Centuria Capital Group · ASX:CNI
Centuria Capital — FY2019 Earnings Presentation
39 slides from Centuria Capital's earnings presentation, Aug 13, 2019
Slide 1: Centuria Capital Group FY19 Results
Centuria Capital Group FY19 RESULTS A S X:CNI 13 AUGUST 2019 CENTURIA CAPITAL GROUP ASX:CNI 1 Centuria Unlisted: 13 Garden Street, South Eveleigh NSW
Slide 2: Agenda
Agenda 1. Group Overview and Highlights 2. Financial Results 3. Divisional Overview 4. Strategy & Outlook 5. Appendices CMA: 154 Melbourne Street, South Brisbane QLD CENTURIA CAPITAL GROUP ASX:CNI 2
Slide 3: Group Overview & Highlights
SECTION ONE Group Overview & Highlights A S X:CNI CENTURIA CAPITAL GROUP ASX:CNI 3 Centuria Heathley: 32 Morrow Street, Taringa, QLD
Slide 4: Centuria funds management platform
CENTURIA PLATFORM Centuria Capital (CNI) funds management platform $6.2bn ASX:CNI Group AUM1 Market Capitalisation $746m2 $5.3bn $0.9bn $0.5bn Real Estate AUM Investment Bonds AUM CNI Co-Investments $2.7bn $2.6bn Centuria Life Listed Property AUM Unlisted Property AUM Centuria Centuria Centuria Life
Slide 5: Delivering growth and creating value across the platform
CENTURIA PLATFORM Delivering growth and creating value across the platform $6.2bn AUM1 9.25cps 9.70cps $746m 27% Increase on FY18 FY19 Distribution FY20 Distribution CNI market capitalisation2 per security per security Guidance 12.8% growth on FY18 4.9% growth on FY19 $ 34.4% 26.6% 77.1% $1.7bn 12 m
Slide 6: Centuria platform grows 27% to $6.2bn
ASSETS UNDER MANAGEMENT Centuria platform grows 27% to $6.2bn 1 • Real estate AUM grew 33% to $5.3bn ASSETS UNDER MANAGEMENT ($BN) 30% • $1.7bn of gross acquisitions and $0.2bn CAGR2 $6.2bn 1 of revaluations drove platform growth1 FY17-FY19 Centuria Industrial REIT 1.3 $4.9bn • Centuria Heathley pro
Slide 7: $1.7 billion of real estate acquisitions in FY19
GROUP TRANSACTIONS $1.7 billion 1 of real estate acquisitions in FY19 CMA CIP Centuria Unlisted Healthcare $569m $190m $304m $620m • Included Australia’s third largest • Three assets and one JV with • New healthcare real estate real estate transaction in CY18 • Eight assets acquired Lederer Group in
Slide 8: Increasing investor relevance and scale
CNI - AN ESTABLISHED FUND MANAGER Increasing investor relevance and scale 1 Jul 16 – 31 Jul 19 S&P/ASX300 Index CNI TSR CNI total securityholder return 129.6%1 S&P/ASX300 index 47.5% • Strong security price appreciation continues to attract equity manager investment • CNI is aligned to compelling se
Slide 9: Centuria is well positioned for FY20
CNI - AN ESTABLISHED FUND MANAGER Centuria is well positioned for FY20 • Office, industrial and healthcare real estate sectors Aligned to and investment bonds compelling • Aligned to strong sectors with positive demographic themes sectors • Continuing to identify attractive investment opportunities
Slide 10: Financial Results
SECTION TW O Financial Results A S X:CNI CENTURIA CAPITAL GROUP ASX:CNI 10 CIP: 14-17 Dansu Court, Hallam VIC
Slide 11: Delivering strong investor returns
GROUP FINANCIAL HIGHLIGHTS Delivering strong investor returns • Distributions per stapled security of EARNINGS AND DISTRIBUTIONS (CENTS PER SECURITY) 9.25 cents, a 12.8% increase on FY18 ▪ Underpinned by 77.1% recurring FY19 revenues, a 27.2% increase on FY18 Performance • Operating NPAT $45.7m1, Op
Slide 12: Total revenues underpinned by 77% of recurring revenues
RECURRING REVENUES Total revenues underpinned by 77% of recurring revenues $ millions 77.1% • Recurring revenue up 27.2% on FY18 120 recurring 66.5% revenue • $22.5m of recognised performance fees recurring revenue 100 • Performance fees FY18 all cash. FY19 $1.9m cash received 80 • Delivering larger
Slide 13: Operating profit underpinned by property funds management and co-investments segments
OPERATING SEGMENT RESULTS Operating profit underpinned by property funds management and co-investments segments FY19 FY18 OPERATING PROFIT BY SEGMENT ($m) ($m) Property funds management1 25.1 22.2 Profit increased 13.1% reflecting expanded platform, strong recurring revenue contribution Performance
Slide 14: Strengthened balance sheet supports platform growth opportunities
DEBT AND CAPITAL MANAGEMENT Strengthened balance sheet supports platform growth opportunities 30 JUN 2019 30 JUN 2018 OPERATING BALANCE SHEET ($m) ($m) ASSETS $1.32 4.9 times 17.5% Cash and cash equivalents 87.8 76.4 Net Asset Value Operating interest Operating Receivables 65.7 17.1 per security1 co
