Summerset Group Holdings Limited · NZX:SUM
Summerset — FY2022 Earnings Presentation
71 slides from Summerset's earnings presentation, Feb 24, 2023
Slide 1: Full year results presentation
Full year results presentation Full Year Report 2022
Slide 2: Agenda
Full Year Report 2022 Full year results presentation Agenda 01 Cyclone Gabrielle 02 Our highlights 03 Our community 2 04 Market fundamentals 05 New Zealand development 06 Australia development 07 Financial performance 08 Business performance 09 Appendix
Slide 3: Cyclone Gabrielle
Full Year Report 2022 Cyclone Gabrielle update Cyclone Gabrielle No material damage to villages, a $250,000 Disaster Relief fund established to support staff ▪ We are incredibly saddened by the large scale of devastation that has occurred in the last week ▪ While the cyclone has passed, there is sti
Slide 4: Cyclone Gabrielle
Full Year Report 2022 Cyclone Gabrielle update Cyclone Gabrielle No material damage to villages, a $250,000 Disaster Relief fund established to support staff ▪ Summerset was well organised and prepared for this type of event. Our Emergency Response Team activated our emergency management plan swiftl
Slide 5: Our highlights
Our highlights 5 Full Year Report 2022 Summerset on the Landing (Kenepuru, Wellington)
Slide 6: FY22 investor highlights
Full Year Report 2022 Our highlights FY22 investor highlights Record full year new and resale settlements of 1,007 total Occupation Rights, up 3% on FY21 Financial performance Record underlying profit of $171.4m, up 21% from $141.1m in FY21 Net operating cash flows of $369.2m Net profit after tax (N
Slide 7: FY22 investor highlights
Full Year Report 2022 Our highlights FY22 investor highlights 651 total units delivered across 12 villages, 18 villages in construction across ten regions in New Zealand New Zealand development A total of 651 units delivered across 12 villages Opened two New Zealand villages in Cambridge (Waipā Dist
Slide 8: Record underlying profit of $171.4m up 21% on FY21
Full Year Report 2022 Our highlights Record underlying profit of $171.4m up 21% on FY21 Uplift in underlying profit driven by strong development returns and growth in deferred management fees $269.1m $369.2m $171.4m Net profit after tax Net operating cash flows Underlying profit FY21 $543.7m FY21 $3
Slide 9: Record underlying profit of $171.4m up 21% on FY21
Full Year Report 2022 Our highlights Record underlying profit of $171.4m up 21% on FY21 Uplift in underlying profit driven by strong development returns and growth in deferred management fees Underlying profit IFRS NPAT $180m $600m $150m $500m $120m $400m $90m $171.4m $300m $543.7m $141.1m $60m $200
Slide 10: Acquisitions – Four new sites acquired in FY22
Full Year Report 2022 Our highlights Acquisitions – Four new sites acquired in FY22 10 Masterton, Approximately 235 Rest home and Memory Drysdale, Approximately 249 Rest home and Memory Wairarapa independent homes hospital-level care care centre independent homes hospital-level care care centre Vict
Slide 11: Our community
Our community 11 Full Year Report 2022
Slide 12: Our residents
Full Year Report 2022 Our community Our residents Bringing the best of life to residents every day ▪ Created a suite of activities and events for residents, including the “Summerset Sessions” virtual entertainment series ▪ Continued our work on medication optimisation to ensure better quality of lif
Slide 13: Lumin – resident portal
Full Year Report 2022 Our community Lumin – resident portal Bringing the best of life to residents every day ▪ Successfully completed the introduction of our purpose built resident platform, Lumin, for residents at Kenepuru ▪ The system will now be integrated into a further eight villages in 2023 ▪
Slide 14: Our staff
Full Year Report 2022 Our community Our staff Our people are an integral part of everything that Summerset offers ▪ The last year was very challenging for our care teams with the emergence of the Omicron Covid-19 variant early in FY22 ▪ Staff did an excellent job keeping residents, visitors and each
Slide 15: Our environment
