ELANOR INVESTORS GROUP — Investor Presentation 2020

Aug 19, 2020

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20 August 2020

Company Announcements Office ASX Limited Exchange Centre Level 4, 20 Bridge Street Sydney NSW 2000

Dear Sir/Madam

Attached is the Elanor Investors Group (ASX:ENN) FY20 Results Presentation.

Yours sincerely,

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Symon Simmons Company Secretary Elanor Funds Management Limited

Authority and Contact Details

This announcement has been authorised for release by the Board of Directors of Elanor Funds Management Limited

For further information regarding this announcement please contact:

Symon Simmons Company Secretary Elanor Funds Management Limited Phone: (02) 9239 8400

Elanor Funds Management Limited | GPO Box 1511, Sydney NSW 2001 | www.elanorinvestors.com 1

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ELANOR INVESTORS GROUP FY20 Results Presentation

20 August 2020

Contents

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1	FY20 Results Overview	3
2	FY20 Highlights	5
3	Strategy and Business Overview	12
4	Financial Results	18
5	Strategy and Outlook	21

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FY20 Results Overview

FY20 Results Overview

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			•	Listed Elanor Commercial Property Fund in December 2019. FUM of $381.6m at 30
	Funds Under Management	$1,692m 22.0% increase on FY19	•	June 2020 Established managed funds in FY20 with a combined gross asset value of $180.3m as at 30 June 2020
	ASX Listed Funds Under Management	$709m 108.0% increase on FY19	• •	Elanor Retail Property Fund FUM of $327.8m as at 30 June 2020 Listed Elanor Commercial Property Fund in December 2019. FUM of $381.6m at 30 June 2020
	Funds Management	$21.5m	• •	FY20 Management Fees of $15.5m, an increase of 54.4% Increase of 27.4% in annualised recurring Funds Management fees, including cost
	Income	43.0% increase on FY19		recoveries, to $14.4m
	Core Earnings	$15.4m	• •	Distributions from Co-investments of $5.8m, down from $7.4m 2HFY20 Core Earnings of $3.0m (reflecting the impact of the COVID-19 pandemic)
		12.0% decrease on FY19
	Distributions Per Security	9.51c 40.8% decrease on FY19 1HFY20 distribution 50.5% increase	• •	Stapled securities on issue increased by 19.8% to 119.6m at 30 June 2020 2HFY20 distribution suspended due to the uncertain operating and market conditions as a result of the COVID-19 pandemic
		on 1HFY19
	Gearing1,2	29.7% Increased from 28.4% at 30 June 20	• •	The Group has significant capital to facilitate future growth Gearing includes $60m of unsecured 5 year Corporate Notes. Secured gearing ratio at 30 June 2020 of 4.7%. Average tenure 2.4 years with first maturity April 2022

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1. Based on equity accounting Elanor Metro and Prime Regional Hotel Fund, Elanor Luxury Hotel Fund and Bluewater Square Syndicate 2. Net debt / (total assets less cash)

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FY20 Highlights

Asset Values in ENN’s Managed Funds Reflect Disciplined Investment Approach

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1,645
1,640
2.42
0.00
1,635 (4.71) 5.35
1,630
1,625
1,620 1,640
1,637
1,615
1,610
1,605
1,600
1
31 December 2019 Retail Commercial Healthcare HTL 30 June 2020
$’000
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• The aggregate re-valuations of the Group’s Managed Funds’ assets grew 0.2% from 31 December 2019, a direct result of the Group’s disciplined, risk-first approach to real estate investment

• The asset values across the sectors reflect:

• Retail: strong rental collections for April, May and June 2020 given high proportion of non-discretionary tenants (ERF: 78% of AprilJune 2020 rents collected as at 31 July 2020)

• Commercial: strategically positioned properties in recovering markets with strong tenant covenants (incl. Government); no Sydney or Melbourne CBD exposure

• Hotels Tourism & Leisure (HTL): high proportion of regional assets benefiting from growing domestic tourism demand

• Healthcare: resilient sector with properties strategically located in established health precincts

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1. Asset values as at 31 December 2019 and acquisition value for assets acquired since 31 December 2019

