Slide 1: Results for the year ended 30 June 2016
RESULTS FOR THE YEAR ENDED 3O JUNE 2016 11 August 2016 | HIGHLIGHTS RESULTS OVERVIEW OPERATIONAL PERFORMANCE OUTLOOK | $715m operating profit Out performance maintained Macro themes transforming the 42.5¢ forecast operating eps | 40.1¢ operating eps for the full year. sector and driving growth are 2
Slide 2: Important notice and disclaimer
For personal use only + This document has been prepared by Goodman Group (Goodman Limited (ABN 69 000 123 071), Goodman Funds Management Limited (ABN 48 067 796 641; AFSL Number 223621) as the Responsible Entity for Goodman Industrial Trust (ARSN 091 213 839) and Goodman Logistics (HK) Limited (Comp
Slide 3: Contents
CONTENTS N 1 — HIGHLIGHTS N 2 — RESULTS OVERVIEW N 3 — OPERATIONAL PERFORMANCE N 4 — STRATEGY AND OUTLOOK ICES — RESULTS ANALYSIS — INVESTMENT — DEVELOPMENT — MANAGEMENT — CAPITAL MANAGEMENT
Slide 4: Section 1: Highlights
For personal use only Section1+1+ Section Highlights Highlights Goodman Interlink, Hong Kong Erfurt, Zalando, Germany
Slide 5: Focused strategy driving consistent and sustainable growth
For personal use only + Focused strategy driving consistent and sustainable growth – Operating profit¹ of $715 million, up 9% on FY2015 – Operating EPS¹ of 40.1 cents², up 7.8% on FY2015 – Distribution per security of 24.0 cents, up 8% on FY2015 – FY2017 forecast operating EPS of 42.5 cents, up 6% o
Slide 6: Macro themes transforming the sector and driving growth
For personal use only + Macro themes transforming the sector and driving growth are expected to continue – Growth in consumerism globally, the evolution of e-commerce and new enabling technologies – Customer focus on cost efficiencies, rationalising operations, upgrading facilities and optimising su
Slide 7: Operational highlights: own, develop, manage
For personal use only + High occupancy maintained at 96% + Retention rate of 79% and WALE of 4.7 years Own + Like for like rental growth at 1.9% and positive lease reversions of 3.0% on new leasing deals + Leased 3.4 million sqm across the global platform equating to $356.5 million of property incom
Slide 8: Section 2: Results Overview
For personal use only Section Section2+2+ Results Results Overview overview Stockyards Industrial Estate, Australia M7 Business Hub, Australia
Slide 9: Outperformance maintained for the full year FY2016
For personal use only + Outperformance maintained for the full year FY2016 – Driven by global development and management contributions – Benefiting from global platform with offshore earnings contributing Operating profit ($m) 714.5 59% of operating EBIT Statutory accounting profit ($m) 1,274.6 + Fo
Slide 10: Profit and loss
Profit and loss For personal use only + Statutory profit of $1.3 billion, includes property and intangible Income statement valuations, derivative mark-to-markets and other non-cash or non-recurring items FY2015 FY2016 $m $m – Cap rate compression and revaluations from higher and Investment (look th
Slide 11: Balance sheet
For personal use only Balance sheet + Strong balance sheet maintained – Financial leverage reduced from receipt of urban renewal FY2015 FY2016 $m $m proceeds and revaluations – Gearing to remain low given earnings composition Stabilised investment properties 2,710 2,553 Partnership cornerstones1 3,9
Slide 12: Group liquidity position
Group liquidity position For personal use only + Capital structure and hedge strategies have enabled the Goodman Group debt maturity profile Group to withstand foreign currency volatility + Cash and available lines of credit of $2,555 million as at 30 June 2016 – $1,337 million cash – $1,218 million
Slide 13: Section 3: Operational Performance
For personal use only Section 3+ Operational Performance Interlink, Berlin Goodman Fiege Brieseleang, Hong Kong Osaka Nanko, Japan
Slide 14: Investment
Investment For personal use only + Property fundamentals remain sound reflecting the quality of the portfolio Investment ($m) FY2015 FY2016 and customers Direct 145.9 141.5 – Maintained occupancy at 96% Cornerstones 354.7 371.6 – Retention remains high at 79% and WALE of 4.7 years Look through EBITD
