Slide 1: 2014 Full Year Results
For personal use only 2014 Full Year Results
Slide 2: Outline
Outline 1. Introduction For personal use only Steven Sewell, Managing Director & CEO 2. Financial Results Tom Honan, Chief Financial Officer 3. Property Performance Tom Honan 4. Optimise Tom Honan 5. Enhance Jonathan Timms, EGM - Development & Asset Strategy 6. Redevelop Jonathan Timms 7. Transact S
Slide 3: Introduction
Introduction Steven Sewell For personal use only
Slide 4: FY14 Key Financial Highlights
FY14 Key Financial Highlights Key Metrics FY14 FY13 % change For personal use only Statutory Net Profit $441.3m $212.7m 107.5% Underlying Earnings $242.9m $224.4m 8.2% Underlying Earnings per Security 17.0 15.8 7.6% (cents) Distribution per Security (cents) 15.71 14.1 11.3% FY14 FY13 Total Tangible
Slide 5: FY14 Key Achievements
FY14 Key Achievements Operational For personal use only • Comparable NOI growth of 2.3% • 1,1121 total leasing deals across the portfolio. Average leasing spread of 2.5% for owned centres Redevelopment and Asset Strategy • Warnbro 100% leased, yield increased to 9.7%, opening ahead of schedule • Pip
Slide 6: Our Property Focus
Our Property Focus For personal use only Model Growing Optimise Enhance Redevelop Transactions Shareholder Returns • Efficiencies and • Ambience of our • Market pipeline • IRR driven, 10 year reduced cost structure centres through increased to $1.3bn models on all 70 upgrades assets, recycling under
Slide 7: Financial Results
Financial Results Tom Honan For personal use only
Slide 8: Segment Income Statement
Segment Income Statement Segment Income Statement1 for year ended: FY14 FY13 For personal use only $m $m Direct property investment income 310.3 309.5 • Underlying EPS of 17.0 cents per Syndicate investment income 11.7 22.0 security for the FY, up 7.6% on pcp Investment Income 322.0 331.5 Property m
Slide 9: Segment Balance Sheet
Segment Balance Sheet For personal use only Segment Balance Sheet1 as at: FY14 FY13 Assets $m $m Cash 57.3 72.2 • Balance Sheet Gearing of 24.1% as at 30 June Direct Property (Held for Sale) 95.3 371.4 2014 providing significant financial flexibility Direct Property 4555.7 3,774.0 Managed Fund Inves
Slide 10: Operational Performance
Operational Performance For personal use only
Slide 11: Operating Platform Delivers Stable Results
Operating Platform Delivers Stable Results Deliver consistent operating For personal use only Solid core fundamentals performance 30 supermarkets achieving sales of >$12,000 per sq.m • NOI growth +3.2% annual ~270 million customer average for past 5 years visitations annually • Occupancy 99.5%, cons
Slide 12: National Operational Achievements
National Operational Achievements FDC Portfolio Jun-14 Jun-13 For personal use only No. of Shopping Centres 63 47 Comparable NOI Growth – Stabilised1 2 2.3% 2.8% Occupancy2 99.5% 99.5% Annual Retail Sales Growth (SCCA)2 3 0.7% 3.3% Specialty Occupancy Cost2 14.6% 14.7% Capitalisation Rate (weighted
Slide 13: Strength of Sub-regional Centres
Strength of Sub-regional Centres NOI Market MAT For personal use only FDC Portfolio % of Income Growth2 Occupancy2 Growth2,3 Convenience 10% 0.1% 98.2% -0.1% Sub-regional 62% 3.1% 99.7% 0.9% Regional 27% 0.9% 99.6% 0.8% Total4 100% 2.3% 99.5% 0.7% FDC Predominantly Sub-regional1 Other • 62% of FDC’s
Slide 14: National Leasing Performance
National Leasing Performance Renewals (12 months to June 14) New Leases (12 months to June 14) For personal use only Sub- Sub- Specialty Leasing Metrics1 2 Convenience Regional Total3 Convenience Regional Total regional regional Total Leasing Transactions 77 302 186 570 27 105 56 189 Gross Income ($
Slide 15: National Sales Review