Full Year Report 2022 Our community Our environment Our sustainability achievements Environmental performance and sustainability ▪ Summerset is a market leader in sustainability within the retirement and aged care sector ▪ Our ESG performance is strong and we continue to perform well on key rating i
Slide 16: Our environment
Full Year Report 2022 Our community Our environment Environmental performance and sustainability Emissions intensity - tCO2e per $million of revenue 60 54 ▪ We have been measuring, managing, and reporting on our 49 carbon footprint since 2017 (our base year) 42 ▪ Our emissions are independently audi
Slide 17: Community support
Full Year Report 2022 Our community Community support Promoting and supporting our communities ▪ We are proud to be increasing the range of organisations we support, and finding sponsorship opportunities that align with our brand and our values Wellington Free Ambulance New Zealand Symphony Orchestr
Slide 18: Market fundamentals
Market fundamentals 18 Full Year Report 2022
Slide 19: Sales price relativity
Full Year Report 2022 Market fundamentals 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 $1,400,000 $1,200,000 $1,200,000 $1,000,000 $1,000,000 $800,000 19 $800,00
Slide 20: Demographics and industry build rates
Full Year Report 2022 Market fundamentals Demographics and industry build rates New Zealand to see strong population growth and undersupply of retirement units New Zealand population growth 75 years and over New Zealand ILU net build rate 30,000 1,200,000 16% 1,000,000 14% 12% 25,000 800,000 10% 600
Slide 21: New Zealand development
New Zealand development 21 Full Year Report 2022 Summerset Mt Denby (Whangārei, Northland)
Slide 22: Development activity
Full Year Report 2022 New Zealand development Development activity New Zealand summary ▪ In FY22 we delivered 651 total units over 12 sites ▪ This included 502 villa deliveries, a Summerset record for a 12 month period ▪ A total of 18 villages in construction across ten regions in New Zealand in FY2
Slide 23: Summerset at Monterey Park, Hobsonville, Auckland
Full Year Report 2022 New Zealand development Summerset at Monterey Park, Hobsonville, Auckland 23 149 independent villas, 73 apartments, 52 serviced Rest home and hospital level Final 14 independent villas due Site progress – December 2022 apartments and main building delivered care available for d
Slide 24: Summerset Cambridge (Waipā District)
Full Year Report 2022 New Zealand development 24 Summerset Mt Denby (Whangārei) Summerset Rototuna (Hamilton) Summerset by the Dunes (Pāpāmoa Beach, Tauranga) Summerset Cambridge (Waipā District)
Slide 25: Summerset at Pōhutukawa Place (Bell Block, New Plymouth)
Full Year Report 2022 New Zealand development 25 Summerset at Pōhutukawa Place (Bell Block, New Plymouth) Summerset Palms (Te Awa, Napier) Summerset Waikanae (Kāpiti Coast) Summerset Boulcott (Lower Hutt, Wellington)
Slide 26: Summerset on the Landing, Kenepuru, Wellington
Full Year Report 2022 New Zealand development Summerset on the Landing, Kenepuru, Wellington 26 101 independent villas and 48 Main building with 86 serviced apartments, 17 care suites, Rest home and hospital level Site progress – December 2022 apartments delivered 26 care beds and 20 memory care apa
Slide 27: Summerset Richmond Ranges, Blenheim, Avonhead, Prebbleton
Full Year Report 2022 New Zealand development 27 Summerset Richmond Ranges (Tasman District) Summerset Blenheim (Marlborough District) Summerset at Avonhead (Christchurch) Summerset Prebbleton (Selwyn District)
Slide 28: Summerset on Cavendish, Casebrook, Christchurch
Full Year Report 2022 New Zealand development Summerset on Cavendish, Casebrook, Christchurch 28 227 independent villas Main building with 56 serviced apartments, 43 care beds Rest home and hospital level care Site progress - December 2022 delivered and 20 memory care apartments delivered available
Slide 29: New Zealand development pipeline
Full Year Report 2022 New Zealand development New Zealand development pipeline Diversified development pipeline with 23 sites in FY22 29 * New sites purchased in FY22
