Slide 1: Cromwell Property Group FY24 Results Presentation
Thursday 29 August 2024 ASX Market Announcements Office Exchange Centre 20 Bridge Street SYDNEY NSW 2000 To whom it may concern Cromwell Property Group (ASX:CMW) FY24 Results Presentation I attach a copy of Cromwell Property Group’s FY24 Results Presentation. Yours faithfully CROMWELL PROPERTY GROUP
Slide 2: Cromwell Property Group FY24 results presentation
Cromwell Property Group FY24 results presentation 29 August 2024 C R O M W E L L P R O P E R T Y G R O U P | F Y 2 4 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 4 R E S U L T S 2
Slide 4: Agenda
Agenda Introduction Dr Gary Weiss AM, Chair Results overview Jonathan Callaghan, CEO Acknowledgement of Country Financial results and capital management Michelle Dance, CFO Cromwell Property Group acknowledges and pays respects to past, present, and future Traditional Custodians and Elders of Austra
Slide 5: Key achievements
Key achievements Solid performing portfolio of Strategic asset sales achieved Platform set for growth core assets • $1.6 billion of assets sold or contracted for • Leasing across the Investment Portfolio • Focus remains on growth of local platform sale since 2022, dramatically simplifying remains st
Slide 6: Business transformation update
Business transformation update C R O M W E L L P R O P E R T Y G R O U P | F Y 2 4 R E S U L T S 207 Kent Street, Sydney 5
Slide 7: Europe sale provides solid foundation for growth
Europe sale provides solid foundation for growth • Sale of the European platform for €280 million1 / $457 million. Significant business Refocus on local core simplification funds management skills • This simplification will refocus the business on local growth opportunities, backed by a strong activ
Slide 8: Strong locally focused platform
Strong locally focused platform Australia New Zealand Investment Portfolio Funds Management Oyster Fully integrated platform Active asset manager $2.2 billion $1.5 billion $0.8 billion Total AUM1 Total AUM Total AUM Building value and efficiency through Driving positive leasing outcomes. integrated
Slide 9: Annual Results
Annual Results Financial year ended 30 June 2024 C R O M W E L L P R O P E R T Y G R O U P | F Y 2 4 R E S U L T S Level 10, 100 Creek Street, Brisbane 8
Slide 10: FY24 financial summary
FY24 financial summary Overview Financial position Statutory loss1 Underlying operating profit1 NTA per unit Liquidity2 $531.6 million $136.7 million $0.61 $292.3 million (equivalent to loss of 20.3 cps) (equivalent to 5.22cps) (FY23 $0.84) (FY23 $289 million) Distributions AFFO Headline gearing3 Lo
Slide 11: ESG remains a key focus
ESG remains a key focus Strategic achievements Base Building GreenPower coverage1 Australian tenant satisfaction Gender diversity progress in Australia score (FY23) 97% 88% 40:40:20 where Cromwell directly manages electricity achieved in 4/6 levels of business contracts 8.6% above index2 Base Buildi
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 G R O U P | F Y 2 4 R E S U L T S Soward Way, Greenway 11
Slide 13: FY24 headline results
FY24 headline results • Statutory loss for the year to 30 June 2024 of $531.6 million, driven by valuation FY24 FY23 Change changes: • Unrealised fair value losses on the Australian Investment Portfolio of Statutory loss ($m)1 (531.6) (443.8) (19.8%) $315.1 million ($300.8 million on a like-for-like
Slide 14: FY24 earnings overview
FY24 earnings overview FY24 ($’M) FY23 ($’M) Change (%) Australian Investment Portfolio EBIT 156.6 161.2 (2.9%) Australian Investment Portfolio impacted by asset sales. Like for like NOI increased 0.3%. Funds and Asset Management Australian EBIT impacted by valuation Australia EBIT 8.5 28.8 (70.5%)
Slide 15: Net tangible asset (NTA)
Net tangible asset (NTA) • Reduction in NTA largely due to asset revaluations and impairments to discontinued operations, including: • Australian Investment Portfolio down -7% 1H24 and -5% 2H24 • $296.2 million reduction to reflect sale prices and exit costs from sale of CPRF and sale of the Europea