Slide 15: Development
For personal use only + Development WIP at $3.4 billion Development ($M) FY2015 FY2016 – Europe and North America key contributors to increased revenue, Revenue 327.8 464.1 representing 52% of commencements EBITDA 256.6 366.1 – $1 billion of completions and commencements in the 4th quarter + Develop
Slide 16: Management
For personal use only + Strong management returns driven by Management ($M) FY2015 FY2016 – Increasing asset values which are growing management Management income² 215.7 259.7 earnings EBITDA 125.2 166.3 – Transactional activity levels a recurring theme and includes performance fees Key metrics FY20
Slide 17: Assets under management and Partnership achievements
For personal use only + Major achievements completed during the year include Third party AUM by region – Commitment of a further US$1.25 billion and acquisition of a portfolio of projects by GCLP – GCLP develop to hold strategy in line with investment partners objectives as the Partnership matures a
Slide 18: Partnership summary metrics
For personal use only GAIP GHKLP GAP GEP GCLP GMT1 GJCP5 GNAP ABPP Total assets $6.7bn $4.7bn $3.9bn $3.8bn $2.6bn $2.4bn $1.9bn $1.1bn $0.9bn GMG co-investment $1.2bn $0.8bn $0.5bn $0.5bn $0.4bn $0.3bn2 $0.2bn2 $0.6bn $0.3bn GMG co-investment 27.5% 20.0% 19.9% 20.4% 20.0% 20.7%2 20.0%2 55.0% 43.1%
Slide 19: Section 4: Outlook and Summary
For personal use only Section 3+ Section 4+ Outlook and Summary Pudong International Airport Logistics Park, China Pudong International Airport Logistics Park, China
Slide 20: Strategy and outlook
For personal use only + Australian listed, leading global industrial property operator and investment manager + Global platform in gateway cities generating long term returns with a focus on quality locations + Capital partnering approach focused on long term returns, performance and return on equit
Slide 21: Appendix 1: Results analysis
For personal use only Appendix 1+ Results analysis Westney Pinnacle Industry Corporate Park, Park, New Zealand Australia Banfield Distribution Centre, Australia Kobe, Japan
Slide 22: Five year growth in EPS, WIP, AUM and gearing
For personal use only Operating EPS Development WIP Total AUM Gearing + Consistent and sustainable operating earnings growth over five years + Growth in development remains sustainable given capability and ongoing structural demand drivers globally + AUM organically growing on the back of developmen
Slide 23: Total income by business segment
For personal use only Total income by business segment for the year ended 30 June 2016 Category Total Investment Management Development Unallocated Non- operating items $M $M $M $M $M $M Gross property income 204.6 205.4 - - - (0.8) Management income 259.3 - 259.3 - - - Development income 1,250.4 -
Slide 24: Statutory to operating profit reconciliation
For personal use only Category Total Investment Management Development Unallocated Non-operating items $M $M $M $M $M $M EBIT – per statutory accounts 1,383.3 406.6 166.3 366.1 (60.3) 504.6 Net gain from fair value adjustments on investment properties (327.8) (327.8) Net gain on disposal of investme
Slide 25: Non-operating items in statutory profit and loss
For personal use only Non-operating items in statutory profit & loss Year ended 30 June 2016 $M $M Property valuations Net gain from fair value adjustments on investment properties 327.8 Share of net gain from fair value adjustments on investment properties in associates and joint ventures 546.6 Def
Slide 26: Balance sheet by segment and region
For personal use only As at 30 June 2016 Direct Investments Developments Other Total Assets $M $M $M $M $M Cash - - - 1,337.0 1,337.0 Receivables - - 287.1 151.3 438.4 Inventories - - 1,375.8 - 1,375.8 Investment properties 2,552.5 - 168.2 - 2,720.7 Investments accounted for using equity method - 4,
Slide 27: For personal use only
For personal use only + For year ended 30 June 2016¹ 1. Calculated on 1,778.3 million securities being closing securities on issue 27
