Goodman Group · ASX:GMG
Goodman — H1 FY2013 Earnings Presentation
53 slides from Goodman's earnings presentation, Feb 21, 2013
Slide 1: Results for the half year ended 31 December 2012
Goodman Group Results for the half year ended 31 December 2012 For personal use only 21 February 2013 Global partner + Global platform 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) 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 Goodm
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 - Results analysis - Investment - Development - Management - Capital management 3
Slide 4: Section 1 Highlights
For personal use only Section1+1+ Section Highlights Highlights Goodman Interlink, Hong Kong Erfurt, Zalando, Germany 4
Slide 5: Highlights
Highlights For personal use only + Focused strategy delivering sustainable growth: – Operating profit1 of $266 million, up 16% on 1H FY12 – Operating EPS1 of 16.2 cents2, up 6% on 1H FY12 – Distribution per security of 9.7 cents, up 8% on 1H FY12 – Total assets under management of $21 billion, up 10
Slide 6: Highlights
Highlights For personal use only + Investment demand from global capital partners remains strong: – Capital partnering approach to new and existing markets: raised $1.8 billion of new third party equity in 1H FY13 – Three of the Group’s largest funds extended for between 5 and 7 years – Contemporary
Slide 7: Highlights
Highlights For personal use only + High occupancy maintained at 96% + Retention rate of 78% and WALE of 4.7 years Own + Like for like rental growth at 2.1% + Leased 1.3 million sqm across the platform equating to $130 million of property income + WIP at $2.0 billion across 63 projects in 10 countrie
Slide 8: Section 2 Results overview
For personal use only Section Section2+2+ Results Results Overview overview Stockyards Industrial Estate, Australia M7 Business Hub, Australia 8
Slide 9: Results overview
Results overview For personal use only + Operating results ahead of initial targets: 1H FY13 – Property fundamentals remain sound Operating profit ($M) 265.7 – Result driven by growth in development and management Statutory accounting profit ($M) 154.6 activities Operating EPS (cents)1 16.2 – Mainta
Slide 10: Profit and loss
Profit and loss For personal use only + Half year operating profit of $265.7 million: Income statement 1H FY12 1H FY13 – Investments continue to trend up on increasing rents $m $m with ROA of >7% Investment (look through) 239.0 254.9 – Increased scale improving management margins Management 36.0 56.
Slide 11: Balance sheet
Balance sheet For personal use only + Strong balance sheet maintained: Balance sheet – $449 million equity raising provides funding for long-term 30 June 2012 31 Dec 2012 growth opportunities $m $m Stabilised investment properties 2,259 2,137 – Managed fund equity raisings and asset recycling Fund c
Slide 12: Group liquidity position
Group liquidity position For personal use only + Goodman Group has cash and available lines of Goodman Group debt maturity profile credit of $1.6 billion at 31 December 2012: – $378.1 million cash – $1,189.7 million available lines + Significant covenant headroom maintained + Average debt maturity p
Slide 13: Section 3 Operational Performance
For personal use only Section 3+ Operational Performance Interlink, Berlin Goodman Fiege Brieseleang, Hong Kong Osaka Nanko, Japan
Slide 14: Investment
Investment For personal use only + Property fundamentals remain stable reflecting Investment ($m) 1H FY12 1H FY13 quality of the portfolio and customers: Direct 84.1 81.1 Cornerstones 154.9 173.8 – Maintained occupancy at 96% Look through EBITDA 239.0 254.9 – Retention remains high at 78% Key metric
Slide 15: Development
Development For personal use only + Development demand continues to be driven by Development ($m) 1H FY12 1H FY13 structural changes: Revenue 86.0 102.1 – E-commerce, supply chain efficiencies, building EBITDA 71.0 83.1 obsolescence, 3PL consolidation + Development WIP at $2.0 billion Key metrics 1H
Slide 16: Management
Management For personal use only + External assets under management (AUM) of $17.3 Management ($m) 1H FY12 1H FY13 billion increased 13% from 1H FY12 Fund management fees 36.3 51.1 + Development completions organically growing AUM Property service fees2 30.7 35.7 + Fund initiatives and transactional
Slide 17: Management – AUM
Management – AUM For personal use only + Major new initiatives completed during the half year include: – Secured US$890 million for GNAP alongside CPPIB – CPPIB doubled their equity commitment for GCLH to US$800 million – Establishment of a US$1 billion development partnership in Japan with ADIC – E
Slide 18: Management platform