Slide 16: Lower gearing and simpler funding structure
Lower gearing and simpler funding structure Debt and gearing positions Debt expiry profile at 30 June 2024 $2,000 60% $1,000 Current liquidity1 Millions Net debt in AUD Millions $1,800 $900 $1,600 50% $800 $292.3 million $1,400 Gearing levels % 40% $700 $1,200 $600 $1,000 30% Weighted average $500 c
Slide 17: Debt and hedging in step with strategy execution
Debt and hedging in step with strategy execution • Conversion of a $1.2 billion multi-bank lending facility to a green CMW Hedge Profile and sustainability-linked loan, targeting ambitious reduced emissions targets and gender pay gap. 100% 7% • Remaining €55 million of Unsecured Facility was repaid
Slide 18: Investment Portfolio
Investment Portfolio C R O M W E L L P R O P E R T Y G R O U P | F Y 2 4 R E S U L T S HQ North, Fortitude Valley, Brisbane 17 17
Slide 19: Resilient portfolio through market cycle
Resilient portfolio through market cycle Occupancy and leasing remains robust Portfolio value • A high-quality portfolio of eight office assets focused on Australia's east coast with NLA of 247k sqm and valued $2.2 billion at $2.2 billion (-5% on 31 December 2023 valuations). • Strategic asset manag
Slide 20: High quality portfolio drives ongoing leasing success
High quality portfolio drives ongoing leasing 100 Creek Street, Brisbane success • Leasing markets continued to be active with more than 40,000sqm Diversification by state 1 leased during the year . (Value) 1 • Portfolio WALE to 5.4 years , slight increase on FY23 of 5.3 years. 11% • Income security
Slide 21: Leasing success reduces near-term expiry risks
Leasing success reduces near-term expiry risks • Lease renewals with 2 major tenants at HQ North Tower, AECOM (6,600sqm) and • Tenant retention has helped to improve the WALE of the portfolio from 5.3 years at 1 TechOne (9,600sqm) recommitting to the building for 7-year terms each, and Metro 30 June
Slide 22: Asset upgrades drive portfolio strength
Asset upgrades drive portfolio strength Targeted asset upgrades drive leasing success and tenant satisfaction • McKell Building conversion of outdated commercial gas-fired heating system to an electric heat-recovery reverse cycle heating, ventilation, and air conditioning (HVAC) system, driving ESG
Slide 23: Asset upgrades drive portfolio strength: HQ North ESG case study
Asset upgrades drive portfolio strength HQ North ESG case study • Major capital improvement project and electrification programme at HQ North, 540 Wickham Street, Fortitude Valley, QLD has assisted two key lease renewals, helping to achieve tenant ESG goals. • Works undertaken: • Removal of the gas
Slide 24: Funds and asset management
Funds and asset management C R O M W E L L P R O P E R T Y G R O U P | F Y 2 4 R E S U L T S 545 Queen Street, Brisbane 23
Slide 25: Australia / New Zealand funds management
Australia / New Zealand funds management Key activities • Ongoing management of $2.3 billion across nine products in Funds management Australian funds management Australia and New Zealand. by product split Product breakdown by value • Cromwell Direct Property Fund: • Portfolio1 of 6 high quality, co
Slide 26: European funds management
European funds management Key activities • Funds under management in Europe were $6.2 billion at 30 June Europe FUM Breakdown 2024. • Platform mandate deployment gained momentum with improved volumes during second half FY24, although investment activity overall remains low. • CEREIT sold five assets
Slide 27: 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 | F Y 2 4 R E S U L T S Farrer Place, Queanbeyan 26
Slide 28: Co-investments
Co-investments Cromwell Direct Property Fund Cromwell European REIT Cromwell Italy Urban Logistics Fund (CDPF) (CEREIT) (CIULF) • Cromwell holds a co-investment position • Cromwell’s 27.8% share reflects value as • Cromwell’s 50% share of the portfolio will of 4.2% in CDPF, valued at $12.3 million.
