LIFESTYLE COMMUNITIES LIMITED — AGM Information 2016

Nov 28, 2016

Making a difference. Annual General Meeting 29th November 2016

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LIFESTYLE COMMUNITIES LIMITED - Downsize to a bigger life

A BUSINESS MAKING A DIFFERENCE

Agenda

1. Introduction from Chairman 2. Presentation from Managing Director

2. Formal Business

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LIFESTYLE COMMUNITIES LIMITED - Downsize to a bigger life

A BUSINESS MAKING A DIFFERENCE

Section 1

Introduction from Chairman Tim Poole

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LIFESTYLE COMMUNITIES LIMITED - Downsize to a bigger life

A BUSINESS MAKING A DIFFERENCE 2

Section 2

Presentation from Managing Director James Kelly

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LIFESTYLE COMMUNITIES LIMITED - Downsize to a bigger life

A BUSINESS MAKING A DIFFERENCE 3

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The Lifestyle Story
Lifestyle commenced
2003
with James, Dael & Bruce
developing a business plan
Development of
first community at
Brookfield in Melton. 2004
Opened June 2005
Company listed on
2007
Stock Exchange
Major Capital Raising 2012
of $36m
1,000th homeowner
moves into Lifestyle
2014
Hastings
Co-founder Dael
Perlov passed away 2014
from Cancer - aged 45
2,000th homeowner
moves into Lifestyle
2016 Geelong.
Opened our 10th
Community Clubhouse
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Lifestyle Communities

• Builds affordable highly desirable master planned communities;

• Provides facilities that exceed the expectations of our target customer by:

• Selling houses at 75-80% of the median house price

• Minimising ongoing maintenance

• Designed to promote community engagement

• Setting a sustainable rental at less than 25% of the Pension, balancing the needs of homeowners with returns for shareholders

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Why do we create Lifestyle Communities?

• To enable over 50’s to downsize and enrich their lives

• To provide financial freedom for our homeowners

• To give homeowners a choice – to mix/participate to the extent that’s right for them

• To change the mindset of what over 50’s can offer

• To provide a secure and predictable return to our shareholders

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Making A Difference 13 years later - how do we know if we are achieving this?

• Over 2,100 homeowners call a Lifestyle Community home

• 94% of homeowners would recommend us to friends and family[(1)]

• Approximately one in three new home sales come from referrals

• Pre-sales on new communities are increasing

• We have wait lists on all existing communities

Notes:[(1)] 2016 Lifestyle Communities homeowner survey

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LIFESTYLE COMMUNITIES LIMITED - Downsize to a bigger life

A BUSINESS MAKING A DIFFERENCE

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‘‘ ” it’s changed our lives. We’ve never been happier in our entire life, ever! Ever, ever, ever! Julie & Rod

‘‘ We wanted to downsize, there’s more to life than working, getting stressed and doing housework – ” best decision we’ve ever made.

Natalie & Stuart

‘‘ We have made so many friends here; we have ” a new lease on life. Tom & Sue

‘‘ It’s like coming home to a resort. You just couldn’t wish for better. It’s just like ” a new chance at life. Helen & Ted

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Financial Model

Creates a win-win for homeowners and shareholders

CREATING COMMUNITIES

MANAGING COMMUNITIES

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Total annuities at year end
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Cash break even after allocation of costs Dividend flow
to management business
Completed communities
RECYCLING
building a long term
CAPITAL POOL
sustainable income stream
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FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16

Note: Not to scale

• Organic growth through recycling capital not raising capital

• Pricing homes at 80% of average surrounding home values which:

Increases sales rates

Helps mitigate property cycle risk

• Conservatively geared to mitigate financial risk

• Rentals increase at CPI or 3.5% whichever if the greater

• DMF of 20% after 5 years on the resale price of the home

As at 31 October 2016 the gross rental annualised at $13.2 million per annum

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Community Overview How does the Lifestyle Communities model of living work?

Homeowners at Lifestyle Communities own their own home and lease the land upon which their homes are located, via a weekly site fee.

Homeowners at Lifestyle Communities are fully protected by the Residential Tenancies Act.

Homes typically priced at 75-80% of the median house price.

