SCENTRE GROUP ANNUAL
FINANCIAL
REPORT
2022
Creating the places
more people choose to come, more often,
for longer
22 February 2023
Scentre Group Limited
ABN 66 001 671 496
Contents | Highlights | Letters to securityholders | Our strategy | Directors' Report | Financial Report | Information
At Scentre Group, we create extraordinary places that connect and enrich communities.
We bring people together through our Westfield platform, which includes 42 destinations across Australia and New Zealand. We create an essential place where customers, communities and businesses can interact.
1
Creating extraordinary places and experiences
Auslan Santa customer activation
We continued our commitment to make the magic of Christmas inclusive and accessible to more of our customers in 2022 by partnering with Deaf Australia to pilot Auslan Santa for children who use Auslan as their primary form of communication. This followed the national launch of Sensitive Santa in 2019 for children with sensory challenges, anxiety or other physical disabilities.
Cover image: Westfield Sydney Pitt Street Alive activation, April 2022
2 SCENTRE GROUP | 2022 Annual Financial Report
ABOUT
US
Scentre Group owns and operates 42 Westfield destinations with
37 located in Australia and five in New Zealand. Our destinations are in close proximity to 20 million people. The Group's total assets under management are $51.2 billion represented by $35.0 billion SCG investment, and $16.2 billion of third-party funds.
The Group employs 3,129 people across Australia and New Zealand. Approximately 93% of our workforce is located in Australia.
Our strategy is to create the places more people choose to come, more often, for longer.
Contents | Highlights | Letters to securityholders | Our strategy | Directors' Report | Financial Report | Information | 3 |
Scentre Group is the owner and operator of
destinations in Australia and New Zealand.
In 2022 we welcomed 480 million customer
visits to our destinations,and our business partners achieved record sales across our
platform of $26.7 billion.
OUR
REPORTING
SUITE
This document is part of a suite of reporting documents, including:
Corporate Governance Statement
Property Compendium
Reconciliation Action Plan
To be released in March 2023
Responsible Business Report
Modern Slavery Statement
We acknowledge the Traditional Owners and communities of the lands on which our business operates.
Contents
OUR
STRATEGY
PAGE 10
HIGHLIGHTS
PAGE 5
$1,040m $26.7bn
Funds From Operations | Record business |
20.6% | partner sales 21.0% |
Our highlights | 5 |
Letters to securityholders | 6 |
Our strategy | 10 |
Directors' Report | 22 |
Remuneration Report | 42 |
Independent Auditor's Report | 72 |
Financial Report | 77 |
Income Statement | 78 |
Statement of Comprehensive Income | 79 |
Balance Sheet | 80 |
Statement of Changes in Equity | 81 |
Cash Flow Statement | 82 |
Notes to the Financial Statements | 83 |
Directors' Declaration | 136 |
Investor relations | 137 |
Members' information | 139 |
Directory | 141 |
We pay our respect to Aboriginal and Torres Strait Islander cultures and to their Elders past and present.
We recognise the unique role of Māori as Tangata Whenua of Aotearoa/New Zealand.
98.9% 480m
Occupancy | Annual customer visits |
0.2% | 67 million |
Go to Financial Report
4 SCENTRE GROUP | 2022 Annual Financial Report
Contents | Highlights | Letters to securityholders | Our strategy | Directors' Report | Financial Report | Information | 5 |
5 YEAR RESULTS OVERVIEW
"I am very pleased with these results, driven by the Group's strong operating performance and proactive customer strategy to attract more people to our Westfield destinations."
Elliott Rusanow
Chief Executive Officer
FY22 | FY21 | FY20 | FY19 | FY18 | ||
Operating profit (i)(ii) | $m | 1,022.0 | 845.8 | 763.4 | 1,274.7 | 1,270.3 |
Operating profit per security (ii) | cents | 19.71 | 16.32 | 14.71 | 24.10 | 23.94 |
Funds From Operations (FFO) (i)(ii) | $m | 1,039.9 | 862.5 | 766.1 | 1,331.9 | 1,330.0 |
OUR
HIGHLIGHTS
FINANCIAL
The Group delivered strong operational performance during 2022.
Funds From Operations of $1,040 million, up 20.6%.
PEOPLE AND
COMMUNITIES
We are focused on our customer strategy and driving visitation to our Westfield destinations.
During 2022 we welcomed 480 million annual customer visits, up 67 million on 2021.
