Ingenia Communities Group · ASX:INA
Ingenia Communities — Investor Day (June 2017)
60 slides from Ingenia Communities's investor day presentation, Jun 20, 2017
Slide 1: Ingenia sales momentum points to strong FY18
ASX / Media Release 20 June 2017 Ingenia sales momentum points to strong FY18 Highlights Target of 190 new home settlements for FY17 now achieved On track to deliver EBIT guidance of $30 million for FY17 Expect FY18 settlements in the range of 260-280 new homes EBIT guidance of $42 - $46 mil
Slide 2: Investor Update and Presentation
Mr Owen said the Group had assembled a valuable capital city and coastal land bank to support ongoing sales growth into FY19 and was continuing to invest in its development and sales platform to position the Group for a multi-year growth strategy. Ingenia will provide the final full year FY17 settle
Slide 3: 2017 Investor Tour
Ingenia Lifestyle Lara INGENIA COMMUNITIES GROUP 2017 Investor Tour 20 June 2017 1
Slide 4: Table of Contents
Table of Contents Simon Owen, CEO • Business Overview • Strategy • Guidance Update • Development Overview Owen Burnie, Senior Development Manager • Structure and Process • Supply Chain • Evolution of Development • Project Updates • Avina Kate Melrose, General Manager Project Sales • Increasing Momen
Slide 5: Business Update
Business Update Simon Owen, CEO Amanda make this a usual Divider style slide Ingenia Albury, NSW 3
Slide 6: Our Business Drivers
Our Business Drivers Ingenia operates in two complementary sectors with strong growth prospects Demand Drivers Opportunity > Over 65’s fastest growing > Grow market awareness Affordable rent-driven 01. demographic and penetration seniors housing > More than 70% of seniors > Convert home equity into
Slide 7: Business Overview
Business Overview Creating Australia’s best lifestyle communities Over 4,500 Residents Ingenia has 66 Australian communities & growing Portfolio now over 3,600 Occupied permanent homes $700 million 790,000+ room nights p.a Villas and sites NT $ Annual revenue >$160 million Stable rent base >$1.2 mil
Slide 8: Key Drivers Remain Strong
Key Drivers Remain Strong Ingenia Lifestyle Bethania, QLD 6
Slide 9: Strategy: Seniors Rental Growth Drivers
Strategy Supported by key growth drivers: Seniors Rental Property ownership without a mortgage Superannuation account balances (by age group) (by age Superannuation account group) balances (by age group) 100% 100% 6% 14% 13% 4% 90% 22% 24% 20% 7% 10% 80% 80% 14% 10% 15% 70% 14% 10% 60% 60% 19% 50% 3
Slide 10: Strategy: Holidays Growth Drivers
Strategy Supported by key growth drivers: Holidays Tourism GDP Establishments vs. Revenue 60 1,700 1,600 Up 7.4% 50 1,400 1,650 Up 9% 1,200 Tourism GDP ($B) 40 1,600 1,000 30 1,550 800 600 20 1,500 400 10 1,450 200 0 1,400 0 Financial Year Establishments (LHS) Revenue ($m) (RHS) Source: ABS, Tourism
Slide 11: Guidance Update
Guidance Update Ingenia Lifestyle Bethania, QLD 9
Slide 12: On Track to Deliver Strong FY17 Result
On Track to Deliver Strong FY17 Result Target of 190 new home settlements achieved New Home Settlements* Target Settlement of 191 new homes to 15 June – 400 350+ target of 190 exceeded 350 300 Target 260 - 280 > Further 19 settlements contracted that could fall 250 into either FY17 or FY18 - anticip
Slide 13: Strong Growth Anticipated FY18
Strong Growth Anticipated FY18 New projects and recent acquisitions growing revenue earnings Metric FY18 Guidance Comment Will depend on launch timing of new projects (Latitude One, Conjola, Glenwood Settlements 260-280 homes and Grange) Dependant on settlement volumes and margins, timing of asset s
Slide 14: Development
Development Large scale metro and coastal projects underpin growth Development Portfolio* Approved Subject To Total Approval Potential pipeline now 2,650 sites Metro (49%) 463 833 1,296 > Over 1,300 sites available for immediate development Coastal (38%) 594 408 1,002 > Development underway in key m
