Cromwell Property Group · ASX:CMW
Cromwell Property — H1 2023 Earnings Presentation
38 slides from Cromwell Property's earnings presentation, Feb 27, 2023
Slide 1: ASX cover letter for HY23 Results Presentation
Monday 27 February 2023 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) HY23 Results Presentation I attach a copy of Cromwell Property Group’s HY23 Results Presentation. Yours faithfully C
Slide 2: HY23 Results Presentation
For personal use only HY23 Results Presentation 27 February 2023 C R O M W E L L P R O P E R T Y G R O U P | H Y 2 3 R E S 545 U L QUEEN T S STREET, 1 BRISBANE
Slide 3: Important Information & Disclaimer
Important Information & Disclaimer For personal use only www.asx.com.au C R O M W E L L P R O P E R T Y G R O U P | H Y 2 3 R E S U L T S 2
Slide 4: Agenda
For personal use only Agenda Introduction Dr Gary Weiss AM, Chair HY23 Results Overview Acknowledgement Jonathan Callaghan, CEO of Country Financial Results and Capital Management Michael Wilde, CFO Segment performance Cromwell Property Group acknowledges and pays respects to past, Jonathan Callagha
Slide 5: Cromwell Property Group overview
Cromwell Property Group overview For personal use only Introduction Broad Fund Management Platform Broad Fund Management Platform Geographic and Culturally Diverse Team Global Asset Management Expertise $12.0 billion 350+ 217 Total AUM people properties $8.1 billion 15 3.5 million Total third‐party
Slide 6: Cromwell's operating platform
Cromwell’s operating platform For personal use only at 31 December 2022 Total AUM by Sector 4%3% Office $12.0 billion 20% Retail Total AUM Industrial / logistics Across 15 countries Other 9% 64% Property Securities Total AUM by Geography $6.2 billion 7% Australia NZ Europe 3% 12% Italy UK CEREIT Man
Slide 7: Half year 2023 results
For personal use only Half year 2023 results C R O M W E L L P R O P E R T Y G R O U P | H Y 2 3 R E S U L T S C R O M W E L L P R O P E R T Y G R O U P | H Y 2 3 R E S U L T S 6
Slide 8: Strategic summary
Strategic summary For personal use only • Continue to simplify the business and strengthen balance sheet Continue strategy execution • Transition to capital light fund manager remains a strategic priority • Continue to focus on driving growth in funds management platform Growth in Funds Management •
Slide 9: HY23 financial summary
HY23 financial summary For personal use only Earnings and distributions Financial position Unrealised negative valuations and increased debt costs detracted NTA per unit Liquidity2 from positive operating income $0.97 $344 million (FY22 $1.04) Statutory loss1 Underlying operating profit1 $129.5 mill
Slide 10: HY23 operational summary
HY23 operational summary For personal use only Results Overview Investment portfolio Fund and asset management Portfolio Value1 Total third‐party AUM New committed European mandates $2.8 billion $8.1 billion (down 3.7% from FY22 on a (FY22 $7.8 billion) €1.9 billion like‐for‐like basis) GAV2 WACR WA
Slide 11: Environmental, social & governance
Environmental, social & governance For personal use only New targets build on a strong history of sustainability to continue to drive performance, focusing on embodied carbon and supporting adaptive reuse. Environmental People Places & Communities Create a culture of authenticity and creativity. We
Slide 12: Financial Results and Capital Management
For personal use only Financial Results and Capital Management C R O M W E L L P R O P E R T Y G R O U P | H Y 2 3 R E S U L T S C R O M W E L L P R O P E R T Y G R O U P | H Y 2 3 R E S U L T S 11
