Cairn Homes plc 2019 Preliminary Results Presentation Oak Park, Naas
2019 Preliminary Results Presentation Table of Contents Page 1 Highlights 2 Michael Stanley Co-Founder & CEO 2 Sustainability & Innovation 11 3 Financial 15 Ian Cahill Head of Finance 4 Market & Landbank 20 5 Guidance, Capital Returns & Outlook 26 Declan Murray 6 Head of Investor Relations Appendices 30 1
01 Highlights Our 2,000 th Customers 2
Highlights Exceptional Sales Robust Underlying Gross Strong Revenue and Performance in 2019 and Operating Margin Operating Profit 1,080 €435m (+29%) 19.6% Closed sales in 2019 Revenue Gross margin 853* €68m (+28%) 15.6% Year to date closed and forward sales Operating profit Operating margin (701 expected to close in 2020) Cash Capital Updated Generation Returns Guidance €99.2m 5.25 cent 1,250 – 1,300 Free cash generation in 2019 Sales completions in 2020 Dividend per ordinary share c. €400m 1,700 – 1,800 €100m Free cash generation in 2020-22 Increased guidance for 2022 Shareholder returns (including expected sales completions ongoing €60m share buyback) to date * As at 02 March 2020 3
Building the Best in Class Irish Homebuilder 01 02 03 We acquire We have a strong We win awards our land well track record in for design and enhancing land placemaking value 04 05 We drive We deliver a operational diverse range of efficiencies through new homes to a our established deep buyer pool scale All generating strong profits and shareholder returns 4
1. We Acquire Our Land Well c. €900 million deployed on a 79% 76% c. 17,000 unit landbank Cap ital Of landbank units acquired deployed €’m # Units within 1 year of IPO 500 20,000 450 18,000 95% 400 16,000 O f capital allocated in the Greater Dublin Area 350 14,000 300 12,000 €32,000 €63,000 250 10,000 200 8,000 Average Average 150 6,000 housing apartment site cost site cost 100 4,000 50 2,000 545 11.5% 0 0 2015 2016 2017 2018 2019 Land as a % of NDV Average unit size Acquisitions in Period (€'m) (IPO target: 20%) of our 35 sites Cumulative Units Acquired Will support margin growth First mover advantage in acquiring a long-term, historically low cost land bank driving long-term shareholder value 5
2. We have a Strong Track Record in Enhancing Land Value Level of SHD Planning Grants Underpin 100% 83% our Forecasts Of forecast 2020 sales Of forecast 2021 sales # Units Units Granted through SHD Process since 2018 completions have FPP* completions have FPP* 4,000 Cairn +140% 7 6,695 more units than 3,000 Homebuilder 2 New site Units granted planning permission 2,000 commencements in since IPO, including 2,230 units 1,000 2020 (c. 5,000 units) since September 2019 0 Cairn Homes Plc Homebuilder Homebuilder Homebuilder 3,500 13 2 3 4 Incremental unit gains Industry leading SHD No Planning Risk in c. 17,000 Unit Landbank through planning grants of planning and no refusals Accretive to future 2 % gross margin 23 % Full Planning Permission SDZ (effective FPP) 34 % We own the best sites in the best In Planning (SHD process) locations, in areas of proven demand 7% Residentially Zoned with excellent public transport links Subject to Zoning and close to areas of high 34% employment * Including SDZ effective FPP 6
3. We Win Awards for Design and Placemaking 12,000 55km New trees planted across our Of new roads built developments to date 13 50% New playgrounds and Carbon pledge outdoor gyms opened reduction by 2030 €125m 34 acres Spent and committed on public Of parks and green realm and infrastructure projects areas delivered 8 acre park at Oak Park, Naas – designed to create a semi-natural landscape Oak Park Six Hanover Quay Marianella Parkside 2019 Excellence in 2019 Housing Project of the Year 2017 Excellence in Arts Programme Planning Award Planning Award Commendation 7
4. We Drive Operational Efficiencies Through Our Established Scale Industry’s Largest Procurer 2.5% €325m of Labour and Materials Build cost inflation in 2019 Current Committed from €288m procurement Order Book €’m 300 €700m +€46m* Procured since IPO Top 20 subcontractors - 66% of total, average €23m 250 each and working across an average of 8 sites +€147m* 200 20 2,500 Active sites by the end of Working full-time across 150 2020 (c. 11,500 units) Cairn active sites 100 86% 60% . Fixed construction costs Fixed construction costs 50 on active construction on active construction sites in 2020 sites in 2021 0 2017 2018 2019 As the largest homebuilder in Ireland, scale brings cost advantages * Annual increase in procurement spend 8
