Slide 1: Results for the half-year ended 31 December 2010
Goodman Group Results for the half-year ended 31 December 2010 For personal use only 24 February 2011 building momentum + delivering opportunities 1
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) and Goodman Funds Management Limited (ABN 48 067 796 641) (AFSL Number 223621) as the Responsible Entity for Goodman Industrial Trust (ARSN 091 213 839)). Th
Slide 3: Contents
Contents For personal use only + Section 1 Highlights + Section 2 Results overview + Section 3 Operational performance + Section 4 Outlook and summary + Appendices – IIF transaction update – Results analysis – Investment – Development – Management – Capital management 3
Slide 4: Section 1 Highlights
For personal use only Section 1+ Highlights M7 Business Hub, Australia 4
Slide 5: Highlights
Highlights For personal use only + Operating profit after tax of $170.5 million up 23% on 1HFY10 – Fully diluted operating EPS of 2.6 cents1 – On target to deliver full year operating profit after tax of $380 million (up 23% on FY10), equating to fully diluted operating EPS of 5.5 cents2 – Half year
Slide 6: Highlights
Highlights For personal use only + Increased occupancy across all markets up 2% to 95% from June 2010 Own + Retention rate of 72% and WALE of 5.5 years + Leasing rental growth of 3.4% achieved + $0.7 million of new commitments across 9 countries with WIP at $1.5 billion + $10 billion development pip
Slide 7: Section 2 Results overview
For personal use only Section 2+ Results overview Millennium Centre, New Zealand 7
Slide 8: Results overview
Results overview For personal use only + Underlying fundamentals showing positive momentum 1H FY11 – First half operating performance supports upper end of guidance for full year Operating earnings ($M) 170.5 – Property valuations stable with liquidity returning to all markets Statutory accounting p
Slide 9: Profit and loss
Profit and loss For personal use only + Half year operating profit of $170.5 million 31 December 2010 income statement – 7% movement in A$ offset by hedges 1H FY10 1H FY11 $m $m – >7.0% ROA in investment, improving occupancy and rents Investment (look through) 236.1 224.5 – Development margins for w
Slide 10: Balance sheet
Balance sheet For personal use only + Strong balance sheet maintained through prudent 31 December 2010 balance sheet capital management initiatives 30 Jun 2010 31 Dec 2010 $m $m – Actively recycling development holdings, third party capital utilisation and monetising land Stabilised assets 2,310 2,2
Slide 11: Property valuations
Property valuations For personal use only + Revaluations stable with liquidity returning to all markets + Property valuation indices in major operating markets signal a stabilisation of asset values with positive momentum apparent in Hong Kong and China + WACR of 7.8% - down from 7.9% as at 30 June
Slide 12: Section 3 Operational performance
For personal use only Section 3+ Operational performance Highbrook Business Park, New Zealand 12
Slide 13: Investment
Investment For personal use only + Retained high quality and well located property portfolio - which remains a core activity of the Group Investment ($m) 1H FY10 1H FY11 Direct 85.4 81.7 + Overall quality and cash flows remain sound Cornerstones 150.7 142.8 Look through EBITDA 236.1 224.5 – Occupanc
Slide 14: Development
Development For personal use only + Development remains a key component of the Development ($m) 1H FY10 1H FY11 Goodman business model Revenue 19.5 48.7 – Built-out value of all projects under Group control estimated to EBITDA 6.5 35.7 exceed $10 billion + Development activity and enquiry increasing
Slide 15: Development projects: Australia & New Zealand