Slide 13: HY23 headline results
HY23 headline results For personal use only Valuation headwinds and asset sales overshadow solid HY23 HY22 Change performance of funds management platform Statutory (loss) / profit ($m)1 (129.5) 132.5 (197.7%) • Statutory loss of $129.5 million was driven by $181.3 million in Statutory (loss) / prof
Slide 14: HY23 segment results
HY23 segment results For personal use only Fund and asset management Fund and asset management HY23 HY22 Change • European fund management increased fee revenue across all areas compared to pcp. ($m) ($m) • In Australia inflows into all retail funds have reduced. No transactional or performance fee
Slide 15: Capital management
Capital management For personal use only Gearing continues to be a key focus through FY23 Debt expiry profile 50% $ 900 M $ 800 M 45% $ 700 M Debt Balance ($M) Target Gearing Range $ 600 M 40% 42.5% 41.8% 42.0% 41.8% 41.0% 41.6% $ 500 M 39.6% 39.2% $ 400 M 35% $ 300 M $ 200 M 30% $ 100 M $0M 25% FY
Slide 16: Financial results and capital management
Financial results and capital management For personal use only Ongoing capital management and strong covenants, positions us well to manage ongoing impacts of inflation Covenant headroom provides stability in uncertain markets Interest rate hedging remains high Facility Covenant Actual Limit • 58% o
Slide 17: Fund and asset management
For personal use only Fund and asset management C R O M W E L L P R O P E R T Y G R O U P | H Y 2 3 R E S U L T S C R O M W E L L P R O P E R T Y G R O U P | H Y 2 3 R E S U L T S 16
Slide 18: Fund management highlights
Fund management highlights For personal use only Positive growth continues across all platforms Funds and asset management Third Party Assets Under Management • European Fund Management platform saw Australia / New Zealand increased revenue across all fee streams Italy 14% Phoenix • 3 new non‐discre
Slide 19: European fund management
European fund management For personal use only UK and European team continue to show strong execution; with mandate growth, solid valuations and development success Key activities Growth in newly committed non- discretionary European mandates (€m) • 3 new non‐discretionary mandates committed from la
Slide 20: European fund management: CEREIT
European fund management For personal use only Portfolio resilience apparent as pivot to logistics continues Cromwell European Real Estate Investment Trust (CEREIT) Key statistics Portfolio by asset type • Selective divestments of non‐strategic assets are in advanced stages and will allow focus on G
Slide 21: Retail fund management
Retail fund management For personal use only Funds and asset management Cromwell Direct Property Fund (CDPF) Oyster Property Group Phoenix Portfolios • Positive net equity inflows of $16 million, • Cromwell owns 50% of Oyster Property Group • Cromwell owns 45% of Phoenix Portfolios (Phoenix), down o
Slide 22: Co-investments
For personal use only Co- investments C R O M W E L L P R O P E R T Y G R O U P | H Y 2 3 R E S U L T S C R O M W E L L P R O P E R T Y G R O U P | H Y 2 3 R E S U L T S 21
Slide 23: Co-investments: long term positions
Co-investments For personal use only Long term positions Cromwell Direct Property Fund (DPF) Cromwell European REIT (CEREIT) • Cromwell maintains a co‐investment of 4.2% in DPF, • Cromwell’s 28% share is carried at a equity value of valued at $18.9 million. $593.7 million. • Distribution yield of 5.
