Summerset Group Holdings Limited · NZX:SUM
Summerset — FY2020 Earnings Presentation
57 slides from Summerset's earnings presentation, February 2021
Slide 1: Full year results presentation
Full year results presentation Full Year Report 2020 Summerset at Heritage Park
Slide 2: Agenda
Full Year Report 2020 Full year results presentation Agenda 01 Our highlights 02 Strategic update 03 Business overview 2 04 Financial results 05 Final dividend 06 Appendix
Slide 3: Our highlights
a nerset Our highlights 2&8 FY20
Slide 4: FY20 Summary
Full Year Report 2020 Our highlights FY20 Summary Key result highlights ▪ Continued focus on the COVID-19 pandemic to ensure the safety of our residents and staff ▪ Underlying profit for FY20 of $98.3m ▪ Net profit after tax (NZ IFRS) of $230.8m, up 32% on FY19 ▪ Operating cash flows of $266.8m ▪ Ge
Slide 5: FY20 result snapshot
Full Year Report 2020 Our highlights FY20 result snapshot IFRS net profit after tax of $230.8m resulting in a 20% growth in company equity 5
Slide 6: Looking back – Our year in review
Our highlights Full Year Report 2020 Our highlights Looking back – Our year in review A showcase of key events from the past year 6 Summerset St Johns Summerset at Pohutukawa Place January March May Earthworks start at St Our next-generation village Construction sites fully Johns site in Auckland ce
Slide 7: Looking back – Our year in review
Our highlights Full Year Report 2020 Our highlights Looking back – Our year in review A showcase of key events from the past year 7 Summerset Rototuna July September November Connect speaker series First residents moved into Lower Hutt resource restarts with our first Papamoa Beach village consent r
Slide 8: Strategic update
Strategic update 8 FY20 Summerset Rototuna
Slide 9: Our strategy
Full Year Report 2020 Our strategy Our strategy Summerset builds, owns and operates integrated retirement villages ▪ Emphasis on continuum of care model ▪ High quality care and facilities across all villages ▪ Villages designed to integrate into local communities ▪ Internal development and construct
Slide 10: Summerset snapshot
Full Year Report 2020 Our strategy Summerset snapshot Diversified portfolio throughout New Zealand ▪ 23 years of consistent delivery and asset growth ▪ Total assets have grown more than six times since listing on the NZX in 2011 ▪ Portfolio of 4,442 units and 915 care beds, home to more than 6,200 r
Slide 11: Business overview
umimerset iness . Bus overview FY20
Slide 12: Our people, our care, our portfolio
Full Year Report 2020 Business overview Our people Our care Our portfolio 6,200+ 97% 4,442 Residents Care resident Total units in satisfaction portfolio 1,800+ 972 5,992 12 Staff members 57 care units and 915 Units in land care beds in portfolio bank 95% 1,042 $3.9b Village resident 863 care units a
Slide 13: COVID-19 update
Full Year Report 2020 COVID-19 update COVID-19 update Prevention of COVID-19 remains our focus ▪ Our priority throughout 2020 was on keeping our residents and staff safe from the COVID-19 global pandemic ▪ New Zealand’s effective public health response resulted in zero cases to date in our villages
Slide 14: Our residents
Full Year Report 2020 Bringing the best of life Our residents Bringing the best of life to residents every day ▪ Our care centres achieved 97% resident satisfaction with 95% for our retirement village residents in our 2020 survey ▪ Enhanced focus on resident wellbeing, with the development of an onl
Slide 15: Our staff
Full Year Report 2020 Bringing the best of life Our staff Significant investment in staff development and training ▪ Winners of the Training and Staff Development Award at the NZ Aged Care Association Excellence in Care Awards ▪ Finalist in the HR New Zealand Awards for Talent Acquisition with the w
Slide 16: Our environment
Full Year Report 2020 Bringing the best of life Our environment Environmental performance and sustainability ▪ Continued to build on our commitment to sustainability throughout 2020 ▪ Achieved an environmental, social and governance rating of AA from Morgan Stanley and submitted a non-scored survey
