Goodman Group · ASX:GMG
Goodman — H1 FY2021 Earnings Presentation
46 slides from Goodman's earnings presentation, Feb 19, 2021
Slide 1: 1H FY21 Results
HIGHLIGHTS RESULTS OPERATIONAL OUTLOOK APPENDICES OVERVIEW PERFORMANCE Section 1 Section 2 Section 3 Section 4 1H FY21 RESULTS Long-term trends in the digital economy driving growth 19 February 2021 1 Goodman Westlink, Hong Kong ,SAR, China
Slide 2: Important Notice and Disclaimer
Important Notice and Disclaimer – This document has been prepared by Goodman Group (Goodman Limited – This document contains certain “forward-looking statements”. The words (ABN 69 000 123 071), Goodman Funds Management Limited (ABN 48067 “anticipate”, “believe”, “expect”, “project”, “forecast”,”est
Slide 3: Contents
CONTENTS SECTION 1 APPENDICES Highlights – Results analysis SECTION 2 – Property investment Results overview – Development SECTION 3 Operational performance – Management SECTION 4 – Capital management Outlook 3
Slide 4: Highlights
Section 1 HIGHLIGHTS Goodman Westlink, Hong Kong, SAR, China 4
Slide 5: Highlights
HIGHLIGHTS Strong demand from the digital economy continues to drive $ 614.9m $ 8.4bn enduring change, sustaining OPERATING PROFIT WORK IN PROGRESS activity and property fundamentals for our business + Market conditions remain favourable for our Key financial metrics for the period include: + Strong
Slide 6: Highlights
HIGHLIGHTS + The Partnerships continued to perform strongly through the period + Strong capital position and a further reduction in gearing to 4.8% $51.8bn ‒ External AUM up 6% to $48.5 billion, with total AUM + Net debt declined to $0.8bn with $2.3 billion of TOTAL AUM up 5% on 1H FY20 to $51.8 bil
Slide 7: Group and Partnership Highlights
GROUP AND PARTNERSHIP HIGHLIGHTS 97.9% 3.0% 1.9m 4.8% OWN OCCUPANCY NPI GROWTH SQUARE METRES LEASED GEARING High occupancy maintained at Like for like NPIgrowth Leased 1.9 million sqm across the global Headline gearing of 98% and WALE of 4.4years at 3.0% platform equating to $269 million of annual 4
Slide 8: Results Overview
Section 2 RESULTS OVERVIEW The Rambler, Goodman Interlink, Hong Kong, SAR, China 8
Slide 9: Results Overview
RESULTS OVERVIEW + Operating profit of $614.9 million up 16% on 1H FY20 1H20 1H21 + Statutory accounting profit of $1,041.5million Operating profit ($M) 530.4 614.9 ‒ Includes property valuations, derivative and foreign currency Statutory accounting profit ($M) 810.6 1,041.5 mark-to-market movements
Slide 10: Profit and Loss
PROFIT AND LOSS + Half year statutory accounting profit of $1,041.5 million, INCOME STATEMENT includes property valuations, derivative mark-to-markets and other non-cash or non-recurring movements 1H20 1H21 $M $M ‒ Global property revaluation gains for 1H FY21 were $1.5 Property investment 213.3 196
Slide 11: Balance Sheet
BALANCE SHEET + Strong balance sheet maintained BALANCE SHEET ‒ Gearing decreased to 4.8%4 (from 7.5% FY20) and As at 30 As at 31 16.6%5 on a look-through basis December June 2020 ‒ Cash utilised to repay $0.8 billion of bonds $M 2020 $M ‒ Period end FX strength reduces A$ translated value of foreig
Slide 12: Group Liquidity Position
GROUP LIQUIDITY POSITION + Cash and available lines of credit (excluding Partnership debt and equity) of $2.3 billion as at 31 December 2020 Debt Maturity Profile ‒ $1.3 billion in cash ‒ $1.0 billion of available lines + Weighted average debt maturity profile of 6.1 years + Gearing at 4.8%¹ (16.6%²
Slide 13: Operational Performance
Section 3 OPERATIONAL PERFORMANCE Avion Logistics Centre, France 13
Slide 14: Resilience Through COVID
RESILIENCE THROUGH COVID + Our business has adapted to the new operating environment. We have implemented fully flexible operating environment to provide safety and support wellbeing of employees while delivering high levels of productivity ‒ Despite the challenges of the past 12 months (CY2020), th
