Goodman Group · ASX:GMG
Goodman — FY2020 Earnings Presentation
46 slides from Goodman's earnings presentation, Aug 13, 2020
Slide 1: FY20 Results
HIGHLIGHTS RESULTS OPERATIONAL OUTLOOK APPENDICES OVERVIEW PERFORMANCE Section 1 Section 2 Section 3 Section 4 13 August 2020 FY20 RESULTS GOODMAN DELIVERS STRONG FY20 RESULT WITH OPERATING PROFIT UP 12.5% TO $1.06 BILLION 1 Goodman Changzhou Logistics Centre,China
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 Akamatsudai, Tokyo, Japan 4
Slide 5: Highlights
HIGHLIGHTS Goodman has adapted to the new operating environment with limited $ 1.06bn $ 6.5bn OPERATING PROFIT WORK IN PROGRESS disruption and continues to grow its business sustainably for the long term. + Goodman plays an important role in providing Key financial metrics for the year include: + De
Slide 6: Highlights
HIGHLIGHTS + $2.9 billion of revaluation gains across the Group and Partnerships leading to strong out-performance: + The market conditions are favourable for our operations and we have responded with increased levels of development activity. We believe this will be $51.6bn – Partnerships achieved 1
Slide 7: Group and Partnership Highlights
GROUP AND PARTNERSHIP HIGHLIGHTS 97.5% 3% 3.0m OWN OCCUPANCY NPI GROWTH SQUARE METRES LEASED INVESTMENTS High occupancy maintained at Like for like NPIgrowth Leased 3.0 million sqm across the global Significant higher and better use opportunities exist across the portfolio 97.5% and WALE of 4.5years
Slide 8: Results Overview
Section 2 RESULTS OVERVIEW Artist’s impression – Amazon facility at Oakdale West Industrial Estate, Sydney, Australia. 8
Slide 9: Results Overview
RESULTS OVERVIEW + Statutory accounting profit of $1,504.1million FY19 FY20 – Includes property valuations, share based payments, Operating profit ($m) 942.3 1,060.2 derivative and mark-to-market movements Statutory accounting profit ($m) 1,627.9 1,504.1 + Operating profit of $1,060.2 million up 12.
Slide 10: Profit and Loss
PROFIT AND LOSS + Statutory accounting profit of $1,504.1million, includes INCOME STATEMENT property valuations, share based payments expense and mark-to-market movements FY19 FY20 $M $M – Global property revaluation gains for FY20 were $2.9 billion, driven by rent growth, cap rate compression and P
Slide 11: Balance Sheet
BALANCE SHEET + Group balance sheet remains well positioned BALANCE SHEET – Gearing decreased to 7.5% (from 9.7% FY19) and 20.3% on FY19 FY20 a look-through basis, primarily due to strong operating cash $M $M flow, transaction timing, positive valuation movements and payout ratio Stabilised investme
Slide 12: Group Liquidity Position
GROUP LIQUIDITY POSITION + Cash and available lines of credit (excluding Partnership debt and equity) of $2.8 billion as at 30 June 2020 Goodman Group drawn debt expiry profile – $1.8 billion in cash 1,249 – $1.0 billion of available lines + Weighted average debt maturity profile of 5.8 years + Gear
Slide 13: Operational Performance
Section 3 OPERATIONAL PERFORMANCE Chifley Business Park South, MelbourneAustralila 13
Slide 14: Property Investment
PROPERTY INVESTMENT 97.5% 4.9% OCCUPANCY WACR + The focus on infill locations is providing cashflow resilience and driving strong underlying propertyfundamentals – Occupancy of 97.5% – WALE of 4.5 years – Like-for-like net property income growth of 3% + Increase in property income driven by underlyi
Slide 15: Development
DEVELOPMENT + WIP has grown strongly to $6.5 billion and is expected to grow DEVELOPMENTS further in the near term FY19 FY20 – Strong demand from our customers, particularly those in the digital economy, has given us confidence to increase development activity. Development income ($M) 1,236.5 1,019.