Slide 15: Development
Development Owen Burnie, Senior Development Manager New community centre installation at South West Rocks, NSW 13
Slide 16: Development – Structure and Process
Development – Structure and Process In house team in place covering key disciplines NSW VIC QLD Accounting & Customer Development Risk & Design Team Development Development Finance Service Team Compliance Team Team > In the past 12 months we have internalised the project management (site superintend
Slide 17: Supply Chain
Supply Chain Expanded supply chain > Now using 7 builders • Three on-site builders • Four manufactured home builders > Parkwood and Glendale remain key suppliers • Strong relationship in place and collaborative process • Provide approximately 45% of homes in FY17 > Supply chain expanding to larger o
Slide 18: Evolution of Development
Evolution of Development Product innovation: on-site building Ingenia Holidays Avina Avina – artists impression 16
Slide 19: Evolution of Development: Process
Evolution of Development Process Diversifying building methodologies Manufactured / relocatable homes built off- Relocatable homes built on-site site Product & Constrained to transport and installation Able to meet market demand for level access homes and ‘bricks Design requirements – steps required
Slide 20: Evolution of Development: Ingenia Design Standards
Evolution of Development Ingenia Design Standards > Ingenia’s own ‘standard’ homes • Twelve key home designs • Standard specification with upgrade packages • Finish and façade options • External and internal colour options • Customers able to ‘customise’ from limited set of choices > Ability to tend
Slide 21: Evolution of Development: Modern Facades
Evolution of Development Product innovation: modern facades Ingenia Lifestyle The Grange, NSW 19
Slide 22: Project Update: Lara
Project Update Ingenia Lifestyle Lara, Melbourne / Geelong • Acquired October 2015 • Expansion of partially complete community • New product launched • Final stage of civil works underway • Building on-site • Display village complete • At 15 June YTD, 29 new homes settled, 20 homes deposited or cont
Slide 23: Project Update: Bethania
Project Update Ingenia Lifestyle Bethania, Brisbane • Acquired July 2015 • Expansion of partially complete community (76 approved sites) • Civil works completed for remaining 83 sites • Using onsite builders (Ezi Build and MJH Multi) • Two adjacent land parcels acquired (DA for 191 homes lodged Dece
Slide 24: Project Update: Chambers Pines
Project Update Ingenia Lifestyle Chambers Pines, Brisbane • Acquired March 2015 • Council approval received for expansion of existing community on adjacent (golf course) land for 256 sites and community clubhouse • Civil works for first stage of expansion and display home complete with community clu
Slide 25: Project Update: South West Rocks
Project Update Ingenia South West Rocks, NSW Mid North Coast • Acquired February 2016 • Expansion of partially complete mixed-use community • Community clubhouse and new entry complete • All Stage 1 homes (24 sites) sold • Stage 2 (27 homes) civil works underway for completion in July • Using tradit
Slide 26: Project Update: The Grange
Project Update Ingenia Lifestyle The Grange, Lake Macquarie NSW • Ingenia’s first lifestyle community was acquired in March 2013 • Expansion of 56 sites on vacant land approved by Council and civil works underway • New community centre in place – opening in conjunction with first display homes (anti
Slide 27: Project Update: Latitude One
Project Update Ingenia Lifestyle Latitude One, Port Stephens NSW • Acquired December 2016 • Approved Greenfield development • Contract awarded for Stage 1 civil works – commencing mid 2017 • S82 approval for onsite building obtained by Ingenia subsequent to purchase • Investigating options to improv
Slide 28: Project Update: Lake Conjola
