Goodman Group · ASX:GMG
Goodman — H1 2022 Earnings Presentation
43 slides from Goodman's earnings presentation, Feb 17, 2022
Slide 1: Goodman Group 1H FY22 Results
GOODMAN GROUP 1H FY22 RESULTS Strong positioning and business conditions support an increase in projected FY22 operating EPS growth to 20%. 17 February 2022
Slide 2: Important Notice and Disclaimer
IMPORTANT NOTICE AND DISCLAIMER – This document has been prepared by Goodman Group (Goodman Limited (ABN 69 000 123 – This document contains certain “forward-looking statements”. The words “anticipate”, “believe”, 071), Goodman Funds Management Limited (ABN 48067 796 641; AFSL Number 223621) as the
Slide 3: Contents
CONTENTS Section 01 Highlights Section 02 Results overview Section 03 Operational Section 04 Outlook performance Appendices 1. Results analysis 2. Property investment 3. Development 4. Management 5. Capital management 3 GOODMAN GROUP 1H FY22 RESULTS
Slide 4: Highlights
01 HIGHLIGHTS 4 GOODMAN GROUP 1H FY22 RESULTS
Slide 5: Highlights
HIGHLIGHTS The deliberate positioning of our portfolio and focus on infill locations is driving increased development activity, more valuable projects, rental growth, and strong $786.2m $12.7bn OPERATING PROFIT WORK IN PROGRESS performance from our Partnerships. + Strong customer demand is benefitti
Slide 6: Highlights
HIGHLIGHTS + Capital management to support growth with significant $68.2bn + Strong revaluation gains and acquisitions across the Group and Partnerships combined with development activity is driving investment capacity AUM growth + Low gearing maintained at 7.2% – External AUM up 32% to $64.1 billio
Slide 7: Group and Partnership Highlights
GROUP AND PARTNERSHIP HIGHLIGHTS 98% 3.4% 4.5m 7.2% OWN OCCUPANCY NPI GROWTH SQUARE METRES LEASED GEARING High occupancy maintained at Like for like NPI growth at 3.4% Across the global portfolio Headline gearing of 7.2%, with look 98%¹ and WALE of 4.9 years¹ equating to $619 million of annual throu
Slide 8: Results Overview
02 RESULTS OVERVIEW 8 1H FY22 RESULTS
Slide 9: Results Overview
RESULTS OVERVIEW + Cash backed Operating profit of $786.2 million up 28% on 1H21 1H21 1H22 – Operating cash flow for the period reflects the timing differences and the significant Operating profit ($M) 614.9 786.2 investments made into inventories, commensurate with the growth in development activit
Slide 10: Profit and Loss
PROFIT AND LOSS + Half year statutory accounting profit of $2,002.8 million, includes property valuations, Income statement derivative mark-to-markets and other non-cash or non-recurring movements 1H21 1H22 – The Group’s share of global property revaluation gains for 1H22 were $1.5 billion $M $M – A
Slide 11: Balance Sheet
BALANCE SHEET + Strong balance sheet maintained Balance sheet – Gearing 7.2%4 (6.8% in FY21) and 18.7%5 on a look-through basis AS AT AS AT – Period end FX strength marginally increased A$ translated value of foreign denominated assets 30 JUNE 2021 31 DECEMBER 2021 and liabilities $M $M + Movement i
Slide 12: Group Liquidity Position
GROUP LIQUIDITY POSITION + Cash and available lines of credit (excluding Partnership debt and equity) of $2.1 billion as at 31 December 2021 – $719.6 million in cash, $1,340.6 million of available lines – Weighted average debt maturity profile of 6.0 years + Gearing at 7.2%¹ (18.7%² look-through) an
Slide 13: Operational Performance
03 OPERATIONAL PERFORMANCE 13 GOODMAN GROUP 1H FY22 RESULTS
Slide 14: Environmental, Social and Governance
ENVIRONMENTAL, SOCIAL AND GOVERNANCE + During FY22, Goodman continued its concerted efforts to make ESG fundamental to our business and core operations. + Our 2030 Sustainability Strategy provides a blueprint and is a fundamental contributor to our strong performance and long-term strategy. PROPERTY
