Metlifecare Share Offer Presentation - 26 June 2012
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26 June 2012
Metlifecare Share Offer Presentation
1
Disclaimer1
The Metlifecare Share Offer is being made in a Simplified Disclosure Prospectus (SDP) dated 26
June 2012. All subscribers must first receive a copy of the SDP.
The information contained in this presentation has been prepared in good faith by Metlifecare. To the
maximum extent permitted by law, Metlifecare, 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 Metlifecare, its directors, officers, employees and agents) for any direct or indirect loss
or damage which may be suffered by any recipient through use of or reliance on anything contained
in, or omitted from, this presentation.
1 Please see slides 49 and 50 for further regulatory information
2
Agenda
1 Introduction
2 New Zealand Retirement Village Industry
3 Metlifecare Overview
4 Development Opportunities
5 Financial Information
6 Key Offer Details
A Appendix: Management and Board
B Appendix: Portfolio
C Appendix: Cash Flow Generation
D
D Appendix: Assumptions
Appendix: Assumptions and
and Explanations
Explanations
E Appendix: Important Regulatory Information
3
Presenting Today
Alan Edwards, Managing Director and CEO
MBL BA HED
• Significant experience in senior executive, general management and organisational
development roles
• 12 years experience in leading companies in the retirement village industry
Tristram van der Meijden, CFO
CA BSc BCom
• Over 10 years experience as an accountant
• Has held senior finance and accounting roles in the property and financial services
sectors
Michael Oliver, General Manager Strategy and Development
CA BMS
• Chief Executive of Vision Senior Living pre Merger
• Broad financial background across many industries and includes international experience
4
1 Introduction
5
Situation Overview
Merger Offer Process
On 21 June 2012 the shareholders of Metlifecare As part of the merger RVNZ has agreed to reduce its
voted in favour of the Merger of Metlifecare, Vision current stake in Metlifecare
Senior Living Limited (VSL) and Private Life Care Metlifecare is providing an Offer process to support
Holdings Limited (PLC) the sell down of 16.5m-22.5m RVNZ shares in
This is a significant transaction for Metlifecare that Metlifecare to increase liquidity:
provides the Company:
— Sell-down will be contingent on the settlement of
— An enhanced presence in the key Auckland the VSL and PLC acquisitions
retirement village market (increasing from seven — This will reduce RVNZ’s holding in the Company
to twelve villages in Auckland) to between 43.2%-46.4%
— Access to a development pipeline and an
experienced in-house development team that can Offer to open on 5 July 2012
execute this pipeline Settlement and allocation of shares expected on 23
— Immediate cash flow accretion July 2012
— A platform for Metlifecare to drive growth
— A good brownfield and greenfield pipeline
Settlement of the transaction is expected on 23 July
subject to various other approvals
6
A Snapshot of Metlifecare (Post Merger)
Metlifecare Portfolio Statistics Metlifecare Financial Statistics
24 – Villages (12 in Auckland)
~$1.8-1.9bn1 – Value of investment properties
3,902 – Current Units (59% in Auckland)
~$579-616m1 – NTA
At least 750 – Units available for development post
rationalisation 183.8m – Shares on issue
4,000 plus – Residents $404m2 – Market capitalisation
90% plus – Resident satisfaction within retirement villages
CRESTWOOD POWLEY Bay of Islands BAYSWATER
134 units 80 units 40 units 232 units
HIGHLANDS 7 SAINT VINCENT GREENWOOD PARK
199 units 93 units 3
238 units
PAKURANGA THE POYNTON THE AVENUES
87 units 140 units 88 units
PINESONG Waitakere 3 3
Forest Lake PALMERSTON NTH SOMERVALE
354 units 324 units 165 units (50%owned) 94 units
98 units
Dannemora Hillsborough Papamoa
201 units 217 units 33 units
WAIRARAPA
Longford Park Hibiscus Coast
81 units
193 units 269 units
OAKWOODS
KAPITI
137 units
225 units
COASTAL VILLAS
180 units
Metlifecare VSL PLC
1 See slide 23 for further information
2 Closing share price as at 21 June 2012 of $2.20 and shares on issue of 183.8m
3 Vision joint venture with Te Rapa Racing Limited
7
Investment Highlights
New Zealand has an ageing population
1 Strong Industry Fundamentals Retirement Village penetration rates are relatively low compared to other OECD nations
These two factors lead to the possibility of an increase in demand for retirement village
accommodation in the future
Metlifecare is well positioned with a scale portfolio in key growth locations
Established Operator with Mature villages expected to generate consistent resales
2
Mature Villages Current average age of residents is 81.5
Growth in resales volumes still to be achieved in newer villages
Majority of units and value located within the premium Auckland and Bay of Plenty locations
— Demand and price growth expected to be stronger in these regions
3 Portfolio in Premium Locations
Increased ability to leverage efficiencies across the portfolio and offer a wider geographic
