Summerset Group Holdings Limited · NZX:SUM
Summerset — FY2023 Earnings Presentation
72 slides from Summerset's earnings presentation, Feb 23, 2024
Slide 1: Full year results presentation
Full year results presentation Full Year Report 2023
Slide 2: Agenda
Full Year Report 2023 Full year results presentation Agenda 01 Our highlights 02 Our strategy 03 Our community 04 Our environment 2 05 New Zealand development 06 Australia development 07 Financial performance 08 Business performance 09 Appendix
Slide 3: Our highlights
Our highlights 3 Full Year Report 2023 Summerset Cambridge, Waikato District
Slide 4: FY23 investor highlights
Full Year Report 2023 Our highlights FY23 investor highlights Record underlying profit of $190.3m in FY23, up 11% on FY22 with strong sales pipeline in place to start FY24 Record underlying profit of $190.3m, up 11% from $171.4m in FY22 Net profit after tax (NZ IFRS) of $436.3m, up 62% from $269.1m
Slide 5: Record underlying profit of $190.3m up 11% on FY22
Full Year Report 2023 Our highlights Record underlying profit of $190.3m up 11% on FY22 Record underlying profit of $190.3m in FY23, up 11% on FY22 with strong sales pipeline in place to start FY24 $436.3m Net profit after tax $398.2m Net operating cash flows $190.3m Underlying profit FY22 $269.1m F
Slide 6: Record underlying profit of $190.3m up 11% on FY22
Full Year Report 2023 Our highlights Record underlying profit of $190.3m up 11% on FY22 Consistent asset growth over time continues to strengthen balance sheet Underlying profit Total assets $200m $7,000m $175m $6,000m $150m $5,000m $125m $4,000m $100m $190.3m $6,942m $171.4m $3,000m $5,840m $75m $1
Slide 7: Looking back – FY23 milestones
Full Year Report 2023 Our highlights Looking back – FY23 milestones A showcase of key events from the past year Kenepuru main building opens Cambridge village opens 7 Cyclone Gabrielle support St Johns sales launch Summerset Oakleigh South March May Solar panels installed on Half Moon Bay receives p
Slide 8: Looking back – FY23 milestones
Full Year Report 2023 Our highlights Looking back – FY23 milestones A showcase of key events from the past year Mosgiel acquisition Rolleston acquisition Cranbourne North first units 8 Aged Advisor Award Bell Block main building opens Chirnside Park Smoking Ceremony November July September Te Awa ma
Slide 9: Our strategy – FY23 progress
Full Year Report 2023 Our strategy Our strategy – FY23 progress Summerset builds, owns and operates integrated retirement villages, creating vibrant, happy communities for residents and our people that delivers on our purpose – bringing the best of life BRINGING THE BEST OF LIFE Our strategic goals
Slide 10: Our strategy – FY23 progress
Full Year Report 2023 Our strategy Our strategy – FY23 progress Summerset builds, owns and operates integrated retirement villages, creating vibrant, happy communities for residents and our people that delivers on our purpose – bringing the best of life BRINGING THE BEST OF LIFE Our strategic goals
Slide 11: Our community
Our community 11 Full Year Report 2023
Slide 12: Our residents
Full Year Report 2023 Our community Our residents Bringing the best of life to residents every day ▪ Named the ‘Best Provider Nationwide’ in the Aged Advisor annual People's Choice Awards, with five villages also named as finalists in their categories ▪ Our retirement village achieved 96% resident s
Slide 13: Our people
Full Year Report 2023 Our community Our people Our people are key to our success, and we are immensely proud of the work they do ▪ Improved our sector leading employee benefits, enhancing our parental leave offering to complement our wide range of existing benefits ▪ Recognised that the cost of livi
Slide 14: Community support
Full Year Report 2023 Our community Community support Promoting and supporting our communities ▪ Media investment in the sector was highly competitive in 2023, with Summerset continuing to lead in brand consideration ▪ Our focus remains on growing our brand and presence in both New Zealand and Victo
Slide 15: Our environment
Our environment 15 Full Year Report 2023
Slide 16: Our environment
