Scentre Group · ASX:SCG
Scentre — FY2019 Earnings Presentation
29 slides from Scentre's earnings presentation, Feb 18, 2020
Slide 1: Full Year Results 2019
Full Year Results 2019 Westfield Newmarket, NZ
Slide 2: Scentre Group Overview
Scentre Group Overview Extraordinary platform of 42 Westfiel Living Centres with over 548 million annual customer Creating visits extraordinary places, – Regarded as the first choice platform for retail and brand partners to connect and interact with customers connecting and – Vertically integrated
Slide 3: Our Purpose, Plan and Strategy
Our Purpose Creating extraordinary places, connecting and enriching communities Our Plan We will create the places more people choose to come, more often, for longer Our Strategy Customers We will be customer obsessed, delivering extraordinary experiences, every day Retail & Brand People Partners We
Slide 4: Full Year Results
Full Year Results 31 December 2019 Cents per Proforma $m security Growth % Growth %1 “Our strategic focus on the customer and Operating Earnings (OE)2 1,287.4 24.34 1.0% + 3.6% curation of our offer to continually meet their Funds From Operations (FFO) 1,344.6 25.42 0.7% + 3.2% changing expectations
Slide 5: Highlights
Highlights Customer & Retail Partners Development & Asset Management Capital Management Activity – Increased annual customer visits to over 548 – Opened the NZ$790 million (SCG share: – Divested the Sydney Office Towers for $1.52 million in 2019 an increase of more than 12 million NZ$400m) redevelop
Slide 6: Operating Performance
Operating Performance 31 December 20191 Customer Visits Per Annum > 548 million, an increase of > 12 million “The strength of our portfolio combined Comparable Net Operating Income (NOI) Growth2 + 2.0% with our leading Portfolio Leased 99.3% operating platform has seen customer visits Total Annual R
Slide 7: Net Operating Income
Net Operating Income Comparable NOI Growth1 31 Dec 2019 Portfolio Leased 99.3% approx. 20% of Lease Deals Number – Total Deals3 2,566 specialty rent Lease Deals Area (sqm) – Total Deals3 420,239 Average Specialty Lease Incentives 7.2%4 During 2019, comparable net operating income1 (NOI) grew by + 2.
Slide 8: Scentre Group Portfolio
Scentre Group Portfolio High quality retail property – strategically located within high population-growth trade areas – generating more than 548 million customer visits Scentre Group’s portfolio is located in major cities, with population forecast to grow by more than 40% or 10 million people by 20
Slide 9: Development Activity
Development Activity Total Project Cost SCG Share Completion $m $m Completed Projects Newmarket NZD790 NZD400 Q4 2019 Active Projects Carindale 50 16 2H 2020 Mt Druitt 55 28 2H 2020 Total Projects 863 428 Target returns from development of greater than 7% yield and greater than 15% IRR Woden Bradley
Slide 10: Future Retail Developments
Future Retail Developments Albany (NZ) > $3bn 1 2 Barangaroo (NSW) Future Retail Developments 3 Booragoon (WA) 4 Doncaster (VIC) 5 Eastgardens (NSW) 6 Knox (VIC) 7 Liverpool (NSW) 8 Marion (SA) 1 10 3 9 9 Sydney (NSW) 8 7 2 5 10 Warringah Mall (NSW) 4 6 In addition, the Group has potential opportuni
Slide 11: We are a Responsible, Sustainable Business
We are a Responsible, Sustainable Business Community Environmental People Economic Connecting and enriching communities Net zero emissions by 20301 We will be the place for talent to thrive We will deliver long term sustainable returns through economic cycles – Continued to expand the reach and – Es
Slide 12: Financial Performance
Financial Performance Funds From Operations 12 months to 12 months to Growth % Pro forma1 $m 31 Dec 2019 31 Dec 2018 Growth % Net Operating Income 1,925.5 1,900.8 Management Income 48.7 46.1 + 3.6% Income 1,974.2 1,946.9 1.4% 1 Overheads (88.1) (85.9) EBIT 1,886.1 1,861.0 1.3% Net Interest (510.0) (
Slide 13: Cash Flow
Cash Flow Cash flows from operating activities 12 months to 31 Dec 2019 Receipts in the course of operations (including GST) 2,931.3 Payments in the course of operations (including GST) (962.2) Net operating cash flows from equity accounted entities 130.4 Income and withholding taxes paid (41.0) GST
Slide 14: Financial Position
Financial Position Balance Sheet $m Total Property Investments 31 Dec 2019 38,172.6 31 Dec 2018 39,101.1 $38.2bn Property Investments Total Assets 40,034.9 40,982.3 Total Liabilities 15,798.0 16,419.6 $23.3bn Net Assets before Minority Interest 24,236.9 24,562.7 Net Assets Minority Interest (898.3)
Slide 15: Debt Management