cross section of units in the key Auckland market
Management team has significant experience in the NZ retirement village industry
4 Experienced Management Team
The post Merger addition of key VSL staff will add in-house development expertise
Post Merger, Metlifecare expects to have good greenfield and brownfield development options
5 Excellent Growth Opportunities
We expect to generate development margins through the experienced VSL development team
Metlifecare is currently trading at a material discount to NTA, and is well below NZ listed
peers
6 Attractive Valuation Metrics
Metlifecare has a high embedded value per unit relative to listed peers
Metlifecare has low enterprise value per unit relative to major competitors
8
2 New Zealand Retirement Village Industry
9
NZ Independent Living Overview
Fragmented market with Metlifecare positioned to take advantage of growth
Competitive Landscape Market Share by Number of ILUs1
Market largely fragmented with many smaller
participants
The largest six participants provide less than half of the
total retirement units Metlifecare
Other (not-for-profit) 17%2
The merger has increased its size in terms of retirement 19%
units and also number of villages in operation
Competitors differentiate themselves in terms of
location, price, facilities and availability of units
Metlifecare is ideally positioned to lever off its existing Ryman
offering and brand 13%
Major Competitors’ Positioning3 Other (for-profit)
34%
Summerset
>750
1,630 6%
599
3,902 1,052
3,274
2,174 240 Primelife
110 1,486
407 327 4%
Bupa Oceania
Metlifecare2 Ryman Summerset
1 2 3
Units - Existing
4 5 6 7
Units - Land bank
8 3% 4%
Care Beds - Existing Care Beds - Land Bank
1 Equity
broker research and CBRE
2 Post
merger
3 Ryman figures from May 2012 Key Statistics Presentation. Summerset figures from June 2012 Investor Presentation
10Industry Demographics
Aging population and potential increased retirement penetration rate
New Zealand Demographics New Zealand 65+ Population Growth (‘000)1
The New Zealand population is expected to grow from 4.4m to
4.9m over the next 20 years 1,400
1,200
Concurrently, the population continues to age due to falling
mortality and increasing fertility rates 1,000
800
Population aging is a key demographic shift that will
600
significantly impact the New Zealand economy
400
The proportion of people aged 65+ living in retirement villages 200
(i.e. the penetration rate) is currently relatively low
1991
1996
2001
2006
2011
2016
2021
2026
2031
2036
2041
2046
2051
2056
2061
Developed Nations Penetration Rates (65+)2 Demand for Retirement Living
12% 11% Penetration Rate
10% Population
Year 65+ ('000s)1 4% 5% 6% 7% 8%
8%
2011 584 23 29 35 41 47
6% 5%
4% 2016 690 28 35 41 48 55
4%
2021 795 32 40 48 56 64
2%
2026 916 37 46 55 64 73
0% 2031 1,029 41 51 62 72 82
USA Australia New Zealand
1 Statistics
New Zealand (2009 base – series 1)
2 NZ penetration rates obtained from CBRE. Australia and USA penetration rates obtained from Grant Thornton Report – “Retirement living – industry trends and
prospects”, January 2011. A "penetration rate" is a percentage calculated by dividing the number of people living in retirement units aged 75 years and over (or 65
years and over, as the case may be) by the number of the total population aged 75 years and over (or 65 years and over, as the case may be) in the relevant
catchment area 113
Metlifecare Overview
12Metlifecare Summary Metrics
Metlifecare Summary Markets by Units3
Criteria Value
Other
24%
Total Villages (pre rationalisation) 24
Auckland
Bay of 59%
Total Retirement Units (pre rationalisation) 3,902 Plenty
17%
Total Care Beds 407
Development Units At least 750 Markets by Value3
Development Care Beds 110
Other
19%
Total Investment Properties ~$1.8-1.9bn1
Bay of
Projected Operating Cash Flow FY13 $61m2 Plenty Auckland
15% 66%
NTA ~$579-616m1
1 See slide 23 for further details
2 See slide 25 for further details
3 Excluding care beds
13History
Metlifecare
Metlifecare lists
RVNZ acquires incorporated
on the NZX
Metlifecare 82% of
strengthens Metlifecare after
Metlifecare 5- a $3.90 per
balance sheet
year low share share takeover
through 2-for-5
price of $1.38 Offer
rights issue
Jul Mar
Oct 1984
Mar 1994
2005
Mar 2009
2009
Aug
2009 Feb
2011 Dec
2011 Dec June
2011 2012
Alan Edwards
appointed as Merger of
Strategic review Vision, PLC
CEO of undertaken and RVNZ sell-down
Metlifecare Settlement of of stake to and
Merivale Village $46m in new Metlifecare
equity raised via 50.1% at same
for $26m time as approved by
a placement minority
placement
shareholders
14Sources of Income
Compulsory weekly fees covering village operational costs (e.g. rates)
Resident
Discretionary village services fees for additional care and needs of
Fees
residents
Government funding for specified contracted services
Care This includes resthome and hospital levels of care and the residents
Provision will be subject to the government funding approvals
• The cashflows are stable
Standard DMF payment is 30% of occupational right agreement (ORA)
