Slide 1: Results for the year ended 30 June 2018
Results for the year ended 30 June 2018 17 August 2018 For personal use only
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 Good
Slide 3: Contents
Contents + Section 1 – Highlights For personal use only + Section 2 – Results overview + Section 3 – Operational performance + Section 4 – Outlook + Appendices - Results analysis - Property investment - Development - Management - Capital management 3
Slide 4: Section 1 - Highlights
Section1 - Highlights For personal use only
Slide 5: Highlights
Highlights + The Group has continued to perform strongly in FY18. Key financial metrics for the year include: For personal use only – Operating profit1 of $845.9 million, up 9% on FY17 – Operating earnings per share (EPS)2 of 46.7 cents, up 8.3% on FY17 – Gearing stable at 5.1%³ (5.9% at FY17) – Dis
Slide 6: Highlights
Highlights + Portfolio driving strong performance including $2.8 billion in revaluations For personal use only – External assets under management (AUM) up 15% to $35.1 billion, with total AUM up 11% to $38.3 billion on FY17 – Partnership average total return¹ of 15.0% for FY18 – Strong portfolio fun
Slide 7: Highlights
Highlights For personal use only + High occupancy maintained at 98% and WALE of 4.8 years + Like for like NPI growth at 3.2% Own + Leased 3.5 million sqm across the global platform equating to $429 million of annual rental property income across the Group and Partnerships + Competing demand for spac
Slide 8: Section 2 - Results overview
Section 2 - Results overview For personal use only
Slide 9: Results overview
Results overview + Outperformed original targets for FY18 FY17 FY18 For personal use only – Strong contributions by the global development and management operations offsetting the impact of asset sales Operating profit ($m) 776.0 845.9 + Operating EPS¹ of 46.7 cents¹ per security, up 8.3% on FY17 St
Slide 10: Profit and loss
Profit and loss + Statutory profit of $1.1 billion, includes property valuations offset by fair Income statement For personal use only value movements of derivatives and other non-cash or non-recurring FY17 FY18 items $M $M – Strong revaluations globally totalling $2.8 billion (Group’s share Propert
Slide 11: Balance sheet
Balance sheet Balance sheet For personal use only + Balance sheet remains robust FY17 FY18 – Maintaining low financial leverage in line with Financial Risk $m $m Management Policy Stabilised investment properties 1,834 1,624 – Gearing decreased to 5.1% (from 5.9% in FY17) and 16.3% on a Partnership
Slide 12: Group liquidity position
Group liquidity position Goodman Group debt maturity profile For personal use only + Cash and available lines of credit of $3.4 billion as at 30 June 2018¹ - $2.4 billion in cash² - $1.0 billion of available lines + Significant liquidity and balance sheet capacity maintained given current strategy -
Slide 13: Section 3 - Operational performance
Section 3 - Operational performance For personal use only
Slide 14: Property investment
Property investment + Property fundamentals remain strong, with the portfolio now focused in major For personal use only Property investment ($m) FY17 FY18 urban centres around the world Direct 130.5 113.2 + The portfolio concentration in infill markets is delivering higher occupancy Cornerstones 26
Slide 15: Development
Development + Globally diversified workbook with development WIP at $3.6 billion For personal use only Development ($M) FY17 FY18 + Selective development led strategy across key infill markets Development income 1,402.8 1,299.5 – Strong completions of $3.5 billion with 87% committed Development expe
Slide 16: Management
Management For personal use only + External AUM of $35.1 billion up 15% on FY17 Management ($M) FY17 FY18 – AUM increase due to revaluation gains and development completions across the Management earnings 266.6 316.5 platform, offsetting sales + Continued strong performance of the Partnerships incre
Slide 17: Management platform
Management platform For personal use only GAIP GHKLP GEP GAP GCLP GMT GJCP GNAP GUKP Total assets $7.0bn $6.0bn $5.7bn $3.7bn $3.5bn $2.4bn $2.3bn $2.1bn $0.3bn GMG co-investment 27.9% 20.0% 20.4% 19.9% 20.0% 21.2% 17.3% 55.0% 33.3% GMG co-investment $1.3bn $0.9bn $0.7bn $0.7bn $0.5bn $0.4bn $0.2bn
Slide 18: Section 4 - Outlook
For personal use only Section 4 - Outlook
Slide 19: Outlook
Outlook + Our industry is experiencing considerable change For personal use only – Consumer behaviour and rapidly changing technology solutions are driving change in consumer fulfilment – Most industries including e-commerce, traditional retail and 3PL’s are re-evaluating supply chains – Proximity t
Slide 20: Outlook
Outlook + For personal use only Urbanisation continues to drive change to higher value uses including residential – Currently the Group has sites capable of delivering >35,000 apartments – Multiple sites in various stages of planning, with realisation dependant on market cycles over the medium term
Slide 21: Appendix - Results analysis
Appendix 1 – Results analysis For personal use only 21
Slide 22: Profit and loss
Profit and loss Total income by business segment for the year ended 30 June 2018 For personal use only Category Total Property Management Development Operating Non- investment expenses operating items $M $M $M $M $M $M Gross property income 150.4 149.6 - - - 0.8 Management income 316.5 - 316.5 - - -
Slide 23: Profit and loss (cont'd)
Profit and loss (cont’d) Category Total Property Management Development Operating Non-operating For personal use only investment expenses items $M $M $M $M $M $M EBIT / Segment operating earnings 1,452.5 384.8 316.5 490.6 (249.4) 510.0 Net gain from fair value adjustments on investment properties (7
