Slide 1: Results for the year ended 30 June 2017
Results for the year ended 30 June 2017 For personal use only 21 August 2017
Slide 2: For personal use only
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 Goodman Logistics (HK) Limited (Comp
Slide 3: Section 4 – Outlook
For personal use only Section 4 – outlook
Slide 4: Highlights
For personal use only Image of Amazon warehouse Section1+1+ Section Highlights Highlights Goodman Interlink, Hong Kong Erfurt, Zalando, Germany
Slide 5: Delivering consistent and sustainable growth
For personal use only + Delivering consistent and sustainable growth – Operating profit¹ of $776.0 million, up 8.6% on FY16 – Operating EPS¹ of 43.1 cents², up 7.5% on FY16 – Distribution per security of 25.9 cents, up 8% on FY16 – FY2018 forecast operating EPS of 45.7 cents, up 6% on FY17 – Statuto
Slide 6: Capital management initiatives
For personal use only + Capital management initiatives providing operational flexibility and the ability to fund financial obligations and long term growth – Financial Risk Management policy changes in line with current operating practice, resulting in reduced gearing targets and credit rating upgra
Slide 7: Operational highlights
For personal use only + Occupancy increased to 97% reflecting portfolio quality improvement + Retention rate of 81% and WALE of 4.7 years + Like for like rental growth at 3.0% and positive lease reversions of 2.5% on new leasing deals Own + Leased 3.1 million sqm across the global platform equating
Slide 8: Results Overview
For personal use only Section Section2+2+ Results Results Overview overview Stockyards Industrial Estate, Australia M7 Business Hub, Australia
Slide 9: Operating profit growth whilst reducing gearing
For personal use only + Operating profit growth whilst reducing gearing FY16 FY17 – EBIT margin across Management and Development operations have increased to 67% (65% in FY16) Operating profit ($m) 714.5 776.0 – Overall ROA at 9.1%, over 10% excluding cash Statutory accounting profit ($m) 1,274.6 7
Slide 10: Income statement
For personal use only + Statutory profit of $778 million, includes strong property Income statement valuations offset by fair value movements of derivatives FY16 FY17 and other non-cash or non-recurring items $M $M – Continued strong revaluations of $1.6 billion across the Property investment 406.6
Slide 11: Balance sheet
For personal use only Balance sheet + Stabilised investment properties decreased as a result of FY16 FY17 urban renewal settlements and asset sales $m $m Stabilised investment properties 2,553 1,834 + Partnership cornerstones steady, asset rotation in Partnership cornerstones1 4,950 4,967 Partnershi
Slide 12: Debt maturity and liquidity
For personal use only + Gearing reduced to 5.9%¹ (18.0%² look through) and Goodman Group debt maturity profile expected to remain low at this point of the cycle + Significant liquidity and balance sheet capacity maintained given current development volume and future obligations – Liquidity increased
Slide 13: Operational Performance
For personal use only Section 3+ Operational Performance Interlink, Berlin Goodman Fiege Brieseleang, Hong Kong Osaka Nanko, Japan
Slide 14: Property investment
For personal use only + Property fundamentals improving reflecting a high quality portfolio Property investment ($m) FY16 FY17 as a result of repositioning and strength of customers Direct 141.5 130.5 – High occupancy at 97% Cornerstones 265.1 266.2 – Retention remains high at 81% and WALE of 4.7 ye
Slide 15: Development
For personal use only + Deliberate strategy over the past five years to de-risk Development ($M) FY16 FY17 development WIP by shifting the majority of works into the Development income 1,393.2 1,402.8 Partnerships Development expenses (929.1) (919.9) – Reduce Group capital allocation to development
Slide 16: Management