Slide 16: Management
MANAGEMENT + External AUM of $48.0 billion, up 12% on FY19 MANAGEMENT – AUM increase supported by revaluation gains and development completions FY19 FY20 across the platform. Rental growth and cap rate compression is driving valuations Management earnings ($M) 469.7 511.2 + Strong performance of the
Slide 17: Management Platform
MANAGEMENT PLATFORM Total assets ($bn) 8.9 9.0 6.5 5.0 4.5 4.3 3.8 3.1 0.9 GMG co-investment (%) 28.8 20.2 20.4 20.0 19.9 55.0 15.5 21.4 33.3 GMG co-investment ($bn) 1.7 1.5 0.8 0.7 0.8 2.0 0.4 0.5 0.3 Number of properties 97 11 116 36 34 17 15 11 6 Occupancy1 (%) 96 99 98 94 98 95 100 99 86 Weighte
Slide 18: Environmental, Social and Governance
ENVIRONMENTAL, SOCIAL ANDGOVERNANCE 18
Slide 19: Environmental, Social and Governance
ENVIRONMENTAL, SOCIAL ANDGOVERNANCE Goodman’s sustainability strategy is based on three strategic pillars which are aligned with nine of the UN Sustainable Development Goals. These pillars represent key ESG priorities most relevant to Goodman, its stakeholders and customers. Our sustainably designed
Slide 20: Outlook
Section 4 OUTLOOK 4 ; a \ wa 2. * ; . a ~~, | 7 ey . ‘ * aa PH ae ; sy Ad j ‘ a | | x o, _. | are ae | ney | | resi | cae mw Oe Li « 2 © -” v = Lt} . . a 4 wae ' y ¥ ! taal HTT) =
Slide 21: Outlook
OUTLOOK Goodman Yuen Long Logistics Centre, Hong Kong, SAR Goodman has deliberately – Partnering with long-term capital to share risk and return over a significant globally diversified platform + Management performance and outlook remains strong positioned its business + Combined with macro trends g
Slide 22: Outlook
OUTLOOK + We expect that the challenges brought about – Increased our environmental sustainability targets + As a result the Group expects to deliver FY21 by COVID-19 could continue over the longer to install 400MW of solar capacity primarily operating profit of $1,165 million an increase term howev
Slide 23: Results Analysis
Appendix 1 RESULTS ANALYSIS Bedford Commercial Park, Bedford,UK Goodman Logistics Center El Monte, Los Angeles, USA 23
Slide 24: 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 115.9 114.9 – – – 1.0 Management income 511.2 – 511.2 – – – Development income 882.6 – – 882.6 – – Distributions from investments 1.2 1.2 – – – – N
Slide 25: Reconciliation Non-Operating Items
RECONCILIATION NON-OPERATING ITEMS Year ended Total 30 June 2020 Non-operating items in statutory income statement $M $M Property valuation related movements Net gain from fair value adjustments attributable to investment properties 45.2 Share of net gain from fair value adjustments attributable to
Slide 26: Financial Position
FINANCIAL POSITION Direct Assets Property investment Development Other Total Capital allocation $B As at 30 June 2020 $M $M $M $M $M Cash – – – 1,781.9 1,781.9 9.6 Receivables – – 172.1 244.2 416.3 Inventories – – 1,180.2 – 1,180.2 8.7 Investment properties 1,797.9 – 103.3 – 1,901.2 Investments acco
Slide 27: 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 28: Net Tangible Asset Movement
NET TANGIBLE ASSET MOVEMENT For year ended 30 June2020¹ $ per security 0.34 (0.11) (0.30) 5.80 (0.46) 0.58 (0.01) 5.84 5.34 Net assets Intangibles Net tangible Operating Property Other Distribution Foreign Net tangible attributable assets as at profit valuation non-cash exchange assets as at to secu
Slide 29: Property Valuations
PROPERTY VALUATIONS + Despite the impact of COVID-19, the industrial and logistics asset class + The global portfolio cap rate has compressed by 23bps to 4.9% over have proven to be in strong demand and continues to generate positive FY20 revaluations + Revaluation gains across the global portfolio
Slide 30: Property Investment
Appendix 2 PROPERTY INVESTMENT Goodman Logistics Center Fontana II, Los Angeles, USA 30
Slide 31: Leasing
LEASING 3.0m 97.5% SPACE LEASED OCCUPANCY Across the Group and Partnerships: + 3 million sqm leased during the year, equating to $401.7 million of annual rental property income + High occupancy at 97.5%. Leasing area Net annual rent Average lease term Region SQM $M YEARS Australia / New Zealand 1,05
Slide 32: Customers
CUSTOMERS Top 20 global customers (by net income – look through basis) % Amazon 7.2 Deutsche Post (DHL) 2.3 A.P. Moller – Maersk 1.7 Japan Post (Toll) 1.6 Kimberly-Clark Corporation 1.3 SF Express 1.3 Iron Mountain 1.1 Georgia-Pacific 1.1 BMW Group 1.1 JD.com 1.0 DB Schenker 1.0 Equinix 0.9 Kuehne +
Slide 33: Geographic Exposure
GEOGRAPHIC EXPOSURE Top 20 sub-regions (byAUM) % Sydney 25.7 Hong Kong 19.1 Greater Los Angeles 7.1 Germany 6.8 Auckland 5.6 Greater Tokyo 4.5 Melbourne 3.2 France 2.7 Greater Osaka 2.7 Greater Shanghai 2.7 Brisbane 2.6 Beijing / Tianjin 2.0 Poland 1.8 United Kingdom 1.7 The Netherlands 1.3 Spain 1.