Slide 24: Reconciliation non-operating items
Reconciliation non-operating items For personal use only Non-operating items in statutory income statement Year ended 30 June 2018 $M $M Property valuation related movements Net gain from fair value adjustments attributable to investment properties 71.1 Share of net gain from fair value adjustments
Slide 25: Financial position
Financial position As at 30 June 2018 Direct Assets Property Developments Other Total For personal use only $M investments $M $M $M $M Capital allocation Cash - - - 2,406.8 2,406.8 Receivables - - 375.4 306.5 681.9 Inventories - - 958.0 - 958.0 Investment properties 1,624.3 - 150.3 - 1,774.6 Investm
Slide 26: Business performance analysis
Business performance analysis + Operating margins have steadily increased + ROA has increased For personal use only – Focused strategy – Positive performance from investment property on a like- for-like basis – Income growth has exceeded expense growth in the active business – More assets and develo
Slide 27: Net tangible asset movement
Net tangible asset movement For personal use only + For year ended 30 June 2018¹ 1. Calculated on 1,800.8 million securities being closing securities on issue 27
Slide 28: Property valuations
Property valuations + The Group continues to benefit from the improvement in the quality of the global portfolio as well as strong industrial For personal use only fundamentals in regard to increasing investment demand for logistics assets and improving market rental growth + Accordingly, the global
Slide 29: Appendix - Property investment
Appendix 2 – Property investment For personal use only Rochedale Motorway Estate, QLD, Australia
Slide 30: Leasing
Leasing Across the Group and Partnerships: For personal use only + 3.5 million sqm leased during the year + High occupancy at 98% Region Leasing area (sqm) Net annual rent ($M) Average lease term (years) Australia / New Zealand 1,168,689 163.0 5.0 Asia 1,301,998 192.3 3.5 UK / Continental Europe 994
Slide 31: Customers
Customers Top 20 global customers (by net income - look through basis) For personal use only 31
Slide 32: Geographic exposure
Geographic exposure Top 20 sub-regions (by AUM) For personal use only 32
Slide 33: Direct portfolio detail
Direct portfolio detail Portfolio snapshot Key metrics¹ For personal use only + 23 properties with a total value of $1.6¹ billion located Total assets A$1.6 billion primarily in the Sydney market Customers 290 Number of properties 23 – Represents a significant part of the urban renewal portfolio Occ
Slide 34: Appendix - Development
Appendix 3 – Development For personal use only
Slide 35: Developments
Developments FY18 Developments Completions Commencements Work in progress For personal use only Value ($bn) 3.5 3.2 3.6 Area (m sqm) 2.2 2.0 2.2 Yield (%) 7.4 7.2 7.2 Committed (%) 87 67 64 Weighted average lease term (years) 9.5 7.7 7.8 Development for third parties or Partnerships (%) 80 71 76 Aus
Slide 36: Developments (cont'd)
Developments (cont’d) Development volume For personal use only + Maintained development pipeline of $10 billion – Forecast GLA of 5.9 million sqm – Development pipeline allocated as Australia/New Zealand 18%, Asia 44%, UK/Europe 24% and Americas 14% + The Group’s development future cash commitments
Slide 37: Appendix - Management
Appendix 4 - Management For personal use only
Slide 38: Global platform
For personal use only Global platform 38
Slide 39: Management - AUM
Management - AUM Third party AUM by region For personal use only + Major achievements completed during the year include – GMT conditionally sold Viaduct office portfolio to Blackstone for A$587 million – Established Brazil Partnership (A$952 million equity commitment) alongside APG, CPPIB, GIC and F
Slide 40: Appendix - Capital management
Appendix 5 – Capital management For personal use only
Slide 41: Currency mix
Currency mix For personal use only Currency mix – including the impact Currency mix – outstanding debt of Capital Hedging FX Swaps 41
Slide 42: Financial risk management
Financial risk management + The Group has been implementing a robust capital management framework, which includes a revised Financial Risk Management (FRM) policy. This provides: For personal use only ‒ Stronger balance sheet which has been reflected in higher credit ratings upgrade from S&P and Moo
Slide 43: Financial risk management (cont'd)
Financial risk management (cont’d) Interest rate hedge profile For personal use only + Interest rates are hedged to 85% over next 12 months + Weighted average hedge rate of 2.99%1 - NZD – hedge rate 3.57% - JPY – hedge rate 2.99% - HKD – hedge rate 2.46% - GBP – hedge rate 3.03% - Euro – hedge rate
Slide 44: Financial risk management (cont'd)
Financial risk management (cont’d) For personal use only Foreign currency denominated balance sheet hedging maturity profile Currency Weighted average Weighted average Amount receivable1 Amount payable1 maturity exchange rate NZ$ 4.2 years 1.0943 A$274.2m NZ$300.0m HK$ 3.7 years 5.9927 A$571.0m HK$3
Slide 45: Exchange rates
Exchange rates + Statement of Financial Position – exchange rates as at 30 June 2018 For personal use only – AUDGBP – 0.5604 (30 June 2017: 0.5902) – AUDEUR – 0.6332 (30 June 2017: 0.6727) – AUDHKD – 5.8015 (30 June 2017: 5.9935) – AUDBRL – 2.8565 (30 June 2017: 2.5385) – AUDNZD – 1.0922 (30 June 20
Slide 46: Thank you
Thank you For personal use only Important Notice This document has been prepared by Goodman Group (Goodman Limited (ABN 69 000 123 071) and Goodman Funds Management Limited (ABN 48 067 796 641) (AFSL 223621) as the Responsible Entity for Goodman Industrial Trust (ARSN 091 213 839)). The details in t