Slide 15: Strong 26.6% annualised return from co-investments
CO-INVESTMENTS Strong 26.6%1 annualised return and contributions to FY19 recurring revenues CARRYING VALUE DISTRIBUTION CARRYING VALUE DISTRIBUTION CO-INVESTMENTS 30 JUN 2019 INCOME FY19 31 JUN 2018 INCOME FY18 ($m) ($m) ($m) ($m) Increased alignment to CMA and CIP Centuria Metropolitan REIT (CMA)3,
Slide 16: Commitment to increased resourcing as platform scale increases
GOVERNANCE AND SYSTEMS Commitment to increased resourcing as platform scale increases FY19 implemented initiatives Current focus Increased staffing to governance and compliance team Introduction of Senior Executive Non-Financial Risk Committee Implementing Vision 2020 A new, integrated property mana
Slide 17: Divisional Overview
SECTION THREE Divisional Overview A S X:CNI CENTURIA CAPITAL GROUP ASX:CNI 17 Centuria Heathley: 87-89 Langtree Avenue, Mildura VIC
Slide 18: Unlisted real estate funds continue to generate robust demand
REAL ESTATE DIVISION: CENTURIA UNLISTED REAL ESTATE Unlisted real estate funds continue to generate robust demand • Extremely high demand from Centuria’s ATTRACTIVE INITIAL YIELD SPREAD IN DECREASING TERM DEPOSIT AND RATE CLIMATE4 mature retail distribution network • $438m Zenith sale, strong result
Slide 19: Centuria Metropolitan REIT: management creating unitholder value
REAL ESTATE DIVISION: CENTURIA METROPOLITAN REIT Centuria management creating unitholder value since inception 100% TOTAL UNITHOLDER RETURN SINCE IPO 1,2,3 90% CMA 95.3% Market Included Australia’s CNI 80% in the largest co-investment Capitalisation S&P/ASX300 A-REIT index 73.9% S&P/ASX 24.9% $1.0 b
Slide 20: Centuria Industrial REIT: management creating unitholder value
REAL ESTATE DIVISION: CENTURIA INDUSTRIAL REIT Centuria management creating unitholder value 60% TOTAL UNITHOLDER RETURN UNDER CENTURIA MANAGEMENT 1,2,3 Market Included Australia’s 50% 45.3% CIP CNI in the largest domestic co-investment Capitalisation S&P/ASX300 pure-play S&P/ASX 300 AREIT index 30.
Slide 21: Specialised healthcare property fund manager
REAL ESTATE DIVISION: CENTURIA HEATHLEY Specialised healthcare property fund manager with a growing pipeline Established presence in the attractive, Strategic focus on expanding fragmented healthcare real estate sector Centuria Heathley’s3 footprint 9 • Capacity for near term AUM expansion to $1.0bn
Slide 22: Continued investment in Centuria Life
INVESTMENT BONDS DIVISION Continued investment in Centuria Life FY18 CHANGE TOTAL AUM ($m) FY18 FY19 TO FY19 (%) Centuria LifeGoals launched in 2H19 Prepaid funeral plans (Guardian)2 508.5 534.0 5.0 • 22 new investment options all to highly Capital Guaranteed (Centuria Life) 216.0 194.0 (10.2) rated
Slide 23: Strategy & Outlook
SECTION FOUR Strategy & Outlook A S X:CNI CENTURIA CAPITAL GROUP ASX:CNI 23 Centuria Unlisted: 60 Brougham Street, Geelong VIC
Slide 24: Australian real estate and investment bond sectors
STRATEGY & OUTLOOK Australian real estate and investment bond sectors • Strong population growth. Strategic geographic location to service APAC region Australia • Transparent government, independent central bank • Clear land title system, freehold title Capital continues • Attractive yield spread in
Slide 25: Strategic vision and objectives
STRATEGY & OUTLOOK Strategic vision and objectives Vision Continue to build a leading funds management platform with quality strategic pillars A clear Deliver income and capital growth from compelling real estate and investment bond sectors and simple for a broad range of investor profiles strategy
Slide 26: Appendices
SECTION FIVE Appendices A S X:CNI CENTURIA CAPITAL GROUP ASX:CNI 26 Centuria CIP: 69 Rivergate, Heathley: Murarrie 11-19 Riverview QLD Place, Murarrie, QLD
Slide 27: Reconciliation of statutory profit to operating profit
APPENDIX: GROUP FINANCIALS Reconciliation of statutory profit to operating profit FY19($m) FY18($m) Statutory net profit after tax 50.9 56.2 Statutory EPS (cents)1 14.2 19.8 Less non-operating items: Impairment changes in relation to Seed Capital Valuation - 0.4 Gain on fair value movements in deriv
Slide 28: Operating segment balance sheet
APPENDIX: GROUP FINANCIALS Operating segment balance sheet PROPERT FUNDS INVESTMENT BONDS CO-INVESTMENTS CORPORATE 30 JUN 2019 30 JUN 2018 OPERATING BALANCE SHEET MANAGEMENT MANAGEMENT ($m) ($m) ($m) ($m) ($m) ($m) ASSETS Cash and cash equivalents 13.2 6.3 62.8 5.5 87.8 76.4 Receivables 37.9 0.9 22.
