Slide 1: Qualitas Limited – FY24 Results Presentation
ASX Announcement Qualitas Limited (ASX: QAL) 21 August 2024 Qualitas Limited – FY24 Results Presentation Qualitas Limited (ASX: QAL) provides the attached FY24 Results Presentation. Authorised for release by the Board of Directors of the Company. For more information, please contact: Investor Enquir
Slide 2: Disclaimer
Disclaimer This announcement contains general information only and does not consider your investment objectives, financial situation or needs. Qualitas is not licensed to provide financial product advice about Qualitas shares or other financial products. This announcement does not constitute financi
Slide 3: Qualitas (ASX:QAL) FY24 Results
Qualitas (ASX:QAL) FY24 Results 21 August 2024
Slide 4: Acknowledgement of Country
Acknowledgement of Country Qualitas acknowledges the Traditional Custodians of Country throughout Australia and their ongoing connection to land, sea, and community. We pay our respect to their Elders past and present. JOURNEY OF GROWTH BY ALYSHA MENZEL 2
Slide 5: Agenda and presenters
Agenda and presenters 1 Strategic Outlook and FY24 Highlights 2 Funds Management ANDREW SCHWARTZ MARK FISCHER Group Managing Global Head of Real Director and Co-Founder Estate and Co-Founder 3 FY24 Financial Results 4 Outlook and Guidance - Appendices KATHLEEN YEUNG Global Head of PHILIP DOWMAN Chie
Slide 6: Record FY24 capital raising and deployment generate momentum for robust FY25 growth
Record FY24 capital raising and deployment generate momentum for robust FY25 growth FY24 NET FUND CAPITAL Significant inflow – private credit Flight to quality in manager INFLOW2 outperforms providing superior and investment selection risk-adjusted returns $2.8bn +55% vs. FY23 FY24 DEPLOYMENT $1.4bn
Slide 7: Competitive advantages underpinning success and stability of our platform
Competitive advantages underpinning success and stability of our platform Large scale capital from sticky investor base Diversified real estate strategies with enables us to write large cheques creating ability to traverse real estate lifecycle incumbent financier advantage One of the foundational C
Slide 8: Strategic Outlook and FY24 Highlights
Strategic Outlook and FY24 Highlights
Slide 9: Capital raising underpins growth
Capital raising underpins growth – $2.8bn net inflow demonstrates investors’ conviction in our platform FY24 RESULTS HIGHLIGHTS $8.9bn $2.8bn $6.8bn $4.4bn $1.5bn FUM1 Net inflow Fee Earning FUM2 Invested FUM2 FUM not yet earnings fees / +46% vs. FY23 +55% vs. FY23 +40% vs. FY23 +13% vs. FY23 dry po
Slide 10: High quality growth reflected in our achievement of long-term margin target
High quality growth reflected in our achievement of long-term margin target, with recurring revenue nearly doubling in the past two years $53.7m $23.3m $37.9m STRONG RECURRING REVENUE GROWTH AND MARGIN EXPANSION Funds management Principal income Funds management 49% revenue +47% vs. FY23 EBITDA excl
Slide 11: Positive net performance fee revenue driven by private credit funds
Positive net performance fee revenue driven by private credit funds • Credit fund performance UNRECOGNISED PERFORMANCE FEE POOL CREDIT PERFORMANCE FEE OFFSETS fees have more stable TODAY CARRIES LOWER VOLATILITY REVERSAL FROM EQUITY realisation profile than Unrecognised performance fee pool split FY
Slide 12: Co-investment across platform below 3%
Co-investment across platform below 3% – optimising balance sheet efficiency to support growth USE OF BALANCE SHEET CASH AS AT 30 JUNE 2024 SHORT-TERM INVESTMENT IN DEAL FLOW WHILE TRANSITION TO LONGER TERM CO-INVESTMENT Flexibility to deploy $209m balance sheet capital into more accretive short-ter
Slide 13: Increase in private credit due to search for appropriate risk premium
Increase in private credit due to search for appropriate risk premium CRE PRIVATE CREDIT OFFERS ATTRACTIVE PREMIUM PER INCREMENTAL RISK1 Given volatility in global markets, comparing to traditional asset classes CRE private credit vs. listed private credit offers: Margin to risk free rate alternativ
Slide 14: Long runway for Australian CRE private credit
Long runway for Australian CRE private credit – ripe with opportunities for experienced managers • Investors are selecting managers with LARGE AND GROWING AUSTRALIAN LARGE AND EXPERIENCED MANAGERS a focus on transparency, track record CRE FINANCING MARKET ARE SCALING UP and reputation. $7.2bn Qualit
Slide 15: Robust investment fundamentals in Australian residential private credit
Robust investment fundamentals in Australian residential private credit • QCDF II is the largest closed-ended RESIDENTIAL SECTOR HAS THE WIDEST ELEVATED CONSTRUCTION COSTS Australia-focused private real estate FINANCING DISLOCATION TRANSLATE TO LARGER INVESTMENTS fund established between 2020 and Fe