Slide 34: Direct Portfolio Detail
DIRECT PORTFOLIO DETAIL + 24 properties with a total value of $1.8¹ billion located primarily in the KEY METRICS¹ Sydney market FY20 – Represents a significant part of the urban renewal portfolio Total assets $1.8 billion +Leasing transactions remain strong across the portfolio Customers 304 – 288,8
Slide 35: Development
Appendix 3 DEVELOPMENT 35
Slide 36: Developments
DEVELOPMENTS FY20 DEVELOPMENTS Completions Commencements Work in progress Value ($bn) 2.4 4.5 6.5 Area (m sqm) 1.4 1.6 2.1 Yield (%) 6.8 6.8 6.5 Committed (%) 85 79 76 Weighted average lease term (years) 9.3 14.1 15.1 Development for third parties or Partnerships (%) 80 73 79 Australia / New Zealand
Slide 37: Management
Appendix 4 MANAGEMENT 37
Slide 38: Global Platform
GLOBAL PLATFORM $18.6bn AUM $9.2bn 64 ASIA ++ ++ + + + CONTINENTAL EUROPE/UK Properties AUM + + + +++ 138 + + Properties + + + + ++ + $4.6bn + THE AMERICAS AUM ++ 22 AUSTRALIA Properties $19.2bn AUM 168 NEW ZEALAND Properties + OUR GLOBAL NETWORK $51.6bn + + Assets under management (AUM) + + 392 Pro
Slide 39: Management – AUM
MANAGEMENT – AUM + The majority of Goodman’s assets reside in its Partnerships – The Group manages 15 Partnerships with 49 investor representatives on the Boards and Investment Committees independent of Goodman – Goodman maintains a 26% average equity cornerstone position in the Australia / Partners
Slide 40: Capital Management
Appendix 4 CAPITAL MANAGEMENT 40
Slide 41: Currency Mix
CURRENCY MIX Currency mix – outstanding debt Currency mix – including the impact of capital hedging FX swaps AUD USD 1% 65% AUD USD 1% 39% JPY NZD 6% 6% JPY 7% GBP 8% EUR 28% HKD 15% EUR 24% 41
Slide 42: Financial Risk Management
FINANCIAL RISK MANAGEMENT The Group has implemented a robust capital management framework + The Group has implemented a robust capital + Interest risk management: management framework, under its Financial – Policy to ensure between 60% and 100% Risk Management (FRM) policy. This of current year inte
Slide 43: Financial Risk Management (cont)
FINANCIAL RISK MANAGEMENT(CONT) + Interest rates are hedged to 73% over next 12 months Interest rate hedge profile – Weighted average hedge rate of2.54%1 – NZD – hedge rate 2.21% $M % – JPY – hedge rate 2.01% 4,500 5 – HKD – hedge rate 1.62% 4,000 – GBP – hedge rate 1.70% 4 3,500 – Euro – hedge rate
Slide 44: Financial Risk Management (cont)
FINANCIAL RISK MANAGEMENT(CONT) FOREIGN CURRENCY DENOMINATED BALANCE SHEET HEDGING MATURITY PROFILE Weighted average Weighted average Amount Amount maturity exchange rate receivable1 payable1 NZ$ 2.9 years 1.0864 A$368.3m NZ$400.0m HK$ 4.2 years 5.7260 A$908.6m HK$5,190.0m US$ 3.7 years 0.7141 A$634
Slide 45: Exchange Rates
EXCHANGE RATES STATEMENT OF FINANCIAL POSITION – EXCHANGE RATES AS AT 30 JUNE 2020 + AUDGBP – 0.5566 (30 June 2019: 0.5523) + AUDEUR – 0.6128 (30 June 2019: 0.6173) + AUDHKD – 5.3402 (30 June 2019: 5.4761) + AUDBRL – 3.7602 (30 June 2019: 2.6880) + AUDNZD – 1.0694 (30 June 2019: 1.0449) + AUDUSD – 0
Slide 46: Thank You
THANK YOU 46