Cromwell Property Group · ASX:CMW
Cromwell Property — FY2023 Earnings Presentation
43 slides from Cromwell Property's earnings presentation, Aug 31, 2023
Slide 1: Cromwell Property Group FY23 Results Presentation ASX Announcement
Thursday 31 August 2023 ASX Market Announcements Office Exchange Centre 20 Bridge Street SYDNEY NSW 2000 To whom it may concern Cromwell Property Group (ASX:CMW) FY23 Results Presentation I attach a copy of Cromwell Property Group’s FY23 Results Presentation. Yours faithfully CROMWELL PROPERTY GROUP
Slide 2: Cromwell Property Group 2023 Financial Year Results
Cromwell Property Group 2023 Financial Year Results 31 August 2023 C R O M W E L L P R O P E R T Y G R O U P | F Y 2 3 R E S U L T S 1
Slide 3: Important Information & Disclaimer
Important Information & Disclaimer 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 | F Y 2 3 R E S U L T S 2
Slide 4: Acknowledgement of Country and Agenda
Agenda Introduction Dr Gary Weiss AM, Chair 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 Callaghan, CEO present, and future
Slide 5: Cromwell Property Group overview
Cromwell Property Group overview Introduction Broad Fund Management Platform Group Fund Management Platform Geographic and Culturally Diverse Team Global Asset Management Expertise $11.5 billion 350+ 217 Total AUM people properties $8.0 billion 15 3.5 million Total third-party AUM countries sqm $5.5
Slide 6: Cromwell's operating platform
Cromwell’s operating platform at 30 June 2023 Total AUM by Sector 3%3% $11.5 billion Office 24% Retail Total AUM Industrial / logistics Across 15 countries Other 61% 9% Property Securities Total AUM by Geography $6.2 billion 7% Australia Europe 5% NZ 11% Italy CEREIT Manager 39% UK 5% Benelux $4.4 b
Slide 7: Financial year 2023 results
Financial year 2023 results C R O M W E L L P R O P E R T Y 400 George Street, Brisbane G R O U P | F Y 2 3 R E S U L T S 6
Slide 8: Strategic achievements and highlights
Strategic achievements and highlights Executing on strategic Growth in Fund Continued sale of non-core Environmental, Social and initiatives Management assets Governance improvements • Significant progress in business • Proposed transaction between • Completed sales of $246.5 million • Sustainable f
Slide 9: FY23 financial summary
FY23 financial summary Earnings and distributions Overview Financial position Statutory loss1 Underlying operating profit1 NTA per unit Liquidity2 $443.8 million $158.6 million $0.84 $289 million (equivalent to loss 16.95 cps) (equivalent to 6.06 cps) (FY22 $1.04) Gearing3 Look through gearing3 Dist
Slide 10: FY23 operational summary
FY23 operational summary 207 Kent Street, Sydney Results overview Investment portfolio Fund and asset management Portfolio value1 Total third-party AUM European mandate deployment2 $2.6 billion $8.0 billion €560 million GAV ($248.1 million decline from (FY22 $7.8 billion) FY22 on a like-for-like bas
Slide 11: ESG remains a key focus for the Group
ESG remains a key focus for the Group Cromwell Diversified Property Trust GRESB Results for 2022 NABERS Sustainable Portfolio Index Results Cromwell has achieved outstanding results in its energy and water portfolio performance. 87 29 58 Cromwell Diversified Property Trust • 4th best office portfoli
Slide 12: Financial Results and Capital Management
Financial Results and Capital Management C R O M W E L L P R O P E R T Y 100 Creek G R O U P Street, Brisbane | F Y 2 3 R E S U L T S 11
Slide 13: FY23 headline results
FY23 headline results Group investment and leasing activity remains robust, with FY23 FY22 Change valuation headwinds detracting from overall performance Statutory (loss) / profit ($m)1 (443.8) 263.2 (268.7%) • Statutory loss of $443.8 million was driven by $491.6 million in unrealised fair value ad
Slide 14: FY23 earnings
FY23 earnings Operating Profit FY23 ($’M) FY22 ($’M) Change (%) (cents per unit) Fund and Asset Management Australia EBIT 28.8 37.9 (24.0%) Decrease a result of no transactions fees in FY23 Europe EBIT 12.5 11.8 5.9% Increase a result of higher performance fees in FY23 Total Fund Management EBIT 41.
