Goodman Group · ASX:GMG
Goodman — Investor Presentation (October 2008)
32 slides from Goodman's investor presentation, Oct 29, 2008
Slide 1: Keeping focused
Keeping focused Goodman Group Capital management initiatives and Asian restructure 29 October 2008 NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, US PERSONS
Slide 2: Disclaimer
2 Disclaimer This document has been prepared by Goodman Group (Goodman International Limited (ABN 69 000 123 071) and Goodman Funds Management Limited (ABN 48 067 796 641; AFSL Number 223621) as the Responsible Entity for Goodman Industrial Trust (ARSN 091 213 839) (RE)). Presentation of general bac
Slide 3: Glossary
3 Glossary Term Meaning ABPP + Arlington Business Parks Partnership ASX + Australian Securities Exchange or ASX Limited or the financial market which it operates as the case requires Cap rate + Capitalisation rate Capex + Capital expenditure Core+ funds + Where a fund has development capacity with p
Slide 4: Executive summary
4 Executive summary + Goodman Group (Goodman or Group) is undertaking a number of initiatives designed to both strengthen the Group's capital position as well as streamline its Asian business + Fully underwritten equity issue raising $955m (including Macquarie Bank Ltd’s (Macquarie) consideration as
Slide 5: Contents
5 Contents + Section 1 Capital management initiatives and Asian restructure + Section 2 Goodman Group update + Section 3 Recap of investment case + Appendix A Goodman Group overview Exchange rate assumptions: AUD/NZD 1.1, AUD/HKD 5.1, AUD/GBP 0.41, AUD/EUR 0.53, AUD/USD 0.67, AUD/JPY 64.9. Goodman G
Slide 6: Section 1 – Capital management initiatives and Asian restructure
6 Section 1 – Capital management initiatives and Asian restructure
Slide 7: Capital management initiatives
7 Capital management initiatives + In light of significant volatility and dislocation in capital markets, Goodman is pursuing a range of initiatives to strengthen the Group’s balance sheet Equity raising – $955m + Fully underwritten equity raising of $955m including Macquarie’s consideration for its
Slide 8: Capital management initiatives
8 Capital management initiatives Fund co-investments + Continue to sell down fund cornerstone investments to target levels + A number of investors are currently in due diligence across a range of individual funds Reduced allocation to development + Goodman is setting more rigorous hurdles for develo
Slide 9: Asian platform restructure
9 Asian platform restructure + Goodman is acquiring Macquarie’s interests in the Macquarie Goodman Asia (MGA) joint venture (ex Japan) for $200m (HK$1,010m) + Results in one streamlined pan Asian platform (ex Japan), which management views as highly strategic to long-term growth + Goodman to benefit
Slide 10: Asian platform restructure
10 Asian platform restructure + Total consideration to Macquarie of $200m (HK$1,010m) for its Hong Kong interests and Asian rights (ex Japan) + Macquarie has agreed to use up to 100% of its consideration to apply for Goodman securities via sub underwrite of the equity issue (will be scaled back to t
Slide 11: Section 2 – Goodman Group update
11 Section 2 – Goodman Group update
Slide 12: Goodman capital position
12 Goodman capital position + Announced initiatives significantly enhance Goodman’s capital position – Reduces proforma headline gearing from 39.9% to 30.9% (constant currency) and 35.0% post FX movements – Identified future asset sales would reduce gearing to 32.6% (post FX movements) – Available l
Slide 13: Debt facility overview
13 Debt facility overview + Capital management initiatives strengthen Goodman’s ability to refinance upcoming expiries – $1.5bn of available liquidity post initiatives (pre identified asset sales) enhances Goodman’s ability to meet commitments – Goodman can repay CY08 and CY09 expiries from availabl
Slide 14: Proforma statement of financial position
14 Proforma statement of financial position 30 Jun 08 Adjustments Proforma Post FX Balance sheet impact ($m) ($m) ($m) ($m) Cash 639 (577) 62 Investments 6,406 247 6,653 Intangibles 1,073 34 1,107 Other assets 1,515 (69) 1,446 Total assets 9,634 (366) 9,268 10,346 Debt 4,229 (1,325) 2,904 Other liab
Slide 15: Gearing bridge
15 Gearing bridge + The chart below illustrates the impact on gearing of capital management initiatives and foreign exchange movement since 30 June 2008 Goodman Group Capital management initiatives and Asian restructure 29 October 2008 NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES OR TO, OR F
Slide 16: Gearing analysis
