Stockland · ASX:SGP
Stockland — H1 2020 Earnings Presentation
37 slides from Stockland's earnings presentation, Feb 19, 2020
Slide 1: 1H20 Results
For personal use only 1H20 Results 19 February 2020 BARINGA, QLD
Slide 2: Agenda
Agenda update Group For personal use only Group update capital management Financial results and Mark Steinert Managing Director & CEO Financial results and capital management Tiernan O’Rourke CFO Property Commercial Commercial Property Louise Mason Group Executive & CEO, Commercial Property Communit
Slide 3: Group update
Group Financial results and Commercial Communities Summary update capital management Property and outlook WILLAWONG DISTRIBUTION CENTRE, QLD Mark Steinert update 1H20 Results Presentation Group 3 For personal use only
Slide 4: Result on track for full year guidance
Result on track for full year guidance update Group FFO reflects second half skew in Communities For personal use only 6 months to 31 December 2019 capital management Financial results and Funds from operations1 (FFO) FFO per security1 Adjusted FFO (AFFO)1 AFFO per security1 $384m 16.1 cents $338m 1
Slide 5: Strong momentum delivering key strategic priorities
Strong momentum delivering key strategic priorities update Group 6 months to 31 December 2019 For personal use only capital management Financial results and Priority Achievements • Portfolio weighting increased to 26% (from 23%) Acquisition • Acquired remaining 50% interest in Stockland Piccadilly
Slide 6: Driving operational excellence
Capability Driving operational excellence update Group For personal use only Sustainability leadership Customer innovation People and leadership capital management Financial results and 2nd globally Live chat for Residential sales Remuneration review In the Dow Jones Sustainability Index ~4,000 enqu
Slide 7: Financial results and capital management
Group Financial results and Commercial Communities Summary update capital management Property and outlook Artist Impression M_PARK, NSW Financial results management and capital Tiernan O’Rourke For personal use only
Slide 8: Capital position
Capital position update Group At 31 December 2019 For personal use only capital management Financial results and Investment grade credit ratings Interest cover1 Weighted average cost of debt Gearing A-/Stable S&P 5.0:1 4.4% 26.1% 26.7% at 30 June 2019 A3/Stable Moody’s Property Commercial Fixed / he
Slide 9: Strong operating cash flows
Strong operating cash flows update Group For personal use only $m Key areas of capital employed capital management Financial results and 1,200 53 1,000 • Strong operating cashflows covering distributions and funding growth • Operating cash flows increased due to strong residential revenue and (579)
Slide 10: Funds from operations
Funds from operations update Group For personal use only • Non core divestments reduced retail and logistics FFO capital management Financial results and • Communities reflects 2H20 skew to high margin Sydney projects, timing of Merrylands Court and The Grove1 and non core village disposals • Reduce
Slide 11: Statutory profit to FFO and AFFO reconciliation
Statutory profit to FFO and AFFO reconciliation update Group The table below shows the reconciliation of statutory profit to FFO with reference to the definitions outlined in the Property Council of Australia (PCA) white paper “Voluntary best practice guidelines for disclosing FFO and AFFO” For pers
Slide 12: Commercial Property
Group Financial results and Commercial Communities Summary update capital management Property and outlook Commercial Property Louise Mason KEYWEST, VIC For personal use only
Slide 13: Delivering on our strategy
update Group For personal use only capital management Financial results and Delivering on our strategy Implementing plan to improve portfolio quality and returns Property Commercial Execute Logistics pipeline Grow Workplace Strengthen Retail Town Centres • Completed approximately 45,000 sqm of devel
Slide 14: Solid operating performance
Solid operating performance update Group Commercial Property For personal use only capital management Financial results and FFO comparable 2.0% Key metrics Asset value1 FFO change Occupancy WALE2 WACR3 FFO comparable growth in 1H20 Logistics $2,771m $81m 3.9% 98.3% 5.4 yrs 5.7% Property Commercial S
Slide 15: Solid valuation results
Solid valuation results update Group Commercial Property For personal use only capital management Financial results and Net valuation uplift of $199m in 1H20 with 49%1 of assets independently revalued in the last six months Logistics $2,771m2 Workplace $1,032m2 Retail $6,628m2 Property Commercial $2
Slide 16: Growing portfolio delivers strong returns
Growing portfolio delivers strong returns update Group Logistics For personal use only capital management Financial results and • Portfolio value more than doubled since 31 December 2013 Transacted with Fife Group: through asset creation • Consolidated a 71Ha land holding3, 50/50 joint venture at Ke
Slide 17: Performance demonstrates quality of portfolio
Performance demonstrates quality of portfolio update Group Logistics For personal use only capital management Financial results and Key metrics 1H20 1H19 • Strong comparable FFO growth of 3.9% $81m $81m FFO • Leasing demand remains strong with 300,835 sqm leased Asset value3,5 $2,771m $2,469m • Comp
Slide 18: $0.6bn business park development pipeline
$0.6bn1 business park development pipeline update Group Logistics For personal use only capital management Financial results and M_Park Business Campus, Macquarie Park, NSW Optus Campus, Macquarie Park, NSW 3 Ha site 7.6 Ha site $500m1 development 12 year lease to Optus with 55,000 sqm NLA Property
Slide 19: Strong leasing and rental growth
Strong leasing and rental growth update Group Workplace For personal use only capital management Financial results and • Strong comparable FFO growth of 6.1% 6 assets • Rental growth on new leases and renewals of 15.8% $1.0bn3 portfolio value 7% portfolio weighting • 91% of portfolio in Sydney • Acq
