Stockland · ASX:SGP
Stockland — FY2015 Earnings Presentation
31 slides from Stockland's earnings presentation, Aug 19, 2015
Slide 1: FY15 Stockland Results Presentation
FY15 Stockland Results Presentation Delivering sustainable growth 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 07 Commercial Property John Schroder, Group Executive and CEO, 13 Commercial Property Residential Andrew Whitson, Group Executive and CEO, 20 Residential Retir
Slide 3: Strategy delivering strong results
Strategy delivering strong results For personal use only EPS growth of 7.8% and FFO per security growth of 13.0%, FY15 FY14 Change reflecting consistent implementation of our strategy, together with supportive market conditions Statutory Profit $903m $527m 71.4% Statutory Earnings per security 38
Slide 4: FY15 Achievements - Grow asset returns
FY15 Achievements - Grow asset returns For personal use only $425m retail development underway at 13.5% 4.8% comparable Activated at target IRR and FFO from 14,000 margins next wave has CP portfolio residential lots grown to $1.1bn DISCIPLINED INVESTMENT Record RL Acquired Acquired development activ
Slide 5: FY15 Achievements - Grow customer base
FY15 Achievements - Grow customer base For personal use only High RESIDENTIAL CUSTOMER COMMUNITIES Ranked - broadening customer SATISFACTION reach, 74% owner occupiers # 11 Retail on retail 151 million 80% tenants tenant OVER MEDIUM DENSITY dwellings to commence shopper visits to satisfaction 500 co
Slide 6: FY15 Achievements - Operational excellence
FY15 Achievements - Operational excellence For personal use only LEADER IN OPERATIONAL SUSTAINABILITY EXCELLENCE Launched with in carbon intensity reductions #2 Globally $8m 1 >$60m 85% Employee Engagement, savings from FY06 ABOVE GLOBAL norm3 Highest retail NABERS Energy CHARITY PARTNERS 4.27 stars
Slide 7: Group Finance – Tiernan O’Rourke
Group Finance – Tiernan O’Rourke For personal use only Shellharbour, NSW, Australia’s largest single rooftop solar system
Slide 8: Strong improvement in both Underlying Profit and FFO
Strong improvement in both Underlying Profit and FFO For personal use only Underlying Profit Funds from Operations $m FY15 FY14 Change % Comp. FY15 FY14 Change % Comp. Growth % Growth % Retail 351 347 1.3% 4.2% 379 369 2.6% 4.8% Logistics & Business Parks 120 100 20.1% 3.1% 131 108 21.0% 5.1% Of
Slide 9: FFO to Statutory Profit
FFO to Statutory Profit For personal use only $m FY15 FY14 Change Group Funds From Operations (“FFO”) 657 573 14.7% Adjust for: Amortisation of fit out incentives (45) (37) Amortisation of rent-free incentives (16) (15) Straight-line rent 8 7 Tax benefit on Underlying Profit 4 27 Underlying Profit
Slide 10: FY15 Achievements - Capital strength
FY15 Achievements - Capital strength For personal use only Australia’s first LOWER corporate 6.2% Insert image COST GREEN BOND or text of debt Maintained rating: SYSTEMS ENHANCEMENT/ Diversification of funding sources 5.31 Long dated weighted average YEARS debt maturity A- CREDIT for OPTIMISATION ov
Slide 11: Investing cash in future growth
Investing cash in future growth For personal use only Cash Flow Summary 2,000 43% relates to payments on 1,800 capital efficient terms The Address has commenced 322 (380) 1,600 settlements 1,400 508 (437) 1,200 $ millions 1,000 (211) 800 Includes Residential cashflows of: 1,462 600 781 Sales 1,2
Slide 12: Maintaining a strong balance sheet
Maintaining a strong balance sheet For personal use only Key debt metrics FY15 FY14 A-/stable metrics maintained S&P rating A-/Stable A-/Stable Focus on diversifying funding sources Drawn debt1 $3.1b $3.3b Cash on deposit $0.2b $0.2b Consistent interest cover ratio Available undrawn committed
Slide 13: Commercial Property
Commercial Property Wetherill Park, NSW For personal use only
Slide 14: Commercial Property: Sustainable returns
Commercial Property: Sustainable returns For personal use only Sustainable profit growth Asset FFO Total WALE Occupancy2 WACR3 ROA values (comparable Underlying (years) (stable Comparable FFO growth of 4.8% with strong results across ($m)1 change) Profit assets) all asset classes (comparable chang
Slide 15: Retail: Accretive development pipeline
Retail: Accretive development pipeline For personal use only Retail development activity progressing as planned Under construction Total Stabilised Incremental Baldivis (WA): Opened 2H15, fully leased. $20m enhanced value spend ($m) yield1 IRR2 recognised in FY15 Baldivis 116 8.0% ~13.0% Wetheri
Slide 16: Retail: Continuing to achieve positive leasing spreads
