16 November 2012 The Manager Company Notices Section ASX Limited Exchange Centre 20 Bridge Street Sydney NSW 2000 Dear Sir GOODMAN GROUP (GOODMAN) ANNUAL GENERAL MEETINGS CHAIRMAN S ADDRESS Please find attached the Chairman s and Group Chief Executive Officer s presentations and the CEO s written address for Goodman s Annual General Meetings held today. A live webcast of the Annual General Meetings will also be available on the Goodman website (www.goodman.com). Yours sincerely Carl Bicego Company Secretary Goodman Group Goodman Limited ABN 69 000 123 071 Goodman Funds Management Limited ABN 48 067 796 641 AFSL Number 223621 as responsible entity of Goodman Industrial Trust ARSN 091213 839 Level 17, 60 Castlereagh Street, Sydney NSW 2000 GPO Box 4703, Sydney NSW 2001 Australia Tel +61 2 9230 7400 Fax +61 2 9230 7444 Goodman Logistics (HK) Limited Company No. 1700359 ARBN 155 911 149 a Hong Kong company with limited liability Suite 2008, Three Pacific Place, 1 Queen s Road East, Hong Kong Tel +852 2249 3100 Fax +852 2525 2070 info-au@goodman.com www.goodman.com
Goodman Group Annual General Meetings 16 November 2012 Westin Hotel, Sydney Global partner + Global platform
Directors and Executives Mr Ian Ferrier Independent Chairman Mr Gregory Goodman Group Chief Executive Officer Mr John Harkness Independent Director Ms Anne Keating Independent Director Mr Jim Sloman Independent Director Mr Phillip Pryke Independent Director Ms Rebecca McGrath Independent Director Mr Philip Fan Independent Director Mr Philip Pearce Executive Director of Goodman Logistics (HK) Limited Mr Carl Bicego Company Secretary 2
Agenda + Chairman s Address + Group CEO s Address + Formal Business 3
Chairman s address Overview Zalando development, Germany 4
Overview + Achieved strong financial result and remained committed to our strategy Operating profit of $463 million Statutory profit of $408 million Debt maturities are fully covered to [FY2016] with significant liquidity Average debt maturity of 5.9 years Fully diluted EPS of 30.5¹ cents, an 8% increase on FY2011 Distribution per security of 18.0 cents Re affirm FY2013 operating EPS guidance of 32.3 cents, a 6% growth on FY12 ¹ Calculated based on weighted average diluted securities of 1,519.2 million and includes performance rights where hurdles have been met 5
Overview + Achieved strong financial result and remained committed to our strategy Successfully completed $400 million fully underwritten institutional placement at $4.25 per security to fund identified long term growth opportunities in a sustainable manner Launching Security Purchase Plan for up to $13 000 per Securityholder at $4.25 per security next week 6
Overview + Goodman has expanded its global platform and continues to build a sustainable business Strong capital partners Global network expansion into large and high growth markets Prudent allocation of resources Global and stable customer base 7
Chairman s address Sustainability M20 Business Park, New Zealand 8
Global forces and trends shaping or impacting our operation and sustainability + Developing economies Their emergence is reshaping traditional economic world order. Brazil and China are some of the most dominant and influential economic players. Have largest populations and some of the fastest growing economies. Investing in long term growth assets, e.g. infrastructure, construction and building an emerging middle class. + Urbanisation Existing urban areas will absorb 20% of the population increase over the next four decades. Most of this growth will occur in developing economies. Goodman has achieved significant growth in China over the past 5 years and recently entered Brazil. 9
Global forces and trends shaping or impacting our operation and sustainability + Consumption patterns Rising middle class. By 2025 India and China will account for almost half the world s output with millions lifted out of poverty. In Brazil over 30 million people have moved into the middle class in the past 5 years. This figure is predicted to double in the next 5 years. 10
Global forces and trends shaping or impacting our operation and sustainability + Global connected markets Shift in the way markets are connected, influencing consumption patterns and the way products are manufactured, purchased and transported. Positive impact on the services which Goodman provides and the customer base it services, e.g. third party logistics providers, automotive, retail and e retail industries. e retail now one of Goodman s largest and fastest growing customer segments. Online shopping now accounts for 20% of all purchases Growing at 15-20% p.a. in developed markets and up to 75% p.a. in developing markets such as China Estimated global e commerce market will be valued at up to $1.4 trillion by 2015. 11
