Stockland · ASX:SGP
Stockland — FY2023 Earnings Presentation
38 slides from Stockland's earnings presentation, Aug 24, 2023
Slide 1: FY23 Results
¥% Stockland FY23 Results 24 August 2023
Slide 2: Acknowledgement of Traditional Custodians
Stockland acknowledges the Traditional Custodians and knowledge-holders of the land on which we live, work and play and pay our respects to their Elders past, present and emerging. We acknowledge and thank all Aboriginal and Torres Strait Islander People for enriching our nation with their historica
Slide 3: Agenda
Agenda Group update Tarun Gupta MD & CEO Financial results and Alison Harrop capital management CFO Commercial Property Louise Mason CEO, Commercial Property Communities Andrew Whitson CEO, Communities Summary and Tarun Gupta Outlook MD & CEO 3 FY23 Results Figures are rounded to nearest million, un
Slide 4: Group update
Group update Tarun Gupta MD & CEO Waterlea, VIC
Slide 5: FY23 Results
FY23 Results Strong FY23 operational and financial results FY23 pre-tax FFO per security of 37.1 cents Execution of strategy driving performance High quality portfolio reflected in strong operating metrics Balance sheet strength and flexibility 5 FY23 Results Yennora Distribution Centre, NSW
Slide 6: Execution delivering results
Execution delivering results Reshape portfolio Accelerate pipeline Scale partnerships Sustainable growth Demonstrated results from dynamic reshaping Enhancing our business through development Consistent execution delivering returns: High-quality platform focused on sustainable of the portfolio: and
Slide 7: FY23 Result
FY23 Result Strong operational and financial results Pre-tax FFO Pre-tax FFO per security FY23 Highlights $883m 37.1 cents • FY23 pre-tax FFO per security of 37.1 cents, and post-tax FFO per security of 35.6 cents 3.8% on FY22 3.9% on FY22 • Execution of strategy delivering meaningful and high-quali
Slide 8: ESG strategy
ESG strategy1 Focused on innovation, scale and economically sustainable solutions Decarbonisation Circularity Social impact Resilience A practical, 1.5 degree aligned2 pathway Principles to make resources Enhancing our social impact Adapt and regenerate for to Net Zero emissions stay useful, longer
Slide 9: Innovative people and culture
Innovative people and culture Bringing our purpose to life Committed to wellbeing and diversity Innovative, future-focused and climate conscious culture • Motivated team, with employee • Fostering innovative • Launched Stockland • ESG deeply embedded Equileap Gender Equality Global engagement at 88%
Slide 10: Financial results and capital management
Financial results and capital management Alison Harrop CFO Stockland Head Office, Sydney CBD, NSW
Slide 11: Strong capital position
Strong capital position Disciplined management and redeployment capacity Gearing1 Available liquidity Interest Cover2 • Robust balance sheet with gearing at 21.9%, down 150 bps from FY22 21.9% ~$1.6bn 6.2x Down from 23.4% Cash and undrawn facilities 12-month rolling average to • Substantial liquidit
Slide 12: Funds from operations
Funds from operations Pre-tax FFO growth of 3.8% $m FY23 FY22 Change Reflects comparable FFO growth of 3.5%1 across CP portfolio; contributions from new Logistics development completions; and FFO result reflects: Commercial Property FFO 636 564 12.7% an uplift in CP Development and Management Income
Slide 13: FY23 operating cashflows
FY23 operating cashflows Operating Cashflow1 Operating Cashflow before land acquisitions1 $332m $981m Focused cashflow management $918m in FY22 $1,536m in FY22 • FY23 distribution reflects payout ratio of 74% of post-tax FFO Cash movements between FY22 and FY23 driven by investments for future growt
Slide 14: Commercial Property
Commercial Property Louise Mason CEO, Commercial Property Stockland Birtinya, QLD
Slide 15: Commercial Property: Execution of strategy delivering returns
Commercial Property Execution of strategy delivering returns Accelerate Reposition and Focus Maximise • Delivery of Logistics pipeline generating high-quality • Town Centres portfolio benefiting from active remixing • Progressing potential pipeline of longer-dated income growth and repositioning str
Slide 16: Commercial Property: Strong performance from high-quality portfolio
Commercial Property Strong performance from high-quality portfolio Commercial Property FFO of $636m and comparable FFO growth of 3.5%1 underpinned by: • Strong comparable FFO growth in Town Centres of 4.8%1 and Logistics 4.6%1 Asset value3 • $10.5bn Consistently high rent collection rates across the
Slide 17: Commercial Property: High quality income growth mitigating cap rate expansion
Commercial Property High quality income growth mitigating impact of cap rate expansion Net valuation decrease of $250m1 2.3% decrease on 30 June 2022 book value Brooklyn Distribution Centre, VIC Artist impression, Affinity Place, North Sydney , NSW Stockland Shellharbour, NSW Commercial Property Por
Slide 18: Logistics: Strong performance from high quality portfolio
Logistics Strong performance from high quality portfolio • Comparable FFO growth of 4.6%1, benefiting from favourable demand-supply dynamics in strong markets Portfolio value7 - - Re-leasing spreads2 accelerating from 19.6% over 1H23, to 23.9% over 2H23; averaging 21.1% over FY23 Occupancy and rent
Slide 19: Logistics: Strong earnings visibility from attractive pipeline
Logistics Strong earnings visibility from attractive pipeline Total development pipeline ~$6.4bn2 Delivery of ~$450m developments since June 20225 representing ~200,000 sqm NLA Targeting ~6% Yield on cost 1. Subject to approvals and where applicable, the acquisition and/or completion of the property
Slide 20: Workplace: Solid performance with value-add potential
Workplace Solid performance with value-add potential • ~$2.0bn1 Workplace portfolio, with the majority currently being positioned for future development, including mixed-use Portfolio value1 • Comparable FFO growth of (1.9)%2 and occupancy of 93.8%3,4, reflecting vacancy in one asset • Re-leasing sp