Slide 15: Property Investment
PROPERTY INVESTMENT + Property fundamentals remain strong throughout the portfolio supporting occupancy, rent Property investments growth and positive re-valuations – Occupancy of 98.4% 1H21 1H22 – WALE of 4.9 years, and is expected to increase as developments underway complete Direct ($M) 32.8 52.6
Slide 16: Development
DEVELOPMENT + Significant global development activity combined with scarcity of supply supporting both Developments value and volume, and WIP now at $12.7 billion – Increased scale and higher value projects has seen the average development period for projects 1H21 1H22 in WIP increase to 22 months,
Slide 17: Management
MANAGEMENT + External AUM of $64.1 billion, up 32% on 1H21 Management – Management earnings up 18% following strong revaluation gains, development completions and acquisitions 1H21 1H22 – Following consistent outperformance of the Partnerships, performance fees of $74 million Management earnings ($M
Slide 18: Management Platform
MANAGEMENT PLATFORM GAIP GHKLP GCLP GNAP GAP GEP GJCP GMT3 GUKP4 AUSTRALIA HONG KONG CHINA USA AUSTRALIA EUROPE JAPAN NEW ZEALAND UK Total assets ($B) 12.8 9.9 6.9 6.6 6.5 6.2 4.5 4.1 2.5 GMG co-investment (%) 29.1 20.3 20 55 19.9 20.4 14.3 24.8 35.5 GMG co-investment ($B) 2.8 1.6 1.0 3.1 1.0 0.8 0.
Slide 19: Outlook
04 OUTLOOK 19 GOODMAN GROUP 1H FY22 RESULTS
Slide 20: Outlook
OUTLOOK + The significant level of customer demand, high utilisation of + Scarcity of land and an increased focus on reducing The concentration of Goodman’s available space, combined with barriers to entry and supply greenfield development, is driving increased intensity of business in targeted loca
Slide 21: Outlook
OUTLOOK + Over the past seven years, management and investment + Maintaining a strong balance sheet and retaining income, earnings growth has been impacted by our asset sales provides significant liquidity, stability and financial program resources for growth and agility to optimise returns + This h
Slide 22: Appendix: Results Analysis
01 APPENDIX RESULTS ANALYSIS 22 GOODMAN GROUP 1H FY22 RESULTS
Slide 23: Profit and Loss
PROFIT AND LOSS Property Non-operating Total investment Management Development Operating expenses items Category $M $M $M $M $M $M Gross property income 69.3 69.2 – – – 0.1 Management income 219.6 – 219.6 – – – Development income1 745.1 – 38.6 706.5 – – Net gain from fair value adjustments on invest
Slide 24: Reconciliation Non-Operating Items
RECONCILIATION NON-OPERATING ITEMS Half year ended 31 Total December 2021 Non-operating items in statutory income statement $M $M Property valuation related movements Net gain from fair value adjustments attributable to investment properties 93.6 Share of net gain from fair value adjustments attribu
Slide 25: Financial Position
FINANCIAL POSITION Property Direct Assets investment Development Other Total As at 31 December 2021 $M $M $M $M $M Cash – – – 719.6 719.6 Receivables – – 183.3 370.7 554.0 Inventories 663.6 – 1,110.8 – 1,774.4 Investment properties 1,709.4 – 56.1 – 1,765.5 Investments accounted for using equity meth
Slide 26: Net Tangible Asset Movement
NET TANGIBLE ASSET MOVEMENT [GRAPH] 26 GOODMAN GROUP 1H FY22 RESULTS
Slide 27: Property Valuations
PROPERTY VALUATIONS + Continued investment demand for logistics assets and a favourable occupational market has supported the valuation growth over the half + Market rental growth, cap rate compression, development completions within the Partnerships and FX have been drivers of the valuation increas
Slide 28: Appendix: Property Investment
02 APPENDIX PROPERTY INVESTMENT 28 GOODMAN GROUP 1H FY22 RESULTS