Chairman s address Major new initiatives Pudong International Airport Logistics Park, China 12
Major new initiatives + Internal Restructure of the Group March 2012 Over 600 employees and 41% of earning outside Australia Added Goodman Logistics (HK) Limited to internal structure to reflect the global nature of the business and growth of operations globally Improve Group s profile in Asia and facilitate international growth + Entry into North America June 2012 Launched Goodman North America Partnership (GNAP) with CPPIB with $890 million equity commitment Formed business with local company, Birtcher Developments and Investments 13
Major new initiatives + Launch into Brazil November 2012 Formed joint venture with WTORRE Develop prime logistics and industrial properties + Japan Consolidation November 2012 Privatised Japan business Agreed commercial terms to consolidate Goodman s interest in Macquarie Goodman Japan Goodman and Macquarie to split assets Goodman to own 100% of management company Transaction expected to be completed December 2012 14
Capital management initiatives + Goodman has maintained its commitment to a sound financial position and retained its strong balance sheet over the year with the completion of a number of capital management initiatives that have diversified debt funding sources and extended the maturity profile + Raised $500 million for a 10 year term through the successful completion of the Group s third senior unsecured note issue in the US bond market + Sufficient liquidity to repay all outstanding maturities to FY2016 + Moody s upgraded Goodman s credit rating to same level as S&P, Baa2 stable + Nov 2012 - Successful completion of $400 million equity raising + Raised significant third party equity in Funds, to be covered in Group CEO s presentation 15
Chairman s address Board renewal Moorebank Business Park, Australia 16
Board renewal + Given our international focus now taking the opportunity to diversify the skill set of the Board by introducing new members with international experience + Directors standing for election: Ms Rebecca McGrath; and Mr Philip Fan + Directors standing for re-election: Mr James Sloman Mr Ian Ferrier, Chairman + Mr Philip Pearce is standing for election as a director of Goodman Logistics (HK) Limited 17
Board renewal + Board announced the appointment of three new Executive Directors of Goodman Limited from 1 January 2013 Mr Anthony Rozic Deputy Chief Executive Officer Mr Danny Peeters CEO Continental Europe and WTGoodman Board member Mr Philip Pearce Managing Director Greater China and a director of Goodman Logistics (HK) Ltd + All have more than six years experience with the Group across the regions + Will complement the functional and strategic direction of the Board + Bring formal responsibility and decision making to enhance communication with Board and Securityholders + Emphasises importance of offshore operations + Assists Board with future succession planning 18
Group CEO s address Arnstadt Logistics Centre, Germany 19
Opening remarks + Strong financial performance in FY2012 + Well positioned as a global leader in the sector and to drive sustainable future growth + Selectively and prudently capitalising on customer and investor demand + Pace of growth accelerating across Goodman s business activities $2 billion development work in progress $20.3 billion in total assets under management + Benefitting form stable property fundamentals High occupancy maintained at 96% Leased 530,000 sqm in the first quarter of FY2013 20
Expansion of global platform + Entered North American and Brazilian markets 21
Accelerating business activity + Strong and growing presence in Asia $3 billion in total assets under management Development pipeline with end value of over $1.5 billion Team of approx. 400 people working in China, Hong Kong and Japan Artist s impression: 102,000 sqm facility for Vipshop development at Tianjin, China Artist s impression: 60,000 sqm Goodman Ichikawa development in Tokyo, Japan 22
Accelerating business activity + Market share growing in Europe Largest developer of logistics space $700 million of development projects currently underway + Dominant providers of industrial and business space in Australia and New Zealand Undersupply of high quality space driving development demand Over $650 million of development work in progress 50,000 sqm logistics centre extension for Zalando at Erfurt, Germany Artist s impression: 31,400 sqm facility for Jeminex at Interlink Industrial Estate, Sydney 23