National Sales Review FDC Sales Category Analysis1 For personal use only Category Annual Sales % of Portfolio MAT Comment ($m) Sales Change2 Supermarkets sales averaging Supermarkets 3,292.8 41% 1.1% over $12,200 per sq.m, above benchmark levels Retail services and food oriented retailers Specialtie
Slide 16: Specialty Sales Review by Category
Specialty Sales Review by Category % of Specialty Sales MAT For personal use only Specialty Category1 Jun-14 Dec-11 Change2 Food Retail 12% 12% (1.0%) Food Catering 15% 14% 3.3% Apparel 22% 25% (0.2%) General Retail 17% 16% 2.5% Leisure 8% 8% 1.2% Homewares 3% 4% (3.2%) Retail Services 23% 21% 3.8%
Slide 17: Optimise
For personal use only Optimise
Slide 18: Balance Sheet and Debt
Balance Sheet and Debt FDC Gearing Levels1 FDC direct cost of debt as at reporting date For personal use only 8.50% 36% 34.6% 8.00% 8.07% 34% 32% 7.50% 7.48% 29.9% 7.00% 30% 6.90% 28% 6.50% 26% 26.3% 25.5% 6.00% 24.1% 24% 22.9% 5.50% 5.24% 5.15% 5.00% 5.23% 22% Guidance Range - 4.7-4.9% 20% 4.50% De
Slide 19: Yardi Voyager 2014 Onwards
Yardi Voyager 2014 Onwards Transforming the business A Single Platform providing: For personal use only Voyager + module + module • Deal to Lease – Leasing process – end to end Fixed Assets Document AP / AR Lease (Accounting) Management • Property Management – one source of key Recoveries Job Costin
Slide 20: Operational Efficiencies Being Achieved
Operational Efficiencies Being Achieved Controllable Variable Outgoings growth % change For personal use only Ave Growth FY10-14 Budgeted FY15 4.0% CAGR1 1.2% 6.0% 1.2% CAGR 1.0% 41% CAGR 5.0% 3.5% CAGR 0.5% 4.0% 3.5% CAGR 1.1% 3.0% (1) Compound Average Growth Rate 2.0% 1.0% 0.0% FY13 FY14 FY15B -1.
Slide 21: Procurement Update
Procurement Update Current tenders underway: Six categories underway. Remaining nine categories to be completed in the next 18 months For personal use only Category Budgeted Spend Consumption Purchasing Comments ($m p.a.) Benefit Benefit Electricity $47.0 $$ • RFP completed – NSW/SA/WA • BMS upgrad
Slide 22: Loyalty, Social Media, Marketing and Innovation
Loyalty, Social Media, Marketing and Innovation • Loyalty / Rewards Program (Freebies) For personal use only • 500,000 members approx • 19.6m customer interactions • 1.2m redemptions for special offers from our retailers • 8.1m app screen views since August 2013 • Social Media • Over 50,000 Corporat
Slide 23: Enhance
Enhance Jonathan Timms For personal use only Enhance
Slide 24: Enhance
Enhance Enhance the look and feel of our centres to improve customer experience, dwell time and sales For personal use only • Ambience upgrades to enhance the presentation of non- development affected FDC properties, to address historic under investment and resulting sales productivity • Upgrades to
Slide 25: Enhance cont.
Enhance cont. Small projects that add value, improving tenancy mix For personal use only • Small Value-Add Projects • Mall and tenant reconfigurations • Five projects delivered in FY14, delivering an average yield in excess of 10% • Tenancy Mix • New leasing capability driving significant improvemen
Slide 26: Redevelop
For personal use only Redevelop
Slide 27: Total Project Spend
Total Project Spend Redevelopment pipeline grows to $1.3 billion, FDC total spend $673m For personal use only Regional Sub-regional Under Warnbro ($39.4m) Convenience Construction Cranbourne ($112.3m)1 Warriewood ($83.8m)1 Board Colonnades ($51.8m)1 Approved Halls Head ($60m)1 Vic Gardens ($20m)1 Fu
Slide 28: Warnbro Update
Warnbro Update Project on target to open fully leased ahead of schedule in September For personal use only • 100% leased – strong mix of national and local retailers from fashion through to casual dining • Big W – first ‘next generation store’ • During construction, centre sales have remained steady
Slide 29: Warnbro Update cont.