Net operating cash flow | Cents per security |
$1,181m 29.3% | 22.78c |
Operating profit | Cents per security |
$1,022m 20.8% | 19.71c |
Funds From Operations | Cents per security |
$1,040m 20.6% | 20.06c |
Distribution | Cents per security |
$817m 10.5% | 15.75c |
Annual customer visits | Customer advocacy (NPS) |
480m 67m | 40pts(i) 2pts |
FFO per security (ii) | cents | 20.06 | 16.64 | 14.76 | 25.18 | 25.06 |
Statutory profit/(loss) after tax (iii) | $m | 300.6 | 887.9 | (3,731.8) | 1,179.5 | 2,287.2 |
Distribution per security | cents | 15.75 | 14.25 | 7.00 | 22.60 | 22.16 |
Security price (at 31 December) | $ | 2.88 | 3.16 | 2.78 | 3.83 | 3.90 |
Assets under management (AUM) | $b | 51.2 | 50.4 | 49.9 | 56.0 | 54.2 |
Group's share of AUM | $b | 35.0 | 34.4 | 34.1 | 38.2 | 39.1 |
- Operating profit and FFO are non-IFRS (International Financial Reporting Standards) measures derived from profit/(loss) after tax. All adjustments to profit/(loss) after tax are detailed on page 23.
- For consistency with FY22, FY21 and FY20, FY19 and FY18 were restated to exclude straightlining of rent.
- Statutory profit/(loss) after tax is inclusive of unrealised fair value movements.
BUSINESSES
We continue to drive strong demand for space in our Westfield destinations.
During the year we experienced record leasing activity and completed 3,409 deals.
PLATFORM
We made progress on expanding and enhancing our platform.
Our membership program grew to 3.2 million members, an increase of 1 million in 2022.
Occupancy
98.9% 0.2%
Leasing deals
3,409 912
Westfield members
3.2m 1m
(i) NPS excludes Westfield Knox which is under development.
Business partner sales
$26.7bn 21.0%
New brands to portfolio
288 21
6 | SCENTRE GROUP | 2022 Annual Financial Report | Contents | Highlights | Letters to securityholders | Our strategy | Directors' Report | Financial Report | Information |
7
A MESSAGE
FROM THE CHAIR
A strong year
On behalf of my fellow Board members I am pleased to present our Annual Financial Report for 2022. It has been a successful year for the Group as we remained focused on our customer strategy following several pandemic-impacted years.
The vibrancy of our Westfield destinations has been pleasing to see with visitation growing as Australians and New Zealanders returned to living their lives free of restrictions.
Our financial performance reflects this positive momentum and demonstrates our continued proactive and deliberate approach to generating long-term value for our securityholders.
It has been a significant year for the Group as we successfully executed our leadership transition with Elliott Rusanow commencing in the role of Chief Executive Officer on 1 October, following the decision of our inaugural CEO Peter Allen to step down. Andrew Clarke commenced in the role of Chief Financial Officer at the same time. Both were internal appointments which is testament to the strength of the Group's succession and talent pipeline.
On behalf of the Board and securityholders, I would like to thank Peter for his extraordinary leadership over eight years as our inaugural CEO. The seamless transition that occurred throughout the year is testament to his leadership and stewardship of our company and culture. I look forward to recognising Peter's leadership more fulsomely at our Annual General Meeting in April.
We are committed to fostering a diverse, equitable and inclusive workplace where our people feel respected, inspired to deliver their best and do work that matters to businesses and communities.
Gender diversity remains a key focus of this approach. We have continued to increase female representation at all levels of the organisation and are well positioned to achieve our goal of 40:40:20 across the Group's workplace by 2025. We currently have four women on the Board and will achieve 40% female representation in 2023.
We have continued to deliver on our responsible business strategy. During the year we released our third Reconciliation Action Plan. The Board maintains oversight of our approach to climate risk. In March 2023 we will release our Responsible Business Report, providing more detail on our progress and pathway to net zero by 2030.
Board renewal and succession planning continues to be a focus. The Board is committed to continuing to ensure that we appoint directors with an appropriate mix of skills, knowledge, experience and diversity.
We were very pleased to have Steve McCann join the Board from 1 November 2022. He will stand for election at our upcoming AGM.
Andrew Harmos has announced his retirement from the Board and on behalf of the directors I extend my thanks to him for his contribution to Scentre Group since our formation in 2014. Andrew has been a dedicated Chair of the Human Resources Committee for the past several years and his work throughout this time has been significant. Again, I will elaborate at the upcoming AGM on Andrew's contribution.
Our management team under Elliott's leadership remains focused on our customer strategy and growth ambition, continuing to deliver long-term growth for our securityholders.
I thank my fellow directors for their valuable contribution and support as we delivered our leadership transition this year.
Thank you for your continued support of our company.
Brian Schwartz AM
Chair
22 February 2023
Left: Brian Schwartz, Chair
Right: Elliott Rusanow, CEO
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Scentre Group published this content on 21 February 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 21 February 2023 22:54:56 UTC.