Slide 20: $2.2bn development pipeline
$2.2bn1 development pipeline update Group Workplace For personal use only capital management Financial results and Walker Street, North Sydney, NSW Piccadilly, Sydney CBD, NSW 2,300 sqm Located in the mid-town Sydney amalgamated landholding CBD Property Commercial Development planning Up to 60,000 s
Slide 21: Stable performance, tracking to guidance
Stable performance, tracking to guidance update Group Retail Town Centres For personal use only capital management Financial results and • Income and capital performance tracking to guidance • Actively stabilising the portfolio through a program of rebasing rents and up-weighting to Food 32 and Serv
Slide 22: Continued growth in retail sales
Continued growth in retail sales update Group Retail Retail Town Centres For personal use only capital management Financial results and Active asset management • Comparable specialty sales growth of 2.7% MAT Total portfolio Comparable centres3 • Comparable specialty sales of $9,386 psm1, ~5% above U
Slide 23: Rebasing rents supporting sustainable income
Rebasing rents supporting sustainable income update Group Retail Town Centres For personal use only capital management Financial results and 1H20 1H19 Active asset management Occupancy2 99.4% 99.4% • Rebased rents to deliver sustainable occupancy Specialty retail leasing activity3 • Specialty occupa
Slide 24: Remixing and placemaking support positive rental and sales growth
Remixing and placemaking support positive rental and sales growth update Group Accelerated to focus on higher growth categories For personal use only capital management Financial results and 5 year CAGR 1 12.0% 11.1% • Remixing to Food Catering and Services yielding higher rental and sales 9.7% prod
Slide 25: Outlook
Outlook1 update Group Commercial Property For personal use only capital management Financial results and ~1% Comparable FFO growth forecast in FY20 in line with guidance Workplace and Logistics markets remain strong Property Commercial • $4.3bn2 pipeline in the eastern states • Progressing to Workpl
Slide 26: Communities
Group Financial results and Commercial Communities Summary update capital management Property and outlook MINTA, VIC ARTIST’S IMPRESSION Communities Andrew Whitson 1H20 Results Presentation 26 For personal use only
Slide 27: On track to deliver guidance for FY20
On track to deliver guidance for FY20 update Group Residential For personal use only capital management Financial results and Execution of strategy drives 1H20 growth • 2,158 settlements1 (including 266 townhome settlements) on track to deliver above 5,200 settlements for the full year 2,158 (12.3)%
Slide 28: Strong net sales in 2Q20 underpinning outlook
Strong net sales in 2Q20 underpinning outlook for FY20 and beyond1 update Group Residential For personal use only capital management Financial results and Net sales 1800 • Net sales result underpinned by market strength on the 1600 eastern seaboard with the return of owner occupiers 227 and investor
Slide 29: Competitive advantage drives market share to 16%
Competitive advantage drives market share to 16% update Group Residential For personal use only capital management Financial results and Brand Scale Landbank • Focus on providing an exceptional customer • Our market share of 16%1 is more than four times • 76,000 lot landbank2 with an average age of
Slide 30: Positioned to leverage strengthening residential market
Positioned to leverage update Group strengthening residential For personal use only market capital management Financial results and • On track to deliver over 5,200 settlements and operating profit margin ~19% in FY20 • Strong sales results and a normalised default rate are expected to drive settlem
Slide 31: Strategic initiatives and market improvement driving sales performance
Strategic initiatives and market update Group improvement driving sales performance For personal use only Retirement Living 412 14.8% capital management Financial results and • Over 12% improvement in established sales in 1H20 compared to 1H191 with a ~30% Total units settled On 1H19 increase in con
Slide 32: Retirement Living strategy
update Group For personal use only capital management Financial results and Retirement Living strategy Disciplined execution of Retirement Living strategy Property Commercial Enhance customer Increase returns through Improve quality experience and satisfaction development pipeline and capability of
Slide 33: Summary and outlook
Group Financial results and Commercial Communities Summary update capital management Property and outlook AURA, QLD and outlook Summary Mark Steinert For personal use only
Slide 34: Creating value through our diversified model, asset creation capabilities and brand
update Group For personal use only capital management Financial results and Creating value through our diversified model, asset creation capabilities and brand • Focused strategy to leverage our diversified model to Property Commercial grow returns and improve portfolio quality Capital allocation2 •
Slide 35: Strong foundation to grow profit
Strong foundation to grow profit update Group For personal use only Major contributors1 capital management Financial results and FY20 FY21 Future pipeline Commercial Secured key acquisitions and planning approvals to Capital partnership opportunities continue to be Melbourne Business Park (VIC) Prop
Slide 36: FY20 outlook
FY20 outlook1 update Group Disciplined focus on execution of strategy For personal use only capital management Financial results and Commercial Property Residential Retirement Living Group Guidance ~1% >5,200 >850 $8m pa 37.4c comparable FFO growth lot settlements established and unallocated corpora
Slide 37: Important Notice
Stockland Corporation Limited For personal use only ACN 000 181 733 Stockland Trust Management Limited ACN 001 900 741; AFSL 241190 As responsible entity for Stockland Trust ARSN 092 897 348 LEVEL 25 133 Castlereagh Street SYDNEY NSW 2000 Important Notice While every effort is made to provide accura