Slide 1: 2012 Full Year Results
For personal use only 28 August 2012 Charter Hall Group 2012 Full Year Results 12 months to 30 June 2012
Slide 2: Presenters and agenda
For personal use only David Harrison David Southon Paul Altschwager Joint Managing Joint Managing Chief Financial Director Director Officer 1 Results summary and Group overview 2 Operational performance 3 Financial performance 4 Strategy, outlook and guidance 5 Additional Information 1
Slide 3: Results summary and Group overview
For personal use only 01 Results summary and Group overview
Slide 4: Results Summary: Key achievements FY12
Results Summary For personal use only Key achievements FY12 Increase in operating earnings before specific items to 21.5cps, up 4.4% Increase in property and property co-investment yield to 7.1%, up from 6.4% Growth in Australian FUM platform of 11% pa over the past 2 years, 4% since June 2011
Slide 5: Results Summary: Full year summary
Results Summary For personal use only Full year summary Increase in operating earnings before specific items1 to 21.5cps, up 4.4% on pcp Statutory profit after tax of $16.7m, down 68% on pcp Net operating earnings after specific items of $54.8m or 18.6cps, down 9.7% on pcp Distribution of 18.2
Slide 6: Solid securityholder returns
Results Summary For personal use only Solid securityholder returns Total securityholder return FY12: 14.6% Distribution per security growth 18.20 Solid performance over 1 and 3 years 16.50 to 31 July 20121 12.55 S&P/ASX 200 S&P/ASX 200 Property Charter Hall 40% Accumulation Index Accumulation Index
Slide 7: Our strategy
Group Overview For personal use only Our strategy Our strategy is to access, deploy and manage equity that is invested into core Australian real estate sectors to create value and provide growing income and capital returns for investors. Access to multiple equity sources including listed, pooled who
Slide 8: Investment strategy
Group Overview For personal use only Investment strategy Our investment strategy, focusing on core property asset sectors, will endure macroeconomic cycles and generate growing income and capital returns, consistent with the investment appetite of investors in the real estate asset class. RETAIL OFF
Slide 9: Australian focused property platform
Group Overview For personal use only Australian focused property platform Today, Charter Hall manages a $9.4bn property portfolio NO. OF PROPERTIES NO. OF TENANTS LETTABLE AREA TOTAL ASSETS GROSS INCOME (SQM) ($M) ($M) 184 2,968 2.3m 9,3811 817 Diversification by equity source Diversification by ass
Slide 10: Expertise across risk/return spectrum
Group Overview For personal use only Expertise across risk/return spectrum Charter Hall Funds1 Risk vs. Return Profile Return $0.5bn 20% + $0.5bn Real Estate Sectors Development Retail 15 - 17% Office 11 – 14% $0.7bn $1.5bn Industrial Wholesale Diversified Pooled 9 – 11% $2.0bn $2.8bn $1.9bn Listed
Slide 11: Operational performance
For personal use only 02 Operational performance
Slide 12: Improved quality of earnings
Operational Performance For personal use only Improved quality of earnings EBITDA of $65.2m1, up 5.4% from $61.9m 89% of earnings generated from 97% of earnings from core sector property investments annuity style income and property funds management Property Investment $39.9m 61% $37.4m FY11 FY12 $2
Slide 13: Property Investment portfolio
Property Investment For personal use only Property Investment portfolio $530m1 equity invested into Charter Hall co-investment portfolio Represents 14% of the total Group FUM in which Charter Hall is a co-investor Delivering full year EBITDA of $39.9m1, 61% total Charter Hall Group EBITDA – Yi