Full Year Report 2023 Our environment Our environment Environmental performance and sustainability ▪ Summerset is a market leader in sustainability in the retirement and aged care sectors, performing well on key rating indices ▪ We strive to develop, build and manage more sustainable Electric vehicl
Slide 17: Our environment
Full Year Report 2023 Our environment Our environment Environmental performance and sustainability Emissions source & measure 2017 2021 2022 2023 (Base year) ▪ We have been successfully measuring, managing, and Gas Emissions from gas used per 0.013 0.012 0.012 0.011 reporting on our carbon footprint
Slide 18: Our sustainability framework and targets
Full Year Report 2023 Our environment Our sustainability framework and targets Our vision is to develop villages responsibly, creating a sustainable future for all ST RAT EG IC Contribute to the economic Create caring communities for Reduce our impact on the planet our residents and employees G OALS
Slide 19: Our climate action plan
Full Year Report 2023 Our environment Our climate action plan Our climate action plan summarises how we are tackling the challenge of decarbonisation and transition O UR DESIG N & DECARBO NISAT IO N O F MANAGING OPERAT IONAL PRIO RIT IES CO NST RUCT IO N VIL L AG ES EF F ICIENCIES 19 O UR Design and
Slide 20: New Zealand development
New Zealand development 20 Full Year Report 2023 Summerset SummersetatRichmond Pōhutukawa Place(Tasman Ranges (Bell Block, New Plymouth) District)
Slide 21: Development activity
Full Year Report 2023 New Zealand development Development activity New Zealand summary ▪ Delivered 633 units to be sold under Occupation Right and 49 care beds over 14 sites in FY23, deliveries weighted to the second half of the year and at the lower end of market guidance, in line with economic con
Slide 22: New Zealand development village photos
Full Year Report 2023 New Zealand development Summerset Mt Denby (Whangārei) Summerset at Monterey Park (Hobsonville, Auckland) 22 Summerset Cambridge (Waipā District) Summerset by the Dunes (Pāpāmoa Beach, Tauranga)
Slide 23: Summerset Pōhutukawa Place (Bell Block, New Plymouth)
Full Year Report 2023 New Zealand development Summerset Pōhutukawa Place (Bell Block, New Plymouth) 23 144 independent villas Main building with 56 serviced apartments, 20 memory care Rest home and hospital level Site progress – December 2023 delivered apartments, 19 care suites and 21 care beds del
Slide 24: Summerset Palms (Te Awa, Napier)
Full Year Report 2023 New Zealand development Summerset Palms (Te Awa, Napier) 24 181 independent villas Main building with 56 serviced apartments, 20 memory care Rest home and hospital level care Site progress – December 2023 delivered apartments, 15 care suites and 28 care beds delivered available
Slide 25: Summerset Waikanae, Boulcott, Kenepuru, Richmond Ranges
Full Year Report 2023 New Zealand development 25 Summerset Waikanae (Kāpiti Coast) Summerset Boulcott (Lower Hutt, Wellington) Summerset on the Landing (Kenepuru, Wellington) Summerset Richmond Ranges (Tasman)
Slide 26: Summerset Blenheim, Rangiora, Casebrook, Prebbleton
Full Year Report 2023 New Zealand development 26 Summerset Blenheim (Marlborough District) Summerset Rangiora (Waimakariri District) Summerset on Cavendish (Casebrook, Christchurch) Summerset Prebbleton (Selwyn District)
Slide 27: New Zealand development pipeline
Full Year Report 2023 New Zealand development New Zealand development pipeline Diversified development pipeline with 20 sites in FY23 27 * New sites purchased in FY23
Slide 28: Project cash profits
Full Year Report 2023 New Zealand development Project cash profits ▪ $3.1b+ $235m+ Summerset developments produce positive net Forecast capital Projected net cash cash flows (net cash position) upon completion, this investment position means they carry no debt once built ▪ The villages currently und
Slide 29: Project cash profits
Full Year Report 2023 New Zealand development Project cash profits ▪ 14.1% $195m Our last ten villages to complete recycled around Cash margin* Project cash profit $195.2m of positive cash flow ▪ This is an average cash margin of 14.1% Total units Cash ▪ Two villages were completed in FY23, these we
Slide 30: Australia development
Australia development 30 Full Year Report 2023 Summerset Cranbourne North (Melbourne, Victoria)
Slide 31: Development activity
