SIME DARBY PROPERTY BERHAD Credit Suisse 9th Annual ASEAN Conference 11 & 12 January 2018 1 Cautionary Note
This presentation does not constitute and is not an offer to sell or the solicitation of an offer to buy securities of any company referred to in this presentation in the United States or elsewhere. The companies referred to herein have not registered and do not intend to register any securities under the US Securities Act of 1933, as amended (the “Securities Act”), and any securities may not be offered or sold in the United States absent registration under the Securities Act or an exemption from registration under the Securities Act. By attending the presentation you will be deemed to represent, warrant and agree that to the extent that you purchase any securities in any of the companies referred to in the presentation, you either (i) are a "qualified institutional buyer" within the meaning of Rule 144A under the Securities Act, or (ii) you will do so in an "offshore transaction" within the meaning of Regulation S under the Securities Act. This presentation may contain forward-looking statements by Sime Darby Berhad that reflect management’s current expectations, beliefs, intentions or strategies regarding the future and assumptions in light of currently available information. These statements are based on various assumptions and made subject to a number of risks, uncertainties and contingencies. Actual results, performance or achievements may differ materially and significantly from those discussed in the forward- looking statements. Such statements are not and should not be construed as a representation, warranty or undertaking as to the future performance or achievements of Sime Darby Berhad and Sime Darby Berhad assumes no obligation or responsibility to update any such statements. No representation or warranty (either express or implied) is given by or on behalf of Sime Darby Berhad or its related corporations (including without limitation, their respective shareholders, directors, officers, employees, agents, partners, associates and advisers) (collectively, the "Parties") as to the quality, accuracy, reliability or completeness of the information contained in this presentation (collectively, the "Information"), or that reasonable care has been taken in compiling or preparing the Information. None of the Parties shall be liable or responsible for any budget, forecast or forward-looking statements or other projections of any nature or any opinion which may have been expressed or otherwise contained or referred to in the Information. The Information is and shall remain the exclusive property of Sime Darby Berhad and nothing herein shall give, or shall be construed as giving, to any recipient(s) or party any right, title, ownership, interest, license or any other right whatsoever in or to the Information herein. The recipient(s) acknowledges and agrees that this presentation and the Information are confidential and shall be held in complete confidence by the recipient(s). This presentation is for the purposes of information only and no part of this presentation is intended to be or shall be construed as an offer, recommendation or invitation to subscribe for or purchase, or otherwise making available, any securities in Sime Darby Berhad. 2 Presentation Outline
1. Overview
2. Strategies
3. Transformation Focus
4. Financial Performance
5. Appendices
3 1. Overview
2. Strategies
3. Transformation Focus
4. Financial Performance
5. Appendices
4 Our History – Who We Are
• Sime Darby Property, SP Setia • Sime UEP was and EPF acquired the iconic established through • Completion of Battersea Power Station for the acquisition of a the Guthrie GBP400mn (42 acres) 30 large stake in Corridor United Estates Expressway • Concession agreements with Nov Projects Bhd, the (25 km) which the government of Malaysia developer of Subang connect Shah and four higher learning 2017 Jaya township Alam to institutions were signed to (2,241 acres) Rawang develop Pagoh Education Hub 1984 2005 2012
Sime 1972 1995 2007 2013 Darby • Negara • Guthrie • Sime Darby • City of Elmina Property Properties, the Property Property Division was launched subsidiary of Development was established (5,000 acres) Berhad, an Golden Hope Holding Bhd, a following the historical merger independent Plantations subsidiary of of Kumpulan launched its Kumpulan Sime Darby Bhd, listed entity first township Guthrie Berhad Kumpulan on Bursa – Taman launched its Guthrie Bhd and Melawati first township – Golden Hope Malaysia (880 acres) Bukit Jelutong Plantations Bhd (2,205 acres)
5 Our Footprint
Integrated Townships Landbank HSR Hubs development 20,763 acres of the remaining
Georgetown developable land bank which includes:
. Ara Damansara . Pulau Tikus . SJCC 12,026 acres of the remaining . SJ7 developable land bank located . ALYA . Taman Melawati within our existing 23 active . KL East townships, integrated and niche . Lagong MALAYSIA . Kota Elmina developments
. City of Elmina . Denai Alam 3,196 acres of land located . Bukit Jelutong
. Bandar Bukit Kuala within the Malaysia Vision Valley Raja 1, 2 & 3 Lumpur (MVV) region . Putra Heights . Saujana Impian
Negeri Total estimated GDV of . Serenia City Sembilan RM100.4 bn for the remaining . Planters’ Haven Melaka developable land bank . Hamilton . Labuan Bileh Additional 20,599 acres of land . Nilai Impian 1 & 2 . Bandar Ainsdale via MVV and Land Options . Nilai Utama Johor Agreements (5+3 years) Bahru . Bandar Universiti Pagoh SINGAPORE 1,599 employees