Capital partners + Capital partnering remains key to prudently growing business activities + $900 million of third party equity raised in FY2012, with more than $1.5 billion of third party equity initiatives announced since 30 June $300 million equity commitment from Malaysia s Employees Provident Fund to invest in Australian logistics assets US$890 million North American industrial development partnership with CPPIB Goodman and CPPIB increase China Partnership commitment to US$1 billion Combined 200 million additional equity committed by APG and PGGM for Goodman European Logistics Fund US$1 billion development partnership established with ADIC in Japan External equity commitments over US$100 million for the Goodman Japan Core Fund GAIF launched capital raising with equity commitments of $400 million 5 year extension of the Arlington Business Parks Partnership 24
Capital management equity raising + Committed to maintaining a sound financial position + Completed $400 million institutional placement + Offering Security Purchase Plan and activating Distribution Reinvestment Plan + Initiatives undertaken will: Help fund the stronger than anticipated business growth Provide funding for Brazil market entry Maintain sound financial position, with long-term gearing around 25% 25
Outlook + Goodman is well positioned and building a quality global brand and reputation + Performing strongly and taking advantage of a wide range of opportunities Significant customer and investor demand for prime quality industrial space + Long-term growth driven by: Strength of capital partner and customer relationships Goodman s proven capability, quality portfolio, size and scale and global operating platform + Reaffirm FY2013 full year operating earnings per security of 32.3 cents (up 6% on FY2012) 26
thank+you
CEO s ADDRESS GOODMAN GROUP ANNUAL GENERAL MEETING 16 NOVEMBER 2012 AT 10:00AM THE WESTIN, SYDNEY Thank you Ian and good morning ladies and gentlemen. Goodman has performed very well over the last year delivering a full year operating profit of $463 million, operating earnings per security of 30.5 cents and paying a distribution of 18 cents for the full year. We have adapted our business to operate in a low growth economic environment and worked hard to leverage our competitive advantage, maintain our position as a global leader in our sector and drive the future growth of our business in a sustainable manner. Our diverse and growing global operating platform, proven capability as a specialist provider of industrial property, and the strength of our capital partner and customer relationships, are key advantages for Goodman. They have enabled us to selectively and prudently capitalise on the undersupply of high quality industrial space and the demand for prime investment product around the world. This is highlighted by the accelerating pace of growth across our business activities, which is reflected in the size of our development work in progress, currently at $2 billion across 63
projects in 10 countries, and our total assets under management which have increased to over $20 billion. We are benefitting from stable property fundamentals. Occupancy remains high across our total portfolio at 96%, and we completed 1.9 million sqm of leasing activity during the year, equating to $195 million of net property income. The 2013 financial year has started very well, with our property teams leasing 530,000 sqm of space in the first quarter. We expanded our operating platform during the year in a prudent and well considered manner, establishing our North American business, and we will shortly be commencing the development of our first facility at Oakland in the San Francisco Bay area, which is part of our $1 billion development pipeline in the U.S. market. Last week we also announced our entry into South America, through a new joint venture in Brazil to be called WTGoodman, with leading local property group, WTorre. WTGoodman gives us immediate access to four land sites which we will develop into a total of 850,000 sqm of prime logistics and industrial space over the next few years, with a forecast completion value of US$1.1 billion. Our operating platform is now truly global, covering the Asia Pacific region, Europe and the Americas. It presents Goodman with significant growth opportunities, while providing earnings diversity and the flexibility to allocate capital to take advantage of different economic cycles.