Elanor’s Investments Competitively Positioned in their Respective Markets

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Elanor’s Managed Funds have acquired assets across Australia and New Zealand based on their unique risk return profile and real estate attributes, with a focus on:

• Retail - non-discretionary retail

• Commercial - established office precincts with lower levels of supply

• HTL - major regional tourism and commercial precincts

• Healthcare - well positioned assets in established health precincts

Retail

Commercial

Healthcare

Hotels, Tourism and Leisure (HTL)

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Continued Growth in AUM: 24% Year on Year

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FUM Compound Annual Growth Rate (CAGR) of 64% p.a. since listing in July 2014

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2,000
1,800
1,600
1,400
1,200
$1,692
1,000
$1,387
800
$1,083
600
$682
400
$485
$346
$87
200
0 $87$86 $118 $107 $159 $145 $163 $203
At IPO in July-14 30-Jun-15 30-Jun-16 30-Jun-17 30-Jun-18 30-Jun-19 30-Jun-20
Balance Sheet Investments Funds Under Management
$ millions
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• Funds Under Management (FUM) of approximately $1.7bn as at 30 June 2020 reflects a CAGR of 64% since Elanor’s IPO in July 2014

• ASX Listed FUM grew to $0.71 billion, an increase of 108% during FY20 following the listing of the Elanor Commercial Property Fund in December 2019

• Total funds under management and balance sheet investments of approximately $1.9bn

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Note: Consistent with the basis on which ENN’s base management fees are calculated, figures reflect the Gross Asset Value of the various managed funds

Diversified FUM Across Elanor’s Investment Sectors of Focus

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Retail Commercial
$765m $415m
ASX: ERF Hunters ASX: ECF
$328m $60m $382m
2020
Waverley Bluewater Stirling
$175m $52m $33m
Fairfield Belconnen
$94m $56m
2019
$769m $300m
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Healthcare $128m

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EHREF
$128m
$ Nil
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Hotels, Tourism and Leisure $384m

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EMPR
$163m
ELHF
$169m
EWPF
$52m
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$318m

• Four new multi-asset Funds established during the year, each with opportunities for growth:

• Elanor Commercial Property Fund (ASX: ECF)

• Elanor Luxury Hotel Fund (ELHF)

• Elanor Healthcare Real Estate Fund (EHREF)

• Elanor Wildlife Park Fund (EWPF)

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Note: Consistent with the basis on which ENN’s base management fees are calculated, figures reflect the Gross Asset Value of the various managed funds

Continued Growth in Funds Management Income: 43% Year on Year

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24,000
22,000
20,000
18,000
16,000
14,000
12,000
10,000
8,000
6,000
4,000
2,000
- 30-Jun-15 30-Jun-16 30-Jun-17 30-Jun-18 30-Jun-19 30-Jun-20
Performance Fees 890 2,708 4,180 338 1,297 1,756
Acquisition Fees 2,325 1,500 2,672 3,997 3,694 4,228
Management Fees 1,687 5,136 7,324 9,374 10,040 15,504
Total 4,902 9,344 14,176 13,709 15,031 21,488
$' 000
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• Funds management income grew to $21.5m, an increase of 43%

• Management fees grew to $15.5m, an increase of 54%

• Recurring funds management income grew by 27% to $14.4m (excludes development and leasing fees)

• Development and leasing fees from repositioning projects and hotel refurbishments of $1.8m in FY20

• Acquisition fees and performance fees adversely impacted in 2HFY20 due to the COVID-19 pandemic

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Scalable Funds Management Platform Well Positioned for Growth

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People

• High calibre, long tenure and experienced senior executives • Strong track record of delivering investment performance • Team located across the country

Process

• Non-discretionary and value-add town centre retail • Quality tenant covenants for strategically located commercial and healthcare office assets • Regionally located hotel, tourism and leisure assets

	•	Deep capability to execute differentiated strategy
Platform	•	ASX listed Fund Manager with $1.7bn of FUM
	•	‘Capital Lite’: balance sheet growth capital of $107 million (capital recycling)
	•	Average realised Managed Fund Investment Total Return (IRR) of 20% p.a. since IPO in 2014
Performance	•	64% CAGR in FUM since IPO in 2014
	•	Asset values held through COVID

