Slide 1: Results for the year ended 30 June 2012
Goodman Group Results for the year ended 30 June 2012 10 August 2012 For personal use only building the future+
Slide 2: Important notice and disclaimer
Important notice and disclaimer For personal use only This document has been prepared by Goodman Group (Goodman Limited (ABN 69 000 123 071) and Goodman Funds Management Limited (ABN 48 067 796 641) (AFSL Number 223621) as the Responsible Entity for Goodman Industrial Trust (ARSN 091 213 839)). This
Slide 3: Contents
Contents For personal use only + Section 1 Highlights + Section 2 Results overview + Section 3 Operational performance + Section 4 Outlook and summary + Appendices – Results analysis – Investment – Development – Management – Capital management – Corporate structure 3
Slide 4: Section 1 Highlights
For personal use only Section 1+ Highlights Goodman Interlink, Hong Kong 4
Slide 5: Highlights
Highlights For personal use only + Focused strategy delivering: – Operating profit1 of $463 million, up 21% on FY2011 – Operating EPS1 of 30.52 cents, up 8% on FY2011 – Distribution per security of 18.0 cents, up 3% on FY2011 – Total assets under management of $20 billion, up 11% on FY2011 + Global
Slide 6: Highlights
Highlights For personal use only + Strength and focus of Group’s strategy delivering results: – The ‘active’ developments and management businesses contributed 38% of operating EBIT, trending to 50% over medium term – Increasing market share across Goodman regions of operation – Focus on quality of
Slide 7: Highlights
Highlights For personal use only + High occupancy maintained at 96% + Retention rate of 80% and WALE of 5.2 years Own + Like for like rental growth at 2.8% + Leased 1.9 million sqm across the platform equating to $195 million of property income + WIP at $1.9 billion across 68 projects in 13 countrie
Slide 8: Section 2 Results overview
For personal use only Section 2+ Results overview Stockyards Industrial Estate, Australia 8
Slide 9: Results overview
Results overview For personal use only + Operating results above initial targets: FY2012 – Stronger than expected performance in European operations Operating profit ($M) 463.4 Statutory accounting profit ($M) 408.3 – Maintained liquidity and low gearing Operating EPS (cents)1 30.7 – Fund capital ra
Slide 10: Profit and loss
Profit and loss For personal use only + Full year operating profit of $463.4 million: Income statement FY2011 FY2012 – Foreign EBIT reduced by weighted average AUD $m $m appreciation of 5% compared to FY2011 Investment (look through) 443.2 477.6 – Offset by currency hedges included in interest expen
Slide 11: Balance sheet
Balance sheet For personal use only + Strong balance sheet maintained: Balance sheet – Selective approach to pre-committed and pre-sold FY2011 FY2012 developments $m $m Stabilised investment properties 2,409 2,259 – Managed fund equity raisings and asset recycling Fund cornerstones1 2,632 2,937 + St
Slide 12: Group liquidity position
Group liquidity position For personal use only + Goodman Group has cash and available lines of credit of Goodman Group debt maturity profile $1.3 billion at 30 June 2012: – $310.8 million cash – $965.6 million available lines + Significant covenant headroom maintained + Average Debt Maturity profile
Slide 13: Section 3 Operational performance
For personal use only Section 3+ Operational performance Saint-Mard Logistics Centre, France 13
Slide 14: Investment
Investment For personal use only + Property fundamentals remain stable reflecting quality of Investment ($m) FY11 FY12 the portfolio and customers: Direct 166.6 171.3 – Maintained occupancy at 96% Cornerstones 276.6 306.3 Look through EBITDA 443.2 477.6 – Retention remains high at 80% Key metrics1 F
Slide 15: Development
Development For personal use only + Development demand driven by structural changes: Development ($m) FY11 FY12 – E-commerce, supply chain efficiencies, building Revenue 157.6 183.6 obsolescence, 3PL consolidation EBITDA 121.6 139.8 + Development WIP maintained at $1.9 billion – Active developments
Slide 16: Management
Management For personal use only + External Assets Under Management (AUM) of $16.1 billion Management ($m) FY2011 FY2012 increased 12% Fund management fees 64.1 76.4 + Development completions organically grown AUM Property service fees2 56.9 62.7 + Size and scale has resulted in improved margins acr
Slide 17: Management - AUM
Management - AUM For personal use only + Major new initiatives completed during the year include: – Secured US$890 million for GNAP alongside CPPIB – US$3501 million of external investor commitments in the Japan Core Fund and Japan Development Fund – A$500 million equity commitment for Australia alo
Slide 18: Management platform
Management platform For personal use only Goodman’s six largest managed vehicles GAIF GTA GELF GHKLF ABPP GMT1 Total assets $4.7bn $2.8bn $2.2bn $1.7bn $1.6bn $1.3bn GMG co-investment 43.3% 19.9% 26.6% 20.0% 43.1% 17.2%2 GMG co-investment $1.1bn $0.3bn $0.3bn $0.2bn $0.3bn $0.1bn2 Number of properti
