Stockland · ASX:SGP
Stockland — FY2014 Earnings Presentation
30 slides from Stockland's earnings presentation, Aug 18, 2014
Slide 1: FY14 Stockland Results Presentation – A year in focus
For personal use only FY14 Stockland Results Presentation – A year in focus
Slide 2: Agenda
Agenda 2 For personal use only Topic Speaker Page Group Update Mark Steinert, 03 Managing Director and CEO Financial Update Tiernan O’Rourke, CFO 06 Commercial Property John Schroder, Group Executive and CEO, 11 Commercial Property Residential Andrew Whitson, Group Executive and CEO, 18 Residential
Slide 3: Delivered strong profit growth
Delivered strong profit growth 3 For personal use only FY14 earnings per security of 24.0c: 7.1% growth on FY13 Exceeded revised 6% target Our Our purpose vision Driven by strong momentum in Residential and Retirement Living We believe there’s To be a great Australian results a better way to l
Slide 4: Strong operational performance
Strong operational performance 4 For personal use only Strong uplift in underlying profit and FFO, reflecting improving FY14 FY13 Change operational performance and efficiencies Statutory Profit $527m $105m nm Statutory Earnings per 22.8 cents 4.7 cents nm Underlying EPS growth of 7.1%, FFO per
Slide 5: Creating sustainable, organic growth
Creating sustainable, organic growth 5 Logistics & For personal use only Retail Business Parks Office Residential Retirement Living 50% of SGP portfolio 13% of SGP portfolio 8% of SGP portfolio 20% of SGP portfolio 9% of SGP portfolio Artist’s impression Artist’s impression Stockland Gladstone, Qld
Slide 6: Group Finance – Tiernan O’Rourke
For personal use only Group Finance – Tiernan O’Rourke Shellharbour, NSW
Slide 7: Significant improvements in Underlying Profit and Funds From Operations
Significant improvements in Underlying Profit and Funds From Operations 7 For personal use only $m FY14 FY13 Change Commentary Retail 347 324 7.5% 2.3% comparable NOI growth; completion of developments Logistics & Business Parks1 100 95 5.5% 1.0% comparable NOI growth; acquisitions Office1 70 87 (
Slide 8: Group Funds from Operations (FFO)
Group Funds from Operations (FFO) 8 For personal use only Group FFO reflects strong growth in Commercial Property and $m FY14 FY13 Change Residential Communities Underlying Profit 555 495 12.2% Adjust for: FFO in excess of cash distribution Amortisation of fit out incentives1 37 32 Amortisation
Slide 9: Statutory Profit
Statutory Profit 9 For personal use only $m FY14 FY13 Change Commentary Underlying Profit 555 495 12.2% Commercial Property revaluations 1191 65 Cap rate compression and income growth Change in fair value of Retirement Living (50) (47) investment properties Impairment of Retirement Living goodwill (
Slide 10: Strong balance sheet to support growth
Strong balance sheet to support growth 10 For personal use only Strong balance sheet remains a priority Key debt metrics A-/stable metrics; rating confirmed in May 2014: FY14 FY13 Allows access to a broad range of debt providers S&P rating A-/Stable A-/Stable Generally lower borrowing costs
Slide 11: Commercial Property – John Schroder
For personal use only Commercial Property – John Schroder Wetherill Park, NSW
Slide 12: Commercial Property: sustainable growth
Commercial Property: sustainable growth 12 For personal use only Solid result in a challenging environment Asset Total FFO WALE Occupancy2 WACR3 weighting Underlying (change) (years) (stable Operating profit growth of 3.0% across Commercial Property ($m)1 Profit assets) (change) Retail 7.5% Re
Slide 13: Commercial Property delivered solid result
Commercial Property delivered solid result 13 For personal use only Commercial Property ($m) Funds From Operations1 Underlying Profit FY14 FY13 Change Comparable FY14 FY13 Change Comparable growth2 growth2 Retail 369 336 9.9% 3.9% 347 324 7.5% 2.3% Logistics and Business Parks3 108 101 6.9% 1.1%
Slide 14: Retail: Improving sales growth trend over the past six months
Retail: Improving sales growth trend over the past six months 14 For personal use only Specialty store sales supported by growth in non discretionary Sales by Total MAT Comparable Sales per sqm spend Category1 Annual Annual Annual Growth % Growth % Growth FY14 included one less week of reported sale
Slide 15: Retail: Continuing to drive returns
Retail: Continuing to drive returns 15 For personal use only Maintained high occupancy Retail leasing activity1 FY14 FY13 Consistent rental growth reflects high sales productivity and moderate Occupancy 99.6% 99.4% occupancy cost ratio Tenant retention 71% 75% Tenant retention and incentives i