Retail: Continuing to achieve positive leasing spreads For personal use only Retail leasing activity1 FY15 FY14 Strong leasing momentum continues: Occupancy2 99.5% 99.6% Positive leasing spreads of 3.2% Tenant retention 64% 71% Average rental growth3 on total lease deals 3.2% 2.5% 211 project
Slide 17: Logistics & Business Parks: Activating growth strategy
Logistics & Business Parks: Activating growth strategy For personal use only Logistics & Business Parks FY15 FY14 Over 180,000 square metres of leasing activity Leasing activity executed 142,600 sqm 349,600 sqm Disciplined acquisition strategy, three new assets at Botany and Leasing activity und
Slide 18: L&BP: Growing & activating the development pipeline
L&BP: Growing & activating the development pipeline For personal use only Development type Greenfield Brownfield Active Development Planning Underway Future Wave Ingleburn (Stage 1) Ingleburn (Stage 2 & 3) Target returns Yennora (Bld 3 & 8A) 11% - 14% IRR Yennora (Bld 1 & 2) (Greenfield) NSW 7% - 8%
Slide 19: Office: Tactical allocation, optimising returns
Office: Tactical allocation, optimising returns For personal use only Office FY15 FY14 Maintained positive leasing momentum Leasing activity executed 40,100 sqm 39,700 sqm Tactically overweight improving Sydney office market, our Leasing activity under HOA1 3,600 sqm 6,500 sqm assets close to fu
Slide 20: Residential – Andrew Whitson
Residential – Andrew Whitson Isles of Newport, Brisbane For personal use only
Slide 21: Residential Communities: Driving sustainable returns
Residential Communities: Driving sustainable returns For personal use only Significant increase in operating profit and ROA, driven Residential Communities FY15 FY14 Change by market conditions and new projects Lots settled 5,876 5,219 12.6% Revenue – Retail $1,194m $964m 23.9% Record contract
Slide 22: Residential Communities: Operating profit margin improvement
Residential Communities: Operating profit margin improvement For personal use only Residential Communities FY15 Core Workout1 Total Improved project mix has been driven by new launch Lots settled 5,493 383 5,876 projects Revenue $1,146m $99m $1,245m Revenue 92% 8% 100% Project rate increase refl
Slide 23: Residential Communities: Growing assets and customers
Residential Communities: Growing assets and customers For personal use only Significant progress in activating our portfolio: Launched three projects with 14,000 lots in FY15: The Grove, Core Capital projects employed1 The Address and Cloverton, all in Melbourne Delivering 31 Active Projects curre
Slide 24: Residential Communities: Market overview
Residential Communities: Market overview For personal use only FY15 Stockland Summary 2016 market outlook State FY15 Comments on our State Vacant land Vacant Comments on market outlook settlement settlements sales land volumes in FY15 volumes prices (%change over FY14) NSW 45% Strong lift from Will
Slide 25: Retirement Living – Stephen Bull
Retirement Living – Stephen Bull Cardinal Freeman, NSW For personal use only
Slide 26: Retirement Living: Delivering growth
Retirement Living: Delivering growth For personal use only Total Portfolio FY15 FY14 Change Significant uplift in operating profit and ROA: EBIT $54m $45m 19.8%▲ Increased volumes, particularly for developments Operating Profit $48m $40m 19.9%▲ Increased turnover cash per unit - price growth,
Slide 27: Retirement Living: Active management driving returns
Retirement Living: Active management driving returns For personal use only Development remains a key focus in improving returns Growth in DMF valuation ($m) 27 500 homes under construction or completed 22 27 20 Cardinal Freeman Apartments stage 1 fully reserved, stage 2 to 58 launch this half
Slide 28: Summary and Outlook – Mark Steinert
Summary and Outlook – Mark Steinert Wetherill Park, NSW For personal use only
Slide 29: Positive outlook for our businesses
Positive outlook for our businesses Large housing undersupply remains1 For personal use only -40.0 Annual Rolling Sum ('000s) Moderate economic growth is expected to continue to -20.0 underpin commercial property demand 0.0 20.0 Residential market fundamentals remain sound albeit 40.0 individual
Slide 30: FY16 outlook
FY16 outlook For personal use only Underlying EPS growth of 6-7.5% and FFO per security growth of 8.5-10%, assuming no material change in market conditions, targeted for FY16. Underpinned by: Settlements of around 6,000 residential lots Improving residential margins to around 14% from strategi
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