Slide 1: FY18 Results
4. = SSS = ESULTS —— 2tAucust 2018
Slide 2: Highlights
Highlights EBIT $48.8 million – up 52% on FY17 Underlying profit EPS 17.7 cents – up 36% on FY17 FINANCIAL Revenue of $189.5 million – up 26% on FY17 Operating cash flow of $47.2 million – up 56% on FY17 Non-core asset sales well progressed - $60 million contracted or completed STRATEGY Over 7,000 i
Slide 3: Business overview
Business overview growing rental portfolio delivering stable cashflows Ingenia has Over 7,000 Income producing sites 61 Australian communities Portfolio value now Over 5,500 rental and lifestyle residents $747 million 785,000 ‘room nights’ p.a. Cabins, caravan and camping Stable rent base >$1.6 mill
Slide 4: Performance and capital management
Performance and capital management Ingenia Holidays White Albatross, NSW 4
Slide 5: Key financials
Key financials successful integration of new assets delivering increased earnings Key Financial Metrics FY18 FY17 Revenue $189.5m $149.9m 26% Revenue and EBIT growth driven by acquisitions, growing rents and accelerating development EBIT1 $48.8m $32.1m 52% Statutory profit $34.2m $26.4m 30% Underlyi
Slide 6: Strong growth in EBIT from core business
Strong growth in EBIT from core business EBIT FY18 FY17 Rental base expanding – driven by acquisitions, additional rental cabins and Lifestyle and Holidays 51% new home settlements $25.3m $16.8m operations 93% Lifestyle development $21.0m $10.9m Rental growth and high occupancy offset by sale of fiv
Slide 7: Drivers of change in EBIT
Drivers of change in EBIT 60.0 2.3 2.0 6.5 0.2 48.8 50.0 3.0 40.0 7.1 32.1 30.0 $m 20.0 10.0 48.8 0.0 EBIT 30 June Development Development Lifestyle & Improvement in Divestments Other EBIT 30 June 2017 sales volume margin Holiday existing village 2018 acquisitions NOI • Key drivers of 52% growth in
Slide 8: Capital management
Capital management well positioned to fund development pipeline Debt Metrics 30 Jun 18 30 Jun 17 Funding growth Expansion of loan facilities to $350 million with extended term Loan to value ratio (covenant <50%) 32.6% 27.7% Available unutilised debt under existing facilities Gearing ratio1 26.6% 21.
Slide 9: Growth in value across core portfolios
Growth in value across core portfolios lifestyle capitalisation rates continue to compress Jun 18 Independently valued 35 assets in FY18 Av. Cap Av. Cap Portfolio Book Value Rate Jun 181 Rate Jun 171 Ingenia Gardens and Lifestyle and Holidays portfolios’ value ($m) up 11% ($62.6 million) like for li
Slide 10: Strategy
Strategy - Ingenia’s newest greenfield project 10
Slide 11: Australia's best lifestyle communities
Australia’s best lifestyle communities strategy focussed on growing stable rental returns Rental base acquired, expanded or developed Development Return of Capital Sell: home (development return) plus new rental contracts Rent: land Rent: cabins/sites Rental Income Rent: units 11
Slide 12: Underlying demand drivers remain strong
Underlying demand drivers remain strong many seniors will struggle to fund a comfortable retirement Median House Price ($) Home Ownership (Age) Limited savings or Pension superannuation $1.6m 90% Superannuation account balances Source: ASFA Research and Resource Centre 120% $1.4m 80% CoreLogic & ANZ
Slide 13: Operations review
Operations review Core Portfolio by Book Value Under Ingenia Development Gardens 20% 17% Lifestyle and Holidays 63% Ingenia Lifestyle Latitude One, NSW - Display Village Launch July 2018 13
Slide 14: Ingenia Lifestyle and Holidays
Ingenia Lifestyle and Holidays over 90% weighting to capital city and coastal markets Key Data 30 Jun 18 30 Jun 17 Portfolio quality enhanced as subscale non-core assets sold and development accelerated Total properties 35 33 Permanent sites 2,702 2,323 16% Strong growth in rental sites – 287 new ho
Slide 15: Ingenia Lifestyle and Holidays
