Goodman Group · ASX:GMG
Goodman — FY2013 Earnings Presentation
55 slides from Goodman's earnings presentation, Aug 15, 2013
Slide 1: Results for the year ended 30 June 2013
Goodman Group Results for the year ended 30 June 2013 For personal use only 15 August 2013 Global partner + Global platform
Slide 2: Important notice and disclaimer
Important notice and disclaimer For personal use only + This document has been prepared by Goodman Group (Goodman Limited (ABN 69 000 123 071) Goodman Funds Management Limited (ABN 48 067 796 641; AFSL Number 223621) as the Responsible Entity for Goodman Industrial Trust (ARSN 091 213 839) and Goodm
Slide 3: Contents
Contents For personal use only + Section 1 Highlights + Section 2 Results overview + Section 3 Operational performance + Section 4 Strategy and outlook + Appendices - Results analysis - Investment - Development - Management - Capital management 3
Slide 4: Section 1 Highlights
For personal use only Section 1+ Highlights Goodman Interlink, Hong Kong ATL Logistics Centre, Hong Kong ATL, Logistics Centre, Hong Kong
Slide 5: Highlights
Highlights For personal use only + Focused strategy delivering: – Operating profit¹ of $544 million, up 17% on FY2012 – Operating EPS¹ of 32.4 cents², up 6% on FY2012 – Distribution and dividend per security of 19.4 cents, up 8% on FY2012 – Forecasting FY2014 operating profit of $594 million equatin
Slide 6: Highlights
Highlights For personal use only + Prudent capital management aligned to sustainable risk adjusted returns: – Selective pre-committed and pre-sold approach to development activities: WIP 72% pre-committed and 92% pre-sold – Capital partnering approach to all markets: recycled $400 million of corners
Slide 7: Highlights
Highlights For personal use only + High occupancy maintained at 96% + Retention rate of 77% and WALE of 4.7 years Own + Like for like rental growth of 2.6% + Leased 2.9 million sqm across the platform equating to $270 million of property income across the Group and managed funds + WIP of $2.3 billio
Slide 8: Section 2 Results overview
For personal use only Section 2+ Results overview Stockyards Industrial Estate, Australia
Slide 9: Results overview
Results overview For personal use only + Operating results above initial targets: FY2013 – Stronger operating results from all business units Operating profit ($M) 544.1 – Maintained liquidity and low gearing reflecting strength of returns on a risk adjusted basis Statutory accounting profit ($M) 16
Slide 10: Profit and loss
Profit and loss For personal use only + Full year operating profit of $544.1 million: Income statement – Investments continue to trend up on increasing rents FY2012 FY2013 $m $m with ROA of ~7% Investment (look through) 477.6 501.8 – Increased scale improving management margins in Management 79.3 10
Slide 11: Balance sheet
Balance sheet For personal use only + Strong balance sheet maintained: Balance sheet – Selective approach to pre-committed and pre-sold FY2012 FY2013 developments $m $m Stabilised investment properties 2,259 2,090 – Managed fund equity raisings and balance sheet recycling Fund cornerstones1 2,937 3,
Slide 12: Group liquidity position
Group liquidity position For personal use only + Goodman Group has cash and available lines of credit of $1.8 billion at 30 June 2013: – $645 million cash – $1,172 million available lines + Significant covenant headroom maintained + Average debt maturity profile of 5.4 years + ICR at 5.0 times (3.0
Slide 13: Section 3 Operational performance
For personal use only Section 3+ Operational performance Interlink, Hong Kong Bungarribee Industrial Estate, Australia
Slide 14: Investment
Investment For personal use only + Property fundamentals remain stable reflecting quality of Investment ($m) FY2012 FY2013 the portfolio and customers: Direct 171.3 158.6 – Maintained occupancy at 96% Cornerstones 306.3 343.2 – Retention remains high at 77% Look through EBITDA 477.6 501.8 – WALE of
Slide 15: Development
Development For personal use only + Development demand driven by structural changes: Development ($m) FY2012 FY2013 – E-commerce, supply chain efficiencies, building Revenue 183.6 207.8 obsolescence, 3PL consolidation EBITDA 139.8 165.8 + Development WIP increased to $2.3 billion – Active developmen
Slide 16: Management
Management For personal use only + External assets under management (AUM) of $19 billion Management ($m) FY2012 FY2013 increased 21% Management income2 139.1 181.5 – 14% increase on a constant currency basis EBITDA 79.3 108.6 + Development completions have organically grown AUM + Size and scale has
Slide 17: Management - AUM
Management - AUM For personal use only + Major new initiatives completed during the year include: – Secured US$890 million for GNAP alongside CPPIB – $1 billion development partnership established with ADIC in Japan – $260 million of external investor commitments in the Japan Core Fund – KGIT, the f