6 An Integrated Property Developer
What We Do Property Property Hospitality Development Investment & Leisure
. Domestic: Klang Valley, . Manages ~2mn sq. ft. of . Domestic: Sime Darby Negeri Sembilan and Johor net commercial space in Convention Centre, TPC KL, Malaysia, S’pore and Impian Golf & Country Club . International: London, United Kingdom United Kingdom, . International: Darby Park development of Battersea . Retail Mall: Melawati Mall Executive Suites, S’pore & Power Station Darby Park Serviced Residences, Vietnam
Breakdown of Revenue Breakdown of Operating Profit
RM3.25bn RM2.60bn RM2.56bn RM642mn RM455mn RM353mn
4% 5% 6% 5% 3% 2% 106% 4% 114% 113% 92% 93% 90% -1% -18% -4% -9% -5% FY2015 FY2016 FY2017 FY2015 FY2016 FY2017 7 Shareholding Structure as at 10 Jan’18
RM1.64
54.7% Share Price
Share Price Movement (RM)
1.78 1.64 1.52 1.45 1.28 1.20 As at 10 Jan’18 1.11 Foreign Shareholdings 14.7%
10.7%
4.8% RM11.09bn 15.1% Market Capitalisation
Domestic Shareholdings 6,800,839
and the public Number of Ordinary Shares (000’)
Source: Tricor 8 Strong and Dynamic Board of Directors
Board members have held prominent positions and directorships in public listed companies involving the property sector as well as the banking and finance sectors and in governmental, regulatory and professional bodies
Tan Sri Abdul Wahid Dato' Rohana Tan Sri Dato' Sri Amrin Omar Mahmood Awaluddin Non-Independent Non- Senior Independent Managing Director Executive Chairman Non-Executive Director
Tengku Datuk Seri Ahmad Dato' Jaganath Shah Alhaj ibni Almarhum Dato' Johan Datuk Tong Poh Derek Steven Sultan Salahuddin Abdul Ariffin Keow Sabapathy Azjz Shah Alhaj Independent Non- Executive Director Independent Non- Independent Non- Executive Director Executive Director Executive Director
Dato' Seri Ahmad Datuk Dr Mohd Daud Datin Norazah Johan Mohammad Bakar Mohamed Razali Raslan Non-Independent Non- Independent Non- Independent Non- Executive Director Executive Director Executive Director
9 Qualified and Experienced Management Team
Strong management team with relevant experience and a proven track record in the real estate industry
Dato' Sri Amrin Awaluddin Managing Director
Fairuz Radi Dato’ Wan Hashimi TBA TBA Datuk Tong Poh Albakri Chief Marketing Keow Chief Transformation Chief Operating Officer & Head, Chief Operating Officer Officer – & Sales Officer Group Chief Managing Director’s – Township Integrated Financial Officer Office Development (w.e.f. 16 Jan’18) (w.e.f. 1 Mar’18)
TBA TBA Tang Ai Leen Choo Suit Mae Chief Group Chief Human Chief Risk and Group General Resources Officer Corporate Counsel Compliance Assurance Officer Officer (w.e.f. 1 Mar’18)
10 Financial Highlights as at 30 June 2017
RM2.6bn RM818mn 32% Revenue PBIT PBIT Margin
RM608mn RM11bn 7% PATAMI Invested Cap ROIC
RM1.77bn RM1.92bn 55% Unbilled Sales Gross Sales Value Avg. Take Up Rate
RM6.3bn RM14.6bn 18% Shareholders’ Fund Total Assets Gross Debt/Equity Ratio Pro forma shareholders’ fund post- Pro forma D/E Ratio post-listing: listing: RM9.6bn 12%
11 Financial Highlights as at 30 September 2017
RM464mn RM101mn 24% Revenue Operating Profit Operating Profit Margin
RM420mn RM421mn PBIT PATAMI
RM1.78bn RM528mn 667 Unbilled Sales Gross Sales Value Units Sold
RM6.9bn RM14.6bn 15% Shareholders’ Fund Total Assets Gross Debt/Equity Ratio
Note: 1QFY18 PBIT included the gain on disposal of Malaysia Land Development Company of RM41mn and the gain on disposal of 40% equity stake in Seriemas Development Sdn Bhd of RM278mn – total RM319mn 12 Sustainability Strategic Framework
Sustainability Purpose:
“Contribute to a Better Society, Minimise Environmental Harm and Deliver Sustainable Development”
Ascribed to the United Nations Sustainable Development Goals (SDGs)
City of Elmina Townships For The Future Earmarked as a model Wellness & Liveability Township Elmina Community Park 13 1. Overview
2. Strategies
3. Transformation Focus
4. Financial Performance
5. Appendices
14 Key Investment Highlights
#1 20,763 acres with remaining estimated GDV of RM100.4bn Largest developable A competitive advantage to monetize non-strategic land bank in land Malaysia Sustainable earnings contribution for the next 15 – 20 years
#2 Well positioned along the Guthrie Corridor Strategic Expressway and West Coast Expressway locations with Strategically located in Negeri Sembilan and Johor to full spectrum benefit from Malaysia Vision Valley and High Speed of products Rail projects
#3 Good track record of over 40 years in property Recognised development with success in transforming former brand with estate lands into major townships established Received awards over the years for excellence and track record distinctions
15 Strategies & Growth Plans
Township Product Land bank Strategic Recurring Development Diversification management Partnerships Income
Leverage on the Develop and offer a Prioritise the Proactively secure Grow recurring sizeable land bank variety of industrial development partnerships via income to 10% located in strategic developments such located along the JV or of the PBIT economic growth as Built-To-Suit Guthrie Corridor opportunistic M&A by FY2022 areas (BTS) products Expressway