Full Year Report 2023 Australia development Summerset Craigieburn Summerset Mernda Development activity Summerset Chirnside Park Australia summary Melbourne CBD ▪ Development at our Australian sites on track with several Summerset Oakleigh South major milestones achieved in FY23 ▪ Summerset’s first
Slide 32: Summerset Cranbourne North (Melbourne)
Full Year Report 2023 Australia development Summerset Cranbourne North (Melbourne) 32 10 independent villas Main building with 34 assisted living apartments and 72 care Rest home and hospital level Site progress – December 2023 delivered beds to commence construction in FY24 care will be available
Slide 33: Australia expansion
Full Year Report 2023 Australia development Australia expansion Queensland seen as logical next step for Queensland population growth 75 years and over expansion in Australia 1,600,000 16% 1,400,000 14% ▪ Summerset has been active in Australia since 2018, 1,200,000 12% establishing strong local mana
Slide 34: Australia development pipeline
Full Year Report 2023 Australia development Australia development pipeline Now have seven villages in planning and development across Victoria 34
Slide 35: Financial performance
Financial performance 35 Full Year Report 2023 Clark Coastal, Summerset at Monterey Park (Hobsonville)
Slide 36: Reported profit (IFRS)
Full Year Report 2023 Financial performance Reported profit (IFRS) NZ$m FY23 FY22 Variance FY21 Total revenue 272.2 238.7 14% 205.3 ▪ IFRS NPAT of $436.3m, 62% up on FY22 and the Reversal of impairment on land & buildings - - - 3.4 second highest in Summerset’s history Fair value movement of investm
Slide 37: Fair value movement
Full Year Report 2023 Financial performance Fair value movement ▪ Fair value movement of $441.6m, up 64% on FY22 $441.6m $159.1m Fair value movement Increase from new ▪ Fair value movement has been driven by: units delivered ▪ New units built ($159.1m): Value of new units delivered in FY23 Fair valu
Slide 38: Underlying profit
Full Year Report 2023 Financial performance Underlying profit ▪ Record underlying profit of $190.3m, up 11% on $190.3m 11% Underlying profit Increase on FY22 FY22 ▪ The increase is driven by the following: NZ$m FY23 FY22 Variance FY21 ▪ Realised development margin of $121.2m, a 16% increase on FY22,
Slide 39: Cash flows
Full Year Report 2023 Financial performance Cash flows $398.2m 8% ▪ Net operating cash flows of $398.2m, up from Net operating cash flows Increase on FY22 $369.2m at FY22 ▪ Net operating business cash flows of $131.5m, which NZ$m FY23 FY22 Variance FY21 includes: Net operating business cash flow* 13
Slide 40: Balance sheet
Full Year Report 2023 Financial performance Balance sheet ▪ Total assets of $6.9b, up 19% on FY22 driven by $6.9b $2.1b Total assets 19% Retained 22% portfolio growth and the underlying value in our existing villages earnings ▪ Investment property valuation of $6.4b, up 18% on NZ$m FY23 FY22 Varianc
Slide 41: Net tangible assets
Full Year Report 2023 Financial performance Net tangible assets Strong financial discipline underpinning net tangible assets and gearing Net tangible assets and gearing* Summerset net tangible assets per share $18 50% $12 $11.10 $16 45% $10 37.7% 40% $14 34.7% NTA per share 33.6% 33.6% Gearing ratio
Slide 42: Funding
Full Year Report 2023 Financial performance Funding ▪ Bank facility approximately $1.5b, with existing $1.5b $450m Bank facility Retail bonds $450.0m of retail bonds at 31 December 2023 ▪ As at 31 December 2023, 59% of total debt was Funding maturity profile hedged at fixed interest rates, resulting
Slide 43: Development assets
Full Year Report 2023 Financial performance Development assets ▪ Development assets exceed the value of net debt $1.7b 36.4% Underlying development Bank & bond LVR by $263.6m, or 19% assets ▪ Development assets comprise: Net debt to underlying assets ▪ $603.0m relating to undeveloped land, being the
Slide 44: Debt measures
Full Year Report 2023 Financial performance Debt measures ▪ Gross debt of $1.399b*, up from $1.074b* at FY22 34.7% 201% Gearing ratio ICR coverage ▪ Uplift in gross debt driven by increased construction Gross borrowings and gearing activity across our developing villages and land settlements in the
Slide 45: Final dividend
