockland Pitt Street Mall, Sydney, NSW
Slide 26: FY17 outlook
FYI7 outlook Targeting FY17 FFO per security growth of 5-7%, with a profit skew to 2H17, assuming no material change in market conditions. Underpinned by: Settlements above 6,000 residential lots, with a significant settlement and profit skew to 2H17, reflecting project timing Residential margins ar
Slide 27: Important Notice
Important Notice Le While every ef is made to ptowltaccurate and complete information, Stockland does not warrant or epresent that the information in this préséiitation is free from errors or omissions or is suitable for your intended use. This presentation contains forward-tooxifig:stakements, incl