price1
DMF is primary source of income for mature villages
DMF
Accrued over period of residents expected stay, however crystallizes
and received by Metlifecare when resident exits unit and new resident
moves in
Standard ORA allows Metlifecare to capture 100% capital gain
when units resold1
Capital Gains
Dependent on the tenure of occupant and property price growth
during the period of occupation
Development margin is, in broad terms, the margin obtained on selling an ORA following
development of the unit. The calculation includes construction costs, GST, land apportionment,
capitalised interest and infrastructure but excludes amenities. Margins are calculated based on when
Development a stage is completed
Margin • Retirement units are sold to residents under an ORA. The ORA allows residents to occupy the
unit for the balance of their life and is repaid upon the relicensing of the unit
Development margin is typically reinvested in the business to drive growth
1 Metlifecare has several villages with different contracts in place due to existing arrangements in place when the village was acquired. In particular, the
Metlifecare Kapiti Village contains legacy ORAs that contain provisions for the residents to be refunded 90% of capital gains following resale of the units
154
Development Opportunities
16Excellent Growth Opportunities
Brown & Greenfield Development pre
Rationalisation1 Development Locations pre Rationalisation1
Metlifecare The Poynton 120
Metlifecare Coastal 33
Vision Bay of Islands 101
Vision Papamoa 127
Vision Forest Lake 33
Metlifecare Oakwoods 40 Brownfield Units
Greenfield Units
Metlifecare The Avenues 27
Metlifecare Crestwood 66
Stanley Road - Glenfield 94
Unsworth Heights 2 200 2
Ilam 170
Metlifecare is well placed to take advantage of growing
demand within the retirement village industry
Following settlement Metlifecare will consider
rationalising its portfolio. This will include the
identification of non core assets/land and may
eventuate in the possible sale of assets
Following portfolio rationalisation post settlement
Metlifecare will have a good brownfield and greenfield
pipeline with a minimum of 750 development units
Metlifecare will maintain an emphasis on premium
Auckland locations
1 Excludes care facility development(s)
2 Purchase of Unsworth Heights is conditional on Overseas Investment Act approval
17Development Pipeline
Metlifecare has created an exciting development pipeline with large growth opportunities
Metlifecare targets premium locations in which to develop its
retirement villages with ability to capture good capital gains
Development Ability to rejuvenate and intensify existing sites
Strategy
Aim to develop full continuum of care villages over next 3 to 5
years
Auckland 2012 and 2013 target
Brownfield
Bay of Plenty 2013 target
Sites
Others 2012 and 2014
Stanley Road – commence construction 2013
Greenfield Unsworth Heights – commence construction 2014
Sites
Ilam Park
Metlifecare will continue to evaluate new locations that fit with
the growth strategy
Future Sites
Financial flexibility to secure further sites
Development expertise to execute
18Leveraging Vision’s Development Expertise
In-house Development Team Vision Development
777
800
To be led by Michael Oliver and Richard 666 643 631
565 568
Number of Units
Stephenson 600 519 534
452
Management of consenting, design, costing and 396
project management (through to completion) 400
297
258
In-house design and project management 202
200
incorporates a high level of “know-how” and
intellectual property
0
Advantages include: 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Development Pipeline Completed Units
— Attractive, well designed villages that are in
demand from residents
Development Margins1
— Leverage existing development work (e.g.
quantity surveying data, designs) to reduce 32%
cost of future stages and villages
— Provides greater control and transparency
over projects and enhances ability to deliver
5.7 20%
projects on time and within budget 18%
2.3 2.4
FY11A FY12A FY13F
Development margin ($m) Development margin %
1 Higher margins in FY12 due to completion of Dannemora which had record sale prices. Margin calculation includes construction costs, GST, land
apportionment, capitalised interest and infrastructure but excludes amenities. Margins calculated based on when a stage is completed
195
Financial Information
20Financial Highlights (Post Merger)
Metlifecare has 12 villages within the Auckland region
Premium assets Portfolio contains greenfield development opportunities as well as high margin
with platform for brownfield opportunities to enhance existing villages
growth Addition of new in-house development team will provide capability to grow existing
and new villages
Ability to grow Metlifecare targets development margins of 15% or better 1
development Metlifecare expects the new development expertise will assist in achieving margin
income targets and other areas of the business, including maintenance and refurbishments