Development projects For personal use only + Major development projects Australia & New Zealand Australia – Bungarribee Industrial Estate Australia – Oakdale Industrial Estate Customer Metcash Customer DHL Area Area 36,165 sqm 82,015 sqm Lease term 10 years Lease term 15 years GAIF / Contracted owne
Slide 16: Development projects: UK & Europe
Development projects For personal use only + Major development projects UK & Europe France – Saint-Mard UK – Andover Customer French retailer Customer Co-op Area 50,000 sqm Area 43,468 sqm Lease term 9 years Lease term 20 years Contracted owner GMG Contracted owner 3rd Party Germany – Malsch Germany
Slide 17: Asian regional perspective
Asian regional perspective For personal use only 1. J-REP is Goodman’s platform in Japan and is majority owned by a 50/50 strategic alliance between Goodman and Macquarie (Macquarie Goodman Japan) 2. Includes Beijing Airport Logistics Park Note: Artist’s impressions may be subject to change 17
Slide 18: Development projects: Asia
Development projects For personal use only + Major development projects Asia China – Beijing Airport Logistics Park China – Pudong Airport Logistic Park Land area 81,847 sqm Land area 172,260 sqm Phase 1: 42,677 sqm Lettable area Phase 2: 26,048 sqm Lettable area Phase 2: 55,846 sqm Contracted Contr
Slide 19: Management
Management For personal use only + External Assets Under Management (AUM) unchanged on a constant currency basis ($1.0 billion movement resulting from FX) Management ($m) 1H FY10 1H FY11 Fund management fees 35.5 30.3 + Growth in AUM expected to be strong moving forward Property service fees 26.2 29
Slide 20: Management - AUM
Management - AUM For personal use only + Major new initiatives completed during the half include: – Completed €300 million GELF equity raising – Completed $1.5 billion refinance of GAIF debt facilities – Recommended offer to acquire 100% of IIF 20
Slide 21: Management platform
Management platform For personal use only Goodman’s five largest Fund cornerstones GAIF ABPP GELF GHKLF GMT1 Total assets $4.4bn $1.9bn $1.8bn $1.3bn $1.2bn GMG co-investment 43.7% 35.7% 27.9% 20.0% 16.5%2 GMG co-investment $1.1bn $0.3bn $0.3bn $0.2bn $0.1bn2 Number of properties 107 28 83 15 21 Occ
Slide 22: Section 4 Outlook and summary
For personal use only Section 4+ Outlook and summary Keylink Industrial Estate, Australia 22
Slide 23: Outlook and summary
Outlook and summary For personal use only + Maintain position as a strong industrial property and business partner in all markets we operate in + Expand relationships with major investment partners to capture opportunities Strategy + Focus on higher and better use to maximise development returns + R
Slide 24: Appendix 1 IIF transaction update
For personal use only Appendix 1+ IIF transaction update Highbrook Business Park, New Zealand 24
Slide 25: IIF transaction update
IIF transaction update For personal use only + The IML Independent Directors have unanimously recommended that Unitholders vote in favour of the transaction in the absence of a superior competing proposal + Transaction continues to progress: – Scheme booklet has been sent to IIF Unitholders for cons
Slide 26: Appendix 2 Results analysis
For personal use only Appendix 2+ Results analysis Kobe, Japan 26
Slide 27: Profit and loss
For personal use only Profit and loss 27
Slide 28: Profit and loss (cont)
Profit and loss (cont) For personal use only GMG results Half Year ended Half Year ended Increase / 31 Dec 2009 31 Dec 2010 (decrease) $M $M $M Property investment1 165.5 164.8 (0.7) Management services2 54.8 50.6 (4.2) Development 19.5 48.7 29.2 Operating revenue net of property expenses 239.8 264.
