Goodman Group · ASX:GMG
Goodman — H1 2023 Earnings Presentation
43 slides from Goodman's earnings presentation, Feb 16, 2023
Slide 1: Goodman Group upgrades operating EPS growth guidance following strong 1H23 performance
GOODMAN GROUP 1H23 RESULTS Goodman Group upgrades operating EPS growth guidance to 13.5% following strong 1H23 performance Goodman Business Park, Greater Tokyo, Japan 16 February 2023
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 FY22 RESULTS
Slide 4: Highlights
Artist’s impression – Burrows Industrial Estate, Sydney, Australia 01 HIGHLIGHTS 4 GOODMAN GROUP 1H FY23 RESULTS
Slide 5: Highlights
HIGHLIGHTS The consistent execution of our strategy, focus on infill locations and the positioning of our portfolio is supporting leasing, development activity, rental growth and $877m $13.9bn OPERATING PROFIT WORK IN PROGRESS assets under management. + The Group has delivered a strong 1H23 result.
Slide 6: Highlights
HIGHLIGHTS + Capital management continues to support growth with $79.5bn + Location driving strong underlying investment fundamentals – Continued high occupancy at 99.0% significant investment capacity – Low gearing maintained at 9.7% – Like-for-like net property income (NPI) growth of 4.2% – Signif
Slide 7: Group and Partnership Highlights
GROUP AND PARTNERSHIP HIGHLIGHTS 99% 4.2% 3.7m 9.7% OWN OCCUPANCY NPI GROWTH SQUARE METRES LEASED GEARING High occupancy maintained at Like for like NPI growth at 4.2%1 Across the global portfolio Headline gearing of 9.7%, with look 99.0%¹ and WALE of 5.4 years¹ equating to $484 million of annual th
Slide 8: Results Overview
Goodman Beijing Southgate Industrial Estate, Beijing, China 02 RESULTS OVERVIEW 8 1H FY22 RESULTS
Slide 9: Results Overview
RESULTS OVERVIEW + Cash backed operating profit of $876.5 million up 11.5% on 1H22 1H22 1H23 – Continued strong contribution from development activity Operating profit ($M) 786.2 876.5 + Statutory accounting profit of $1,097.0 million Statutory accounting profit ($M) 2,002.8 1,097.0 – Includes prope
Slide 10: Profit and Loss
PROFIT AND LOSS + Half year statutory accounting profit of $1,097 million, which includes property valuations, Income statement derivative mark-to-markets and other non-cash or non-recurring movements – Revaluation gains for 1H23 across the Group and Partnerships were $1.4 billion, driven primarily
Slide 11: Balance Sheet
BALANCE SHEET + Strong balance sheet maintained Balance sheet – Gearing 9.7%4 (8.5% in FY22) and 20.7%5 on a look-through basis AS AT AS AT + Reduction in the directly owned portfolio reflects the net impact of asset sales and 30 JUNE 2022 31 DECEMBER 2022 development completions $M $M + Growth in G
Slide 12: Group Liquidity Position
GROUP LIQUIDITY POSITION + Cash and available lines of credit (excluding Partnership debt and equity) of $2.8 billion as at 31 December 2022 – $1.0 billion in cash, $1.8 billion of available lines – Weighted average debt maturity profile of 5.8 years + Gearing at 9.7%¹ (20.7%² look-through). Consist
Slide 13: Operational Performance
03 OPERATIONAL PERFORMANCE 13 GOODMAN GROUP 1H FY22 RESULTS
Slide 14: Environmental, Social and Governance
ENVIRONMENTAL, SOCIAL AND GOVERNANCE PROPERTY PEOPLE AND CULTURE CORPORATE PERFORMANCE + Goodman has committed to monitor and disclose progress + Reached a gender ratio of 44% female and 56% male with + In the 2022 Global Real Estate Sustainability Benchmark towards our science-based emissions reduc