Expected FY13 operating cash flow of $0.28 per share
Operating cash Similar operating cashflows beyond FY13 are highly dependent upon the successful
re-investment of capital into new built stock and this being available for sale and sold
flow
Core operating cashflows are expected to be more stable over a large mature
portfolio
Metlifecare will have a Loan to Value Ratio of ~23%, following the merger
Debt Facilities allow the transfer of greenfield land from core debt into development
Debt position debt once sites are consented and ready for construction
Bank funding capacity to seek out additional development opportunities in the future
1 Development margin is, in broad terms, the margin obtained on selling an occupational right following development of the unit. The calculation includes
construction costs, GST, land apportionment, capitalised interest and infrastructure but excludes amenities. Margins are calculated based on when a stage is
completed
21Financial Overview
NTA ($m)1 Total Investment Properties ($bn)1
~579 - 616 ~1.8-1.9
505 526
~420-450
434
1.3 1.3
1.1 ~1.1-1.2
FY09 FY10 FY11 FY12 (MET FY12 FY09 FY10 FY11 FY12 (MET FY12
projected) (projected pro projected) (projected
forma) pro forma)
LVR2 Incremental Operating Cash Flow3
33%
60.7
26%
~23% 45.2
20%
34.7 33.5
~11% 24.8
FY09 FY10 FY11 FY12 (MET FY12 FY09 FY10 FY11 FY12 FY13
projected) (projected pro (projected) (projected pro-
forma) forma)
1 See slide 23 for further information on FY12 projected values
2 See slide 24 for further information on FY12 projected values
3 See slide 25 for further information on FY12 projected values
22Balance Sheet
Pro Forma Merged
As at 26 June 2012 ($m) MET PLC VSL Adjustments1 Group
Assets
Investment Properties 1,270.6 313.3 366.0 8.3 1,958.2
Property, Plant & Equipment 21.7 0.1 0.3 22.1
Other Assets 36.1 0.2 4.3 40.6
Total Assets 1,328.4 313.6 370.6 8.3 2,020.9
Liabilities
Resident Loans 661.0 152.9 158.4 972.3
Bank Debt (Net of Cash) 66.9 24.2 98.7 12.6 202.42
Other Liabilities 23.2 13.4 34.5 71.1
Total Liabilities 751.1 190.5 291.6 12.6 1,245.8
Total Equity 577.3 123.1 79.0 (4.3) 775.1
NTA per share $4.22
Movement in Property Valuation3 (143.2) - (105.8)
Deferred Tax4 (53.4)
Adjusted NTA (post valuation and deferred tax) 578.5 – 615.9
Adjusted NTA per share $3.15-$3.35
1 Adjustments include transaction costs, integration costs, the purchase of Unsworth Heights and known trading information to 25 June 2012
2 Estimate of the merged group opening debt position includes transaction costs, integration costs, the purchase of Unsworth Heights land and known trading
information to 25 June 2012
3 Investment Property and Asset movements includes an estimate of the impact of changes in discount rates and property price growth assumption signalled in
Metlifecare's market announcement on 21 June 2012 on the investment properties and assets of Metlifecare and PLC. Please see slide 46 for further details
4 Deferred Tax adjustments have been made for Metlifecare, PLC and VSL. The adjustments for Metlifecare relate to the impact of the potential changes in
shareholder continuity on tax losses carried forward and the impact of the recent changes to the depreciation rules on the depreciable tax base in the future. The
adjustments for VSL and PLC relate to the impact on deferred tax from changes to shareholder continuity following the Merger
23Core and Development Debt Summary
Core Development Development
26 June 2012 ($m)1 Core Debt Land2 (Exc. Land) Debt Stock3 Total Debt
Metlifecare (Pro Forma) 141.4 15.6 125.8 61.0 53.7 202.4
Facility Limit 150.0 100.0 250.0
Loan to Value Ratio4 14-15% 8-9% 22-24%
Total debt represents around 23% of Metlifecare investment properties post Merger
The sell down of currently-completed development stock is expected to reduce the development debt balance
and create material headroom within the development facility which will be utilised for current and future
development
1 The above is an estimate of the merged group opening debt position and includes transaction costs, integration costs, the purchase of Unsworth Heights land
and known trading information to 25 June 2012
2 Subject to Overseas Investment Act approval of Unsworth Heights ($12.6m)
3 Currently completed development stock
4 The range on the LVR reflects the high and low assumptions in relation to the impact of investment properties. See slide 23 for further detail
24Incremental Operating Cash Flow
MET MET
MET actual projection Pro Forma2
$m (except per share data)1 FY11 FY12 FY13
Operating Cash Flow Items
Sales 35.2
Operations (0.5)
Operating Cash Flow 34.7 33.5 60.7
Funding Costs (12.2) (7.0) (9.5)
Operating Cash Flow (post funding) 22.5 26.5 51.2
Shares on Issue (millions) 122.4 144.1 183.8
Cash flow per share (pre funding) $0.28 $0.23 $0.33
Cash flow per share (post funding) $0.18 $0.18 $0.28
1 The information presented above is not general purpose prospective financial information nor a financial statement, but comprises special purpose prospective
