Ingenia Communities Group · ASX:INA
Ingenia Communities — H1 2018 Earnings Presentation
41 slides from Ingenia Communities's earnings presentation, Feb 20, 2018
Slide 1: 1H18 Results Presentation
Ingenia 1H18 Results Presentation 20 February 2018 xIngenia
Slide 2: For personal use only
ak <\Ingenia Ingenia Holidays 3k ~ Ingenia Gardens 2
Slide 3: Highlights
Highlights Ingenia FINANCIAL (Y } STRATEGY = ( Y ) (> / OPERATIONS [ } Vv) f an DEVELOPMENT ( Y ) rade EBIT $19.3 million - up 41% on 1H17 Underlying profit EPS 7.1 cents - up 18% on 1H17 Revenue of $76.9 million - up 17.6% on 1H17 Non-core asset sales well progressed Over 7,000 income producing sit
Slide 4: Business overview
Business overview creating Australia’s best lifestyle communities For personal use only Ingenia has Over 7,000 Income producing sites 64 Australian communities Portfolio now Over 5,400 rental and lifestyle residents $717 million 790,000 ‘room nights’ p.a Cabins, caravan and camping Stable rent base
Slide 5: Performance and capital management
Performance and capital management = ae — — New cabins 5 gee © ; SS ee 3 ==. : | Be \ ss f 2 : 124 Cabins \\ ® ; 193 sites \ oy + Over 100,000 \ eed ens nights per annum oO Potential to add 29 ’ LL ‘ \ new cabins Ingenia Holidays Cairns Coconut, Qld xIngenia ;
Slide 6: Key financials
Key financials successful integration of new assets delivering increased earnings Key Financial Metrics | His | 4H17 Revenue $76.9m $65.4m EBIT $19.3m $13.7m cz. - Revenue and EBIT up significantly as new acquisitions contribute and margins expand Statutory profit $17.1m $7.6m Underlying profit’ $14
Slide 7: Strong growth in EBIT from core business
Strong growth in EBIT from core business EBIT Lifestyle and Holidays operations $13.2m $7.5m Lifestyle development $4.2m $3.9m Ingenia Gardens $6.1m $5.8m Other $0.2m $1.2m Portfolio EBIT $23.7m $18.4m Corporate costs ($4.4m) ($4.7m) EBIT $19.3m, $13.7m Lifestyle and Holidays operations Lifestyle de
Slide 8: Capital management
Capital management well positioned to fund development pipeline Loan to value ratio (covenant <50%) 351% 277% + Non-core asset sales providing capital for reinvestment . . * Available unutilised debt under existing facilities Gearing ratio" 28.1% 21.8% » Growing cash inflows - operations and home sa
Slide 9: Development pipeline to drive NAV growth
Development pipeline to drive NAV growth Ingenia NAV per security 99253 $2.50 Development $0 x) * 2,201 sites on balance sheet - $59,000 per development site . » Development pipeline will create considerable value over next 5 years as built out and settled + Platform also includes options and contra
Slide 10: Growth in value across core portfolios
Growth in value across core portfolios lifestyle capitalisation rates continue to compress porto Av. Cap Rate Av. Cap Rate Dec 17 » Independently valued 23 assets 1H18 (thirteen ortfolio Dec 17! Jun 17! Book Value ($m) lifestyle and holiday communities) Lifestyle and Holidays 8.16% 8.37% 585.47 * Ga
Slide 11: For personal use only
Fraser Property se Park Ridge Ingenia Lifestyle Chambers Pines ) = Ohpels F us aD (Ce) 0) >. i)
Slide 12: Underlying demand drivers remain strong
Underlying demand drivers remain strong many seniors will struggle to fund a comfortable retirement Median House Price ($) Home Ownership (Age) Limited savings or Pension superannuation 1,400,000 100% 100% g 1,200,000 oo 3 4,000,000 ov 70% } According to ASFA a 800,000 60% oe i couple requires $60,4
Slide 13: Excellent visibility on future earnings growth
Excellent visibility on future earnings growth EBIT $’m Dev profit on extra 50-100+ homes p.a. FY18 EBIT' $45-47m Rents on 170+ new tourism cabins Rents on 100+ > new cabins ~ Rents on 2,840 new homes ~ ¢ Increase development » to 350+ homes p.a C * Add land rents on 2,840 new homes 2,840 Developmen
Slide 14: For personal use only
For personal use only 14
Slide 15: Ingenia Lifestyle and Holidays
Ingenia Lifestyle and Holidays over 90% weighting to capital city and coastal markets 2 ae Smee Strong growth in rental sites as new acquisitions are integrated and home settlements increase Total properties 33 29 * 14% Permanent sites 2.478 1.807 Increased weighting to target markets - , , signific
