Slide 1: Results for the year ended 30 June 2014
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 Good
Slide 3: Contents
Contents For personal use only + Section 1 Highlights + Section 2 Results overview + Section 3 Operational performance + Section 4 Strategy and outlook + 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 $601 million, up 10% on FY2013 – Statutory accounting profit of $657 million – Operating EPS¹ of 34.8 cents², up 7% on FY2013 – Distribution per security of 20.7 cents, up 7% on FY2013 – FY2015
Slide 6: Highlights
Highlights For personal use only + Industrial property sector continuing to benefit from structural and cyclical changes – Logistics continues to be a major beneficiary of global growth in e-commerce – Customer demand in proven, quality logistics locations, with good fundamentals remains sound (deve
Slide 7: Highlights
Highlights For personal use only + Occupancy maintained at 96% + Retention rate of 73% and WALE of 4.9 years Own + Like for like rental growth of 2.2% + Leased 3.0 million sqm across the platform equating to $347.2 million of property income across the Group and managed funds + WIP of $2.6 billion a
Slide 8: Section 2 Results overview
For personal use only Section Section2+2+ Results Results Overview overview Stockyards Industrial Estate, Australia M7 Business Hub, Australia 8
Slide 9: Results overview
Results overview For personal use only + Operating results above initial guidance: FY2014 – Stronger operating results from active parts of the business Operating profit ($M) 601.1 – Property fundamentals remain sound Statutory accounting profit ($M) 657.3 – Maintained liquidity and low gearing Oper
Slide 10: Profit and loss
Profit and loss For personal use only + Full year operating profit of $601.1 million: Income statement – Investments reducing in line with balance sheet initiatives with FY2013 FY2014 $m $m ROA >7% and total returns of 11% Investment (look through) 501.8 491.8 – Balance sheet initiatives include the
Slide 11: Balance sheet
Balance sheet For personal use only + Strong balance sheet maintained: Balance sheet – Consistent approach to pre-sold developments FY2013 FY2014 $m $m – Managed fund equity raisings and balance sheet Stabilised investment properties 2,090 2,191 recycling Fund cornerstones1 3,086 3,434 + Fund corner
Slide 12: Group liquidity position
Group liquidity position For personal use only + Goodman Group has cash and available lines of credit of $1.5 billion at 30 June 2014: – $359.9 million cash – $1,112.9 million available lines + Significant covenant headroom maintained + Average debt maturity profile of 5.4 years + ICR at 5.9 times (
Slide 13: Section 3 Operational Performance
For personal use only Section 3+ Operational Performance Interlink, Berlin Goodman Fiege Brieseleang, Hong Kong Osaka Nanko, Japan
Slide 14: Investment
Investment For personal use only + Property fundamentals remain stable reflecting quality of the Investment ($m) FY2013 FY2014 portfolio and customers: Direct 158.6 152.1 – Maintained occupancy at 96% Cornerstones 343.2 339.7 – Retention remains high at 73% Look through EBITDA 501.8 491.8 – WALE of
Slide 15: Development
Development For personal use only + Development demand driven by structural changes: Development ($m) FY2013 FY2014 – E-commerce, supply chain efficiencies, building Revenue 207.8 276.5 obsolescence, 3PL consolidation EBITDA 165.8 214.5 + Development volumes increasing, reflecting our development le
Slide 16: Management
Management For personal use only + External assets under management (AUM) of $22.4 Management ($m) FY2013 FY2014 billion, up 15% on FY2013 Management income² 181.5 205.9 + Development completions have organically grown AUM EBITDA 108.6 117.1 + Size and scale has resulted in strong margins across the
Slide 17: Management - AUM
Management - AUM For personal use only + Major new initiatives completed during the year include: – Raised €550 million for GELF, with Goodman selling a further €110 million of its cornerstone investment to meet investor demand – Establishment of KWASA Goodman Germany partnership, with EPF on a 70:3
Slide 18: Management platform
Management platform For personal use only GAIF GTA GELF GHKLF GMT1 ABPP EPF GCLH GJCF2 Total assets $5.7bn $3.4bn $3.2bn $2.9bn $2.0bn $1.6bn $1.1bn $1.1bn $1.0bn GMG co-investment 27.5% 19.9% 20.4% 20.0% 17.6%3 43.1% 38.0% 20.0% 23.0%3 GMG co-investment $0.9bn $0.4bn $0.4bn $0.4bn $0.2bn3 $0.4bn $0
Slide 19: Section 4 Outlook and Initiatives 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: Strategy and outlook
Strategy and outlook For personal use only + Australian listed, leading global industrial property operator and fund manager + Focus on execution of a consistent and clearly enunciated strategy + Customer service focus and asset management capabilities are key to business model + Capabilities in maj
