Scentre Group · ASX:SCG
Scentre — H1 2014 Earnings Presentation
22 slides from Scentre's earnings presentation, Aug 26, 2014
Slide 1: Operational Update and 2014 Half Year Results
O P E R AT I O N A L U P D AT E AND 2014 HALF YEAR R E S U LT S 26 AUGUST 2014
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: Scentre Group Highlights
SCENTRE GROUP HIGHLIGHTS OPERATING ► High levels of occupancy together with growth in comparable property net operating income and specialty sales for the 6 months to June 2014 Portfolio leased: >99.5% Comparable net operating income growth Australia / New Zealand: +2.3% Specialty Retail Sales
Slide 4: Outlook – Scentre Group
OUTLOOK – SCENTRE GROUP ► Half Year to December 2014 forecast: FFO: 10.88 cents per security Distribution: 10.2 cents per security ► Comparable property net operating income growth for Australia and New Zealand: 2.0% - 2.5% for the year 2014 OPERATIONAL UPDATE AND HALF YEAR RESULTS │ 4
Slide 5: Scentre Group Overview
SCENTRE GROUP OVERVIEW ► Scentre Group was established as the pre-eminent self-managed Australia/NZ focused shopping centre A-REIT ► Owner and operator of 47 Westfield shopping centres in Australia and New Zealand valued at $39.4bn (Scentre Group share $29.2bn) ► Largest vertically integrated retail
Slide 6: Driving Growth
DRIVING GROWTH ► Growth objectives will be achieved through: Intensive management of its existing portfolio to maximise the sales productivity of retailers and to provide superior experiences to consumers Improving the quality of the portfolio to adapt to the next generation of retail Majority
Slide 7: Shopping Centres – Australia and New Zealand
SHOPPING CENTRES – AUSTRALIA AND NEW ZEALAND 100% owned 50% owned Brisbane Carindale (25%) Chermside Mt Gravatt North Lakes Strathpine Gold Coast Helensvale Central NSW Kotara Auckland Tuggerah Perth Adelaide Albany Carousel Sydney Glenfield Innaloo Marion Bondi Junction Manukau Whitford City Tea Tr
Slide 8: Portfolio Summary
PORTFOLIO SUMMARY Current Australia New Zealand Total Centres 38 9 47 Retail Outlets 11,075 1,410 12,485 GLA (m sqm) 3.4 0.4 3.8 SCG Interests (bn) $26.5 NZ$2.9 $29.2 JV Partner Interests (bn) $10.2 - $10.2 Assets Under Management (bn) (AUM) $36.7 NZ$2.9 $39.4 SCG Share of AUM 72% 100%
Slide 9: Shopping Centre Operating Performance
SHOPPING CENTRE OPERATING PERFORMANCE Average Specialty Store Specialty Specialty Rent Portfolio Specialty Retail Lease Deals Comparable Occupancy Retail Sales Leased Sales Completed YTD NOI Growth Cost Growth (%) (MAT) (Number/Area) (%) 1 (%) (%) 1 Growth As at 30 June 2014 Amount YOY (%) 1,436 Por
Slide 10: Development & Construction Activity
DEVELOPMENT & CONSTRUCTION ACTIVITY ► $2.0bn of projects currently under construction (SCG share $0.6bn, of which $0.3bn incurred to date) Total Project SCG Share Anticipated Project Yield $m $m Completion Scentre Group Mt Gravatt $400m $400m 6.75% - 7.25% 2014 Miranda $475m $238m 6.50% - 7.00%
Slide 11: Major Development Opportunities
MAJOR DEVELOPMENT OPPORTUNITIES ► The Group is undertaking pre-development activity on $3bn (SCG share:$2bn) of future development opportunities, with between $1.5bn and $2.0bn of developments expected to commence over the next 3 years Australia New Zealand Carousel (WA) North Lakes (QLD) Alba
Slide 12: Balance Sheet