Full Year Report 2023 Financial performance Final dividend Declared FY23 final dividend of 13.2 cents per share Gross dividend payout per year ▪ The Board has declared an unimputed final dividend $70m of 13.2 cents per share, being 30% of underlying $60m profit $50m ▪ This represents a payout for FY
Slide 46: Dividend policy review
Full Year Report 2023 Financial performance Dividend policy review Dividend policy updated to 20% to 50% of Underlying profit Cumulative dividend payout (2018 to 2023) $900m ▪ Summerset’s growth strategy is to deliver expansion $805.9m opportunities in New Zealand and Australia, that $800m produce c
Slide 47: Business performance
Business performance 47 Full Year Report 2023
Slide 48: Retirement unit delivery
Full Year Report 2023 Business performance Retirement unit delivery FY23 unit Retirement units Care units Total delivery Serviced Memory care Care Care units Record 692 total units delivered in FY23, Villas Apartments apartments apartments suites beds includes first deliveries in Australia Bell Bloc
Slide 49: Development margin
Full Year Report 2023 Business performance Development margin Record realised development margin of 32% $121.2m $121.2m, with a 32% development margin Development margin Realised margin 16% ▪ Record realised development margin of $121.2m, an increase of 16% on FY22 Realised development margin ▪ Deve
Slide 50: New sales
Full Year Report 2023 Business performance New sales Record 560 new sales in the period, gross 560 $686k Average gross proceeds of $384.0m New sales of 4% Occupation Rights proceeds ▪ A record 560 new sales of Occupation Rights in New sales FY23 FY22 Variance FY21 FY23, up 4% on the 537 settled in F
Slide 51: New sales stock
Full Year Report 2023 Business performance New sales stock 380 uncontracted stock as at FY23, impacted 380 Uncontracted 6.0% Percentage of by almost 250 units delivered in Q4 new sale stock uncontracted stock ▪ Uncontracted stock as a % of total portfolio of 6.0% is up from 5.4% at FY22 New sales st
Slide 52: Resales
Full Year Report 2023 Business performance Resales Record 543 resales in the period, up 16% on 543 $88.1m FY22 with realised resale gain of $88.1m Resales of Occupation Realised resale 26% Rights gains ▪ Total gross proceeds of $318.6m, up 21% on FY22 Resales FY23 FY22 Variance FY21 ▪ This was drive
Slide 53: Resales cash margin
Full Year Report 2023 Business performance Resales cash margin Cash margin on resales of 37% with $115.7m $115.7m $214k realised in FY23 Cash margin on Realised resale cash resales margin ▪ Resales cash margin of 37% in FY23 with an Resales FY23 FY22 Variance average margin of $214k per unit, up fro
Slide 54: Embedded value
Full Year Report 2023 Business performance Embedded value Embedded value now $1.6b, up 9% on FY22 $1.6b $1.1b Embedded value 9% Embedded resale gain ▪ Total embedded value now $1.6b, having increased Embedded value from $1.5b at FY22, a 9% uplift $1,800m ▪ Embedded value comprised of: $1,600m ▪ $1.0
Slide 55: Resale stock
Full Year Report 2023 Business performance Resale stock Uncontracted resale stock remains low 144 2.3% Uncontracted Percentage of resale stock uncontracted stock ▪ Resale stock has increased from 266 units at FY22 to 292 units at FY23 Resales stock FY23 FY22 Contracted 148 116 ▪ The increase in over
Slide 56: Questions
Questions 56 Summerset Pohutukawa Place (Bell Block)
Slide 57: Disclaimer
Full Year Report 2023 Disclaimer Disclaimer ▪ This presentation may contain projections or forward looking statements regarding a variety of items. Such forward looking statements are based upon current expectations and involve risks and uncertainties ▪ Actual results may differ materially from thos
Slide 58: Appendix
Appendix 01 Summerset overview 02 Portfolio and land bank 03 Underlying profit reconciliation 58 04 Historical trends 05 Fair value movement 06 Sales price relativity 07 Summerset growth and demographics 08 Customer profile and occupancy Summerset Down the Lane (Hamilton)
Slide 59: Summerset overview
Full Year Report 2023 Appendix Summerset overview Diversified portfolio throughout New Zealand and Australia Our portfolio Our care Our people 6,087 1,284 8,000+ Retirement units Care units in Residents in portfolio portfolio 5,571 1,338 2,800+ 59 Retirement units Care units in Staff members in land
