Scentre Group · ASX:SCG
Scentre — FY2016 Earnings Presentation
26 slides from Scentre's earnings presentation, Feb 21, 2017
Slide 1: Full Year Results – December 2016
FULL YEAR RESULTS – DECEMBER 2016 Owner and Operator of in Australia and New Zealand Westfield Newmarket
Slide 2: Scentre Group delivers strong results
Scentre Group delivers strong results We are very 3.2% 2.9% FFO Growth Comparable NOI pleased with these results which highlight - 23.3 cents per security Growth - Higher than guidance the benefits of our - Underlying FFO growth of 5% Top end of guidance strategic focus on owning the highest 21.3c >
Slide 3: Our purpose and strategy
Our purpose and strategy Strategy Our Asset Management Own the highest quality shopping centres and focus on maximising the operating performance of the centres Since the establishment of Scentre Group in June 2014, we have continued to improve the quality of the portfolio through: - Increasing the
Slide 4: The highest quality shopping centre portfolio
The highest quality shopping centre portfolio As at 31 December 2016 Total $45.7bn AUM >$3bn Centres 39 Scentre Group interest Future development pipeline $32.3bn Gross Lettable Area (sqm) 3.6m SCG Interest (bn) $32.3 JV Partner Interest (bn) $13.4 16 of 25 98% Weighted Average Capitalisation Rate 5
Slide 5: In the best locations
In the best locations Located in high population, urbanised transportation nodes Australia with the highest density growth. >65% 34 centres $31.1 billion1 of the population live within a 30 min drive of a Westfield shopping centre >67% of the portfolio by asset value is in Sydney and New Zealand Mel
Slide 6: Strong underlying operating performance
Strong underlying operating performance 31 December 2016 2.9% $22.7bn Total Sales (MAT) $22.7bn Comparable Annual retail Specialty Store Sales Growth (psm) (MAT) 2.6% NOI Growth sales Average Specialty Store Sales (psm) $11,203 Top end of guidance Specialty Store Rent (psm) $1,607 Portfolio Leased >
Slide 7: Continued growth in retail sales
Continued growth in retail sales Comparable specialty sales growth by region1 2.6% >80% 6.0% Sales Growth Of the portfolio generates Specialty sales per square annual retail sales in excess 4.0% 4.1% metre growth of $500m 3.1% 3.0% 2.9% 2.5% 2.6% 2.0% 2.0% Total portfolio Comparable sales growth %1
Slide 8: Continued growth in retail sales by category
Continued growth in retail sales By category Comparable sales growth %1 3 months to 12 months to 31 Dec 2016 31 Dec 2016 Supermarkets 1.1% (0.1%) Department Stores (0.2%) 1.5% Discount Department Stores (4.9%) (1.8%) Cinemas (10.7%) (3.5%) Fashion 1.1% 1.3% Footwear (0.5%) 1.5% Jewellery 3.5% 6.0% L
Slide 9: Creating the best retail product offering
Creating the best retail product offering Scentre Group is focused on creating the best retail product offering for each shopping centre and its local community. This strategic focus is key to enabling the continued growth of specialty store sales and rents. Average specialty store sales Average spe
Slide 10: Developing extraordinary places with exceptional returns
Developing extraordinary places with exceptional returns $665m Delivered $605m >15% Developments Completed in 2016 >7.5% Yields Developments Commenced in 2016 Total Returns Forecast total returns in excess of On completed developments at North 15% North Lakes, Warringah Mall, Marion Lakes, Warringah
Slide 11: Deliverable development pipeline for future growth
Deliverable development pipeline for future growth Future developments - Albany (NZ) - Booragoon (WA)1. - Coomera (QLD) - Innaloo (WA) >$3bn Westfield Newmarket - Knox (VIC) - Kotara (NSW) Future - Marion (SA) development - Newmarket (NZ) pipeline - St Lukes (NZ) - Sydney (NSW) Westfield Coomera Wes
Slide 12: Delivering outstanding development returns
Delivering outstanding development returns Through owning the highest quality shopping centre portfolio and the fully integrated development, design, construction and leasing teams, Scentre Group is able to consistently deliver total development returns in excess of 15%. Value Creation Development &
Slide 13: Strong financial performance
Strong financial performance Funds from Operations 3.2% $m 12 months to 12 months to FFO Growth 31 Dec 2016 31 Dec 2015 - Exceeding guidance, delivering 23.3 cents per Net Operating Income 1,809.7 1,824.5 security - Underlying FFO growth of 5% Management Income 46.3 46.5 Project Income 81.2 84.6 $1.