Slide 28: 30 June 2016 property valuations
For personal use only + The investment activity within the industrial market has remained steady over the 2016 after a very strong 2015 + The weighted cap rate for the Group compressed by 65 bps over the 12 month period to 6.4% + The Groups Urban Renewal sites in Australia continue to drive revaluat
Slide 29: Appendix 2: Investment
For personal use only Appendix 2+ Investment Goodman Interlink, Hong Kong
Slide 30: Leasing activity by region
For personal use only Across the Group and Partnerships: + 3.4 million sqm leased during the year + Reversions of 3.0% on new leasing deals, with like for like NPI growing at 1.9% + Occupancy maintained at 96% Region Leasing area (sqm) Net annual rent ($M) Average lease term (years) Australia 728,02
Slide 31: Top global customers
For personal use only Top 20 global customers (by net income – look through basis) 31
Slide 32: Top sub-regions by AUM
For personal use only Top 20 sub-regions (by AUM) 32
Slide 33: Urban renewal portfolio snapshot
For personal use only Portfolio snapshot Key metrics + 29 properties with a total value of $2.6 billion located primarily Total assets A$2.6 billion in the Sydney market Customers 232 – Represents a significant part of the urban renewal portfolio Number of properties 29 Occupancy 93% + Leasing deals
Slide 34: Appendix 3: Development
Rheinberg Logistics Centre , Germany For personal use only Appendix 3+ Development Bungarribee Industrial Estate, Australia
Slide 35: FY16 developments
For personal use only FY16 Developments Completions Commencements Work in progress Value ($M) 3,161 3,347 3,354 Area (m sqm) 2.4 2.8 2.5 Yield (%) 8.3 7.8 7.8 Pre-committed (%) 84 67 68 Weighted average lease term (years) 9.5 9.3 9.6 Development for third parties or Partnerships (%) 80 72 74 Austral
Slide 36: Development volume and pipeline
For personal use only Development volume + Maintained development pipeline of $10 billion – Forecast GLA of 7 million sqm – Development pipeline allocated as Asia Pacific 51%, Europe 27% and Americas 22% + The Group’s development future cash commitments Commitments as at 30 June 2016 $M Gross GMG co
Slide 37: Appendix 4: Management
For personal use only Appendix 4+ Management Senec Logistics Centre, BirminghamBusiness Slovakia Park, U.K Interlink Industrial Estate, Australia
Slide 38: Global platform
GLOBAL PLATFORM North America 41 people A$3.0bn in assets’ 13 properties Current Goodman global presence {As at 20 June 2016 (Australian currency). 1. Estimated ena value, Europe/UK AS1.2bn in assets 5 properties 256 people A$5.Qbninassets # 143 properties A$0.1bn in assets 3 properties Brazil 28 pe
Slide 39: Goodman Australia Industrial Partnership
For personal use only Key events Key metrics¹ + Execution of asset rotation strategy disposing $594 million of Total assets $6.7 billion investment properties in the period Interest bearing liabilities $2.2 billion + Completed 127,577 sqm of developments with an end value of Gearing² 32.4% $188 mill
Slide 40: Goodman Hong Kong Logistics Partnership
For personal use only Key events Key metrics¹ + Leased 517,721 sqm in the twelve months to June 2016, Total assets $4.7 billion representing HK$409 million of annualised rental income Interest bearing liabilities $0.7 billion + 99% occupancy with a weighted average lease expiry of 2.4 Gearing2 12.6%
Slide 41: Goodman Australia Partnership
For personal use only Key events Key metrics¹ + Execution of asset rotation strategy disposing $384 million of Total assets $3.9 billion investment properties Interest bearing liabilities $1.0 billion + Completed 225,235 sqm of developments with end value of Gearing² 25.8% $210 million Customers 279
Slide 42: Goodman European Partnership
For personal use only Key events Key metrics¹ + Secured over 957,000 sqm of new and renewed leases Total assets $3.8 billion (excluding developments) in FY16. These leases represent Interest bearing liabilities $1.4 billion €42 million of annual rent Gearing ² 33.1% + €452 million of new acquisition