Management platform For personal use only Goodman’s six largest managed vehicles GAIF GTA GELF GHKLF ABPP GMT1 Total assets $5.1bn $2.9bn $2.4bn $1.8bn $1.6bn $1.3bn GMG co-investment 38.4% 19.9% 28.4% 20.0% 43.1% 18.1%2 GMG co-investment $1.1bn $0.3bn $0.4bn $0.2bn $0.3bn $0.2bn2 Number of properti
Slide 19: Section 4 Outlook and Summary
For personal use only Section 3+ Section 4+ Capital Management Outlook and Initiatives Summary Pudong International Airport Logistics Park, China Pudong International Airport Logistics Park, China
Slide 20: Outlook and summary
Outlook and summary For personal use only + Maintain position as a leading global industrial property operator and fund manager + Fully operational in the largest and / or growing consumer economies Strategy + Customer service model and asset management capabilities key to business model + Focus is
Slide 21: 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 22: Profit and loss
Profit and loss Total income by business segment for the year ended 31 December 2012 For personal use only Category Total Investment Management Development Unallocated Non- operating items $M $M $M $M $M $M Gross property income 112.4 111.6 - - - 0.8 Fund management income 51.0 - 51.0 - - - Property
Slide 23: Profit and loss (cont)
Profit and loss (cont) For personal use only Category Total Investment Management Development Unallocated Non-operating items $M $M $M $M $M $M EBIT – per statutory accounts 243.0 190.4 56.0 83.1 (22.1) (64.4) Net gain from fair value adjustments on investment properties (20.8) - - - - (20.8) Net ga
Slide 24: Reconciliation non-operating items
Reconciliation non-operating items For personal use only Non-operating Items in statutory profit & loss Notes Half Year ended 31 Dec 2012 $M $M Property valuations Net gain from fair value adjustments on investment properties 1 20.8 Share of net gain from fair value adjustments on investment propert
Slide 25: Financial position
Financial position For personal use only As at 31 December 2012 Direct Investments Developments Other Total Assets $M $M $M $M $M Cash - - - 378.1 378.1 Receivables - 94.7 163.6 453.2 711.5 Inventories - - 837.7 - 837.7 Investment properties 2,136.9 - 368.0 - 2,504.9 Investments accounted for using
Slide 26: Property valuations
Property valuations For personal use only + Overall property valuations relatively stable with the exception of UK + WACR at 7.9% + Strong investor demand continues for prime investment assets + Negative sentiment from valuers on assets with shorter lease terms 31 December 2012 property valuations (
Slide 27: Appendix 2 Investment
For personal use only Appendix 2+ Investment Goodman Interlink, Hong Kong
Slide 28: Leasing
Leasing For personal use only Across the Group and Funds platform: + ~1.3 million sqm leased during the half year + Positive lease reversions of 2.7% on new leasing deals, with like for like NPI growing at 2.1% + Occupancy maintained at 96% Division Leasing area (sqm) Net annual rent (A$M) Average l
Slide 29: Customers
For personal use only Customers 29
Slide 30: Geographic exposure
Geographic exposure For personal use only Top 20 sub regions (by AUM) 30
Slide 31: Direct portfolio detail – Australia
Direct portfolio detail – Australia For personal use only Portfolio snapshot Key metrics Total assets A$1.8 billion + 28 properties with a total value of $1.8 billion located across key Australian markets Customers 235 + Leasing deals remain strong across the portfolio: Number of properties 28 – 145
Slide 32: Direct portfolio detail – UK and CE
Direct portfolio detail – UK and CE For personal use only Portfolio snapshot Key metrics Total assets A$0.3 billion + Occupancy at 92% Customers 27 + Strong WALE of 5.3 years + Active enquiry on remaining vacancy Number of properties 12 + Cap rates stable with current WACR of 8.0% Occupancy 92% Weig
Slide 33: Appendix 3 Development
Rheinberg Logistics Centre , Germany For personal use only Appendix 3+ Development Bungarribee Industrial Estate, Australia
Slide 34: Developments
Developments For personal use only 1HFY13 Developments Completions Commitments Work in progress Value ($M) 920 1,147 2,005 Area (m sqm) 0.9 1.0 1.7 Yield (%) 8.6 8.6 8.6 Pre-committed (%) 92 77 73 Weighted Average Lease Term (years) 5.4 7.9 10.3 Development for Third Parties or Funds (%) 90 70 78 Au
Slide 35: Developments (cont)
Developments (cont) For personal use only + Increased development pipeline in excess of $11 billion with entry into new markets – Development pipeline restocked (Americas, China, Japan) – Forecast GLA over 7 million sqm – Development pipeline allocated as Asia Pacific 43%, Europe 45% and Americas 12
