GOODMAN GROUP — AGM Information 2019

Nov 19, 2019

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20 November 2019

Market Announcements Office ASX Limited Via ASX Online

Dear Sir / Madam

GOODMAN GROUP (GOODMAN) ANNUAL GENERAL MEETINGS – CHAIRMAN’S AND CEO’S PRESENTATIONS

Please find attached the Chairman’s presentation and Group Chief Executive Officer’s presentation and written address for Goodman’s Annual General Meetings being held today.

A live webcast of the Annual General Meetings will also be available on the Goodman website (www.goodman.com)

Yours faithfully

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Carl Bicego Company Secretary

Goodman Group

Goodman Limited | ABN 69 000 123 071 Goodman Funds Management Limited | ABN 48 067 796 641 | AFSL Number 223621 as responsible entity of Goodman Industrial Trust | ARSN 091213 839 Level 17, 60 Castlereagh Street, Sydney NSW 2000 | GPO Box 4703, Sydney NSW 2001 Australia Tel +61 2 9230 7400 | Fax +61 2 9230 7444

Goodman Logistics (HK) Limited | Company No. 1700359 | ARBN 155 911 149 | a Hong Kong company with limited liability Suite 901, Three Pacific Place, 1 Queen’s Road East, Hong Kong | Tel +852 2249 3100 | Fax +852 2525 2070 info-au@goodman.com | www.goodman.com

GOODMAN GROUP 2019 ANNUAL GENERAL MEETINGS

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20 November 2019

SPACE FOR T H E W O R L D ’ S G R E A T E S T AMBITIONS

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ANNUAL GENERAL MEETINGS

DIRECTORS AND EXECUTIVES

Ian Ferrier AM Independent Chairman

Greg Goodman Group Chief Executive Officer

Chris Green Independent Director

Stephen Johns Independent Director

Rebecca McGrath Independent Director

Carl Bicego Company Secretary

Danny Peeters Executive Director

Phillip Pryke Independent Director

Anthony Rozic Executive Director

Penny Winn Independent Director

Goodman Business Park, Greater Tokyo, Japan.

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ANNUAL GENERAL MEETINGS

AGENDA

Chairman’s address

Group strategy video

Group CEO’s address

Formal business

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ANNUAL GENERAL MEETINGS

CHAIRMAN’S ADDRESS

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ANNUAL GENERAL MEETINGS

FINANCIAL OVERVIEW

Goodman Qingpu Centre, Shanghai, China.

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Financial overview

Goodman performed very well in FY19

• • Operating profit of $942 million, up 11.4% on FY18
• • Statutory profit of $1,628 million, up 48% on FY18
• • Operating earnings per security of 51.6 cents, up 10.5% on FY18
• • Distribution per security of 30.0 cents, up 7% on FY18.

Operating profit ($M)

FY15 654 FY16 715 FY17 776 FY18 846 FY19 942

Statutory profit ($M)

FY15 1,208 FY16 1,275 FY17 778 FY18 1,098 FY19 1,628

Gearing (%)

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FY12 23.9
FY13 18.5
FY14 19.5
FY15 17.3
FY16 11.8
FY17 5.9
FY18 5.1
FY19 9.7
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ANNUAL GENERAL MEETINGS

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Securityholder return

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Growth in premium to NTA ($M) 8,928 Total Securityholder return relative performance
3.5
3.0
2.5
2,300
2.0
1,200 1,300
1.5
400
1.0
FY15 FY16 FY17 FY18 FY19 0.5
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S&P/ASX 20 index S&P/ASX 100 index S&P/ASX 200 A–REIT index Goodman

• A collaborative approach to remuneration:

– tailored to drive strategic alignment across a global team of 1,000 people located throughout 17 countries

• returns generated over the long-term are shared between securityholders, capital Partners and Goodman’s people.

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Aligning interests

• • Remuneration framework:

• designed to attract and retain high-quality professionals with local expertise who are integral to delivering the results

• focused on influencing long-term decision making and collaboration across business units and international operations to drive sustainable outcomes

• measure financial performance of our people and global operations on a consistent basis with long-term cash profits of the business.

FY19 remuneration mix All employees (excluding executive KMP)

� STI and LTI � Fixed remuneration

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41%
59%
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• • Alignment between pay and long-term performance is evidenced by the significant proportion of at-risk remuneration
• • Employees must achieve performance goals over a three-year period to qualify for performance based pay.

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ANNUAL GENERAL MEETINGS

Stakeholder engagement

Following last year’s strike, the Board asked the Chairman and Head of the Remuneration Committee to meet with a large number of local and international investors, proxy advisors and other key stakeholders.