Slide 30: Australia development
Australia development 30 Full Year Report 2022
Slide 31: Development activity
Full Year Report 2022 Australia development Summerset Craigieburn Summerset Mernda Development activity Summerset Chirnside Park Australia summary Melbourne CBD ▪ Our expansion into Australia continues to show excellent progress, now have seven Australian sites after the Summerset Oakleigh South acq
Slide 32: Artist impressions of Australian villages
Full Year Report 2022 Australia development 32 Artist impression: Summerset Chirnside Park (Melbourne) Artist impression: Summerset Craigieburn (Melbourne) Artist impression: Summerset Oakleigh South (Melbourne) Artist impression: Summerset Torquay (Victoria)
Slide 33: Australia development pipeline
Full Year Report 2022 Australia development Australia development pipeline Excellent progress made in growing our Australian pipeline 33 * New sites purchased in FY22
Slide 34: Financial performance
Financial performance 34 Full Year Report 2022 Serviced apartment, Summerset on Cavendish (Casebrook, Christchurch) 34
Slide 35: Reported profit (IFRS)
Full Year Report 2022 Financial performance Reported profit (IFRS) Total revenue NZ$m FY22 238.7 FY21 205.3 Variance 16% FY20 172.4 Reversal of impairment on land & - 3.4 - - ▪ IFRS NPAT of $269.1m, with $134.4m achieved buildings across 2H22 Fair value movement of investment 268.8 537.5 (50%) 221.1
Slide 36: Fair value movement
Full Year Report 2022 Financial performance Fair value movement ▪ FY22 fair value movement of $268.8m, with $268.8m $222.2m Fair value movement Increase from new $132.1m in 2H22 compared to $136.7m in 1H22 units delivered ▪ Fair value movement has been driven by: ▪ New units built ($222.2m): Value o
Slide 37: Underlying profit
Full Year Report 2022 Financial performance Underlying profit ▪ Underlying profit of $171.4m, a full year record and $171.4m 21% Underlying profit Increase on FY21 up 21% on FY21 ▪ Realised development margin of $104.9m, a 34% increase, average margin of $195k per unit NZ$m FY22 FY21 Variance FY20 ▪
Slide 38: Cash flows
Full Year Report 2022 Financial performance Cash flows ▪ Net operating cash flows of $369.2m, down 4% from $369.2m 4% Net operating cash flows Decrease on FY21 $383.4m at FY21 with key movements being: ▪ Increased expenses due to portfolio growth and inflationary cost pressures NZ$m FY22 FY21 Varian
Slide 39: Free cash flows
Full Year Report 2022 Financial performance Free cash flows* ▪ Summerset’s current business model has a strong $236.5m 9.5% Steady state free cash flows Return on assets emphasis towards growth, meaning our portfolio is relatively young Free cash flows (FY22 vs steady state) ▪ Over 50% of our units
Slide 40: Balance sheet
Full Year Report 2022 Financial performance Balance sheet ▪ Total assets of $5.8b, up 19% on FY21 driven by $5.8b $1.8b Total assets 19% Retained 15% portfolio growth and the underlying value in our existing villages earnings ▪ Investment property valuation of $5.4b, up 18% on NZ$m FY22 FY21 Varianc
Slide 41: Net tangible assets and gearing
Full Year Report 2022 Financial performance Net tangible assets Strong financial disciplines underpinning net tangible assets and gearing Net tangible assets and gearing* Summerset net tangible assets per share $14 40.0% $10 $9.44 34.5% 33.9% $9 35.0% $12 32.4% $8 28.0% 30.0% $10 $7 Gearing ratio (%
Slide 42: Gearing ratio
Full Year Report 2022 Financial performance Gearing ratio ▪ Net debt of $1,049m* at FY22, up from $860.3m* at 32.4% 35.3% Gearing ratio Bank & bond LVR 1H22 Net debt to underlying assets ▪ Uplift in gross debt driven by increased construction $234m excess assets activity across our developing villag
Slide 43: Project cash profits
Full Year Report 2022 Financial performance Project cash profits ▪ Summerset developments produce positive net 18 $250m+ Villages under Projected net cash cash flows (net cash position) upon completion, this means they carry no debt once built construction position ▪ The net cash position represents
Slide 44: Funding