Slide 43: Goodman China Logistics Partnership
For personal use only Key events Key metrics¹ + GCLP portfolio continues to expand with 27 stabilised Total assets $2.6 billion properties and 23 development properties, providing 4.2 million sqm on a fully developed basis Interest bearing liabilities $0.3 billion Gearing² 5.9% + Strategic alignment
Slide 44: Goodman Property Trust
For personal use only Key events Key metrics¹ + 45.1% increase in profit before tax, from NZ$171 million to Total assets $2.4 billion NZ$248 million Interest bearing liabilities $0.7 billion Gearing3 33.9% + An 11.1% increase in net tangible assets to 120.4 cents per unit Customers 281 Number of pro
Slide 45: Goodman Japan Core Partnership
For personal use only Key Events Key metrics1 + Acquired a new industrial asset from the Goodman Japan Total assets $1.9 billion Development Partnership in July 2015 further improving Interest bearing liabilities $0.9 billion the quality of the portfolio Gearing² 41.7% + Maintained100% occupancy on
Slide 46: Goodman North America Partnership
For personal use only Key Events Key metrics¹ + Completed 1.8 million sqft of developments with an end Total assets $1.1 billion value of $201 million USD Interest bearing liabilities n/a Gearing n/a + Work in progress of 2.1 million sqft with end an end value of Customers 5 $194 million USD as at 3
Slide 47: Arlington Business Parks Partnership
For personal use only Key Events Key metrics¹ + Arlington Business Parks Partnership (ABPP) is a core plus Total assets $0.9 billion unlisted fund which opportunistically invests, develops and Interest bearing liabilities $0.3 billion manages business parks located in key UK regional and Gearing² 30
Slide 48: Appendix 5: Capital management
For personal use only Appendix 5+ Capital management Torun Logistics Centre, Poland
Slide 49: Debt covenants
For personal use only Covenants Test Covenant Result Headroom Net liabilities1 as a percentage of net tangible assets is Gearing ratio 55.0% 20.1% 34.9% not more than 55.0% Interest cover ratio EBITDA to interest expense at least 2.0x 2.0x 5.5x 3.5x Secured debt as a percentage of total tangible ass
Slide 50: Currency mix
For personal use only Currency mix – including the impact Currency mix – outstanding debt of Capital Hedging FX Swaps 50
Slide 51: Financial risk management
For personal use only Financial risk management in line with Group Board policy + Interest risk management: - Policy to ensure between 60% and 100% of current year interest rates are fixed - 88% hedged over next 12 months - Weighted average hedge maturity of 5.0 years - Weighted average hedge rate o
Slide 52: Interest rate hedge profile
For personal use only Interest rate Interest rate hedge profile + Interest rates are hedged to 88% over next 12 months + Weighted average hedge rate of 4.22%1 - NZD – hedge rate 4.39% - JPY – hedge rate 2.81% - HKD – hedge rate 2.13% - GBP – hedge rate 5.08%2 - Euro – hedge rate 1.80% - USD – hedge
Slide 53: Interest rate hedging profile
For personal use only Interest rate hedging profile1 Euro payable GBP payable HKD payable NZD payable JPY payable USD payable AUD receivable As at Fixed Fixed2 Fixed Fixed Fixed Fixed A$M Fixed June rate rate rate rate rate rate Rate €M % £M % HK$M % NZ$M % ¥M % US$M % % 2017 (620.0) 2.20 (465.0) 6.
Slide 54: Foreign currency balance sheet hedging maturity profile
For personal use only Foreign currency denominated balance sheet hedging maturity profile Currency Maturity Weighted average Amount receivable1 Amount payable1 exchange rate NZ$ 2017 / 2018 / 2021 1.1674 A$65.4m NZ$100.0m HK$ 2018 / 2020 / 2021 6.5396 A$529.4m HK$3,390.0m € 2017 / 2018 / 2020 0.7644
Slide 55: Exchange rates
For personal use only + Statement of Financial Position – exchange rates as at 30 June 2016 – AUDGBP – 0.5613 (30 June 2015 : 0.4903) – AUDEUR – 0.6725 (30 June 2015 : 0.6910) – AUDHKD – 5.7786 (30 June 2015 : 5.9739) – AUDBRL – 2.3718 (30 June 2015 : 2.3930) – AUDNZD – 1.0456 (30 June 2015 : 1.1381
Slide 56: Thank you
For personal use only thank+you