Cromwell Property Group · ASX:CMW
Cromwell Property — HY24 Earnings Presentation
40 slides from Cromwell Property's earnings presentation, Feb 29, 2024
Slide 1: HY24 Results Presentation ASX cover letter
Thursday 29 February 2024 ASX Market Announcements Office Exchange Centre 20 Bridge Street SYDNEY NSW 2000 To whom it may concern Cromwell Property Group (ASX:CMW) HY24 Results Presentation I attach a copy of Cromwell Property Group’s HY24 Results Presentation. Yours faithfully CROMWELL PROPERTY GRO
Slide 2: Cromwell Property Group HY24 results presentation
Cromwell Property Group HY24 results presentation 29 February 2024 C R O M W E L L P R O P E R T Y G R O U P | H Y 2 4 R E S U L T S 1
Slide 3: Important Information & Disclaimer
Important Information & Disclaimer www.asx.com.au C R O M W E L L P R O P E R T Y G R O U P | H Y 2 4 R E S U L T S 2
Slide 4: Agenda
Agenda Introduction Dr Gary Weiss AM, Chair Results Overview Acknowledgement Jonathan Callaghan, CEO of Country Financial Results and Capital Management Michelle Dance, CFO Segment performance Cromwell Property Group acknowledges and pays respects to past, Rob Percy, CIO present, and future Traditio
Slide 5: Cromwell's operating platform
Cromwell’s operating platform $11.4 billion Total AUM by Sector Total AUM Across 15 countries 2% 3% Office 29% Retail Europe Industrial / logistics $6.3 billion 1 Finland 58% Other 2 Sweden 8% Property Securities 1 Singapore 1 Denmark SINGAPORE CEREIT MANAGER United Kingdom 2 Germany 1 Poland 2 The
Slide 6: Cromwell Property Group overview
Cromwell Property Group overview Broad Fund Management Platform Group Fund Management Platform Geographic and Culturally Diverse Team Global Asset Management Expertise $11.4 billion 340+ 217 Total AUM people properties $8.3 billion 15 3.7 million Total third-party AUM countries sqm $5.9 billion Euro
Slide 7: HY24 results
HY24 results C R O M W E L L P R O P E R T Y G R O U P | H Y 2 4 R E S U L T S 6 Solar panel installation, HQ North, Fortitude Valley
Slide 8: HY24 financial summary
HY24 financial summary Overview Financial position Statutory loss1 Underlying operating profit1 NTA per unit Liquidity2 $271.4 million $83.7 million $0.72 $192.9 million (equivalent to loss of 10.36 cps) (equivalent to 3.20 cps) (FY23 $0.84) (FY23 $289 million) Distributions AFFO Gearing3 Look throu
Slide 9: HY24 operational summary
HY24 operational summary Cromwell Head Office, 100 Creek Street, Brisbane Investment portfolio Fund and asset management Portfolio value1 Total third-party AUM $2.4 billion $8.3 billion ($185.5 million decline from FY23 (FY23 $8.0 billion) on a like-for-like basis) WACR WALE Europe AUM Australia / N
Slide 10: Delivering on ESG commitments
Delivering on ESG commitments Strategic achievements Australian Investment Portfolio Gender diversity progress in GRESB Score improvements Announced FY23 scope 3 tenant-customer engagement score Australia Cromwell Polish Retail Fund emissions, leading the 87% 40:40:20 90/100 (2022: 85/100) market in
Slide 11: Financial Results and Capital Management
Financial Results and Capital Management C R O M W E L L P R O P E R T Y G R O U P | H Y 2 4 R E S U L T S 100 Creek Street, Brisbane 10
Slide 12: HY24 headline results
HY24 headline results Valuations and interest rates driving performance impact HY24 HY23 Change • Statutory loss for six months to 31 December 2023 of $271.4 million included Statutory loss ($m)1,2 (271.4) (129.5) (109.6%) unrealised fair value reductions on the Australian Investment Portfolio of $1
Slide 13: HY24 earnings overview
HY24 earnings overview HY24 ($’M) HY23 ($’M) Change (%) Fund and Asset Management Australia EBIT 3.9 21.4 (82.0%) Impacted by lower valuations and asset sales. HY23 included non-recurring $15.9 million profit on LDK sale. Europe EBIT 7.9 5.8 36.2% HY24 includes a $3.4 million performance fee. Total
Slide 14: NTA changes led by valuations
NTA changes led by valuations 100 Creek Street, Brisbane Net tangible assets (NTA) • Reduction in NTA largely driven by reduction in asset values and asset sales: • Continued negative office sentiment led to 7.5% reduction in Australian Investment Portfolio value. • Purchase price reduction on CPRF
Slide 15: Positive balance sheet management
Positive balance sheet management $584 million1 of asset sales completed since 2022 • Final stages of asset sales programme underway. Current liquidity3 $193 million • Majority of assets sold above or around book value. • Non-core asset sales have resulted in $584 million1 of asset sales completed o
Slide 16: Capital management
Capital management Net debt reduction remains a key priority $2,000 60% • Gearing reduction continues to be a priority with Millions proceeds of asset sales used to reduce net debt. $1,800 50% • Total net debt position decreased by 5.2%, from $1,600 $1.74 billion to $1.65 billion over the half-year.