Slide 36: Appendix 4 Management
For personal use only Appendix 4+ Management Senec Logistics Centre, BirminghamBusiness Slovakia Park, U.K Interlink Industrial Estate, Australia
Slide 37: Global platform
For personal use only Global platform 37
Slide 38: Goodman Australia Industrial Fund
Goodman Australia Industrial Fund For personal use only Key events Key metrics1 Total assets A$5.1 billion + Successfully completed $638 million equity raising in December and fund extension to 2019 Interest bearing liabilities A$1.8 billion Gearing2 34.8% + Completed US$185 million unsecured note i
Slide 39: Goodman Trust Australia
Goodman Trust Australia For personal use only Key events Key metrics1 + Acquired 112 Talavera Road, North Ryde with Total assets A$2.9 billion subsequent development pre-commitment to Fujitsu Interest bearing liabilities A$1.1 billion for 11,600sqm office building Gearing2 38.6% Customers 243 + Work
Slide 40: Goodman European Logistics Fund
Goodman European Logistics Fund For personal use only Key events Key metrics1 + Significant weighting to core Western European Total assets A$2.4 billion countries >80%4 Interest bearing liabilities A$0.9 billion Gearing2 37.8% + Acquisitions totalling $106 million completed from the Customers 92 Gr
Slide 41: Goodman Hong Kong Logistics Fund
Goodman Hong Kong Logistics Fund For personal use only Key events Key metrics1 + Seven year fund extension approved unanimously in Total assets A$1.8 billion December. Next liquidity review in 2020 Interest bearing liabilities A$0.5 billion Gearing2 26.5% + Sold two assets for $51 million on a highe
Slide 42: Arlington Business Parks Partnership
Arlington Business Parks Partnership For personal use only Key events Key metrics1 + Arlington Business Parks Partnership (ABPP) is a Total assets A$1.6 billion core plus unlisted fund which invests, develops and Interest bearing liabilities A$0.8 billion manages business parks located in key UK reg
Slide 43: Goodman Property Trust
Goodman Property Trust For personal use only Key events Key metrics1 + A constituent in the leading NZX15 Index Total assets A$1.3 billion Interest bearing liabilities A$0.5 billion + Completed unit purchase plan and private placement Gearing2 35.4% equity raisings for NZ$90 million Customers 243 Nu
Slide 44: Appendix 5 Capital management
For personal use only Appendix 5+ Capital management Torun Logistics Centre, Poland
Slide 45: Group financial covenants
Group financial covenants For personal use only Covenants Test Covenant Result Headroom Net liabilities1 as a percentage of net tangible assets is Gearing ratio 55.0% 27.9% 27.1% not more than 55.0% Interest cover ratio EBITDA to interest expense at least 2.0x 2.0x 4.8x 2.8x Secured debt as a percen
Slide 46: Currency mix
For personal use only Currency mix 46
Slide 47: Financial risk management
Financial risk management For personal use only Financial risk management in line with Group Board policy + Interest risk management: – 92% hedged over next 12 months – Weighted average hedge maturity of 6.0 years – Weighted average hedge rate of 4.84%1 vs spot 1.23%2 – Current “all in” net WACD 3.2
Slide 48: Financial risk management (cont)
Financial risk management (cont) For personal use only Interest rate + Interest rates are hedged to 92% over next 12 months + Weighted average hedge rate of 4.84%1 vs spot 1.23%2 - NZD – (hedge 4.39%, spot 3.57%) - JPY – (hedge 1.19%, spot 0.29%) - HKD – (hedge 1.37%, spot 0.89%) - GBP – (hedge 8.04
Slide 49: Financial risk management (cont)
Financial risk management (cont) For personal use only Interest rate hedging profile Euro payable GBP payable HKD payable NZD payable JPY payable USD payable AUD receivable Fixed Fixed1 Fixed Fixed Fixed rate Fixed Fixed rate rate rate rate rate % rate % As at €M % £M % HK$M % NZ$M % ¥M US$M % A$M D
Slide 50: Financial risk management (cont)
Financial risk management (cont) For personal use only Currency hedging profile Amount Amount Maturing in Hedge rate payable Hedge rate payable year ending June HK$M NZ$M 2013 4.9031 (50.0) 1.1932 (5.0) Foreign currency denominated balance sheet hedging maturity profile Currency Maturity Weighted av
Slide 51: Exchange rates
Exchange rates For personal use only + Statement of Financial Position – exchange rates as at 31 December 2012 – AUDGBP – 0.6428 (31 December 2011 : 0.6537) – AUDEUR – 0.7868 (31 December 2011 : 0.7813) – AUDHKD – 8.0474 (31 December 2011 : 7.9675) – AUDSGD – 1.2684 (31 December 2011 : 1.3297) – AUD
Slide 52: Q&A
For personal use only Q&A Interlink Industrial Estate, Australia Citadel Logistics , Wolverhampton, UK
Slide 53: Thank you
For personal use only thank+you 53