Slide 17: Our new sites
Full Year Report 2020 Growth strategy Our new sites One new site and one extension added to our land bank in FY20 ▪ Acquisition of 2.8ha of land in Half Moon Bay to be home to our ninth Auckland village, first in eastern Auckland ▪ Acquisition of a 1.5ha extension to our highly successful Richmond v
Slide 18: Development - Australia
Full Year Report 2020 Growth strategy Summerset Cranbourne North (Melbourne) Development - Australia Substantial investment into growing our Australian team ▪ Appointed the heads of our design, sales and operations teams for Victoria throughout 2020 ▪ Good progress on our Cranbourne North village: ▪
Slide 19: Development - New Zealand
Full Year Report 2020 Growth strategy Development - New Zealand Significant progress in executing our New Zealand development strategy ▪ Now have a total of 13 villages in construction across nine regions in New Zealand, up from seven in construction in 2018 ▪ Delivered 356 units, two main buildings
Slide 20: New villages photos
Full Year Report 2020 Growth strategy 20 Summerset by the Dunes (Papamoa Beach, Tauranga) Summerset Palms (Te Awa, Napier) Summerset at Pohutukawa Place (Bell Block, New Plymouth) Summerset St Johns (Auckland)
Slide 21: New main building
Full Year Report 2020 Growth strategy New main building A vibrant community hub that forms the heart of our villages ▪ Completed two main buildings at our Casebrook and Rototuna villages ▪ These buildings reflect the evolution of our village centre design and provide a focal point to bring our resid
Slide 22: Development Pipeline (2018 to 2020)
Full Year Report 2020 Growth strategy Development Pipeline (2018 to 2020) Diversified development pipeline has grown from 16 sites in FY18 to 23 sites in FY20 22 * New sites purchased
Slide 23: House price inflation
Full Year Report 2020 Growth strategy House price inflation REINZ annual residential house price inflation in New Zealand, national median price $749k (record), up 19.3% 23 Source: REINZ, December 2020
Slide 24: Retirement unit delivery
Business overview Full Year Report 2020 Business performance Retirement unit delivery Delivered 356 units and 79 care beds in FY20 356 Total units delivered 79 Care beds across nine sites delivered ▪ 356 total units and 79 care beds were delivered Unit delivery Villas Serviced Memory care Care Total
Slide 25: Development margin
Business overview Full Year Report 2020 Business performance Development margin Realised development margin of $48.2m, with 20% $48.2m a 20% development margin Development margin Realised margin ▪ Full year realised development margin of $48.2m Realised development margin ▪ Development margin of 20%
Slide 26: New sales
Business overview Full Year Report 2020 Business performance New sales 404 new sales in the period, record gross 404 $245.4m proceeds of $245.4m New sale of occupation Gross proceeds rights ▪ 404 new sales of occupation rights in FY20, up 23% from FY19 New sales FY20 FY19 Variance FY18 ▪ Record gros
Slide 27: New sales stock
Business overview Full Year Report 2020 Business performance New sales stock Uncontracted stock down 33% from FY19 179 4.0% Uncontracted stock Percentage of uncontracted stock ▪ Uncontracted new sale stock of 179 units, down from 266 at FY19 (-33%) New sales stock FY20 FY19 FY18 Contracted 117 78 10
Slide 28: New sales performance
Full Year Report 2020 Business performance New sales performance New sale settlements and unit delivery Annual new sales contracts 500 800 414 404 382 400 339 333 329 600 300 400 450 454 200 409 354 356 303 200 100 - 28 - Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec FY15 FY16 FY17 FY18 FY19 FY20
Slide 29: Resales
Business overview Full Year Report 2020 Business performance Resales Record realised gain of $46.1m, up 25% 381 $46.1m Resale of occupation rights Realised resale gain ▪ Resales of 381 occupation rights in FY20, up from Resales FY20 FY19 Variance FY18 323 in FY19 (18%) Gross proceeds ($m) 176.8 143.