Increase exposure Expand the Assess best and Capture a larger Retain strategic in integrated & development of highest use for share of the assets and urban integrated TOD and each land parcel property dispose non- developments TAD projects and dispose non- development performing strategic lands market in Malaysia assets
Increase and Strategic and Establish a core accelerate current opportunistic land and experienced GDV of ~RM100bn acquisitions team
16 Leverage on our prime locations in Klang Valley
10,297 acres of land bank along Guthrie Corridor Expressway with
Gamuda Lagong remaining GDV of more than RM20 Garden 1,552 acres billion
Good connectivity: Kota Elmina 1,540 acres GCE, DASH, NKVE, LATAR and NSE Mass Rail Transit-1 (MRT 1) and Keretapi Tanah Melayu Line (KTM) Elmina West 2,661 acres
Forest Reserve Elmina East 1,089 acres Prioritise these Denai Alam & developments by Bukit Subang 1,250 acres DASH offering affordable and
RRI saleable products
Setia ECO Park Setia Alam Ara Damansara 693 acres Bukit Jelutong Legend 2,205 acres Ongoing developments Subang Jaya Future developments Guthrie Corridor Expressway 2,241 acres Bdr. Bukit Raja 1,2 Damansara-Shah Alam Elevated Expressway (DASH) and 3 New Klang Valley Expressway (NKVE) 4,333 acres KL-Kuala Selangor Expressway (LATAR) North-South Expressway (NSE) 17 Increase and Accelerate Current GDV of RM100bn ~12k acres of remaining developable land bank with a remaining GDV of RM85.9bn Township/Development Name Year Total Area Remaining Remaining Remaining Commenced (acres) Developable GDV Development Area (acres) (RM bil) Period (years) Niche / Integrated 1 ALYA, Kuala Lumpur 2012 62 51 6.8 9 Chemara Hills, Seremban 2013 44 3 0.1 1 USJ Heights, Subang Jaya 2007 375 17 0.2 3 SJ 7, Subang Jaya 2015 40 35 5.2 16 2 SJCC, Subang Jaya 2012 30 28 3.8 11 3 KL East 2011 160 97 2.0 12 Township 4 City of Elmina: Elmina West, Shah Alam 2015 2,661 2,623 16.1 5 City of Elmina: Elmina East, Shah Alam 2012 1,089 856 3.6 25 City of Elmina: Denai Alam & Bukit Subang 1999 1,250 104 0.7 6 Bandar Bukit Raja 2 & 3, Klang 2016 2,820 2,472 12.4 27 Bandar Bukit Raja 1, Klang 2002 1,513 144 2.2 7 Serenia City, Dengkil, Sepang 2013 2,370 1,486 8.7 19 Putra Heights, Subang Jaya 1999 1,796 86 3.8 12 Ara Damansara, Petaling Jaya 1999 693 74 5.8 6 Bukit Jelutong, Shah Alam 1995 2,205 165 2.1 7 Saujana Impian, Kajang 1995 600 13 0.01 1 Taman Melawati, Ulu Klang 1972 880 6 0.7 6 Nilai Impian 2, Nilai 2014 546 426 3.2 9 Nilai Impian 1, Nilai 1997 1,263 189 0.9 6 Bandar Ainsdale, Seremban 2011 562 195 1.3 8 Planters' Haven, Nilai 1996 250 81 n/a¹ n/a¹ 8 Bandar Universiti Pagoh, Muar 2013 4,099 2,855 6.2 17 Taman Pasir Putih, Pasir Gudang 1981 356 20 0.1 6 TOTAL 25,664 12,026 85.9 Future development 8,737 14.5²
¹ Remaining developable area includes 6 parcels of homestead lots and 60 vacant homestead plots ² This GDV figure is preliminary and currently only available for 4 out of 26 future developments 18 Well Positioned To Benefit From Malaysia Vision Valley (MVV)
A new economic corridor and a Premier To To Urban Transformation Region under the Bangi Kajang Elite National Transformation Agenda Highway LEKAS Highway MVV Total Area: 379,086 acres SELANGOR Parcel A: Sime Darby Property’s Interest: Proposed 3,196 acres High Speed Owned: Parcel A of 3,196 acres Rail Station MVV Option Agreements: Additional 8,793 acres (currently held by SD Berhad) Bandar KLIA Ainsdale Additional PARCEL A : HIGH TECHNOLOGY 8,793 acres AND INDUSTRIAL PARK • A critical investment corridor for Negeri SEREMBAN North-South Expressway Sembilan PORT DICKSON To • Limited land for industrial developments in Johor Nilai & Senawang
STRAITS OF MALACCA • Increased foreign and local demand for high technology hub
• Continuation of Putrajaya, Cyberjaya and Kuala Lumpur International Airport Legend MALACCA development area Sime Darby Property’s land Sime Darby Berhad’s land • Leverage on existing developed Sime Darby Plantation’s land infrastructure & proposed HSR project 19 Option to Increase Land Bank Totaling ~20k acres
Land Options 2 0 , 5 9 9 MVV Options Agreement Agreement with Sime Darby Plantation a c r e s with Sime Darby Berhad 11,806 acres 8,793 acres
Kumpulan Sime Darby and SD Plantation entered into 9 Kedah Sime Darby Property entered call option agreements Bukit Selarong estate: into several call option with SD Property pursuant to 148 acres agreements for lands within which SD Property has options Penang the MVV development to purchase these lands at region future market value Byram estate: 864 acres
Options Validity: 5 years, extendable by 3 years Options Validity: 5 years, extendable by 3 years
Sungai Kapar estate: 993 acres Selangor Labu, New Labu (Kirby), New West Estate, Carey Island: 2,000 acres Negeri Labu (Main) and Hamilton estates Sembilan Sepang estate: 2,000 acres Lothian Estate: 485 acres Sua Betong estates
Ainsdale estate: 268 acres Kulai, Johor
Kulai A estate: 1,862 acres Kulai B estate: 3,186 acres 20 Unlock Value from Battersea Project with Remaining GDV of £8.3bn
Battersea Power Station (BPS) : Established in Jul’12
JOINT 4 0 : 4 0 : 2 0 Sime Darby Property: SP VENTURE Setia : EPF
Years to project 10-15 completion
Site Area 42 acres
