Goodman Group · ASX:GMG
Goodman — FY2021 Earnings Presentation
45 slides from Goodman's earnings presentation, Aug 12, 2021
Slide 1: FY21 Results
HIGHLIGHTS RESULTS OPERATIONAL OUTLOOK APPENDICES OVERVIEW PERFORMANCE Section 1 Section 2 Section 3 Section 4 12 August 2021 FY21 RESULTS GOODMAN DELIVERS STRONG FY21 RESULT WITH OPERATING PROFIT UP 15.0% TO $1.22 BILLION 1 Goodman Kunchi East China New-retail Hub
Slide 2: Important Notice and Disclaimer
Important Notice and Disclaimer – This document has been prepared by Goodman Group (Goodman Limited – This document contains certain “forward-looking statements”. The words (ABN 69 000 123 071), Goodman Funds Management Limited (ABN 48067 “anticipate”, “believe”, “expect”, “project”, “forecast”,”est
Slide 3: Contents
CONTENTS SECTION 1 APPENDICES Highlights – Results analysis SECTION 2 – Property investment Results overview – Development SECTION 3 Operational performance – Management SECTION 4 – Capital management Outlook 3
Slide 4: Highlights
Section 1 HIGHLIGHTS Goodman Hannan Logistics Centre, China Molins de Rei Logistics Centre, Barcelona, Spain 4
Slide 5: Highlights
HIGHLIGHTS Goodman’s adaptable and flexible approach has enabled our people to continue to deliver high levels of $ 1.22bn $ 10.6bn OPERATING PROFIT WORK IN PROGRESS productivity in the current environment, whilst prioritising their health, safety and well-being. + Goodman’s disciplined focus on + L
Slide 6: Highlights
HIGHLIGHTS + Underlying investment property fundamentals are strong ‒ Increased utilisation of our facilities leading to continued high occupancy of 98.1% + The Group expects to deliver FY22 operating EPS of 72.2 cents (up 10% on FY21) $57.9bn ‒ Forecast distribution for FY22 will remain at 30.0 cen
Slide 7: Group and Partnership Highlights
GROUP AND PARTNERSHIP HIGHLIGHTS 98.1% 3.2% 3.9m OWN OCCUPANCY NPI GROWTH SQUARE METRES LEASED INVESTMENTS High occupancy maintained at Like-for-like NPIgrowth Across the global platform equating to Significant higher and better use opportunities exist across the portfolio 98% and WALE of 4.5 years
Slide 8: Results Overview
Section 2 RESULTS OVERVIEW The Hayesbery, Sydney, Australia 8
Slide 9: Results Overview
RESULTS OVERVIEW + Statutory accounting profit of $2.3 billion FY20 FY21 ‒ Includes significant property valuations, share based Operating profit ($m) 1,060.2 1,219.4 payments, derivative and mark-to-market movements Statutory accounting profit ($m) 1,504.1 2,311.9 + Operating profit of $1.22 billio
Slide 10: Profit and Loss
PROFIT AND LOSS + Statutory accounting profit of $2.3 billion, includes INCOME STATEMENT property valuations, FX, share based payments expense and mark-to-market movements FY20 FY21 $M $M ‒ Revaluation gains for FY21 were $5.8 billion, driven by rent Property investment 425.2 411.5 growth, cap rate
Slide 11: Balance Sheet
BALANCE SHEET + Group balance sheet remains well positioned with net BALANCE SHEET debt of ~$1.1 billion after the redemption of $0.7 billion of loans and USD bonds FY20 FY21 $M $M ‒ Gearing 6.8%4 (from 7.5% FY20) and 17.8% on a look- through basis. Retained earnings, positive valuation Stabilised i
Slide 12: Group Liquidity Position
GROUP LIQUIDITY POSITION + Cash and available lines of credit (excluding Partnership debt and equity) of $1.9 billion as at 30 June 2021 – $0.9 billion in cash, $1.0 billion of available lines – Weighted average debt maturity profile of 6.3 years + Gearing at 6.8%¹ (17.8%² look-through) and consiste
Slide 13: Operational Performance
Section 3 OPERATIONAL PERFORMANCE Goodman Business Park, Chiba, Japan 13
Slide 14: Property Investment
PROPERTY INVESTMENT 98% 4.3% OCCUPANCY WACR + Underlying propertyfundamentals across the portfolio remain strong ‒ Occupancy of 98% ‒ WALE of 4.5 years ‒ Like-for-like net property income growth of 3.2% reflecting strong underlying market growth and ~70% of rents with fixed or CPI-linked reviews + L
Slide 15: Development