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: Sustainable growth
Sustainable growth For personal use only + Consistent and sustainable operating earnings growth over five years + Growth in development remains sustainable with entry into new markets and ongoing structural changes within those markets + AUM organically growing on the back of development completions
Slide 23: Profit and loss
Profit and loss For personal use only Total income by business segment for the year ended 30 June 2014 Category Total Investment Management Development Unallocated Non- operating items $M $M $M $M $M $M Gross property income 207.7 212.2 - - - (4.5) Management income 205.5 - 205.5 - - - Development i
Slide 24: 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 786.0 386.2 117.1 214.5 (55.9) 124.1 Net gain from fair value adjustments on investment properties (48.6) - - - - (48.6) Share
Slide 25: Reconciliation non-operating items
Reconciliation non-operating items For personal use only Non-operating Items in statutory profit & loss Year ended 30 June 2014 $M $M Property valuations Net gain from fair value adjustments on investment properties 48.6 Share of net gain from fair value adjustments on investment properties in assoc
Slide 26: Financial position
Financial position For personal use only As at 30 June 2014 Direct Investments Developments Other Total Assets $M $M $M $M $M Cash - - - 359.9 359.9 Receivables - 32.8 259.8 240.7 533.3 Inventories - - 1,130.1 - 1,130.1 Investment properties 2,190.7 - 342.2 - 2,532.9 Investments accounted for using
Slide 27: Net tangible asset bridge
Net tangible asset bridge For personal use only + For year ended 30 June 2014¹ 1. Calculated on 1,727.7 million securities being closing securities on issue 27
Slide 28: Cash flow
Cash flow For personal use only + Cash flow from operating activities growing in excess of underlying operating profit + Reinvestment into development consistent with investment strategy and rotating into long term managed fund cornerstone investments + Non cash share of equity accounted income rema
Slide 29: Property valuations
Property valuations For personal use only + The year to June 2014 has seen the industrial market remain active with transactional activity across all regions and the WACR firming to 7.5% + Pre-commitments on development work in progress also contributing to firming cap rates + Valuation gains driven
Slide 30: Appendix 2 Investment
For personal use only Appendix 2+ Investment Goodman Interlink, Hong Kong
Slide 31: Leasing
Leasing For personal use only Across the Group and Funds platform: + 3.0 million sqm leased during the year + Reversions of 5.8% on new leasing deals, with like for like NPI growing at 2.2% + Occupancy Regionmaintained at 96% Leasing area (sqm) Net annual rent ($M) Average lease term (years) Austral
Slide 32: Customers
For personal use only Customers 32
Slide 33: Geographic exposure
Geographic exposure For personal use only 33
Slide 34: Direct portfolio detail
Direct portfolio detail For personal use only Portfolio snapshot Key metrics Total assets A$2.2 billion + 38 properties with a total value of $2.2 billion located across key Australian and UK markets Customers 283 + Leasing deals remain strong across the portfolio: Number of properties 38 – 272,298
Slide 35: Appendix 3 Development
Rheinberg Logistics Centre , Germany For personal use only Appendix 3+ Development Bungarribee Industrial Estate, Australia
Slide 36: Developments
Developments For personal use only FY14 Developments Completions Commencements Work in progress Value ($M) 2,227 2,488 2,589 Area (m sqm) 1.6 2.1 2.2 Yield (%) 9.0 8.4 8.3 Pre-committed (%) 96 57 53 Weighted average lease term (years) 8.9 9.8 10.0 Development for third parties or funds (%) 93 86 91
Slide 37: Developments (cont)
Developments (cont) For personal use only + Maintained development pipeline in excess of $10 billion – Development pipeline restocked (North America, China and Japan landbanks) – Forecast GLA over 7 million sqm – Development pipeline allocated as Asia Pacific 36%, Europe 42% and Americas 22% + The G
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
For personal use only Global platform 39
Slide 40: Goodman Australia Industrial Fund
Goodman Australia Industrial Fund For personal use only Key events Key metrics¹ + Acquired four investment properties totalling $417 million (pre- Total assets A$5.7bn costs), three with active asset management opportunities Interest bearing liabilities A$2.1bn Gearing2 36.4% + Completed the sale of
Slide 41: Goodman Trust Australia