Estimated GDV ~£9bn Phase 1 – Circus West The largest office tenant at RM87mn Recognition of profit in 1QFY18 Battersea, occupying about 500,000 sq. ft. of space upon handover of 431 units (approx. 40% of the total office (FY2017 – Profit recognition of RM140mn (338 units) space) from 2021 Total 769 units of Phase 1 have been handed over Phase 2: Take-up rate of 90%, representing sales value of £577mn to-date. Full completion of the handover in Dec’17 • Target completion in Q4 2020 Tunneling work completed for Northern Line Phase 3: Take-up rate of 71%, equivalent to Extension as boring machines break through at sales value of £582mn Kennington • Target completion in 1H 2021 21 Increase Product Diversification
Township & Residential TOD and Premium and Industrial Integrated Strata TAD Branded Lifestyle Segment Development Development Concepts
• Offers Built-To-Suit • Comprehensive • Comprises of 8 • Freehold service (BTS) facilities to flagship development residence with 6 capitalise on the township along parcels spanning acres of skypark township's the Guthrie 61-acres covering recreational connectivity to Corridor residential, area • Served by the Putra major highways Expressway commercial & retail Heights Interchange, and ports USJ Interchange, components NKVE, LDP, ELITE, KESAS & SKVE • Encompasses one Highways of Malaysia’s premier golf and • Lifestyle destination country clubs, TPC • A variety of • An integrated • The Véo & Quarza KL industrial projects development Residences, with a modern multi- modal transportation to serve as an within Ara featuring modern industrial and Damansara contemporary system living high technology hub 22 Three-Pronged Approach to Active Land Bank Management STRATEGIC DEVELOP PARTNERSHIPS MONETISATION
Prioritise and focus on Earmark potential developers to Strategic monetisation of parcels of land growth of high co-develop ongoing and outside key development focus in order to: performing townships greenfield townships as a mean . Enhance the land value and expedite the to: development via other developers . Speedy realisation of land value Drive cost reduction . Accelerate development of our initiatives to enhance sizeable land bank To be disposed within 1-2 years: profitability . Leverage on partners’ • 1,614 acres - Kedah expertise and resources • 37 acres – Sabah
A r e a s : Ongoing Projects: Past Transactions: 2015: . Townships: Elmina . Elmina land (135 acres) to E&O West, Elmina East, Serenia City, Bandar 2016: Bukit Raja & Bandar . Serenia City land (346 acres) to Sunsuria Universiti Pagoh . Semenyih land (238 acres) 2017: . Integrated: Subang . Semenyih land (803 acres) to I&P Jaya City Centre . Bandar Bukit Raja Industrial 2018: (SJCC) and KL East Park, establishment of the joint . Disposal of Malaysia Land Development venture currently in progress Company & 40% stake in Seriemas Development 23 Strategic Partnerships
Leverage on the expertise and competencies of key strategic partners such as…
Malaysia Vision Valley Sixth Economic Corridor in Malaysia
Melawati Mall The first major shopping mall in Taman Melawati
Radia Bukit Jelutong Mixed development at the heart of Bukit Jelutong
PJ Midtown Integrated project at the epicenter of Petaling Jaya
Battersea Power Station (BPS) Project A major regeneration project in Nine Elms 24 Grow Recurring Income to 10% of Total PBIT by 2022
Immediate Focus: T a r g e t s ( n e x t 3 - 5 Y e a r s ) Joint venture with Mitsui #1 International to develop a high Build-To-Suit technology BTS industrial hub at Sizeable Sizeable recurring (BTS) & Bandar Bukit Raja 2 & 3 (53 recurring income from the Lease acres) income from industrial segment Industrial the industrial Review partnership to transform Assets Serenia City into a thriving segment business and industrial park
Review profitability of existing #2 portfolio and divest non-performing Divest non- assets in Australia, Singapore and Stable Vietnam core earnings and hospitality Historical Disposals: FY2015: Subang Avenue cash flows assets FY2016: 2 assets in S’pore & a hotel in Malacca FY2017: 1 asset in S’pore YTD FY2018: 1 asset in Australia
#3 Optimise value creation of Melawati Mall Establish a Enhance Target completion of KL East Gallery portfolio of high value via by mid-2018 value retail & creation of Increase operational focus to grow commercial existing the commercial and office segments assets assets . Such as Oasis Damansara and SJCC 25 1. Overview
2. Strategies
3. Transformation Focus
4. Financial Performance
5. Appendices
26 Transformation for Value Creation 3 focus areas for quick wins during FY18
Focus Area Transformation initiatives Aspirational Targets
▪ Strengthen market intelligence and Increase Unbilled consumer insight platform Sales & Sales to RM2bn – RM ▪ Overhaul digital & sales gallery Increase marketing 2.5bn sales experience ▪ Leverage on strategic partnership
▪ Enhance consultant and contractor Shorten development time: selection process • Landed: from average 39 ▪ Integrate tender process with authority months to 30 months End-to-end • Highrise: from average Improve approval cycle time 63 months to 45 speed to ▪ Enhance project timeline tracking system months market ▪ Exploring optimal business models
4 - 7% cost reduction for ▪ Strategic sourcing of key materials 8 targeted projects (est. Procurement ▪ Tender strategy enhancement procurement spend of ▪ Strategic collaboration with business RM550m) partners 5 - 10% cost reduction ▪ Reduce main infrastructure cost Strategic cost Design to through value ▪ Optimise building cost by refining management value engineering (est. structural and M&E design construction cost of RM1.1bn)