Ingenia Lifestyle and Holidays rental income and margins growing Key Data FY18 FY17 Strong growth in cash flows – rental revenue up over 37% Permanent rental income $21.7m $14.9m Annuals rental income $4.8m $4.3m Average weekly rent $166 per week Tourism rental income $34.9m $25.3m Like for like ave
Slide 16: Ingenia Holidays
Ingenia Holidays portfolio expansion and reinvestment enhancing profile and returns Significant growth achieved (like for like revenue up 8%) Average Booking Website revenue Strategic partnerships providing incremental revenue Revenue generation Cabin occupancy up 3%; RevPOR* up 4% Site occupancy up
Slide 17: Development
Development significant contributor to growth in rental base Key Data FY18 FY17 New home settlements up 36% on prior year New home settlements 287 211 New home settlements contributing ~$2,425,000 per annum rent across existing and new communities Av. new home sales price1 ($’000) 324 309 Above grou
Slide 18: Key projects established in market with demonstrated demand
Key projects established in market with demonstrated demand increasing focus on large, long-life projects and site expansions Sites Development commencement to completion The Grange 11 Lake Conjola 91 Latitude One 406 Plantations 196 Bethania 368 Chambers Pines 311 Lara 50 Albury 46 Hunter Valley 8
Slide 19: Sector leading pipeline in place
Sector leading pipeline in place supporting sustainable future growth All approvals secured for FY19 targeted settlements Increasing sites available (ex Sydney) as residential markets slow and banks reduce funding for developers 750 Approved Not Approved Development Size Far North Coast NSW >200 sit
Slide 20: Market conditions are changing
Market conditions are changing differentiated markets, some sector benefits emerging Behind the headline data are some mid-term benefits Annual change in dwelling values by decile for land lease communities July 2018 Highest value 10th Prices expected to continue to fall in 2018 and into 2019 9th Pr
Slide 21: Sales outlook remains positive
Sales outlook remains positive All FY19 settlements will come from communities 166 which are in market and 350+ have sales momentum FY18 Carry Forward* FY19 Forecast (47% of forecast) Settlements FY19 sales target is underpinned by: Strong pre sales - 47% of forecast settlements are already at depos
Slide 22: Progressing opportunities to expand product reach
Progressing opportunities to expand product reach Importing flat packed homes could materially reduce cost and open up new markets In past 18 months imported and installed 43 flat packed cabins from China for Durack and Chambers Pines Additional 30 cabins ordered and first home order about to be pla
Slide 23: Ingenia Gardens (seniors rental)
Ingenia Gardens (seniors rental) strong, stable, government supported earnings Key Data FY18 FY17 Stable performance as occupancy and rent continue to increase Total revenue $28.0m $28.4m Sale of five non-core Tasmanian assets complete in April 2018 EBIT $11.4m $11.6m Average rent now $338 per week
Slide 24: Ingenia has delivered on guidance and strategic objectives
Ingenia has delivered on guidance and strategic objectives track record established Delivery of strategy has resulted in significant growth across key metrics Divested non-core and subscale assets to refocus portfolio on quality large scale rental communities Demonstrating quality of platform an
Slide 25: Thinking ahead
Thinking ahead Increase development Add 110+ new rental Add 150+ new tourism to 350+ homes p.a cabins at Chambers cabins across key Add land rents on Pines, Eight Mile Plains holiday parks 3,244 new homes and Durack EBIT $’M DEV PROFIT ON RENTS RENTS EXTRA ON 3,244 ON 110+ RENTS ON FY18 50-100+ NEW
Slide 26: Outlook
Outlook ageing of population and housing affordability will drive earnings growth Macro/Residential Housing Slowdown in residential housing expected to continue into FY19 – diverse product, price point and market exposure provide mitigation Some insulation against short-term housing market, but long
Slide 27: FY19 guidance