Slide 16: Logistics and Business Parks: Executing organic growth and repositioning
Logistics and Business Parks: Executing organic growth and repositioning 16 It has been an active year Logistics and Business Parks2 FY14 FY13 For personal use only Transactions: Leasing activity executed 349,600 sqm 295,700 sqm Acquired $274m of assets at an average yield of 7.7%1 Leasing activit
Slide 17: Office: Optimising portfolio returns
Office: Optimising portfolio returns 17 Active management: Office1 FY14 FY13 For personal use only Extended WALE Leasing activity executed 39,700 sqm 49,000 sqm Leasing activity under HOA2 6,500 sqm 4,500 sqm Achieved solid rental growth despite challenging market conditions Average rental growt
Slide 18: Residential – Andrew Whitson
Artist’s impression Shane’s Park Conservation For personal use only zone 20 minutes to Hawkesbury river Residential – Andrew Whitson Elara, NSW
Slide 19: Strong profit growth, capitalising on market improvements
Strong profit growth, capitalising on market improvements 19 For personal use only Materially stronger result Residential Communities FY14 FY13 Change Improved profitability driven by market upturn and strategic initiatives Lots settled 5,219 4,641 12.5% Operating profit margin uplift on track
Slide 20: Operating Profit margin improvement remains on track
Operating Profit margin improvement remains on track 20 For personal use only Focus on operating profit margin Residential Communities FY14 Core Workout1 Total Reduced overheads Lots settled 4,542 677 5,219 Project rate impacted by: Revenue $869m $173m $1,042m Full year effect of more conserva
Slide 21: Executing our strategy to drive returns
Executing our strategy to drive returns 21 For personal use only Capital Growing profitability through: Core projects employed1 Delivering 30 Active projects2 Accelerating production to take advantage of current market strength current $1.1b earnings ~28,200 Lots FY14 Five new launch projects in
Slide 22: Market overview: Positive outlook but pace of price growth moderating
Market overview: Positive outlook but pace of price growth moderating 22 For personal use only FY14 Stockland Summary FY15 market outlook State FY14 Comments on our sales in State Vacant land Vacant Comments on market outlook settlement FY14 sales land volumes % volumes prices NSW (27%) Sydney mark
Slide 23: Retirement Living – Stephen Bull
Artist’s impression For personal use only Retirement Living – Stephen Bull Cardinal Freeman, NSW
Slide 24: Retirement Living: Continued growth in operating profit
Retirement Living: Continued growth in operating profit 24 Retirement Living has delivered strong operating results: For personal use only Total Portfolio Excluding Aged Care FY14 FY13 Change 18% increase in established unit turnover Established unit turnover 647 547 18.3% 14% increase in comp
Slide 25: Retirement Living: Portfolio review
Retirement Living: Portfolio review 25 For personal use only We have undertaken a review of our business : Key valuation assumptions FY14 FY13 We have a clear path to continued profit growth Weighted average discount rate 12.8% 12.8% We have revised key assumptions: Weighted average 20 year grow
Slide 26: Retirement Living: Positioning for further growth
Retirement Living: Positioning for further growth 26 For personal use only Key achievements include: Artist’s impression An improved unit turnover process resulting in materially reduced downtime Settled sale of our Aged Care business to Opal Aged Care in July, and established our strategic part
Slide 27: Summary and Outlook – Mark Steinert
For personal use only Summary and Outlook – Mark Steinert Balcatta, WA
Slide 28: Focus on business priorities
Focus on business priorities 28 For personal use only Priority Progress Grow assets and customer base Medium Density and Completed Homes extend customer reach synergistically Acquired 2,300 Residential lots adjoining successful residential projects Retail development creating high performing s
Slide 29: Well positioned for further growth in FY15
Well positioned for further growth in FY15 29 For personal use only EPS growth of 6-7.5%1 targeted for FY15, underpinned by: Settlement of residential lots – towards the upper end of our 5,000-6,000 through the cycle range 2-3% comparable income growth in Commercial Property Steady improveme
Slide 30: Disclaimer Of Liability
For personal use only Stockland Corporation Limited Disclaimer Of Liability While every effort is made to provide accurate and complete information, Stockland does not warrant ACN 000 181 733 or represent that the information in this presentation is free from errors or omissions or is suitable for S