General & ▪ Rationalise and control of staff related 10 - 20% reduction in Admin. costs targeted overhead ▪ Optimise township maintenance expenditure (est. cost of expenditure RM300m) 27 Achievements To date, 23 initiatives have been implemented across the 3 focus areas
Achievements Key Highlights
. Revamped SJCC Lot 15 sales gallery . Strategic partnerships on end-financing packages . Enhanced digital marketing and digitized sales Increase funnel tracking sales 23 initiatives . Enhanced end-to-end development process by implemented overlapping tender process with authority approval Improve (potential time saving of 4-6 months) speed to . Appointed authority liaison to expedite approval market (potential time saving of 3-5 months) . Streamlined internal approval process
. Identified 12 key materials for strategic sourcing . Strategic earth transfer between townships . Introduced incentivised consultant fee scheme
RM69mn cost . 15% reduction in structure costs of a high rise savings Strategic development through value engineering cost . Average of 13% savings in Main Infra contracts potential management awarded to date
. Optimised staff related costs . Reduced township maintenance costs and closure of tail end townships
28 1. Overview
2. Strategies
3. Transformation Focus
4. Financial Performance
5. Appendices
29 Financial Highlights - First Quarter FY2018
RM’mn 1Q FY2018
Continuing Operations
Revenue RM464mn ( 4% YoY) 1QFY17: RM444mn
Segment Results RM101mn ( 87% YoY) 1QFY17: RM54mn
• Share of profit of RM87mn from Battersea Power Station project (1QFY17: Loss of RM1mn) Property RM115mn ( 191% YoY) • Higher contribution from Elmina West, Elmina 1QFY17: RM40mn Development East and Serenity Cove, a project in Gold Coast, Australia • Share of loss of RM5mn from Sime Darby CapitaLand (Melawati Mall) Sdn Bhd RM-7mn Property Investment • Melawati Mall was opened in Jul’17 and is 1QFY17: RM8mn still in its early stage of operation with occupancy of about 60% Leisure and RM-7mn • 1QFY17 included the reversal of an impairment Hospitality 1QFY17: RM6mn of property, plant and equipment of RM10mn
Gross Sales Value Unbilled Sales Units Sold (As at 30 Sep’17) 1QFY18: RM528mn RM1,778mn 1QFY18: 667 (vs 1QFY17: RM639mn) (As at 30 Jun’17: RM1,766mn) (vs 1QFY17 : 435 units) 30 Financial Position as at 30 September 2017
Capital Structure Total Borrowings
RM7,150mn 15% Short-term Gross Borrowings Debt/Equity 21% Ratio 1% Net Debt/Equity Ratio RM1,100mn Total Borrowings
RM1,100mn RM1,048mn
Long-term Equity Debt Bank balances, Borrowings deposits and 79% * Includes Cash held under Housing Development Accounts cash*
Note: Debt excluded liabilities associated with assets held for sale 31 Inventories
Completed Development Unit Inventory Turnover Period Inventories RM million Months
878.5 32.3 31.8 801.5
18.4 427.5 319.5 13 298.5 11
2015 2016 2017 2015 2016 2017
Total Excluding East Residence Development
2016 and 2017: • The higher completed development unit inventories (as compared to RM319.5mn in 2015) were largely due to unsold units from the East Residence development at ALYA KL of RM580mn in 2016 and RM374mn in 2017. • The management is currently working on the marketing strategy to sell these units.
32 Cash Flows from Operating Activities
(RM million) 2015 2016 2017 As at 30 Sep’17 Cash flow from operating activities 713.9 566.8 527.8 424 Land held for property development (228.5) (224.1) (4.2) (690.4) Property development cost (610.1) (552.6) (619.7) (87.9) Others (2.2) 535.7 602.5 (23.7) Changes in working capital (840.8) (241.0) (21.4) (802) Cash (used in) / generated from (126.9) 325.8 506.4 (378) operations
Tax paid (173.2) (140.7) (135.4) 15 Zakat paid (1.0) (1.0) (1.0) - Dividend received from a joint venture - - 119.2 -
Dividends received from associates 1.8 131.8 - 9.0 Operating cash flows (used in) / generated (292.0) 185.9 621.1 (363) from continuing operations
33 Capital Structure Overview As at 30 June 2017
Actual Capital Structure Pro-forma Capital Structure
RM million 6,587.9 1,168.9 1,075.3 9,910.1 1,168.9 1,232.5 264.7 264.7 Minority Minority Interest Interest Gross D/E Ratio: 18% Gross D/E Ratio: 12% Net D/E Ratio: 1% 6,323.2 9,645.4
Equity Debt Cash Equity Debt Cash
Maturity Period of Indebtedness (30 Jun 2017)
RM million Total = RM 1,168.9 million
20% 39% 26% 15%
450.1
308.4 230.2 180.2
Within 1 year 1-2 years 3-5 years More than 5 years
34 Dividend Policy
We propose to pay dividends out of cash generated from our operations after setting aside necessary funding for capital expenditure and working capital requirements.
As part of this policy, our Company targets a dividend payout ratio of not less than 20.0% of our consolidated profit attributable to the owners of our Company under MFRS, beginning 1 July 2017
The declaration of interim and final dividends is subject to the discretion of our Board. However, our ability to pay will depend upon a number of factors, including:
. the level of our cash, gearing, return on equity and retained earnings;
. our expected financial performance;
. our projected levels of capital expenditure and other investment plans;
. our working capital requirements; and
. our existing and future debt obligations.