Slide 15: NTA impacts largely driven by asset revaluations
NTA impacts largely driven by asset revaluations Revaluations of both the Australian portfolio and CPRF have contributed to a reduction in NTA of 19% Australian portfolio valuation changes Polish sale process • Portfolio decreased 9.1%, driven by cap rate expansion and generally in line with our pee
Slide 16: Capital management
Capital management Balance sheet security through debt reduction remains a key priority Debt reduction activities ongoing, despite valuation headwinds • Gearing at 42.6% (look-through 47.6%), attributed to negative valuation impacts, felt globally. $2,000 60% • Total Group net debt position decrease
Slide 17: Capital management
Capital management Ongoing capital management to help navigate ongoing market conditions Diversified debt profile Comfortable compliance with covenants Interest rate hedging appropriate given sale expectations • Diversification of lender domicile to protect from single • Foreign currency impacts to
Slide 18: Fund and asset management
Fund and asset management C R O M W E L L 475 Victoria P R O P E R T Y Avenue, Chatswood G R O U P | F Y 2 3 R E S U L T S 17
Slide 19: Fund management highlights
Fund management highlights Platform growth continues across both retail Third party assets under management Regional fund management by and institutional markets globally product split AUM % by country Australia / New Zealand • Global fund management platform managing $8.0 billion of AUM from third-
Slide 20: European fund management
European fund management Artist impression, Nervesa 21, Milan UK and European team continue to show prudent asset management and strong execution Key activities European fund management platform • Deployment of non-discretionary mandates continues well € 5,000 Millions with €560 million2 assets purc
Slide 21: Australia / New Zealand fund management
Australia / New Zealand fund management Key activities Australian fund management Product breakdown by value • Australian and New Zealand fund management platform totals $2.54 billion across 9 CDPF* $639.4m $408.0m products. C12 $116.3m • Execution of growth strategy through proposed transaction bet
Slide 22: Proposed transaction between CDPF and AUDPF
Proposed transaction between Cromwell Direct Property Fund (CDPF) and Australian Unity Diversified Property Fund (AUDPF) Platform growth through fund acquisition to drive improved value Key statistics of merged fund Merged Fund • A compelling opportunity to create material value for unitholders thro
Slide 23: Co-investments
Co-investments C R O M W E L L P R O P E R T Y G R O U P Campegine, | Italy F Y 2 3 R E S U L T S 22
Slide 24: Co-investments
Co-investments Cromwell Direct Property Fund (CDPF) Cromwell European REIT (CEREIT) • Cromwell maintains a co-investment of 4.1% in CDPF, • Cromwell’s 28% share is carried at an equity value of valued at $16.5 million. $589.7 million. • Distribution yield of 6.05% was paid monthly, with • Distributi
Slide 25: Co-investments
Co-investments Cromwell Italy Urban Logistics Fund (CIULF) Cromwell Polish Retail Fund (CPRF) • Portfolio of seven logistics assets valued at $91.5 million. • Seven catchment dominant shopping centres valued at $589.9 million, down $158.8 million during the financial year • Assets located in norther
Slide 26: Investment portfolio
Investment portfolio C R O M W E L L P R O P E R T Y 400 George Street, Brisbane G R O U P | F Y 2 3 R E S U L T S 25
Slide 27: Investment portfolio leasing is mitigating cap rate expansion
Investment portfolio leasing is mitigating cap rate expansion ~18,500sqm • Net operating income (on a like-for-like basis) was up Held Assets Valuation Movement 12m 3.9% on FY22. 4% Rent & Other • Market wide interest rate pressure impacted Investment 2% 1.61% Total 1 New or renegotiated leases -9.1
Slide 28: Small to mid-size occupiers are driving performance in A-grade
Small to mid-size occupiers are driving performance in A-grade Quality, affordable space is in demand National CBD Vacancy Rate 18% • The A-grade market has seen strong tenant demand and limited supply, performing well 16% compared to the Premium grade sector, where vacancy has been impacted by supp
Slide 29: Investment Portfolio's near-term vacancy is located where tenant demand is stronger