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On average, release of
$110,000 sale of your old home
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A 90 year lease provides security of tenure.

AFFORDABLE LIVING

The weekly site fee is approx. 20% of the aged pension after receipt of the Commonwealth Rental Assistance.

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Financial Overview

Growing annuity income streams

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Financial Summary FY2016 ($ Million) FY2015 ($ Million)
Net profit after tax attributable to shareholders $19.3 $16.7
Underlying net profit after tax attributable to shareholders $16.9 $16.7
Total assets $222.5 $179.6
Equity $131.3 $113.8
Dividends (interim and final) 2.5 cents per share 1.5 cents per share
Net debt $45.2 $23.6
Net debt to equity ratio 25.6% 17.2%
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11 years of growing annuity income streams

Site Rental Fees (gross) Deferred Management Fee (cash)

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$14,000,000
$12,000,000
$10,000,000
$8,000,000
$6,000,000
$4,000,000
$2,000,000
Financial Year 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Total number of
homes settled 100 138 202 305 412 546 695 906 1,146 1,348
(Cumulative)
Number of resales
- - 4 11 8 11 10 23 34 52
attracting a DMF
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Portfolio Overview

13 communities in planning, development or under management

Focus remains in Victoria

• Favourable planning legislation

• Better access to zoned, flat land for development

• Low saturation of land lease communities

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Community Homes Settled
Brookfield at Melton 228 100%
Seasons at Tarneit 136 100%
Casey Fields at Cranbourne 217 100%
Chelsea Heights 186 100%
Warragul 182 100%
Hastings 141 100%
Shepparton 268 62% Shepparton
Lyndarum at Wollert 154 41%
Geelong 164 31%
Officer 151 46%
Berwick Waters 220 -
Lyndarum
Bittern [(1)] 208 - Brookfield
Officer
Ocean Grove [(1)] 190 - Seasons Berwick Waters
Chelsea Heights
2,445 [(2)] 59% Geelong Casey Fields Warragul
Correct as at 31 October 2016 Ocean Grove Hastings
Bittern
Notes: [(1) ] Commencement of construction subject to planning
approval and the contract becoming unconditional.
(2) Represents gross numbers not adjusted for joint venture
interests at Cranbourne and Chelsea Heights.
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• Balanced state legislation for the management of communities

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Acquisition Strategy

Focused on Melbourne and Geelong’s growth corridors

Melbourne’s Growth Corridors

• Looking for zoned land in Melbourne and Geelong’s growth corridors

• Increasing opportunities to buy superlots from land developers

• Melbourne has strategic benefits of flat topography increasing site choice

• Multiple communities can be built in each growth corridor

Looking to acquire at least one new site every 12 months

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Key Thematics

Two key emerging trends come together to create the Lifestyle business model

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Affordability
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• Opportunity to create a more affordable model

• Rents sustainable for pensioners

• Ability to free up equity

• High quality offer

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Baby Boomers

• Want to maintain control

• Want to own their home

• Want to free up equity

• Looking to be empowered

• Looking for a bigger life

Current housing solutions are not satisfying the new emerging customer

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Market Overview

Victorian Population Growth

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85+ (114k)
War Generation Average age
80-84 (116k) of Lifestyle
Baby Boomer Generation
Communities’
75-79 (151k) homeowners
72 years [(1)]
70-74 (194k)
65-69 (264k)
60-64 (302k)
55-59 (340k)
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As at 30 June 2013 there were over 574,000 Victorians aged over 70 and over 906,000 aged between 55 and 69

Lifestyle Communities is well positioned to meet the needs of the baby boomer age wave

Source: ABS 2014 Catalogue 3235.0 Notes:[(1)] As at 30 June 2016

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Customer Touchpoint’s

Every touchpoint drives customer referral

Set organisational goal to increase referral rate

• Implemented a focused strategy to try and lift the number of homeowner referrals for new sales

• Have developed an action plan for each of the 32 touchpoints we have with our homeowners

• Want to ensure that we surprise and delight the homeowner at every touchpoint

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Notes:[(1)] For FY2016 settlements

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33%
Referral rate
for sales [(1)]
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Community Designs