Full Year Report 2022 Financial performance Funding ▪ Bank facility approximately $1.2b, with existing $1.2b $375m Bank facility Retail bonds $375.0m of retail bonds Funding maturity profile ▪ Bank facility has undrawn capacity at $493.5m at $600m FY22 ▪ 64% of drawn debt is hedged at fixed interest
Slide 45: Final dividend
Full Year Report 2022 Financial performance Final dividend Declared FY22 final dividend of 11.6 cents per share Gross dividend payout per year ▪ The Board has declared an unimputed final dividend $60m of 11.6 cents per share, being 30% of underlying $50m profit $40m ▪ This represents a payout for FY
Slide 46: Business performance
Business performance 46 Full Year Report 2022 Cottage, Summerset Pōhutukawa Place (Bell Block, New Plymouth)
Slide 47: Retirement unit delivery
Full Year Report 2022 Business performance Retirement unit delivery 651 total units delivered in the period, includes 588 Retirement units 651 Total units a record 502 villas delivered delivered ▪ 651 total units delivered in the period across 12 Retirement units Care units villages, including 588 r
Slide 48: Development margin
Full Year Report 2022 Business performance Development margin Record realised development margin of 30% $104.9m $104.9m, with a 30% development margin Development margin Realised margin 34% ▪ Record full year realised development margin of Realised development margin $104.9m, an increase of 34% on F
Slide 49: New sales
Full Year Report 2022 Business performance New sales Record gross proceeds of $353.4m from 537 537 $353.4m new sales New sales of Gross proceeds 4% ▪ 537 new sales of Occupation Rights in FY22, in line Occupation Rights with the 540 settled in FY21 New sales FY22 FY21 Variance FY20 ▪ Record gross pr
Slide 50: New sales stock
Full Year Report 2022 Business performance New sales stock 308 uncontracted stock as at FY22, impacted 308 5.4% by delivery timing weighted to Q422 Uncontracted Percentage of new sale stock uncontracted stock ▪ Uncontracted stock as a % of total portfolio of 5.4% remains in line with FY21 (5.2%) New
Slide 51: New sales performance
Full Year Report 2022 Business performance New sales performance New sale settlements and total ORA unit delivery Annual new sales contracts 800 800 600 540 600 537 414 404 382 400 339 329 400 671 651 541 508 506 200 413 200 354 - - Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec FY16 FY17 FY18 FY19
Slide 52: Resales
Full Year Report 2022 Business performance Resales Record realised resale gain of $70.2m, up 17% 470 $70.2m on 470 resales Resales of Occupation Realised resale 17% Rights gain ▪ Total gross proceeds of $263.6m, up 14% on FY21 with higher average gross proceeds per unit and Resales FY22 FY21 Varianc
Slide 53: Embedded value
Full Year Report 2022 Business performance Embedded value Embedded value now $1.5b, up 9% on FY21 $1.5b $1.0b Embedded value Embedded resale gain ▪ Total embedded value now $1.5b, having increased Embedded value from $1.4b at FY21, a 9% uplift $1,600m $1,600m ▪ Embedded value comprised of: $1,400m $
Slide 54: Resale stock
Full Year Report 2022 Business performance Resale stock Available resale stock remains at low levels 150 2.6% with a good pool of units available for FY23 Uncontracted Percentage of resale stock uncontracted stock ▪ Resale stock has increased from 198 units at FY21 to 266 units at FY22 Resales stock
Slide 55: Resale performance
Full Year Report 2022 Business performance Resale performance Resale settlements Annual resale contracts 500 600 500 400 400 300 300 438 470 200 381 323 200 300 301 244 100 100 - - FY16 FY17 FY18 FY19 FY20 FY21 FY22 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 55 2022 2021 2020 2019 Realised resa
Slide 56: Questions
a merset Questions °
Slide 57: Disclaimer
Full Year Report 2022 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 Care centre valuation 07 Summerset growth 08 Customer profile and occupancy Summerset Richmond Ranges (Tasman)
Slide 59: Summerset overview
