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Believe in better. REFINANCE AND MARKET UPDATE 5 MARCH 2025
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1 FY25 market update Progress across multiple key strategic areas of thebusiness has been made during 2H25. 1. Expected by 31 March 2025. Improving sales momentum Sales are improving with new sales volumes +29% and resales volumes +6% in 3Q25 vs 3Q24. Pleasing sell down progress at The Helier (Auckland), now 34% occupied1, alongside newly completed apartment developments at Waterford (Auckland) and Awatere (Hamilton). Unsold stock of $361m remains our biggest lever to reduce debt. Recently appointed both a Chief Sales and Marketing Officer, and General Manager Sales. Banking syndicate reaffirms support Refinance of debt facilities successfully completed on 4 March 2025 at existing levels of $500m effective 1 May 2025. Good demand from existing and new lenders resulted in the addition of a new syndicate member, optimal pricing, extended tenor and no change to covenants. Prudent headroom in place to execute current and future development plans. Interest Cover Ratio (ICR) as at 30 September 2024 was4.2x compared to the 2.0x ICR covenant. No requirement for additional capital or bank borrowings. Business optimisation Team established to support the delivery of long term savings expected to be in the range of $10-15m annually reflecting the right sizing of support functions in light of divestments. The $5m annualised cost right sizing program signalled at HY25 has been completed with benefits to be realised from FY26. With changes to the certification pathways for overseas nurses recently introduced, a decision has been made to close the Wesley Institute of Nursing Education, with March 2025 being the final intake. The contribution to underlying EBITDA of the training school was $6.8m in FY24 and circa $5.0m in respect of FY25. Developments A more flexible short term development pipeline provides a focus on reducing gearing while balancing continued growth. The Meadowbank dementia building (40 care suites) and the Franklin development (31 villas and community centre) are currently under construction and on track for completion in in May 2025 and January 2026 respectively. Portfolio transition accelerated by targeted divestments Development completions and continued divestment of non core sites are transitioning the portfolio toward a >50% retirement portfolio mix, currently 54% care / 46% ILU, with a focus on premium offerings and amenities. Divestments to date have been sold at book value (in aggregate). Further divestments are in the later stages of due diligence and on track to settle during HY26.
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2 Banking syndicate reaffirms support Successfully refinanced debt facilities. Sufficient headroom remains to execute the current development pipeline and provide for future growth. 1. Oceania accounting policy, finance costs on working capital facility and in relation to completed developments recognised in NPAT. Finance costs in relation to developments under construction capitalised to WIP. Total finance costs in relation to completed developments circa $10m for FY25. • New syndicated facility agreement negotiated and effective from 1 May 2025 • Completed refinance of bank facilities at existing levels of $500m with the current syndicate remaining supportive of the business and its ongoing growth • Good demand from both existing and new lenders, with optimal pricing, reflecting a strong market appetite for the business • Expanded syndicate with BNZ now joining the three incumbent lenders • No waivers or amendments to banking covenants sought, with confidence in current and ongoing compliance • No new requirements for syndicate approval of land purchases or development commencement • Secured estimated line and margin fee cost savings of c.$1.0m per annum1 • Split and increase in tenor introduced with the use of 3 and 5 year facilities separating the maturity profile of term and retail debt • At HY25, gearing was 37.5% with prudent net debt headroom (including cash) of $96m. Gearing reduction to below 35% is being targeted through the ongoing focus on unsold stock and a reduced intensity development pipeline Increased tenure out to FY31 separates the maturity profile of debt Pro-forma debt tenor profile has improved (NZDm) Post re-financePre re-finance Syndicated banking facility Facility size $500m Headroom (30 Sep 24) $96m Banking partners ANZ, BNZ, ASB, ICBC Margin and line fee decrease (0.3%) 125 100 50 450 FY26 FY27 FY28 FY29 FY30 FY31 125 100 500 FY26 FY27 FY28 FY29 FY30 FY31
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3 Improving sales momentum Oceania has made good progress on the sell down of unsold stock, with sales momentum improving through 3Q25. 1. Discontinued an additional fee charged at the Helier which was the equivalent of 1% of annual DMF per annum over the first 5 years of the residents tenure. • Active management of our $361m of unsold stock (as at 30 Sep 24) remains our biggest lever to reduce debt • A robust review of portfolio pricing has been completed, with the net impact of actioned upward and downward price revisions being neutral. Further sales effortswere supported by the appointment of a dedicated Chief Sales and Marketing Officer and GM Sales during FY25 • Third quarter (October, November, December) new sales and resales volumes increased 29%, and 6% respectively, vs 3Q24. Applications received during January and February 2025 were 28% higher than the prior comparative period • Apartments and care suites at The Helier continue to sell down with 6 ILU and care suite sales settled and on track to settle in Q4. Enquires have been bolstered through recent sales and marketing efforts, including a review of the proposition1 • The 5 applications currently in place with expected settlement in Q1 FY26 will bring total occupancy to 39% • Acceptance of the care suite model remains strong in both urban and regional locations, with c.50% of the 55 care suites at Redwood in Blenheim now sold, 10 months since opening • Revenue recognition policy remains consistent with prior years. ORA sales are only recognised when a contract becomes unconditional and has either cooled off or the resident has occupied the unit • No changes have been made to DMF structures. Since 2012 the Oceania ORA structure has included a 30% DMF Sales volumes 1Q25 2Q25 3Q25 YTD Dec New sales 39 50 40 129 Resales 77 92 74 243 Total 116 142 114 372 1Q24 2Q24 3Q24 YTD Dec New sales 30 53 31 114 Resales 68 104 70 242 Total 98 157 101 356 Q1 Q2 Q3 YTD Dec ILU and CS sales volumes 38 44 64 53 51 51 153 14860 72 93 89 50 63 203 224 98 116 157 142 101 114 356 372 FY24 FY25 FY24 FY25 FY24 FY25 FY24 FY25 ILU CS
