Cromwell Property Group · ASX:CMW
Cromwell Property — FY2021 Earnings Presentation
50 slides from Cromwell Property's earnings presentation, Aug 26, 2021
Slide 1: FY21 Results Presentation ASX cover letter
Thursday 26 August 2021 ASX Market Announcements Office Exchange Centre 20 Bridge Street SYDNEY NSW 2000 Dear Sir/Madam Cromwell Property Group (ASX:CMW) FY21 Results Presentation I attach a copy of Cromwell Property Group’s FY21 Results Presentation. Yours faithfully CROMWELL PROPERTY GROUP LUCY LA
Slide 2: FY21 Results Presentation
FY21 Results Presentation 26 August 2021 CROMWELL PROPERTY GROUP
Slide 3: Important Information & Disclaimer
Important Information & Disclaimer This presentation including its appendices they deem necessary or consider appropriate for their Fund ARSN 165 011 905 (DPF), Cromwell Ipswich City (Presentation) is dated 26 August 2021 and has been particular jurisdiction. Heart Trust ARSN 154 498 923 (ICH), Crom
Slide 4: Agenda
Agenda Introduction and Board Composition Chair Dr Gary Weiss, AM FY21 Results Overview Acting CEO Michael Wilde Financial Results and Capital Management Acting CFO Brett Hinton Property Investment Head of Property Bobby Binning Funds Management CIO Rob Percy Retail Funds Management Head of Retail F
Slide 5: Cromwell Property Group Overview
Cromwell Property Group Overview Introduction BroadPortfolio Fund Management Platform Geographic and Culturally Diverse Team Asset Management Expertise $11.9 billion 460+ 226 Total AUM people properties $7.6 billion Total Third Party FUM 15 3.4 million countries sqm Comprising $5.2 billion Wholesale
Slide 6: Cromwell's Operating Platform
Cromwell’s Operating Platform Introduction Operating Across Three Continents and 15 Countries Total AUM by Sector EUROPE 3.5% $5.9 10.8% Office 6.1% Retail billion Industrial / Logistics 13.6% Other 66.0% Property Securities SINGAPORE CEREIT Total AUM by Geography Manager AUSTRALIA $5.0 8.2% Total A
Slide 7: Cromwell's Objective
Cromwell’s Objective Introduction Cromwell’s Objective Cromwell’s investors and capital partners benefit from… Strategic portfolio construction and rigorous investment Actively 1 selection and due diligence processes invest, develop and manage commercial property assets Local on-the-ground teams wit
Slide 8: New Chair, Refreshed Board and New CEO
New Chair, Refreshed Board and New CEO Introduction Chronology of Events Sep 2020 Dr Gary Weiss and Joe Gersh elected to Board by securityholder vote Dec 2020 CEO Paul Weightman retires from Cromwell with CFO Michael Wilde appointed as Acting CEO Mar 2021 Rob Blain and Eng Peng Ooi join the Board. J
Slide 9: FY21 Results Overview
FY21 Results Overview CROMWELL PROPERTY GROUP
Slide 10: FY21 Financial Summary
FY21 Financial Summary FY21 Results Overview Earnings and Distributions Financial Position Statutory profit1 NTA per unit Liquidity3 $308.2 million A 73.5% increase on the FY20 result $1.02 $675 million (equivalent to 11.78 cps) of $177.6 million (FY20 $0.99) Underlying operating profit1 Weighted av
Slide 11: FY21 Operational Summary
FY21 Operational Summary FY21 Results Overview Property Investment Fund and asset management Portfolio Value WACR Total Third Party FUM Assets 5.5% $7.6 billion 226 $3.9 billion (FY20 $7.3 billion) A 5% increase on the FY20 result of $3.7 billion WALE Wholesale FUM Tenant-Customers 5.9 years $5.2 bi
Slide 12: Key Achievements
Key Achievements FY21 Results Overview FY21 Previously Stated Priorities FY21 Progress and Key Operational Highlights Property Investment Performance resilient through COVID-19 with only $0.6 million of rent Optimise performance of Core 1 Australian property portfolio waived and $9.6 million deferre
Slide 13: ESG Drives Operational Resilience