financial information prepared for the sole purpose of clarifying investor queries about the merged group operating cash flows. Refer Appendix D for principal
assumptions. Estimated operating cash is based on 12 months and the timing of settlement could have an impact on the actual operating cash generated in
FY13
2 Metlifecare Pro Forma calculated as the combination of Metlifecare projection to 30 June 2013 and VSL and PLC forecasts to 30 June 2013
256
Key Offer Details
26Key Offer Details
Purpose of Metlifecare is providing a process to support the sell down of 16.5 - 22.5m RVNZ shares
the Offer Directed by RVNZ who will reduce holding in the Company to 43.2-46.4%
A documented Offer under the Simplified Disclosure Prospectus (SDP) regime
Offer Available to retail investors through brokers
Structure Institutional investors may also be invited to participate
RVNZ’s stake post the sell-down is held in escrow for 16 months from settlement of the
Escrow Merger
VSL stake held in escrow for 16 months from settlement of the Merger
Two new independent directors to be appointed by the end of 2012, taking the Board to 4
Board / independent directors, 2 RVNZ representatives and Alan Edwards the Managing Director
Governance — The first Independent Director will be appointed within 30 days of the completion of the
Merger
Sell-down contingent on the following:
— Settlement of the VSL and PLC acquisitions
Other
— Overseas Investment Act approval
— Various other third party approvals
27Ownership and Governance
Shareholdings post merger completion Shareholdings Post RVNZ Sell Down
Retirement
Retirement Other
Other Villages
Villages 48.2-51.4%
39.2% 43.2-46.4%
55.4%
Vision Vision
Shareholders Shareholders
5.4% 5.4%
RVNZ and Governance
RVNZ is committed to sell down its shareholding below 50% through the SDP Offer
The shares held by RVNZ post the sell down will be subject to escrow for 16 months
By 31 December 2012 the Board objective is to have appointed two additional Independent Directors, i.e. the Board
mix will be four Independent Directors, two RVNZ representatives and a Managing Director. The first Director will be
appointed within 30 days of Merger completion
It is anticipated that there will be a larger portion of retail shareholders on the register that could provide greater
liquidity
28Important Dates1
Roadshow Beginning late June 2012
Offer Open 5 July 2012
Bookbuild for eligible investors 17 July 2012
Final Price and allocation announcement 18 July 2012
Settlement / Allotment 23 July 2012
1 All dates are indicative only and, subject to the requirements of the Securities Act and NZSX Listing Rules, may be amended by Metlifecare, RVNZ, and the
Arranger at their absolute discretion
29A
Appendix: Management and Board of
Directors
30Executive Team
[Photo]
Alan Edwards Tristram van der Mike Oliver Lynne Abercrombie Jan Martin Colleen Tang
Managing Director & Meijden General Manager, General Manager General Manager General Manager
CEO CFO Strategy and Operations Sales & Marketing Human Resources
Development
Qualifications: Qualifications: Qualifications: Qualifications: Qualifications: Qualifications:
MBL, BA, HED CA, BSc, BCom BMS, CA MBA, Dip Occ Ther BCom Dip Bus (HR)
Experience: Experience: Experience: Experience: Experience: Experience:
Significant Over 10 years’ Broad financial Significant Over 15 years' Over 20 years‘
experience in senior experience as an background across experience in both experience in sales human resource
executive, general accountant many industries and the public and management and experience in the
management and Has held senior includes private health business manufacturing and
organisational finance and international services industry development service industry
development roles accounting roles in experience International
12 years experience the property and experience in
in leading financial services property and
companies in the sectors telecommunications
retirement village sectors
industry
31Board of Directors
Peter Brown David Hunt Alan Edwards John Loughlin Brent Harman
Chairman Director Managing Director & Independent Director Independent Director
CEO
Qualifications: Qualifications: Qualifications: Qualifications:
LLB (Hons), BCom BCom, CPA, Grad. MBL, BA, HED BCA, MBA, FCA,
Dip. App. Fin ACIS, FIINZ, FCASP,
FNZIM, AFInst.D
Experience: Experience: Experience: Experience: Experience: Two new
20 years experience 20 years experience 12 years experience Professional Director on various Independent
in property in property and in leading Director on various Boards Directors to be
Numerous senior finance sectors companies in the boards Career in the media added
executive positions retirement village industry
industry
32B
Appendix: Portfolio
33Asset Portfolio
Criteria Value/Comment
The Avenues Bayswater Coastal Villas Crestwood
Total ORAs 88 232 180 134
Villas - 159 131 120
Apartments 88 56 - -
Serviced Apartments - 17 49 14
Total Care Beds - 6 30 41
34Asset Portfolio
Criteria Value/Comment
Greenwood Park Highlands Kapiti Village Oakwoods
Total ORAs 238 199 225 137
Villas 144 129 225 92
Apartments 79 - - -