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Strategy and Business Overview

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Elanor Investors Group: ‘Pure Play’ Real Estate Funds Manager

• $1.7bn of FUM

Real Estate Funds Manager

• ASX listed FUM of $0.71bn

• Annualised recurring Funds Management fees of $14.4m and growing

• ‘ True Play’ Real Estate Funds • Balance Sheet comprises cash, short term receivables and Co-investments in Managed Funds

~~Manager~~

Well Positioned for Growth

• Active pipeline in all investment sectors of focus

• Growth capital of approximately $107m as at 30 June 2020

Commercial: Office FUM of $0.41bn and Healthcare FUM of $0.13bn

Strong and Differentiated Capability Across Key Real Estate Sectors

• Active asset management delivering strong risk adjusted returns from high investment quality commercial and healthcare properties that are competitively positioned in recovering markets

• Retail: FUM of $0.77bn

• Value-add assets that deliver high risk adjusted returns through repositioning

• Hotels, Tourism and Leisure: FUM of $0.38bn

• High investment quality accommodation hotels with near term operational and strategic value-add opportunities

• Exposure to strongly growing Australian regional tourism and leisure sectors

Highly Scalable Platform

• Invested in senior management capabilities across acquisition, asset and development management, institutional partnerships and capital raising

Strong Track Record of Investment Returns

• Average total realised returns (IRR) of 20% p.a. from Managed Funds since listing in 2014

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Funds Management Strategy

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Strategic Objective

  - Grow funds

  - under management

• Deliver strong returns for Elanor capital partners and security holders

• ‘Capital-lite’ funds management business

Provide superior investment results to deliver on strategic objective

Commercial Office Retail Hotels, Tourism Healthcare Office and Leisure

• Real • Active asset • Active asset • Active asset Estate management management • Active asset management • Realise ‘value add’ • Execute retail • Realise ‘value-add’ management

• Sector operational and repositioning strategies • operational Specialist hotels asset

• Focus strategic opportunities management platform opportunities

Co-investment with capital partners (‘Capital Lite’)

Listed Public Markets – Australian Securities Exchange

Capital Global institutional investors – capital led strategy Partners Domestic institutional investors – listed and unlisted institutional investors Wholesale capital investors – Family Office and wholesale private investors

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ENN Generates Consistent Transactional Income

As an active Fund Manager and investor, ENN continues to generate consistent and growing levels of transactional cash earnings from:

• Performance fees

• Gains on the sale of Co-investments in the Group’s Managed Funds

• Gains on the sale of balance sheet assets primarily to seed new Funds Management initiatives

Transactional income included in Core Earnings since FY16 comprises:

	FY16	FY17	FY18	FY19	FY20
	$’000	$’000	$’000	$’000	$’000
Performance Fees	2,709	4,180	338	1,297	1,756
Gain on Sale of Co-investments	-	-	-	1,189	4,178
Gain on Sale of Balance Sheet Assets	952	-	6,805	5,905	6,000
	3,661	4,180	7,143	8,391	11,934

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Funds Under Management and Investment Portfolio

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MANAGED FUNDS

INVESTMENT PORTFOLIO

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($m) ($m)
Hotel Ibis
Stirling Street 1834 Styles Albany
Hospitality
Syndicate Elanor Wildlife
Fairfield Elanor Wildlife
Centre Syndicate Park Fund Waverley Park Fund
Gardens Fund
Elanor Commercial
Waverley Property Fund Hunters Plaza Syndicate Elanor Commercial
Gardens Fund 94 33 52 Bluewater Square Syndicate 2 5 7 Property Fund
Belconnen Markets Syndicate 13
2
175 7 36
Hunters Plaza 382 1
Syndicate
Bluewater 60
Square Syndicate Elanor Healthcare
52 Elanor Retail 31 6 Real Estate Fund
Property Fund
Belconnen $1,692m [1] $203m
56
Markets Syndicate
128
Elanor Healthcare
Real Estate Fund
328 169 36 57
Elanor Luxury
163 Hotel Fund
Elanor Retail
Elanor Luxury
Property Fund Hotel Fund Elanor Metro and Prime
Regional Hotel Fund
Elanor Metro and Prime
Regional Hotel Fund
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1. Consistent with the basis on which ENN’s base management fees are calculated, figures reflect the Gross Asset Value of the various managed funds