Investment Portfolio’s near-term vacancy is located where tenant demand is stronger Underlying market fundamentals are supportive despite Leasing into areas of stronger demand valuation movements Vacancy and expiry to 2025 • The Investment Portfolio has low vacancy and near-term expiry. • Current In
Slide 30: 207 Kent Street, Sydney
207 Kent Street, 207 Kent Street, Sydney Sydney Strong leasing demand from groups Hitting the A-Grade sweet spot upgrading location and quality FY23 saw 5 new leases over 4,211sqm from mid- Access to quality amenities with new, premium grade end-of-trip sized companies, many moving out of suburban a
Slide 31: Environmental sustainability
Environmental sustainability Significant ratings improvements through continued ESG-focused upgrade activities Key activities during FY23 Portfolio NABERS Energy rating Portfolio NABERS Water rating (by NLA) (by NLA) • Moved up NABERS Sustainable Portfolios Index 2023 to equal 4th, up from 14th in F
Slide 32: Outlook
Outlook C R O M W E L L P R O P E R T Y 545 Queen Street, Brisbane G R O U P | F Y 2 3 R E S U L T S 31
Slide 33: Strategic focus
Strategic focus We remain committed to the Group’s long-term stability and growth objectives 1 2 3 Ongoing growth of Fund Continued focus on resilience Management platform and strength of investment Reduce gearing to within through the launch of new portfolio through active target range. products in
Slide 34: FY24 Outlook
FY24 Outlook 400 George Street, Brisbane Focus remains on execution of key For more information, please contact: strategic initiatives and the ongoing strengthening of Cromwell’s balance sheet Jonathan Callaghan in the face of a difficult operating Chief Executive Officer environment. jonathan.calla
Slide 35: Appendices
Appendices C R O M W E L L P R O P E R T Y 207 Kent G R O U P Street, Sydney | F Y 2 3 R E S U L T S 34
Slide 36: Appendices
Appendices 36 FY23 Operating and Statutory (Loss) / Profit Reconciliation 37 Segment Result - Operating Earnings Detail 38 Balance Sheet 39 Net Property Income 40 Movement in Book Value 41 Balance Sheet Debt Details C R O M W E L L 475 Victoria P R O P E R T Y Avenue, Chatswood G R O U P | F Y 2 3 R
Slide 37: FY23 Operating and Statutory (Loss) / Profit Reconciliation
FY23 Operating and Statutory (Loss) / Profit Reconciliation Appendix FY23 ($,M) FY22 ($,M) Profit from Operations 158.6 201.0 Operating EPS 6.06 cps 7.68 cps Gain on sale of investment properties 2.0 11.8 Gain on sale of other assets - 2.3 Other transaction costs (4.2) (3.1) Operating lease costs 5.
Slide 38: Segment Results – Operating Earnings Detail
Segment Results – Operating Earnings Detail Appendix Funds and asset management Investment portfolio Co-investments Cromwell 30 June 2023 $M $M $M $M Segment revenue Rental income and recoverable outgoings - 202.3 79.3 281.6 Operating profit of equity accounted investments 1.5 - 43.1 44.6 Developmen
Slide 39: Balance Sheet
Balance Sheet Appendix FY23 ($M) FY22 ($M) Assets Cash and Cash Equivalents 113.9 286.0 Investment Property 3,098.2 3,740.0 Investment Property held for sale 45.3 - Disposal group assets held for sale 93.1 160.4 Equity accounted investments 662.2 670.7 Receivables 79.6 66.7 Intangibles 0.3 0.5 Deriv
Slide 40: Net Property Income
Net Property Income Appendix FY23 ($M) FY22 ($M) Variance ($M) Variance (%) 2-6 Station Street, Penrith 3.1 3.1 0.0 0.0% 2-4 Rawson Place, Sydney 14.3 14.5 (0.2) (1.4%) 203 Coward Street, Mascot 33.5 32.4 1.1 3.4% 700 Collins Street, Melbourne 17.6 16.8 0.8 4.8% Soward Way, Greenway 17.4 16.9 0.5 3.
Slide 41: Movement In Book Value
Movement In Book Value Appendix FY23 FY22 FY21 FY20 FY19 FY18 FY17 FY16 FY15 FY14 FY13 FY12 FY11 FY10 $M $M $M $M $M $M $M $M $M $M $M $M $M $M Opening Balance 3,740.0 3,863.5 3,752.3 2,520.9 2,451.1 2,357.8 2,274.0 2,101.0 2,249.5 2,396.0 1,724.4 1,444.9 1,064.1 1,117.2 Acquisitions - - 89.3 1,286.
Slide 42: Balance Sheet Debt Details
Balance Sheet Debt Details Appendix Drawn Commitment Maturity Fin Yr Years Facility1 Covenants (AUD $M) (AUD $M) Date Expiry Remaining Bank 1 - 5 Year Facility 196 250 Jun-2025 2025 2.0 yrs Bank 2 - 5 Year Facility 254.5 350 Jun-2027 2027 4.0 yrs Bank 3 - 5 Year Facility 0 150 Jun-2025 2025 2.0 yrs
Slide 43: L T S
C R O M W E L L P R O P E R T Y G R O U P | F Y 2 3 R E S U L T S 42
Cromwell Property Group — FY2023 Earnings Presentation on 6ix