24 Feb 2021

A message from our Chairman and CEO

DownloadSave as PDF
Dear Securityholder

We remain customer obsessed and focused on listening and adapting to our customers’ rapidly changing expectations.
 

We remained committed to our customer strategy during the challenging operating environment of 2020, brought the future forward and focused on Our Plan. We were proactive and decisive in supporting our customers, retail partners and people to enhance long-term value for our securityholders.


As a result, the Group achieved gross cash inflow of $2,357 million and net operating cash flows (after interest, overheads and tax) grew by 95.7 per cent in the second half of the year to $771 million. The Group collected $2,059 million in gross rent collections, including $641 million during Q4 2020, equivalent to 100 per cent of gross billings.

Every Westfield Living Centre remained open, every day, providing our retail and brand partners the opportunity to connect with customers. Despite the government restrictions, we had more than 450 million customer visits in 2020.

When we reflect on the year, we know our business fundamentals are strong. We operate a business and brand that is important to our customers and essential to the community. The strategic locations of our 42 Westfield Living Centres, close to where most of the population lives and works, our customer strategy, and our strong organisational culture underpinned by our diversity and inclusion strategy, means we are well-positioned for future growth.
 

We are very proud of our people and their ability to remain agile and focused and thank them for their efforts and contribution.


Our people maintained their dedication to customers and seized opportunities to do things differently. We accelerated new strategic initiatives to support our customer-driven strategy and meet the needs of our communities in a COVID-Safe way.

This included piloting a contactless, drive-through aggregated click and collect platform called Westfield Direct. This was an extraordinary achievement, delivered within a two-week period, with internal resources from our digital and customer experience teams. We have taken advantage of the learnings from this period and directed them into the development of some new offerings which will launch in 2021.

We successfully launched Westfield Plus in New Zealand in 2019 and introduced this membership platform to Australia in 2020, resulting in more than 1.2 million members so far. This is the next step in our customer strategy as we seek to find new ways to engage with our customers.

Our commitment to major community initiatives was constant, including our Westfield Local Heroes program, which saw $1.2 million and 126 grants awarded to deserving individuals and their organisations across our communities.

We maintain regular engagement with our customers to understand their needs, including our Westfield iQ research platform. Customers tell us they want to experience physical stores and experiences and interact with brands. This continues to drive strong demand as demonstrated by our occupancy of 98.5 per cent and deal activity, which saw more than 2,625 new leasing deals completed in the year, the vast majority of these completed in the second half.

We did not receive any financial support from the Australian or New Zealand governments including the JobKeeper program. We played an industry leadership role through the Shopping Centre Council of Australia to support government engagement and public policy development. We focused our case-by-case support on those that needed the most help which were our small to medium (SME) sized ‘mum and dad’ retail partners. We reached commercial arrangements with 3,398 of our 3,600 retail partners including 2,456 SME retail partners in relation to the Code of Conduct for Commercial Tenancies.

We increased our employee engagement activities and communications during the year to ensure our people remained informed and connected to the business. We maintained our momentum on our diversity and inclusion strategy and initiatives and prioritised our employee resource group deliverables around mental health and wellbeing and domestic and family violence.

Our ability to make decisions through the cycle has underpinned investor confidence and support from debt capital markets when we needed it. At the onset of the pandemic, we acted quickly to secure additional funding, ensuring we were in a strong financial position to see the Group through and beyond the volatile period. Our capital management actions were focused on preserving value for the long-term and we did not seek equity from our securityholders.

Most significantly, we priced a US$3.0 billion (A$4.1 billion) 60-year subordinated hybrid note issue in the United States market to diversify our sources of capital and ensure enough long-term liquidity to cover all debt maturities to early 2024.

Our long-term objective to create sustainable returns for our securityholders is consistent with our approach to be a responsible, sustainable business. Our Corporate Governance Statement and Code of Conduct encapsulate our policies and how they are integrated into our decision making and culture.

During 2020, we announced our target to achieve Net Zero Carbon Emissions by 2030 and committed to the Task Force for Climate-Related Financial Disclosures (TCFD). Page 16 of this report includes our first disclosure against TCFD recommendations in our annual report. Our standalone Responsible Business Report and our first Modern Slavery Statement will be released at the end of March 2021.

Board renewal and succession planning continues to be a focus. The Board is committed to continuing to ensure that we include directors with an appropriate mix of skills, knowledge, experience and diversity, including gender. We are in the process of addressing further gender representation. During the year we were pleased to welcome Michael Wilkins and Guy Russo to the Board. Mike and Guy are valued business leaders and we are looking forward to their diverse perspectives and contribution to the Group.

As consumer confidence continues to grow and the economic recovery picks up pace, the Board, management and our people are confident 2021 will bring a year of opportunity.

We remain customer obsessed and focused on listening and adapting to our customers’ rapidly changing expectations. We will continue to innovate, pursue market share and deliver on Our Purpose and Our Plan – creating the places more people choose to come, more often, for longer.

We thank our people for their commitment to our customers during a disrupted year, and for their contribution to this year’s results.

Thank you for your continued support of Scentre Group.

Brian Schwartz AM, Chairman
Peter Allen, Chief Executive Officer
 

search results for “