Stockland · ASX:SGP
Stockland — H1 2024 Earnings Presentation
36 slides from Stockland's earnings presentation, Feb 21, 2024
Slide 1: 1H24 Results
1H24 Results 21 February 2024 Providence, QLD
Slide 2: Acknowledgement of Traditional Custodians
Stockland acknowledges the Traditional Custodians and knowledge-holders of the land on which we live, work and play. We recognise and value their continued and inherent connection to land, sea, culture and community. We also pay our respects to their Elders past and present and extend that respect t
Slide 3: Agenda
Agenda Group update Tarun Gupta MD & CEO Financial results and Alison Harrop capital management CFO Commercial Property and Kylie O'Connor Investment Management CEO, Investment Management CP Development and Andrew Whitson Communities CEO, Development Summary and Tarun Gupta Outlook MD & CEO 3 1H24 R
Slide 4: Group update
Group update Tarun Gupta MD & CEO Willowdale, NSW
Slide 5: Accelerated execution of strategy
1H24 Results Accelerated execution of strategy ✓ Announced ~$1.06bn acquisition of 12 actively trading Masterplanned Communities (MPC) projects1 ✓ Expanded capital partnership platform with SCP and SSRCP2 ✓ Redeploying capital towards targeted growth sectors ✓ Positioning for a step change in produc
Slide 6: Accelerated execution of strategy
Accelerated execution of strategy Reshape portfolio Accelerate pipeline Scale partnerships Sustainable growth • Announced a ~$1.06bn1 acquisition of 12 • Positioning for a step change in production • Consistent execution in scaling the capital • Accelerated execution of strategy, focused on actively
Slide 7: 1H24 Result
1H24 Result On track to deliver FY24 guidance, with material 2H24 skew 1H24 Highlights • 1H24 FFO per security of 11.2c and 1H24 distribution per Funds From Operations Post-tax FFO per security NTA per security security of 8.0c, reflecting the material FFO skew to 2H24 $266m 11.2 cents $4.20 • Accel
Slide 8: Innovative culture bringing ESG strategy to life
Innovative culture bringing ESG Net Zero targets2 Social value3 target of $1bn strategy1 to life ✓ Launched a leading renewable energy ✓ Endorsement of Stockland’s 4th Reconciliation partnership with Energy Bay Action Plan (RAP) – ‘Stretch’ RAP 2023-26 ✓ Established a lower carbon concrete partnersh
Slide 9: Financial results and capital management
Financial results and capital management Alison Harrop CFO Stockland Head Office, Sydney CBD, NSW
Slide 10: Maintaining capital discipline
Maintaining capital discipline Positioned for step change in production rate • Active balance sheet management, including ongoing Gearing5 Available liquidity Interest Cover3 capital recycling with ~$380m1 of non-core Town Centres disposals 26.8% ~$2.6bn 4.8x • Substantial available liquidity of ~$2
Slide 11: Funds from operations
Funds from operations Earnings reflect material 2H24 skew in MPC and LLC FFO $m 1H24 1H23 Change FFO per security (pre and post-tax) at 11.2 cents, reflecting: Commercial Property FFO 329 320 2.9% Comparable FFO growth of 3.1%1 across CP portfolio • Growth in Commercial Property FFO contribution: Re
Slide 12: 1H24 operating cashflows
1H24 operating cashflows Operating Cashflow1 Operating Cashflow before land acquisitions1 $(362)m $67m Prudent cashflow management: • 1H24 distribution reflects a payout ratio of 72% of post- $(174)m in 1H23 $192m in 1H23 tax FFO • 1H24 operating cashflow reflects: Cash movements between FY23 and 1H
Slide 13: Commercial Property and Investment Management
Commercial Property and Investment Management Kylie O’Connor CEO, Investment Management
Slide 14: Commercial Property
Commercial Property High quality operational metrics Commercial Property FFO of $329m and comparable FFO growth of 3.1%1 underpinned by: • Strong comparable FFO growth in Logistics 6.0%1 Asset value3 • Sustained tenant demand driving positive leasing spreads in Logistics and Town Centres ~$10.6bn •
Slide 15: Commercial Property valuations
Commercial Property Valuations supported by high quality income growth Net valuation decrease of $(51)m1 0.5% decrease on 30 June 2023 book value Yennora Distribution Centre, NSW Optus Centre, Macquarie Park NSW Stockland Wetherill Park, NSW Commercial Property Portfolio Logistics Workplace Town Cen
Slide 16: Logistics
Logistics Strong performance from well-located portfolio • Comparable FFO growth of 6.0%1, reflecting favourable demand-supply dynamics for well-located assets • Re-leasing spreads2 accelerating from 23.9% over 2H23 to 39.6% over 1H24 Portfolio value4 • Occupancy at 99.9%3 with ~290,000 sqm leased o
Slide 17: Workplace
Workplace Solid results from value-add portfolio • Majority of the $1.9bn1 Workplace portfolio is currently being positioned for future development • Positive comparable FFO growth of 2.8%2, driven by rental escalations on existing leases Portfolio value1 • Smaller scale of the portfolio leading to
Slide 18: Town Centres
Town Centres Resilient performance in a moderating retail $m 1H24 1H23 environment Town Centres FFO $187m $185m Asset value6 $5,012m $5,490m • Comparable FFO growth of 2.1%1, with strong leasing spreads of 3.5%2 across new leases and renewals in 1H24 Occupancy3 99.1% 99.4% • Active repositioning del
Slide 19: Town Centres
Town Centres Well-positioned portfolio • Total comparable MAT growth of 5.4%, and comparable specialty MAT growth of 2.6% versus the prior corresponding period1 Comparable centres annual MAT • Portfolio MAT growth rates stabilising from previously elevated levels that reflected post-COVID-19 growth1