Slide 21: Workplace: Mixed use opportunities providing optionality
Workplace Mixed use opportunities providing optionality • Strategic holdings of well-located sites providing mixed use development opportunities • Progressing opportunities at M_Park Stage 2, NSW, Piccadilly Complex, NSW and Triniti, NSW 1 • Maintaining optionality over development decisions includi
Slide 22: Town Centres: Strong performance from essentials-based portfolio
Town Centres Strong performance from essentials-based portfolio • Total comparable sales growth of 14.7%, and comparable specialty sales growth of 19.8% Active repositioning delivering results: ~$2bn non-core disposals over FY16-23 versus the prior corresponding period which reflected COVID-19 trade
Slide 23: Town Centres: Well positioned portfolio
Town Centres Well positioned portfolio FY23 FY22 Town Centres FFO $379m $350m • Strong comparable FFO growth of 4.8%1, with tenant confidence and demand reflected in: Asset value7 $5,201m $5,543m • Positive leasing spreads of 3.1%2 while occupancy costs reduced to 14.8% from 15.8% in FY223 Occupancy
Slide 24: Commercial Property: FY24 focus and outlook
Commercial Property FY24 focus and outlook Yennora Distribution Centre, NSW Artist impression, M_Park, NSW Stockland Wetherill Park, NSW Logistics Workplace Town Centres Deliver pipeline Progressing mixed-use opportunities Portfolio optimisation • Maximise income generation opportunities through • P
Slide 25: Communities
Communities Andrew Whitson CEO Communities
Slide 26: Communities: Progress on strategy demonstrating results
Communities Progress on strategy demonstrating results Extend Grow Optimise • Solid performance across Communities in an environment • Acquisition of five LLC projects3 providing further runway for • Execution of strategy delivering diversified and growing of rising interest rates: accelerated devel
Slide 27: Communities: Strong FFO results
Communities Strong FFO results Communities FFO up ~16.5%, underpinned by: • MPC settlements of 5,4031 at 26.0% development operating profit margin • LLC settlements of 382 at 29.6% development operating profit margin • $15m in high-quality Rental Income2, benefiting from a full year of LLC operation
Slide 28: Masterplanned Communities: Resilient performance
Masterplanned Communities Resilient performance • Delivered 5,4031 settlements in an environment of rising interest rates, supply chain constraints and significant inclement weather FY23 Development FY23 Development FFO EBIT • 26.0% development operating profit margin, benefiting from the completion
Slide 29: Masterplanned Communities: Sales reflecting interest rate increases
Masterplanned Communities Sales reflecting interest rate increases Net sales by quarter 2,036 1,974 1,947 1,891 1,868 1,799 382 314 180 • Net sales of 3,770 lots, reflecting interest rate increases throughout the year 327 324 250 1,562 1,545 1,350 1,375 697 219 204 1,149 580 630 550 1,121 • 4Q23 gro
Slide 30: Masterplanned Communities: Market outlook
Masterplanned Communities Market outlook 12-month outlook State Price Volumes Market commentary • Structural drivers and outlook remain supportive, with low unemployment rates and a rebound in net overseas migration amidst ongoing constrained land supply • Price growth limited by affordability const
Slide 31: Masterplanned Communities: Positioning for market recovery
Masterplanned Communities Positioning for market recovery Affordable mix increasing while stock on market remains low vs historical averages1 • Leveraging scale to expand affordable alternatives, achieving: Average lot size (sqm) % affordable mix - Speed to market – ability to rapidly pivot a stage
Slide 32: Land Lease Communities: Strong performance
Land Lease Communities Strong performance • FY23 FFO of $58m reflecting: FY23 Development Total settlements FFO in FY23 - Development income from 382 settlements at a development operating profit margin of $58m 382 29.6% - Transfer of Stockland Halcyon Nirimba, QLD and Stockland Halcyon Berwick, VIC
Slide 33: Land Lease Communities: Sustained demand
Land Lease Communities Sustained demand Net sales by quarter • FY23 net sales of 270 homes continues to reflect a deliberate slowing of releases to allow production to catch up • Sustained demand for LLC development product, supported by a modest improvement in the established housing market 136 100
Slide 34: Land Lease Communities: Expanded pipeline and accelerated development
Land Lease Communities Expanded pipeline and accelerated development activity • Acquisition of five LLC projects1 providing further scale for the LLC platform and runway for development activity • Total portfolio of ~10,5002 home sites, including a development pipeline of ~8,200 • Activation of pipe
Slide 35: Communities: FY24 focus and outlook
Communities FY24 focus and outlook Willowdale, NSW Stockland Halcyon Lakeside, QLD Masterplanned Communities Land Lease Communities Positioning for market recovery Capitalising on positive growth momentum • Good visibility into FY24 with 4,275 contracts on hand • Good visibility into FY24 with 387 c
Slide 36: Summary and Outlook
Summary and Outlook Tarun Gupta MD & CEO
Slide 37: Summary and outlook
Summary and outlook Outlook • Execution of strategy delivering results and meaningful income contributions • Town Centres portfolio mix well positioned for inflationary environment • Delivery of Logistics pipeline underway, generating high-quality recurring income as developments complete • Progress
Slide 38: Important Notice
Stockland Corporation Limited ACN 000 181 733 Stockland Trust Management Limited ACN 001 900 741; AFSL 241190 As a responsible entity for Stockland Trust ARSN 092 897 348 Important Notice This Presentation and its accompanying Annexures (“Presentation”) has been prepared and issued by Stockland Corp