16 Gearing analysis + Goodman’s gearing remains comfortably within covenant limits – no gearing covenant breach in any scenario represented in the table below Gearing sensitivity to asset devaluations and A$ depreciation Asset revaluations1 -% (5.0%) (10.0%) (15.0%) (20.0%) (25.0%) 5.0% 29.8% 31.2%
Slide 17: Goodman funds platform
17 Goodman funds platform + Goodman is recognised as an industrial specialist throughout key Asia Pacific and European markets + Deep longstanding relationships with large pension funds, sovereign funds, fund of funds and other institutions – Many invest across multiple fund vehicles and in the Grou
Slide 18: Goodman funds platform
18 Goodman funds platform + Goodman fund vehicles in strong financial position – Principles agreed with all ABPP investors (subject to final approvals) for a fund recapitalisation via contribution of circa $730m (£300m) of real estate in exchange for fund equity – GEBPF has asset specific debt and h
Slide 19: FY09 earnings
19 FY09 earnings + The Group is setting more rigorous hurdles for development starts on balance sheet and within funds given the current dislocation in real estate and credit markets + Assuming only known transactions, rental income and base management fees received for balance of FY09, Goodman’s EP
Slide 20: FY09 earnings
20 FY09 earnings + Base case operating assumptions result in circa $173m reduction in FY09 EBIT estimate Earnings reconciliation Operating EBIT EPS equivalent Operating EBIT mix table Original FY09 target FY09 base case ($m) (cps) Investment 45 – 55% 67 – 72% Prior FY09 EBIT guidance 790 36.0 Manage
Slide 21: Section 3 – Recap of investment case
21 Section 3 – Recap of investment case
Slide 22: Recap of investment case
22 Recap of investment case + Goodman is undertaking a number of initiatives designed to both strengthen the Group's capital position as well as streamline its Asian business + Fully underwritten equity issue raising $955m including Macquarie’s consideration for Asian JV interests (ex Japan) $1+ bil
Slide 23: Risks
23 Risks + This section discusses some of the key risks associated with an investment in Goodman. Before investing in Goodman, you should consider whether this investment is suitable for you. Potential investors should consider publicly available information on Goodman (such as that available on the
Slide 24: Risks
24 Risks + Employees: The Group is reliant on retaining and attracting quality senior executives and other employees. The loss of the services of any of the Group’s senior management or key personnel, or the inability to attract new qualified personnel, could adversely affect the Group’s operations.
Slide 25: Appendix A – Goodman Group overview
25 Appendix A – Goodman Group overview
Slide 26: Overview
26 Overview Leading global industrial property group + One of the world’s leading specialised industrial property groups + Integrated property group that owns, develops and manages industrial property and business space + Global capability built with local expertise Note: As at 30 June 2008. All amo
Slide 27: Overview
27 Overview Global presence + Headquartered in Australia with 1,240 professionals in 39 cities across Asia Pacific and Europe + Platform allows Goodman to service international customers and provide investment opportunities to global investors Note: As at 30 June 2008. All amounts quoted in Australi
Slide 28: Overview – History
28 Overview History Goodman Group Capital management initiatives and Asian restructure 29 October 2008 NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, US PERSONS
Slide 29: Overview
29 Overview Goodman Funds + Series of dedicated geographic funds investing in high quality real estate Partnership + Generally funds have first rights to acquire assets approach + Increasingly providing exposure to development activities to generate enhanced returns + Dedicated fund managers and loc
Slide 30: Overview
30 Overview Customer service offering + Central to the success of Goodman’s business is its Customer Service Model which underpins the long-term commitment to over 1,300 customers in Australia, China, Europe, Hong Kong, Japan, New Zealand and the United Kingdom + Goodman’s business strategy encompas
Slide 31: Overview
31 Overview Investors + Goodman funds provide investment opportunities across six regions/economies – Funds denominated in local currencies + Goodman takes a partnership approach to relationships with investors – 49 global investors in two or more Goodman funds1 + 44% (by value) of investors are int
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