Slide 29: Profit and loss (cont)
Profit and loss (cont) For personal use only + Total income by business segment for the half year ended 31 December 2010 Category Total Investment Management Development Unallocated Non-operating items1 $M $M $M $M $M $M Gross property income 112.3 111.7 0.6 Fund management income 30.3 30.1 0.2 Prop
Slide 30: Profit and loss (cont)
Profit and loss (cont) For personal use only Category Total Investment Management Development Unallocated Non-operating items1 $M $M $M $M $M $M EBIT – per statutory accounts 196.9 164.8 30.6 35.7 (16.2) (18.0) Valuation movement1 10.2 10.2 1 Non-operating and non-cash items 7.8 7.8 Operating EBIT 2
Slide 31: Reconciliation non-operating items
Reconciliation non-operating items For personal use only Non-operating Items in statutory profit & loss Half Year ended 31 Dec 2010 $M $M Property valuation Net loss from fair value adjustments on investment properties (2.9) Share of net loss from fair value adjustments on investment properties in a
Slide 32: Financial position
Financial position For personal use only + Headline gearing of 24.5% As at 31 December 2010 Direct Assets Investments Developments Other Total $M $M $M $M $M Cash 220.7 220.7 Receivables 17.8 237.9 207.1 462.8 Inventories 422.5 422.5 Investment properties 2,249.9 470.4 2,720.3 Investments accounted
Slide 33: Gearing bridge
Gearing bridge For personal use only + 30 June 2010 to 31 December 2010 33
Slide 34: Net tangible assets
Net tangible assets For personal use only + Movement in net tangible assets for the half year ended 31 December 2010 Net tangible asset reconciliation $M $M Per security Total equity at 1 July 2010 4,721.7 0.75 Valuation of non-current assets during the year Valuation of investments properties (2.9)
Slide 35: Net tangible asset bridge
Net tangible asset bridge For personal use only + For half year ended 31 December 2010 1 1. Calculated on 6,856.7 million securities being closing securities on issue of 6,893.0 million less 36.3 million securities related to ESAP and excludes minority interest 35
Slide 36: Intangibles, derivatives and currency
Intangibles, derivatives and currency For personal use only + Intangible impairment of $8.6 million relates to Intangibles – segment carrying values UK Business Parks and Logistics Adjusted for Book value impairment Book value 30 June 2010 and FX 31 Dec 2010 $m $m $m + Positive FX and interest rate
Slide 37: Appendix 3 Investment
For personal use only Appendix 3+ Investment Interlink, Hong Kong 37
Slide 38: Leasing
Leasing For personal use only + Leasing rental growth of 3.4% achieved + ~1 million sqm leased during the first half + Minimal rental arrears and tenant defaults + Like on like property income +2.2% on direct portfolio Division Leasing area (sqm) Net annual rent (A$m) Average lease term (years) Occu
Slide 39: Customers
Customers For personal use only 1. Includes customers of GMG and its managed funds and is based on net rental income 2. Everything Everywhere Ltd is the consolidation of T-mobile and Orange 39
Slide 40: Direct portfolio detail - Australia
Direct portfolio detail - Australia For personal use only Portfolio snapshot Key metrics1 Total assets A$1.9 billion + 31 properties with a total value of $1.9 billion located across key Australian markets Customers 229 + Leasing deals remain strong across the portfolio Number of properties 31 – 69,
Slide 41: Direct portfolio detail - UK
Direct portfolio detail - UK For personal use only Portfolio snapshot Key metrics1 Total assets A$0.3 billion + Occupancy at 94.1%2 Customers 12 + Vacancy relates to one property + Strong WALE of 6.4 years Number of properties 11 + Cap rates stable with current WACR of 7.8% Occupancy 94.1%2 Weighted
Slide 42: Appendix 4 Development
For personal use only Appendix 4+ Development Belleville Logistics Centre, France 42
Slide 43: Developments
Developments For personal use only 1HFY11 Developments Completions Commitments Work in progress Value ($M) 356 734 1,485 Area (m sqm) 0.2 0.5 0.9 Yield (%) 9.9 8.5 9.0 Pre-committed (%) 100 97 76 Weighted Average Lease Term (years) 10.6 11.2 9.8 Development for Third Parties or Funds (%) 94 89 77 As
Slide 44: Developments
Developments For personal use only + The Group has a development pipeline in excess of $10 billion – Across Group and Funds – Based on currency as at 31 December 2010 – Allocated as Asia Pacific $4 billion and Europe $6 billion – Forecast GLA of over 6.5 million sqm – Development timeframe in excess