Slide 16: Ingenia Lifestyle and Holidays
Ingenia Lifestyle and Holidays rental income and margin growing Lifestyle and Holidays Operations | His 1H17 Permanent rental income $10.6m $7.1m Annuals rental income $2.4m $2.0m Tourism rental income $17.7m $10.6m Commercial rent $0.2m $0.2m Total rental income $30.9m $19.9m EBIT $13.2m $7.5m EBIT
Slide 17: Ingenia Holidays
Ingenia Holidays portfolio expansion and reinvestment enhancing profile and returns Significant growth achieved (like for like revenue up over 6%) » Key performance indicators tracking ahead of industry (occupancy 7% above and RevPAR $12 above industry averages) » Actively marketing to unique databa
Slide 18: Ingenia Holidays Cairns Coconut, QLD
Ingenia Holidays Cairns Coconut, QLD one of Australia’s most awarded holiday parks 3° (Value for money hotels - Australia) 6"" (Top hotels for families - Australia) Performance in line with targets and Digital and OTA booking channels Asset strategy will deliver further well above industry growing g
Slide 19: Ingenia Gardens (seniors rental)
Ingenia Gardens (seniors rental) strong, stable, government supported earnings operational performance Total revenue $14.5m $14.1m EBIT $6.1m $5.8m . EBIT up 5% as incremental rent growth and occupancy contribute EBIT margin 41.8% 411% oI ° + Average rent now $333 per week * Average resident tenure
Slide 20: Development
Development settling more homes at expanding margins $113,000 per new home 1H18 New home settlements 90 82 . + On track to meet target gross above ground development Deposited/Contracted (at 31 Dec) 187 100 profit per home of $115,000+ as new high margin projects Average above ground profit ($7000)
Slide 21: On track to meet settlement guidance
On track to meet settlement guidance good momentum into FY19 » Strong pipeline of contracts and deposits supports achievement of FY18 guidance and settlements growth into FY19 » Latitude One, Lake Conjola and The Grange on track for settlements from April 2018 300 Turnkey Settlements 100 117 YTD Set
Slide 22: Significant development pipeline in place
Significant development pipeline in place Targeting eleven new or expansion projects Latitude One Avina (new) (expansion) > $500 Plantations 3 (new) Nerang 5 (new) g Hervey Bay Latitude One = (new) (expansion) 8 Upper Coomera P & > 8375 (new) © E S x= 3g 8 - Chambers Pines g Lake Conjola Blueys Beac
Slide 23: New projects supplement projects currently in market
New projects supplement projects currently in market increasing focus on large, long-life projects and site expansions Key projects gaining momentum and delivering price growth as they mature Sites Development commencement to completion The Grange 52 Lake Conjola 114 Latitude One 470 Plantations 196
Slide 24: Ingenia Lifestyle Latitude One, Port Stephens NSW
Ingenia Lifestyle Latitude One, Port Stephens NSW first greenfield project on track Approval received in January 2018 for additional 41 sites (increase to 270 sites) Capital works well advanced Civil infrastructure works to Stage 1 and entry road completed Service connections underway Stage 2 civil
Slide 25: High median sales price supports project
For personal use only High median sales price supports project 25
Slide 26: Ingenia Lifestyle The Grange, Morisset NSW
Ingenia Lifestyle The Grange, Morisset NSW expansion of existing community well progressed Expansion (56 sites) of established community New clubhouse, display homes and first homes now complete Civil infrastructure works nearing completion First settlements commenced in October 2017 Further 33 home
Slide 27: Ingenia Holidays Lake Conjola, NSW
Ingenia Holidays Lake Conjola, Lake Conjola NSW new homes on track for settlements from April * Creation of new home precinct complementing successful tourist park » Stage 1 (39 homes) civil infrastructure works well progressed with completion due Q4-18 * First homes now on site with 2 - 3 homes per
Slide 28: Outlook: ageing of population and housing affordability
Outlook: ageing of population and housing affordability will drive earnings growth Macro/Residential Housing Housing affordability and ageing population driving long-term demand Slowdown in residential housing remains key risk - diverse product, price point and market exposure provide mitigation Res
