Westfield — FY2016 Earnings Presentation
28 slides from Westfield's earnings presentation, Feb 23, 2017
Slide 1: Disclaimer and forward-looking statements
The financial information included in this release is based on the Westfield Corporation’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 th
Slide 2: 2016 results highlights
• Funds From Operations (“FFO”) of 33.7 cents per security and Distribution of 25.1 cents per security, in-line with forecast • Over $1bn of revaluation gains driven by value created from completed developments • Continued solid operational performance: • Specialty retail sales of $725 psf, up 2.2%,
Slide 3: Development program progress
• Significant progress on $9.5bn retail development program: • Successfully opened the $1.2bn major stage of Westfield World Trade Center, ahead of our target yield and commenced the $1.1bn expansion at Valley Fair in San Jose • Solid progress on $1bn redevelopment of Century City, $600m expansion a
Slide 4: Funds From Operations and balance sheet summary
Funds From 12 months % Change Assets Under Management / As at Operations ($m) to Dec 16 Proforma1 Balance Sheet ($bn) 31 Dec 16 Net Property Income 795 5.9% Assets under Management 30.9 Management Income 33 (7.8)% Total Assets 21.1 Project Income 93 (17.3)% Net Debt 7.8 FFO 700 3.8% Gearing: Enterpr
Slide 5: 2017 guidance
• WFD expects to achieve for full year 2017: • FFO: 33.8 – 34.0 cents per security, after taking into account lost income from redevelopment projects underway, representing pro-forma FFO growth of between 3% and 3.5% from 20161 • Distribution: 25.5 cents per security 1 On a constant currency basis a
Slide 6: Current development projects
$3.7bn of current projects (WFD: $2.5bn, of which $1.2bn incurred to date) with an estimated yield range of approximately 7% - 8% Total Project WFD Anticipated Current Projects $m $m Completion Westfield World Trade Center (New York) – Tower 31 300 300 2018 / 2019 Century City (Los Angeles) 1,000 1,
Slide 7: Highlights cont'd: future projects
HIGHLIGHTS CONT’D Undertaking pre-development work on $5.8bn in future retail projects, as well as future residential development opportunities Anticipated Commencement – Retail Total Project WFD share 2017 – 2018 Milan (Italy) €1.4bn 75% Topanga (Los Angeles) $0.3bn 55% Croydon (London) £1.4b
Slide 8: Portfolio metrics: Flagship and Regional
HIGHLIGHTS CONT’D Average Specialty Store Rent Assets under Specialty Specialty Specialty Comparable As at Management % of Portfolio Occupancy Retail Sales Retail Sales Amount Growth NOI Growth 31 December 2016 ($bn) Portfolio Leased (%) 1 Cost (%) (MAT/ psf) Growth (%) 2 (psf) YOY (%) (%) 2 Flagshi
Slide 9: Specialty retail sales growth by category
Flagship Regional Period ending 31 December 2016 12 months 3 months 12 months 3 months Specialties 3.5% 5.5% 0.5% 3.0% By Category: Fashion 2.2% 3.5% (1.2)% (0.1)% Jewellery 1.9% 3.0% 5.1% 5.3% Leisure 5.1% 8.9% (1.3)% 6.0% Food retail 1.4% 3.4% 1.3% 2.7% General retail (0.8)% (3.9)% 1.4% 6.4%
Slide 10: Portfolio overview by assets under management
December 2016 Flagship Regional Total Centres 17 18 35 Retail Outlets 3,746 2,689 6,435 GLA (m sqf) 23.7 19.5 43.2 Assets Under Management (bn) $25.4 $5.5 $30.9 WFD Interests (bn) $16.0 $3.1 $19.1 JV Partner Interests (bn) $9.4 $2.4 $11.8 WFD Interests (%) 63% 56% 62% Assets Under Mana
Slide 11: Development program post completion
c. 45 - 50 c. 10% 9.5 30.9 18% 18% c. 90% 13.5 82% 65% 35% 2004¹ 2016 Development Post Completion Program Flagship Regional 1 Represents US and UK Only
Slide 12: Annual specialty retail sales per sqf
Annual Specialty Retail Sales $ per sqf Assets >$1bn in Total Annual Sales 1200 9 >1,000 1000 Topanga 898 >800 Garden State Plaza 800 725 Milan Croydon 600 405 Century City 3 400 Valley Fair Topanga Stratford City 200 Stratford City Westfield London Westfield London World Trade Center (2) 0 - 2004(1
Slide 13: $1bn+ in annual retail sales
$1bn+ in Annual Retail Sales 2.00 1.75 1.50 1.25 1.00 0.75 0.50 0.25 - Estimated flagship annual retail sales post completion of the Development Program Note: Assumes 3% organic sales growth per annum between 2016 and 2020
Slide 14: Assets
2016 HALF YEAR RESULTS │ 14
Slide 15: Assets: United States