For personal use only + External assets under management (AUM) of $30.5 billion up Management ($M) FY16 FY17 4% on FY16 net of asset sales of $2.5 billion Management earnings² 259.7 266.6 + Continued strong performance of the Partnerships and AUM growth increasing management earnings Key metrics FY1
Slide 17: Third party assets under management
For personal use only + Major achievements completed during the year include Third party AUM by region – GAIP received ratings upgrade from Standard & Poors, a second rating from Moody’s and subsequently completed a new US$600 million 10 year debt issuance – GHKLP completed restructuring of the unse
Slide 18: Partnerships overview
For personal use only GAIP GHKLP GEP GAP GCLP GMT1 GJCP5 GNAP GUKP Total assets $6.8bn $4.7bn $4.5bn $3.6bn $2.9bn $2.3bn $1.9bn $1.3bn $0.3bn9 GMG co-investment 27.5% 20.0% 20.4% 19.9% 20.0% 21.0%2 16.8%2 55.0% 33.3% GMG co-investment $1.3bn $0.7bn $0.5bn $0.6bn $0.4bn $0.3bn2 $0.2bn2 $0.7bn $0.1bn
Slide 19: Outlook and Summary
For personal use only Section 3+ Section 4+ Outlook and Summary Pudong International Airport Logistics Park, China Pudong International Airport Logistics Park, China
Slide 20: Structural changes supporting growth in gateway cities
For personal use only + Macro structural changes are supporting sustainable business growth in gateway cities – Focus on consumer dominated markets given growth in consumerism – The evolution of e-commerce and supply chain transformation is underway but still in early stages + Servicing the consumer
Slide 21: Outlook and long term growth
For personal use only + Deliberate repositioning of our business and structural changes in the industry are expected to sustain long term growth – Continued improvement in portfolio quality following the sale of over $8 billion of real estate in the last three years, underpinning strong rental growt
Slide 22: Appendix 1 – Results analysis
For personal use only Appendix 1+ Results analysis Westney Pinnacle Industry Corporate Park, Park, New Zealand Australia Banfield Distribution Centre, Australia Kobe, Japan
Slide 23: Total income by business segment
For personal use only Total income by business segment for the year ended 30 June 2017 Category Total Property Management Development Operating Non- investment expenses operating items $M $M $M $M $M $M Gross property income 177.1 177.4 (0.3) Management income 266.3 266.3 Development income 1,207.1
Slide 24: Operating EBIT reconciliation
For personal use only Category Total Property Management Development Operating Non-operating investment expenses items $M $M $M $M $M $M EBIT / Segment operating earnings 1,130.6 396.7 266.6 482.9 (248.2) 232.6 Net gain from fair value adjustments on investment properties (180.9) (180.9) Net gain on
Slide 25: Non-operating items in statutory income statement
For personal use only Non-operating items in statutory income statement Year ended 30 June 2017 $M $M Property valuation related movements Profit on disposal of investment properties 49.0 Net gain from fair value adjustments attributable to investment properties 180.9 Share of net gain from fair val
Slide 26: Capital allocation
For personal use only As at 30 June 2017 Direct Property Developments Other Total Assets investments $M $M $M $M $M Capital allocation Cash - - - 2,095.1 2,095.1 Receivables - - 398.5 188.3 586.8 Inventories - - 1,235.5 - 1,235.5 Investment properties 1,833.8 - 176.4 - 2,010.2 Investments accounted
Slide 27: Operating margins and ROA
For personal use only + Operating margins have steadily increased + ROA has increased – Focused strategy – Positive performance from investment property on a like for like basis – Income growth has exceeded expense growth in the active business – More assets and developments are in Partnerships – Ma
Slide 28: For personal use only
For personal use only + For year ended 30 June 2017¹ 1. Calculated on 1,789.1 million securities being closing securities on issue 28
Slide 29: Property valuations
