Scentre Group · ASX:SCG
Scentre — FY2018 Earnings Presentation
27 slides from Scentre's earnings presentation, Feb 20, 2019
Slide 1: 2018 Full Year Results
2018 FULL YEAR RESULTS Westfield Coomera, QLD
Slide 2: Scentre Group Overview
SCENTRE GROUP OVERVIEW Extraordinary platform with 41 Living Centres valued at over $54 billion 1 – Generating $24 billion of annual retail in-store sales across Australia and New Zealand – More than 7% of all retail sales in Australia occur in a Westfield Living Centre – Over 535 million customer v
Slide 3: Full Year Results
FULL YEAR RESULTS 31 December 2018 Funds From Operations per security 25.24 cents + 3.9% “We are pleased to Distribution per security 22.16 cents + 2.0% deliver these strong SCG share of AUM $39.1 billion + 8.0% results in line with our forecast, demonstrating Assets Under Management (AUM) $54.2 bil
Slide 4: Operating Performance
OPERATING PERFORMANCE 31 December 2018 Comparable Net Operating Income (NOI) + 2.5% “We are seeing more Portfolio Leased 99.3% customers coming to Total Lettable Area > 3.8 million sqm, increase of 193,400 sqm1 our living centres, coming more often as Customer Visits Per Annum > 535 million, increas
Slide 5: Highlights
HIGHLIGHTS Enhanced Customer Experience Active curation of retail, services and experiences to meet customer expectations – Introduced 437 new brands to the portfolio, and 317 existing brands grew their store network – More than 35% of the stores across our portfolio are experience-based offerings –
Slide 6: Retailer In-Store Sales
RETAILER IN-STORE SALES Comparable in-store sales growth psm 1 – Total specialty in-store sales were up 1.5% for the year 3 months to 31 Dec 2018 12 months to 31 Dec 2018 – > 400 sqm in-store sales were up 2.1% for the year Retail Services 1.0% 2.3% Leisure 0.4% 1.1% – < 400 sqm in-store sales were
Slide 7: Retailer In-Store Sales
RETAILER IN-STORE SALES Comparable specialty in-store sales growth psm by region 1 7 1. Total stable portfolio SCENTRE GROUP FULL YEAR RESULTS 2018 7
Slide 8: Development Activity
DEVELOPMENT ACTIVITY Total Project SCGShare GLA Added Completion Cost $m $m sqm 2018 Completed Projects – Commenced the NZ$790 million Plenty Valley 80 40 10,300 Q1 2018 (SCG share: NZ$400 million) redevelopment of Carousel 350 350 27,500 Q3 2018 Westfield Newmarket in 2018, opening in Q4 2019 Coome
Slide 9: Future Developments
FUTURE DEVELOPMENTS 1 Albany (NZ) 2 Barangaroo (NSW) 3 Booragoon (WA)1 7 4 Eastgardens (NSW) 5 Knox (VIC) 6 Marion (SA) 7 Stirling (Innaloo) (WA) 8 Sydney (NSW) Westfield Stirling, WA 3 11 8 9 St Lukes (NZ) 7 12 6 2 4 1 8 10 9 10 Tea Tree Plaza (SA) 5 11 Warringah Mall – stage 2 (NSW) 12 Whitford Ci
Slide 10: Scentre Group Portfolio
SCENTRE GROUP PORTFOLIO As at 31 Dec 2018 Total Centres 41 Gross Lettable Area (sqm) 3.8m SCG share of AUM $39.1bn 6 centres JV Partner share of AUM Assets Under Management (AUM) $15.1bn $54.2bn Brisbane $6.3bn 2 WHOLLY OWNED 4 JOINT VENTURES Cap Rates Range Average 3 Perth Adelaide Sydney 15 centre
Slide 11: Financial Performance
FINANCIAL PERFORMANCE Funds From Operations 3.9% $m 12 months to 12 months to Growth % 31 Dec 2018 31 Dec 2017 Net Operating Income 1,900.8 1,848.6 Management Income 46.1 45.4 FFO growth per security Project Income 85.3 80.1 Delivering 25.24 cents per security Income 2,032.2 1,974.1 2.9% Overheads (
Slide 12: Financial Position
FINANCIAL POSITION Balance Sheet $39.1bn $m 31 Dec 2018 31 Dec 2017 Total Property Investments 39,101.1 36,228.8 Total Assets 40,982.3 37,536.0 Property Investments up 8.0% Total Liabilities 16,419.6 14,081.0 Net Assets before Minority Interest 24,562.7 23,455.0 $23.6bn Minority Interest (925.0) (92
Slide 13: Debt Management
DEBT MANAGEMENT 31 December 2018 Debt metrics Net Debt $13.5bn Gearing (look through basis) Weighted average interest rate 33.9% 4.4% $2.1bn 33.9 % Weighted average debt maturity 4.4 years Liquidity Gearing Liquidity $2.1bn Interest rate exposure hedged percentage 69% Investment grade credit ratings
Slide 14: Debt Management
DEBT MANAGEMENT Maturity Profile 1,2 Facilities & liquidity 1,2 3.0 % $bn 2.5 Bonds 2.0 USD 22% 3.5 EUR 26% 4.0 1.5 GBP 10% 1.5 AUD 4% 0.6 1.0 Total 62% 9.6 0.5 Bank Facilities Drawn 26% 4.1 - Undrawn 12% 1.9 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 Total 38% 6.0 Bonds Drawn Facilities Undr
