Slide 1: 1H15 Stockland Results Presentation: Implementing our Strategy
1H15 Stockland Results Presentation Implementing our Strategy For personal use only
Slide 2: Agenda
Agenda For personal use only Topic Speaker Page Group Update Mark Steinert, 03 Managing Director and CEO Group Finance Tiernan O’Rourke, CFO 09 Commercial Property John Schroder, Group Executive and CEO, 15 Commercial Property Residential Andrew Whitson, Group Executive and CEO, 21 Residential Retir
Slide 3: Strategy delivering strong results
Strategy delivering strong results For personal use only 1H15 1H14 Change Underlying profit up 8.5% to $290m Statutory Profit $462m $298m 55.1% 1H15 earnings per security of 12.4c, 6.9% growth on 1H14 Statutory Earnings per security 19.8 cents 12.9 cents 53.5% Underlying Profit1 $290m $267m 8.
Slide 4: Implementing our strategy: Grow asset returns (Commercial Property)
Implementing our strategy: Grow asset returns For personal use only Key Achievements in 1H15 Commercial Property Comparable underlying profit1 4.7% Retail 3.3% Logistics and Business Parks 5.7% Office 7.8%2 $501m active retail pipeline tracking to plan Remixing centres to reflect fas
Slide 5: Implementing our strategy: Grow asset returns (Residential and Retirement)
Implementing our strategy: Grow asset returns For personal use only Key Achievements in 1H15 Residential Communities Record contracts on hand, up 17.2% on FY14 Activated 13,400 lots delivering target margins at The Grove and Cloverton, both in Melbourne Acquired over 2,600 lots in Sydney, Melb
Slide 6: Implementing our strategy: Grow our customer base
Implementing our strategy: Grow our customer base For personal use only Key Achievements in 1H15 Customer satisfaction high1: Retailer satisfaction at 80% Shopper satisfaction at 93% Residential satisfaction at 78% Retirement Living satisfaction score of 8.5 out of 10 Over 148 million sh
Slide 7: Implementing our strategy: Operational Excellence
Implementing our strategy: Operational Excellence For personal use only Key Achievements in 1H15 A global leader in sustainability with GRESB Green Star and #2 rank in DJSI Halving downtime and reducing renovation costs by 20% in Retirement Living WGEA Employer of Choice for Gender Equality ci
Slide 8: Implementing our strategy: Capital strength
Implementing our strategy: Capital strength For personal use only Long track record of prudent debt management Key Achievements in 1H15 35.0% Ten year gearing1 history, and target 20-30% gearing band Progressed capital partnering strategy; joint-ventured 30.0% our Townsville regional centre 25.0%
Slide 9: Group Finance – Tiernan O’Rourke
Group Finance – Tiernan O’Rourke For personal use only Brooklyn Estate, Vic
Slide 10: Strong improvement in both Underlying Profit and Funds from Operations
Strong improvement in both Underlying Profit and Funds from Operations For personal use only Underlying Profit Funds from Operations $m 1H15 1H14 Change % Comp. 1H15 1H14 Change % Comp. Growth % Growth % Retail 174 174 (0.1%) 3.3% 188 184 2.1% 4.5% Logistics & Business Parks 57 471 21.9% 5.7% 63
Slide 11: Revaluations enhance Statutory Profit
Revaluations enhance Statutory Profit For personal use only $m 1H15 1H14 Change Group Funds From Operations (“FFO”) 307 269 14.5% Adjust for: Amortisation of trust fit out incentives (22) (19) Amortisation of L&BP and Office rent-free incentives (8) (8) Straight-line rent 4 4 Tax benefit on Underlyi
Slide 12: Investing cash in future growth
Investing cash in future growth For personal use only Cash Flow Summary Operational cash applied to accelerate Residential $m 1H15 1H14 Change production Net cash inflow from operating 137 303 (166) Over $70m of land payments relate to contracts with capital activities efficient terms, ~60% of t
Slide 13: Maintaining a strong balance sheet
Maintaining a strong balance sheet For personal use only Key debt metrics 1H15 FY14 A-/stable metrics; rating confirmed in September 2014 S&P rating A-/Stable A-/Stable Focus on diversifying funding sources Drawn debt1 $3.2b $3.3b Cash on deposit $0.5b $0.2b Consistent interest cover ratio and
Slide 14: New forward start swaps, lowering future interest costs
New forward start swaps, lowering future interest costs For personal use only Fixed hedge rates reduced in future years to positively impact the Group’s WACD 7.5% 7.0% 7.0% 7.1% Hedge Rate 6.9% – FY14 7.0% 6.7% 6.6% 6.5% 6.4% 6.7% 6.0% 5.6% Hedge Rate 5.5% – 2H15 5.0% 5.0% 4.8% 4.5% 4.0% FY15 FY16 F
Slide 15: Commercial Property – John Schroder
Commercial Property – John Schroder Wetherill Park, NSW For personal use only
Slide 16: Commercial Property: Driving returns