Project Update Ingenia Lifestyle Lake Conjola, NSW (coastal) • Acquired September 2015 • Ingenia subsequently achieved DA approval on adjacent (golf course) land for 114 sites and community clubhouse • Civil works to commence 2017 • Will utilise traditional offsite building • Significant interest th
Slide 29: Avina Van Village
Avina Van Village i i ee eS fem 6 a aap —=— «48 Indicative artist impression xIngenia 27
Slide 30: Overview: Avina Van Village
Overview: Avina Van Village Acquired October 2016 • Located on 5.1 hectares 50 kilometres from Sydney CBD (Hawkesbury LGA) • Provides development opportunity in key Sydney market Mixed-use community with existing tourism and permanent homes (5.1 hectares) • 41 existing and occupied homes • 56 touris
Slide 31: Asset Strategy
Asset Strategy Priority – development of new masterplanned community Continue to own and operate existing community (tourism and permanent sites) > DA lodged September 2016 for 247 new homes and community facilities > Over time invest in selected improvements including: > New development on vacant l
Slide 32: Masterplan
Masterplan eee sae -. Community Centre & Facilities * ~ naa Ye ww - Sas > = pe r ¥ * - Indicative artistiimpression cingenia 30
Slide 33: Homes
Homes • 2 – 3 bedrooms • Lot sizes average 250 sqm • 1.5 – 2 bathrooms • 1 – 2 car garages 31
Slide 34: Facilities
Facilities • Outdoor swimming pool • Bowling green • Community clubhouse • Walking trail • BBQ area • Dining and lounge areas • Lake • Library • Landscaped gardens • Workshop 32
Slide 35: Development Update
Development Update > DA Lodged September 2016 for 247 new homes and community facilities > Council and Joint Regional Planning Panel process continuing • JRPP conducted site visit in March 2017 • Request for information returned 5 June > Current status: waiting on Council to submit report to JRPP me
Slide 36: Sales and Marketing
Sales and Marketing Kate Melrose, General Manager, Sales 34
Slide 37: Ingenia Lifestyle: Increasing Momentum
Ingenia Lifestyle Land Lease Communities Increasing Momentum • Increasing awareness of the land lease model • Momentum continues – sales guidance upgraded as market recognition grows and new records set • Pension change impacts 2017 • Budget changes supportive • Market conditions The Foundations of
Slide 38: Growing Recognition of the Simplicity of the Model
Growing Recognition of the Simplicity of the Model Land Lease Communities are the “disruptor” of the retirement sector. A “fair go solution” for Aussies “MHE/LLC’s will be bigger than the village sector” “Land Lease Communities are popping up at a (Chris Baynes – Leaders Summit 2017 rate that can’t
Slide 39: Broader Exposure
Broader Exposure Increased Media Coverage 37
Slide 40: Sector Maturing
Sector Maturing From caravan conversions to masterplanned communities Increased diversity of product and price point will drive sales momentum into FY18 and beyond Median House Price Sydney Melbourne Brisbane $1.15m $843k $655k FY18 Gold ⋅ Avina ⋅ Latitude One FY17 $400k - $1m+ ⋅ Glenwood FY16 Silve
Slide 41: National Market Outlook
National Market Outlook Key housing market indicators for Sydney/Melbourne and other capital cities, other than Perth, show a stable outlook 1. Price growth slowing 2. Rental growth stable 3. Discounts balanced or falling 4. Days on Market still ≤ 45 days 5. Stable construction pipeline • Our market
Slide 42: Two Budget Incentives Will Mobilise Our Target Market
Two Budget Incentives Will Mobilise Our Target Market 1. Incentives to downsize with increased super contribution will appeal more to self-funded retirees • Contribution of up to $300,000 into super from the proceeds of the sale of their home ($600k couple) • Principal home must be owned for 10 year
Slide 43: Two Budget Incentives Will Mobilise Our Target Market
Two Budget incentives will mobilise our target market 2. First home buyers (FHB) super savers scheme increase demand for the stock our market is selling Mum and Dad trying to mobilise the adult kids out of the house so they can downsize see the FHB incentive plus the extra cash they will have as an