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The Group has Significant Capital to Facilitate Future Growth

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Existing Capital Available to Facilitate Future Growth ($m)	Existing Capital Available to Facilitate Future Growth ($m)
Cash and receivables 23 Capital management; recycling Co-investment capital (anticipated to be recycled to cash in FY21) 84
Total Growth Capital	107

• The Group has approximately $107m of balance sheet growth capital, including ‘capital recycling’ of its Co-investments in Elanor Luxury Hotel Fund and Elanor Metro and Prime Regional Hotel Fund (10% Co-investment holding objective)

• The Group has an active pipeline in its key investment sector focuses of commercial and healthcare office real estate, retail real estate and the accommodation hotels, tourism and leisure sectors

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Financial Results

Core Earnings Analysis

Contribution to Core Earnings FY19 $’000 FY20 $’000	Contribution to Core Earnings FY19 $’000 FY20 $’000	Contribution to Core Earnings FY19 $’000 FY20 $’000
Funds management income 15,032 21,487 Co-investment earnings 7,423 5,837 Balance sheet investment earnings 5,702 2,010 Profit on sale of assets and co- investments 7,094 10,349 Other income - 205 Corporate overheads (13,365) (16,208) STI (Core Earnings impact) (631) (1,572) Other expenses - (1,770)
EBITDA 21,255 20,338
Depreciation and amortisation (796) (597) Operating profit before interest and tax 20,459 19,741 Interest income 2,088 1,770 Borrowing costs (4,536) (5,424) Operating profit before tax 18,011 16,087 Income tax (expense)/benefit (463) (653)
Core Earnings	17,548	15,434
Operating EPS (cents) 18.32 14.73
DPS (cents)	16.06	9.51

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• Increase in Funds Management income of 43.0% to $21.5m (refer page 10 of this presentation for a breakdown of Funds Management income)

• Co-investment earnings reflects distributions received/receivable from Co-investment in the Group’s Managed Funds. Elanor Retail Property Fund, Elanor Luxury Hotel Fund, Elanor Metro and Prime Regional Hotel Fund and Elanor Wildlife Park Fund suspended 2HFY20 distributions as a result of the operational and market impacts of the COVID-19 pandemic

• Balance sheet investment earnings incorporates the earnings of Featherdale Wildlife Park up to 29 November 2019 when it was sold to the Elanor Wildlife Park Fund

• Profit on sale of assets and Co-investments primarily comprises the profit on the sale of Featherdale Wildlife Park (not retained by the Group for growth capital) and the share of profit on the sale of Cradle Mountain Lodge by the Elanor Metro and Prime Regional Hotel Fund during the year

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Adjusted Balance Sheet[1]

	Balance Sheet as at 30 June 2020	$’000
	Assets
	Cash	17,255
	Receivables	6,514
	Inventories Financial assets	19 19,101
	Other current assets	4,801
	Property, plant and equipment Equity accounted investments	7,573 197,839
	Intangibles	600
	Deferred tax assets	1,783
	Total assets	255,485
	Liabilities
	Payables and other current liabilities	5,306
	Liabilities associated with assets held for sale	2,119
	Other current liabilities	2,682
	Interest bearing liabilities	88,064
	Other non-current liabilities	248
	Deferred tax liabilities	2,012
	Total liabilities	100,431
	Net assets	155,054
	Number of securities (m)	119,579
	NAV per security	$1.30
	NTA per security	$1.29
	Gearing (ND / TA less cash)	29.7%

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• Net assets of $155.1m as at 30 June 2020 ($159.1m as at 30 June 2019)

• Co-investment in Elanor Managed Funds of $197.8m ($123.8m as at 30 June 2019)

• Interest bearing debt of $88.1m as at 30 June 2020 ($83.5m as at 30 June 2019), including $60m of unsecured 5 year Corporate Notes

• Gearing of 29.7%; secured gearing ratio of 4.7% at 30 June 2020

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1. Statutory balance sheet has been restated to reflect the co-investment in Bluewater Square Syndicate, Elanor Metro and Prime Regional Hotel Fund and Elanor Luxury Hotel Fund on an equity accounted basis, not consolidation

