Scentre Group · ASX:SCG
Scentre — FY2014 Earnings Presentation
28 slides from Scentre's earnings presentation, Feb 24, 2015
Slide 1: 2014 Full Year Results
2 0 1 4 F U L L Y E A R R E S U LT S 24 FEBRUARY 2015
Slide 2: Disclaimer
DISCLAIMER The financial information included in this release is based on the Scentre Group’s IFRS financial statements. Non IFRS financial information has not been audited or reviewed. This release contains forward-looking statements, including statements regarding future earnings and distributions
Slide 3: Key Metrics
KEY METRICS SCENTRE GROUP Results Summary 6 months to Dec ’14 Earnings: Funds from Operations (FFO) $578m FFO per security 10.88 cents Distribution per security 10.20 cents Return on Contributed Equity 1 11.0% AIFRS profit $1,281m Portfolio: Assets Under Management $40.9bn Portfolio Leased >99.5% Co
Slide 4: Highlights
HIGHLIGHTS Establishment of Scentre Group (SCG) Scentre Group was established on 30 June 2014 following the merger of the Australian and New Zealand operations of Westfield Group with Westfield Retail Trust Financial Results This presentation focuses on Scentre Group’s inaugural result for the six m
Slide 5: Highlights (continued)
HIGHLIGHTS (CONTINUED) Development Completed $410m development at Westfield Garden City Major stage opening of $475m (SCG share: $238m) development at Westfield Miranda 3rd Party Design and Construction – opening of $440m Macquarie Centre project and continued progress on $670m Pacific Fair project,
Slide 6: Strategy
STRATEGY SCG’s strategy is to create extraordinary places connecting and enriching communities by owning, managing and developing the best retail assets in Australia and New Zealand Pre-eminent portfolio of shopping centres in Australia and New Zealand • $41 billion of retail assets under management
Slide 7: Outlook
OUTLOOK 2015 Full Year Forecast 22.5 cents FFO per security 3.5% growth Distribution per security 20.9 cents 2014 FULL YEAR RESULTS │ 7
Slide 8: Portfolio Overview
PORTFOLIO OVERVIEW A$27.5bn1 Portfolio by GLA 38 Centres NZ 10% Brisbane - $4.5bn ACT 4% 3 Wholly Owned 3 Joint Ventures WA 5% NSW 39% NT QLD SA 8% WA 6 Sydney – $14.4bn 10 Wholly Owned 7 Joint Ventures SA QLD 15% NSW 17 3 VIC 19% 3 2 Canberra – $1.2bn Portfolio by Asset Value (SCG share) 2 Perth –
Slide 9: Portfolio Detail
PORTFOLIO DETAIL As at 31 Dec 2014 Australia New Zealand 1 Total 2 Centres 38 9 47 Retail Outlets 11,289 1,410 12,699 GLA (m sqm) 3.5 0.4 3.9 SCG Interests (bn) 3 $27.5 NZ$1.9 $29.3 JV Partner Interests (bn) 3 $10.6 NZ$1.0 $11.6 Assets Under Management (bn) 3 $38.1 NZ$2.9 $40.9 1 Pro forma post New
Slide 10: Operating Performance
OPERATING PERFORMANCE Period to 31 Dec 2014 Australia New Zealand 1 Total Moving Annual Turnover (bn) $20.4 NZ$2.0 $22.3 Specialty Retail Sales (psm) $10,200 NZ$8,765 Specialty Store Rent (psm) $1,561 NZ$1,139 Comparable Specialty Retail Sales growth 3.6% 2.3% Comparable Specialty Store Rent growth
Slide 11: Comparable Retail Sales Growth
COMPARABLE RETAIL SALES GROWTH Period to 31 Dec 2014 12 months 3 months Australia Majors (0.4)% 0.4% Mini Majors (0.8)% 0.8% Specialties 3.6% 3.6% Total 1.5% 1.6% New Zealand Majors 1.4% 2.2% Mini Majors (3.4)% 0.0% Specialties 2.3% 3.2% Total 1.3% 2.2% 2014 FULL YEAR RESULTS │ 11
Slide 12: Development and Construction Activity
DEVELOPMENT AND CONSTRUCTION ACTIVITY Successfully completed the $410m development at Westfield Garden City in Brisbane Opened the first two stages of the $475m development at Westfield Miranda in Sydney, and opened the $440m Macquarie Centre design and construction project in Sydney for AMP Capital
Slide 13: New Developments
NEW DEVELOPMENTS CHATSWOOD • Demolition and redevelopment of the existing two level Victoria Avenue Mall and creation of a new, five level mall fronting Victoria Ave • Includes the creation of five new large format tenancies for local and international mini major tenants, including Top Shop, and a n
Slide 14: Development Opportunities
DEVELOPMENT OPPORTUNITIES The Group is undertaking pre-development activity on future development opportunities in excess of $3bn Australia New Zealand Carousel (WA) North Lakes (QLD) Albany (NZ) Chermside (QLD) Plenty Valley (VIC) Newmarket (NZ) Hurstville (NSW) Tea Tree Plaza (SA) St Lukes (NZ) Kn
Slide 15: Financing Position