Full Year Report 2022 Appendix Summerset overview Diversified portfolio throughout New Zealand Our people Our care Our portfolio 7,400+ 1,161 5,518 Residents Care units in Retirement units portfolio in portfolio 2,400+ 1,379 5,985 59 Staff members Care units in Retirement units land bank in land ban
Slide 60: Portfolio as at 31 December 2022
Full Year Report 2022 Appendix Portfolio as at 31 December 2022 6,679 total units including 5,518 retirement units and 1,161 care units Existing portfolio - as at 31 December 2022 Retirement units Care units Total units and Serviced Memory care Care Care care beds Village Villas Apartments apartment
Slide 61: Portfolio as at 31 December 2022
Full Year Report 2022 Appendix Portfolio as at 31 December 2022 6,679 total units including 5,518 retirement units and 1,161 care units Existing portfolio - as at 31 December 2022 Retirement units Care units Total units and Serviced Memory care Care Care care beds Village Villas Apartments apartment
Slide 62: Future development
Full Year Report 2022 Appendix Future development Largest New Zealand land bank for a retirement village operator of 5,224 units and beds Land bank – as at 31 December 2022 Retirement units Care units Serviced Memory care Total units and Village Villas Apartments Care suites Care beds apartments apa
Slide 63: Future development
Full Year Report 2022 Appendix Future development Largest New Zealand land bank for a retirement village operator of 5,224 units and beds Landbank – as at 31 December 2022 Retirement units Care units Serviced Memory care Total units and Village Villas Apartments Care suites Care beds apartments apar
Slide 64: FY22 underlying profit reconciliation
Full Year Report 2022 Appendix FY22 underlying profit reconciliation Reconciliation of underlying profit to reported net profit after tax FY22 FY21 Variance FY20 Net profit before tax (IFRS) 265.1 543.6 (51%) 221.7 Net profit after tax (IFRS) 269.1 543.7 (51%) 230.8 Less reversal of impairment on la
Slide 65: Historical trends
Full Year Report 2022 Appendix Historical trends Underlying profit 11 year CAGR of 32% since listing 11 Year FY11 NZX Full Year Results FY22 FY21 FY20 FY19 FY18 CAGR* listed New sales of Occupation Rights 16% 537 540 404 329 339 108 Operational Resales of Occupation Rights 13% 470 438 381 323 301 12
Slide 66: Fair value movement
Full Year Report 2022 Appendix Fair value movement Fair value movement of investment property – key assumptions Value of Fair value movement of Fair value investment Key valuation assumptions investment property gain/(loss) property* Discount Growth rate Growth rate Growth rate Growth rate Growth ra
Slide 67: Fair value movement
Full Year Report 2022 Appendix Fair value movement Fair value movement of investment property – key assumptions Value of Fair value movement of Fair value investment Key valuation assumptions investment property gain/(loss) property* Discount Growth rate Growth rate Growth rate Growth rate Growth ra
Slide 68: Care centre valuation
Full Year Report 2022 Appendix Care centre valuation Care centre valuation – key assumptions Value of Total care beds Total care units Assumed Assumed value Value of care facilities care facility (non ORA) (ORA) capitalisation rate per bed** (incl. ORA) Village Location No. NZ$m % NZ$'000 Summerset
Slide 69: Summerset growth
Full Year Report 2022 Appendix Summerset growth 25 years of consistent delivery and growth Summerset build rate 8,000 7,000 6,679 6,028 651 6,000 5,357 671 4,944 413 5,000 4,590 69 354 4,084 506 Units 4,000 3,576 508 3,035 541 3,000 2,601 434 6,028 2,297 5,357 304 4,944 1,973 4,590 1,813 324 4,084 2
Slide 70: Customer profile & occupancy
Full Year Report 2022 Appendix Customer profile & occupancy Occupancy, tenure and resident demographic statistics Occupancy – retirement villages Occupancy – established care centres 100% 100% 80% 80% 60% 60% 97% 96% 96% 96% 95% 96% 96% 96% 97% 93% 40% 40% 20% 20% 70 - - FY18 FY19 FY20 FY21 FY22 FY1
Slide 71: Ngā mihi
Ngā mihi For more information: 71 Will Wright Chief Financial Officer will.wright@summerset.co.nz 021 490 251
Summerset Group Holdings — FY2022 Earnings Presentation on 6ix