Summerset Group Holdings Limited · NZX:SUM
Summerset — H1 2021 Earnings Presentation
55 slides from Summerset's earnings presentation, Aug 24, 2021
Slide 1: Half year results presentation
Half year results presentation Half Year Report 2021 Summerset at Heritage Park
Slide 2: Agenda
Half Year Report 2021 Half year results presentation Agenda 01 Covid-19 update 02 Our highlights 03 Business overview 2 04 Financial results 05 Interim dividend 06 Appendix
Slide 3: COVID-19 update
Half Year Report 2021 COVID-19 update COVID-19 update Prevention of COVID-19 remains our focus ▪ The latest lockdown is a reminder the COVID-19 global pandemic continues to be part of our operating environment ▪ We have again moved early and fast to keep our residents and staff safe. Summerset restr
Slide 4: Our highlights
SEimerset Our highlights 8&8 1H21
Slide 5: 1H21 Summary
Half Year Report 2021 Our highlights 1H21 Summary Key result highlights ▪ Underlying profit for 1H21 of $75.5m, a six month record ▪ Record net profit after tax (NZ IFRS) of $263.8m, up from $1.0m in 1H20 and $230.8m for FY20 ▪ Operating cash flows of $229.7m, up from $92.8m in 1H20 ▪ Gearing ratio
Slide 6: 1H21 result snapshot
Half Year Report 2021 Our highlights 1H21 result snapshot IFRS net profit after tax of $263.8m resulting in a 45% growth in company equity since 1H20 $263.8m $229.7m $75.5m Net profit after tax Net operating cash flows Underlying profit 1H20 $1.0m 1H20 $92.8m 1H20 $45.1m $4.4b 28.5% $1.1b 6 Total as
Slide 7: Looking back – 1H21 review
Our highlights Half Year Report 2021 Our highlights Looking back – 1H21 review A showcase of key events from the past six months Resident Maisie Lund receives vaccine Lower Hutt blessing 7 Summerset Heritage St Johns Ellerslie Apartments, Richmond Main Building opening Tyler Grant Lower Hutt blessin
Slide 8: Business overview
a Stimmerset overview 1H21
Slide 9: Summerset snapshot
Half Year Report 2021 Our strategy Summerset snapshot Diversified portfolio throughout New Zealand Our people Our care Our portfolio 6,600+ 97% 4,669 Residents Care resident Retirement units satisfaction in portfolio 1,900+ 1,035 5,070* 9 Staff members Care units in Retirement units portfolio in lan
Slide 10: Bringing the best of life
Half Year Report 2021 Bringing the best of life Bringing the best of life Bringing the best of life to residents and staff ▪ Our focus remains on protecting our residents and staff from COVID-19, good progress made on our vaccination rollout ▪ To date, over 80% of both our aged care residents and ca
Slide 11: Our environment
Half Year Report 2021 Bringing the best of life Our environment CarbonzeroTM audit Environmental performance and sustainability ▪ New Zealand’s first and only carbonzero TM certified retirement village operator, recording a 31% reduction in carbon emissions since 2017 31% 25% 17% Environmentally ▪ W
Slide 12: Development - Australia
Half Year Report 2021 Growth strategy Development - Australia Two new sites purchased, bringing our total number of Australian sites to four ▪ In March we purchased our third Australian site in Chirnside Park, Melbourne ▪ Today we announced the purchase of 9.76ha of land in Craigieburn, bringing Sum
Slide 13: New sites – announced today (Craigieburn)
Half Year Report 2021 Growth strategy Summerset site New sites – announced today (Craigieburn) Fourth Australian site acquired in Craigieburn, around 32km north of Melbourne’s CBD Summerset Chirnside Park ▪ Acquisition of 9.76ha of land in Craigieburn, part of the outer ring of Greater Melbourne ▪ T
Slide 14: Development - New Zealand
Half Year Report 2021 Growth strategy Development - New Zealand Record six month deliveries of 347 total units ▪ Delivered a record 347 total units including 130 villas, one main building and two apartment blocks in 1H21 ▪ Now have a total of 13 villages in construction across ten regions in New Zea