Warnbro Update cont. Project forecast to significantly exceed approved financial metrics For personal use only Board Adjusted1 Expected Approved Original Return Forecast Yield 8.2% 9.0% 9.7% IRR 12.6% 13.5% 14.5% • Total income for Centre above budget as a result of: • Development leasing deals and
Slide 30: Cranbourne Update
Cranbourne Update Construction and leasing update For personal use only • Construction is ahead of schedule • 27 out of 64 total leasing deals completed • Three mini major retailers terms agreed • First stage opened 8 August – new rooftop car park and travelator • Project expanded to accommodate new
Slide 31: New Approved Projects – Warriewood
New Approved Projects – Warriewood The Opportunity: For personal use only • The market – existing and forecast strong specialty productivity due to growing catchment and limited competition • Anchors – high sales productivity in sub optimal configuration, eg. Existing Woolworths undersized • Demand
Slide 32: New Approved Projects – Colonnades
New Approved Projects – Colonnades The Opportunity: For personal use only • Utilising current vacant land • Woolworths demand for larger store • Capitalise on Aldi SA expansion • Masters Big Box hardware incorporated • New Harris Scarfe store Proposal and Key Metrics Total Cost $51.8m Expected start
Slide 33: Sustainability and Safety
Sustainability and Safety For personal use only Sustainability • 14% reduction in energy use from FY2009 to FY2013 • 5% energy and waste reduction targets set for FY2015 • Key Initiatives being undertaken include solar passive design, LED lighting, grey water recycling, modulated Co2 controls etc Sa
Slide 34: Transact
For personal use only Transact
Slide 35: Review of Capital Transactions
Review of Capital Transactions Active 12 month period with the managed syndicates providing a strong deal pipeline For personal use only FY14 Dispositions Settlement Interest FDC Share WACR • Counterparty to approx $1bn $m of transactions during FY14 Into Co-ownership Arrangements ISPT 2 July 2013 5
Slide 36: Case Study – Carlingford Court
Case Study – Carlingford Court Solid Upside Post Acquisition For personal use only Leasing & Income • 16 deals completed since acquisition, majority long term deals • Renewal spread of 1.9% • Vacancy spread of 7.8% • Blended rate 2.8% • Continue to improve tenancy mix with potential income upside Op
Slide 37: Strategy & Outlook
Strategy & Outlook Steven Sewell For personal use only
Slide 38: Our Strategic Drivers
Our Strategic Drivers Organic Income For personal use only Growth • Maximise Sales productivity • Drive NOI and occupancy levels Redevelopment • Unlock latent upside that exists nationally and Portfolio • Redevelopment, refurbishment and tenancy remixing opportunities Management • Asset strategy to
Slide 39: FY15 Outlook
FY15 Outlook For personal use only FY15 EPS guidance range of between 18.0- 18.3 cents per security, subject to any unforeseen events Payout ratio expected to be within the range of 90%-95% of underlying earnings, which after allowing for adjustments1 to be within a range of 95%-105% of AFFO (1) Pro
Slide 40: Appendices
For personal use only Appendices
Slide 41: Reconciliation of AFFO
Reconciliation of AFFO For personal use only • 92% pay out ratio on Reconciliation from Underlying Earnings to AFFO1 FY14 FY13 Underlying Earnings, reflecting $m $m 105% of AFFO Reported Underlying Earnings 242.9 224.4 Adjusting for FFO: Rent Free Amortisations 1.9 2.4 Reported Funds from Operations
Slide 42: Summary of Syndicates
Summary of Syndicates For personal use only External Syndicate GAV Liabilities FDC Equity Equity Comment $m $m $m $m Previous 11 syndicates 745.9 371.7 214.0 161.1 Acquired since June 2013 RDP06 120.5 59.0 37.6 23.9 FDC to expected to acquire September 2014 RDP14 73.5 26.2 15.3 32.0 FDC expected to
Slide 43: Refit Examples
Refit Examples Before After For personal use only Before After 43
Slide 44: Reinvesting in our Centres
Reinvesting in our Centres FDC Capital Expenditure Summary – by ownership For personal use only FY14 Actual • Centralised approach to Opex management will result in better delivery of planned Centre $M works, enhancing the FDC portfolio Fitout 13.9 Operational 16.2 Total 30.1 • Income Producing / Co
Slide 45: Expansive Retail Management Platform of Shopping Centres
Expansive Retail Management Platform of 70 Shopping Centres For personal use only $6.9 billion Regional Centres - 1 Convenience Centres -1 Sub-regional Centres - 6 assets under Sub-regional Centres - 4 Convenience Centres - 8 Convenience Centres - 9 Other - 2 management 1 <1% by Value 17 14% by Valu
