Cromwell Property Group · ASX:CMW
Cromwell Property — FY2022 Earnings Presentation
45 slides from Cromwell Property's earnings presentation, Aug 25, 2022
Slide 1: ASX cover letter: FY22 Results Presentation
Thursday 25 August 2022 For personal use only ASX Market Announcements Office Exchange Centre 20 Bridge Street SYDNEY NSW 2000 To whom it may concern Cromwell Property Group (ASX:CMW) FY22 Results Presentation I attach a copy of Cromwell Property Group’s FY22 Results Presentation. Yours faithfully C
Slide 2: Cromwell Property Group 2022 Financial Year Results
For personal use only Cromwell Property Group 2022 Financial Year Results 25 August 2022 CROMWELL PROPERTY GROUP
Slide 3: Important Information and Disclaimer
Important Information and Disclaimer For personal use only This presentation including its appendices (Presentation) Investors should also seek such financial, investment, Phoenix Property Securities Fund ARSN 129 580 267 is dated 25 August 2022 and has been prepared by legal, tax advice or other ad
Slide 4: Introduction and agenda
Introduction and agenda For personal use only Acknowledgement of Country Agenda Introduction We acknowledge the Traditional Dr Gary Weiss AM, Chair Custodians of the lands on which we FY22 Results Overview meet, and we pay our respects to their Jonathan Callaghan, CEO Elders past, present and emergi
Slide 5: Cromwell Property Group overview
Cromwell Property Group overview Introduction For personal use only Broad Fund Management Platform Geographic and Culturally Diverse Team Global Asset Management Expertise $12.0 billion 440+ 216 Total AUM people properties $7.8 billion Total third-party AUM 14 3.4 million countries sqm Comprising $5
Slide 6: Cromwell's operating platform
Cromwell’s operating platform At 30 June 2022 For personal use only Operating across three continents and 14 countries Total AUM by Sector 3% Office 15% Retail Total AUM of 6% $12 billion 9% Industrial Other across 67% 14 countries Property securities Total AUM by Geography $5.9 billion Europe CEREI
Slide 7: Financial Year 2022 results
For personal use only Financial Year 2022 results CROMWELL PROPERTY GROUP 6
Slide 8: Strategic summary
Strategic summary For personal use only Vision is to be a trusted, global real estate fund manager, with local presence. Streamlining internal processes and procedures, including simplification of global operating structure for New strategy improved processes, cost savings and scalability. Sim
Slide 9: FY22 financial summary
FY22 financial summary Results Overview For personal use only Earnings and distributions Financial position Statutory profit1 NTA per unit Liquidity2 $263.2 million A 15% decrease on the FY21 result of $308.2 million $1.04 $647 million (equivalent to 10.05 cps) (FY21 $1.02) Underlying operating prof
Slide 10: FY22 operational summary
FY22 operational summary Results Overview For personal use only Investment portfolio Fund and asset management Portfolio Value Total third-party AUM Assets $3.0 billion (up 2.15% from FY21 on a like-for-like basis) $7.8 billion 216 (FY21 $7.8 billion) WACR WALE Europe New committed European mandates
Slide 11: Environmental, Social and Governance
Environmental, Social and Governance Achievements and updates For personal use only A refreshed corporate strategy has given us the opportunity to review our ESG strategy, in conjunction with a third-party adviser. We have assessed the most important ESG priorities for stakeholders and are continuin
Slide 12: People & culture
People & culture People are our most important asset For personal use only Designing our business Updated company values and vision developed to ensure a uniform and aligned business. for success and Key people hires within updated global structure, including new CEO during the financial year em
Slide 13: Financial Results and Capital Management
For personal use only Financial Results and Capital Management CROMWELL PROPERTY GROUP 12
Slide 14: FY22 headline results
FY22 headline results For personal use only Commentary FY22 performance versus prior comparable period (PCP) Statutory profit of $263.2 million, equivalent to 10.05 cps, a 15% reduction due to lower share of statutory profit from FY22 FY21 Change equity accounted investments, lower revaluation gai
Slide 15: FY22 segment results
FY22 segment results For personal use only Commentary FY22 segment profit1 versus prior comparable period Fund and asset management Australian unlisted fund inflows remain positive in open funds, as investors continue to FY22 FY21 Change demonstrate appetite for stable, income producing investment
Slide 16: Capital management
Capital management For personal use only Debt profile and balance sheet Group gearing1 Headline gearing reduced to 39.6% after application of asset sales 60% In target proceeds, now within target gearing range. 55% gearing Weighted average cost of debt, including hedging, for FY22 50% range decr
Slide 17: Strong capital position
Strong capital position Financial results and capital management For personal use only Substantial headroom to covenants Interest rate hedging 51.6% of borrowings at year end are hedged by fixed rate debt or Facility Covenant Actual Limit Headroom (value) through a mix of interest rate swaps and c
Slide 18: Investment portfolio
For personal use only Investment portfolio CROMWELL PROPERTY GROUP
Slide 19: Investment portfolio overview
Investment portfolio overview Defensive portfolio continues to perform well, underpinned by heavy weighting to Government and large corporates For personal use only Investment portfolio overview Leasing and asset management Outlook Portfolio valuations are stable on a like-for- Focus on maintain
Slide 20: Investment portfolio update
Investment portfolio update Property Investment For personal use only Major tenant-customers greater than 10% Lease expiry profile by gross income 70% Top Tenants1 % of Gross Income Credit Rating2 60% Federal Government 21.7% AAA 50% 40% Qantas Airways Limited 18.6% Baa2 30% NSW State Government 15.