For personal use only + Movement primarily driven by cap rate compression and rental growth across the regions given the continued strong investor interest in the sector. + Repositioning of portfolio has also partly driven cap rate compression along with the stabilisation of development projects + O
Slide 30: Appendix 2 – Investment
For personal use only Appendix 2+ Investment Goodman Interlink, Hong Kong
Slide 31: Leasing activity
For personal use only Across the Group and Partnerships: + 3.1 million sqm leased during the year + Reversions of 2.5% on leasing transactions, with rent growing at 3.0% + High occupancy at 97% Region Leasing area (sqm) Net annual rent ($M) Average lease term (years) Australia / New Zealand 1,410,51
Slide 32: Top global customers
For personal use only Top 20 global customers (by net income or a look through basis) 32
Slide 33: Top sub-regions (by AUM)
For personal use only Top 20 sub-regions (by AUM) 33
Slide 34: Portfolio snapshot
For personal use only Portfolio snapshot Key metrics² + 23 properties with a total value of $1.8 billion located Total assets A$1.8 billion primarily in the Sydney market Customers 261 Number of properties 23 – Represents a significant part of the urban renewal portfolio Occupancy 93% Weighted avera
Slide 35: Appendix 3 – Development
Rheinberg Logistics Centre , Germany For personal use only Appendix 3+ Development Bungarribee Industrial Estate, Australia
Slide 36: FY17 developments
For personal use only FY17 Developments Completions Commencements Work in progress Value ($bn) 2.7 2.8 3.5 Area (m sqm) 2.2 2.1 2.4 Yield (%) 8.0 7.7 7.8 Pre-committed (%) 88 65 64 Weighted average lease term (years) 8.8 9.4 10.6 Development for third parties or Partnerships (%) 82 68 75 Australia /
Slide 37: Development volume
For personal use only Development volume + Maintained development pipeline of $10 billion – Forecast GLA of 6.1 million sqm – Development pipeline allocated as Asia Pacific 56%, Europe 30% and Americas 14% + The Group’s development future cash commitments Commitments as at 30 June 2017 $M Gross GMG
Slide 38: Appendix 4 – Management
For personal use only Appendix 4+ Management Senec Logistics Centre, BirminghamBusiness Slovakia Park, U.K Interlink Industrial Estate, Australia
Slide 39: Global platform
GLOBAL PLATFORM The Americas” A$1.6bn in assets 16 properties Current Goodman global presence As at 30 June 2017 (Australian currency), * Gompnises both stabilised and development assets Continental F] Europe/UK A$7.1bn in assets 142 properties j Total A$34.6bn in assets* 387 properties* 1,125 peopl
Slide 40: GAIP key events and metrics
For personal use only Key events Key metrics¹ + Execution of asset rotation strategy with committed investment Total assets $6.8bn property disposals totaling $765 million during the year Interest bearing liabilities $2.1bn + Completed 121,736 sqm of developments with an end value of Gearing² 25.6%
Slide 41: GHKLP key events and metrics
For personal use only Key events Key metrics¹ + Leased 584,000 sqm, representing HK$485 million of Total assets $4.7 billion annualised rental income. Average uplift of 26% Interest bearing liabilities $0.7 billion + 98% occupancy with a weighted average lease expiry of 2.8 Gearing2 10.0% years Cust
Slide 42: GEP key events and metrics
For personal use only Key events Key metrics¹ + Secured over 809,900 sqm of new and renewed leases Total assets $4.5 billion (excluding developments), representing €35 million of annual Interest bearing liabilities $1.6 billion rental income Gearing ² 33.1% + €323 million of new committed acquisitio
Slide 43: GAP key events and metrics
For personal use only Key events Key metrics¹ + Execution of asset rotation strategy generating $931 million of Total assets $3.6 billion proceeds from the sale of investment properties during FY17 Interest bearing liabilities $0.3 billion + Completed 28,439 sqm of developments with total project Ge
Slide 44: GCLP key events and metrics
