Arvida : FY2024 Annual Report

2024 Annual Report

AboutFinancialArvidaStatements

This Annual Report and Financial Statements of Arvida Group Limited (Arvida or Group) is prepared in accordance with the International Financial Reporting Standards, NZX Listing Rules and Corporate Governance Code, Companies Act 1993 and with due consideration of the International Integrated Reporting Council's (IIRC) International Integrated Reporting Framework.

The report covers the period 1 April 2023 to 31 March 2024 and is supplemented by an additional presentation and disclosures:

• 2024 Annual Results Presentation
• 2024 Greenhouse Gas Inventory Report
• 2024 Climate Related Disclosures report

Both are available on the Company's website www.arvida.co.nz.

Additionally, audit reports for each of our care facilities are available at the Ministry of Health's website (www.health.govt.nz), along with audited financial statements for each of our retirement villages at the New Zealand Companies Office website (www.companiesoffice.govt.nz).

Target Audience and Application

This Annual Report has been primarily prepared for shareholders to outline how we are delivering on our strategy. The report is also relevant for prospective shareholders or any other stakeholder who has

an interest in our performance and prospects.

External Audit and Assurance

An audit of Arvida's consolidated annual financial statements was performed by the Group's independent external auditor, Ernst & Young, in accordance with International Standards on Auditing (New Zealand). Ernst

• Young also separately conducted a limited assurance of our greenhouse gas emissions inventory (including Scope 1, Scope 2 and Scope 3 emissions), which is included in our climate related disclosures reporting.

The rest of this Annual Report has not been subjected to independent audit or review. Information reported, other than that mentioned above, is derived from Arvida's own internal records and publicly disclosed information.

The senior management team and the Board have collectively reviewed the contents of this Annual Report and agree that it reflects a balanced view of business performance and outlook.

Forward-Looking Statements

The Annual Report contains certain forward-looking statements with respect to the Company's financial position and operational results. This involves a degree of risk and uncertainty because they relate to events and depend on circumstances that may or may not occur in the future. Because of this uncertainty, all forward-looking statements have not been reviewed or reported on by our auditor.

If you have any comments about this report, including things we could do better, please email Investor Relations at [e-mail].

2024 Annual Report

03

02 ABOUT ARVIDA

1. CHAIR AND CEO REPORT

1. STRATEGY IN ACTION

1. FINANCIAL STATEMENTS

1. CLIMATE RELATED DISCLOSURES

1. GOVERNANCE

1. REMUNERATION

1. DISCLOSURES

1. DIRECTORY

About Arvida

We own, operate and build retirement living communities in New Zealand.

We were formed in 2014 when we listed on the New Zealand stock exchange with 18 retirement villages. Since then, we have grown to become one of New Zealand's largest retirement living and aged care groups operating in 36 locations1 across the country.

$139.4m $85.4m $95.2m

IFRS Net profit	Underlying profit2	Operating EBITDA3
FY23 $82.5m	FY23 $88.0m	FY23 $83.6m

144.4

4.2

33.9

% 632

427

1.3

$

m $

b

$

m

$

b

Operating

Total assets

Gearing4

Sales of

Gross value

Embedded value

cash flow

occupation rights

of sales

FY23 $148.3m

FY23 $3.8b

FY23 30.5%

FY23 568

FY23 $376m

FY23 $1.1b

1. Subsequent to balance date, one community has been divested.
2. Underlying Profit is a non-GAAP (unaudited) financial measure and differs from NZ IFRS net profit after tax. Please refer to the section Financial Commentary for a reconciliation to Reported Profit under IFRS.
3. Operating EBITDA is a non-GAAP (unaudited) financial measure that adds back interest and depreciation to underlying profit and excludes development margin on new units.
4. Calculated as a ratio of net interest-bearing debt to net interest-bearing debt plus the book value of total equity.
   5 Calculated as a ratio of care beds, care suites and serviced apartments to total portfolio units.

2024 Annual Report

05

6750+		5789
RE SIDENT S	UNIT S AND CARE BEDS
2900+		1877
TE AM MEMBERS	UNIT S IN DE VELOPMENT PIPELINE
36		42%
C OMMUNITIE S	NEEDS - BASED UNIT S 5

About Arvida

2024 Annual Report

07

Our Business

Our business model has been refocused to build a best-in-class integrated retirement living platform, that is positioned to deliver real cash profitability and growth for our investors. We aim to drive growth in cash flows and total returns by realising the identified development opportunities within our existing portfolio and by continuing to add value accretive opportunities to the platform over the longer term by recycling capital into higher value opportunities to optimise our growth potential.

Most of our retirement communities offer residents the opportunity to age with us by moving from independent living options to assisted living options and higher acuity care as their needs change. We have plans to include a continuum of care in almost all our retirement communities. Only three of our 36 communities are focused solely on higher acuity care services.

Independent living options include villas, townhouses and apartments. Assistance and care services can be accessed by residents in serviced apartments and care suites. Our aged care offering includes resthome, hospital and dementia care.

Diversity in our portfolio has come about with implementation of an acquisition growth strategy.