Every facet of our product has evolved

Urban Layout

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Ensure that the homes work together by varying setbacks and facades

Landscaping

Entry

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Create a sense of arrival Significant investment in and security landscaping to add colour and texture

Clubhouse

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Ongoing evolution with design becoming more contemporary

House Designs

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Evolving to meet the needs of the baby boomer

Never get a second chance of a first impression

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Lifestyle Officer

Each community is better than the last as we keep evolving

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Sales Rates

“Proof is in the pudding” increasing the sales rate

• Lifestyle Communities’ focus has shifted to improve pre-sales. This reduces risk by supporting a more aggressive construction program which enables a quicker recycling of capital

• Evolution in the sales launch of communities has provided improved presale rates at Officer and Berwick Waters

• Officer achieved 66 sales in the first year from launch compared to an average across all projects of 40 sales, 109 sales have been achieved in total to 31 October 2016

• Berwick Waters launched on 7 April 2016 and achieved 55 pre-sales to 31 October 2016

SALES PROFILE FROM DATE OF FIRST SALE (TREND LINES)

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Sales
140
Cranbourne
120
Officer
Average across
100
portfolio
80 Tarn eit
Berwick
60 War ragul
Waters
40
20
Years
1 2
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The higher the sales rate, the faster we recycle capital

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Latest Community

Lifestyle Berwick Waters: A promising start

• Civil works commenced in September 2016

• First homes targeted to be completed in May/June 2017

• 55 homes are already pre-sold up until 31 October 2016

• 47% of sales came from homeowner referrals

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Settlement Goals - New Sales

Settlements growing with increased sales rates and new projects

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FY2016 FY2017 FY2018
settlements settlement settlement
(actual) range range
TOTAL 202 250-270 260-290
Warragul 1 - -
Casey Fields [(1)] 2 - -
Shepparton 51 40-55 40-55
Chelsea Heights [(1)] 27 - -
Hastings 14 - -
Lyndarum 43 50-60 45-55
Geelong 36 40-50 45-55
Officer 27 85-100 20-30
Berwick Waters [(2)] - 10-25 60-80
Bittern [(2)(3)] - - 20-40
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The settlement ranges above constitute a forecast for FY2017 and a projection for FY2018 which is indicative only. They are dependent on construction commencement dates for sites not yet commenced at Berwick Waters and Bittern, planning approval for Bittern and market conditions.

Notes:[(1)] Gross numbers not adjusted for joint venture interests

(2)Settlement goals dependent on construction commencement date

(3)Subject to planning approval

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Sales and Settlements

July - October 2016

• On target to achieve on or around 125-130 new home settlements for 1HFY2017

• As previously advised settlements for FY2017 are expected to be in the range of 250-270 settlements

• Resales have continued to increase, we are on target to achieve on or around 35 resales for 1HFY2017

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New homes Resale homes Resale homes
New home
- net sales settlements - net sales
settlements
commitments settlements commitments
JUL 16 - JUL 16 - JUL 16 - JUL 16 -
OCT 16 OCT 16 OCT 16 OCT 16
Brookfield - - 5 5
Tarneit - - 2 1
Warragul - - 4 9
Cranbourne [(1)] - - 8 6
Shepparton 18 12 2 2
Chelsea Heights [(1)] - - 1 5
Hastings - - 4 4
Wollert 17 35 - -
Geelong 15 14 - -
Officer 42 16 - -
Berwick Waters - 24 - -
Bittern - - - -
Ocean Grove - - - -
Total 92 101 26 32
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Note: (1) Represents gross numbers not adjusted for

joint venture interests at Cranbourne and Chelsea Heights

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Portfolio Snapshot

31 October 2016

Lifestyle Communities’ portfolio continues to grow

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Home sites occupied or sold
Total home sites in Home sites sold & Home sites sold & and awaiting settlement
Communities
communities occupied awaiting settlement
# %
Existing Communities – Sold out
Brookfield at Melton 228 228 - 228 100%
Seasons at Tarneit 136 136 - 136 100%
Warragul 182 182 - 182 100%
Casey Fields at Cranbourne [(1)] 217 217 - 217 100%
Chelsea Heights [(1)] 186 186 - 186 100%
Hastings 141 141 - 141 100%
Existing Communities – Under construction
Shepparton 268 167 36 203 76%
Lyndarum at Wollert 154 63 53 116 75%
Geelong 164 51 42 93 57%
Officer 151 69 40 109 72%
Berwick Waters 220 - 55 55 25%
New Communities – Awaiting commencement
Bittern [(2)] 208 - - - -
Ocean Grove [(2)] 190 - - - -
Total Home Sites [(3)] 2,445 1,440 [(4)] 226 [(5)] 1,666 68%
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Summary