BALANCE SHEET 1 $m 30 Jun ’14 Cash 421 Property investments Shopping centres 28,449 Construction in progress 331 Assets held for redevelopment 404 Total Property investments 29,184 Deferred tax assets 88 Other assets 384 Total assets 30,077 Interest bearing liabilities Current 325 Non-curr
Slide 13: Current Financial Position
CURRENT FINANCIAL POSITION ► Immediate establishment of debt funding and extended debt maturity profile: Total debt facilities of $13.0bn $5bn 3 year bridge finance facility entered into as part of the restructure financing package with $3bn repaid in July 2014 from proceeds of debut EUR and GBP
Slide 14: Facility Maturity Profile
FACILITY MATURITY PROFILE (AFTER JULY 2014 BOND ISSUE) Liquidity Summary $bn $bn 4.0 3.9 Total Committed Financing Facilities 13.0 Amounts Drawn (11.5) Undrawn Financing Facilities 1.5 Cash 0.4 3.0 Total Liquidity 1.9 2.3 2.0 1.1 1.1 1.0 1.0 0.9 0.8 0.7 0.8 0.3 0.1 0.0 0.0 2014 2015 2016 2017 2018 2
Slide 15: Appendices
APPENDICES 2014 OPERATIONAL UPDATE AND HALF YEAR RESULTS │ 15
Slide 16: Retail Sales
RETAIL SALES Period to 30 June 2014 Comparable Change Moving Annual MAT Growth Turnover (MAT) Retail Sales 12 months 6 months Australia Majors (0.5)% (1.9)% Mini Majors (1.4)% (1.6)% Specialties 2.7% 3.3% Total $20.2bn 0.6% 1.1% 0.9% New Zealand Majors (0.3)% 0.2% Mini Majors (8.3)% (6.6)%
Slide 17: Specialty Retail Sales by Region
SPECIALTY RETAIL SALES BY REGION Period to 30 June 2014 Comparable Change By Region 12 months 6 months NSW 3.8% 4.3% QLD 0.3% 0.7% VIC 2.4% 3.9% SA 3.9% 4.7% WA 2.1% 2.2% ACT (0.5)% 0.2% Australia 2.7% 3.3% New Zealand 0.4% 0.8% 2014 OPERATIONAL UPDATE AND HALF YEAR RESULTS │ 17
Slide 18: Comparable Change in Retail Sales by Category – Australia
COMPARABLE CHANGE IN RETAIL SALES BY CATEGORY – AUSTRALIA Period to 30 June 2014 Retail Sales 12 months 6 months Majors: Department Stores (0.2)% (0.1)% Discount Department Stores (5.0)% (6.9)% Supermarkets 2.9% 1.2% Cinemas (3.2)% (2.9)% Mini-Majors: (1.4)% (1.6)% Specialties - Total: 2.7% 3.
Slide 19: Balance Sheet - 30 June 2014
BALANCE SHEET - 30 JUNE 2014 $m Consolidated Equity Accounted Total Cash 419 2 421 Property investments Shopping centres 27,183 1,266 28,449 Construction in progress 331 - 331 Assets held for redevelopment 394 10 404 Total property investments 27,908 1,276 29,184 Net investment in equity accou
Slide 20: Financing Facilities
FINANCING FACILITIES (As at July 2014) ► Diversified funding including bonds and bank facilities from 20 banks Bond Covenants GBP Bonds 6% Bank Facilities - Net Debt / Net Assets Not greater than 65% Undrawn 12% Secured Debt Not greater than 45% Unencumbered Leverage Not less than 125% Euro Bonds 23
Slide 21: Interest Rate Hedging Profile
1,2,3 INTEREST RATE HEDGING PROFILE $ Fixed Rate Derivatives Hedging Floating Rate $ & NZ$ Debt Debt Outstanding as at 31 Dec $ debt payable $ swap payable $ cap payable $ collar payable $ swap receivable NZ$ swap payable NZ$ collar payable Fixed Fixed Strike Strike Fixed Fixed Strike $m $m $m $m $m
Slide 22: Overview of Reporting
OVERVIEW OF REPORTING Included in Reporting Matrix – Scentre Group Financial Statements 30 June 2014 Income Statement Balance Sheet Continuing Operations Westfield Group Australia and New Zealand Yes Yes Westfield Retail Trust Australia and New Zealand No Yes Discontinuing Operations Westfield