Also, we have made portfolio refinements by divesting a number of our smaller and care-only communities.

Our growth strategy has evolved as our portfolio has matured. Now we are more focused on building broad-acrevilla-led retirement communities set in urban-fringe locations. Providing a continuum of care continues to remain central to our strategy.

With an existing landbank that comprises over 1,800 homes, we are set to grow and continue to build beautiful retirement communities with superb amenities that will allow our residents the freedom to thrive as they age.

Arvida Community Queenstown Country Club



About Arvida

H O W W E C R E ATE VA LU E

Our Values

Our Inputs

E S TA B L I S H E D

Existing group of retirement living communities.

O P P O R T U N I T I E S

Substantial pipeline of brownfield and broad-acre greenfield development opportunities.

C A R E

Exceptional care that supports our residents' changing needs.

E X P E R T I S E

Vertically integrated expertise in aged care, retirement village management and development activities.

U N D E R S TA N D I N G

Deep understanding of our residents' needs as they age.

R E L AT I O N S H I P S

Relationships with our communities, suppliers and funding partners.

P R O V I D E R S

Access to a broad range of capital providers.

Business Activities

ENG AGING WELL

Empowering our people to give their best every day.

LIVING WELL

Inspiring our residents to live their best lives.

NUR T URING WELL

Being a sustainable organisation.

GROWING WELL

Enhancing our portfolio of retirement communities.

2024 Annual Report

09

Value We Create

RESIDENTS

We create high-quality environments that meet the changing needs of our residents as they age. Each resident can be actively involved with designing their own life and shaping their community.

T E A M S

We provide the opportunity to do meaningful work and create an environment where our people can thrive.

I N V E S T O R S

We aim to grow value and generate attractive returns for our investors through the optimisation of growth opportunities and generation of real cash profitability.

C O M M U N I T I E S

We engage with and give back to our local communities through employment opportunities, health infrastructure, housing supply and support as people age.

S U P P L I E R S

We develop enduring relationships with our suppliers that are mutually beneficial.

REGUL ATORS & FUNDERS

We partner with regulators and public health agencies with a long-term view of meeting the needs of an ageing population.

About Arvida

E N G A G I N G W E L L

FY24 Highlights

• Strengthened recruitment processes, tools and support network.
• Selected new information system to aid application and monitoring of human resources framework.
• Recorded an increase in employee retention and decrease in turnover rates.
• Evolved the employee reward and recognition proposition.
• Refreshed our 'values & purpose' through company-wide workshops and engagement.
• Continued our values-led listening culture using Peakon with almost 2,000 responding to the latest survey.
• Completed mental wellbeing workshops and conducted an assessment of our mental wellbeing risk.
• Implemented phase 1 of the workforce initiative to realign settings post Covid.

FY25 Focus

• Core human resource and recruitment system, ensuring teams are fully enabled.
• Meaningful performance frameworks that create a shared understanding of what is to be achieved.
• Streamline organisational design in critical areas and where efficiencies are attractive.
• Regional operational structure performing.
• Leader capability with the creation of frameworks, tools, coaching and targeted training.
• Onboarding programme that ensures our team are set up for success and can deliver value as quickly as possible.

Outlook

• Nurse pay gap and a shortage of experienced nurses in some regions remain key challenges for the sector.
• Implementation of workforce planning initiative across Arvida care communities.
• Worsening macroeconomic conditions to impact households and team wellbeing.

Long-term Goals

• An employer of choice that offers a safe workplace with a culture that supports team members to strive for better.

How We Measure

• Senior leader and employee engagement, learning and retention (and turnover).
• Diversity and inclusion.
• Rostered hours.

L I V I N G W E L L

FY24 Highlights

• Recorded excellent Net Promoter Scores across our independent and care residents again.
• Embedded Ngā Paerewa standards in culture and practice.
• Key Māori Advisory and Health Equity groups established.
• Shifted our clinical direction following Covid to re-engage with the Attitude of Living Well model.
• Continued to lift occupancy across our care centres.
• Completed review of IT current state, set IT roadmap and delivered year 1 strategic goals.
• Grew prompted brand awareness, preference and consideration, as well as digital engagement.

FY25 Focus

• Care occupancy back to historical levels.
• Attitude of Living Well operational resources and key metrics.
• Clinical governance framework, dashboards and reporting systems.
• Lead generation in priority communities.
• Digital enablement of customer management system.
• Network, data and cybersecurity strategy.
• New brand campaign launched.

Outlook

• Ngā Paerewa health standards introducing additional governance oversight and compliance requirements.
• Public health sector to remain critically stressed and funding limited, with the sector funding model set to continue to disincentivise equitable (in terms of access for all) outcomes.

Long-term Goals

• The Attitude of Living Well expressed in our retirement communities.
• Excellence in the delivery of quality aged care.
• An authentic brand and trusted market position.

How We Measure

• Net Promoter Score of independent and care residents.
• Care occupancy, clinical standards (4-year Ministry of Health certification) and notified injuries.
• Outwardly-facingcommunity engagement.
• Brand engagement.