Slide 29: New revenue accounting standard's impact on performance fees
APPENDIX: GROUP FINANCIALS New revenue accounting standard’s impact on performance fees AASB 15 Revenue from customers applies to all contracts with is no transitional impact from adoption of AASB 15, however customers to deliver goods or services as part of the entity’s future performance fees will
Slide 30: Real estate AUM grew 33% in FY19 to $5.3 billion
APPENDIX: REAL ESTATE DIVISION Real estate AUM grew 33% in FY19 to $5.3 billion 1 properties properties 37 valued at $1,317m 17 valued at $493m (FY18: $638m) (FY18: $400m) CMA: 6 properties CIP: 10 properties Unlisted: 2 properties CDPF: 1 property Healthcare:18 properties CMA: 2 properties CIP: 8 p
Slide 31: Property AUM movement
APPENDIX: REAL ESTATE DIVISION Property AUM movement $ Billions 1. Based on 100% equity ownership. Pro forma adjustments to reflect Centuria Heathley transaction CENTURIA CAPITAL GROUP ASX:CNI 31
Slide 32: CMA and CIP portfolio snapshots
APPENDIX: REAL ESTATE DIVISION CMA: Australia’s largest CIP: Australia’s largest pure play office REIT domestic pure play industrial REIT PORTFOLIO SNAPSHOT FY19 FY181 PORTFOLIO SNAPSHOT FY19 FY182 Number of assets 20 19 Number of assets 43 37 Book value $m 1,400.0 930.5 Book value $m 1,221.3 999.0
Slide 33: CDPF Gross AUM increase from FY18
APPENDIX: REAL ESTATE DIVISION CDPF Gross AUM1 increase of 215% from FY18 GROSS ASSETS UNDER MANAGEMENT FY19 Acquisitions 118.9m 37.8m 13.2m CDPF: 381 Macarthur Avenue, Hamilton QLD 0.7m CDPF: Moore St, Canberra ACT FY16 FY17 FY18 FY19 Purchase price $35.0m Purchase Price $19.74m Site area 1,554sqm
Slide 34: Social and Affordable Housing
APPENDIX: REAL ESTATE DIVISION Social and Affordable Housing Artist Impressions Established partnership with Compass Housing and Tetris Capital • Pre-agreed, government backed, take-out price • Delivered through Social and Affordable Housing Fund 2 (SAHF) Largest provider in the Hunter region and on
Slide 35: Centuria LifeGoals - meet the managers
APPENDIX: INVESTMENT BONDS Centuria LifeGoals - meet the managers The Centuria Life Investment Committee Has chosen some of the best fund managers in Australia and the world who are specialists in their particular field • Property and infrastructure funds 2 options • Cash and fixed interest funds 3
Slide 36: Definitions
Definitions Operating Segments: Group has five reportable CNI, CCG or the Group: Centuria Capital Group operating segments. These reportable operating Non-operating segments: Non-operating items comprises of Centuria Capital Limited ABN 22 segments are the divisions which report to the Group’s compr
Slide 37: Disclaimer
Disclaimer Core Property ratings disclaimer: An investment fund rating reflects Australia Ratings’ current opinion of a fund or investment’s ability to achieve its stated investment objectives in the near term. The rating expresses a view on the expected The Core Property rating (assigned in August
Slide 38: Disclaimer
Disclaimer This presentation has been prepared by Centuria Capital Limited and Centuria Funds Management Limited This presentation has been prepared without taking account of any person’s individual investment as responsible entity of Centuria Capital Fund (together the stapled listed entity CNI). o
Slide 39: Centuria Metropolitan REIT ASX:CMA
CENTURIA METROPOLITAN REIT ASX:CMA 39
Centuria Capital Group — FY2019 Earnings Presentation on 6ix