Slide 14: Property Investment portfolio
Property Investment For personal use only Property Investment portfolio OWNERSHIP CHARTER CHARTER PROPORTION MARKET DISCOUNT MINIMUM CHARTER HALL STAKE HALL HALL OF CHARTER CAP RATE RATE RENTAL INVESTMENT INVESTMENT INVESTMENT HALL REVIEWS YIELD3 INCOME INVESTMENT PORTFOLIO (%) ($M) ($M) (%) (%) (%)
Slide 15: Strong Property Investment portfolio metrics
Property Investment For personal use only Strong Property Investment portfolio metrics Lease expiry profile1 (30 June 2012) Top 10 tenants (30 June 2012) TENANT % PORTFOLIO LEASED (BY GROSS INCOME) Australian Government 10.0 Wesfarmers 8.1 Woolworths 7.2 44.2% Telstra 5.7 Macquarie Group 3.0 18.0% W
Slide 16: Australian FUM platform growth
Property Funds Management For personal use only Australian FUM platform growth Group FUM $9.4bn today Australian property FUM has grown to $8.9bn today, from $7.2bn at June 2010 Offshore property FUM has reduced to $0.5bn, from $3.0bn at June 2010 – In line with strategy to refocus on the Aust
Slide 17: Positive equity inflows
Property Funds Management For personal use only Positive equity inflows Secured over $1billion in equity during FY12 and an additional $319m since 30 June 2012 EQUITY SECURED DURING FY12 EQUITY SECURED SINCE BALANCE DATE ($M) ($M) Wholesale pooled funds 176 8 Wholesale partnerships 8002 78 Direct
Slide 18: Property funds management
Property Funds Management For personal use only Property funds management $M FY10 FY11 FY12 Full year funds management EBITDA of $23.3m Revenue 38.3 74.9 73.4 Average of 78bps of FUM on an annualised basis 1 Net Operating Expenses3 (30.5) (54.2) (50.1) Annuity style revenue Property Funds Manage
Slide 19: Another active year
Property Funds Management For personal use only Another active year Investment management Secured over $1bn equity and acquired $0.5bn of property assets Property management and leasing services Managed fund portfolio comprising 2.3m sqm of lettable area Portfolio generates gross rental income
Slide 20: Focused on realising investor and group equity
Development Investment For personal use only Focused on realising investor and group equity $5.8m of CHOF impairments, predominantly from the Little Bay project and currently in dispute with development alliance partner $42.8m expected to be realised and repatriated to the Group in the next 2 ye
Slide 21: Asset recycling strategy
Capital Management For personal use only Asset recycling strategy Charter Hall is focused on recycling its property and development investment capital into higher return investments – Over the past 12 months, $68m has been realised and $41m reinvested – Over the next 2 years, a further $112m has b
Slide 22: Financial performance
For personal use only 03 Financial performance
Slide 23: Key financial metrics
Financial Performance For personal use only Key financial metrics GROUP FY12 FY11 CHANGE Statutory profit after tax $16.7m $52.3m (68.1%) Operating earnings before specific items $63.6m $60.4m 5.3% Operating EPS before specific items 21.5cps 20.6cps 4.4% Operating earnings after specific items $54.8
Slide 24: Operating Earnings
Financial Performance For personal use only Operating Earnings OEPS before specific items growth of 4.4% $M FY12 FY11 GROWTH % – Strong property investment growth of 6.7% Property Investment1 39.9 37.4 6.7% – 12.6% property funds management growth Property Funds Management 23.3 20.7 12.6% Developm
Slide 25: Operating Margin
Financial Performance For personal use only Operating Margin Property funds management EBITDA improved $M FY12 FY11 GROWTH % by 12.6% Annuity Style Revenue1 56.1 52.5 6.9% Revenue growth decline of 2.0% attributable to Development and Project Management 9.4 8.6 9.3% high FY11 transactional reven