35 Thank You
Investor Relations Sime Darby Property Berhad Corporate Website: www.simedarbyproperty.com Investor Relations: https://www.simedarbyproperty.com/investor-relations.html 1. Overview
2. Transformation Focus
3. Strategies
4. Financial Performance
5. Appendices
37 Ongoing Projects (Launched up to June’17)
Township Type of product Date Expected Price Range Units Total Gross Units Take-up Launched Completion (RM’000) Launched Sales Value Sold as at Rate as at (RM mn) 25 Dec’17 25 Dec’17 KLANG VALLEY DSLH Jul-16 2018 794-1,386 151 138.7 115 76% Elmina West DSLH Nov-16 2018 789-1,453 278 242.6 126 98% Elmina East 1,880- Semi-D Sep-16 2018 80 165.3 68 85% 2,200 1,160- DSLH Mar-17 2019 67 86.5 49 73% 2,001 Serenia City 3-storey Semi-D Jul-16 2018 From 8,211 15 125.2 10 67% factory Bandar Bukit DSLH Dec-16 2018 649-942 230 161.8 199 87% Raja 2 & 3 DSLH May-17 2019 682-1,012 82 61.4 54 66%
Bandar Bukit 1,132- Shop office May-17 2019 12 15.1 12 100% Raja 1 1,380 NEGERI SEMBILAN
Bandar Ainsdale DSLH Jul-16 2018 581-846 43 29.6 23 53%
JOHOR
Bandar DSLH Jan-17 2019 363-496 177 68.3 124 70% Universiti Pagoh TOTAL 1,135 1094.5 780
Notes: - DSLH refers to double-storey link houses - All land tenures are freehold except for the development in Bandar Universiti Pagoh which is leasehold 38 Ongoing Projects (Launched in YTD FY2018)
Total Gross Units Take-up Date Price Range Units Township Project Name Sales Value Sold as at Rate as at Launched (RM’000) Launched (RM mn) 25 Dec’17 25 Dec’17 KLANG VALLEY Bandar Bukit Casira 2 Jul’17 739-1,183 111 90.8 75 68% Raja 2 & 3
Elmina West Elmina Green 1 Oct’17 684-1,195 187 143.5 113 60% Liana Nov’17 1,212-2,149 72 101.7 29 40%
Bukit Jelutong Tara Oct’17 2,009-2,626 14 32.0 9 64%
Putra Heights HT5Q Oct’17 933-1,326 6 6.7 1 17%
SJCC Lot 15 Nov’17 594-1,010 204 156.7 130 64%
Denai Alam Ferrea Nov’17 761-1,455 120 103.0 87 73%
NEGERI SEMBILAN
Chemara Hills Castilla 2 Oct’17 1,467-1,726 34 53.4 9 27%
Bandar Ainsdale Redup Oct’17 656-973 45 35.2 16 36%
TOTAL 793 723.0 469.0
39 Proposed Launches (2H FY2018)
Est. GDV Township Type of product Total units Expected completion (RM mn) KLANG VALLEY
KL East Serviced apartment 254 2020 171
Elmina West DSLH 579 2020 380 DS shop office 11 2020 14 Elmina East DS shop office 14 2019 26 DSLH 228 2019 177 Denai Alam DS shop office 17 2020 21 Bandar Bukit Raja DSLH 111 2019 75 2 & 3 Serenia City DSLH 302 2020 166
Putra Heights Medium cost apartment 1,700 2021 355
Bukit Jelutong Serviced apartment 108 2019 343 NEGERI SEMBILAN Nilai Impian DSLH 132 2020 62 JOHOR Bandar Universiti Commercial office 35 2020 33 Pagoh Commercial office 38 2021 36 DSLH 112 2020 42
TOTAL 3,787 1,901
Notes: - All land tenures are freehold except for the developments in Bandar Universiti Pagoh - Estimated GDV as at 31 Oct 2017 40 Breakdown of External Revenue and PBIT 1QFY2018 vs 1QFY2017
REVENUE
In RM'mn 1QFY2018 1QFY2017 YoY % Continuing Operations Property Development 424 398 7 Property Investment 12 17 (29) Leisure and Hospitality 28 29 (3) Sub-total 464 444 4 Discontinuing Operation 9 13 (33) Total Revenue 473 457 3
PBIT
In RM'mn 1QFY2018 1QFY2017 YoY % Continuing Operations Property Development 393 40 893 Property Investment (7) 139 (105) Leisure and Hospitality 34 6 509 Sub-total 420 184 128 Discontinuing Operation 2 - >100 Total PBIT 422 184 129
41 Historical Key Financial Metrics FY2015, FY2016 and FY2017
Revenue PBIT Margin
2015 3,253,933 2015 820,852 25%
2016 2,590,737 2016 978,419 38%
2017 2,564,399 2017 817,649 32%
3-Year 3-Year 2,803,023 872,307 Average Average 31%
PATAMI ROIC
2015 560,809 2015 10%
2016 749,076 2016 12%
2017 607,926 2017 7%
3-Year 3-Year 639,270 10% Average Average
Notes: • Revenue, PBIT and PATAMI refer to contributions for the financial year from the continuing operations only • Calculation of Return on Invested Capital (ROIC) based on PBIT and balance sheet of both continuing and discontinuing operations
42 Operating Profit
FY2015 FY2016 FY2017
239 25% 146 518 517 25% (34) 46% 45% (15) -3% -4% (9) 685 399 -1% 71% 68% (31) -5%
19 RM million (81), -7% 2%
Operating Profit: 881 973 499
Share of results of associate/JV: (61) 5 319
