Vicinity Centres · ASX:VCX
Vicinity Centres — Federation Centres — H1 FY2013 Earnings Presentation
35 slides from Vicinity Centres's earnings presentation, Feb 22, 2013
Slide 1: 2013 Half Year Results
2013 Half Year Results 22 February 2013
Slide 2: Outline
Outline 1. Introduction Steven Sewell, Managing Director & CEO 2. Financial Results Marlon Teperson, Chief Financial Officer 3. Operational Performance Mark Wilson, Chief Operating Officer 4. Redevelopment Business Jonathan Timms, EGM - Development & Asset Strategy 5. Strategy and Outlook Steven Sew
Slide 3: Introduction
Introduction Steven Sewell
Slide 4: FY13 Strategic Achievements to date
FY13 Strategic Achievements to date Strong progress on strategic objectives Key Strategic Achievements Status Strategic Alliances formed $1.05 billion of working capital S&P Credit Rating assigned Senior Secured Bank Debt Rating A- Corporate Rating BBB+ Development pipeline growing Expanded to $1.10
Slide 5: FY13 Key Results Highlights
FY13 Key Results Highlights Strong operations and improved financing drive earnings Key Financial Highlights $115.9 million Statutory Net Profit $106.2 million Underlying Profit 29.9% Balance Sheet Gearing1, expected to fall to 24.2% post ISPT transaction completion Key Operational Highlights 3.0% C
Slide 6: Development Pipeline Growing
Development Pipeline Growing Demand from supermarkets and other major tenants seeking to expand their footprint or enter new markets drives redevelopment pipeline • Development pipeline over five years now forecast to total $1.1 billion – with FDC share approximately $591 million • Co-ownership alli
Slide 7: New Strategic Alliances
New Strategic Alliances Co-ownership of $2 billion of assets, realising $1 billion of working capital Equity Month Value Interest Assets ($m) Realised ($m) Galleria (WA), The Glen (Vic) & Perron Group June 2012 $1,380.8 50% $690.4 Colonnades (SA) Mandurah (WA), Karingal (Vic), ISPT1 July 2013 $742.8
Slide 8: Credit Rating Assigned
Credit Rating Assigned Quality assets, strategy and management capability key to credit rating Standard & Poor’s credit rating assigned • Senior Secured Bank Debt Rating A- • Corporate Rating BBB+ Validates the low risk strategy and operating model • Capital recycling initiatives • Low gearing and p
Slide 9: Syndicate Business Simplification
Syndicate Business Simplification $1 billion of syndicate assets transacted to date Forecast At Inception Actual at Completion (December December of Restructure 2011) 2012 (est. Dec 2015) Total Syndicates 26 19 5 Total Assets $2.5bn $1.5bn $0.33bn Total Equity $1.2bn $0.8bn $0.16bn FDC share of equi
Slide 10: Corporate Repositioning, Rebranding and Relocation
Corporate Repositioning, Rebranding and Relocation The name Federation Centres reflects the evolution of the company • The signage replacement will be done progressively – as part of our overall asset enhancement program • Phase 1: • 24 centres will be either partially or fully rebranded as part of
Slide 11: Introducing Federation Centres
Introducing Federation Centres • Federation Centres is much more than a simple name change – it represents fundamental change within the business • Our Centres are an important part of the local communities in which they operate – we want people to “love our local shopping” 11
Slide 12: Financial Results
Financial Results Marlon Teperson 12
Slide 13: Financial Performance
Financial Performance Key financial result highlights first half FY13 Key Metrics 1H FY13 Statutory Net Profit $115.9m Underlying Profit $106.2m Underlying Earnings Per Security (cpu) 7.5 Distribution Per Security (cpu) 6.6 Balance Sheet Gearing 29.9% Net Tangible Asset Per Security $2.22 Weighted A
Slide 14: Financial Result
Financial Result Segment Income Statement1 for six months ended: 31-Dec-12 31-Dec-112 • Direct Property Investment $m $m Income lower due to sale of 50% Direct property investment income 148.5 29.0 assets to Perron Managed fund investment income 11.3 5.0 Investment Income 159.8 34.0 Property managem
Slide 15: Financial Position
Financial Position Segment Balance Sheet1 as at: 31-Dec-12 30-Jun-12 • $547.7 million direct property acquired from Assets $m $m syndicates in 1H FY13 Cash 83.6 182.4 Direct Property 4,418.1 3,804.3 Managed Fund Investments 381.3 487.3 • Net assets of $3.37 billion Intangible Assets 199.7 199.7 Othe
Slide 16: Opportunity to Diversify Funding Sources
Opportunity to Diversify Funding Sources Significant financial flexibility in restructured Core facility A$ million Dec-12 Actual Dec-13 Forecast • New $1.8bn Core facility in place with maturities 800 in Nov 15 and Nov 17 689 700 • Covers all existing debt refinance requirements 650 650 • Significa
Slide 17: Interest Rate Risk Mitigated
Interest Rate Risk Mitigated Hedging profile extended to align with debt restructure A$ millions FDC Hedge Profile as at 31 December 2012 1,400 4.0% ($m) 3.5% 1,200 Current Fixed Rate debt $388.5 3.0% 1,000 Interest rate hedges $1,111.8 2.5% 800 Total fixed rate debt & interest rate swaps $1,500.3 2