Slide 26: Resizing Platform for Growth
Financial Performance For personal use only Resizing Platform for Growth Ongoing review of cost structure RESTRUCTURING IMPACT Total FY12 FY13 (estimate) Significant restructure in FY12 and August Restructure costs $5.0m $3.9m1 $1.1m2 2012 resulting in the removal of 20 permanent roles and repla
Slide 27: Reconciliation to statutory profit
Financial Performance For personal use only Reconciliation to statutory profit Charter Hall’s statutory profit after tax has been adversely impacted by mainly non-cash items $13.9m $5.9m ($9.1m) $2.3m $3.9m $12.2m $5.8m $63.6m $54.8m $2.0m $9.9m $16.7m Statutory profit MTM of Fair value Inventory
Slide 28: Balance sheet and NTA
Financial Performance For personal use only Balance sheet and NTA $M 30-JUN-12 30-JUN-11 Cash 39.3 26.3 Property investments 614.0 695.2 Development investments 66.7 68.8 (4.7c) Other tangible assets 59.1 67.3 (3.4c) Intangibles 98.7 100.0 (2.0c) 1.6c Total assets 877.8 $2.21 957.6 $2.13 Borrowings
Slide 29: Cashflow reconciliation
Financial Performance For personal use only Cashflow reconciliation $13.5m ($1.1m) ($6.6m) $6.5m 25.70cps ($13.9m) 21.51cps 18.55cps $9.1m 18.20cps ($3.9m) $63.6m $76.0m $53.8m $54.8m 2 Operating Net CQO Restructuring CHOF4 Operating Change in tradeChange in trade Earnings Other 1 Operating Distribu
Slide 30: Debt management
Financial Peformance For personal use only Debt management Across fund platform, $3.0bn of debt refinanced in FY12 - Weighted average maturity increased to 3.1 years, from 2.7 years at 30 June 2011 - Weighted average cost of debt reduced to 6.2%, from 7.4% $3.5bn of drawn debt across platform wi
Slide 31: Strategy, outlook and guidance
For personal use only 04 Strategy, outlook and guidance
Slide 32: FY13 strategic objectives
Strategy For personal use only FY13 strategic objectives Source equity to invest into core real estate sectors targetting growth in the Australian FUM platform by 6-10% pa ACCESS Realise and recycle a further $112m of capital in property and development investments over the next 2 years Enhanc
Slide 33: FY13 year to date activity
Strategy For personal use only FY13 year to date activity Since balance date Charter Hall has: Completed the DIF equity raising oversubscribed at $119.5m Established a new unlisted wholesale partnership established to acquire Bay Village Shopping Centre for $164m, Charter Hall’s investment is $1
Slide 34: FY13 earnings guidance
Outlook For personal use only FY13 earnings guidance Subject to unforeseen events, we expect : FY13 operating earnings to be in the range of 22.5 to 23.0 cps, representing 5% to 7% growth over FY12 33
Slide 35: Further information
For personal use only Further information David Southon David Harrison Joint Managing Director Joint Managing Director +61 2 8908 4025 +61 2 8908 4033 david.southon@charterhall.com.au david.harrison@charterhall.com.au Kylie Ramsden Paul Altschwager Head of Listed Investor Relations Chief Financial O
Slide 36: Additional Information
For personal use only 28 August 2012 Charter Hall Group Additional Information
Slide 37: Additional Information contents
For personal use only Additional Information 1 Group overview 2 2 Property funds management 3 3 Property investment highlights 5 4 Financial information 10 5 Development 17 6 Capital management & funding 20 1
Slide 38: Group overview