PBIT: 821 978 818
• FY2016: • Recorded gains on land disposal at Semenyih (RM185mn) & Serenia City (RM126mn) and gains on disposals of 2 property investment assets in Singapore (RM447mn)
• FY2017: • Write down of inventories at ALYA KL and Putra Heights (RM149mn) offset by the gain on land disposal at Semenyih (RM413mn) and the gain on disposal of SD Enterprise Centre (Alexandra Road), Singapore (RM145mn) 43 Revenue and Gross Profit of Property Development
Projects Revenue Gross Profit 1 . Higher revenue in 2017 due to the sale RM mn 2015 2016 2017 2015 2016 2017 of 4 blocks of commercial office towers amounting to c.RM343.3mn 1 Ara Damansara 334.2 223.0 434.7 64.9 18.1 58.7 2 2 Bandar Bukit Raja 833.5 331.3 215.6 287.3 150.8 86.6 Lower revenue in 2016 and 2017 due to completion of several phases and some Bukit Jelutong 73.8 24.8 22.8 34.1 6.1 1.2 projects being at the tail end of the City of Elmina: Elmina East and construction progress 672.3 362.1 353.4 278.9 154.8 84.4 3 West 3 3 City of Elmina: Denai Alam 175.4 88.1 76.2 74.1 40.1 61.2 Lower revenue in 2016 due to completion of several phases in 2015 and new phases KL East 111.3 115.7 135.2 15.4 19.0 (0.9) launched towards the end of FY2016 4 Putra Heights 91.1 51.7 133.6 6.4 19.3 9.4 4 . Higher revenue in 2017 due to higher Saujana Impian 18.3 45.7 31.0 3.6 9.1 6.0 construction completion and sale of 5 Semenyih 0.3 242.3 434.0 0.2 (57.2) (11.5) inventories . 2017 gross profit includes write down of 6 Serenia City 1.3 391.2 41.1 (2.1) (2.9) 17.4 inventories (RM19mn) Subang Jaya City Centre 36.3 21.8 1.2 (12.2) (1.6) (1.8) 5 Bandar Ainsdale 132.5 95.3 52.6 11.9 7.6 4.9 Higher revenue in 2016 and 2017 due to disposal of land amounting to RM242mn Chemara Hills 38.0 32.7 35.4 12.6 1.3 1.0 and RM433.95mn, respectively Nilai Impian 248.7 199.3 176.0 83.7 48.3 52.6 6 Bandar Universiti Pagoh 37.8 22.9 62.7 12.4 6.0 17.1 Higher revenue in 2016 mainly due to disposal of land of RM129mn Taman Pasir Putih 156.7 62.8 17.8 94.7 29.5 (4.1) 7 7 Others 36.2 24.6 168.3 12.7 8.8 (69.5) . Increase in 2017 revenue due to recognition of sale of completed Sub-total 2,997.8 2,335.3 2,391.7 978.7 457.2 312.7 inventories in ALYA KL amounting to Net Operating Expenses (294.2) (311.2) (347.6) RM112.71mn . 2017 gross profit includes write down of Operating Profit (Excl. disposal gains) 684.5 146.0 (34.9) inventories of ALYA of RM130mn 8 Net Gain on Disposals 157.3 371.0 435.0 8 • 2015: Gain on disposal of 50% equity Operating Profit 841.7 517.0 400.1 stake in the JV with Sunsuria (RM157mn) Gross Profit Margin (%) 32.6% 19.6% 13.1% • 2016: Gains on land disposal in Serenia Operating Profit Margin (Excl. disposal gains) (%) 22.8% 6.3% (1.5%) City (RM129mn) and Semenyih (RM242mn) Operating Profit Margin (Incl. disposal gains) (%) 28.1% 22.2% 16.7% • 2017: Gain on land disposal in Semenyih (RM434mn) 44 Revenue and Gross Profit of Property Investment
Property Revenue Gross Profit 1 Nil contribution from Wisma Zuellig in 2016 due to expiry RM ‘mm 2015 2016 2017 2015 2016 2017 of the tenancy agreement in 2015. 1 Wisma Zuellig, Selangor 2.0 - - 1.8 (0.2) (0.2) Signed a lease agreement with Wisma Guthrie, Selangor 1.6 2.7 2.6 0.2 1.4 1.5 Reagan in 2017 • Currently under renovation Oasis Square, Ara Damansara 14.0 14.0 14.0 4.5 6.3 3.9 and target to be operational in May 2018 Wisma Sime Darby, KL 19.0 19.9 19.8 0.6 1.7 2.6
SD Business Centre, Spore 15.9 18.6 4.6 12.5 15.0 3.6 2 . In 2016, recorded total net SD Centre, Spore 19.9 22.1 - 16.1 17.2 - gains of RM479.4mn from the disposals of two SD Enterprise Centre, Spore 5.6 5.8 - 4.3 4.2 - properties in Singapore (SD Centre (Dunearn) and SD 160 Dundee Street, UK 7.9 6.2 5.9 4.9 3.5 3.8 Business Centre (Kilang) Others 6.2 5.6 7.7 7.5 7.3 7.7 . In 2017, the net gains of RM145mn mainly Sub-total 92.1 94.9 54.5 52.3 56.5 22.9 attributable from the disposal of SD Enterprise Net Operating Expenses (61.0) (37.3) (53.8) (Alexandra) in Singapore
Operating Profit (Excl. disposal gains) (8.7) 19.1 (31.0)
2 Net Gains on Disposals 81.9 479.4 144.9
Operating Profit 73.2 498.5 113.8
Gross Profit Margin (%) 56.7% 59.5% 42.0%