Slide 29: Leasing
LEASING 4.5m 98.4% SPACE LEASED OCCUPANCY Across the Group and Partnerships: + 4.5 million sqm leased over the 12 months, equating to $619.0 million of annual property income + High occupancy at 98.4%. Average lease Leasing area Net annual rent term Region SQM $M YEARS Australia / New Zealand 1,620,
Slide 30: Customers
CUSTOMERS 30 GOODMAN GROUP 1H FY22 RESULTS
Slide 31: Direct Portfolio Detail
DIRECT PORTFOLIO DETAIL + Long term strategic portfolio with potential for higher and better use, re-zoning and redevelopment + 33 properties with a total value of $2.4¹ billion located primarily in the Sydney market – Represents a significant part of the urban renewal portfolio + Leasing transactio
Slide 32: Appendix: Development
03 APPENDIX DEVELOPMENT 32 GOODMAN GROUP 1H FY22 RESULTS
Slide 33: Developments
DEVELOPMENTS 1H 22 developments As at 31 December 2021 Completions Commencements Work in progress Value ($B) 4.1 5.4 12.7 Area (m sqm) 1.4 1.5 3.4 Yield (%) 6.8 6.4 6.7 Committed (%) 99 53 63 Weighted average lease term (years) 11.2 16.1 14.2 Development for third parties or 65 86 89 Partnerships (%
Slide 34: Appendix: Management
04 APPENDIX MANAGEMENT 34 GOODMAN GROUP 1H FY22 RESULTS
Slide 35: Global Platform
GLOBAL PLATFORM CONTINENTAL EUROPE/UK $10.8BN ASIA THE AUM 127 $22.2BN AMERICAS AUM Properties 75 Properties $6.7BN AUM 22 Properties OUR GLOBAL AUS/NZ NETWORK $28.5BN AUM $68.2BN 172 Assets under management (AUM) Properties 396 Properties 14 Countries 35 GOODMAN GROUP 1H FY22 RESULTS
Slide 36: Management – AUM
MANAGEMENT – AUM + The majority of Goodman’s assets reside in Partnerships – The Group manages 16 Partnerships with 47 investors who are represented on the Boards and Investment Committees independent of Goodman – Goodman maintains a 27% average equity cornerstone position in the Partnerships to ens
Slide 37: Appendix: Capital
05 APPENDIX CAPITAL 37 GOODMAN GROUP 1H FY22 RESULTS
Slide 38: Currency Mix
CURRENCY MIX 38 GOODMAN GROUP 1H FY22 RESULTS
Slide 39: Financial Risk Management
FINANCIAL RISK MANAGEMENT The Group has a robust capital management framework + The Group has a robust capital management framework, under its Financial Risk Management (FRM) policy. This provides: – Stronger balance sheet which has been reflected in our credit ratings from S&P and Moody’s BBB+ / Ba
Slide 40: Financial Risk Management (cont)
FINANCIAL RISK MANAGEMENT (CONT) + Interest rates are hedged to 66% over the next 12 months – Weighted average hedge rate of 1.82%¹ – NZD – hedge rate 1.20% – JPY – hedge rate 1.41% – HKD – hedge rate 1.38% – GBP – hedge rate 1.51% – Euro – hedge rate 0.72%² – USD – hedge rate 3.59% + Weighted avera
Slide 41: Financial Risk Management (cont)
FINANCIAL RISK MANAGEMENT (CONT) Foreign currency denominated balance sheet hedging maturity profile Weighted average Weighted average Amount maturity exchange rate Amount receivable1 payable1 NZ$ 3.1 years 1.0748 A$605.0m NZ$650.0m HK$ 2.7 years 5.7598 A$1,346.6m HK$7,740.0m US$ 3.7 years 0.7252 A$
Slide 42: Exchange Rates
EXCHANGE RATES Statement of financial position – exchange rates as at 31 December 2021 Currency Exchange rate AUDGBP – 0.5432 (30 June 2021: 0.5432) AUDEUR – 0.6327 (30 June 2021: 0.6327) AUDHKD – 5.8222 (30 June 2021: 5.8222) AUDBRL – 3.7528 (30 June 2021: 3.7528) AUDNZD – 1.0739 (30 June 2021: 1.0
Slide 43: Thank You
THANK YOU For more information visit goodman.com Important Notice This document has been prepared by Goodman Group (Goodman Limited (ABN 69 000 123 071) and Goodman Funds Management Limited (ABN 48 067 796 641) (AFSL 223621) as the Responsible Entity for Goodman Industrial Trust (ARSN 091 213 839) a