For personal use only Key events Key metrics¹ + Secured over 560,000 sqm of new and renewed leases Total assets $2.9 billion (excluding developments) in FY17, increasing occupancy to 97% Interest bearing liabilities $0.4 billion Gearing² 8.8% + Completed 10 development projects with an estimated val
Slide 45: GMT key events and metrics
For personal use only Key events Key metrics¹ + 4.0% increase in operating earnings before tax from Total assets $2.3 billion NZ$117 million to NZ$122 million Interest bearing liabilities $0.7 billion + An 8.3% increase in net tangible assets to 130.4 cents per Gearing3 30.6% unit Customers 240 Numb
Slide 46: GJCP key events and metrics
For personal use only Key Events Key metrics1 + Acquired a new industrial asset from the Goodman Japan Total assets $1.9 billion Development Partnership in August 2016 further improving Interest bearing liabilities $0.8 billion the quality of the portfolio Gearing² 35.0 % + Maintained 100% occupancy
Slide 47: GNAP key events and metrics
For personal use only Key Events Key metrics¹ + Stabilised and value add portfolio of 4.5m sqft with a current Total assets² $1.3 billion book value of US$560m Interest bearing liabilities n/a Gearing n/a + Leased 1.0m sqft to Syncreon at Goodman Logistics Centre Carlisle, Central Pennsylvania Custo
Slide 48: GUKP key events and metrics
For personal use only Key Events Key metrics¹ Total assets $0.3 billion + New Partnership established alongside CPPIB and APG brings over £1 billion of investment capacity for high quality Interest bearing liabilities n/a logistics and industrial development opportunities Gearing² n/a Customers 3 +
Slide 49: Appendix 5 – Capital management
For personal use only Appendix 5+ Capital management Torun Logistics Centre, Poland
Slide 50: Debt covenants
For personal use only Covenants Test Covenant Result Headroom Net liabilities1 as a percentage of net tangible assets is Gearing ratio 45.0% 14.4% 30.6% not more than 45.0% Interest cover ratio EBITDA to interest expense at least 2.0x 2.0x 9.5x 7.5x Secured debt as a percentage of total tangible ass
Slide 51: Currency mix
For personal use only Currency mix – including the impact Currency mix – outstanding debt of Capital Hedging FX Swaps 51
Slide 52: Financial risk management policy
For personal use only + Updated Financial Risk Management Policy aligned with current operating practice - Gearing target reduced to 0% - 25% + Interest risk management: - Policy to ensure between 60% and 100% of current year interest rates are fixed - 94% hedged over next 12 months - Weighted avera
Slide 53: Interest rate hedge profile
For personal use only Interest rate Interest rate hedge profile + Interest rates are hedged to 94% over next 12 months + Weighted average hedge rate of 4.02%1 - NZD – hedge rate 4.01% - JPY – hedge rate 2.88% - HKD – hedge rate 2.16% - GBP – hedge rate 4.51%2 - Euro – hedge rate 1.68% - USD – hedge
Slide 54: Interest rate hedging profile
For personal use only Interest rate hedging profile1 Euro payable GBP payable HKD payable NZD payable JPY payable USD payable AUD receivable As at Fixed Fixed2 Fixed Fixed Fixed Fixed A$M Fixed June rate rate rate rate rate rate Rate €M % £M % HK$M % NZ$M % ¥M % US$M % % 2018 (579.6) 2.19 (427.7) 7.
Slide 55: Foreign currency balance sheet hedging maturity profile
For personal use only Foreign currency denominated balance sheet hedging maturity profile Currency Maturity Weighted average Amount receivable1 Amount payable1 exchange rate NZ$ 2017 / 2018 / 2021 1.1674 A$65.4m NZ$100.0m HK$ 2018 / 2020 / 2021 / 2022 6.5396 A$529.4m HK$3,390.0m € 2017 / 2018 / 2020
Slide 56: Exchange rates
For personal use only + Statement of Financial Position – exchange rates as at 30 June 2017 – AUDGBP – 0.5902 (30 June 2016 : 0.5613) – AUDEUR – 0.6727 (30 June 2016 : 0.6725) – AUDHKD – 5.9935 (30 June 2016 : 5.7786) – AUDBRL – 2.5385 (30 June 2016 : 2.3718) – AUDNZD – 1.0482 (30 June 2016 : 1.0456
Slide 57: Thank you
For personal use only thank+you