Slide 18: Management platform
Management platform For personal use only Goodman’s seven largest managed vehicles GAIF GTA GELF GHKLF ABPP GMT1 GCLH Total assets $5.1bn $3.0bn $3.0bn $2.6bn $1.5bn $1.7bn $0.8bn GMG co-investment 26.6% 19.9% 30.8% 20.0% 43.1% 17.5%2 20.0% GMG co-investment $0.8bn $0.4bn $0.5bn $0.4bn $0.3bn $0.2bn
Slide 19: Section 4 Strategy and outlook
For personal use only Section 4+ Strategy and outlook Matsudo Centre, Japan
Slide 20: Strategy and outlook
Strategy and outlook For personal use only + Leading global industrial property operator and fund manager + Focus on execution of a consistent and clearly enunciated strategy + Customer service focus and asset management capabilities are key to business model + Capabilities in major markets with foc
Slide 21: Appendix 1 Results analysis
For personal use only Appendix 1+ Results analysis Highbrook HDL, New Zealand Highbrook Business Park , New Zealand
Slide 22: Profit and loss
Profit and loss Total income by business segment for the year ended 30 June 2013 For personal use only Category Total Investment Management Development Unallocated Non- operating items $M $M $M $M $M $M Gross property income 219.6 218.3 - - - 1.3 Management income 181.0 - 181.0 - - - Development inc
Slide 23: Profit and loss (cont)
Profit and loss (cont) For personal use only Category Total Investment Management Development Unallocated Non-operating items $M $M $M $M $M $M EBIT – per statutory accounts 502.9 383.1 108.6 165.8 (48.5) (106.1) Net gain from fair value adjustments on investment properties (28.0) - - - - (28.0) Net
Slide 24: Reconciliation non-operating items
Reconciliation non-operating items For personal use only Non-operating Items in statutory profit & loss Year ended 30 June 2013 $M $M Property valuations Net gain from fair value adjustments on investment properties 28.0 Share of net gain from fair value adjustments on investment properties in assoc
Slide 25: Financial position
Financial position For personal use only As at 30 June 2013 Direct Investments Developments Other Total Assets $M $M $M $M $M Cash - - - 645.4 645.4 Receivables - 138.1 229.4 283.5 651.0 Inventories - - 949.5 - 949.5 Investment properties 2,090.2 - 315.7 - 2,405.9 Investments accounted for using equ
Slide 26: Net tangible asset bridge
Net tangible asset bridge For personal use only + For year ended 30 June 2013¹ 1. Calculated on 1,713.2 million securities being closing securities on issue and excludes minority interest 26
Slide 27: Property valuations
Property valuations For personal use only + WACR has marginally increased to 7.9% + Negative market sentiment persists in the UK + Valuation uplifts experienced in Australia and Hong Kong are primarily the result of rental growth 30 June 2013 property valuations (look through) Book value Movement si
Slide 28: Appendix 2 Investment
For personal use only Appendix 2+ Investment Saint-Mard Logistics Centre, France
Slide 29: Leasing
Leasing For personal use only Across the Group and Funds platform: + ~2.9 million sqm leased during the year + Reversions of 3.7% on new leasing deals, with like for like NPI growing at 2.6% + Occupancy maintained at 96% Division Leasing area (sqm) Net annual rent (A$M) Average lease term Occupancy
Slide 30: Customers
For personal use only Customers 30
Slide 31: Geographic exposure
Geographic exposure For personal use only Top 20 sub regions (by AUM) 31
Slide 32: Direct portfolio detail - Australia
Direct portfolio detail - Australia For personal use only Portfolio snapshot Key metrics Total assets A$1.8 billion + 28 properties with a total value of $1.8 billion located across key Australian markets Customers 233 + Leasing deals remain strong across the portfolio: Number of properties 28 – 234
Slide 33: Direct portfolio detail – UK and CE
Direct portfolio detail – UK and CE For personal use only Portfolio snapshot Key metrics Total assets A$0.3 billion + Occupancy at 89% Customers 33 + WALE of 2.6 years + Active enquiry on vacant properties Number of properties 10 + Cap rates stable with current WACR of 8.3% Occupancy 89% Weighted av
Slide 34: Appendix 3 Development
For personal use only Appendix 3+ Development Rheinberg Logistics Centre, Germany
Slide 35: Developments
Developments For personal use only FY13 Developments Completions Commitments Work in progress Value ($M) 1,662 2,160 2,345 Area (m sqm) 1.2 1.6 1.9 Yield (%) 8.8 8.7 8.8 Pre-committed (%) 95 72 72 Weighted Average Lease Term (years) 9.4 6.8 6.7 Development for Third Parties or Funds (%) 98 91 92 Aus
Slide 36: Developments (cont)
Developments (cont) For personal use only + Maintained development pipeline in excess of $10 billion – Development pipeline restocked (North America, China and Japan landbanks) – Forecast GLA over 7 million sqm – Development pipeline allocated as Asia Pacific 39%, Europe 46% and Americas 15% + The G
Slide 37: Appendix 4 Management