Goodman Trust Australia For personal use only Key events Key metrics¹ + Refinanced $600 million of the Australian Syndicated Total assets A$3.4bn Debt facility extending the tenor by 2.3 years Interest bearing liabilities A$1.2bn Gearing2 34.9% + Urban renewal opportunity realised with the sale of C
Slide 42: Goodman European Logistics Fund
Goodman European Logistics Fund For personal use only Key events Key metrics¹ + Acquisition of property assets totalling €374.4 million over Total assets A$3.2bn the last 12 months from: Interest bearing liabilities A$1.2bn – GMG: €182 million Gearing2 37.8% – Third party: €192 million Customers 104
Slide 43: Goodman Hong Kong Logistics Fund
Goodman Hong Kong Logistics Fund For personal use only Key events Key metrics¹ + The Fund’s portfolio comprising of 13 properties and Total assets A$2.9bn one container terminal offering customers 1.4 million Interest bearing liabilities A$0.7bn sqm of quality logistics space Gearing2 21.0% Customer
Slide 44: Goodman Property Trust
Goodman Property Trust For personal use only Key events Key metrics1 + Active portfolio management: Total assets A$2.0bn Interest bearing liabilities A$0.7bn - Over 150,000 sqm of space leased to new or existing customers during the 12 months ended 31 March 2014 Gearing2 36.0% - WALE of 5.5 years an
Slide 45: Arlington Business Parks Partnership
Arlington Business Parks Partnership For personal use only Key events Key metrics¹ + Completed £38 million new 21,524 sqm warehouse for Total assets A$1.6bn PCL Logistics and Arla Foods Ltd Interest bearing liabilities A$0.3bn Gearing2 27.3% + Completion of 38,500 sqft turnkey warehouse Customers 11
Slide 46: EPF Mandate
EPF Mandate For personal use only Key Events Key metrics1 Total assets A$1.1bn + KWASA-Goodman Industrial Trust (KGIT) was Interest bearing liabilities A$0.5bn established in June 2012 in partnership with the Gearing² 40.9% Employees Provident Fund (EPF) Customers 32 Number of stabilised properties
Slide 47: Goodman China Logistics Holding
Goodman China Logistics Holding For personal use only Key events Key metrics¹ + Secured a 5-year joint venture extension to 30 June 2019 Total assets A$1.1bn Interest bearing liabilities A$0.1bn + Total equity commitment of $1.5 billion Gearing1 4.1% Customers 49 + GCLH portfolio continues to expand
Slide 48: Goodman Japan Core Fund
Goodman Japan Core Fund For personal use only Key events Key metrics¹ + Up to August 2014 ¥39.25 billion (A$400 million) of over Total assets A$1.0bn subscribed capital raisings from new and existing Interest bearing liabilities A$0.5bn investors to acquire new assets and fund future growth Gearing2
Slide 49: Appendix 5 Capital management
For personal use only Appendix 5+ Capital management Torun Logistics Centre, Poland
Slide 50: Group financial covenants
Group financial covenants For personal use only Covenants Test Covenant Result Headroom Net liabilities1 as a percentage of net tangible assets is Gearing ratio 55.0% 28.0% 27.0% not more than 55.0% Interest cover ratio EBITDA to interest expense at least 2.0x 2.0x 5.9x 3.9x Secured debt as a percen
Slide 51: Currency mix
For personal use only Currency mix 51
Slide 52: Financial risk management
Financial risk management For personal use only Financial risk management in line with Group Board policy + Interest risk management: - 94% hedged over next 12 months - Weighted average hedge maturity of 4.8 years - Weighted average hedge rate of 4.27%1 vs spot 1.60%2 + Foreign currency risk managem
Slide 53: Financial risk management (cont)
Financial risk management (cont) For personal use only Interest rate + Interest rates are hedged to 94% over next 12 months + Weighted average hedge rate of 4.27%1 vs spot 1.60%2 - NZD – (hedge 4.69%, spot 4.43%) - JPY – (hedge 1.30%, spot 0.26%) - HKD – (hedge 1.55%, spot 1.81%) - GBP – (hedge 6.75
Slide 54: Financial risk management (cont)
Financial risk management (cont) For personal use only Interest rate hedging profile Euro payable GBP payable HKD payable NZD payable JPY payable USD payable AUD receivable Fixed Fixed1 Fixed Fixed Fixed Fixed A$M Fixed rate rate rate rate rate rate Rate As at €M % £M % HK$M % NZ$M % ¥M % US$M % % J
Slide 55: Financial risk management (cont)
Financial risk management (cont) For personal use only Foreign currency denominated balance sheet hedging maturity profile Currency Maturity Weighted average Amount receivable1 Amount payable1 exchange rate NZ$ 2017 / 2018 1.2530 A$79.8m NZ$100.0m HK$ 2016 / 2018 7.8154 A$332.5m HK$2,590.0m ¥ 2016 /
Slide 56: Exchange rates
Exchange rates For personal use only + Statement of Financial Position – exchange rates as at 30 June 2014 – AUDGBP – 0.5511 (30 June 2013 : 0.6072) – AUDEUR – 0.6883 (30 June 2013 : 0.7095) – AUDHKD – 7.3034 (30 June 2013 : 7.0739) – AUDBRL – 2.0820 (30 June 2013 : 2.0250) – AUDNZD – 1.0772 (30 Jun
Slide 57: Thank you
For personal use only thank+you 57