Slide 30: Resales stock
Full Year Report 2020 Business performance Resales stock Available resales stock remain at low levels 73 1.6% Uncontracted stock Percentage of uncontracted stock ▪ Resales stock remains low with 105 retirement units under contract and 73 retirement units Resales stock FY20 FY19 FY18 uncontracted at
Slide 31: Resales performance
Full Year Report 2020 Business performance Resales performance Realised resale gain and volume Annual resales contracts 500 30% 500 26% 26% 24% 400 22% 25% 400 19% 20% 300 16% 300 15% 200 200 381 323 10% 300 301 245 244 100 100 5% - 31 - - FY15 FY16 FY17 FY18 FY19 FY20 Jan Feb Mar Apr May Jun Jul Au
Slide 32: Financial results
Financial results 32 FY20 Summerset Falls
Slide 33: Reported profit (IFRS)
Full Year Report 2020 Financial results Reported profit (IFRS) NZ$m FY20 FY19 Variance FY18 Total revenue 172.4 153.9 12% 137.0 ▪ IFRS NPAT of $230.8m, up 32% on FY19 Fair value movement of investment 221.1 165.3 34% 209.9 ▪ Fair value movement of investment property of property $221.1m, including $
Slide 34: Fair value movement
Full Year Report 2020 Financial results Fair value movement ▪ FY20 fair value movement of $221.1m, up 33.8% $221.1m 33.8% Fair value movement Increase on FY19 on FY19 ▪ Fair value movement has been driven by: Fair value movement of investment property FY20 ▪ Unit pricing ($76.6m): reflecting the tai
Slide 35: Underlying profit
Financial results Full Year Report 2020 Financial results Underlying profit ▪ Underlying profit of $98.3m, down 7% on FY19 $98.3m $9.2m Underlying 7% Additional COVID-19 ▪ This includes expenditure on our response to the profit expenditure COVID-19 pandemic. Excluding this, underlying profit would b
Slide 36: Cash flows
Financial results Full Year Report 2020 Financial results Cash flows ▪ Net operating cash flows of $266.8m, up from $266.8m 12% Net operating cash flows Increase on FY19 $237.9m at FY19 ▪ Net operating business cash flow of $29.8m, up 5% NZ$m FY20 FY19 Variance FY18 on FY19 and inclusive of expendit
Slide 37: Balance sheet
Financial results Full Year Report 2020 Financial results Balance sheet ▪ Total assets of $3.9b, up 17% on FY19 $3.9b $1.0b Total assets 17% Retained 24% ▪ Investment property valuation of $3.6b, up 17% on earnings FY19 ▪ Retained earnings are now $1.0b, up 24% from NZ$m FY20 FY19 Variance FY18 $837
Slide 38: Net tangible assets and gearing
Business overview Full Year Report 2020 Financial results Net tangible assets Strong financial disciplines underpinning net tangible assets and gearing Net tangible assets and gearing* Summerset net tangible assets per share $12.0 50.0% $7.0 $7.0 46.2% $6.0 45.0% $6.00 $5.94 $6.0 $6.0 $5.05 $10.0 $6
Slide 39: Gearing ratio
Financial results Full Year Report 2020 Financial results Gearing ratio ▪ Net debt of $656.8m* as at 31 December 2020, up 32.6% 35.9% Gearing ratio Bank & bond LVR $91.1m on FY19 ▪ Uplift in gross debt driven by land settlements in the Net debt to underlying assets – FY20 period and construction pro
Slide 40: Final Dividend
S@nmerset Final Dividend FY20
Slide 41: Final dividend
Financial results Full Year Report 2020 Final dividend Final dividend Declared FY20 final dividend of 7.0 cents per Dividend payout per year share $35m $30m ▪ The Board has declared an unimputed final $25m dividend of 7.0 cents per share $17.5m $16.2m $16.0m $20m ▪ This bring total dividends for the
Slide 42: Questions
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Slide 43: Disclaimer
Full Year Report 2020 Disclaimer Disclaimer ▪ This presentation may contain projections or forward looking statements regarding a variety of items. Such forward looking statements are based upon current expectations and involve risks and uncertainties ▪ Actual results may differ materially from thos
Slide 44: Appendix
& umimerset Appendix 8 FY20
Slide 45: FY20 underlying profit reconciliation
Appendix Full Year Report 2020 Appendix FY20 underlying profit reconciliation Reconciliation of underlying profit to reported net profit after tax FY20 FY19 Variance FY18 Net profit before tax (IFRS) 221.7 173.6 28% 216.2 Net profit after tax (IFRS) 230.8 175.3 32% 214.5 Financial (NZ$m) Add impairm