Slide 15: Property Investment
PROPERTY INVESTMENT 97.9% 4.7% OCCUPANCY WACR + Property fundamentals remain strong ‒ Occupancy of 98% ‒ WALE of 4.4 years ‒ Like-for-like net property income growth of 3.0% + Completed $2.2 billion of asset sales across the Partnerships in the period ‒ Temporarily impacting income growth but provid
Slide 16: Development
DEVELOPMENT + Development activity remains strong globally with WIP at DEVELOPMENTS $8.4 billion. 1H20 1H21 ‒ Customer led demand continues to support our conviction in increasing the workbook Development income ($M) 577.9 1,105.3 ‒ Increased scale and higher value projects Development expenses ($M)
Slide 17: Management
MANAGEMENT + External AUM of $48.5 billion, up 6% on 1H FY20 MANAGEMENT ‒ Growth in AUM impacted by asset sales, offset by development completions 1H20 1H21 + AUM growth over the next few years to be supported organically by increased development activity and revaluations Management earnings ($M) 21
Slide 18: Management Platform
MANAGEMENT PLATFORM ``` 4 Total assets ($B) 9.5 8.3 5.8 5.3 4.6 4.3 4.1 3.2 1.1 GMG co-investment (%) 29.1 20.3 20.4 20.0 19.9 55.0 14.7 21.4 33.3 GMG co-investment ($B) 2.0 1.4 0.7 0.8 0.7 2.0 0.4 0.5 0.3 Number of properties 100 11 92 36 34 16 18 11 7 Occupancy1 (%) 95 98 99 98 97 100 100 100 100
Slide 19: Environmental, Social and Governance
ENVIRONMENTAL, SOCIAL ANDGOVERNANCE 19
Slide 20: Environmental, Social and Governance
ENVIRONMENTAL, SOCIAL ANDGOVERNANCE Goodman’s sustainability strategy increases our commitments and accelerates our progress with clearly defined targets to hold ourselves accountable, under three pillars. Our sustainably designed, energy- Our workplaces promote the health, safety Our capital struct
Slide 21: Outlook
Section 4 OUTLOOK Oakdale South Industrial Estate, Sydney,Australia 21
Slide 22: Outlook
OUTLOOK ATL Logistics Centre, Hong Kong, SAR, China Strong demand driven by + The logistics and warehousing sector + Our development activity is reflecting these continues to play a significant role globally enduring changes and we have again the digital economy in providing essential infrastructure
Slide 23: Outlook
OUTLOOK + Partnership performance and outlook ‒ GRESB results announced in the half showed + The business is performing strongly. The remains strong consistent improvement across our global enduring shift in utilisation and ‒ Underlying real estate fundamentals continue portfolio, with three Partner
Slide 24: Results Analysis
Appendix 1 RESULTS ANALYSIS Goodman Logistics Center El Monte, Los Angeles, USA 24
Slide 25: Profit and Loss
PROFIT AND LOSS Property Operating Non-operating Total investment Management Development expenses items CATEGORY $M $M $M $M $M $M Gross property income 48.6 48.6 – – – – Management income 180.0 – 180.0 – – – Development income1 1,082.9 – 39.2 1,043.7 – – Distributions from investments – – – – – – N
Slide 26: Reconciliation Non-Operating Items
RECONCILIATION NON-OPERATING ITEMS Half year ended Total 31 December 2020 Non-operating items in statutory income statement $M $M Property valuation related movements Net gain from fair value adjustments attributable to investment properties 12.1 Share of net gain from fair value adjustments attribu
Slide 27: Financial Position
FINANCIAL POSITION Direct Assets Property investment Development Other Total Capital Allocation As at 31 December 2020 $M $M $M $M $M Cash – – – 1,275.2 1,275.2 Receivables – – 258.1 272.3 530.4 Inventories – – 1,141.1 – 1,141.1 Investment properties 1,813.0 – 12.4 – 1,825.4 Investments accounted fo
Slide 28: Net Tangible Asset Movement
NET TANGIBLE ASSET MOVEMENT $ per security As at 31 December 2020¹ 1. Calculated on 1,847.4 million securities being closing securities on issue 28
Slide 29: Property Valuations