• • Three main areas were discussed:

• 1 Establishing appropriate hurdles and time frame for performance hurdles

• 2 Assessment of appropriate quantum of remuneration, mainly through performance rights

• 3 Operating EPS, the Group’s primary cash based performance measure.

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continued Stakeholder engagement

• • This resulted in changes to both performance measures and time frames.

• now 3 years with a 6-9% cumulative increase over this longer period

• • This approach was clearly welcomed, in view of the favourable response received by Securityholder this year when voting.

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2030 SUSTAINABILITY STRATEGY

Goodman’s 2030 Sustainability Strategy is structured around three pillars.

• • These are linked to a set of material issues, with each pillar backed by short and long-term environmental, social and governance (ESG) targets.

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PROPERTY

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PEOPLE AND CULTURE

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CORPORATE PERFORMANCE

We will report our progress on these targets annually, leading us to 2030.

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2019 SUSTAINABILITY PROGRESS

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Target

PROPERTY

Progress

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Target

PEOPLE AND CULTURE

Progress

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Target

CORPORATE PERFORMANCE

Progress

100% renewable Increased use of, Zero workforce Implemented safety Retain investment Credit rating maintained energy use and commenced fatalities initiatives including grade credit at BBB+ (S&P) and within our programmes to a safety framework, rating Baa1 (Moody’s) operations purchase renewable guidelines and training by 2025 energy Task Force on Committed to adopting Global supply Committed to Climate Related the TCFD framework Carbon neutral Continued investment chain ethics increasing efforts to Financial operations in on-site and off-site policy eradicate potential Disclosures by 2025 energy and other instances of modern compliance efficiency projects day slavery in our (TCFD) supply chains Maintain Average occupancy Goodman Contributed $5.7m and >95% overall rate at 98% All employees Internal training, Foundation 13,140 employee hours occupancy rate assessed as communication and to community and demonstrating awards programmes. philanthropic causes our values Performance management system to assess performance

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ANNUAL GENERAL MEETINGS

BOARD RENEWAL

+ New appointments

• Chris Green, April 2019

+ Directors standing for re-election

• Phillip Pryke

• Anthony Rozic

+ Chair succession

• Ian Ferrier retiring end 2020

• Replacement to be announced early 2020.

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CEO’S ADDRESS

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STRUCTURAL CHANGE PROVIDING OPPORTUNITY

• Urbanisation

• • Growth in e-commerce

• Consumer convenience.

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STRATEGIC LOCATIONS DELIVERING RESULTS

• Assets under management $48.2 billion*

• • Development work in progress $4.2 billion*

• Occupancy 98%*

+ Partnership return average 16%.

*As at 30 September 2019

Assets under management ($B)

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48.2
46.2
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38.3
34.6
34.1
FY16 FY17 FY18 FY19 Q1 FY20
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OUR CUSTOMERS

Images clockwise from top left: Rheinberg Logistics Centre (DHL), Rheinberg, Germany; Highbrook Business Park, Auckland, New Zealand; Grossbeeren Logistics Centre (Kuehne+Nagel), Großbeeren, Germany; Centenary Distribution Centre, Sydney, Australia.

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GROWTH OF E-COMMERCE

Worldwide e-commerce share of retail sales 2015–2023

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25%
22%
20%
19.3%
20%
UK 18.1%
16.1%
14.1%
15%
12.2%
10.4% 10.7%
US
8.6%
10%
7.4%
6.3%
AUS
5%
FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23
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*Estimates

Sources: eMarketer, Australian Bureau of Statistics, US Census Bureau, Office for National Statistics

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GLOBAL STRATEGY

Images clockwise from top left: Goodman Commerce Center Eastvale, Los Angeles, USA; Goodman Tsuen Wan West – Building 1, Hong Kong, Greater China; Leicester Commercial Park, Leicester, United Kingdom; Highbrook Business Park, Auckland, New Zealand.

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AUSTRALIA CONTINUING TO INNOVATE

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Port Botany, Sydney, Australia.
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Sydney CBD
Sydney Airport
Port Botany
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CULTURE AND VALUES

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open+
fair
team+
+
performance
drive respect customer+
focus
innovative+
dynamic
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FY20 OUTLOOK

• • Structural trends continuing unabated
• • Reaffirm guidance

• Earning per security 56.3 cents

• Up 9% on FY19.

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CEO’S ADDRESS GOODMAN GROUP – ANNUAL GENERAL MEETINGS 20 NOVEMBER 2019 AT 10:00AM

Thank you Ian, and good morning.

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Urbanisation, the growth of e-commerce, and the increased need for consumer convenience in the major cities around the world, has given, and is giving your company Goodman Group, great opportunity.

That opportunity is for us to give customers what they need. And what they need is logistics infrastructure around the major cities of the world, that enables them to supply goods and services with ever increasing speed, to their customer, the consumer.