Slide 46: Portfolio Overview
Portfolio Overview FDC Portfolio Syndicate & As at 30 June 2014 Externally Managed Total Managed1 For personal use only Wholly Owned Co-Owned Total Portfolio No. of Centres 46 17 63 8 70 GLA (000’s sq.m) 681.9 719.2 1,401.1 103.4 1,428.0 Number of Tenancies 2,169 2,278 4,447 395 4,651 Annual Retail
Slide 47: Key FDC Portfolio Retailers
Key FDC Portfolio Retailers Top 10 Retailers Top 10 Retail Groups For personal use only Rank Retailer Retailer Type Number of % of total Rank Retailer Number of % of total Credit stores income stores income rating A- / A3 1 Supermarket 42 8.3% 1 89 14.8% A- / A3 2 Supermarket 34 6.5% 2 78 11.8% Disc
Slide 48: FDC Expansive and Diversified Retail Mix
FDC Expansive and Diversified Retail Mix Extensive Retail Mix with Circa 4,000 Leases1 Lease Expiry Profile by Income For personal use only 80% Other, 7% Circa 65% of income secured to leases expiring in FY17 and 69% Apparel & 70% beyond Mini Majors, Jewellery, 21% 60% 12% 50% 40% Home, 8% 30% 26% 1
Slide 49: FDC Portfolio Information
FDC Portfolio Information Sales Analysis Jun-14 vs Dec-13 Sales Analysis by State1 For personal use only 6.0% Category Sales Volume MAT Change1 MAT Change1 5.0% ($m) Jun-14 Dec-13 4.0% Jun-14 3.0% Supermarkets 3,292.8 1.1% 3.2% 2.0% 1.0% Specialties 2,966.0 1.6% 2.0% 0.0% Discount Department Stores
Slide 50: FDC Property Portfolio – June 2014
FDC Property Portfolio – June 2014 FDC Share of Valuation Capitalisation Rate Annual Retail Sales ($m) Centre Specialty Specialty For personal use only Occupancy Sales Sales Occupancy Centre State Centre Type FDC Ownership Jun-14 Dec-13 Jun-14 Dec-13 GLA sqm Rate Jun-14 Dec-13 ($psm) ($psm) Cost 1 B
Slide 51: FDC Property Portfolio – June 2014 cont.
FDC Property Portfolio – June 2014 cont. FDC Share of Valuation Capitalisation Rate Annual Retail Sales ($m) Centre Specialty Specialty For personal use only Occupancy Sales Sales Occupancy Centre State Centre Type FDC Ownership Jun-14 Dec-13 Jun-14 Dec-13 GLA sqm Rate Jun-14 Dec-13 ($psm) ($psm) Co
Slide 52: FDC Performance by State – WA
FDC Performance by State For personal use only WA Portfolio Regional Sub-regional Convenience Total No. Of Shopping Centres 1 4 6 11 22% of Portfolio1 Valuation ($m) $347.5 $449.2 $237.0 $1,033.7 Weighted Average 5.75% 7.20% 7.78% 6.85% Capitalisation Rate Key Operating Metrics Jun-14 Jun-13 Occupan
Slide 53: FDC Performance by State – NSW
FDC Performance by State For personal use only NSW Portfolio Regional Sub-regional Convenience Total No. Of Shopping Centres 2 11 2 15 Valuation ($m) $472.6 $670.8 $56.3 $1,199.7 26% of Portfolio1 Weighted Average 6.75% 7.64% 8.02% 7.31% Capitalisation Rate Key Operating Metrics Jun-14 Jun-13 Occupa
Slide 54: FDC Performance by State – QLD
FDC Performance by State For personal use only QLD Portfolio Sub-regional Convenience Other Total 17% of Portfolio1 No. Of Shopping Centres 6 9 1 16 Valuation ($m) $517.2 $207.6 $51.0 $775.8 Weighted Average 7.25% 8.56% 8.25% 7.67% Capitalisation Rate Key Operating Metrics Jun-14 Jun-13 Occupancy 99
Slide 55: FDC Performance by State – VIC
FDC Performance by State For personal use only VIC Portfolio Regional Sub-regional Convenience Total No. Of Shopping Centres 1 10 2 13 Valuation ($m) $215.8 $760.8 $59.8 $1,036.3 Weighted Average 6.00% 7.43% 8.14% 7.18% Capitalisation Rate 22% of Portfolio1 Key Operating Metrics Jun-14 Jun-13 Occupa
Slide 56: FDC Performance by State – SA/TAS/NT/ACT
FDC Performance by State For personal use only Amalgamated SA/TAS/NT/ACT Portfolio Regional Sub-regional Convenience Total No. Of Shopping Centres 1 4 3 8 Valuation ($m) $145.0 $364.5 $86.1 $595.6 Weighted Average 7.00% 7.40% 8.41% 7.45% Capitalisation Rate 13% of Portfolio1 Key Operating Metrics Ju
Slide 57: Our Ethos
Our Ethos For personal use only At Federation Centres, we believe in partnering with our stakeholders to provide engaging consumer experiences for our local communities. At the heart of our success is our team at Federation Centres who are passionate about delivering on our brand promise and helping
Slide 58: Disclaimer
Disclaimer This document is a presentation of general background information about the activities of Federation Centres For personal use only (ASX:FDC) current at the date of lodgement of the presentation (22 August 2014). It is information in a summary form and does not purport to be complete. It i