For personal use only Appendix 4+ Management Senec Logistics Centre, Slovakia
Slide 38: Global platform
For personal use only Global platform 38
Slide 39: Goodman Australia Industrial Fund
Goodman Australia Industrial Fund For personal use only Key events Key metrics¹ Total assets A$5.1billion + Completed $1 billion equity raising with demand from existing and new investors reducing GMG’s co-investment Interest bearing liabilities A$2.0billion Gearing2 37.1% + Approval to raise $175 m
Slide 40: Goodman Trust Australia
Goodman Trust Australia For personal use only Key metrics¹ Key events Total assets A$3.0 billion + Amended the Australian Syndicated Debt Facility giving Interest bearing liabilities A$1.0 billion the Fund access to a further $200 million in debt liquidity. Gearing2 34.5% The amendments included an
Slide 41: Goodman European Logistics Fund
Goodman European Logistics Fund For personal use only Key events Key metrics¹ + Launched a €550 million equity raise which completed Total assets A$3.0 billion post 30 June 2013 with GMG co-investment reducing to Interest bearing liabilities A$1.3 billion 20% Gearing2 38.3% + Successfully completed
Slide 42: Goodman Hong Kong Logistics Fund
Goodman Hong Kong Logistics Fund For personal use only Key events Key metrics¹ + Seven year fund extension to 2020 Total assets A$2.6 billion Interest bearing liabilities A$0.6 billion + US$300 million of new equity raised to fund ATL acquisition Gearing2 24.1% Customers 226 + Successfully completed
Slide 43: Arlington Business Parks Partnership
Arlington Business Parks Partnership For personal use only Key events Key metrics¹ + Sales completed totalling $57.6 million at Gloucester, Total assets A$1.5 billion Centrica at Oxford Business Park and Ford at Filton Interest bearing liabilities A$0.8billion + Leased 12,601 sqm in the year represe
Slide 44: Goodman Property Trust
Goodman Property Trust Key events For personal use only Key metrics1 + Capital management program: Total assets A$1.7 billion - Capital initiatives have provided over NZ$235 million of Interest bearing liabilities A$0.6billion new equity Gearing2 34.8% - Distribution policy of around 80% of after ta
Slide 45: Goodman China Logistics Holding
Goodman China Logistics Holding For personal use only Key events Key metrics¹ + Strong support from capital partner to capitalise on the Total assets A$0.8 billion ongoing demand for prime logistics space in China: Interest bearing liabilities A$81 million - $500m equity upsizing from Canadian Pensi
Slide 46: Appendix 5 Capital management
For personal use only Appendix 5+ Capital management Greater Manchester Police Headquarters, UK Beijing Airport Logistics Centre
Slide 47: Group financial covenants
Group financial covenants For personal use only Covenants Test Covenant Result Headroom Net liabilities1 as a percentage of net tangible assets is Gearing ratio 55.0% 27.5% 27.5% not more than 55.0% Interest cover ratio EBITDA to interest expense at least 2.0x 2.0x 5.0x 3.0x Secured debt as a percen
Slide 48: Currency mix
For personal use only Currency mix 48
Slide 49: Financial risk management
Financial risk management For personal use only Financial risk management in line with Group Board policy +Interest risk management: – 93% hedged over next 12 months – Weighted average hedge maturity of 5.2 years – Weighted average hedge rate of 4.87%1 vs spot 1.61%2 – Current “all in” net WACD 3.21
Slide 50: Financial risk management (cont)
Financial risk management (cont) For personal use only Interest rate + Interest rates are hedged to 93% over next 12 months + Weighted average hedge rate of 4.87%1 vs spot 1.61%2 - NZD – (hedge 4.35%, spot 4.28%) - JPY – (hedge 1.35%, spot 0.42%) - HKD – (hedge 1.20%, spot 1.63%) - GBP – (hedge 7.89
Slide 51: Financial risk management (cont)
Financial risk management (cont) For personal use only Interest rate hedging profile Euro payable GBP payable HKD payable NZD payable JPY payable USD payable AUD receivable Fixed Fixed1 Fixed Fixed Fixed Fixed A$M Fixed rate rate rate rate rate rate Rate As at €M % £M % HK$M % NZ$M % ¥M % US$M % % J
Slide 52: Financial risk management (cont)
Financial risk management (cont) For personal use only Foreign currency denominated balance sheet hedging maturity profile Currency Maturity Weighted average Amount receivable1 Amount payable1 exchange rate NZ$M 2017 / 2018 1.2795 A$172.0M NZ$220.0M HK$M 2016 / 2018 7.8880 A$298.7M HK$2,350.0M ¥M 20
Slide 53: Exchange rates
Exchange rates For personal use only + Statement of Financial Position – exchange rates as at 30 June 2013 – AUDGBP – 0.6072 (30 June 2012 : 0.6529) – AUDEUR – 0.7095 (30 June 2012 : 0.8092) – AUDHKD – 7.0739 (30 June 2012 : 7.8899) – AUDBRL – 2.0250 (30 June 2012 : 2.0590) – AUDNZD – 1.1871 (30 Jun
Slide 54: Q&A
For personal use only Q&A Interlink Industrial Estate, Australia
Slide 55: Thank you
For personal use only thank+you 55