Slide 15: New sites – announced today (Kelvin Grove)
Half Year Report 2021 Growth strategy New sites – announced today Second Palmerston North site for Summerset, located in the northern suburb of Kelvin Grove Summerset on Summerhill ▪ Acquisition of 34.2ha of land in Kelvin Grove, to be home to our second Palmerston North village Palmerston North ▪ W
Slide 16: Summerset village photos
Half Year Report 2021 Growth strategy 16 Summerset Mount Denby (Whangārei) Summerset at Monterey Park (Hobsonville, Auckland) Summerset Rototuna (Hamilton) Summerset on the Dunes (Pāpāmoa Beach, Tauranga)
Slide 17: Summerset village photos
Half Year Report 2021 Growth strategy 17 Summerset at Pohutukawa Place (Bell Block, New Plymouth) Summerset Palms (Te Awa, Napier) Summerset on the Landing (Kenepuru, Wellington) Summerset Boulcott (Lower Hutt, Wellington)
Slide 18: Summerset village photos
Half Year Report 2021 Growth strategy 18 Summerset Richmond Ranges (Nelson) Summerset on Cavendish (Casebrook, Christchurch) Summerset at Avonhead (Christchurch) Summerset Prebbleton (Selwyn District)
Slide 19: Development pipeline
Half Year Report 2021 Growth strategy Development pipeline Diversified development pipeline grown from 16 sites in FY18 to 23 sites in 1H21, 56% of landbank fully consented 19 * New sites purchased Development pipeline as at 30 June 2021, excludes Kelvin Grove and Craigieburn
Slide 20: Residential market summary
Half Year Report 2021 Growth strategy Residential market summary House price inflation remains strong, Summerset conservatively positioned relative to residential house prices Sales prices vs median house price $1,400,000 $1,200,000 $1,000,000 20 $800,000 $600,000 68% $400,000 85% $200,000 34% 51% 3
Slide 21: Retirement unit delivery
Business overview Half Year Report 2021 Business performance Retirement unit delivery Record six month deliveries of 347 total units 284 Retirement units 347 Total units delivered delivered ▪ 284 retirement units and 63 care units delivered Retirement units Care units Unit Total across 10 villages i
Slide 22: Development margin
Business overview Half Year Report 2021 Business performance Development margin Realised development margin of $40.7m, with 22% $40.7m a 22% development margin Development margin Realised margin ▪ Realised development margin of $40.7m, a record Realised development margin half year result and up 134
Slide 23: New sales
Business overview Half Year Report 2021 Business performance New sales 302 new sales in the period, record gross 302 $188.0m proceeds of $188.0m New sale of occupation Gross proceeds rights ▪ A six month record of 302 new sales of occupation rights in 1H21 New sales 1H21 1H20 Variance 1H19 FY20 ▪ Th
Slide 24: New sales stock
Business overview Half Year Report 2021 Business performance New sales stock Stock levels remain stable relative to prior 222 4.7% periods Uncontracted stock Percentage of uncontracted stock ▪ Uncontracted new sale stock of 222 units, up from 179 at FY20 (24%) New sales stock 1H21 FY20 1H20 Contract
Slide 25: New sales performance
Half Year Report 2021 Business performance New sales performance New sale settlements and total unit delivery Annual new sales contracts 400 800 302 300 276 600 194 193 200 400 145 136 347 128 289 217 215 231 100 182 200 139 - - 25 1H18 2H18 1H19 2H19 1H20 2H20 1H21 Jan Feb Mar Apr May Jun Jul Aug S
Slide 26: Resales
Business overview Half Year Report 2021 Business performance Resales Realised gain of $29.4m, up 87%, embedded 243 $29.4m value now exceeds $1.1b Resale of occupation rights Realised resale gain ▪ Total resales of 243 occupation rights in 1H21, up Resales 1H21 1H20 Variance 1H19 FY20 from 136 in 1H2