Slide 16: Funds Management
Management @) QUALITAS
Slide 17: High growth alternative investment manager investing in multi-trillion dollar asset classes
High growth alternative investment manager investing in multi-trillion dollar asset classes DIFFERENTIATORS QUALITAS OVERVIEW PERE RED 50: LARGEST CAPITAL RAISERS OVER THE LAST FIVE YEARS IN $8.9bn Investor-led thematics $7.2bn Private credit $0.7bn Inflationary hedge $0.6bn Build-to-Rent $0.4bn Opp
Slide 18: Funds management model differentiated by long-term scalable capital
Funds management model differentiated by long-term scalable capital… FUM ($M) Track record of raising capital through-the-cycle: • Two commitments from ADIA1 totalled $1bn 8,888 increased external FUM in QDCI by 143%, includes 37% 46% additional $80m activated recently. • $550m from a new global ins
Slide 19: …and ability to deploy into larger investments with high quality counterparties
…and ability to deploy into larger investments with high quality counterparties • $585m loan for the ‘Victoria & Albert’ development DEPLOYMENT ($M) project in Broadbeach, QLD. $80m • Well positioned to finance residual stock loans at 48% $73m 4,186 scale as the incumbent construction financier. CAG
Slide 20: Strategic portfolio repositioning leads to increased portfolio churn
Strategic portfolio repositioning leads to increased portfolio churn – expected to normalise in FY25 • Elevated FY24 portfolio churn due to refinance of ‘Aura SCALING OUR DEPLOYMENT TO TARGET FEE EARNING FUM TO GROW IN by Aqualand’, QCDF I rolling off and strategic portfolio LINE WITH FUM ($M) Net r
Slide 21: Progressing our ESG vision
Progressing our ESG vision Leveraging our platform to support low carbon buildings, delivering impact for our communities and our people and striving for best-in-class corporate governance ENVIRONMENTAL SOCIAL GOVERNANCE • Carbon neutral organisation • Furthering our commitment to • First UNPRI Asse
Slide 22: FY24 Financial Results
FY24 Financial Results QUALITAS
Slide 23: Group earnings
Group earnings1 Increasing contribution from high quality recurring earnings driven by strong deployment and margin efficiencies % • Normalised NPAT of $27m, increased by 25% on P&L BREAKDOWN ($THOUSANDS) FY24 FY235 FY23 reflecting: (YOY) Net funds management revenue2 23,297 18,754 24% – Funds manag
Slide 24: $2.4bn undrawn construction credit to be converted into Invested FUM over FY25
$2.4bn undrawn construction credit to be converted into Invested FUM over FY25 RECONCILIATION OF INVESTED FUM, FEE EARNING FUM AND COMMITTED FUM ($BN) Deployed FUM with investment screening work already done Dry powder represents c. 34% of current Invested FUM down from 50% as at 1H24 – capacity to
Slide 25: Funds management
Funds management Increase in investment activity directly translates to growth in transaction fees with further growth in base funds management fees to be realised over the near term % • Growth in base funds management fee and P&L BREAKDOWN ($THOUSANDS) FY24 FY234 transaction fee driven by: (YOY) Ba
Slide 26: Principal income and Arch Finance
Principal income and Arch Finance Optimising deployment of balance sheet capital to drive principal income growth % • 22 underwriting positions with average drawn PRINCIPAL INCOME ($THOUSANDS) FY24 FY23 balance of $34m in FY24. (YOY) – Gross total deployment of $470m in Income from investments1,2 10
Slide 27: Operating performance – focus on quality and economies of scale
Operating performance – focus on quality and economies of scale Fee margins trending towards long-term target compensated by scale benefits seen through decline in employee cost per dollar of Invested FUM • Average Invested FUM 5-year CAGR of 31%. INSTITUTIONAL MANDATES DRIVE FUNDS NORMALISATION OF
Slide 28: Balance sheet
Balance sheet $155m net cash position with high cash flow for dividends and reinvestment in growth QUALITAS GROUP BALANCE SHEET ($THOUSANDS) FY24 1H24 FY23 Assets • Increases in trade and other receivables are mainly attributed to growth in management and Cash and cash equivalents 194,381 200,511 19
Slide 29: Outlook and Guidance
Outlook and Guidance QUALITAS
Slide 30: FY25 guidance: NPBT $49m - $55m, EPS 11.50cps – 12.91cps
We expect FY25 NPBT to grow 26% to 41% on FY24 • FY25 guidance considerations: FY25 GUIDANCE – Draw down profile of undrawn construction credit not earning full management fees, deployment timing and quantum are key variables of the guidance range. Estimated range – Recurring base management fees an
Slide 31: Offices and investor enquiries
