Slide 1: Goodman Group 1H24 Results
GOODMAN GROUP 1H24 RESULTS Strong first half operating result and EPS growth upgraded to 11% Goodman Business Park, Greater Tokyo, Japan 15 February 2024
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 FY24 RESULTS
Slide 4: Highlights
Artist’s impression of data centre, Tskuba, Japan 01 HIGHLIGHTS 4 GOODMAN GROUP 1H FY24 RESULTS
Slide 5: Highlights
HIGHLIGHTS Goodman has delivered a strong operational result in the first half. The Group is strategically positioned to benefit from the growth in digital infrastructure $1,127m 5.0% OPERATING PROFIT NPI GROWTH required to service the global economy. + Financial highlights + The structural demand d
Slide 6: Highlights
HIGHLIGHTS + Development + The Group continues to deliver on its strategy – Work in progress (WIP)¹ of $12.9 billion with a development yield on cost (YOC) of 6.7% – Strong operating earnings growth while maintaining a robust balance sheet $79.0bn – WIP is 58% pre-committed with an average 14 year w
Slide 7: Group and Partnership Highlights
GROUP AND PARTNERSHIP HIGHLIGHTS 98.4% 5.0% 2.4m 9.0% OWN OCCUPANCY NPI GROWTH SQUARE METRES LEASED GEARING High occupancy maintained at Like for like NPI growth at 5.0%1 Across the global portfolio Headline gearing of 9.0%, with look 98.4%¹ and WALE of 5.3 years¹ equating to $346 million of annual
Slide 8: Results Overview
Goodman Tsuen Wan West data centre, Hong Kong SAR 02 RESULTS OVERVIEW 8 GOODMAN GROUP 1H FY24 RESULTS
Slide 9: Results Overview
RESULTS OVERVIEW + Operating profit (a proxy for cash earnings) of $1,127.4 million up 29% on 1H23 1H23 1H24 – Operating cash flow for the period reflects the timing differences in portfolio performance fees Operating profit ($M) 876.5 1,127.4 (cash to be received in 2H) and investments in inventori
Slide 10: Profit and Loss
PROFIT AND LOSS + Half year statutory loss of $220.1 million, which includes property valuations, derivative Income statement mark-to-markets and other non-cash or non-recurring movements 1H23 1H24 – Revaluations were negative in the first half of FY24 due primarily to increased cap rates, despite $
Slide 11: Balance Sheet
BALANCE SHEET + Strong balance sheet maintained – Gearing 9.0%1 (8.3% in FY23) and 22.7%2 on a look-through basis Balance sheet AS AT AS AT + Reduction in stabilised portfolio reflects the impact of asset sales 30 JUNE 2023 31 DECEMBER 2023 $M $M + Partnership investments decreased primarily due to
Slide 12: Group Liquidity Position
GROUP LIQUIDITY POSITION + Cash and available lines of credit (excluding Partnership debt and equity) of $3.0 billion as at 31 December 2023 – $1.2 billion in cash, $1.8 billion of available lines – Weighted average debt maturity profile of 5.1 years + Gearing at 9.0%¹ (22.7%3 look-through). The Gro
Slide 13: Operational Performance
03 OPERATIONAL PERFORMANCE 13 GOODMAN GROUP 1H FY24 RESULTS
Slide 14: Environmental, Social and Governance
ENVIRONMENTAL, SOCIAL AND GOVERNANCE SUSTAINABLE PROPERTIES & PLACES PEOPLE, CULTURE & COMMUNITY CORPORATE GOVERNANCE & PERFORMANCE + We continue to monitor and report progress towards our + Gender ratio of 44% female and 56% male with 30% + In the 2023 Global Real Estate Sustainability Benchmark sc
Slide 15: Property Investment
PROPERTY INVESTMENT + Underlying property fundamentals remain strong in our markets as we continue to experience high occupancy and positive rental reversions to market in most locations – Portfolio occupancy of 98.4%¹ Property investments 1H23 1H24 – 12 month rolling like-for-like net property inco
Slide 16: Development
DEVELOPMENT + Customers continue to seek more productivity and supply chain optimisation, which continues to be a driver of demand in our locations, despite moderating activity overall Developments 1H23 1H24 – WIP stable at $12.9 billion, with data centres representing 37% Development earnings ($M)
Slide 17: Data Centres
DATA CENTRES Significant progress has been made on advancing our data centre strategy - securing power and planning, commencing 4.0 GW infrastructure and continuing to work with customers on optimal GLOBAL POWER BANK delivery models that suit their requirements + Our secured power bank, proven devel
Slide 18: Data Centre – Power Bank
DATA CENTRE – POWER BANK 18 GOODMAN GROUP 1H FY24 RESULTS
Slide 19: Management
MANAGEMENT + Total AUM of $79.0 billion, with external AUM of $74.6 billion, both down -2% on FY23 – Driven primarily by revaluations and FX, partly offset by developments and acquisitions Management 1H23 1H24 – Strong rental growth in several markets has been reflected in the valuations and mitigat
Slide 20: Management Platform
MANAGEMENT PLATFORM HONG KONG CONTINENTAL UNITED AUSTRALIA SAR USA EUROPE CHINA JAPAN NEW ZEALAND³ KINGDOM BRAZIL Partnership AUM ($B) 28.1 12.1 8.7 7.5 6.1 5.2 4.3 2.4 0.2 Number of Partnerships 8 1 1 2 1 3 1 3 1 GMG co-investment (%) 27.5 20.4 55.0 19.7 20.0 19.6 25.2 35.2 15.0 GMG co-investment (