PROPERTY VALUATIONS + As the impacts of Covid-19 have become further understood in recent + The global portfolio cap rate has compressed by 17bps to 4.7% months and the scale of consumer spending shifts are realised, over 1H FY21 industrial and logistics assets have proven to be an asset class that
Slide 30: Property Investment
Appendix 2 PROPERTY INVESTMENT Highbrook Business Park, Auckland, Nsw Zealand 30
Slide 31: Leasing
LEASING 1.9m 97.9% SPACE LEASED OCCUPANCY Across the Group and Partnerships: + 1.9 million sqm leased during the year, equating to $268.7 million of annual rental property income + High occupancy at 97.9%. Leasing area Net annual rent Average lease term Region SQM $M YEARS Australia / New Zealand 77
Slide 32: Customers
CUSTOMERS Top 20 global customers (by net income – look through basis) 32
Slide 33: Geographic Exposure
GEOGRAPHIC EXPOSURE Top 20 sub-regions (byAUM) 33
Slide 34: Direct Portfolio Detail
DIRECT PORTFOLIO DETAIL + Long term strategic portfolio with potential for higher and better KEY METRICS¹ use, re-zoning and redevelopment 1H 21 + 22 properties with a total value of $1.8¹ billion located primarily in the Sydney market Total assets ($B) 1.8 ‒ Represents a significant part of the urb
Slide 35: Development
Appendix 3 DEVELOPMENT Amazon facility at Oakdale West Industrial Estate, Sydney, Australia. 35
Slide 36: Developments
DEVELOPMENTS 1H 21 DEVELOPMENTS Completions Commencements Work in progress Value ($B) 1.5 3.5 8.4 Area (m sqm) 0.6 1.0 2.5 Yield (%) 6.2 6.3 6.6 Committed (%) 95 49 69 Weighted average lease term (years) 15.2 13.6 14.0 Development for third parties or Partnerships (%) 84 77 80 Australia / New Zealan
Slide 37: Management
Appendix 4 MANAGEMENT 37
Slide 38: Global Platform
GLOBAL PLATFORM 8 UK « ties: Ss wi o 2) ra rT 2 < $21 -“ a ad za OUR GLOBAL NETWORK <x 3 $51.8bn a — Assets under management (AUM) wi 5 369 NY re) Properties = o comcwmacinners O ae i ent accoun den ad bof
Slide 39: Management – AUM
MANAGEMENT – AUM + The majority of Goodman’s assets reside in Partnerships Third party AUM by region ‒ The Group manages 15 Partnerships with 49 investors who are represented on the Boards and Investment Committees independent of Goodman ‒ Goodman maintains a 26% average equity cornerstone position
Slide 40: Capital Management
Appendix 4 CAPITAL MANAGEMENT Bedford Commercial Park, Bedford, United Kingdom 40
Slide 41: Currency Mix
CURRENCY MIX Currency mix – outstanding debt Currency mix – including the impact of capital hedging FX swaps 41
Slide 42: Financial Risk Management
FINANCIAL RISK MANAGEMENT The Group has a robust capital management framework + The Group has a robust capital + Interest risk management: management framework, under its Financial – Policy to ensure between 60% and 100% Risk Management (FRM) policy. This of current year interest rates are fixed pro
Slide 43: Financial Risk Management (cont)
FINANCIAL RISK MANAGEMENT(CONT) + Interest rates are hedged to 62% over next Interest rate hedge profile 12 months – Weighted average hedge rate of 1.48%¹ – NZD – hedge rate 1.29% – JPY – hedge rate 1.87% – HKD – hedge rate 1.49% – GBP – hedge rate 1.65% – Euro – hedge rate 0.72% – USD – hedge rate
Slide 44: Financial Risk Management (cont)
FINANCIAL RISK MANAGEMENT(CONT) FOREIGN CURRENCY DENOMINATED BALANCE SHEET HEDGING MATURITY PROFILE Weighted average Weighted average Amount Amount maturity exchange rate receivable1 payable1 NZ$ 2.4 years 1.0864 A$368.3m NZ$400.0m HK$ 3.9 years 5.7047 A$1,140.0m HK$6,490.0m US$ 3.2 years 0.7141 A$6
Slide 45: Exchange Rates
EXCHANGE RATES STATEMENT OF FINANCIAL POSITION – EXCHANGE RATES AS AT 31 December 2020 + AUDGBP – 0.5637 (30 June 2020: 0.5566) + AUDEUR – 0.6295 (30 June 2020 0.6128) + AUDHKD – 5.9703 (30 June 2020: 5.3402) + AUDBRL – 3.9981 (30 June 2020: 3.7602) + AUDNZD – 1.0706 (30 June 2020: 1.0694) + AUDUSD
Slide 46: Thank You
THANK YOU 46