Serviced Apartments 15 70 - 45
Total Care Beds - 41 - 48
35Asset Portfolio
Criteria Value/Comment
Pakuranga Palmerston North Pinesong Powley
Total ORAs 87 98 354 80
Villas 69 49 99 46
Apartments - - 230 -
Serviced Apartments 18 49 25 34
Total Care Beds 60 38 10 45
36Asset Portfolio
Criteria Value/Comment
The Poynton 7 Saint Vincent Somervale Wairarapa
Total ORAs 140 93 94 81
Villas - - 83 56
Apartments 125 81 - -
Serviced Apartments 15 12 11 25
Total Care Beds 5 2 40 41
37Asset Portfolio
Criteria Value/Comment
Dannemora Forest Lake Hibiscus Coast Hillsborough Heights
Total ORAs 201 165 269 217
-
Villas - 127 150 176
Apartments 201 38 71 0
Serviced Apartments - - 48 41
Total Care Beds - - - -
38Asset Portfolio
Criteria Value/Comment
Ilam Park Bay of Islands Longford Papamoa
Total ORAs NA 40 193 33
Villas - - 144 33
Apartments - - - -
Serviced Apartments - - 49 -
Total Care Beds - - - -
39Asset Portfolio
Criteria Value/Comment
Unsworth Heights1 Waitakere
Total ORAs NA 324
Villas - -
Apartments - 324
Apartments - -
Total Care Beds - -
1Purchase of Unsworth Heights is conditional on Overseas Investment Act approval
40MET Portfolio Summary
Combined Portfolio
Ave Care Future Future Future Future Overall
Villages ILU's ILA's SA's Total RH Hosp Total Total
Age Suites ILU's ILA's SA's Hosp Total
Auckland
1 MET Crestwood 83.1 120 - 14 134 41 - - 41 - 66 - - 66 241
2 MET Highlands 84.4 129 - 70 199 7 34 - 41 - - - - - 240
3 MET Pakuranga 82.1 69 - 18 87 60 0 - 60 - - - - - 147
4 MET Pinesong 78.7 99 230 25 354 0 0 10 10 - - - - - 364
5 MET The Poynton 79.0 - 125 15 140 - - 5 5 - 120 - - 120 265
6 MET Powley 83.4 46 - 34 80 8 37 0 45 - - - - - 125
7 MET 7 Saint Vincent 84.2 81 12 93 - - 2 2 - - - - - 95
8 VSL Dannemora 78.9 - 201 - 201 - - - - - - - - - 201
9 VSL Waitakere 79.4 - 324 - 324 - - - - - - - - - 324
10 Hibiscus Coast 81.7 150 71 48 269 - - - - - - - - - 269
11 Hillsborough Heights 83.2 176 - 41 217 - - - - - - - - - 217
12 Longford Park 82.7 144 - 49 193 - - - - - - - - - 193
Bay of Plenty
13 MET The Avenues 81.5 - 88 - 88 - - - - - 27 - 32 59 147
14 MET Bayswater 82 159 56 17 232 - - 6 6 - - - - - 238
15 MET Greenwood Park 82.2 143 80 15 238 - - - - - - - - - 238
16 MET Somervale 85.5 83 - 11 94 10 30 - 40 - - - - - 134
17 VSL Papamoa 76.5 33 - - 33 - - - - 127 - - - 127 160
Other
18 VSL Bay of Islands 74.7 40 - - 40 - - - - 51 50 - - 101 141
19 MET Coastal Villas 83.0 131 - 49 180 7 23 - 30 9 24 - - 33 243
20 VSL Forest Lake 80.1 127 38 - 165 - - - - 15 18 - - 33 198
21 MET Kapiti 79.5 225 - - 225 - - - - - - - - - 225
22 MET Oakwoods 84.0 92 - 45 137 8 40 - 48 - 40 - - 40 225
23 MET Palmerston North 83.8 49 - 49 98 8 30 - 38 - - - - - 136
24 MET Wairarapa 83.8 56 - 25 81 14 27 - 41 - - - - - 122
25 Unsworth Heights n.a. - - - - - - - - 140 60 - 40 240 240
26 Ilam Park n.a. - - - - - - - - - 170 - - 170 170
27 Stanley Road n.a. - - - - - - - - - 94 - 38 132 132
Total 81.5 2,071 1,294 537 3,902 163 221 23 407 342 669 - 110 1,121 5,430
41C
Appendix: Cash Flow Generation
42ORA Cash Flow Generation
Cash flow model (‘000) ORA (Occupational Right Agreement)
A capital sum payment is made to
500 Metlifecare to secure an ORA to a unit
for new resident
450 (32)
3.5% p.a. nominal growth
Development margin usually
400 111
Capital gain on
generated for new units
350
resale
Upon departure the resident is repaid
300 (245) the capital sum less the DMF
250
Capital gain realised on resale as
value of unit increases with time
200 (280)
350 350
150 Initial sale price
100
184
50
70
0
Initial sale Construction development Resale Refurbishiment Refundable Net cash flow
proceeds costs margin / net proceeds and other deposit paid to on resale
cash flow resale costs previous
1
resident
Year 0 - new sale Year 8 - resale
1 Initial sale proceeds less DMF
43D
Appendix: Assumptions and Explanations
44Key Assumptions for VSL and PLC for FY13
Total resales of 120 units at an average price of $320k per unit, which assumes a return
to historical average for unit resales for PLC and recognition of the maturing VSL villages
We have assumed capital gain of $79k per unit, which is consistent with the historical
average for this portfolio of villages
We have assumed deferred management fees per unit of $40k per unit, which is
consistent with the historical average for this portfolio of villages
New sales of 54 units at an average price of $386k per unit, which assumes an orderly
sell down of existing stock available at current list prices
Included in operations are repairs & maintenance
— Maintenance expenses include all costs associated with maintaining the buildings
and do not vary materially to Metlifecare’s current experience
— This is between $150k - $250k per village depending on age and excluding any one-
off projects
45MET Investment Properties Valuation
Metlifecare has recently appointed CBRE to undertake the annual independent
valuations of its investment properties for the 30 June 2012 full year accounts. The
formal valuation process will not be completed until the accounts are finalised.