FY19 guidance growth forecast FY19 builds on the strong growth delivered in FY18 Guidance Comment New home 350+ Strong deposits and contracts in place but settlements dependent on timing of key projects, including Plantations EBIT1 10-15% growth Growth driven by increased settlements Underlying 5-10
Slide 28: FY19 focus
FY19 focus Improve performance of existing assets to drive revenue growth and capitalise on quality operating and sales platform Accelerate build out of development pipeline to deliver new rental contracts and leverage platform Secure approvals on existing and optioned land to further extend develop
Slide 29: Appendices
Appendices Ingenia Lifestyle Lara, VIC 29
Slide 30: Underlying profit
Appendix 1 underlying profit FY18 FY17 ($m) ($m) Lifestyle and Holidays – Operations 25.3 16.8 Lifestyle Development 21.0 10.9 Ingenia Gardens 11.4 11.6 Other 0.2 1.8 Portfolio EBIT 57.9 41.1 Corporate costs (9.1) (9.0) EBIT 48.8 32.1 Net finance costs (6.1) (6.9) Income tax (expense)/benefit (5.9)
Slide 31: EBIT and underlying profit by segment
Appendix 2 EBIT and underlying profit by segment Lifestyle Lifestyle Ingenia Fuel, Food and Corporate and ($m) TOTAL Operations Develop. Gardens Beverage Other Rental income 61.8 - 24.6 - 0.1 86.5 Manufactured home sales - 85.9 - - - 85.9 Catering income - - 3.1 - - 3.1 Fuel, food and beverage incom
Slide 32: Cash flow
Appendix 3 cash flow 30 Jun 18 30 Jun 17 ($m) ($m) Opening cash at 1 July 9.6 15.0 Rental and other property income 102.1 82.7 Property and other expenses (81.4) (63.9) Net cash flow associated with manufactured home development 34.6 15.8 Net borrowing costs paid (8.9) (6.0) All other operating cash
Slide 33: Consolidated balance sheet
Appendix 4 consolidated balance sheet 30 Jun 2018 30 Jun 2017 ($m) ($m) Cash 14.5 9.6 Inventories 30.2 21.6 Investment properties 730.4 693.5 Assets held for sale 28.7 - Other assets 22.0 23.5 Total assets 825.8 748.2 Borrowings (excluding finance leases) 229.0 166.5 Derivatives 0.1 0.3 Retirement v
Slide 34: Capitalisation rates have progressively tightened
Appendix 5 capitalisation rates have progressively tightened Lifestyle and Mixed-use Communities 11.50% 10.50% Surfrider,NSW Darwin FreeSpirit,NT Armidale,NSW 9.50% Ballina,NSW Rainbow Waters,QLD Implied cap rate % 8.50% Bonny Hills,NSW Dunbogan,NSW Fraser Lodge,QLD Akuna,VIC Bass Hill,NSW Sanctuary
Slide 35: Competitor landscape
Appendix 6 competitor landscape Major Competitor Properties Locations Strategy Ingenia Communities 35 NSW, QLD, and VIC Acquire and operate lifestyle and tourism parks and undertake site (ASX: INA) expansions and greenfield development. Discovery Parks 65 All states Acquired from private equity by S
Slide 36: Competitor landscape (cont)
Appendix 6 competitor landscape (cont) Major Competitor Properties Locations Strategy Living Gems / Gem Life 13 QLD, NSW, VIC Family owned - developer and operator of greenfield residential parks. Joint venture (Gem Life) with Singaporean based Thakral to expand. Serenitas (National Lifestyle 10 WA
Slide 37: Credit rating of lifestyle communities
Appendix 7 credit rating of lifestyle communities A Grade office: 126 Phillip Street, Sydney CBD Current independent cap rate: 4.75% Deutsche Bank, FIIG Securities, Qantas, Sinopec, Tenants (include): TCorp, Wellington Management Constant, often involving rental voids and leasing Re-leasing risk: in
Slide 38: Contact information
Contact information Simon Owen CEO & Managing Director Tel: +61 2 8263 0501 sowen@ingeniacommunities.com.au Ingenia Communities Group Level 9, 115 Pitt Street Donna Byrne Sydney NSW 2000 Group Investor Relations Manager Tel: +61 2 8263 0507 www.ingeniacommunities.com.au dbyrne@ingeniacommunities.com
Slide 39: Disclaimer
Disclaimer This presentation was prepared by Ingenia Communities Holdings Limited (ACN 154 444 925) The forward looking statements included in this presentation involve subjective judgment and and Ingenia Communities RE Limited (ACN 154 464 990) as responsible entity for Ingenia analysis and are sub