ESG Drives Operational Resilience Overview ESG and Sustainability Framework 2021 Initiatives Global deployment of Business Continuity Plans ensuring continued operations throughout COVID-19 ISO accreditation covering our environmental and information technology management practices in Australia Cert
Slide 14: ESG Performance Reflected In Benchmarks
ESG Performance Reflected In Benchmarks Integrating ESG into business and delivering good corporate governance and practices MSCI ESG Rating Sustainalytics ESG Risk Rating ISS QualityScore as at October 2020 as at January 2021 as at May 2021 AA 9.9 Social 1 E&S Disclosure Environment 3 Negligible Ri
Slide 15: Financial Results and Capital Management
Financial Results and Capital Management CROMWELL PROPERTY GROUP
Slide 16: FY21 Headline Results
FY21 Headline Results Financial Results and Capital Management Commentary FY21 Performance Versus PCP Statutory profit of $308.2 million, equivalent to 11.78 cps, a FY21 FY20 Change 72.7% increase primarily due to a higher fair value gain on investment properties versus FY20 Statutory profit ($m)1
Slide 17: FY21 Segment Results
FY21 Segment Results Financial Results and Capital Management Commentary FY21 Segment Profit1 Versus Prior Comparable Period Property Investment FY21 FY20 Change ($m) ($m) Property investment (direct and indirect) comprises more than 80% of profit before non-allocated items. Profit of $193.6 million
Slide 18: Debt Reprofiled and Extended
Debt Reprofiled and Extended Financial Results and Capital Management Debt Profile and Balance Sheet Group Gearing1 60.00 Gearing is 42%, unchanged on the previous year, with 55.00 various strategies being considered to reduce gearing to 50.00 the target range of 30% – 40% 45.00 40.00 Weighted a
Slide 19: Strong Capital and Cash Flow Position
Strong Capital and Cash Flow Position Financial Results and Capital Management Substantial Headroom to Covenants Operating Profit to Cashflow Reconciliation Facility Covenant Actual Limit Headroom (value) on Aggregate LVR 37% 60.0% $1.1 billion Value Senior 6.1 3.0 Secured WALE 3.1 years $190.6 year
Slide 20: Property Investment
Property Investment CROMWELL PROPERTY GROUP
Slide 21: Property Investment Overview
Property Investment Overview Property Investment Key Property Investment Metrics1 Cromwell’s Objectives Assets Valuation WACR WALE Occupancy Manage leasing expiries, maximise Australia 18 $3.1 billion 5.4% 6.1 years 94.7% cashflow and recycle capital faster DIRECT Valuation Grow footfall at centres,
Slide 22: Property Investment Overview
Property Investment Overview Property Investment Valuation impacts – Australia Valuation Impacts – Italy Valuation Impacts – Poland 12 of 18 Australian assets were All Italian assets were independently All Polish assets were independently independently revalued as at 30 revalued as at 30 June
Slide 23: Australian Portfolio Update
Australian Portfolio Update Property Investment Robust performance reflected in increased asset valuations FY21 COVID-19 position – Australian portfolio 18 assets with book value of $3.1 billion $180.0 $175.7 $160.0 Weighted Average Lease Expiry of 6.1 years (FY20 6.2 $140.0 years) and occupancy
Slide 24: Australian Portfolio Update
Australian Portfolio Update Property Investment Lease Expiry Profile Remains Favourable Cromwell Lease Expiry Profile1 70.0% 65.0% Vacancy by gross passing income of 6.0%, with approximately 7% of leases expiring each year on average 60.0% over the next four years 50.0% 47% of gross income from
Slide 25: Polish Portfolio Update