Asia is a very important market for Goodman and we have a strong and growing presence in the region, with operations in China, Hong Kong and Japan and a dedicated local team of around 400 people working in these businesses. We have over $3 billion in assets under management in Asia and a development pipeline with a forecast completion value of over $1.5 billion. Our business in China is growing strongly. We now have a local team of 80 people working in Shanghai, Beijing and Chengdu, with around 500,000 sqm of developments currently underway across 7 projects and control of over 4 million sqm of developable land. Within the next year, we will see our development work in progress almost doubling to 800,000 sqm. In Japan, the demand for modern, prime logistics facilities is also high. This is being driven by ageing logistics stock, demand for larger facilities due to consolidation, and an undersupply of high quality, modern logistics space. We see considerable opportunity and have undertaken a number of initiatives this year consistent with our long-term commitment to the Japan market. We recently announced that we are consolidating our interest in the Japan platform, and expect to this to be completed by year end. We also recently secured a combined US$350 million of new equity capital from global investors, to drive our development and core investment activities in Japan.
In Europe, we have grown our market share to become the largest developer of logistics space in that market, delivering over one million sqm of new logistics space in 2012. Development momentum continues to be very strong and is exceeding our expectations in the 2013 financial year to date, with $700 million of projects currently underway, predominantly in Germany, France and Benelux. In Australia and New Zealand we remain the dominant providers of industrial and business space. Growth in our development activities has been very strong, again in response to the short supply of prime quality space, with demand increasing particularly from the retail and third party logistics sectors. This is highlighted by over $650 million of development work in progress currently underway in our Australian and New Zealand businesses. Capital partnering remains key for Goodman, and provides us with significant capacity to prudently grow our business activities. Our access to third party capital from global investor groups has seen Goodman raise $900 million of new third party equity capital across our managed fund platform in the 2012 financial year. Since 30 June, we have announced an additional $1.5 billion of third party equity initiatives, including in China, Japan, North America and Australia. Some of the initiatives we have undertaken include forming a new global relationship with Malaysia s Employees Provident Fund with an initial $300 million equity commitment and expanding our existing relationship with Canada Pension Plan Investment Board
into North America, while increasing the capital allocated to our China joint venture. Abu Dhabi Investment Council committed US$250 million of equity via a new Japan Development Partnership with Goodman to help fund our $700 million development pipeline. In Europe, we secured additional equity commitments for our European Logistics Fund from Dutch asset managers, APG and PGGM. Our Australian Industrial Fund has launched a $400 million equity raising, and we also extended our Business Parks Partnership in the UK by a further five year term. Importantly, Goodman had adopted a prudent and measured approach to delivering the significant business activities we are undertaking around the world. We are committed to maintaining a sound financial position, while enabling the business to take advantage of long-term growth opportunities in a sustainable manner. In line with this approach, we announced a $400 million equity raising via an institutional placement at $4.25 per security last week. We are also offering all Securityholders the opportunity to participate in a Security Purchase plan at $4.25 per security, and will activate the Goodman Distribution Reinvestment Plan from June 2013. These capital management initiatives will help to fund the stronger than anticipated business growth being experienced across
Goodman s key operating markets globally and to provide funding for the Group s entry into Brazil, while maintaining our sound financial position with long-term gearing stable around 25%. To illustrate some of the initiatives and operating activities we are undertaking, I d now like to play a short highlights video. Let me now talk about the year ahead. Goodman is well positioned as a global leader in industrial property. We have adapted our business to operate in a low growth world and we continue to work hard to build our quality global brand and reputation. We are performing strongly, with accelerating business activity in our key markets around the world, which comes from our ability to take advantage of the wide range of opportunities being presented by the strong customer and investor demand for prime quality industrial space. We are able to achieve this and drive the long-term growth of our business in a sustainable manner because of our extensive, wellestablished capital partner and customer relationships, combined with Goodman s proven development and management capability, quality portfolio, size and scale, and our global operating platform. For these reasons, we reaffirm our FY2013 full year forecast for an operating EPS of 32.3 cents, up 6% on FY2012.
Finally, I would like to thank all stakeholders for your ongoing support and the Goodman team for your hard work and commitment in helping to drive the performance of our business and ensure we are very well positioned for the future.