Slide 45: Appendix 5 Management
For personal use only Appendix 5+ Management Uxbridge, United Kingdom 45
Slide 46: Goodman Australia Industrial Fund
Goodman Australia Industrial Fund For personal use only Key events Key metrics1 + Finalised a comprehensive restructure of GAIF’s debt platform Total assets A$4.4 billion – Moved to a senior unsecured debt structure Interest bearing liabilities A$1.7 billion – Refinanced A$1.5 billion of debt across
Slide 47: Arlington Business Parks Partnership (UK)
Arlington Business Parks Partnership (UK) For personal use only Key events Key metrics1 + Total leasing of 16,100 sqm (£3.7 million NPI) during 1H FY11 – Total assets A$1.9 billion reduced vacancy to 10% Interest bearing liabilities A$0.9 billion + Continue to pursue land sales at highest and best u
Slide 48: Goodman European Logistics Fund
Goodman European Logistics Fund For personal use only Key events Key metrics1 + Completed €300 million rights issue: Total assets A$1.8 billion – Demand from existing Unitholders totalled €30 million Interest bearing liabilities A$0.6 billion – Dutch asset managers, APG (€150 million) and PGGM (€100
Slide 49: Goodman Hong Kong Logistics Fund
Goodman Hong Kong Logistics Fund For personal use only Key events Key metrics1 + Approximately 190,700 sqm or 25% of the portfolio leased during Total assets A$1.3 billion 1H FY11 with portfolio occupancy reaching a 18 month high Interest bearing liabilities A$0.3 billion + Completed disposal of Sea
Slide 50: Goodman Property Trust
Goodman Property Trust For personal use only Key events Key metrics1 + Sound portfolio performance1 Total assets A$1.2 billion – WALE of 5.5 years Interest bearing liabilities A$0.4 billion – 95% occupancy Gearing2 37.0% – Over 45,000 sqm of space leased to new or existing Customers 220 customers in
Slide 51: Appendix 6 Capital management
For personal use only Appendix 6+ Capital management Rainton Bridge, United Kingdom 51
Slide 52: Group financial covenants
Group financial covenants For personal use only Covenants Test Covenant Result Headroom Net liabilities1 as a percentage of net tangible assets is not Gearing ratio 60% 30.8% 29.2% more than 60% (reducing to 55% from 30 June 2011) Interest cover ratio EBITDA to interest expense at least 2.0x 2.0X 4.
Slide 53: Group liquidity position
Group liquidity position For personal use only + Cash and available lines of credit of $1,448.7 million at 31 December 2010 − $220.7 million cash, $1,228.0 million available lines + Headline gearing at 24.5% as at 31 December 2010 + Average Debt Maturity profile of 3.7 years + In November 2010, Good
Slide 54: Currency mix
For personal use only Currency mix 54
Slide 55: Financial risk management
Financial risk management For personal use only + Financial risk management in line with Group board policy – interest risk management: – 86% hedged in the first 12 months – Weighted average hedge maturity of 4.6 years – Weighted average hedge rate of 5.42%1 vs spot2 3.16% – Current “all in” net WAC
Slide 56: Financial risk management
Financial risk management For personal use only Interest rate + Interest rates are hedged to 86% over next 12 months + Weighted average hedge rate of 5.42%1 vs spot2 3.16% - NZD – (hedge 8.17%, spot 4.61%) - JPY – (hedge 1.09%, spot 0.70%) - HKD – (hedge 2.74%, spot 2.24%) - GBP – (hedge 8.37%3, spo
Slide 57: Financial risk management (cont)
Financial risk management (cont) For personal use only Interest rate hedging profile Euro payable GBP payable HKD payable NZD payable JPY payable Fixed Fixed1 Fixed Fixed rate Fixed rate rate rate % rate As at June €M % £M % HK$M % NZ$M ¥M % 2011 (405.0) 3.53 (425.0) 8.08 (1,750.0) 2.90 (114.1) 8.43
Slide 58: Financial risk management (cont)
Financial risk management (cont) For personal use only Currency hedging profile Amount Amount Maturing in Hedge rate payable Hedge rate payable year ending June HK$M NZ$M 2011 5.0701 (62.6) 1.1630 (5.3) 2012 4.9885 (62.6) 1.1768 (5.3) 2013 4.9077 (62.6) 1.1932 (5.0) Foreign currency denominated bala
Slide 59: Exchange rates
Exchange rates For personal use only + Statement of Financial Position – exchange rates as at 31 December 2010 – AUDGBP – 0.6585 (31 December 2009 : 0.5581) – AUDEUR – 0.7647 (31 December 2009 : 0. 6241) – AUDHKD – 7.9512 (31 December 2009 : 6.9669) – AUDSGD – 1.3126 (31 December 2009 : 1.2623) – AU
Slide 60: Thank you
For personal use only thank+you 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