DEVELOPMENT + Strong demand from our customers and the ongoing DEVELOPMENTS transition to infill locations has allowed the Group to increase WIP to $10.6 billion FY20 FY21 – Increased scale and higher value projects with average development Development income ($M) 1,019.1 1,580.2 period for projects
Slide 16: Management
MANAGEMENT + External AUM of $54.0 billion, up 12% on FY20 MANAGEMENT – AUM increase supported by strong revaluation gains and development completions across the platform FY20 FY21 – Base management and property services fees broadly flat. Despite Management earnings ($M) 511.2 459.1 growth in stabi
Slide 17: Largest Partnerships
LARGEST PARTNERSHIPS Total assets ($bn) 10.5 9.3 5.9 5.8 5.4 4.9 3.9 3.6 1.5 GMG co-investment (%) 29.1 20.3 20.0 20.4 19.9 55.0 14.7 22.4 33.3 GMG co-investment ($bn) 2.2 1.5 0.8 0.7 0.9 2.3 0.4 0.6 0.4 Number of properties 99 11 36 85 34 19 18 11 9 Occupancy1 (%) 96 97 98 100 98 100 100 98 100 Wei
Slide 18: Global Platform
GLOBAL PLATFORM $20.0bn AUM $9.1bn 69 ASIA ++ ++ CONTINENTAL EUROPE/UK Properties AUM + + +++ 108 + Properties + + + + ++ + $5.0bn + THE AMERICAS AUM ++ 20 AUSTRALIA Properties $23.8bn AUM 166 NEW ZEALAND Properties + OUR GLOBAL NETWORK $57.9bn + + Assets under management (AUM) + + 363 Properties Cu
Slide 19: Environmental, Social and Governance
ENVIRONMENTAL, SOCIAL AND GOVERNANCE 19
Slide 20: Environmental, Social and Governance
ENVIRONMENTAL, SOCIAL ANDGOVERNANCE + During the year, Goodman has made significant progress with our sustainability initiatives and targets, contributing to our strong performance and our long-term strategy – Achieved carbon neutrality for our global operations, four years ahead of our 2025 target
Slide 21: Outlook
Section 4 OUTLOOK Highbrook, Auckland, new Zealand 21
Slide 22: Outlook
OUTLOOK “Green Dock”, Gennevilliers, Paris, France (Artist impression) Highbrook Business Park, Auckland, New Zealand Goodman Yuen Long Logistics Centre, Hong Kong, SAR Goodman has established + The logistics and warehousing sector + Management performance and outlook continues to play a significant
Slide 23: Outlook
OUTLOOK + The higher annual development – The Group has implemented a fully flexible + The Group expects to deliver FY22 production rate and increased operating environment to support the safety and operating EPS of 72.2 cents (up 10% visibility into WIP will see strong well-being of our people on F
Slide 24: Results Analysis
Appendix 1 RESULTS ANALYSIS Leicester Corporate Park, Leicester, United Kingdom Alexandria Industrial Estate, Sydney, Australia 24
Slide 25: Profit and Loss
PROFIT AND LOSS Property Operating Non-operating Total investment Management Development expenses items CATEGORY $M $M $M $M $M $M Gross property income 112.4 112.1 – – – 0.3 Management income 383.9 – 383.9 – – – Development income 1,492.0 – 75.2 1,416.8 – – Net gain from fair value adjustments on i
Slide 26: Reconciliation Non-Operating Items
RECONCILIATION NON-OPERATING ITEMS Year ended Total 30 June 2021 Non-operating items in statutory income statement $M $M Property valuation related movements Net gain from fair value adjustments attributable to investment properties 63.1 Share of net gain from fair value adjustments attributable to
Slide 27: Financial Position
FINANCIAL POSITION Direct Property Assets investment Development Other Total As at 30 June 2021 $M $M $M $M $M Cash – – – 920.4 920.4 Receivables – – 337.1 352.6 689.7 Inventories 220.8 – 1,207.0 – 1,427.8 Investment properties 1,791.1 – 60.1 – 1,851.2 Investments accounted for using equity method –
Slide 28: Business Performance Analysis
BUSINESS PERFORMANCE ANALYSIS + Operating margins have steadily increased + ROA has increased – Longer term benefits of focused strategy, capital management and funding now – Positive performance from investment property on a like-for-like basis emerging in fee revenue – More assets and developments
Slide 29: Net Tangible Asset Movement
NET TANGIBLE ASSET MOVEMENT 1. Calculated on 1,847.4 million securities being closing securities on issue 29