Group overview For personal use only Group overview Charter Hall Group (ASX:CHC) Stapled Security Charter Hall Property Trust (CHPT) Charter Hall Limited (CHL) Property Investment Funds Management Development Investment Total co-investments: $530m (67%)1 Book Value: $99m (12%)1 Total co-investments:
Slide 39: Property funds management
Property funds management For personal use only Property funds management Listed Fund Wholesale Funds, Mandates, Partnerships Retail Investor Funds $2.0bn $5.5bn $1.9bn ($101m co-invested) ($314m co-invested) ($115m co-invested) Opportunistic Investment $0.5bn $5.0bn CQR1 CHOF51 CHOT CPOF CHDPF PFA
Slide 40: Property funds management
Property funds management For personal use only Property funds management TOTAL SECTOR EQUITY SOURCE NO. OF LETTABLE OCCUPANCY WEIGHTED WALE WEIGHTED PROPERTY PROPERTIES AREA (SQM) AVERAGE (BY INCOME AVERAGE ASSETS ($M) RENT IN YEARS) CAP REVIEW RATES Top 5 Managed Funds CQR 1,980 Retail Listed 91 6
Slide 41: Property investment highlights
Property investment highlights For personal use only Property investment highlights OWNERSHIP CHARTER HALL CHARTER HALL PROPORTION OF MARKET CAP DISCOUNT MINIMUM RENTAL CHARTER STAKE INVESTMENT INVESTMENT CHARTER HALL RATE RATE REVIEWS HALL INCOME INVESTMENT INVESTMENT (%) ($M) ($M) PORTFOLIO (%) (%
Slide 42: Core Plus Office Fund (CPOF)
Property investment highlights For personal use only Property investment highlights Core Plus Office Fund (CPOF) KEY EVENTS DURING FY12 PORTFOLIO CHARACTERISTICS KEY METRICS Gross property assets $1.54 billion Strongest performing wholesale office fund in Australia over the 2 years to 30 June 2012
Slide 43: Core Plus Industrial Fund (CPIF)
Property investment highlights For personal use only Property investment highlights Core Plus Industrial Fund (CPIF) KEY METRICS KEY EVENTS DURING FY12 PORTFOLIO CHARACTERISTIC Gross property assets1 $658 million Outperformed the Industrial component of the IPD/Mercer Wholesale Property Total debt
Slide 44: Charter Hall Office Trust (CHOT)
Property investment highlights For personal use only Property investment highlights Charter Hall Office Trust (CHOT) KEY EVENTS DURING FY12 PORTFOLIO CHARACTERISTICS KEY METRICS Gross property assets $1.97 billion Completed transition from listed REIT to wholesale unlisted partnership Total debt $
Slide 45: Wholesale Mandates
Property investment highlights For personal use only Property investment highlights Wholesale Mandates KEY EVENTS DURING FY12 PORTFOLIO CHARACTERISTICS KEY METRICS Brisbane Square, Brisbane – asset independently re-valued to $400m (original 2010 Charter Hall mandates $636 million purchase price $3
Slide 46: Charter Hall Retail REIT (CQR)
Financial information For personal use only Property investment highlights Charter Hall Retail REIT (CQR) KEY EVENTS DURING FY12 PORTFOLIO CHARACTERISTICS KEY METRICS Acquired four properties for $160m (100% value) at an average yield of 8.5%. Gross property assets $1.98 billion Total debt $763 mi
Slide 47: Detailed operating earnings
Financial information For personal use only Detailed operating earnings 1 1 ($M) FY12 FY11 Direct net property income 14.3 15.1 Indirect property income 34.0 31.6 Property investment income 48.3 46.7 Development investment income 2.0 3.8 Investment management fees 37.9 38.8 Property and facilities m
Slide 48: EBITDA segment reconciliation – FY12
Financial information For personal use only EBITDA segment reconciliation – FY12 The reconciliation of EBITDA performance in the results to the segment information contained in note 5(b) of the Preliminary Financial Report is set out below PROPERTY PROPERTY FUNDS DEVELOPMENT DRF COMBINED GROUP INV
Slide 49: EBITDA segment reconciliation – FY11