Slide 21: Outlook
Redbank Motorway Estate, Brisbane, Australia 04 OUTLOOK 21 GOODMAN GROUP 1H FY24 RESULTS
Slide 22: Outlook and FY24 Forecast
Goodman Logistics Center Fullerton, Los Angeles, United States + There may be further dislocation and volatility in real + FY24 Forecast Goodman’s focus on developing estate markets globally, but we are well positioned – The business has performed strongly in the first half , and as and delivering d
Slide 23: Results Analysis
Artist’s impression of data centre in Sydney. 01 APPENDIX RESULTS ANALYSIS 23 GOODMAN GROUP 1H FY24 RESULTS
Slide 24: 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 55.2 52.9 – – – 2.3 Management income 360.8 – 360.8 – – – Development income 653.7 – – 653.7 – – Net gain from fair value adjustments on investment
Slide 25: Financial Position
FINANCIAL POSITION Property Direct assets investment Development Other Total As at 31 December 2023 $M $M $M $M $M Cash – – – 1,213.8 1,213.8 Receivables – – 266.7 373.0 639.7 Inventories 408.4 – 2,031.6 – 2,440.0 Investment properties 1,252.2 – 318.9 – 1,571.1 Investments accounted for using equity
Slide 26: Reconciliation of Non-Operating Items
RECONCILIATION OF NON-OPERATING ITEMS Half year ended 31 December Non-operating items in statutory income statement 2023 $M Property valuation related movements Net gain from fair value adjustments attributable to investment properties 43.3 Share of fair value adjustments attributable to investment
Slide 27: Net Tangible Asset Movement
NET TANGIBLE ASSET MOVEMENT 27 GOODMAN GROUP 1H FY24 RESULTS
Slide 28: Property Valuations
PROPERTY VALUATIONS Artist’s impression of Goodman Innovation Center Queens, New York, USA + Elevated levels of uncertainty in the global economy due to inflation, geopolitical tension and movements in bond rates, have lead to a softening of capitalisation rates for the global portfolio of 60bps to
Slide 29: Property Investment
Goodman Qingpu Centre, Qingpu, China 02 APPENDIX PROPERTY INVESTMENT 29 GOODMAN GROUP 1H FY24 RESULTS
Slide 30: Leasing
LEASING 2.4m 98.4% SQM OF SPACE OCCUPANCY1 LEASED Across the Partnerships: + 2.4 million sqm leased over the 12 months, equating to $346 million of annual property income1 + High occupancy at 98.4% 1 Average Region Leasing area Net annual rent Lease term SQM ‘000 $M YEARS Australia / New Zealand 796
Slide 31: Customers
CUSTOMERS 31 GOODMAN GROUP 1H FY24 RESULTS
Slide 32: Direct Portfolio Detail
DIRECT PORTFOLIO DETAIL + 18 stabilised properties with a total value of $1.7 billion + Long-term strategic portfolio with potential for higher and better use, re-zoning and redevelopment + 95.4% occupancy and a weighted average lease expiry of 6.2 years + Average stabilised portfolio valuation cap
Slide 33: Development
Artist’s impression of data centre in Greater Paris, France 03 APPENDIX DEVELOPMENT 33 GOODMAN GROUP 1H FY24 RESULTS
Slide 34: Developments
DEVELOPMENTS As at 31 December 2023 Completions Commencements Work in progress Value ($B) 2.8 3.0 12.9 Area (m sqm) 0.6 0.8 3.7 Yield (%) 6.3 6.9 6.7 Committed (%) 97 68 58 Weighted average lease term (years) 9.0 12.3 13.6 Development for third parties or 97 62 77 Partnerships (%) Australia / New Ze
Slide 35: Management
04 APPENDIX MANAGEMENT 35 GOODMAN GROUP 1H FY24 RESULTS
Slide 36: 1H FY24 Results
36 GOODMAN GROUP 1H FY24 RESULTS
Slide 37: Management – AUM
MANAGEMENT – AUM + The majority of Goodman’s assets reside in Partnerships – The Group manages 21 Partnerships with 53 investors who are represented on the Boards and Investment Committees independent of Goodman – Goodman maintains a 28.5% average equity cornerstone position in the Partnerships to e
Slide 38: Capital
Crossways Commercial Park, London, UK 05 APPENDIX CAPITAL 38 GOODMAN GROUP 1H FY24 RESULTS
Slide 39: Currency Mix
CURRENCY MIX 39 GOODMAN GROUP 1H FY24 RESULTS
Slide 40: Financial Risk Management
FINANCIAL RISK MANAGEMENT + 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+ / Baa1 respectively – Covenants that are appropriate for
Slide 41: Financial Risk Management (cont)
FINANCIAL RISK MANAGEMENT (CONT) + Interest rate payments are hedged to 74% over the next 12 months – Weighted average hedge rate of 2.89%¹,2,3 – NZD – hedge rate 2.52% – JPY – hedge rate 0.24% – HKD – hedge rate 2.02% – GBP – hedge rate 2.25% – Euro – hedge rate 2.11%² – USD – hedge rate 4.25% + We
Slide 42: 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 1.0696 A$607.8m NZ$650.0m HK$ 3.4 years 5.4501 A$1,618.3m HK$8,840.0m US$ 2.6 years 0.7103 A$
Slide 43: Exchange Rates
EXCHANGE RATES Statement of financial position – exchange rates as at 31 December 2023 Currency Exchange rate AUDGBP – 0.5351 (30 June 2023: 0.5249) AUDEUR – 0.6172 (30 June 2023: 0.6109) AUDHKD – 5.3210 (30 June 2023: 5.2235) AUDBRL – 3.3061 (30 June 2023: 3.1911) AUDNZD – 1.0782 (30 June 2023: 1.0
Slide 44: Thank You
HANK YOU 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) and Goodman Logistics (HK) Limited (BRN