Metlifecare has been provided initial draft indications from CBRE on the values for the
portfolio of villages based on current information provided and CBRE key assumptions,
including discount rates and price growth, that would result in a 15-20% reduction in
Metlifecare NTA (pre the impact of the merger with PLC and Vision). Metlifecare has
announced this to the market on 21 June 2012, indicating a potential 60-80 cents per
share impact on Metlifecare’s NTA.
In calculating the Pro Forma NTA as outlined in this document, Metlifecare has assumed
a potential valuation impact in the range of $106m-$143m. This reflects the assumption
of a 60-80cps impact on MET portfolio on a standalone basis. In addition, an assumption
has been made that PLC NTA could be reduced by a similar percentage given that they
are likely to be subject to similar valuation metrics. We have received no CBRE
feedback on the PLC assets.
Given Vision assets were valued by CBRE as at March 2012, Metlifecare has only
assumed a small uplift (~$3m). This figure reflects the movement of stock previously
held in work in progress but that will be completed as at the date of the merger.
46Metlifecare Financial Explanations
Operating cash flow consistent with Metlifecare’s half year market presentation
— Excludes financing and investing activities
— Estimated operating cash is based on 12 months and the timing of settlement could
have an impact on the actual cash generated in FY13
— Sales includes licensing and re-licensing
— Operations includes deferred management fees, sales and marketing, refurbishment
and maintenance, village operations and corporate overheads
— Funding costs excludes development expenditure and interest associated with
development
Metlifecare FY12 and FY13
— Unaudited management view
— Based on information as at 7 May 2012
— The FY12 view includes licensing and relicensing settlements anticipated for June
2012, which are currently conditional with settlements dependent on third party
property sales
• FY11 cash flow includes the contribution from Merivale, which was sold in February
2011
47E
Appendix: Important Regulatory Information
48Important Regulatory Information
This investor presentation (Presentation) has been prepared by Metlifecare Limited (Metlifecare) in relation to an offer (Offer) of new Metlifecare ordinary shares (Shares), to be made to institutional
and retail investors under a simplified disclosure prospectus dated 26 June 2012.
Summary information
This Presentation contains summary information about Metlifecare, its subsidiaries and their activities, and the Merger with Vision Senior Living Limited (VSL) and Private Lifecare Holdings Limited (PLC)
which is current as at the date of this Presentation. The information in this Presentation is of a general nature and does not purport to be complete nor does it contain all the information which a
prospective investor should consider when making an investment decision or that would be required in a full prospectus. This Presentation should be read in conjunction with Metlifecare’s other periodic
and continuous disclosure announcements lodged with NZX, which are available at www.nzx.co.nz.
No distribution outside New Zealand
This Presentation may not be released or distributed in the United States. This Presentation does not constitute an offer to sell, or a solicitation of an offer to buy, any securities in the United States or in
any jurisdiction in which such an offer would be illegal. The Shares have not been, and will not be, registered under the US Securities Act of 1933 (US Securities Act) or the securities laws of any state
or other jurisdiction of the United States. The entitlements may not be taken up by, and the Shares may not be offered or sold to, directly or indirectly, persons in the United States, unless they have
been registered under the US Securities Act, or are offered and sold in a transaction exempt from, or not subject to, the registration requirements of the US Securities Act and any other applicable US
state securities laws. The distribution of this Presentation in other jurisdictions outside New Zealand may also be restricted by law and any such restrictions should be observed. Any failure to comply with
such restrictions may constitute violation of applicable securities laws.
Future performance
To the extent this Presentation contains certain “forward-looking statements”, the words “forecast”, “estimate”, “likely”, “anticipate”, “believe”, “expect”, “project”, “opinion”, “predict”, “outlook”, “guidance”,
“intend” ,“should”, “could”, “may”, “target”, “plan”, “consider”, “forecast”, “aim”, “will” and similar expressions are intended to identify such forward-looking statements. Indications of and guidance on future
earnings and financial position and performance are also forward-looking statements as are any statements in this Presentation regarding the conduct and outcome of the Offer, the use of proceeds and
Metlifecare’s debt. You are cautioned not to place undue reliance on forward-looking statements. While due care and attention has been used in the preparation of any forward-looking statements, any
such statements, opinions and estimates in this Presentation, are based on assumptions and contingencies subject to change without notice, as are statements about market and industry trends,
projections, guidance and estimates.
Any forward-looking statements contained in this Presentation are not guarantees or predictions of future performance and involve known and unknown risks and uncertainties and other factors, many of
which are beyond the control of Metlifecare, and may involve significant elements of subjective judgment and assumptions as to future events, which may or may not be correct. Refer to the 'Risk
Factors' section of the simplified disclosure prospectus for a summary of certain general and company-specific risk factors that may affect Metlifecare. Actual results, performance or achievements may
vary materially from any forward-looking statements and the assumptions on which such statements are based. Investors should consider any forward-looking statements contained in this Presentation
in light of those disclosures. Any forward-looking statements are based on information available to Metlifecare as at the date of this Presentation. Except as required by law or regulation (including the
NZSX Listing Rules), Metlifecare undertakes no obligation to provide any additional or updated information whether as a result of new information, future events or results or otherwise.