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Strategy and Outlook

ENN Strategy and Outlook

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Strategic Grow funds under management Objectives Deliver strong returns for Elanor capital partners and security holders Acquire high investment quality Grow institutional and private Grow listed public market FUM Grow FUM assets with quality income and funds management capital capital base capital growth potential partners Active Realise earnings and capital Grow earnings from co- Investment growth potential from ENN ‘Capital lite’ business model investments managed assets Management

Outlook

Active pipeline in core real estate sectors of focus

Pursuing new real estate sectors

Exploring strategic opportunities to deliver growth objectives

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Disclaimer

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This presentation has been authorised for release by the Elanor Investors Group Board of Directors.

This presentation has been prepared by Elanor Investors Limited (ACN 169 308 187) and Elanor Funds Management Limited (ACN 125 903 031, AFSL 398196), as responsible entity of Elanor Investment Fund, and their controlled entities (collectively, ‘Elanor Investors Group’, ‘the Group’ or ‘ENN’).

This presentation contains selected summary information relating to the consolidated financial report for Elanor Investors Group for the period ended 30 June 2020 (“Group’s Results”) and does not purport to be all-inclusive or to contain all of the information that may be relevant to any particular investor or which a prospective investor may require in evaluations for a possible investment in the Group. It should be read in conjunction with the Group’s continuous disclosure announcements lodged with the Australian Securities Exchange including the Group’s Results, which are available at www.asx.com.au. The recipient acknowledges that circumstances may change and that this presentation may become outdated as a result. This presentation and the information in it are subject to change without notice and the Group is not obliged to update this presentation.

This presentation is provided for general information purposes only. It is not a product disclosure statement, prospectus or any other disclosure document for the purposes of the Corporations Act and has not been, and is not required to be, lodged with the Australian Securities & Investments Commission. It should not be relied upon by the recipient in considering the merits of the Group or the acquisition of securities in the Group. Nothing in this presentation constitutes investment, legal, tax, accounting or other advice and it is not to be relied upon in substitution for the recipient’s own exercise of independent judgment with regard to the operations, financial condition and prospects of the Group. The information contained in this presentation does not constitute financial product advice. Before making an investment decision, the recipient should consider its own financial situation, objectives and needs, and conduct its own independent investigation and assessment of the contents of this presentation, including obtaining investment, legal, tax, accounting and such other advice as it considers necessary or appropriate. This presentation has been prepared without taking account of any person’s individual investment objectives, financial situation or particular needs. It is not an invitation or offer to buy or sell, or a solicitation to invest in or refrain from investing in, securities in the Group or any other investment product.

The information in this presentation has been obtained from and based on sources believed by the Group to be reliable. To the maximum extent permitted by law, the Group and its other affiliates and their respective directors, officers, employees, consultants and agents make no representation or warranty, express or implied, as to the accuracy, completeness, timeliness or reliability of the contents of this presentation. To the maximum extent permitted by law, no member of the Group accepts any liability (including, without limitation, any liability arising from fault or negligence on the part of any of them) for any loss whatsoever arising from the use of this presentation or its contents or otherwise arising in connection with it.

All dollar values are in Australian dollars ($A or AUD) unless stated otherwise.

This presentation may contain forward-looking statements, guidance, forecasts, estimates , prospects, projections or statements in relation to future matters (‘Forward Statements’). Forward Statements can generally be identified by the use of forward looking words such as “anticipate”, “estimates”, “will”, “should”, “could”, “may”, “expects”, “plans”, “forecast”, “target” or similar expressions in this presentation. Forward Statements including indications, guidance or outlook on future revenues, distributions or financial position and performance or return or growth in underlying investments are provided as a general guide only and should not be relied upon as an indication or guarantee of future performance. No independent third party has reviewed the reasonableness of any such statements or assumptions. No member of the Group represents or warrants that such Forward Statements will be achieved or will prove to be correct or gives any warranty, express or implied, as to the accuracy, completeness, likelihood of achievement or reasonableness of any Forward Statement contained in this presentation. Except as required by law or regulation, the Group assumes no obligation to release updates or revisions to Forward Statements to reflect any changes.

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