Polish Portfolio Update Property Investment Polish Shopping Centres Perform Well Monthly Portfolio Footfall Over Pandemic1 3.5m The portfolio contains six catchment dominant 2019 2020 2021 shopping centres plus a 50% interest in a seventh 3.0m 2.5m All centres anchored by hypermarket/grocery Mil
Slide 26: Italian Portfolio Update
Italian Portfolio Update Property Investment Italian Logistics Assets Unimpacted By Pandemic Commentary Value (€m) WALE Occupancy Valuation Details June 21 (years) (%) Cromwell is the owner of seven logistics assets in Carugate 23.5 10.3 100.0% Northern Italy which were acquired for €51 million ($
Slide 27: CEREIT Investment Update
CEREIT Investment Update Property Investment Cromwell’s 28% interest is valued at $621 million Key statistics Sector diversification Cromwell’s 28.0% equity accounted share of CEREIT’s profit Book value (28.0%) Light 5% for the year was $43.3 million (FY20: $47.5 million) Industrial / $621 million
Slide 28: LDK Update – Strong Sales At Greenway Views
LDK Update – Strong Sales At Greenway Views Property Investment LDK Greenway Views – Strong Sales continue Cromwell has a 50% interest in LDK Healthcare (LDK) which owns two operational Seniors Living villages; The Landings and Greenway Views The Landings, a 220 home Seniors Living village on th
Slide 29: Fund and Asset Management
Fund and Asset Management CROMWELL PROPERTY GROUP
Slide 30: Fund and Asset Management – Overview
Fund and Asset Management – Overview Fund and Asset Management Key Metrics1 Commentary Third Party Funds Under Management Wholesale Opportunity remains to FUM Funds FY21 profit scale post COVID-19, Australasia 13% $5.2 with a number of new $8.8 million fund initiatives recently Chatswood 4% billion
Slide 31: Wholesale Funds – Opportunity to drive FUM Growth
Wholesale Funds – Opportunity to drive FUM Growth Fund and Asset Management European Platform Update European FUM by Region (€ billion) €3.7 billion FUM with 80% underpinned by longer dated capital (FY20 €3.5 billion, 78%) Italy € 0.4 € 0.7 UK Transactional activity slowed during the year due to
Slide 32: Wholesale Funds – New Wooden Building Fund
Wholesale Funds – New Wooden Building Fund Fund and Asset Management A truly sustainable investment opportunity Fund Characteristics The pan-European Cromwell Dasos Wooden Building Fund Target Target is a compelling investment vehicle providing institutions and professional investors with unique a
Slide 33: Retail Funds – Strong Demand Continues
Retail Funds – Strong Demand Continues Fund and Asset Management Cromwell Property Trust 12 (C12) During the year the Rand Distribution Centre in Direk, South Australia sold for $63 million, a $10 million premium to book value. Unitholders received the proceeds via a special distribution C12 now
Slide 34: Retail Funds – Oyster and Phoenix Portfolios
Retail Funds – Oyster and Phoenix Portfolios Fund and Asset Management Phoenix Portfolios (45% interest) is a boutique listed securities manager Cromwell Phoenix Property Securities Fund retains highly recommended rating from two major independent research houses. #1 performing Australian proper
Slide 35: Fund and Asset Management - Global Development Pipeline
Fund and Asset Management - Global Development Pipeline CROMWELL PROPERTY GROUP
Slide 36: Development Pipeline – Opportunity Identification
Development Pipeline – Opportunity Identification Fund and Asset Management 29 projects across ten different countries at various stages of assessment, planning, approvals and construction Stage 1 Stage 2 Stage 3 Stage 4 Stages 2 – 4: Initial Concept Planning Construction Estimated Assessment Planni
Slide 37: Development Pipeline – Projects Underway
Development Pipeline – Projects Underway Fund and Asset Management Four projects with estimated end development value of $659 million currently underway and a further six with an estimated end development value of $1.5 billion have passed initial feasibility assessments Greenway Views, Seniors Livin