Slide 15: Property Investment
PROPERTY INVESTMENT + Property fundamentals remain strong throughout the portfolio supporting occupancy, rent growth and positive re-valuations – Portfolio occupancy of 99.0%¹ Property investments – 12 month rolling like-for-like net property income growth of 4.2%¹ 1H22 1H23 – WALE of 5.4¹ years, an
Slide 16: Development
DEVELOPMENT + Our customers continue to focus on maximising productivity from their space and are looking Developments for sustainable, efficient properties that are close to consumers and optimised to house their investments in automation and technology 1H22 1H23 – Growth in WIP to $13.9 billion De
Slide 17: Management
MANAGEMENT + Total AUM up to $79.5bn, with external AUM of $75.5 billion, up 18% on 1H22 Management – Driven primarily by developments, acquisitions, revaluation gains and FX 1H22 1H23 – Strong rental growth in several markets and rental reversion to market globally has continued to Management earni
Slide 18: Management Platform
MANAGEMENT PLATFORM GAIP GHKLP GNAP GCLP GAP GEP GMT3 GJCP GUKP4 AUSTRALIA HONG KONG USA CHINA AUSTRALIA EUROPE NEW ZEALAND JAPAN UK Total assets ($B) 15.2 12.3 9.8 7.2 7.0 6.7 4.7 4.3 2.5 GMG co-investment (%) 28.6 20.4 55.0 20.0 19.9 19.8 24.9 14.4 34.6 GMG co-investment ($B) 3.4 1.9 4.5 0.9 1.1 0
Slide 19: Outlook
04 OUTLOOK 19 GOODMAN GROUP 1H FY23 RESULTS
Slide 20: Outlook
OUTLOOK Goodman Commerce Center Eastvale, Los Angeles, United States + Scarcity of land and an increased focus on reducing greenfield Global markets remain volatile, but + Continued high utilisation of available space and the desire for development is driving increased intensity of use from existing
Slide 21: Outlook
OUTLOOK + The Partnerships are in a robust financial position, and we + While the economic outlook is uncertain, the Group is in a believe the outlook remains positive with rental growth, strong position operationally and financially through the occupancy and development (including intensification o
Slide 22: Results Analysis
01 APPENDIX RESULTS ANALYSIS 22 GOODMAN GROUP 1H FY23 RESULTS
Slide 23: 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 66.3 64.7 – – – 1.6 Management income 222.8 – 222.8 – – – Development income1 729.9 – 41.9 688.0 – – Net gain from fair value adjustments on invest
Slide 24: Financial Position
FINANCIAL POSITION Property Direct assets investment Development Other Total As at 31 December 2022 $M $M $M $M $M Cash – – – 981.6 981.6 Receivables – – 245.1 267.0 512.1 Inventories 623.0 – 1,535.2 – 2,158.2 Investment properties 1,451.6 – 142.5 – 1,594.1 Investments accounted for using equity met
Slide 25: Reconciliation Non-Operating Items
RECONCILIATION NON-OPERATING ITEMS Half year ended Total 31 December Non-operating items in statutory income statement $M 2022 $M Property valuation related movements Net gain from fair value adjustments attributable to investment properties 56.2 Share of net gain from fair value adjustments attribu
Slide 26: Net Tangible Asset Movement
NET TANGIBLE ASSET MOVEMENT 26 GOODMAN GROUP 1H FY23 RESULTS
Slide 27: Property Valuations
PROPERTY VALUATIONS + Low supply and vacancy in our core markets has created a favourable occupational market which has supported the valuation growth over the half and offset the capitalisation rate softening + Market rental growth, development completions within the Partnerships and FX have been d
Slide 28: Property Investment