Slide 21: Case study: Active asset management at Kent Street
Case study: Active asset management at 207 Kent Street Thinking creatively during lockdown to tailor a space to suit shifting tenant requirements for the post-pandemic return to office For personal use only Lobby – invigorating a key gathering space for Level 14 – how working through lockdowns shift
Slide 22: Fund and Asset Management
For personal use only Fund and Asset Management CROMWELL PROPERTY GROUP
Slide 23: Funds management highlights
Funds management highlights For personal use only Key highlights Third Party Assets Under Management Total assets under management remained steady growing by 0.8% over the financial year. New mandates committed in Europe of €800 million GAV. 35% Retail fund platform growth remained positive wi
Slide 24: European funds management
European funds management For personal use only Key activities European AUM by region (AUD) €3.37 billion third party AUM with 80% underpinned by longer dated Italy capital. 13% 19% 19 acquisitions completed totalling €344.4 million across UK, the UK 7% Netherlands, Italy, Denmark, France and Ge
Slide 25: European funds management: CEREIT
European funds management For personal use only Cromwell European Real Estate Investment Trust Key statistics Sector diversification (CEREIT) Net property income (NPI) up 4.7% y-o-y led by growth of 24.3% in Portfolio Value light industrial / logistics, office like-for-like flat, adjusting for the
Slide 26: Retail funds management: Australia
Retail funds management For personal use only Australia Cromwell Direct Property Fund (DPF) DPF had net equity inflows of $90 million Gross assets grew from $543 million to $780 million Distribution yield of 5.5% Key transactions for the financial year include: Acquisition of 95 Grenfell S
Slide 27: Retail funds management: Australia
Retail funds management For personal use only Australia Cromwell Riverpark Trust Commenced sale process of Energex House following tenant lease extension, with positive interest on the back of a strongly rated ESG asset developed by Cromwell. Sale did not complete as a result of deteriorating ma
Slide 28: Retail funds management: Phoenix and Oyster
Retail funds management For personal use only Phoenix Portfolios Cromwell owns 45% of Phoenix Portfolios (Phoenix), a boutique listed securities manager. Cromwell recognised a share of operating profit of $1 million for the year (2021: $0.9 million). Phoenix has a proven track record in niche
Slide 29: Co-investments
For personal use only Co-investments CROMWELL PROPERTY GROUP
Slide 30: Co-investments: long term positions
Co-investments Long term positions For personal use only Cromwell Direct Property Fund (DPF) Cromwell European REIT (CEREIT) Cromwell made an investment of 4.3%, valued at $19.8 million, in Cromwell’s 28% share is carried at a book value of $600 million. DPF during the year. Distribution of $3
Slide 31: Co-investments: non-core, proposed for sale
Co-investments Non-core, proposed for sale For personal use only Cromwell Italy Urban Logistics Fund (CIULF) Cromwell Polish Retail Fund (CPRF) Economic and market context Economic and market context Lower household spending, although online sales remain resilient. High inflation has led to succ
Slide 32: Strategy & outlook
For personal use only Strategy & outlook CROMWELL PROPERTY GROUP 31
Slide 33: Move to capital light fund manager
Move to capital light fund manager For personal use only Build on Cromwell’s existing global Proposed corporate structure capabilities to focus on funds management and deliver value from component parts. Uniquely positioned in Australia given Cromwell breadth of global platform and ability to pr