5. We Deliver a Diverse Range of New Homes to a Deep Buyer Pool 2019 Sales by New Home Type 3,250 1,850 Customers who have New Homes Sold to First chosen a Cairn home, Time Buyers in our starter €’m # Units with over 2,500 of these homes schemes customers already living 500 1,200 in their new home 1,080 53 43% 450 Net Promoter Score reflecting 1,000 400 our commitment to a positive 3.33 units* customer experience 350 800 Weekly housing sales 830 300 absorption rates per active sales outlet Completed and forward sold 25% 250 600 in 2019 PRS units 200 €345m 2019 Starter Home ASP 400 16% 150 for our Customers Revenue from 14% five completed 100 €356,000 (incl. VAT) on 907 closed 200 and forward sold and forward sale starter homes in PRS 50 2019. Focus on affordability and 2% transactions in selling at volume and at price points 0 0 city centre, where first time buyers can access Duplex Apartments 3 Bed 4 Bed 5 Bed suburban and mortgages Units Houses Houses Houses commuter belt locations Sales Completions Cumulative Sales Completions * Includes PRS sales. 2.47 excluding PRS sales 9
6. We Generate Strong Profits and Shareholder Returns Profitability Growing Significantly And Committed to Shareholder Returns €’m €’m €’m 90 35 120 80 30 100 +23% 70 25 60 80 +28% 20 50 60 40 15 +63% 30 40 10 20 20 5 10 0 0 0 Gross Profit Operating Profit Net Profit after Tax €25m Share €35m Share Interim Final Dividend Dividend (2.5¢) Buyback Buyback (2.75¢) 2018 2019 Amount TSR 2019 Operating Cashflow Dividend Per Total Shareholder Return per Ordinary Share Per Ordinary Share * €99.2 million 5.25 cent 12.7 cent Significant surplus capital generated as we reduce our landbank to a normalised level beyond 2022 * Based on €100 million capital returns and 788.8 million ordinary shares in issuance on 12 September 2019. Assuming expected co mpletion of €60 million share buyback programme 10
02 Sustainability & Innovation Gandon Park, Lucan 11
Our CSR Pillars Community Environment People Industry Working with all Reducing our Carbon People come first. Leading from the stakeholders, footprint. Making a Valuing our teams, front. Developing especially our positive contribution customers and strong industry customers, to create to the environmental partners and relationships, a well- successful places quality of the providing resources trained workforce and and spaces. communities in which and opportunities to sustainable future for Placemaking that we work and the grow and develop the sector strengthens the environment as a together social fabric whole 12
CSR Strategy & Activities People Industry Community Environment Low carbon pledge – Community events at Health and wellbeing Increased initiatives subcontractor our new reduce our carbon developments emissions across all engagement and Workplace diversity developments by support and inclusion Arts programme 50% by 2030 Sustainable using local artists Employee innovation and Biodiversity policy and sculptors engagement sourcing Approach to “climate Significant public Enhanced customer change ready” in our Ongoing external realm and aftercare safety and planning and design infrastructure certification audits investment Transitioning from a CSR to a sustainability agenda 13
Innovation in Our Business Off Site Manufacturing SFS Inner Leaf Precast superstructural elements yielding programme Makes the building watertight at the earliest possible date gains and consistent quality allowing internal finishes to be progressed faster Building Information Modelling Timber Frame Construction Transitioning to BIM technologies for current and future high Economical and efficient method of construction density projects Bathroom Pods Balcony Design Manufactured off-site and delivered ready to fit into place Schoeck Isokorb connectors reduces the amount of trades once the internal trades are progressed needed to construct a balcony nZEB Designing towards near Zero Energy Buildings and A2 levels of energy efficient homes Electric Vehicle Charging Points At all of our developments to proactively encourage our residents to make the switch to EVs Green Walls An eco-friendly engineering solution with aesthetic value and biodiversity gains 14
03 Financial Shackleton Park, Lucan 15
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