FINANCING POSITION Total debt facilities of $13.0bn at 31 December 2014 • Refinancing of $5bn bridge facility completed via: - A$3.1bn of 4, 6 and 10 year EUR bond issues and 12 year GBP bond issue in July 2014; - A$0.4bn 7 year domestic bond issue in September 2014; and - A$1.5bn of 5 and 10¼ year
Slide 16: Funds from Operations and Distribution
FUNDS FROM OPERATIONS AND DISTRIBUTION SCENTRE GROUP $m 6 months to Dec ’14 1 Net Property Income 917 Management income 22 Project income 30 Gross Income 969 Overheads (49) EBIT 920 Net Interest (252) Currency derivatives (1) Earnings before tax 667 Tax (40) 2 Minority interest (49) FFO 578 Less: am
Slide 17: AIFRS Income Statement
AIFRS INCOME STATEMENT SCENTRE GROUP $m 6 months to Dec ’14 Property revenue 1,120 Contribution from equity accounted investments (excluding revaluations) 41 Management income 22 Project income 30 Total Income 1,213 Property expenses and outgoings (260) Overheads (49) Property revaluations (includin
Slide 18: Balance Sheet
1,2 BALANCE SHEET $m 31 Dec ’14 30 Jun’14 Cash 190 421 Property investments Shopping centres 28,920 28,449 Construction in progress 8 331 Assets held for redevelopment 366 404 Property investments held for sale 1,005 - Total Property investments 30,299 29,184 Deferred tax assets 98 88 Other assets 8
Slide 19: Appendices
APPENDICES 2014 FULL YEAR RESULTS │ 19
Slide 20: Comparable Specialty Retail Sales by Region
COMPARABLE SPECIALTY RETAIL SALES BY REGION Period to 31 Dec 2014 By Region 12 months 3 months NSW 4.6% 4.5% QLD 1.2% 0.4% VIC 5.2% 7.1% SA 3.7% 3.1% WA 0.7% (1.8)% ACT (0.1)% 0.2% Australia 3.6% 3.6% New Zealand 2.3% 3.2% 2014 FULL YEAR RESULTS │ 20
Slide 21: Comparable Sales by Category – Australia
COMPARABLE SALES BY CATEGORY – AUSTRALIA Period to 31 Dec 2014 Retail Sales 12 months 3 months Department Stores 0.3% (0.9)% Discount Department Stores (3.5)% (0.7)% Supermarkets 1.8% 2.8% Cinemas (3.5)% (3.8)% Fashion 3.0% 2.6% Food Catering 0.8% 0.7% Food Retail 0.2% 1.7% Footwear 3.9% 5.1% Genera
Slide 22: Debt Facilities
DEBT FACILITIES Diversified funding including bonds and bank facilities from 20 banks Financing Facilities 1 Facility Maturity Profile 1 GBP Bonds 3.0 6% Bank Facilities Total Committed $13.0bn - Undrawn Amount Drawn $11.6bn 11% Undrawn $1.4bn Cash 2 $1.2bn Euro Bonds Liquidity 2 $2.6bn 23% 2.0 Bank
Slide 23: Interest Rate Hedging Profile
1 INTEREST RATE HEDGING PROFILE $ Fixed Rate Debt Derivatives Hedging Floating Rate $ & NZ$ Debt Outstanding as at 31 Dec $ debt payable $ swap payable $ swaption payable 2 NZ$ swap payable NZ$ collar payable NZ$ swaption payable 2 Fixed Fixed Strike Fixed Strike Strike $m $m $m NZ$m NZ$m NZ$m Rate
Slide 24: FFO Reconciliation to Financial Report
FFO RECONCILIATION TO FINANCIAL REPORT Proportionate FFO Financial Statement Total Profit FFO Adjustments 1 Dec ’14 6 months to December 2014 Notes $m A B C=A+B Net Property Income 797 15 812 4(a)(i) & 4(a)(iii) Australia 4(a)(i) & 4(a)(iii) 104 1 105 New Zealand Total Net Property Income 901 16 917
Slide 25: Property Investments
PROPERTY INVESTMENTS Change in value of gross property investments: SCENTRE GROUP $m 6 months to Dec ’14 Gross property investments opening balance 29,184 Revaluations 649 Capital expenditure 400 Exchange rate impact 66 Gross property investments closing balance 30,299 2014 FULL YEAR RESULTS │ 25
Slide 26: Balance Sheet Reconciliation
BALANCE SHEET RECONCILIATION At 31 December 2014 Consolidated Equity Accounted Total $m Cash 189 1 190 Property investments Shopping centres 27,638 1,282 28,920 Construction in progress 8 - 8 Assets held for redevelopment 357 9 366 Property investments held for sale 1,005 - 1,005 Total property inve
Slide 27: Key Ratios Under Bond Covenants
KEY RATIOS UNDER BOND COVENANTS Bond Covenants 31 Dec’14 Net Debt / Net Assets Not greater than 65% 36.7% 1 Secured Debt / Total Assets Not greater than 45% 0.7% Interest Coverage At least 1.5 times 3.3 times 2 Unencumbered Leverage Not less than 125% 253% 1 Pro forma post New Zealand joint venture
Slide 28: Overview of Statutory Reporting
OVERVIEW OF STATUTORY REPORTING Income Statement Scentre Group Financial Statements Full Year 2014 Continuing Operations − Westfield Group Australia and New Zealand 1st and 2nd Half − Westfield Retail Trust Australia and New Zealand 2nd Half Discontinued Operations − Westfield Group United States 1s