Commercial Property: Driving returns For personal use only Sustainable profit growth Asset FFO Total Underlying WALE Occupancy2 WACR3 values (comparable Profit (years) (stable 4.7% growth in comparable underlying profit ($m) 1 change) (comparable assets) change) Comparable FFO growth of 5.1% wit
Slide 17: Retail: Sales growth trend improving
Retail: Sales growth trend improving For personal use only Total MAT up 1.2%, driven by 3.8% growth in specialties Sales by Total MAT Comparable MAT Sales per sqm Category1 Growth % Growth % MAT Growth (calculated by MLA2) Strong comparable growth in 2Q15: Total Portfolio 1.2% 0.9% 0.2% Total:
Slide 18: Retail: Continuing to achieve positive leasing spreads
Retail: Continuing to achieve positive leasing spreads For personal use only Retail leasing activity1 1H15 1H14 High occupancy maintained Occupancy 99.5% 99.6% Positive leasing spread on total operational lease deals, Tenant retention 64% 66% reflecting sustainable average occupancy cost ratios
Slide 19: Logistics & Business Parks: Implementing growth strategy
Logistics & Business Parks: Implementing growth strategy For personal use only Rental growth of 3.6% on all leases Logistics & Business Parks 1H15 1H14 A total of 116,000 square metres of leasing executed or Leasing activity executed 45,600 sqm 194,000 sqm underway Leasing activity under HOA1 70
Slide 20: Office: Tactical allocation, optimising returns
Office: Tactical allocation, optimising returns For personal use only Improved occupancy to 94.3%, following leasing momentum Office 1H15 1H14 in all Sydney markets Leasing activity executed 16,600 sqm 10,000 sqm Brisbane and Perth CBD’s remain challenging, incentives Leasing activity under HOA1
Slide 21: Residential – Andrew Whitson
Artist’s impression Residential – Andrew Whitson Cloverton, Vic For personal use only
Slide 22: Residential Communities: Driving higher returns
Residential Communities: Driving higher returns For personal use only Material improvement in profitability: Residential Communities 1H15 1H14 Change Positive market conditions Lots settled 2,747 2,253 21.9% Revenue – Retail $528m $396m 33.1% Strategic initiatives delivering results – Superl
Slide 23: Residential Communities: Operating profit margin improvement
Residential Communities: Operating profit margin improvement For personal use only Residential Communities 1H15 Core Workout1 Total Continuing project mix improvement from higher Lots settled 2,578 169 2,747 margin new launch projects Revenue $514m $48m $562m Sell-outs continuing at Willowdale a
Slide 24: Residential Communities - Growing assets and customers
Residential Communities - Growing assets and customers For personal use only Capital Core projects employed1 Accelerating production to meet demand Delivering 31 Active Projects current $1.2b Activating our landbank earnings ~27,600 Lots New launch projects including Cloverton and The Grove in
Slide 25: Residential Communities: Market overview
Residential Communities: Market overview For personal use only 1H15 Stockland Summary 2015 market outlook State 1H15 Comments on our State Vacant land Vacant Comments on market outlook settlement settlements sales land volumes in 1H15 volumes prices (%change over 1H14) NSW (19%) Settlements impacte
Slide 26: Retirement Living – Stephen Bull
Retirement Living – Stephen Bull Selandra Rise Retirement Village, Vic For personal use only
Slide 27: Retirement Living: Delivering growth
Retirement Living: Delivering growth For personal use only Operating profit up by 5.8% driven by: Total Portfolio Excluding Aged Care 1H15 1H14 Change 6.6% increase in development volumes EBIT $19m $18m 8.0% ▲ Increased turnover cash per unit - price growth, contract Operating Profit $16m $15m
Slide 28: Retirement Living: Progressing our strategy
Retirement Living: Progressing our strategy For personal use only Growth in DMF valuation primarily due to: DMF valuation assumptions 1H15 FY14 DMF on first sale of new units DMF valuation $m 732 705 Established units price growth, and Weighted average discount rate 12.8% 12.8% Natural matur
Slide 29: Summary and Outlook – Mark Steinert
Summary and Outlook – Mark Steinert For personal use only Hendra Distribution Centre, Qld
Slide 30: FY15 outlook
FY15 outlook For personal use only Tightened guidance for EPS growth to 6.75-7.5%1 for FY15, underpinned by: Settlement of residential lots - towards the upper end of our 5,000-6,000 through the cycle range Improving residential margins from strategic initiatives and favourable market conditio
Slide 31: Important Notice
For personal use only Important Notice Stockland Corporation Limited ACN 000 181 733 While every effort is made to provide accurate and complete information, Stockland does not warrant or represent that the information in this presentation is free from errors or omissions or is suitable for your int