Slide 14: Stable financial position
Stable financial position $19.5bn $32.3bn Operating Net Assets Property Investments Platform The Balance Sheet does not During 2016, total revaluation include the value of the uplift of $1.6bn unique operating platform Balance Sheet - Proportionate $m 31 Dec 2016 31 Dec 2015 Total Property Investmen
Slide 15: Strong capital structure
Strong capital structure Debt metrics Total interest bearing liabilities 31 Dec 16 $11.6bn 31 Dec 15 $11.1bn $3.3bn 33.3% Gearing (look through basis) 33.3% 33.3% Debt Refinanced Gearing Weighted average interest rate 4.5% 4.7% Weighted average debt maturity 5.1 years 5.6 years Refinanced and extend
Slide 16: Disciplined capital management
Disciplined capital management $2.8bn 5.1 Years Debt Maturities Facilities & Liquidity1 Liquidity 31 Dec 16 % $bn1 Weighted average debt No debt maturities Bonds maturity until July 2018 USD 20% $2.8 EUR 27% $3.8 Maturity profile1 GBP 11% $1.5 A$bn AUD 4% $0.6 3.0 Bonds Total 62% $8.7 Drawn Faciliti
Slide 17: 2017 Outlook – Continued strong growth
2017 Outlook – Continued strong growth 4.25% 2.75% to 3% 2017 Outlook Funds from Operations Growth approximately 4.25% Distribution per security 21.73 cents (2% growth) NOI Growth FFO Growth Comparable NOI Growth approximately 2.75% to 3% Estimated comparable 5% underlying FFO NOI growth Weighted Av
Slide 18: Appendices
Appendices Westfield Warringah Mall
Slide 19: Developments: Westfield Carousel
Developments Active project: Westfield Carousel Overview Project Cost $350m (SCG share: $350m) Commencement Q1 2017 Completion 2018 Highlights Incremental Project GLA 27,500sqm Completed Centre GLA 110,000sqm New Anchors David Jones, international mini-majors, new entertainment, dining and leisure p
Slide 20: Developments: Westfield Chermside
Developments Active project: Westfield Chermside Overview Project Cost $355m (SCG share: $355m) Commencement Q1 2016 Completion June 2017 Highlights Incremental Project GLA 33,000 sqm Completed Centre GLA1 156,000 sqm New Anchors Zara, H&M, Sephora, new leisure and dining precinct Specialty Retail a
Slide 21: Developments: Westfield Plenty Valley
Developments Active project: Westfield Plenty Valley Overview Project Cost $80m (SCG share: $40m) Commencement Q1 2017 Completion 2018 Highlights Incremental Project GLA 10,300sqm Completed Centre GLA 63,500sqm New Anchors Village cinema, new leisure and dining precinct Specialty Retail approx. 20 n
Slide 22: Profit and FFO
Profit and FFO Reconciliation from Profit to FFO $m Profit FFO FFO Financial 12 months to Adjustments1 12 months to Statement Notes 31 December 2016 31 December 2016 A B C=A+B Net operating income 1,762.0 47.7 1,809.7 Note 2(iv) Management income 2 46.3 - 46.3 Note 2(i) Project income 3 81.2 - 81.2
Slide 23: Balance Sheet
Balance Sheet Balance Sheet - Proportionate1 $m Consolidated Equity Accounted 31 December 2016 A B C=A+B Cash 159.0 12.5 171.5 Property Investments - Shopping centres 29,027.5 2,486.1 31,513.6 - Development projects and construction in progress 697.6 77.6 775.2 Total Property Investments 29,725.1 2,
Slide 24: Cashflow
Cashflow Cash Flows from Operating Activities – look through basis $m Consolidated Equity Accounted 31 December 2016 A B C=A+B Receipts in the course of operations (including GST) 2,882.6 232.5 3,115.1 Payments in the course of operations (including GST) (1,014.0) (58.5) (1,072.5) Dividends/distribu
Slide 25: Interest hedging profile
Interest hedging profile $ Fixed Rate Debt Derivatives hedging floating rate $ & NZ debt $ Debt Payable $ Swap Payable NZ$ Swap Payable NZ$ Collar Payable 31 December1 $m Fixed Rate $m Fixed Rate NZ$m Fixed Rate NZ$m Strike Rate 2016 (580.0) 3.25% (7,722.5) 2.92% (440.0) 3.59% (70.0) 3.39%/5.25% 201
Slide 26: Important Notice
IMPORTANT NOTICE All amounts in Australian dollars unless otherwise specified. The financial information included in this document is based on the Scentre Group’s IFRS financial statements. Non IFRS financial information included in this document has not been audited or reviewed. This document conta