HIGHLIGHTS ASSETS CONT’D – UNITED STATES Chicago, IL Old Orchard Connecticut Trumbull (52.6%) Meriden Washington Southcenter (55%) New York World Trade Center South Shore Northern CA Sunrise New Roseville San Francisco (50%) New Jersey Valley Fair (50%) Garden State Plaza (50%) Oakridge (55%) Maryla
Slide 16: Assets: UK/Europe
HIGHLIGHTS ASSETS CONT’D – UK/EUROPE London, UK London (50%) Stratford City (50%) Croydon (50%) Flagship Milan, Italy Future Flagship Milan (75%)
Slide 17: Funds from Operations
HIGHLIGHTS FUNDS FROMCONT’D OPERATIONS Dec 16 Dec 15 % Change $m Actual Actual Variance Proforma1 Net Property Income Flagship 577 573 4 8.4% Regional 178 266 (88) (0.9)% Other Property Investment Income 40 29 11 2.7% Total Net Property Income 795 868 (73) 5.9% Management Income 33 37 (4) (7.8
Slide 18: Income statement
HIGHLIGHTS FUNDS FROMCONT’D OPERATIONS 12 months to 12 months to $m Dec 16 Dec 15 Variance Property revenue 1,188 1,282 (94) Management income 33 37 (4) Project income 93 124 (31) Total Income 1,314 1,443 (129) Property expenses and outgoings (448) (458) 10 Overheads (116) (117) 1 Property revaluati
Slide 19: Balance sheet
HIGHLIGHTS BALANCE CONT’D SHEET 1 $m 31 Dec 16 31 Dec 15 Cash 357 1,207 Investment Property Shopping centres 16,838 15,034 Construction in progress 1,164 1,432 Assets held for redevelopment 1,074 1,019 Total investment property 19,076 17,485 Other property investments 608 337 Other assets 1,07
Slide 20: Investment property and cap rates
HIGHLIGHTS CONT’D INVESTMENT PROPERTY 12 months to $bn 31 Dec 16 Investment property opening balance 17.5 Revaluations 1.0 Acquisitions 0.1 Capital expenditure 1.3 Exchange rate impact (0.8) Investment property closing balance 19.1 Shopping Centres – 31 Dec 16 Weighted Average Cap Rate WFD ($bn) WFD
Slide 21: Financing activity and gearing
• Financing activity: • Refinanced $555m (WFD: $338m) of mortgages to August 2026 at 3.39% • Extended $150m of bank facilities from July 2017 to July 2020 • Financing facilities totaling $10.6bn: • $3.4bn of bank facilities ($2.4bn undrawn) • $4.5bn of 144A bonds • $2.7bn of secured mortgages • Gear
Slide 22: Liquidity summary and debt maturities
Dec 16 Liquidity Summary $bn $bn Committed Facilities 10.6 Amounts Drawn (8.2) 3.0 Total Undrawn Facilities 2.4 32% Cash 0.4 Total Available Liquidity 2.8 2.0 18% 18% 1.0 9% 7% 6% 4% 3% 3% 0.0 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2044 Bonds Mortgage Bank
Slide 23: Proportionate IFRS profit to FFO
Proportionate $m Adjustments1 FFO IFRS Profit Net Property Income Flagship 547 30 577 Regional 153 25 178 Other Property Investment Income 40 - 40 Total Net Property Income 740 55 795 Management Income 33 - 33 Project Income 93 - 93 Gross Income 866 55 921 Overheads (116) - (116) EBIT 750 55 8
Slide 24: Proportionate income statement
HIGHLIGHTS FUNDS FROMCONT’D OPERATIONS Equity Proportionate $m Consolidated Accounted IFRS Profit Property revenue 512 676 1,188 Contribution from equity accounted investments 862 (862) - Management income 33 - 33 Project income 93 - 93 Total Income 1,500 (186) 1,314 Property expenses and outgoings
Slide 25: Consolidated and equity accounted balance sheet
Equity $m Consolidated Accounted Total Cash 292 65 357 Investment Property Shopping centres 7,008 9,830 16,838 Construction in progress 907 257 1,164 Assets held for redevelopment 711 363 1,074 Total investment property 8,626 10,450 19,076 Net investment in equity accounted entities 8,237 (8,2
Slide 26: Diversified funding base
• Diversified funding base comprising bonds, bank facilities and secured mortgages Bank Facilities - Undrawn 23% 144A Bonds 42% Total Facilities $10.6bn Bank Facilities - Drawn 9% Mortgages 26%
Slide 27: Gearing and credit metrics
31 Dec 16 Gearing (enterprise value) 35.2% Gearing (book value) 37.1% Secured Debt 12.9% Interest Coverage 3.8 times Unencumbered Leverage 243%
Slide 28: Fixed debt and interest rate swaps
US$ fixed £ fixed debt US$ interest £ interest US$ interest Outstanding debt payable payable swap payable swap payable swap receivable as at 1 1 2 2 Fixed Rate2 December US$m Fixed Rate % £m Fixed Rate % US$m Fixed Rate % £m Fixed Rate % US$m % 2016 (6,718.0) 3.52% (375.0) 2.69% (1,350.0) 1.39% (461