Consumer expectations around choice, price, and importantly, convenience, are rising. Whether it’s children’s toys, clothing, spare car parts, or even groceries, consumers want almost instant

gratification, where virtually everything needs to be delivered within a day or even less. As a result, our customers are focusing on speed to market and this is most evident in the big cities where Goodman operates.

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Given this ever-changing world, Goodman has over the last

10 years been consciously and strategically focusing our real estate

on locations where consumerism is at its highest.

These structural changes, have led to the growth in your company and the continued opportunities we are witnessing around the world.

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Assets under management are now close to $50 billion, and

importantly, can continue to grow organically through our activities.

That’s why we have confidence in our development pipeline, where work in progress currently stands at $4.2 billion and is expected to increase to around $5 billion this year.

Our occupancy is 98%. And in some markets like Tokyo, Hong Kong and Auckland, it’s above 99%.

Meanwhile, our Partnerships with some of the world’s largest

investors generated an average return of 16% and we’re forecasting another strong year.

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We have a customer base which we are very proud to work

alongside to help deliver their ambitions. Our customers are some of the biggest e-commerce, third-party logistics companies and retailers globally.

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In a world where global growth is slowing, there is a constant increase in people’s preference for convenience and choice in the way they want to live and shop.

We’ve seen that the e-commerce and retail platforms are being built with state-of-the-art logistics networks, great amounts of capital and technology.

This is playing out all over the world. While the overall consumer market is subdued, online sales continue to march on and now account for 14.1% of total retail sales globally. This has almost doubled over the last five years and is expected to grow to 22% by 2023.

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In the UK, around 19% of retail spend is online. In the US, it’s currently around 11%, while we’re about 6% here in Australia. Last week in China, Alibaba and JD.com, the two major online retailers, recorded 26 and 28 per cent growth in sales as part of the Double Eleven or Singles Day shopping event. They transacted

$US61 billion in online sales from this one event alone. This is more than three times what we spend online in Australia in one year. And they did most of that in one day.

As part of our focus on the future, some of the many questions we ask at Goodman, is how far will this go? How do we help our customers manage this growth?

The answer is, by organically adding to our portfolio in locations that are close to the major cities of the world, where land is scarce and barriers to entry are high. To be clear, this is an environment that is difficult and challenging – but that’s the way we like it. We like it, because it suits a specialist operator like Goodman, and we have the experienced management team and established track record of doing this successfully.

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In the Americas we’re continuing to build on our major city strategy by acquiring key sites in New Jersey (to service the market in New York) and Los Angeles. Our US portfolio, has a built-out value approaching $6 billion and is expected to grow.

In Asia, we’re continuing our success, as we completed over $1 billion of development in the tier 1 cities of Beijing and Shanghai. We also purchased land in the tightly-held Hong Kong market where we have commenced a significant pre-let development. While in Japan, our team continues to develop some of the best-appointed warehouses in the world, with superior customer amenity.

Our New Zealand business had a record year. There we are now solely focused on infill industrial in Auckland, where occupancy is above 99%.

In Europe – we also had a record year, especially in development, with more than $1.5 billion in completions. We continue to focus on the major cities where we see the best long-term opportunities and value drivers for ourselves and our Partners.

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In Australia we are continuing to concentrate on the primary markets

of Sydney and Melbourne, where more than 90 per cent of our properties are. We are buying infill sites and continually looking to

innovate by exploring multi-story and brownfield developments that intensify the use of land holdings we have had for some time.

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At Goodman, we have a long-term approach that drives our

decisions, evidenced by the fact we are now seeing the benefits of a strategy implemented ten years ago.

This is not a coincidence. It’s part of our culture and our structure, which is reinforced by our long-term incentive plan. This plan has been in place for the last ten years for almost everyone in the

organisation. As a result, I’m proud to say that there’s a real sense of ownership and belonging in the team of Goodman people around the world.

It makes people want to make decisions for the long-term, which is strategically aligned with the objectives of our stakeholders. We have a culture that’s inclusive and respectful and is driven to making sure we’re a better company next year, than we were this year.

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At Goodman, we don’t allow ourselves to become complacent, rather

we are looking ahead to ensure our strategy continues to deliver now and remain relevant in the future.

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In closing, we had a strong FY19 and the first quarter of FY20 continued this trend. Looking ahead, we see the structural trends continuing unabated. As such, I reaffirm the Group’s forecast FY20 operating earnings per security of 56.3 cents, up 9% on FY19.

Finally, I would like to thank the Goodman team around the world for all their hard work in delivering these results for you and all our stakeholders. On behalf of the team, I also thank you for your

continued support of Goodman Group and look forward to meeting

with you at the conclusion of this meeting.

Thank you.

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