Slide 17: Capital management
Capital management Lender diversification reduces refinance risk Average debt term will increase as asset sales complete • The weighted average maturity of debt by $1,200 commitment will increase from 2.4 years to Millions 3.0 years following settlement of the transactions currently under contract1
Slide 18: Capital management
Capital management Asset sales to bolster liquidity and simplify funding structure Hedging position aligned to strategy Facility Covenant Actual Limit • Weighted average cost of debt remains relatively flat over medium term. LVR1 53.4% 60.0% • Current 1.8-year average hedge term will be increased in
Slide 19: Fund and asset management
Fund and asset management C R O M W E L L P R O P E R T Y G R O U P | H Y 2 4 R E S U L T S Business Hub, 100 Creek Street Brisbane 18
Slide 20: Fund management highlights
Fund management highlights Long term stability continues to be a key focus • Valuations continue to be impacted by global market Third party assets under management Regional fund management by product split conditions. • Cromwell Direct Property Fund (CDPF) valuations down Australia / New Zealand 8.
Slide 21: European fund management
European fund management Posti Group Oyj Asset, Tampere, Finland Key activities European fund management platform • Platform and mandate growth impacted by slower € 4,500 transaction volumes in HY24, although positive activity remains: € 4,000 • Two industrial acquisitions with a total value of Inve
Slide 22: Australia / New Zealand fund management
Australia / New Zealand fund management Key activities Australian fund management Product breakdown by value • Managing $2.4 billion across nine products in Australia and New Zealand. • Cromwell Direct Property Fund: Cromwell Direct Property Fund $ 580.2 million • Remains focused on protecting cashf
Slide 23: Co-investments
Co-investments C R O M W E L L P R O P E R T Y G R O U P | H Y 2 4 R E S U L T S Business Hub, 100 Creek Street Brisbane 22
Slide 24: Co-investments
Co-investments Nervesa21, Milan Cromwell Direct Property Fund (CDPF) Cromwell European REIT (CEREIT) • Cromwell holds a co-investment position of 4.2% in CDPF, • Cromwell’s 27.8% share is carried at an equity value of valued at $13.6 million. $535.2 million. • Industry wide valuation impacts and ope
Slide 25: Co-investments
Co-investments Janki Shopping Centre, Poland Cromwell Italy Urban Logistics Fund (CIULF) Cromwell Polish Retail Fund (CPRF) • Portfolio of seven logistics assets valued at $94 million, • Seven catchment dominant shopping centres valued at $531.8 now 50% co-owned with institutional joint venture mill
Slide 26: Investment portfolio
Investment portfolio C R O M W E L L P R O P E R T Y G R O U P | H Y 2 4 R E S U L T S HVAC system installation, McKell Building, Sydney 25
Slide 27: Investment portfolio
Investment portfolio 400 George Street, Brisbane Valuation pressure persists, strong occupancy remains Portfolio value2 • Australian Investment Portfolio valuations down 7.5% to $2.4 billion in half-year to 31 $2.4 billion December 2023, driven by ongoing market-wide pressures. WACR • Portfolio cont
Slide 28: Investment portfolio
Investment portfolio Ongoing asset improvements provide better leasing outcomes Diversification by state (Value) • Operating efficiencies undertaken with building electrification at McKell Building in Sydney and removal of Cogen plant at HQ 12% 11% North Tower, Fortitude Valley. • Solar installation
Slide 29: Investment portfolio
