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07 Apr 2022

2022 AGM CEO address

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HELD ON THURSDAY, 7 APRIL 2022 AT 10:00AM

Thank you Chairman. Welcome and good morning everyone.

Thank you for participating in today’s AGM.

I am very pleased to report on the Group’s performance and the team’s delivery of our 2021 results.

Last year once again highlights the important role we play in our community and economy.

I would like to thank the whole of our Scentre Group team for being proactive and decisive in supporting our customers, communities, business partners, people and securityholders.

We have been agile in our customer focussed strategy to drive visitation to our Westfield Living Centres and are seeing more customers spending their time and money in our centres.

Notwithstanding more government restrictions than the previous year, we achieved 413 million customer visits.

We have remained focused on our customers, leveraging the strengths of our leading platform and pursuing Our Ambition to grow by becoming essential to people, communities and the businesses that interact with them.

As a result we saw our business deliver stronger results in 2021 with Operating Profit being $846 million, an increase of 10.9% over 2020.

Funds from Operations grew by 12.7% to $863 million.

Gross cash rental collections for the year were $2.3 billion, representing an increase of approximately $200 million compared to 2020.

Our net operating cash flow was $914 million, up 24.8% compared to 2020.

Our team’s actions have delivered financial returns that have enabled us to deliver a distribution of 14.25 cents per security for the year, exceeding guidance.

We continue to drive strong demand for space in our Westfield Living Centres from existing and new businesses who are focused on growing their customer engagement and optimising their most productive stores with us.

Leasing deal activity has been strong and as a result, occupancy increased to 98.7%.

During 2021 we made significant progress on customer initiatives that create opportunities to expand and enhance our platform.

We launched Westfield Direct, our aggregated click and collect service, across our Australian Westfield Living Centres, as an extension of our in-centre experience. It means our customers can experience Westfield, wherever they are. Westfield Plus, our membership platform grew in 2021 and now totals more than 2.4 million members.

The combination of these two initiatives provides us with opportunities to learn more about our customer and continue to deliver what they want.

This focus on customers is integral to our $4.5 billion development pipeline, creating destinations that meet the future needs of people and communities.

We have continued to make progress on our approach as a responsible, sustainable business across the four pillars of people, community, environment and economic performance.

The Group is committed to gender equity. At year-end, we had 45% female representation across all levels of management. We have pay equity for like roles by gender.

For our community, the highlight is the ongoing positive impact of our Westfield Local Heroes program, which has now entered its fifth year. Since inception, the Group has donated approximately $5 million to the grassroots organisations represented by our successful Westfield Local Heroes. The key areas of support over this time have included disability and access, family and youth support, domestic violence, welfare services and homelessness, together with mental health and wellbeing.

We are working with our joint venture partners to expand our net zero emissions target for scope 1 and 2 by 2030, to be across our whole portfolio. Currently our net zero target is across those centres we own outright. We are making great progress on this with energy utilisation reduced by 30% since Scentre Group was formed. During 2021, we finalised our Net Zero Pathway outlining our continued approach to reduce energy and emissions. We have been pleased to work with some of our business partners to support them in achieving their environmental targets by providing renewable electricity across their store networks.

This year we are working on our roadmap to reduce waste and water usage. Our teams continue to focus on recycling and water initiatives across our portfolio. We released our Modern Slavery Statement alongside our Responsible Business Report in mid March. It outlines the progress we are making to identify and address the risk of modern slavery occurring in our operations and supply chain.

During the year we refreshed our strategy and developed Our Ambition to outline how we will pursue growth and become essential to people, communities and the businesses that interact with them. Our team is focused on growth.

We have learnt over the past two years that the pandemic impact to our business is temporary and not structural. Our customers want to spend time at our centres which in turn drives demand from our business partners to have access to these customers. Any rationale for Government imposed restrictions regarding lease obligations no longer exists and we expect governments to end their mandating of our securityholders funding support to other businesses.

We are confident that the Group is well positioned to benefit from the continued strength of the consumer and the economic recovery across Australia and New Zealand. In our first quarter of 2022, we have collected approximately $600 million in rent.

Subject to no material change in conditions, the Group expects to distribute at least 15.0 cents per security for 2022, representing at least 5.3% growth. Operating earnings are expected to grow at a higher rate in 2022.

I would like to thank the Board for their continued support and guidance, not only for the last year but for the nearly 8 years I have been CEO of Scentre Group. It’s been a privilege to serve as the Group’s first CEO, establishing our strong culture and supporting a dedicated and highly aligned results driven team.

As this is my last AGM, I would like to thank you, our securityholders for your ongoing support of Scentre Group. I look forward to the Group’s continued success as it pursues its growth ambition. 

I will now hand back to the Chairman.