Goodman Qingpu Centre, Qingpu, China 02 APPENDIX PROPERTY INVESTMENT 28 GOODMAN GROUP 1H FY22 RESULTS
Slide 29: Leasing
LEASING 3.7m 99.0% SQM OF SPACE OCCUPANCY LEASED Across the Partnerships: + 3.7 million sqm leased over the 12 months, equating to $484.4 million of annual property income1 + High occupancy at 99.0% 1 Average Region Leasing area Net annual rent Lease term SQM $M YEARS Australia / New Zealand 1,444 1
Slide 30: Customers
CUSTOMERS Top 20 global customers by net income – look through basis 30 GOODMAN GROUP 1H FY23 RESULTS
Slide 31: Direct Portfolio Detail
DIRECT PORTFOLIO DETAIL + 25 properties with a total value of $2.1¹ billion + Long-term strategic portfolio with potential for higher and better use, re-zoning and redevelopment + Leasing transactions remain strong across the portfolio – 106,549 sqm ($15.4 million net annual rental) of existing spac
Slide 32: Development
Lyons Park, Birmingham, United Kingdom 03 APPENDIX DEVELOPMENT 32 GOODMAN GROUP 1H FY22 RESULTS
Slide 33: Developments
DEVELOPMENTS As at 31 December 2022 Completions Commencements Work in progress Value ($B) 3.6 3.6 13.9 Area (m sqm) 0.6 0.7 3.9 Yield (%) 8.3 6.3 6.4 Committed (%) 100 81 68 Weighted average lease term (years) 12.5 15.7 14.0 Development for third parties or 80 68 83 Partnerships (%) Australia / New
Slide 34: Management
04 APPENDIX MANAGEMENT 34 GOODMAN GROUP 1H FY23 RESULTS
Slide 35: Our Global Network
EUROPE/UK ¥ $11.4BN THE AMERICAS 1 a seen = 28 OUR GLOBAL ~ NETWORK een AU AUS/NZ — . ws . 190
Slide 36: Management – AUM
MANAGEMENT – AUM + The majority of Goodman’s assets reside in Partnerships – The Group manages 18 Partnerships with 52 investors who are represented on the Boards and Investment Committees independent of Goodman – Goodman maintains a 28% average equity cornerstone position in the Partnerships to ens
Slide 37: Capital
Zinc – Highbrook Business Park, Auckland, New Zealand 05 APPENDIX CAPITAL 37 GOODMAN GROUP 1H FY23 RESULTS
Slide 38: Currency Mix
CURRENCY MIX 38 GOODMAN GROUP 1H FY23 RESULTS
Slide 39: Financial Risk Management
FINANCIAL RISK MANAGEMENT The Group has a robust capital management framework + The Group has a robust capital management framework, under its Financial Risk Management (FRM) policy. This provides: – Stronger balance sheet which has been reflected in our credit ratings from S&P and Moody’s BBB+ / Ba
Slide 40: Financial Risk Management (cont)
FINANCIAL RISK MANAGEMENT (CONT) + Interest rates are hedged to 71% over the next 12 months – Weighted average hedge rate of 2.41%¹,2,3 – NZD – hedge rate 1.29% – JPY – hedge rate 0.53% – HKD – hedge rate 1.35% – GBP – hedge rate 1.70% – Euro – hedge rate 0.73%² – USD – hedge rate 4.13% + Weighted a
Slide 41: Financial Risk Management (cont)
FINANCIAL RISK MANAGEMENT (CONT) Foreign currency denominated balance sheet hedging maturity profile Weighted average Weighted average Amount maturity exchange rate Amount receivable1 payable1 NZ$ 3.2 years 1.0775 A$696.4m NZ$750.0m HK$ 3.6 years 5.6869 A$1,569.4m HK$8,840.0m US$ 3.2 years 0.7221 A$
Slide 42: Exchange Rates
EXCHANGE RATES Statement of financial position – exchange rates as at 31 December 2022 Currency Exchange rate AUDGBP – 0.5634 (30 June 2022: 0.5676) AUDEUR – 0.6366 (30 June 2022: 0.6594) AUDHKD – 5.3176 (30 June 2022: 5.4241) AUDBRL – 3.6040 (30 June 2022: 3.5905) AUDNZD – 1.0732 (30 June 2022: 1.1
Slide 43: Thank You
THANK YOU For more information visit goodman.com 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) a