Stockland · ASX:SGP
Stockland — Non-Deal Roadshow (May 2012)
19 slides from Stockland's roadshow presentation, May 2012
Slide 1: Asia Roadshow
Highlands, Vic Asia Roadshow May 2012 www.stockland.com
Slide 2: FY12 Group performance update
FY12 update FY12 Group performance update We are on track to achieve FY12 revised EPS guidance of 30.5 cents • Retail NOI comparable growth expected to be 3.5 – 4%1 • Residential Communities leads remain strong, but customers cautious and conversion rates lower • Retirement Living on track to achiev
Slide 3: Change of Retirement Living accounting to closely align with cash flow
FY12 update Change of Retirement Living accounting to closely align with cash flow We are simplifying Retirement Living accounting • Historically earnings were a combination of cash and accrual/accounting adjustments • Going forward, underlying profit will be closely aligned with cash flows • Very c
Slide 4: We are focused on executing our strategy and increasing returns
Strategy We are focused on executing our strategy and increasing returns Asset mix over time 2% Apartments & UK 8% Office & 24% Industrial Office & Industrial 35% Retail ~65% Retail 42% Retail 36% Retirement 11% Retirement ~12% Retirement 4% Residential Residential 22% Residential ~23% 18% 2009 Toda
Slide 5: Our strategy is built on population growth – it’s a safe bet
Strategy Our strategy is built on population growth – it’s a safe bet Annual population growth1 350 Bipartisan political support 300 for population growth of 330,000 people p.a. requiring: 250 • 160,000 new dwellings Thousands of people 200 (100,000 detached homes) 150 100 • >500,000 sqm new retail
Slide 6: We provide affordable products for the mass market
Strategy We provide affordable products for the mass market Thin, volatile market $125,000 pa household All businesses target the income same customer demographic Deep and resilient market with over 3 million households Focus on corridors with high • >80% home population growth ownership • <5% u
Slide 7: We are responding to the structural changes in retail
Retail We are responding to the structural changes in retail Spending habits are changing Continued focus on value and convenience • Discretionary spending is declining • Our centres are heavily weighted towards food and services • Online retailing is growing • Specialty retailers are predominantly
Slide 8: We are developing our retail centres for resilience and growth
Retail We are developing our retail centres for resilience and growth Investing to create leading centres in Moving up the retail hierarchy1 growing trade areas • Development capex ~$2bn over 5 years 5 centres Major regional • Average 14% incremental IRR (avg ~70,000 sqm) • Increasing market share t
Slide 9: The market for new housing is nearing a cyclical low
Residential The market for new housing is nearing a cyclical low Annual Residential Building Approvals 220,000 Oversupply 200,000 GST “pull forward” Government 180,000 stimulus Interest rates rise “GFC” 20% upside to long-term 160,000 average Post GFC downturn 140,000 120,000 Floor around 120,000 10
Slide 10: The yield curve points to a more positive outlook
Residential The yield curve points to a more positive outlook Housing sentiment tied to interest rates 1 200 4% Sentiment towards home buying follows interest rates 150 6% • The mood can change quickly 100 8% 50 The market is pricing in significant rate cuts • Futures pricing suggests a 90 bps rate
Slide 11: Our affordable products are attracting value-conscious buyers
Residential Our affordable products are attracting value-conscious buyers ~$200k is the affordability threshold for residential lots • Need to reduce lot sizes to capture sales and maintain margins Our product strategy is a clear differentiator • Delivering innovative products that meet customer nee
Slide 12: Our existing land bank will deliver a big volume increase by FY15
Residential Our existing land bank will deliver a big volume increase by FY15 Expected annual lot sales from existing land bank ~3,000 Base level volumes ~1,500 based on current market conditions >6,500 We expect conditions to >5,000 improve by FY15 and volumes should increase further FY12 Projects
Slide 13: Retirement Living underpinned by attractive industry fundamentals
Retirement Living Retirement Living underpinned by attractive industry fundamentals Compelling demand drivers Growth of >65 year old demographic is an opportunity Population aged 65+ years • Expect demand for new developments of circa $35b over the next 20 years Millions of people 2.7% pa • Industry
Slide 14: Retirement Living has strong growth prospects
Retirement Living Retirement Living has strong growth prospects Retirement Living returns growing quickly Cash returns will continue to grow Potential ROA upside if DMF • Strong customer demand for retirement living created is monetised products • ROA expected to grow through operational DMF created
Slide 15: Delivering our strategy through strong financial discipline
Financial KPIs Delivering our strategy through strong financial discipline EPS growth: Average 5 – 6% per annum through the cycle ROE: Focusing on cash returns on cash invested Will disclose FY12 actuals in August Earnings mix: 60-80% recurring, 20 – 40% trading Delivering earnings resilience and gr
Slide 16: We have several accretive investment options
Capital management We have several accretive investment options Redeveloping Retail centres • Investing $400m pa in retail development • Average incremental IRR 14% Buying Residential land • Opportunistically investing in our growth corridors • Buying on capital efficient terms where possible • Incr
Slide 17: We continue to drive operational efficiencies
Cost management We continue to drive operational efficiencies Focus on reducing overheads across all Unallocated Group overheads ($m) 1 businesses and support functions Generating economies of scale from growth • Example: Retirement Living Targeting 66 63 further Cross-business synergies <55 savings
Slide 18: Outlook and summary
Outlook and summary • We have a clear strategy with a path to be a market leader in each of our core businesses • We have a pool of non-core assets that will be progressively sold to fund growth at higher returns and return capital to shareholders • There is plenty of upside in our residential inven
Slide 19: Stockland Corporation Limited / Disclaimer of liability
Stockland Corporation Limited ACN 000 181 733 Stockland Trust Management Limited ACN 001 900 741 25th Floor 133 Castlereagh Street SYDNEY NSW 2000 DISCLAIMER OF LIABILITY While every effort is made to provide accurate and complete information, Stockland does not warrant or represent that the informa