Debt Management 31 Dec 2019 Debt metrics Net Debt FFO to Debt $12.9bn 10.3% $1.8bn 85% Interest Cover 3.6x Liquidity Interest Interest rate exposure hedged percentage 85% rate hedging 3.6x 33.0% Weighted average interest rate 4.2% Weighted average debt maturity 4.2 years Liquidity $1.8bn Interest Co
Slide 16: Debt Management
Debt Management 31 Dec 2019 Maturity Profile Facilities & Liquidity $A billion % $bn 3.5 Bonds EUR 33% 4.8 3.0 USD 18% 2.7 2.5 GBP 10% 1.5 2.0 AUD 3% 0.4 1.5 Total 64% 9.4 Bank Facilities 1.0 Drawn 26% 3.8 0.5 Undrawn 10% 1.5 - Total 36% 5.3 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 Total Fa
Slide 17: Outlook 2020 Forecast
Outlook 2020 Forecast Cents per Proforma Growth % security Growth %1 “Our proposition is to Operating Earnings (OE)2 24.75 – 24.80 + 1.7% + 3.1% deliver long-term sustainable returns Net Project Income3 0.53 – 0.55 through economic cycles” Funds From Operations (FFO) approx. 25.30 - 0.5% + 0.7% PETE
Slide 18: Appendix
Appendix Westfield Newmarket, NZ Full Year Results 2019 18
Slide 19: Developments: Westfield Newmarket
Developments Completed project Westfield Newmarket, NZ Overview Project Cost NZ$790m (SCG share: NZ$400m) Commencement Q1 2018 Completion Q4 2019 Highlights Incremental Project GLA 52,000sqm Westfield Newmarket, NZ Completed Centre GLA 88,150sqm New Anchors David Jones, Farmers, Countdown, Event Cin
Slide 20: Developments: Westfield Carindale
Developments Active project Westfield Carindale, QLD Overview Project Cost $50m (SCG share: $16m) Commencement Q1 2019 Completion 2H 2020 Highlights New Anchors Kmart and new format David Jones1 Westfield Carindale, QLD 1. The new format David Jones store opened in November 2019. The new Kmart store
Slide 21: Developments: Westfield Mt Druitt
Developments Active project Westfield Mt Druitt, NSW Overview Project Cost $55m (SCG share: $27.5m) Commencement Q4 2019 Completion 2H 2020 Highlights Incremental Project GLA 4,000sqm Westfield Mt Druitt, NSW Completed Centre GLA 64,373sqm Specialty Retail Introducing 12 new rooftop restaurants and
Slide 22: Retailer In-Store Sales
Retailer In-Store Sales Comparable specialty in-store sales growth1 3 months to 12 months to Total in-store sales grew 1.5% for the quarter and 1.9% for the year 31 Dec 2019 31 Dec 2019 Retail Services 9.2% 7.1% Specialty in-store sales grew 2.8% for the quarter and 2.2% for the year Leisure 3.7% 3.
Slide 23: Retailer In-Store Sales by Region
Retailer In-Store Sales Comparable specialty in-store sales growth by region1 5% 3.9% 3 months MAT 3.6% 3.2% 3.1% 3% 2.8% 2.6% 2.3% 2.2% 1.6% 1% 0.8% n/a2 0.2% (1%) (1.2%) (1.7%) (2.4%) (3%) NSW QLD VIC WA SA ACT NZ Total 1. Total stable portfolio – total dollar sales growth 2. Westfield Carousel an
Slide 24: Retailer In-Store Sales Category Contribution
Retailer In-Store Sales Category contribution of $25 billion of total retailer in-store sales 18.0% “By listening and acting on 16.0% 16.8% what our customers want we have actively curated the mix 14.0% within our portfolio” 13.5% 12.0% PETER ALLEN CEO 10.0% & Other Fashion Unisex, Mens, 9.7% 8.0% 8
Slide 25: Distribution Per Security (cents)
Distribution Per Security (cents) Delivering long-term sustainable returns through economic cycles +3.0% 23.28 +2.0% 22.60 +2.0% 22.16 +2.0% 21.73 +1.9% 21.30 20.90 2015 2016 2017 2018 2019 2020 (Forecast) Full Year Results 2019 25
Slide 26: Profit & FFO
Profit & FFO Reconciliation from Profit to FFO Statutory Profit FFO FFO Financial 12 months to Adjustments 1 12 months to Statement $m 31 Dec 2019 31 Dec 2019 Notes A B C=A+B 1. FFO adjustments relate to property Net operating income 1,848.4 77.1 1,925.5 Note 2(iii) revaluations, mark to market of i
Slide 27: Balance Sheet
Balance Sheet Balance Sheet – Proportionate1 $m Consolidated EquityAccounted 31 Dec 2019 A B C = A +B Cash 253.0 8.0 261.0 Property Investments 1. Period end AUD/NZD exchange rate 1.0423 – Shopping centres 34,301.8 3,241.0 37,542.8 at 31 Dec 2019 – Development projects and construction in progress 5
Slide 28: Interest Rate Hedging
Interest Rate Hedging 31 Dec 20191 Hedge Maturity Profile Interest Rate Hedging $A billion $bn Fixed Rate 12.0 2.54% Net Debt 12.9 10.0 2.47% 2.45% 8.0 Fixed Rate Debt 2.36% $ Fixed rate debt 0.4 3.31% 2.26% 6.0 2.29% 4.0 Derivatives 2.13% 2.0 $ Swap Payable 9.9 2.49% 1.51% NZ$ Swap Payable 0.7 2.68
Slide 29: Important Notice
Important Notice All amounts in Australian dollars unless otherwise specified. The financial information included in SCENTRE GROUP LIMITED ABN 66 001 671 496 this document is based on the Scentre Group’s IFRS financial statements. Non IFRS financial information included in this document has not been