Operating Profit Margin (Excl. disposal gains) (%) (9.5%) 20.1% (56.9%)
Operating Profit Margin (Incl. disposal gains) (%) 79.5% 525.3% 208.8%
45 Revenue and Gross Profit of Hospitality & Leisure
Property Revenue Gross Profit RM ‘mm 2015 2016 2017 2015 2016 2017 Saujana Impian Golf & County Club, 5.7 5.5 6.0 1.1 0.9 1.9 1 Selangor . Lower contribution in Sime Darby Convention Centre, KL 20.8 26.8 27.3 5.6 9.6 8.8 2016 mainly due to the lower TPC Kuala Lumpur 49.4 50.2 53.9 36.8 36.4 40.6 occupancy rate 1 Equatorial Hotel, Malacca 43.7 38.4 - 27.5 19.9 - Genting View Resort, Pahang 4.4 4.4 3.0 1.1 0.2 0.2 Darby Park Serviced Residences, 6.6 6.4 6.6 4.1 3.9 4.0 Margaret River, Australia Darby Park Serviced Residences, 7.2 5.1 - 5.3 3.7 (0.005) Subiaco, Australia 2 Karri Valley Resort, Australia 9.0 9.3 9.5 3.6 3.7 3.6 . In 2016, the net gains of Darby Park Executive Suites, Spore 11.0 9.3 9.3 7.7 5.9 6.3 RM38.3mn was mainly Darby Park Serviced Residences, 3.1 2.3 1.9 1.9 1.2 0.9 attributable to Vietnam the disposal of Others 3.2 2.8 0.6 0.5 0.6 0.3 Syarikat Malacca Straits Inn Sdn Sub-total 164.0 160.6 118.2 95.2 86.0 66.6 Bhd in Malacca Net Operating Expenses (128.7) (166.7) (81.5) Operating Profit (Excl. disposal (33.5) (80.7) (14.9) gains)
2 Net Gains on Disposals 0.1 38.3 0.1 Operating Profit (33.4) (42.4) (14.8) Gross Profit Margin (%) 58.0% 53.6% 56.3% Operating Profit Margin (Excl. disposal gains) (%) (20.4%) (50.3%) (12.6%) Operating Profit Margin (Incl. disposal gains) (%) (20.4%) (26.4%) (12.5%) 46 Asset Portfolio Property Investment, Hospitality and Leisure
Property Investment Hospitality & Leisure
RETAIL MALLS
Melawati Mall, Kuala KL East Gallery, Kuala Sime Darby TPC Kuala Lumpur, Lumpur (JV with CapitaLand Lumpur Convention Malaysia Malls Asia) . Targeted to open in the 4th Centre, Malaysia • Formerly known as Kuala Lumpur . Launched in July 2017 quarter of 2018 Golf & Country Club . Net lettable area of 617k sq.ft. . Net lettable area of 384k sq. . Committed tenancy of 76% & ft. occupancy rate of 62% as at 30 Sep’17 OFFICE SPACES
Sime Darby Property Block F, Oasis Square Darby Park Executive Darby Park Serviced Corporate Tower • Occupancy rate of 92% Suites, Residences, Vung Tau, as at 30 Sep’17 Singapore Vietnam 47 Beyond A Township Developer Transformation of Ara Damansara to a Transit Oriented & Adjacent Development
Transforms the look and prospects of Ara Damansara, primarily a residential area by providing a much-needed commercial center
Oasis Central (Office/ retail space/ ~85 acres Freehold Oasis Atelier serviced apartments) (Retail space/ serviced apartments) ~RM6bn GDV Oasis Kyla ~70% commercial (Serviced apartments)
LRT Ara Damansara Station LRT Lembah Subang Station
Oasis Square OasisOasis PlantationPlantation Oasis Square OasisOasis Gallery (Office/(Office/retail retail space/ (Office) (Property(Property exhibition) (Office) space/servicedserviced apartments) apartments)
Oasis Rio Oasis Tower (Office) (Office/ retail space/ serviced apartments)
Oasis Autocity Oasis Place (Oasis Corporate Park (1) Oasis Mall (Office/ Automobile (Serviced apartments, (Hotel/ office/ retail space/ (Complex commercial) Exhibition) retails space) serviced apartments)
(1) Parts of Oasis Corporate Park have been completed (Medalla, Centum, Meritus, and Augustus). 48 Sustainability Key Performance Indicators Sustainability Leadership Index Critical Sustainability Key Performance Indicators (KPIs) will guide Sime Darby Property to be a Sustainability Leader by 2020
KPIs Targets Reducing Lost Time Injury • Zero fatality Frequency Rate (LTIFR) & Increasing • “Best in Class” ‘Concerned Reporting’ • LTIFR of 1.0
Increasing Lean Six Sigma • Financial savings at 1.5% of (LSS) Monetary Benefits • Sime Darby Property’s revenue
Enhancing Global Reporting Initiative • Best in class (GRI) Sustainability Reporting • Benchmark by other in each sector
Reducing Green House Gas • 100% achievement of reduction target (GHG) Emissions • Exceed national expectations
• Managing waste for 6 key townships and Reducing Waste Generation Operating Units
Protecting Water Resources • Adopt responsible water stewardship
49