Slide 19: Section 4 Outlook and summary
For personal use only Section 4+ Outlook and summary Matsuda Centre, Japan 19
Slide 20: Outlook and summary
Outlook and summary For personal use only + Maintain position as a leading global industrial property operator and fund manager Strategy + Focus on largest and / or growing consumer economies, North America, Europe, Japan and China + Despite uncertain macro environment, logistics markets remain stab
Slide 21: Appendix 1 Results analysis
For personal use only Appendix 1+ Results analysis Westney Industry Park, New Zealand Kobe, Japan 21
Slide 22: Profit and loss
For personal use only Profit and loss 22
Slide 23: Profit and loss (cont)
Profit and loss (cont) GMG results Year ended Year ended Increase / For personal use only 30 June 2011 30 June 2012 (decrease) $M $M $M Property investment1 329.5 352.5 23.0 Management services 104.6 122.0 17.4 Development 157.6 183.6 26.0 Operating earnings net of property expenses 591.7 658.1 66.4
Slide 24: Profit and loss (cont)
Profit and loss (cont) Total income by business segment for the year ended 30 June 2012 For personal use only Category Total Investment Management Development Unallocated Non- operating items $M $M $M $M $M $M Gross property income 235.7 233.0 - - - 2.7 Fund management income 76.5 - 76.0 0.5 - - Pro
Slide 25: Profit and loss (cont)
Profit and loss (cont) For personal use only Category Total Investment Management Development Unallocated Non-operating items $M $M $M $M $M $M EBIT – per statutory accounts 401.6 352.5 79.3 139.8 (44.7) (125.3) Net gain from fair value adjustments on investment properties (6.5) - - - - (6.5) Share
Slide 26: Reconciliation non-operating items
Reconciliation non-operating items For personal use only Non-operating Items in statutory profit & loss Notes Year ended 30 June 2012 $M $M Property valuations Net gain from fair value adjustments on investment properties 1 6.5 Share of net gain from fair value adjustments on investment properties i
Slide 27: Financial position
Financial position For personal use only As at 30 June 2012 Direct Investments Developments Other Total Assets $M $M $M $M $M Cash - - - 310.8 310.8 Receivables - 40.0 133.2 355.5 528.7 Inventories - - 795.3 - 795.3 Investment properties 2,259.0 - 415.5 - 2,674.5 Investments accounted for using equi
Slide 28: Property valuations
Property valuations For personal use only + Overall property valuations stable with liquidity in all markets + Marginal tightening in WACR to 7.8% + Strong investor demand continues for prime investment assets + Devaluations primarily in UK and Spain 30 June 2012 property valuations (look through) B
Slide 29: Appendix 2 Investment
For personal use only Appendix 2+ Investment Graben Logistics Centre, Germany 29
Slide 30: Leasing
Leasing For personal use only Across the Group and Funds platform: + ~1.9 million sqm leased during the year + Reversions flat on new leasing deals, with like for like NPI growing at 2.8% + Occupancy maintained at 96% Division Leasing area (sqm) Net annual rent (A$M) Average lease term Occupancy at
Slide 31: Customers
For personal use only Customers 31
Slide 32: Direct portfolio detail - Australia
Direct portfolio detail - Australia For personal use only Portfolio snapshot Key metrics Total assets A$2.0 billion + 30 properties with a total value of $2.0 billion located across key Australian markets Customers 235 + Leasing deals remain strong across the portfolio: Number of properties 30 – 233
Slide 33: Direct portfolio detail – UK and CE
Direct portfolio detail – UK and CE For personal use only Portfolio snapshot Key metrics Total assets A$0.3 billion + Occupancy at 81% Customers 25 + Strong WALE of 5.5 years + Active enquiry on vacant properties Number of properties 12 + Cap rates stable with current WACR of 8.0% Occupancy 81% Weig
Slide 34: Appendix 3 Development
For personal use only Appendix 3+ Development Bungarribee Industrial Estate, Australia 34
Slide 35: Developments
Developments For personal use only FY12 Developments Completions Commitments Work in progress Value ($M) 1,720 1,751 1,865 Area (m sqm) 1.3 1.6 1.5 Yield (%) 9.1 8.3 8.5 Pre-committed (%) 100 74 75 Weighted Average Lease Term (years) 8.3 7.0 7.6 Development for Third Parties or Funds (%) 98 87 87 Au
Slide 36: Developments (cont)
Developments (cont) For personal use only + Maintained development pipeline in excess of $10 billion – Development pipeline restocked (North America, China and Japan landbanks) – Forecast GLA over 7 million sqm – Development pipeline allocated as Asia Pacific 49%, Europe 50% and North America 1% + T
Slide 37: Appendix 4 Management
For personal use only Appendix 4+ Management Senec Logistics Centre, Slovakia 37
Slide 38: Global platform
For personal use only Global platform 38
Slide 39: Goodman Australia Industrial Fund