Investment portfolio Active asset management and leasing • Leasing markets remained active during the half-year with ~12,000 sqm leased. • Investment Portfolio vacancy rates below office averages in markets we operate in, • Total rent reversions for new leases or renewals is -4.7% within the 6-month
Slide 30: Outlook
Outlook C R O M W E L L P R O P E R T Y G R O U P | H Y 2 4 R E S U L T S 207 Kent Street, Sydney 29
Slide 31: Outlook
Outlook 11-13 Robinson Street, Dandenong • Focus remains on active management and leasing initiatives within the Australian Investment Portfolio. • Net debt reduction continues as a priority, as asset sale programme nears completion. • Business simplification ongoing, refocusing the Group on core Fu
Slide 32: For more information, please contact:
400 George Street, Brisbane For more information, please contact: Jonathan Callaghan Chief Executive Officer jonathan.callaghan@cromwell.com.au Phone: +61 7 3225 7777 Michelle Dance Chief Financial Officer michelle.dance@cromwell.com.au Phone: +61 7 3225 7777 Libby Langtry Investor Relations Manager
Slide 33: Appendices
Appendices 33 Operating profit and Statutory Loss Reconciliation 34 Segment Results - Operating Earnings Detail 35 Balance Sheet 36 Net Property Income 37 Movement in Book Value 38 Balance Sheet Debt Details C R O M W E L L P R O P E R T Y G R O U P | H Y 2 4 R E S U L T S 400 George Street, Brisban
Slide 34: HY24 Operating Profit and Statutory Loss Reconciliation
HY24 Operating Profit and Statutory Loss Reconciliation HY24 ($,M) HY23 ($,M) Profit from Operations 83.7 87.1 Operating EPS 3.20 cps 3.33 cps Loss on sale of investment properties - 2.0 Other transaction costs (4.7) (1.7) Operating lease costs 2.7 2.9 Fair value loss Investment properties (195.7) (
Slide 35: Segment Results – Operating Earnings Detail
Segment Results – Operating Earnings Detail Funds and asset management Co-investments Investment portfolio Cromwell 31 December 2023 $M $M $M $M Segment revenue Rental income and recoverable outgoings - 40.2 96.7 136.9 Operating profit of equity accounted investments 0.7 22.8 - 23.5 Development inco
Slide 36: Balance Sheet
Balance Sheet HY24 ($M) FY23 ($M) Assets Cash and cash equivalents 156.0 113.9 Investment property 2,347.3 3,098.2 Investment property and fair value investment held for sale 72.2 45.3 Disposal group assets held for sale 535.6 93.1 Equity accounted investments 580.4 662.2 Receivables 53.1 79.6 Intan
Slide 37: Net Property Income
Net Property Income HY24 ($M) HY23 ($M) Variance ($M) Variance (%) 2-4 Rawson Place, Sydney 7.9 7.3 0.6 8.2% 203 Coward Street, Mascot 17.2 16.3 0.9 5.5% 700 Collins Street, Melbourne 9.3 8.7 0.6 6.9% Soward Way, Greenway 8.9 8.7 0.2 2.3% HQ North Tower, Brisbane 7.9 7.7 0.2 2.6% 400 George Street,
Slide 38: Movement In Book Value
Movement In Book Value HY24 FY23 FY22 FY21 FY20 FY19 FY18 FY17 FY16 FY15 FY14 FY13 FY12 FY11 FY10 $M $M $M $M $M $M $M $M $M $M $M $M $M $M $M Opening Balance 3,098.2 3,740.0 3,863.5 3,752.3 2,520.9 2,451.1 2,357.8 2,274.0 2,101.0 2,249.5 2,396.0 1,724.4 1,444.9 1,064.1 1,117.2 Acquisitions - - - 89
Slide 39: Balance Sheet Debt Details
Balance Sheet Debt Details Drawn Commitment Maturity Fin Yr Years Facility Covenants (AUD $M) (AUD $M) Date Expiry Remaining Bank 1 - 5 Year Facility 205 250 Nov-2026 2027 2.9 yrs Bank 2 - 5 Year Facility 255 350 Jun-2027 2027 3.5 yrs Bank 3 - 5 Year Facility 0 150 Jun-2025 2025 1.5 yrs Bank 4 - 5 Y
Slide 40: L T S
C R O M W E L L P R O P E R T Y G R O U P | H Y 2 4 R E S U L T S 39