MELBOURNE OFFICE SYDNEY OFFICE BRISBANE OFFICE Level 38, 120 Collins Street, Level 5, 1 Bligh Street, Level 14, 167 Eagle Street, Melbourne VIC 3000 Sydney NSW 2000 Brisbane QLD 4000 QAL INVESTOR ENQUIRES P: +61 3 9612 3939 E: investor.relations@qualitas.com.au
Slide 32: Disclaimer
Disclaimer This presentation has been prepared by and its sole responsibility of Qualitas Limited (ACN 655 057 588). To the maximum extent permitted by law, the information contained in this presentation is given without any liability whatsoever to Qualitas Limited, any of its related entities, or Q
Slide 33: Appendix 1: Reconciliation of financials
Appendix 1 Reconciliation of financials
Slide 34: Reconciliation of restatement for FY23 financial and statutory financial to normalised financial
Reconciliation of restatement for FY23 financial and statutory financial to normalised financial In 2024, Qualitas discovered that on adoption of AASB 16 there was an accounting misstatement resulting in the understatement of trade and other payables and understatement of expenses due to the incorre
Slide 35: Appendix 2: Segment information
Appendix 2 Segment information
Slide 36: Investor composition as at June 2024
Investor composition as at 30 June 2024 INVESTOR COMPOSITION OF FUM INSTITUTIONAL CAPITAL BY INVESTOR GEOGRAPHIC SPLIT OF FUM CURRENT NUMBER OF COMMITMENTS 8% 12% 8% 36% $8.9bn 29% 84% FUM OF FUM 59% 64% 84% Institutional Retail HNW / Family office Five commitments or more Two to four commitments Do
Slide 37: Diversified product and investment profile as at June 2024
Diversified product and investment profile as at 30 June 2024 FUNDS UNDER MANAGEMENT1 FUNDS UNDER MANAGEMENT UNDERLYING GEOGRAPHIC UNDERLYING SECTOR (BY COMMITTED FUM) RISK ALLOCATION2 EXPOSURE2 EXPOSURE2 (BY INVESTED FUM) (BY INVESTED FUM) (BY INVESTED FUM) 1% 5% 6% 4% 3% 19% 13% 10% 35% 4% 30% 8%
Slide 38: Appendix 3: FUM metrics
Appendix 3 FUM metrics
Slide 39: FUM overview as at June 2024
FUM overview as at 30 June 2024 FUND NAME STRATEGY INVESTMENT TYPE FUM EXPIRY1 QRI (ASX listed) Senior debt / mezzanine $713m Perpetual QSDF Senior debt – diverse $876m Perpetual QPICF 1A Income Senior debt – diverse $773m May-31 CREDIT FUNDS Senior Debt SMA Senior debt – diverse $211m Perpetual Arc
Slide 40: Credit funds – FUM metrics as at June 2024
Credit funds – FUM metrics as at 30 June 2024 COMMITTED INVESTED FEE EARNING FUM NOT YET FUND FEE BASE FEE FUND NAME FUM FUM FUM EARNINGS FEES STRUCTURE BENCHMARK base fee, PF, QRI (ASX listed) $713m $619m1 $713m - % on net asset value transaction fee QSDF $876m $763m $763m $113m QPICF 1A2 $773m $48
Slide 41: Equity funds – FUM metrics as at June 2024
Equity funds – FUM metrics as at 30 June 2024 COMMITTED INVESTED FEE EARNING FUM NOT YET FUND FEE BASE FEE FUND NAME FUM FUM FUM EARNINGS FEES STRUCTURE BENCHMARK Opportunity I $78m $55m $55m - % of Invested FUM base fee, PF % of committed FUM (Invested FUM Opportunity II $259m $242m $249m - post-in
Slide 42: Closing period FUM
Closing period FUM $M FY19 FY20 FY21 FY22 FY23 FY24 Committed FUM Funds management 1,810 2,290 2,503 3,794 5,674 8,565 Arch Finance 448 480 480 465 400 323 Total Committed FUM 2,258 2,770 2,983 4,259 6,074 8,888 Invested FUM Funds management 1,086 1,444 1,660 2,458 3,448 3,980 BTR equity - - - 46 10
Slide 43: Fund key
Fund key LISTED ENTITY ASX: QAL Qualitas Limited LISTED FUNDS ASX: QRI Qualitas Real Estate Income Fund UNLISTED FUNDS QSDF Senior Debt Fund BTR Build-To-Rent equity QBIF Build-to-Rent Impact Fund QCDF Construction Debt Fund QCDF II Construction Debt Fund II QDCI Diversified Credit Investments QDREF
Slide 44: Glossary
Glossary AUM Assets under management Mandated investments Qualitas entered into exclusivity with borrowers with financial close subject Average Invested FUM Average monthly Invested FUM excluding BTR equity and Arch Finance to due diligence and fund Investment Committee approval MREIT Mortgage Real
Slide 45: Appendix 4: Recent investments
Appendix 4 Recent investments
Slide 46: Case study: Large scale residential construction project
Case study: Large scale residential construction project Victoria & Albert – a luxury residential development located in Broadbeach, QLD $585m 425 48 months 150 of 425 Two towers Peak debt facility limit Apartments Loan term Apartments pre-sold Victoria (66-storey) and Albert (42-storey) THE OPPORTU
Slide 47: Case study: Large scale residential construction project
Case study: Large scale residential construction project Victoria & Albert – a luxury residential development located in Broadbeach, QLD WHY DID THE BORROWER CHOOSE AN ALTERNATIVE FINANCIER? WHY QUALITAS? • Pre-sales below bank threshold, typically >70% debt cover. • Qualitas was first mandated on t