Slide 29: Strategic focus
Strategic focus C R O M W E L L P R O P E R T Y G R O U P | F Y 2 4 R E S U L T S 28 28
Slide 30: Strategy overview
Strategy overview We will be an Serving specialising in Australian capital retail, wholesale and traditional light fund manager strategic institutional Australian property investors sectors C R O M W E L L P R O P E R T Y G R O U P | F Y 2 4 R E S U L T S 29
Slide 31: Market segment
Market segment We will continue to driving value from assets in Australian core markets to facilitate transition to an growth through the cycle. Australian capital light We will occupy a distinct We will leverage cyclical We will deploy our balance space in the market focused drivers and match capit
Slide 32: Capital sources
Capital sources We will serve Retail investors Wholesale investors Institutional investors retail, wholesale Retail investors who focus on defensive, income-oriented Self-Managed Super Funds and High Net Worth investors who may Strategic partnerships with Institutional investment groups. and investm
Slide 33: Sector opportunities
Sector opportunities We will focus on Office Industrial Retail traditional Australian Well located, core/core+ office Smaller lot infill assets for Local convenience and ESG repositioning tenants that value proximity to large format retail Office rejuvenation population, benefiting from property Med
Slide 34: Well positioned to take advantage of market opportunities
Well positioned to take advantage of market opportunities • Signals suggest the market is nearing the bottom, with spreads to bond yields widening, providing counter-cyclical opportunities for those with balance sheet capacity. • While distress is not widespread, there are pockets of attractive pric
Slide 35: Key priorities
Key priorities C R O M W E L L P R O P E R T Y G R O U P | F Y 2 4 R E S U L T S 11-13 Robinson Street, Dandenong 34
Slide 36: Key priorities
Key priorities 100 Creek Street, Brisbane • Continue to support asset valuations through ongoing active asset management, including tenant engagement, ESG upgrades and derisking near-term lease expiries. • Growth in Funds Management Platform in Australia and New Zealand through organic and inorganic
Slide 37: For more information, please contact:
400 George Street, Brisbane For more information, please contact: Jonathan Callaghan Chief Executive Officer jonathan.callaghan@cromwell.com.au Phone: +61 7 3225 7777 Michelle Dance Chief Financial Officer michelle.dance@cromwell.com.au Phone: +61 7 3225 7777 Libby Langtry Investor Relations Manager
Slide 38: Appendices
Appendices 38 Operating profit and statutory loss reconciliation 39 Segment results - operating earnings detail 40 Balance sheet 41 Net property income 42 Movement in book value 43 Balance sheet debt details C R O M W E L L P R O P E R T Y G R O U P | F Y 2 4 R E S U L T S Altitude Corporate Centre,
Slide 39: FY24 Operating profit and statutory loss reconciliation
FY24 Operating profit and statutory loss reconciliation Appendix FY24 ($,M) FY23 ($,M) Operating profit1 136.7 158.6 Operating EPS 5.22 cps 6.06 cps Gain on sale of investment properties 1.8 2.0 Other transaction costs (3.3) (4.0) Operating lease costs 1.6 2.1 Fair value loss Investment properties (
Slide 40: Segment results – operating earnings detail
Segment results – operating earnings detail Appendix Funds and asset Investment Portfolio management Co-investments Cromwell 30 June 2024 $M $M $M $M Segment revenue Rental income and recoverable outgoings 194.3 - 73.0 267.3 Operating profit of equity accounted investments1 - 1.3 40.9 42.2 Developme
Slide 41: Balance sheet
Balance sheet Appendix FY24 ($M) FY23 ($M) Assets Cash and cash equivalents 292.3 113.9 Investment Properties 2,212.0 3,098.2 Disposal group assets held for sale 439.2 138.4 Equity accounted investments 20.1 662.2 Receivables 25.8 79.6 Intangibles 0.3 0.3 Derivative financial assets 46.7 56.5 Invest
Slide 42: Net property income
Net property income Appendix FY24 ($M) FY23 ($M) Variance ($M) Variance (%) 2-4 Rawson Place, Sydney 15.6 14.3 1.3 9.1% 203 Coward Street, Mascot 33.5 33.5 0.0 0.0% 700 Collins Street, Melbourne 18.4 17.6 0.8 4.5% Soward Way, Greenway 18.0 17.4 0.6 3.4% HQ North Tower, Fortitude Valley 16.0 16.7 (0.
Slide 43: Movement in book value
Movement in book value Appendix FY24 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 $M Opening Balance 3,098.2 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
Slide 44: Balance sheet debt details
Balance sheet debt details Appendix Drawn Commitment Maturity Fin Yr Years Facility Covenants (AUD $M) (AUD $M) Date Expiry Remaining Bank 1 - 5 Year Facility 152.5 250.0 Nov-2026 2027 2.4 yrs Bank 2 - 5 Year Facility 350.0 350.0 Jun-2027 2027 3.0 yrs Bank 3 - 5 Year Facility 0.0 75.0 Jun-2025 2025
Slide 45: Appendices footnotes
Appendices footnotes 1. Operating profit of equity accounted investments for 2024 includes 12 months operating profit from the equity accounted investments CEREIT and CIULF, however for financial reporting purposes only 11 months of share of profit or loss from the equity accounted investments is in
Slide 46: 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 4 R E S U L T S 45