Slide 27: Embedded value
Business overview Half Year Report 2021 Business performance Embedded value Embedded value now exceeds $1.1b, up 49% $1.1b $780.9m Embedded value Embedded resale gain ▪ Total embedded value now exceeds $1.1b, having Embedded value increased from $765.7m at 1H20, a 49% uplift ▪ Embedded value compris
Slide 28: Resales stock
Half Year Report 2021 Business performance Resales stock Available resales stock remains at very low 62 1.3% levels Uncontracted stock Percentage of uncontracted stock ▪ Resales stock is at historically low levels with 87 retirement units under contract and 62 units Resales stock 1H21 FY20 1H20 unco
Slide 29: Resales performance
Half Year Report 2021 Business performance Resales performance Resales settlements Annual resales contracts 350 500 500 300 400 400 250 To update 200 300 300 150 200 200 245 243 100 181 154 147 142 136 100 100 50 -- 29 - 1H18 2H18 1H19 2H19 1H20 2H20 1H21 Jan Jan Feb Feb Mar Mar Apr Apr May May Jun
Slide 30: Financial results
SEimerset Financial results 1H21
Slide 31: Reported profit (IFRS)
Half Year Report 2021 Financial results Reported profit (IFRS) NZ$m 1H21 1H20* Variance 1H19 FY20 Total revenue 94.9 82.0 16% 74.0 172.4 Fair value movement of ▪ Record IFRS NPAT of $263.8m, up from $1.0m in 260.2 (14.7) N/A 85.7 221.1 investment property 1H20 (normalised -$7.6m net loss after tax)
Slide 32: Fair value movement
Half Year Report 2021 Financial results Fair value movement ▪ 1H21 fair value movement of $260.2m, a record $260.2m $69.1m Fair value movement Increase from new across all prior half and full year reporting periods units delivered ▪ Fair value movement has been driven by: Fair value movement of inve
Slide 33: Underlying profit
Financial results Half Year Report 2021 Financial results Underlying profit ▪ Underlying profit of $75.5m, a six month record and $75.5m 68% Underlying profit Increase on 1H20 up 68% on 1H20 ▪ Uplift in profit driven by the continued improvement in operating earnings across our core business NZ$m 1H
Slide 34: Cash flows
Financial results Half Year Report 2021 Financial results Cash flows ▪ Net operating cash flows of $229.7m, up from $229.7m 148% Net operating cash flows Increase on 1H20 $92.8m at 1H20 ▪ Net operating business cash flow of $42.5m, up NZ$m 1H21 1H20 Variance 1H19 FY20 158% on 1H20, and up from $4.2m
Slide 35: Balance sheet
Financial results Half Year Report 2021 Financial results Balance sheet ▪ Total assets of $4.4b, up 27% on 1H20 $4.4b $1.3b Total assets 27% Retained 56% ▪ Investment property valuation of $4.1b, up 27% on earnings 1H20 ▪ Retained earnings are now $1.3b, up 56% from NZ$m 1H21 1H20 Variance 1H19 FY20
Slide 36: Net tangible assets and gearing
Business overview Half Year Report 2021 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 $16.0 50.0% $8.0 44.3% $7.07 45.0% $14.0 $7.0 40.0% $12.0 $6.0 35.0% $10.0
Slide 37: Gearing ratio
Financial results Half Year Report 2021 Financial results Gearing ratio ▪ Net debt of $643.3m* as at 30 June 2021, down 28.5% 31.2% Gearing ratio Bank & bond LVR from $656.8* at FY20 ▪ Decrease in gross debt driven by increase in Net debt to underlying assets – 1H21 settlement revenue in the period
Slide 38: Funding
Financial results Half Year Report 2021 Financial results Funding ▪ Summerset completed a loan facility refinance in $1.2b $375m Bank facility Retail bonds August 2021 for approximately $700m, with an effective date of 1 October 2021 Refinanced funding maturity profile ▪ Includes the refinance of $3
Slide 39: Interim Dividend
SEimerset _~ Interim = Dividend 1H21
Slide 40: Interim dividend