Slide 38: Outlook
Outlook CROMWELL PROPERTY GROUP
Slide 39: FY22 Outlook
FY22 Outlook Outlook FY22 Priorities Objectives Strategy Process Welcome incoming CEO and complete Update will be provided to the market once a formal strategy has been 1 strategy and business model review approved by the Board Property Investment Optimise performance of Core Australian Maximise NOI
Slide 40: FY22 Outlook
FY22 Outlook Outlook FY22 Outlook Outlook continues Guidance to be impacted by global pandemic For further information please contact: The economic and social impacts of the pandemic will continue to cause uncertainty and dislocation throughout FY22 and are likely to impact market Michael Wilde Ac
Slide 41: Appendices
Appendices CROMWELL PROPERTY GROUP
Slide 42: Appendices Contents
Appendices Contents 42 FY21 Operating and Statutory Profit Reconciliation 43 Segment Result - Operating Earnings Detail 44 Property Portfolio - Top 10 Assets 45 Property Portfolio - Top 10 Leases 46 Property Portfolio - Net Property Income 47 Property Portfolio - Movement in Book Value 48 Property P
Slide 43: FY21 Operating and Statutory Profit Reconciliation
FY21 Operating and Statutory Profit Reconciliation Appendix FY21 ($M) FY20 ($M) Profit from operations 192.2 221.1 Operating EPS (cents per security) 7.35 cps 8.53 cps Gain on sale of investment properties 5.9 3.3 Loss on sale of listed securities - (3.6) Other transaction costs (7.7) (23.4) Operati
Slide 44: Segment Results – Operating Earnings Detail
Segment Results – Operating Earnings Detail Appendix Property Investment Property Investment Fund And Asset Full Year ending 30 June 2021 Direct Indirect Management ($M) ($M) ($M) FY21 Segment revenue Rental income and recoverable outgoings 278.9 - - 278.9 Operating profits of equity accounted inves
Slide 45: Top Assets
Top 10 Assets1 Appendix Current Market Value Occupancy % Asset State Class ($M) Cap Rate by NLA WALE Major Tenants Qantas HQ, Mascot, Sydney NSW Office 550.0 4.75% 100.0% 10.4 years Qantas Airways Limited 400 George Street, Brisbane QLD Office 542.0 5.25% 92.0% 4.6 years QLD State Government, Federa
Slide 46: Top Leases
Top 10 Leases1 Appendix Tenant-customer Tenant Classification Expiry Date % of Portfolio Rental Income Qantas Airways Limited Listed Company/Subsidiary Dec-32 16.4% Commonwealth of Australia (Dept of Social Services) Government Authority Sep-32 9.1% QLD State Government Government Authority Dec-26 8
Slide 47: Net Property Income
Net Property Income Appendix FY21 ($M) FY20 ($M) Variance ($M) Variance (%) Village Cinema, Geelong 1.7 1.3 0.4 30.8% Regent Cinema Centre, Albury 1.3 1.1 0.2 18.2% Kent Street, Sydney 18.4 16.3 2.1 12.9% Soward Way, Greenway 16.2 15.4 0.8 5.2% Northbourne Ave, Lyneham 2.7 2.6 0.1 3.8% HQ North Towe
Slide 48: Movement In Book Value
Movement In Book Value Appendix Strategy of continuously improving portfolio through acquisitions since 2010 In-sourced facilities management model also lowers lifecycle capex FY21 FY20 FY19 FY18 FY17 FY16 FY15 FY14 FY13 FY12 FY11 FY10 ($M) ($M) ($M) ($M) ($M) ($M) ($M) ($M) ($M) ($M) ($M) ($M)
Slide 49: Balance Sheet Debt Details
Balance Sheet Debt Details Appendix Drawn Commitment Maturity Fin Yr Years Facility Covenants (AUD $M) (AUD $M) Date Expiry Remaining Jun-2023 Bank 1 - 5 Year Facility 100.0 100.0 2023 2.0 Bank 2 - 5 Year Facility - 250.0 Jun-2025 2025 4.0 Bank 3 - 5 Year Facility 239.0 250.0 Jun-2026 2026 5.0 Bank
Slide 50: Cromwell Property Group
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Cromwell Property Group — FY2021 Earnings Presentation on 6ix