Slide 15: Outlook 2019 Forecast
OUTLOOK 2019 FORECAST Funds From Operations Growth approx. 3% “We are excited about Distribution per security 22.60 cents, +2.0% the prospects for our business and ability Comparable NOI Growth approx. 2.5% to continue to create long-term value for our securityholders.” PETER ALLEN CEO 15 SCENTRE GR
Slide 16: Appendix
APPENDIX 16 Westfield Carousel, WA SCENTRE GROUP FULL YEAR RESULTS 2018 16
Slide 17: Developments: Westfield Carousel, WA
DEVELOPMENTS Completed project WESTFIELD CAROUSEL, WA Overview Project Cost $350m (SCG share: $350m) Commencement Q1 2017 Completion Q3 2018 Highlights Incremental Project GLA 27,500sqm Westfield Carousel, WA Completed Centre GLA 110,000sqm New Anchors David Jones, H&M, new entertainment, dining and
Slide 18: Developments: Westfield Coomera, QLD
DEVELOPMENTS Completed project WESTFIELD COOMERA, QLD Overview Project Cost $470m (SCG share: $235m) Commencement Q2 2017 Completion Q4 2018 Highlights Completed Centre GLA 59,000sqm Westfield Coomera, QLD New Anchors Event Cinemas, Kmart, Target, Coles, Woolworths, new dining and leisure precinct S
Slide 19: Developments: Westfield Kotara, NSW
DEVELOPMENTS Completed project WESTFIELD KOTARA, NSW Overview Project Cost $160m (SCG share: $160m) Commencement Q3 2017 Completion Q4 2018 Highlights Incremental Project GLA 6,250sqm Westfield Kotara, NSW Completed Centre GLA 82,000sqm New Anchors H&M, Zara, new Kmart, JB Hi Fi Specialty Retail app
Slide 20: Developments: Westfield Tea Tree Plaza, SA
DEVELOPMENTS Completed project WESTFIELD TEA TREE PLAZA, SA Overview Project Cost $50m (SCG share: $25m) Commencement Q3 2017 Completion Q4 2018 Highlights Incremental Project GLA 3,500sqm Westfield Tea Tree Plaza, SA Completed Centre GLA 99,000sqm Dining & Leisure Expanded HOYTS with two LUX cinema
Slide 21: Developments: Westfield Newmarket, NZ
DEVELOPMENTS Active project WESTFIELD NEWMARKET, NZ Overview Project Cost NZ$790m (SCG share: NZ$400m) Commencement Q1 2018 Completion Q4 2019 Highlights Incremental Project GLA 52,000sqm Westfield Newmarket, NZ Completed Centre GLA 88,150sqm New Anchors David Jones, Farmers, Countdown, Event Cinema
Slide 22: Leasing & Retail Solutions
LEASING & RETAIL SOLUTIONS 31 Dec 2018 Comparable Net Operating Income grew by 2.5% in 2018. Portfolio Leased 99.3% This was primarily driven by contracted annual rent Average Specialty Store Rent (psm) $1,654 escalations of approx. CPI+2% Specialty Occupancy Cost 18.0% Lease Deals Completed Number
Slide 23: Profit & FFO
PROFIT & FFO Reconciliation from Profit to FFO Profit FFO FFO Financial 12 monthsto 12 monthsto Statement $m 31 Dec2018 Adjustments 1 31 Dec2018 Notes A B C = A +B Net operating income 1,833.0 67.8 1,900.8 Note 2(iii) Management income 2 46.1 — 46.1 Project income 3 85.3 — 85.3 Income 1,964.4 67.8 2
Slide 24: Balance Sheet
BALANCE SHEET Balance Sheet – Proportionate 1 $m Consolidated EquityAccounted 31 Dec2018 A B C = A +B Cash 206.1 7.8 213.9 Property Investments – Shopping centres 35,522.6 2,828.4 38,351.0 – Development projects and construction in progress 522.2 227.9 750.1 Total property investments5 36,044.8 3,05
Slide 25: Cash Flow
CASH FLOW Cash flows from operating activities – look through basis $m 31 Dec 2018 Receipts in the course of operations (including GST) 2,940.8 Payments in the course of operations (including GST) (930.9) Net operating cash flows from equity accounted entities 125.7 Income and withholding taxes paid
Slide 26: Interest Rate Hedging Profile
INTEREST RATE HEDGING PROFILE $ Fixed rate debt Derivatives $ debt payable $ swap payable NZ$ swap payable NZ$ collar payable 31 December 1 $m Fixed rate $m Fixed rate NZ$m Fixed rate NZ$m Strike rate 2018 (580.0) 3.25% (8,147.3) 2.86% (510.0) 3.08% (70.0) 3.39%/5.25% 2019 (430.0) 3.31% (8,035.4) 2.
Slide 27: Important Notice
IMPORTANT NOTICE All amounts in Australian dollars unless otherwise specified. The financial information included in this document is based on the Scentre Group’s IFRS financial statements. Non IFRS financial information included in this document has not been audited or reviewed. This document conta