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4 Developments Meadowbank and Franklin developments provide a less capital intensive, more flexible development pipeline allowing afocus on reduction of debt while maintaining flexibility for growth. 1. The Directors adopt the CBRE Limited valuation with any Directors adjustments at annual reporting dates being downwards on ly. • Increased levels of occupation, applications and enquiries at the latest stage developments at Awatere and Waterford Villages, completed in October 2024 and January 2025, with 8 residents in occupation as at 28 February 2025 and 5 applications together representing 11% of new stock at these sites • Developing villages for locals, in highly desirable areas with aging local demographics. Meadowbank dementia centre (40 care suites) and Franklin Stage One (31 villas and community centre) are under construction and on track to be delivered in FY2026 • Village manager at Franklin appointed and commences 28 April 2025 • A more flexible short term development pipeline allows a focus on reducing gearing. The in house development team works with trusted partners to ensure the effective cost management in delivering the development pipeline • Current brownfield landbank largely includes development land adjoining current sites, providing optionality to further develop as market conditions improve. This pipeline is focused on adding lower density developments to mature sites. Gracelands, Hawkes Bay, was complemented in FY25 with the purchase of 2.6 hectares of adjoining land • The property portfolio is independently valued by CBRE Limited and partially peer reviewed by Colliers Limited at each reporting date1
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5 Portfolio transition accelerated by targeted divestments Divestment strategy continues to progress,with further settlements expected throughoutHY26. • Seven strategic divestments over the last 18 months have settled across FY24 and FY25, achieving total proceeds of $45m • Divestment proceeds in aggregate have been at an amount which is equal to independent valuations • Further divestments are in the later stages of due diligence and on track to settle during HY26, with negotiations well progressed • Divestments support the rebalancing of Oceania’s portfolio and debt reduction • Future development and divestments will reduce the standard care bed component of Oceania’s portfolio as we move toward a >50% ILU portfolio mix Victoria Place, Tokoroa Middlepark, Christchurch Holmwood, ChristchurchTakanini, Auckland FY25 settlements
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6 Business optimisation Successfully completed$5m cost right sizing program.Currently identifying longer term savings reflecting the right sized support functions post the divestment programmes and optimisation of the business • Completed cost right sizing program announced in HY25, achieving $5m in annual cost savings with benefits expected to be realised in FY26 • Identifying long term savings via a 12 month optimisation programme, targeting $10-15m in annual savings • Further right sizing initiatives will be managed by a central dedicated team • Establishment of new digital platforms will assist in streamlining business operations • The Wesley Institute of Nursing Education (Wesley) has provided training to nurses in New Zealand for several years. With changes to certification pathways for overseas nurses recently introduced, a decision has been made to close the training institute with March 2025 the final intake. Wesley contributed $6.8m to underlying EBITDA in FY24 and will contribute circa $5.1m to underlying EBITDA in FY25
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7 Important notice and disclaimer This presentation has been prepared solely by Oceania Healthcare Limited ("Oceania"). You must read this disclaimer before making any use of this presentation and the accompanying material or any information contained in it ("Document"). The presentation includes non-GAAP financial measures for development sales and resales which assist the reader with understanding the volumes of units settled during the relevant periods and the impact that development sales and resales during the relevant periods had on occupancy as at the end of such periods. The addition of totals and subtotal within tables and percentage movements may differ due to rounding. The information set out in this Document is an update only and does not contain all information necessary to make an investment decision. The information contained in this Document has been prepared in good faith by Oceania. No representation or warranty, expressed or implied, is made to the accuracy, adequacy or reliability of any statements, estimates or opinions or other information contained in this Document, any of which may change without notice. To the maximum extent permitted by law, Oceania, its directors, officers, employees and agents disclaim all liability and responsibility (including without limitation any liability arising from fault or negligence on the part of Oceania, its directors, officers, employees and agents) for any direct or indirect loss or damage which may be suffered by any person through the use of or reliance on anything contained in, or omitted from, this Document. This Document may contain certain forward-looking plans and projections. Those plans and projections reflect current expectations, but are inherently subject to risk and uncertainty, and may change at any time. There is no assurance that those plans will be implemented or that projections will be realised. You are strongly cautioned not to place undue reliance on any forward-looking statements. No person is under any obligation to update this Document at any time after its release or to provide further information about Oceania. This Document is not a product disclosure statement, prospectus, investment statement or disclosure document, or an offer of shares for subscription, or sale, in any jurisdiction. This Document in unaudited. Receipt of this Document constitutes acceptance of the terms set out above in this disclaimer.