FULL YEAR RESULTS PRESENTATION YEAR ENDED 31 DECEMBER 2014 SUMMERSET GROUP HOLDINGS LIMITED 29 February 2012 24 February 2015 0
AGENDA 2 FY14 Result Highlights 6 Business Overview 20 Financial Results 25 Final Dividend 29 Appendix 1
FY14 RESULT HIGHLIGHTS 2
FY14 RESULT HIGHLIGHTS RECORD NEW SALES AND RETIREMENT UNIT DELIVERY HIGHLIGHTS FOR FY14 FY14 Actual vs. FY14 Actual FY13 Actual FY12 Actual FY13 Actual * New sales of occupation rights 286 228 167 25.4% Operational Resales of occupation rights 172 174 164 -1.1% Total sales 458 402 331 13.9% New retirement units delivered 261 209 160 24.9% Net operating cash flow 110,433 88,590 66,254 24.7% Financial (NZ$000) Total assets 1,043,189 844,932 702,339 23.5% Underlying profit ** 24,420 22,154 15,223 10.2% Net profit before tax (IFRS) 53,994 31,755 14,414 70.0% Net profit after tax (IFRS) 54,173 34,223 14,821 58.3% * Percentage movements based on unrounded amounts ** Underlying profit differs from net profit after tax (IFRS). Underlying profit is unaudited. Refer to slide 22 for the definition of underlying profit 3
FY14 RESULT HIGHLIGHTS RECORD NEW SALES AND RETIREMENT UNIT DELIVERY HIGHLIGHTS FOR FY14 ■ 261 new retirement units delivered, up 25% on FY13 – on track for delivery of 300 retirement units in FY15 ■ New sales 25% higher than FY13 ■ Higher new sales driven by strong sell down right across the portfolio supplemented by the new villages in Karaka, Hobsonville, New Plymouth and the Trentham extension ■ Total sales up 14% on FY13 ■ FY14 underlying profit of $24.4m up 10% on FY13, despite lower realised resales gains ■ Total assets of $1.0b, up 23% on FY13 ■ Final dividend of 2.1 cents per share declared, amounting to $4.6m ■ FY14 net profit after tax (NZ IFRS) of $54.2m up 58% on FY13 ■ Operating cash flow up 25% on FY13 4
FY14 RESULT HIGHLIGHTS STRONG TRENDS CONTINUE ACROSS THE BUSINESS TOTAL ASSETS UNDERLYING PROFIT $1100m $25m $23m $1000m $21m $19m $900m $17m $800m $15m $1043m $24.4m $22.2m $13m $700m $845m $11m $15.2m $600m $702m $9m $7m $500m $5m FY12 FY13 FY14 FY12 FY13 FY14 Total assets ($m) Underlying profit ($m) SALE OF OCCUPATION RIGHTS RETIREMENT UNIT DELIVERY 490 290 440 240 390 172 340 190 174 290 164 261 240 140 209 190 286 160 140 90 228 167 90 40 40 FY12 FY13 FY14 FY12 FY13 FY14 5 Unit delivery New Sales Resales
BUSINESS OVERVIEW BUSINESS BUSINESS OVERVIEW 6
FY14 REVIEW RECORD UNDERLYING PROFIT IN FY14 ■ Delivered 261 retirement units in FY14, a record for Summerset, and 25% more than FY13 ■ On track for delivery of 300 retirement units in FY15 ■ Karaka, Hobsonville, Trentham extension and New Plymouth villages opened in FY14 ■ Three new village centres opened in Nelson, Dunedin and Katikati ■ Dunedin village completed ■ Resource consent approval for Ellerslie and Wigram received ■ Commenced construction on the Wigram village - this will open in FY15 ■ Announced extension of existing Karaka site ■ 2014 included additional costs associated with an unusually high volume of new villages opening (four new villages) and new care centres opening (three new care centres) ■ Expect 2015 earnings growth to be higher than 2014 7
SUMMERSET SNAPSHOT THIRD LARGEST OPERATOR, SECOND LARGEST DEVELOPER ■ 2,116 retirement units (villas, apartments and care apartments) ■ 485 care beds ■ More than 3,000 residents ■ 261 retirement units delivered in FY14 ■ On track for 300 retirement units in FY15 ■ 20 villages completed or in development ■ Three villages yet to be developed 8
SUMMERSET STRATEGY SUMMERSET BUILDS, OWNS AND OPERATES RETIREMENT VILLAGES IN NZ ■ Focus on continuum of care model ■ High quality care and facilities within every village ■ Continued investment and upgrade of existing facilities ■ Internal development model embedded ■ Nationwide brand offering ■ Customer centric philosophy – “we love the life you bring to us” ■ Respect for everyday New Zealanders ■ New Zealand focus 9
OPERATIONS AND STAFF FOCUS ON CLINICAL QUALITY AND STAFF TRAINING ■ In 2014 a new Clinical Governance Committee of the Board has been established to further support Summerset’s commitment to deliver care of the highest standard, at all times ■ Review of our quality programme, to promote consistent quality care across all villages ■ Continued Careerforce training programme participation, and qualification attainment ■ New role for Head of Clinical Services to continue evolving the Summerset clinical care strategy ■ 93% care customer satisfaction – industry leading result ■ Summerset increased caregiver wages by between 2.4% and 7.5%, with the higher increases rewarding staff for training and qualifications gained throughout the year 10