Past performance
Investors should note that past performance, including past share price performance, Pro Forma historical information and projected financial information in this Presentation is given for illustrative
purposes only and cannot be relied upon as an indicator of (and provides no guidance as to) future Metlifecare performance including future share price performance. This historical information includes
Pro Forma historical information which is not represented as being indicative of Metlifecare’s views on its future financial condition and/or performance. The historical information in this Presentation is, or
is based upon, information that has been released to NZX.
49Important Regulatory Information
Disclaimer
Neither the Arrangers nor Joint Lead Managers for the Offer, nor any of their or Metlifecare’s respective affiliates or related bodies corporate, nor any of each of their respective advisers, directors,
officers, partners, employees or agents, have authorised, permitted or caused the issue, submission, dispatch or provision of this Presentation and, none of them makes or purports to make any
statement in this Presentation and there is no statement in this Presentation which is based on any statement by any of them. For the avoidance of doubt, the Arrangers and Joint Lead Managers and
their respective affiliates or related bodies corporate, and each of their respective advisers, directors, officers, partners, employees and agents have not made or purported to make any statement in this
Presentation and there is no statement in this Presentation that is based on any statement by any of them. To the maximum extent permitted by law, Metlifecare, the Arrangers the Joint Lead Managers
and their respective affiliates or related bodies corporate, and each of their respective advisers, directors, officers, partners, employees and agents exclude and disclaim all liability, including without
limitation for negligence or for any expenses, losses, damages or costs incurred by you as a result of your participation in the Offer and the information in this Presentation being inaccurate or incomplete
in any way for any reason, whether by negligence or otherwise. To the maximum extent permitted by law, each of Metlifecare, the Arrangers the Joint Lead Managers, their respective affiliates or related
bodies corporate, and each of their respective advisers, directors, officers, partners, employees and agents make no representation or warranty, express or implied, as to the currency, accuracy,
reliability or completeness of information in this Presentation and take no responsibility for any part of this Presentation or the Offer. The Arrangers and Joint Lead Managers and their respective affiliates
or related bodies corporate, and each of their respective advisers, directors, officers, partners, employees and agents make no recommendations as to whether you or your related parties should
participate in the Offer nor do they make any representations or warranties to you concerning the Offer, and you represent, warrant and agree that you have not relied on any statements made by any of
the Arrangers and Joint Lead Managers, or any of their affiliates or related bodies corporate, or any of their respective advisers, directors, officers, partners, employees or agents in relation to the Offer
and you further expressly disclaim that you are in a fiduciary relationship with any of them. Statements made in this Presentation are made only as the date of this Presentation. The information in this
Presentation remains subject to change without notice. Metlifecare reserves the right to withdraw the Offer and/or vary the timetable for the Offer without notice.
Not investment advice
Each recipient of this Presentation should make its own enquiries and investigations regarding all information in this Presentation including but not limited to the assumptions, uncertainties and
contingencies which may affect future operations of Metlifecare and the impact that different future outcomes may have on Metlifecare. This Presentation has been prepared without taking account of
any person’s objectives, financial situation or particular needs. Before making an investment decision, prospective investors should consider the appropriateness of the information having regard to their
own objectives, financial situation and needs and seek legal, financial, accounting and taxation advice appropriate to their jurisdiction. Metlifecare is not licensed to provide financial product advice in
respect of Metlifecare shares. Cooling off rights do not apply to the acquisition of Shares under the Offer.
Investment risk
An investment in Metlifecare shares is subject to known and unknown risks, some of which are beyond the control of Metlifecare, including possible loss of income and principal invested. Metlifecare
does not guarantee any particular rate of return or the performance of Metlifecare nor does it guarantee the repayment or maintenance of capital or any particular tax treatment. Investors should have
regard to the Risk Factors outlined in the simplified disclosure prospectus when making their investment decision.
Financial data
All dollar values are in New Zealand dollars (NZD) unless otherwise stated. Investors should note that this Presentation contains a Pro Forma balance sheet for Metlifecare as at 26 June 2012 to reflect
the effect of the Merger and certain adjustments to its net tangible assets. Such Pro Forma financial information has been prepared by Metlifecare in accordance with the measurement and recognition
requirements, but not the disclosure requirements, of applicable accounting standards and other mandatory reporting requirements in New Zealand. A number of figures, amounts, percentages,
estimates, calculations of value and fractions in this Presentation are subject to the effect of rounding. Accordingly, the actual calculations of these figures may differ from figures set out in this
Presentation. Unless specifically indicated in this Presentation, the financial information contained in this Presentation has not been audited, examined or otherwise reviewed in accordance with New
Zealand Applicable Financial Reporting Standards.
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