Financial information For personal use only EBITDA segment reconciliation – FY11 The reconciliation of EBITDA performance in the results to the segment information contained in note 5(b) of the Preliminary Financial Report is set out below PROPERTY PROPERTY FUNDS DEVELOPMENT DRF COMBINED GROUP INV
Slide 50: DRF reconciliation of balance sheet: 30 June 2012
Financial information For personal use only DRF reconciliation of balance sheet: 30 June 2012 $M 30 JUNE 2012 30 JUNE 2012 DRF ADJUSTMENTS 30 JUNE 12 (DRF CONSOLIDATED) DRF BALANCE SHEET (DRF ON NET CONTRIBUTION BASIS) Cash 39.3 (1.3) - 38.0 Property investments 614.0 (137.0) 53.1 530.1 Development
Slide 51: Reconciliation of operating earnings to statutory profit after tax
Financial information For personal use only Reconciliation of operating earnings to statutory profit after tax FY12 FY11 $000s $000s Operating earnings before specific items 63,586 60,422 Specific items (8,741) - Operating earnings 54,845 60,422 Fair value adjustments on derivatives (9,933) 2,141 Fa
Slide 52: Funds under management reconciliation
Financial information For personal use only Funds under management reconciliation ($0.3bn) $0.5bn ($2.1bn) $0.0bn $0.6bn ($0.1bn) $10.7bn $8.9bn $9.4bn FY11 Revaluation Acquisitions Disposals FX Movement FY12 Acquisitions Disposals Current FY10 FY11 FY12 CURRENT ($BN) ($BN) ($BN) ($BN) Australia FUM
Slide 53: Development investments
Development For personal use only Development investments DEVELOPMENTS ($M – CHC SHARE) VALUE OF INVESTMENT AT 30 JUNE 2011 IMPAIRMENT CURRENT VALUE OF (INC. EQUITY INVESTED DURING FY12) INVESTMENT CHOF4 (CHC share – 3%) Home HQ North Shore, Artarmon 0.9 (0.4) 0.5 CHOF5 (CHC share – 15%) 40 Creek St
Slide 54: Investment in CIP
Development For personal use only Investment in CIP The current economic climate has made it a challenging year for CIP1 Over the last 7 years CIP has provided a pipeline of $389m of quality industrial assets to CPIF and DIF CIP INCOME STATEMENT FY12 ($M) FY11 ($M) Total revenue 120.4 130.7 Proj
Slide 55: Development book and pipeline
Development For personal use only Development book and pipeline PROJECT VALUE PROJECT STATUS FUND SECTOR ($M) COMPLETION DATE Investment Funds Woolworths DC, Tasmania Completed CPIF Industrial 67 FY12 CQR projects Active CQR Retail/CQR 80 FY13 171 Collins Street, Melbourne Active CHOT Office 135 FY1
Slide 56: Property funds debt programmes
Capital management & funding For personal use only Property funds debt programmes 1 ($m) CHC CHOT CQR CPOF CPIF DRF CHUF DPF CHDPF CHOF4 CHOF5 Asset values2 756 1,938 2,011 1,545 602 180 282 100 508 105 317 Net debt (33.2) 849 880 583 206 65 100 51 216 66 108 drawn2 Duration3 1.8 3.8 3.4 4.0 2.6 1.4
Slide 57: Look through debt expiry profile
Capital management & funding For personal use only Look through debt expiry profile (by facility limit) as at 30 June 2012 CHC CQR $1,400m $1,271m $1,288m Wholesale Unlisted Funds $1,200m Retail Investor Funds $1,000m $800m $736m $638m $600m $400m $266m $200m $0m FY13 FY14 FY15 FY16 FY17+ 21
Slide 58: Disclaimer
For personal use only Disclaimer This presentation has been prepared by Charter Hall Group (Charter Hall Limited (ABN 57 113 531 150) and Charter Hall Funds Management Limited (ABN 31 082 991 786) (AFSL 262861) as the responsible entity for Charter Hall Property Trust (ARSN 113 339 147). It is a pre
Slide 59: Further information
For personal use only Further information David Southon David Harrison Joint Managing Director Joint Managing Director +61 2 8908 4025 +61 2 8908 4033 david.southon@charterhall.com.au david.harrison@charterhall.com.au Kylie Ramsden Paul Altschwager Head of Listed Investor Relations Chief Financial O