DEMOGRAPHICS POPULATION OVER 75 YEARS FORECAST TO TRIPLE FROM 2014 TO 2068 POPULATION GROWTH 75 YEARS AND OVER 1,200,000 18% 16% 1,000,000 14% 800,000 12% 10% 600,000 8% 400,000 6% 4% 200,000 2% - 0% 2014 2018 2023 2028 2033 2038 2043 2048 2053 2068 NZ population 75+ (left hand axis) % of population 75+ (right hand axis) Source: Statistics New Zealand 11 50th percentile (median)
SUMMERSET GROWTH 17 YEARS OF CONSISTENT DELIVERY AND GROWTH SUMMERSET BUILD RATE 2,500 2,116 2,000 261 1,855 209 1,646 1,486 160 1,500 Retirement Units 1,352 122 1,272 80 1,109 163 *2011 existing stock includes 12 units acquired 983 126 921 1,000 as part of the Nelson site acquisition 62 1,855 795 126 732 1,646 63 652 1,486 80 1,364* 1,272 528 124 470 1,109 500 407 58 983 921 63 795 732 652 219 188 528 470 129 407 90 219 129 129 - - - 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 12 Existing stock New Retirement Units delivered
FY14 DEVELOPMENT ACTIVITY DELIVERY OF 261 RETIREMENT UNITS IN FY14 ACROSS NINE SITES ■ 261 retirement units delivered across nine villages Care Unit Delivery FY14 Villas Apartments Total Care Beds Apartments ■ Three new villages opened and one existing village extension Dunedin - 20 20 40 42 underway Hamilton 24 - - 24 - Hobsonville 36 - - 36 - ■ First retirement units in Hobsonville, Karaka and New Plymouth delivered Karaka 27 - - 27 - Katikati 24 - - 24 - ■ First retirement units in Trentham extension delivered Nelson - - 15 57 - ■ Care apartment delivery gaining momentum with units New Plymouth 14 - - 14 - delivered in Dunedin and Nelson Trentham 24 - - 24 - Warkworth 15 - - 15 - ■ Large main building programme underway: Total 206 20 35 261 42 ■ Recently delivered main buildings in Nelson, Katikati and Dunedin ■ Extensions to the Nelson and Hamilton main buildings under way ■ Build of Hobsonville, Karaka and New Plymouth main buildings commenced ■ Warkworth care apartment extension commenced 13
FY14 DEVELOPMENT ACTIVITY DELIVERY OF 261 RETIREMENT UNITS IN FY14 ACROSS NINE SITES Hamilton Karaka Trentham Warkworth Nelson Katikati 14
FY14 DEVELOPMENT ACTIVITY DELIVERY OF 261 RETIREMENT UNITS IN FY14 ACROSS 9 SITES Trentham New Plymouth Warkworth Hobsonville New Plymouth Dunedin 15
FUTURE DEVELOPMENT LAND BANK OF 1,881 RETIREMENT UNITS AND 556 CARE BEDS ■ Land bank of 1,881 retirement units spread across Land Bank - as at 31 December 2014 * brownfield and greenfield sites Total Care ■ Additional pipeline of 556 care beds across existing Villas Apartments Retirement Care Beds Apartments sites. Delivery of these future care beds will more than Units double the current level of Summerset care beds Casebrook 179 - 53 232 49 available Ellerslie 62 147 43 252 80 ■ Build target remains 300 retirement units by 2015 Hamilton 85 - 25 110 46 Hobsonville 89 70 30 189 90 ■ Land bank provides in excess of six years of supply at build rate target Karaka 167 24 20 211 49 Katikati 109 - 20 129 49 Lower Hutt 42 96 43 181 49 Nelson 38 - 25 63 46 New Plymouth 94 - 40 134 49 Trentham 115 - 20 135 - Warkworth - - 36 36 - Wigram 156 - 53 209 49 Total 1,136 337 408 1,881 556 * Land bank reflects current intentions as at 31 December 2014 16
DEVELOPMENT MARGIN STRONG PERFORMANCE IN REALISED DEVELOPMENT MARGIN ■ Development margin of $16.7m, and 15.7%, in FY14, up 60% on FY13 ■ Strong 2H14 development margin of 16.6% ■ We expect to achieve a FY15 development margin of 17% DEVELOPMENT MARGIN – HALF ON HALF MARGINS DEVELOPMENT MARGIN – FULL YEAR MARGINS 15.7% 16.6% $14m 18% $18m 16% 13.2% 16% $16m 14% $12m 13.9% 13.6% 12.0% 12.4% 14% $14m 12.1% 11.9% 12% $10m 12% $12m 10% $8m 10% $10m 8% 6.2% $16.7m 8% $8m $6m $11.7m 6% 6% $6m $4m $10.5m 4% 4% $4m $5.5m $6.9m $4.9m $4.9m $2m $3.4m $3.5m 2% 2% $2m $2.3m $m 0% $m 0% 1H12 Actual 2H12 Actual 1H13 Actual 2H13 Actual 1H14 Actual 2H14 Actual FY11 Actual FY12 Actual FY13 Actual FY14 Actual Realised development margin ($m) Margin (%) Realised development margin ($m) Margin (%) 17
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