Slide 18: Funding Capacity to Meet Business Objectives
Funding Capacity to Meet Business Objectives Strategic co-ownerships continue to provide flexibility • $371.4 million ISPT transaction agreements executed in February 2013, settlement July 2013 • Perron co-ownership agreement enabled property acquisition of Bankstown, Dianella, Toormina & CMCS 33 as
Slide 19: Operational Performance
Operational Performance Mark Wilson
Slide 20: Significant Retail Platform
Significant Retail Platform Well diversified geographically, by asset type and by retailer FDC Syndicate Total As at 31 Dec 2012 Wholly Portfolio Managed2 JV1 Owned Regional Centres -1 No. of Properties3 40 7 34 78 Convenience Centres -1 Sub-regional Centres - 4 Sub-regional Centres - 6 Convenience
Slide 21: Property Operations Overview
Property Operations Overview As at 31 December 2012 FDC Portfolio No. of Shopping Centres 47 Comparable NOI Growth – Stabilised1 3.0% Occupancy 99.5% Annual Retail Sales Growth (SCCA) 2.0% Specialty Occupancy Cost 14.7% Capitalisation Rate (weighted average) (%)1 7.45% Presence in every State and Te
Slide 22: Sales Performance
Sales Performance Sales Category Analysis as at 31 December 2012 Category MAT ($ million) MAT Change1 Composition of Sales Supermarkets 2,591.1 1.7% 38% Discount Department Stores 971.3 0.7% 14% Department Stores 180.6 0.1% 3% Mini Majors 543.8 8.0% 8% Specialties 2,497.6 1.7% 37% Portfolio Total 6,
Slide 23: Leasing Results
Leasing Results Leasing performance underpinned by FDC’s well-established retailer relationships Specialty Rent Analysis 1H13 FDC Portfolio Total Leasing Deals 342 Renewal Rent Growth 3.5% Income Renewed ($m) $21.9m % of Total Portfolio Annual Rental 4.8% Occupancy Rate 99.5% • Rental growth of 3.5%
Slide 24: FDC Asset Positioning
FDC Asset Positioning Catchment demographic profiles further enhance FDC’s geographic diversification Primarily Established Metropolitan Locations1 Demographic Profile of FDC Catchments2 Regional 14% In line with Australian Exceed averages Australian 35% averages 47% Metro Below 86% Australian avera
Slide 25: Market and Portfolio Outlook
Market and Portfolio Outlook Cautious outlook but portfolio well positioned • Well diversified portfolio by location, shopping centre type and mix of retailers • Occupancy costs positioned below benchmark averages hold portfolio in good stead to continue to achieve positive momentum through leasing
Slide 26: Redevelopment Business
Redevelopment Business Jonathan Timms
Slide 27: Development Overview
Development Overview An expanded number of opportunities for development have been identified • Relationship with major tenants and key retailers in current retail environment is critical to success of developments and a key focus • No speculative development; all development undertaken within exist
Slide 28: Expansion of Development Pipeline
Expansion of Development Pipeline 5 year development pipeline formed based on three key phases: Phase 1 Currently in progress/awaiting final approval Expected to commence in FY13-14 FDC Anticipated Project Timeframe Project F’cast Asset Status Share of Cost1 Yield Cost FY13 FY14 FY15 FY16 Phase 1 Tu
Slide 29: Expansion of Development Pipeline
Expansion of Development Pipeline 5 year development pipeline formed based on three key phases: Phase 2 Concept and feasibility advanced Expected to commence in FY14-15 Phase 3 Concept development stage Expected to commence FY15+ Asset Status3 Project Cost1 FDC Share of Cost Phase 2 Warriewood, NSW
Slide 30: Warnbro Case Study
Warnbro Case Study • Warnbro Fair is a convenience retail centre located approximately 45kms south of Perth • Commercial terms have been agreed with Big W to lease a new 7014m2 store at Warnbro Fair which will anchor an extension to the centre of 9,647m2 • The feasibility for the redevelopment shows
Slide 31: Strategy & Outlook
Strategy & Outlook Steven Sewell 31
Slide 32: Key Strategic Initiatives
Key Strategic Initiatives A number of key initiatives are being enacted across the entire Group: • Expansion of strategic alliance relationships • Simplification of Syndicate business continues • Redevelopment pipeline and Asset Strategy delivery • Balance sheet – capital and debt optimisation • Org
Slide 33: In Summary
In Summary Attractive Investment Proposition Solid Financial Result for 1H FY13 Unique AREIT – large, internalised, 100% Underlying Profit of $106.2 million Australian shopping centre focused or 7.5 cents per security Pure property strategy focus on predominantly Balance Sheet Gearing within range a
Slide 34: Our Ethos
Our Ethos 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 to drive sustainable
Slide 35: Disclaimer
Disclaimer This document is a presentation of general background information about the activities of Federation Centres (formerly Centro Retail Australia ASX:CRF) current at the date of the presentation (22 February 2013). It is information in a summary form and does not purport to be complete. It i