Slide 44: Downsizing Tips
Ingenia provides customers with quality educational resources Ingenia e-news contains key topics and insights from our panel of experts: Downsizing tips Impact of Budget Changes Sector growth Home innovations Travel opportunities Focus on customer education to support informed decisions an
Slide 45: Pension Changes
Pension Changes Pro-actively educating the market to avoid ‘change paralysis’ 43
Slide 46: Ingenia Lifestyle – Increasing Momentum
Ingenia Lifestyle – Increasing momentum Diversified base of development projects to drive momentum No project expected to be more than 16% of FY18 settlements 44
Slide 47: The Foundations for Growth
The Foundations for Growth A simplified brand, a clear product suite and improved customer insight plus improved systems and processes create a foundation for growth Better Portfolio of Projects Evolved product suite Customer Insight Marketing & Brand clarity 45
Slide 48: The Foundations for Growth - Design
The Foundations for Growth - Design Old style home – The Grange New product – Bethania The future - new home facades 46
Slide 49: Active Lifestyle Estates to Ingenia Lifestyle
Active Lifestyle Estates to Ingenia Lifestyle Evolution into Ingenia Lifestyle 47
Slide 50: New Marketing Initiatives
New Marketing Initiatives • Digital touchscreens • Project Brochures • Educational tools • Digital Campaigns • 360 degree virtual tours • Virtual fly throughs 48
Slide 51: FY17 Marketing Results
FY17 Marketing Results FY17 marketing initiatives generated over 5,000 new leads Total database now over 8,000 leads 4,000 email subscribers Average of 8 EDM’s (Electronic Direct Mail) every month 78% open rate – an engaged database seeking knowledge Cost per lead reducing Strong educa
Slide 52: Stoney Creek’s Value Adding Transformation
Stoney Creek’s Value Adding Transformation Before This image cannot currently be displayed. Physical Public Sales Community Displays and Sold out repositioning stage Launch Centre Off Plan Sales Jun-17 1 Mar-15 FY18 Contract to Settlement (3-12 weeks) After 50
Slide 53: Case Study: Stoney Creek
Case Study Ingenia Lifestyle Stoney Creek – a bronze project $205,000 $385,000 Initial refurbishment homes Final stage new homes Product and price diversity underpinned strong sales at Stoney Creek. Now sold out - final homes will settle early FY18 A physical repositioning of entry works, streetscap
Slide 54: Ingenia Lifestyle Stoney Creek
Ingenia Lifestyle Stoney Creek Strong local demand 20 km radius 80% of purchasers of homes in Stoney Creek came from within 20 kilometres of Stoney Creek 52
Slide 55: Ingenia Lifestyle Lara, VIC – A Silver Project
Ingenia Lifestyle Lara, VIC – A Silver Project Product innovation driving sales volume and price escalation Lara median house price (realestate.com) New product released in March and the opening of the new Display Village in May has had a positive impact on sales volumes and revenues. 53
Slide 56: Ingenia Lifestyle Lara, VIC
Ingenia Lifestyle Lara, VIC Adding value through design efficiency 54
Slide 57: Lara’s light open living space has improved perceived value
Lara’s light open living space has improved perceived value 55
Slide 58: New Gold Class Projects
New Gold Class Projects Avina, Latitude One, Glenwood Avina, Latitude One & Glenwood represent the first stand alone fully master planned communities for Ingenia Provide increased margins Require longer planning lead times Greater opportunity to engage and educate the market Build pent up de
Slide 59: Questions
Questions 57
Slide 60: Disclaimer
Disclaimer This presentation was prepared by Ingenia Communities Holdings The forward looking statements included in this presentation involve Limited (ACN 154 444 925) and Ingenia Communities RE Limited subjective judgment and analysis and are subject to significant (ACN 154 464 990) as responsible