Financial results Half Year Report 2021 Interim dividend Interim dividend Declared 1H21 interim dividend of 9.9 cents Gross dividend payout per year per share $35m $30m ▪ The Board has declared an interim dividend of 9.9 cents per share, unimputed. This compares to a 2020 $25m $17.5m $16.2m $16.0m i
Slide 41: Questions
SEimerset Questions } 1H21
Slide 42: Disclaimer
Half Year Report 2021 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 43: Appendix
SEimerset Appendix 1H21
Slide 44: 1H21 underlying profit reconciliation
Appendix Half Year Report 2021 Appendix 1H21 underlying profit reconciliation Reconciliation of underlying profit to reported net profit after tax 1H21 1H20 Variance 1H19 FY20 Net profit before tax (IFRS) 265.6 (2.7) N/A 92.1 221.7 Net profit after tax (IFRS) 263.8 1.0 26,601% 92.6 230.8 Financial (
Slide 45: Historical trends
Half Year Report 2021 Appendix Historical trends Underlying profit 10 year CAGR of 34% FY11 Full Year Results 10 Year CAGR* 1H21 2H20 1H20 2H19 1H19 NZX listed New sales of occupation rights 19% 302 276 128 193 136 108 Resales of occupation rights 15% 243 245 136 181 142 123 Operational Total sales
Slide 46: Fair value movement
Appendix Half Year Report 2021 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 47: Fair value movement
Appendix Half Year Report 2021 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: Portfolio as at 30 June 2021
Appendix Half Year Report 2021 Appendix Portfolio as at 30 June 2021 5,704 total units including 941 care beds Existing portfolio - as at 30 June 2021 Retirement units Care units Total units and Serviced Memory care Care Care care beds Village Villas Apartments apartments apartments suites beds Whan
Slide 49: Portfolio as at 30 June 2021
Appendix Half Year Report 2021 Appendix Portfolio as at 30 June 2021 5,704 total units including 941 care beds Existing portfolio - as at 30 June 2021 Retirement units Care units Total units and Serviced Memory care Care Care care beds Village Villas Apartments apartments apartments suites beds Levi
Slide 50: Future development
Appendix Half Year Report 2021 Appendix Future development Largest New Zealand land bank for a retirement village operator of 5,267 units and beds* Landbank – as at 30 June 2021 Retirement units Care units Serviced Memory care Care Care Total units and Village Villas Apartments apartments apartments
Slide 51: Future development
Appendix Half Year Report 2021 Appendix Future development Largest New Zealand land bank for a retirement village operator of 5,267 units and beds* Landbank – as at 30 June 2021 Retirement units Care units Serviced Memory care Care Care Total units and Village Villas Apartments apartments apartments
Slide 52: Demographics
Appendix Half Year Report 2021 Appendix Demographics Population over 75 years forecast to grow 231% from 2021 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% 52 15,000 10% 600,000 8% 10,000 400,000 6%
Slide 53: Summerset growth
Appendix Half Year Report 2021 Appendix Summerset growth 24 years of consistent delivery and growth Summerset build rate 6,000 5,704 5,357 347 4,944 413 5,000 4,590 354 4,084 506 4,000 53 3,576 508 Total units 3,035 541 3,000 2,601 434 5,357 2,297 4,944 304 1,973 4,590 1,813 324 2,000 4,084 1,599 1,
Slide 54: Customer profile & occupancy
Appendix Half Year Report 2021 Appendix Customer profile & occupancy Occupancy, tenure and resident demographic statistics Occupancy – retirement villages Occupancy – established care centres 100% 100% 100% 90% 80% 80% 80% 70% 60% 60% 60% 50% 97% 96% 96% 96% 96% 95% 96% 97% 97% 96% 96% 96% 97% 40% 4
Slide 55: Ngā mihi
Ngā mihi 55 For more information: Will Wright Chief Financial Officer will.wright@summerset.co.nz 021 490 251 Jenny Bridgen Communications Manager jenny.bridgen@summerset.co.nz 021 408 215
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