Lifestyle Communities capitalises on the solid base established for future growth

• Emerging baby boomer driving increased customer interest

• Approximately one in three of sales are coming from customer referrals

• Settlements in FY2017 expected to be in the range of 250 to 270 settlements

• The increase in settlements, coupled with an expected increased contribution from community management, is expected to result in a material increase in profit in FY2017

• Expect that dividends in FY2017 will be higher than FY2016

Lifestyle Communities’ model is driven by affordability, the aging population and the emerging baby boomer

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LIFESTYLE COMMUNITIES LIMITED - Downsize to a bigger life

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A BUSINESS MAKING A DIFFERENCE

Section 3 Formal Business

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Item 3

Approval of the Lifestyle Communities Limited Remuneration Report

The instructions given to validly appointed proxies in respect of the resolution were as follows:

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FOR AGAINST ABSTENTION PROXY’S DISCRETION
49,221,673 85,589 80,159 113,573
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Item 4

Re-election of Ms Philippa Kelly, retiring by rotation

The instructions given to validly appointed proxies in respect of the resolution were as follows:

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FOR AGAINST ABSTENTION PROXY’S DISCRETION
68,751,628 9,262 18 120,547
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Item 5

Re-election of Mr Bruce Carter, retiring by rotation

The instructions given to validly appointed proxies in respect of the resolution were as follows

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FOR AGAINST ABSTENTION PROXY’S DISCRETION
68,752,665 8,225 18 120,547
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Important notice and disclaimer

• This Presentation contains general background information about Lifestyle Communities Limited (LIC) and its activities current at 29 November 2016 unless otherwise stated.

• It is information in a summary form and does not purport to be complete. It should be read in conjunction with LICs other periodic and continuous disclosure announcements lodged with the Australian Securities Exchange, which are available at www.asx.com.au.

• This Presentation has been prepared by LIC on the information available. To the maximum extent permitted by law, no representation or warranty, express or implied, is made as to the fairness, accuracy, completeness or correctness of the information, opinions and conclusions in this presentation and LIC, its directors, officers, employees, agents and advisers disclaim all liability and responsibility (including for negligence) for any direct or indirect loss or damage which may be

• suffered by any recipient through use or reliance on anything contained in or omitted from this presentation.

• Past performance information given in this Presentation is given for illustrative purposes only and should not be relied upon as (and is not) an indication of future performance.

• This Presentation contains certain “forward-looking statements” and prospective financial information. These forward looking statements and information are based on the beliefs of LICs management as well as assumptions made by and information currently available to LICs management, and speak only as of the date of this presentation. All statements other than statements of historical facts included in this presentation, including without limitation, statements regarding LICs forecasts, business strategy, synergies, plans and objectives, are forward-looking statements. In addition, when used in this presentation, the

words “forecast”,“estimate”, “expect”, “anticipated” and similar expressions are intended to identify forward looking statements. Such statements are subject to significant assumptions, risks and uncertainties, many of which are outside the control of LIC and are not reliably predictable, which could cause actual results to differ materially, in terms of quantum and timing, from those described herein. Readers are cautioned not to place undue reliance on forward-looking statements and LIC assumes no obligation to update such information.

• The information in this Presentation remains subject to change without notice.

• In receiving this Presentation, you agree to the foregoing restrictions and limitations.

• This Presentation is not for distribution or release in the United States or to, or for the account or benefit of, US persons.

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DOWNSIZE TO A BIGGER LIFE

LIFESTYLE COMMUNITIES LIMITED Level 2, 25 Ross Street South Melbourne VIC 3205 Ph: (03) 9682 2249

www.lifestylecommunities.com.au

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