Slide 24: Co-investments: sale process ongoing
Co-investments For personal use only Sale process ongoing Cromwell Italy Urban Logistics Fund (CIULF) Cromwell Polish Retail Fund (CPRF) • Total portfolio of seven logistics assets valued at • Seven catchment dominant shopping centres valued at $94.4 million, broadly unchanged in half year $679 mill
Slide 25: Investment portfolio
For personal use only Investment portfolio C R O M W E L L P R O P E R T Y G R O U P | H Y 2 3 R E S U L T S C R O M W E L L P R O P E R T Y G R O U P | H Y 2 3 R E S U L T S 24
Slide 26: Investment portfolio
Investment portfolio For personal use only Focus on value-add opportunities and enhancements with sustainability focus underpinning office occupancy • Non‐core asset sales with proceeds of $381m completed during 2022 calendar year Diversification by state Diversification by occupier • Well managed a
Slide 27: Asset refinement is driving leasing activity
Asset refinement is driving leasing activity For personal use only Success from understanding tenants and their changing needs Asset Refinement Activity Leasing outcome 207 Kent Street, Sydney • Upgraded bike, commuter and exercise changing areas • New 10 year full floor 1,245 sqm lease to Australia
Slide 28: Environmental sustainability
Environmental sustainability For personal use only Early stages of asset level ESG strategies already proving successful Portfolio NABERS energy ratings Carbon emissions and decarbonisation plans Carbon emissions down 27.0% for year to 31 December 2022 from prior calendar year Implementing asset
Slide 29: Outlook
For personal use only Outlook C R O M W E L L P R O P E R T Y G R O U P | H Y 2 3 R E S U L T S C R O M W E L L P R O P E R T Y G R O U P | H Y 2 3 R E S U L T S 28
Slide 30: HY23 Outlook
HY23 Outlook For personal use only In the current ongoing difficult economic environment, we hold For more information, please contact: focus on key strategic initiatives and balance sheet strength Jonathan Callaghan Chief Executive Officer jonathan.callaghan@cromwell.com.au • Remainder of FY23 is f
Slide 31: Appendices
For personal use only Appendices C R O M W E L L P R O P E R T Y G R O U P | H Y 2 3 R E S U L T S C R O M W E L L P R O P E R T Y G R O U P | H Y 2 3 R E S U L T S 30
Slide 32: Appendices
Appendices For personal use only 32 HY23 Operating and Statutory Profit Reconciliation 33 Segment Result ‐ Operating Earnings Detail 34 Balance Sheet 35 Net Property Income 36 Movement in Book Value 37 Balance Sheet Debt Details C R O M W E L L P R O P E R T Y G R O U P | H Y 2 3 R E S U L T S 31
Slide 33: HY23 Operating and Statutory Profit Reconciliation
HY23 Operating and Statutory Profit Reconciliation For personal use only Appendix HY23 ($,M) HY22 ($,M) Profit from Operations 87.1 96.4 Operating EPS 3.33 cps 3.68 cps Gain/ (Loss) on sale of investment properties 2.0 ‐ Gain/ (Loss) on sale of listed securities ‐ (0.1) Other transaction costs (1.7)
Slide 34: Segment Results – Operating Earnings Detail
Segment Results – Operating Earnings Detail For personal use only Appendix Funds and asset management Investment portfolio Co‐investments Cromwell 31 December 2022 $M $M $M $M Segment revenue Rental income and recoverable outgoings ‐ 100.1 37.7 137.8 Operating profit of equity accounted investments
Slide 35: Balance Sheet
Balance Sheet For personal use only Appendix HY23 ($M) FY22 ($M) Assets Assets, cash and Cash Equivalents 126.5 286.0 Investment Property 3,539.2 3,740.0 Investment Property held for sale 53.0 ‐ Equity accounted investments 669.9 670.7 Receivables 224.0 66.7 Intangibles 0.3 0.5 Derivative financial
Slide 36: Net Property Income
Net Property Income For personal use only Appendix HY23 ($M) HY22 ($M) Variance ($M) Variance (%) Station Street, Penrith 1.6 1.6 0.0 0.0% McKell Building 7.3 7.1 0.2 2.8% Crown Street, Wollongong 1.4 1.5 (0.1) (6.7%) Bull Street, Newcastle 0.9 1.0 (0.1) (10.0%) Qantas HQ 16.3 15.7 0.6 3.8% 700 Coll
Slide 37: Movement In Book Value
Movement In Book Value For personal use only Appendix Strategy of continuously improving portfolio through acquisitions since 2010 In‐sourced facilities management model also lowers lifecycle capex HY23 FY22 FY21 FY20 FY19 FY18 FY17 FY16 FY15 FY14 FY13 FY12 FY11 FY10 $M $M $M $M $M $M $M $M $M $
Slide 38: Balance Sheet Debt Details
Balance Sheet Debt Details For personal use only Appendix Drawn Commitment Maturity Fin Yr Years Facility Covenants (AUD $M) (AUD $M) Date Expiry Remaining Bank 1 ‐ 5 Year Facility 196 250 Jun‐2025 2025 2.5 yrs Bank 2 ‐ 5 Year Facility 350 350 Jun‐2027 2027 4.5 yrs Bank 3 ‐ 5 Year Facility 55 150 Ju
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