Slide 29: Outlook: further growth and capital recycling
Outlook: further growth and capital recycling Ingenia Lifestyle Chambers Bay Clubhouse Ingenia Improve performance of existing assets to drive revenue growth and leverage operating and sales platform Accelerate build out of development pipeline to deliver new rental contracts and increase margins Co
Slide 30: Appendix
Ices Append Lifestyle Chamb:
Slide 31: Appendix 1: Underlying profit
Appendix 1: Underlying profit lifestyle communities key driver of earnings growth For personal use only 1H18 1H17 ($m) ($m) Lifestyle and Holidays – Operations 13.2 7.5 Lifestyle Development 4.2 3.9 Ingenia Gardens 6.1 5.8 Settlers 0.2 1.2 Portfolio EBIT 23.7 18.4 Corporate costs (4.4) (4.7) EBIT 19
Slide 32: Appendix: reconciliation to EBIT and underlying profit
Appendix 2 reconciliation to EBIT and underlying profit For personal use only Lifestyle Lifestyle Ingenia (A$m) Operations Develop. Gardens Settlers Corporate TOTAL Rental income 30.7 - 12.7 0.1 - 43.4 Accrued DMF fee income - - - 0.5 - 0.5 Manufactured home sales - 25.1 - - - 25.1 Catering income -
Slide 33: Appendix 3: Cash flow
Appendix 3: Cash flow 1H18 1H17 For personal use only ($m) ($m) Opening cash at 1 July 9.6 15.1 Rental and other property income 52.8 39.2 Property and other expenses (43.9) (31.2) Net cash flow associated with manufactured home development 6.1 3.5 Net borrowing costs paid (3.9) (2.9) All other oper
Slide 34: Appendix 4: Balance sheet
For personal use only Appendix 4: Balance sheet 31 Dec 2017 30 Jun 2017 ($m) ($m) Cash 7.1 9.6 Inventory 25.7 21.6 Investment property 734.0 693.5 Assets held for sale 30.4 - Other assets 24.2 23.5 Total assets 821.4 748.2 Borrowings (excluding finance leases) 231.4 166.5 Derivatives 0.2 0.3 Retirem
Slide 35: Appendix 5: Valuations - existing communities
Appendix 5: Valuations - existing communities capitalisation rates progressively tightening Lifestyle and Mixed-use Communities 11.50% a e e 10.50% | xe The Grange e 2 950% | 4 @ = — Surfrider © eos £ Rainbow Waters g e S 8.50% aa “e. 2 Bonny Hills® @ Fraser Lodge = 7.50% waa, Ahan Bass Hill @ a 4 L
Slide 36: Appendix 6: Ingenia Holidays
Appendix 6: Ingenia Holidays solid demand for caravan and camping underpinning further growth Caravan Sector Consolidation and Revenue Growth gs ‘e00 § In 2016 domestic caravan and 8 ioe — ta s=-----. toe r camping nights increased by 16% & 1200 Te AT TIM 1208 to 51.6 million nights" 1.000 PPE Ey ap
Slide 37: Appendix 7: Competitor landscape
Appendix 7: Competitor landscape Major Competitor Properties Locations Strategy For personal use only Ingenia Communities 33 NSW, QLD, and VIC Acquire lifestyle and tourism parks and undertake site expansions and (ASX: INA) greenfield development. Discovery Parks 60 NSW, NT, QLD, SA, Acquired from p
Slide 38: Appendix 7: Competitor landscape (cont)
Appendix 7: Competitor landscape (cont) Major Competitor Properties Locations Strategy For personal use only Living Gems / Gem Life 12 QLD, NSW, VIC Family owned - developer and operator of greenfield residential parks. Joint venture (Gem Life) with Singaporean based Thakral to expand. National Life
Slide 39: Appendix 8: US market performance history
Appendix 8: US market performance history In the US, Manufactured Housing has significantly outperformed other commercial property classes – For personal use only even through the GFC Same Community NOI Growth REIT Sector Indexed Same Community NOI Growth 240% 10.0% 220% Manufactured Housing Mall Eq
Slide 40: Contact information
Contact information SIMON OWEN CEO & Managing Director Tel: +612 82630501 Sowen@ingeniacommunities.com.au a mT (it AAI ql WN DONNA BYRNE Group Investor Relations Manager Tel: +612 8263 0507 Mob: +61 401 711 642 dbyme@ingeniacommunities.com.au INGENIA COMMUNITIE GROUP Level 9, 115 Pitt Street Sydney
Slide 41: Disclaimer
Disclaimer This presentation was prepared by Ingenia Communities Holdings Limited (ACN 154 444 925) The forward looking statements included in this presentation involve subjective judgment and For personal use only and Ingenia Communities RE Limited (ACN 154 464 990) as responsible entity for Ingeni
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