Goodman : GMG 1H FY19 Half Year Results Presentation

Results for the half year ended 31 December 2018

14 February 2019

Important Notice and Disclaimer

• + This document has been prepared by Goodman Group (Goodman Limited (ABN 69 000 123 071), Goodman Funds Management Limited (ABN 48 067 796 641; AFSL Number 223621) as the Responsible Entity for Goodman Industrial Trust (ARSN 091 213 839), and Goodman Logistics (HK) Limited (Company Number 1700359; ARBN 155911142 - A Hong Kong company with limited liability)). This document is a presentation of general background information about the Group's activities current at the date of the presentation. It is information in a summary form and does not purport to be complete. It is to be read in conjunction with the Goodman Group Financial Report for the half year ended 31 December 2018 and Goodman Group's other announcements released to ASX (available atwww.asx.com.au). It is not intended to be relied upon as advice to investors or potential investors and does not take into account the investment objectives, financial situation or needs of any particular investor. These should be considered, with professional advice, when deciding if an investment is appropriate.

• + This Presentation uses operating profit and operating earnings per share (EPS) to present a clear view of the underlying profit from operations. Operating profit comprises profit attributable to Securityholders adjusted for profit on disposal of investment properties, net property valuations gains, non-property impairment losses, net gains/losses from the fair value movements on derivative financial instruments and unrealised fair value and foreign exchange movements on interest bearing liabilities and other non-cash adjustments or non-recurring items e.g. the share based payments expense associated with Goodman's Long Term Incentive Plan (LTIP). A reconciliation to statutory profit is provided in summary on page 10 of this Presentation and in detail on page 5 of the Directors' Report as announced on ASX and available from the Investor Centre atwww.goodman.com.

• + The calculation of fair value requires estimates and assumptions which are continually evaluated and are based on historical experience and expectations of future events that are believed to be reasonable in the circumstances

• + This document contains certain "forward-looking statements". The words "anticipate", "believe", "expect", "project", "forecast", "estimate", "likely", "intend", "should", "could", "may", "target", "plan" and other similar expressions are intended to identify forward-looking statements. Indications of, and guidance on, future earnings and financial position and performance are also forward-looking statements. Due care and attention has been used in the preparation of forecast information. Such forward-looking statements are not guarantees of future performance and involve known and unknown risks, uncertainties and other factors, many of which are beyond the control of the Group, that may cause actual results to differ materially from those expressed or implied in such statements. There can be no assurance that actual outcomes will not differ materially from these statements. Neither the Group, nor any other person, gives any representation, warranty, assurance or guarantee that the occurrence of the events expressed or implied in any forward looking-statements in this document will actually occur.

• + This document does not constitute an offer, invitation, solicitation, recommendation, advice or recommendation with respect to the issue, purchase, or sale of any stapled securities or other financial products in the Group.

• + This document does not constitute an offer to sell, or the solicitation of an offer to buy, any securities in the United States or to any "US person" (as defined in Regulation S under the US Securities Act of 1933, as amended (Securities Act) (US Person)). Securities may not be offered or sold in the United States or to US Persons absent registration or an exemption from registration. The stapled securities of Goodman Group have not been, and will not be, registered under the Securities Act or the securities laws of any state or jurisdiction of the United States.

Contents

• + Section 1 - Highlights

• + Section 2 - Results overview

• + Section 3 - Operational performance

• + Section 4 - Outlook

• + Appendices

  • - Results analysis

  • - Property investment

  • - Development

  • - Management

  • - Capital management

Section1 - Highlights

Highlights

• + Market fundamentals remain positive with the Group delivering a strong 1H19 performance. Key financial metrics include:

  • - Operating profit1 of $465.0m million, up 10.4% on 1H18

  • - Operating earnings per share (EPS)2 of 25.5 cents, up 9.4% on 1H18

  • - Gearing 6.5%³ (5.1% at FY18)

  • - Distribution per security (DPS) of 15.0 cents, up 9.1% on 1H18

  • - Statutory accounting profit of $929.2 million, includes $596.7 million valuation gains, contributing to 8.8% growth in net tangible assets (NTA) since 30 June 2018 to $5.05 per security

• + Structural changes in our customers' businesses is driving strong demand in our infill markets globally

  • - Technology and modernisation of supply chains is driving demand with WIP currently at $3.6 billion and expected to be above $4 billion in the near term

  • - Our locational focus on urban centres is being rewarded with higher intensity use occurring. This is supporting growth in rents and redevelopment opportunities which should continue to contribute to WIP over time

  • - Majority of development undertaken on behalf of Partnerships

• + Location and quality of our assets is driving strong performance in the Partnerships including $2.3 billion in revaluations for the half

  • - External assets under management (AUM) grew significantly, up 27% to $39.6 billion, with total AUM up 24% to $42.9 billion on 1H18

  • - Revaluations and investment, predominantly through our increasing development activity and completions, will support further AUM growth

  • - Strong portfolio fundamentals combined with continued investment demand, are supporting performance of the Partnerships with returns expected to be in the mid teens for FY19

  • 1. Operating profit comprises profit attributable to Securityholders adjusted for property valuations, derivative and foreign currency mark to market and other non-cash or non-recurring items

  • 2. Operating EPS is calculated using Operating Profit and weighted average diluted securities of 1,824.5 million which includes 15.0 million LTIP securities which have achieved the required performance hurdles and will vest in September 2019 and September 2020

  • 3. Gearing is calculated as total interest bearing liabilities over total assets, both net of cash and the fair values of certain derivative financial instruments included in other financial assets of $204.4 million (30 June 2018: $154.3 million). Total interest bearing liabilities are grossed up for the fair values of certain derivative financial instruments included in other financial liabilities of $81.1 million (30 June 2018: $31.9 million).