Slide 34: Non-core asset sales
Non-core asset sales For personal use only Ongoing sale of assets that no Cromwell Italy Urban Logistics Cromwell Polish Retail Fund longer align with our strategy, Fund including planned exit from CPRF, No longer planning a fund or No longer planning a fund or CIULF and LDK recapitalisation str
Slide 35: FY23 outlook
FY23 outlook For personal use only Strong employment will continue to support real estate fundamentals in Australia For further information please contact: with office occupancy improving and leasing metrics showing positive momentum. We will continue to sell non-core assets to reduce gearing an
Slide 36: Appendices
For personal use only Appendices CROMWELL PROPERTY GROUP 35
Slide 37: Appendices contents
Appendices Contents For personal use only 37 FY22 Operating and Statutory Profit Reconciliation 38 Segment Result - Operating Earnings Detail 39 Property Portfolio - Top 10 Assets 40 Property Portfolio - Top 10 Leases 41 Property Portfolio - Net Property Income 42 Property Portfolio - Movement in Bo
Slide 38: FY22 Operating and Statutory Profit Reconciliation
FY22 Operating and Statutory Profit Reconciliation Appendix For personal use only FY22 ($M) FY21 ($M) Profit from operations 201.0 192.2 Operating EPS (cents per security) 7.68 CPS 7.35 CPS Gain on sale of investment properties 11.8 5.9 Gain on sale other assets 2.3 - Other transaction costs (3.1) (
Slide 39: Segment Results – Operating Earnings Detail
Segment Results – Operating Earnings Detail Appendix For personal use only Full Year ending 30 June 2022 Funds and asset Management Co-investments Investment Portfolio Cromwell Segment revenue $M $M $M $M Rental income and recoverable outgoings - 73.7 215.2 288.9 Operating profits of equity accounte
Slide 40: Top Assets
Top 10 Assets1 Appendix For personal use only Current Market Value Occupancy % by Asset State Class ($M) Cap Rate NLA WALE Major Tenants Qantas HQ, Mascot, Sydney NSW Office 560.0 4.75% 100.0% 9.4 years Qantas Airways Limited 400 George Street, Brisbane QLD Office 542.0 5.25% 89.8% 4.7 years QLD Sta
Slide 41: Top Leases
Top 10 Leases1 Appendix For personal use only Tenant-customer Tenant Classification Expiry Date % of Portfolio Rental Income Qantas Airways Limited Listed Company/Subsidiary Dec-32 18.6% Federal Government Government Authority Sep-32 10.4% QLD State Government Government Authority Dec-26 10.0% NSW S
Slide 42: Net Property Income
Net Property Income Appendix For personal use only FY22 ($M) FY21 ($M) Variance ($M) Variance (%) Northbourne Ave, Lyneham 3.0 2.7 0.3 11.1% Station Street, Penrith 3.1 2.9 0.2 6.9% McKell Building, Sydney 14.5 13.4 1.1 8.2% Crown Street, Wollongong 2.9 2.9 0.0 0.0% Bull Street, Newcastle 1.9 1.8 0.
Slide 43: Movement In Book Value
Movement In Book Value Appendix For personal use only Strategy of continuously improving portfolio through acquisitions since 2012 In-sourced facilities management model also lowers lifecycle capex FY22 FY21 FY20 FY19 FY18 FY17 FY16 FY15 FY14 FY13 FY12 ($M) ($M) ($M) ($M) ($M) ($M) ($M) ($M) ($M
Slide 44: Balance Sheet Debt Details
Balance Sheet Debt Details Appendix For personal use only Drawn Commitment Maturity Fin Yr Years Facility Covenants (AUD $'000) (AUD $'000) Date Expiry Remaining Bank 1 - 5 Year Facility 196,000 250,000 Jun-2025 2025 3.0 yrs Bank 2 - 5 Year Facility 350,000 350,000 Jun-2027 2027 5.0 yrs Bank 3 - 5 Y
Slide 45: For personal use only
For personal use only CROMWELL PROPERTY GROUP
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