Slide 46: Historical trends
Full Year Report 2020 Appendix Historical trends Underlying profit 9 year CAGR of 32% FY11 Full Year Results 9 Year CAGR* FY20 FY19 FY18 FY17 FY16 NZX listed New sales of occupation rights 16% 404 329 339 382 414 108 Resales of occupation rights 13% 381 323 301 300 244 123 Operational Total sales 15
Slide 47: Fair value movement
Appendix Full Year Report 2020 Appendix Fair value movement Fair value movement of investment property – key assumptions Value of Fair value movement of Fair value investment Key valuation assumptions investment property gain/(loss) property* Discount Growth rate Growth rate Growth rate Growth rate
Slide 48: Fair value movement
Appendix Full Year Report 2020 Appendix Fair value movement Fair value movement of investment property – key assumptions Value of Fair value movement of Fair value investment Key valuation assumptions investment property gain/(loss) property* Discount Growth rate Growth rate Growth rate Growth rate
Slide 49: Care centre valuation
Appendix Full Year Report 2020 Appendix Care centre valuation Care centre valuation – key assumptions Assumed Assumed value per Value of care facilities Total care beds Value of care facility capitalisation rate equivalent bed** Village Location No. NZ$m % NZ$'000 Summerset by the Park Manukau 54 10
Slide 50: Portfolio as at December 2020
Appendix Full Year Report 2020 Appendix Portfolio as at 31 December 2020 4,442 total units and 915 care beds Existing portfolio - as at 31 December 2020 Serviced Memory care Total units and Village Villas Apartments Care suites Care beds apartments apartments care beds Ellerslie 36 144 57 - - 58 295
Slide 51: Portfolio as at December 2020
Appendix Full Year Report 2020 Appendix Portfolio as at 31 December 2020 4,442 total units and 915 care beds Existing portfolio - as at 31 December 2020 Serviced Memory care Total units and Village Villas Apartments Care suites Care beds apartments apartments care beds Levin 64 22 - 10 - 41 137 Palm
Slide 52: Future development
Appendix Full Year Report 2020 Appendix Future development Largest New Zealand land bank for a retirement village operator of 5,612 units and beds Landbank – as at 31 December 2020 Serviced Memory care Total units and Village Villas Apartments Care suites Care beds apartments apartments care beds Wh
Slide 53: Future development
Appendix Full Year Report 2020 Appendix Future development Largest New Zealand land bank for a retirement village operator of 5,612 units and beds Landbank – as at 31 December 2020 Serviced Memory care Total units and Village Villas Apartments Care suites Care beds apartments apartments care beds Ri
Slide 54: Demographics
Appendix Full Year Report 2020 Appendix Demographics Population over 75 years forecast to grow 245% from 2020 to 2073 Population growth 75 years and over Per annum population growth 75 years and over 1,200,000 18% 25,000 16% 1,000,000 20,000 14% 800,000 12% 54 15,000 10% 600,000 8% 10,000 400,000 6%
Slide 55: Summerset growth
Appendix Full Year Report 2020 Appendix Summerset growth 23 years of consistent delivery and growth Summerset build rate 5,000 4,442 4,500 4,086 356 4,000 3,732 354 3,500 3,278 454 55 3,000 2,828 450 Total units 2,419 409 2,500 2,116 303 2,000 1,855 4,086 261 1,646 3,732 1,486 209 3,278 1,500 1,352
Slide 56: Customer profile & occupancy
Appendix Full Year Report 2020 Appendix Customer profile & occupancy Occupancy, tenure and resident demographic statistics Occupancy – retirement villages Occupancy – established care centres 100% 100% 90% 90% 80% 80% 70% 70% 60% 60% 50% 97% 96% 96% 50% 96% 96% 96% 40% 40% 30% 30% 56 20% 20% 10% 10%
Slide 57: Ngā mihi
Ngā mihi 57 For more information: Scott Scoullar Chief Financial Officer & Deputy CEO scott.scoullar@summerset.co.nz 029 894 7317 Jenny Bridgen Communications Manager jenny.bridgen@summerset.co.nz 021 408 215
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