Goodman Australia Industrial Fund For personal use only Key events Key metrics Total assets A$4.7 billion + Portfolio occupancy increased to 98% Interest bearing liabilities A$1.8 billion + Total leasing of 426,196 sqm for the year, equating Gearing1 37.6% to $47.8 million of property income Custome
Slide 40: Goodman Trust Australia
Goodman Trust Australia For personal use only Key metrics Key events Total assets A$2.8 billion + Portfolio occupancy is stable at 98% Interest bearing liabilities A$1.1 billion Gearing1 39.2% + Successfully renegotiated margins down for the $1.1 billion Australian debt facility Customers 217 Number
Slide 41: Goodman European Logistics Fund
Goodman European Logistics Fund For personal use only Key events Key metrics Total assets1 A$2.2 billion + Completed a €351 million equity raise. Underwritten by: Interest bearing liabilities A$0.8 billion – Dutch asset managers, APG (€150 million) and Gearing2 37.8% PGGM (€50 million) Customers 88
Slide 42: Arlington Business Parks Partnership
Arlington Business Parks Partnership For personal use only Key events Key metrics + Completed fund 5 year extension together with a Total assets A$1.6 billion new £350 million 5 year facility with a syndicate of Interest bearing liabilities A$0.8 billion 3 banks Gearing1 47.8% + Leasing activity of
Slide 43: Goodman Hong Kong Logistics Fund
Goodman Hong Kong Logistics Fund For personal use only Key events Key metrics Total assets A$1.7 billion + GHKLF continues to be the dominant provider of high quality warehouse and logistics space in Hong Interest bearing liabilities A$0.4 billion Kong, offering customers 0.9 million sqm of space Ge
Slide 44: Goodman Property Trust
Goodman Property Trust For personal use only Key events Key metrics1 + Active portfolio management: Total assets A$1.3 billion Interest bearing liabilities A$0.5 billion - Over 155,000 sqm of space leased to new or existing customers during the 12 months ended 31 March 2012, Gearing2 35.7% equating
Slide 45: Appendix 5 Capital management
For personal use only Appendix 5+ Capital management Greater Manchester Police Headquarters, UK 45
Slide 46: Group financial covenants
Group financial covenants For personal use only Covenants Test Covenant Result Headroom Net liabilities1 as a percentage of net tangible assets is Gearing ratio 55.0% 32.1% 22.9% not more than 55.0% Interest cover ratio EBITDA to interest expense at least 2.0x 2.0x 5.5x 3.5x Secured debt as a percen
Slide 47: Currency mix
For personal use only Currency mix 47
Slide 48: Financial risk management
Financial risk management For personal use only Financial risk management in line with Group Board policy +Interest risk management: – 92% hedged over next 12 months – Weighted average hedge maturity of 4.5 years – Weighted average hedge rate of 4.58%1 vs spot 1.42%2 – Current “all in” net WACD 4.41
Slide 49: Financial risk management (cont)
Financial risk management (cont) For personal use only Interest rate + Interest rates are hedged to 92% over next 12 months + Weighted average hedge rate of 4.58%1 vs spot 1.42%2 - NZD – (hedge 4.64%, spot 3.28%) - JPY – (hedge 1.09%, spot 0.35%) - HKD – (hedge 1.92%, spot 0.79%) - GBP – (hedge 8.43
Slide 50: Financial risk management (cont)
Financial risk management (cont) For personal use only Interest rate hedging profile Euro payable GBP payable HKD payable NZD payable JPY payable USD payable Fixed Fixed1 Fixed Fixed Fixed Fixed rate rate rate rate rate rate As at €M % £M % HK$M % NZ$M % ¥M % US$M % June 2013 (620.0) 2.14 (425.0) 8.
Slide 51: Financial risk management (cont)
Financial risk management (cont) For personal use only Currency hedging profile Amount Amount Maturing in Hedge rate payable Hedge rate payable year ending June HK$M NZ$M 2013 4.9077 (62.6) 1.1932 (5.0) Foreign currency denominated balance sheet hedging maturity profile Currency Maturity Weighted av
Slide 52: Exchange rates
Exchange rates For personal use only + Statement of Financial Position – exchange rates as at 30 June 2012 – AUDGBP – 0.6529 (30 June 2011 : 0.6667) – AUDEUR – 0.8092 (30 June 2011 : 0.7405) – AUDHKD – 7.8899 (30 June 2011 : 8.3336) – AUDSGD – 1.2925 (30 June 2011 : 1.3156) – AUDNZD – 1.2771 (30 Jun
Slide 53: Appendix 6 Corporate structure
For personal use only Appendix 6+ Corporate structure M7 Business Hub, Australia 53
Slide 54: Corporate restructure
Corporate restructure For personal use only + Goodman Group confirms that all of the conditions for the Restructure of the Group, through the addition of the Hong Kong incorporated company, Goodman Logistics (HK) Limited (HKCo), to the existing Goodman stapled structure (Restructure), have now been
Slide 55: Q&A
For personal use only Q&A Interlink Industrial Estate, Australia 55
Slide 56: Thank you
For personal use only thank+you Important Notice This document has been prepared by Goodman Group (Goodman International Limited (ABN 69 000 123 071) and Goodman Funds Management Limited (ABN 48 067 796 641) (AFSL223621) as the Responsible Entity for Goodman Industrial Trust (ARSN 091 213 839)). The