Slide 60: Portfolio as at 31 December 2023
Full Year Report 2023 Appendix Portfolio as at 31 December 2023 7,371 total units including 6,087 retirement units and 1,284 care units Existing portfolio - as at 31 December 2023 Retirement units Care units Total units and Serviced Memory care Village Villas Apartments Care suites Care beds care be
Slide 61: Portfolio as at 31 December 2023
Full Year Report 2023 Appendix Portfolio as at 31 December 2023 7,371 total units including 6,087 retirement units and 1,284 care units Existing portfolio - as at 31 December 2023 Retirement units Care units Total units and Serviced Memory care Village Villas Apartments Care suites Care beds care be
Slide 62: Future development
Full Year Report 2023 Appendix Future development Largest New Zealand land bank for a retirement village operator of 4,741 units and beds Landbank – as at 31 December 2023 Retirement units Care units Serviced Memory care Total units and Village Villas Apartments Care suites Care beds apartments apar
Slide 63: Future development
Full Year Report 2023 Appendix Future development Largest New Zealand land bank for a retirement village operator of 4,741 units and beds Landbank – as at 31 December 2023 Retirement units Care units Serviced Memory care Total units and Village Villas Apartments Care suites Care beds apartments apar
Slide 64: FY23 underlying profit reconciliation
Full Year Report 2023 Appendix FY23 underlying profit reconciliation Reconciliation of underlying profit to reported net profit after tax FY23 FY22 Variance FY21 Net profit before tax (IFRS) 422.5 265.1 59% 543.6 Net profit after tax (IFRS) 436.3 269.1 62% 543.7 Financial (NZ$m) Less reversal of imp
Slide 65: Historical trends
Full Year Report 2023 Appendix Historical trends Underlying profit 12 year CAGR of 30% since listing 12 Year FY11 NZX Full Year Results FY23 FY22 FY21 FY20 FY19 CAGR* listed New sales of occupation rights 15% 560 537 540 404 329 108 Operational Resales of occupation rights 13% 543 470 438 381 323 12
Slide 66: Fair value movement
Full Year Report 2023 Appendix Fair value movement Fair value movement of investment property – key assumptions Value of Fair value movement of investment Fair value investment Key valuation assumptions property gain/(loss) property* Discount Growth rate Growth rate Growth rate Growth rate Growth ra
Slide 67: Fair value movement
Full Year Report 2023 Appendix Fair value movement Fair value movement of investment property – key assumptions Value of Fair value movement of investment Fair value investment Key valuation assumptions property gain/(loss) property* Discount Growth rate Growth rate Growth rate Growth rate Growth ra
Slide 68: Care centre valuation
Full Year Report 2023 Appendix Care centre valuation Care centre valuation – key assumptions Total care beds Total care units Assumed Assumed value per Value of care facilities Value of care facility (non ORA) (ORA) capitalisation rate equivalent bed** Village Location No. NZ$m % NZ$'000 Summerset b
Slide 69: Sales price relativity
Full Year Report 2023 Appendix Sales price relativity Continue to watch the residential market closely, unit pricing remains well placed Long term sales price relativity Sales price relativity vs median house price $1.6m $1.2m $1.4m $1.0m $1.2m $0.8m 69 $1.0m $0.8m $0.6m 83% 90% $0.6m $0.4m 89% 100%
Slide 70: Summerset growth and key demographics
Full Year Report 2023 Appendix Summerset growth and key demographics 25 years of consistent delivery and growth Summerset build rate New Zealand population growth 75 years and over 1,200,000 16% 1,000,000 14% 12% 8,000 800,000 10% 7,371 600,000 8% 7,000 400,000 6% 4% 200,000 2% 6,000 - - 2022 2043 2
Slide 71: Customer profile & occupancy
Full Year Report 2023 Appendix Customer profile & occupancy Occupancy, tenure and resident demographic statistics Occupancy – retirement villages Occupancy – established care centres 100% 100% 80% 80% 60% 60% 96% 96% 96% 95% 95% 96% 96% 97% 93% 93% 40% 40% 20% 20% 71 0% - FY19 FY20 FY21 FY22 FY23 FY
Slide 72: Ngā mihi
Ngā mihi For more information: 72 Will Wright Chief Financial Officer will.wright@summerset.co.nz 021 490 251
Summerset Group Holdings — FY2023 Earnings Presentation on 6ix