Slide 30: Property Valuations
PROPERTY VALUATIONS + The industrial and logistics asset class is in high demand from both + The global portfolio cap rate has compressed by 55bps to 4.3% over investors and our customers and continues to generate positive FY21 revaluations + Revaluation gains across the global portfolio for the yea
Slide 31: Property Investment
Appendix 2 PROPERTY INVESTMENT Interchange Park, Sydney, Australia 31
Slide 32: Leasing
LEASING 3.9m 98.1% SPACE LEASED OCCUPANCY Across the Group and Partnerships: + 3.9 million sqm leased during the year, equating to $517.1 million of annual rental property income + High occupancy at 98.1%. Leasing area Net annual rent Average lease expiry Region SQM $M YEARS Australia / New Zealand
Slide 33: Customers
CUSTOMERS Top 20 global customers (by net income — look through basis) Amazon Deutsche Post (DHL) AP. Moller — Maersk Japan Post (Toll) BMW Group SF Express Iron Mountain Koch Equinix DB Schenker Australia Post JD.com Kuehne + Nagel Mainfreight Noble House Home Furniture LLC ‘Syncreon Technology Oml
Slide 34: Direct Portfolio Detail
DIRECT PORTFOLIO DETAIL + 21 properties with a total value of $2.0¹ billion located primarily in the KEY METRICS¹ Sydney market FY21 – Represents a significant part of the urban renewal portfolio Total assets $2.0 billion +Leasing transactions remain strong across the portfolio Customers 284 – 259,1
Slide 35: Development
Appendix 3 DEVELOPMENT 35
Slide 36: Developments
DEVELOPMENTS FY21 DEVELOPMENTS Completions Commencements Work in progress Value ($bn) 2.4 6.6 10.6 Area (m sqm) 1.0 2.2 3.3 Yield (%) 6.4 6.7 6.7 Committed (%) 96 57 70 Weighted average lease expiry (years) 12.7 12.8 13.5 Development for third parties or Partnerships (%) 87 78 81 Australia / New Zea
Slide 37: Management
Appendix 4 MANAGEMENT Canal Logistics Centre, Willebroek, Belgium The Rambler, Goodman Interlink, Hong Kong, China 37
Slide 38: Management – AUM
MANAGEMENT – AUM + The majority of Goodman’s assets reside in its Partnerships – The Group manages 16 Partnerships with 49 investor representatives on the Boards and Investment Committees independent of Goodman – Goodman maintains a 26% average equity cornerstone position in the Partnerships to ensu
Slide 39: Capital Management
Appendix 4 CAPITAL MANAGEMENT Goodman Logistics Center El Monte, California, USA 39
Slide 40: Currency Mix
CURRENCY MIX Currency mix — outstanding debt Currency mix — including the impact of capital hedging FX swaps JPY USD 7% 55% JPY USD 7% 30% EUR NZD 38% 8% GBP. 9% HKD EUR 19% 27% 40
Slide 41: Financial Risk Management
FINANCIAL RISK MANAGEMENT The Group has a robust capital management framework + The Group has a robust capital management + Interest risk management: framework, under its Financial Risk – Policy to ensure between 60% and 100% Management (FRM) policy. This provides: of current year interest rates are
Slide 42: Financial Risk Management (cont)
FINANCIAL RISK MANAGEMENT(CONT) + Interest rates are hedged to 63% over next 12 months – Weighted average hedge rate of1.81%1 – NZD – hedge rate 1.24% – JPY – hedge rate 1.67% – HKD – hedge rate 1.47% – GBP – hedge rate 1.59% – Euro – hedge rate 0.72%2 – USD – hedge rate 4.08% + Weighted average hed
Slide 43: Financial Risk Management (cont)
FINANCIAL RISK MANAGEMENT(CONT) FOREIGN CURRENCY DENOMINATED BALANCE SHEET HEDGING MATURITY PROFILE Weighted average Weighted Amount Amount maturity average receivable1 payable1 exchange rate NZ$ 3.4 years 1.0771 A$557.3m NZ$600.0m HK$ 3.9 years 5.7659 A$1,301.8m HK$7,490.0m US$ 3.3 years 0.7276 A$8
Slide 44: Exchange Rates
EXCHANGE RATES STATEMENT OF FINANCIAL POSITION – EXCHANGE RATES AS AT 30 JUNE 2021 + AUDGBP – 0.5432 (30 June 2020: 0.5566) + AUDEUR – 0.6327 (30 June 2020: 0.6128) + AUDHKD – 5.8222 (30 June 2020: 5.3402) + AUDBRL – 3.7528 (30 June 2020: 3.7602) + AUDNZD – 1.0739 (30 June 2020: 1.0694) + AUDUSD – 0
Slide 45: Thank You
THANK YOU ~ 45