Slide 20: Commercial Property Portfolio and Investment Management FY24 focus
Commercial Property Portfolio and Investment Management FY24 focus Active third party capital platform 1 • Focus on scalability and efficiency of the growing platform • Drive investment performance and returns for capital partners Maximise income generation opportunities 2 • • Capture positive renta
Slide 21: CP Development and Communities
CP Development and Communities Andrew Whitson CEO, Development Wattle Park, Tarneit, VIC
Slide 22: Development
Development Creating value through disciplined execution of ~$49bn development pipeline Development pipeline by forecast end value • Strategic holdings of existing sites providing an active and well-diversified pipeline ~94,600 lots in supply pipeline1 ~84% of the pipeline expected to be active by F
Slide 23: CP Development
CP Development Logistics – delivery of secured development pipeline • Construction expected to commence on the majority of the $1.1bn1 active developments over FY24 • Delivery of secured pipeline to provide high quality recurring income on completion Total development pipeline ~$6.5bn1 Majority of ~
Slide 24: Communities
Communities 1H24 FFO reflects material 2H skew Performance across the Communities business reflects: • 1H24 MPC settlements of 1,6141 lots at 18.0% development operating profit margin. 1H24 MPC development FFO impacted by the material MPC settlement skew to 2H24 and mix shifts in settlements • 1H24
Slide 25: Masterplanned Communities
Masterplanned Communities Performance in line with expectations for material 2H skew • Delivered 1,6141 settlements in 1H24, in line with expectations for a larger skew to 2H in FY24 than in FY23 • Development operating profit margin of 18.0%, impacted by higher proportion of WA settlements and rela
Slide 26: Masterplanned Communities
Masterplanned Communities Sales and enquiry levels showing early signs of improvement Net sales by quarter • Net sales of 2,172 lots, reflecting an improvement in 2Q24 vs 1Q24 2,036 1,891 1,974 1,947 1,868 1,799 382 314 180 324 250 1,562 1,545 • Stabilisation of the interest rate environment leading
Slide 27: Masterplanned Communities: strategic restocking of pipeline
Masterplanned Communities Strategic restocking of pipeline • Capital efficient acquisition of 12 actively trading MPC assets for ~$1.06bn1,2 via the establishment of SSRCP with Supalai National vacant land sales and land price per sqm5 ~19,600 lots ~5,500 lots Restocking 30% acquired acquired window
Slide 28: Masterplanned Communities: positioning for increase in production rates
Masterplanned Communities Positioning for increase in production rates Proven production capability Activating the pipeline • Proven track record of creating high-quality communities for over 70 years • Positioning for recovery with up to six new launches during FY24 • Increased offering of affordab
Slide 29: Masterplanned Communities market outlook
Masterplanned Communities Market outlook Australian residential market: 12-month outlook State Price Volumes Market commentary • Structural drivers are supportive, with resilient labour markets and net permanent migration levels remaining elevated amid ongoing constraints in housing supply • Sales v
Slide 30: Land Lease Communities
Land Lease Communities Solid FFO result • FFO of $12m reflecting development income from 155 home settlements at a 22.3% development operating profit margin 1H24 Development Total settlements • Good earnings visibility with 474 contracts on hand, at ~9%1 higher average pricing vs 1H24 FFO in 1H24 se
Slide 31: Land Lease Communities
Land Lease Communities Strong demand facilitating price and volume growth Net sales by quarter • Strong demand for over-50s lifestyle communities reflected in: • 1H24 net sales of 242 homes, supported by the sustained performance of the established housing market 131 111 • Continued price growth on
Slide 32: Land Lease Communities
Land Lease Communities Continued focus on development activity • Continued focus on activating the pipeline and accelerating development activity to drive future settlement volumes Accelerating development activity - ~2,000 homes currently under development across 10 actively trading Rapid growth in
Slide 33: CP Development and Communities FY24 focus
CP Development and Communities FY24 focus Deliver secured pipeline 1 • Commence construction on the majority of the $1.1bn1 active Logistics development pipeline over FY24 • Progress final two buildings in MPark Stage 1 development • Maintained FY24 targets for MPC and LLC settlements and developmen
Slide 34: Summary and Outlook
Summary and Outlook Tarun Gupta MD & CEO
Slide 35: Summary and outlook
Summary and outlook Outlook: On track to deliver FY24 guidance • Accelerated execution of strategy delivering results • Redeploying capital towards targeted growth sectors and positioning for a step change in production rates across MPC and LLC • Majority of the $1.1bn1 active Logistics pipeline exp
Slide 36: Important Notice
Stockland Corporation Limited ACN 000 181 733 Stockland Trust Management Limited ACN 001 900 741; AFSL 241190 As a responsible entity for Stockland Trust ARSN 092 897 348 Important Notice This Presentation and its accompanying Annexures (“Presentation”) has been prepared and issued by Stockland Corp