Mirvac Group · ASX:MGR
Mirvac — H1 2020 Earnings Presentation
33 slides from Mirvac's earnings presentation, Feb 6, 2020
Slide 1: 1H20 Results
1H20 Results Reimagine Urban Life 06.02.2020
Slide 2: Agenda
1H20 RESULTS Agenda Office & Industrial CAMPBELL HANAN Residential HEAD OF OFFICE & INDUSTRIAL STUART PENKLIS Overview 15 HEAD OF RESIDENTIAL SUSAN LLOYD-HURWITZ CEO & MANAGING DIRECTOR 24 02 Retail Financial Results SUSAN MACDONALD HEAD OF RETAIL 20 SHANE GANNON CHIEF FINANCIAL OFFICER 11 Summary &
Slide 3: Overview
Overview Susan Lloyd-Hurwitz CEO & Managing Director Waterloo Metro Quarter, Sydney (artist impression)
Slide 4: Urban focus on Australia's growth cities delivering results
1H20 RESULTS Urban focus on Australia’s growth cities delivering results $352m 9.0 cpss 47.5% 1H20 OPERATING PROFIT 1H20 EPS 21% GROWTH 14% GROWTH 12 MONTH TOTAL ON PCP ON PCP SECURITYHOLDER RETURN 1 Defensive cash flows, and sustainable distribution growth $2.58 NTA 6.1 cpss 20.8% 1H20 DPS 6% GROWT
Slide 5: Growing value and recurring income through asset creation
1H20 RESULTS Growing value and recurring income through asset creation > $12.3bn of passive invested capital provides highly GROWING DISTRIBUTION FUELLED BY PASSIVE PORTFOLIO visible and secure cash flows that underpin future distribution growth 5% $600 FORECAST AVERAGE > Passive capital allocation
Slide 6: Continuing to deliver modern urban assets
1H20 RESULTS Continuing to deliver modern urban assets > Investing incremental capital in creating modern high-quality assets > Since FY14 we have successfully delivered seven new offices and five new industrial assets totalling ~$2.7bn in value 1 > Portfolio quality improving as new assets delivere
Slide 7: Asset creation and capital partnering driving growth
1H20 RESULTS Asset creation and capital partnering driving growth > Asset creation capability delivering high-quality passive GROWING PASSIVE ASSETS assets as the development pipeline completes AND EXTERNAL ASSETS UNDER MANAGEMENT > Future pipeline with a total expected end value of $35.0 billion $2
Slide 8: Successful execution against capital raising targets
1H20 RESULTS Successful execution against capital raising targets Secured the next generation of value accretive mixed-use, build-to-rent, office, industrial and residential projects MIXED-USE BUILD-TO-RENT ~$5bn EXPECTED END Waterloo Metro Quarter, SYD INDUSTRIAL Flinders West, MEL LIV Munro, MEL R
Slide 9: Enhancing urban mixed-use strategy
1H20 RESULTS Enhancing urban mixed-use strategy > Changing consumer preferences and ongoing urban population growth supporting our urban mixed‑use strategy SYDNEY CBD > Significant government infrastructure investment facilitating density and reshaping residential and SOUTH EVELEIGH, SYD employment
Slide 10: Build-to-rent strategy progressing
1H20 RESULTS Build-to-rent strategy progressing ATTRACTIVE BUILD-TO-RENT MARKET OPPORTUNITY ESTIMATED SIZE OF PRIVATE RENTAL SECTOR (APARTMENTS) 1 > The Australian apartment rental market has an estimated value of $580bn, with no major institutional ownership 1 > Changes in demographic preferences c
Slide 11: Focused ESG approach delivers for all stakeholders
1H20 RESULTS Focused ESG approach delivers for all stakeholders Hu m EMPLOYEES ial COMPETITIVE ENGAGEMENT Organisations FINANCE BENEFITS: an c focused on ESG an TSR EPS SAFETY DIVERSITY > High employee engagement Fin issues are shown NTA WALE TRUST TOP > Talent retention > Increased productivity to
Slide 12: Financial Results
Financial Results The Eastbourne, Melbourne Shane Gannon Chief Financial Officer
Slide 13: Continued strong financial results in line with expectations
1H20 RESULTS Continued strong financial results in line with expectations OPERATING RESULTS 1H20 1H19 $m $m Strong increase in Property NOI driven by Office LFL NOI growth of 5.6%, offset by lower development earnings compared to prior period Office & Industrial 251 265 5% Retail 83 85 2% LFL NOI gr
Slide 14: Capital management supporting growth through cycle
1H20 RESULTS Capital management supporting growth through cycle > Strong operating cash flows in 1H20 given the timing of residential settlements > FY20 forecast distribution of 12.2cpss (+5% on pcp) expected to be fully cash covered 20.8% 4.5% 7.7 yrs A3⁄A- GEARING 1 AVERAGE BORROWING AVERAGE MOODY
Slide 15: Pipeline delivering development profit and increasing recurring income
1H20 RESULTS Pipeline delivering development profit and increasing recurring income MAJOR CONTRIBUTORS¹ FY20 FY21 FUTURE PIPELINE 1 Development Profits & Fair Value Uplifts 2 Development Profits & Fair Value Uplifts 2 Development Pipeline OFFICE & > 477 Collins Street, MEL > 80 Ann Street, BNE Offic
Slide 16: Office & Industrial
Office & Industrial Campbell Hanan Head of Office & Industrial South Eveleigh, Sydney
Slide 17: High quality modern office portfolio delivering strong results
1H20 RESULTS High quality modern office portfolio delivering strong results STRONG PORTFOLIO RESULTS SUPPORTED BY STRATEGIC OVERWEIGHT TO PRIME SYDNEY AND MELBOURNE ASSETS AND DEVELOPMENT COMPLETIONS > Office NOI increased 5.2% on pcp to $177m, including like-for-like NOI growth of 5.6% > Net valuat
Slide 18: Industrial portfolio leveraging strong Sydney growth
1H20 RESULTS Industrial portfolio leveraging strong Sydney growth > Strategic positioning of industrial portfolio exclusively to Sydney, benefiting MIRVAC FUTURE INDUSTRIAL DEVELOPMENTS IN CLOSE PROXIMITY from e-commerce, committed infrastructure and continued urbanisation TO NEW WESTERN SYDNEY INTE
Slide 19: Planning the next wave of new high quality developments
1H20 RESULTS Planning the next wave of new high quality developments ACTIVE AND FUTURE O&I DEVELOPMENT PIPELINE INCREASING TO $8.5BN 1 DELIVERING ON OUR ACTIVE AND COMMITTED DEVELOPMENTS > $3.1 bn 2 committed office development pipeline expected to deliver strong returns $10.0 billion and recurring
Slide 20: Future resilience by creating one of Australia's youngest office portfolios
1H20 RESULTS Future resilience by creating one of Australia's youngest office portfolios YOUNGER PRIME PORTFOLIO LOWERS CAPEX PROFILE AND RISK OF OBSOLESCENCE > Delivering modern smart buildings that work with disruptive technology ~70% ~$6.1bn 86% OF OFFICE PORTFOLIO OF NEW OFFICE ASSETS OF OFFICE
Slide 21: Retail
Retail Susan MacDonald Head of Retail Toombul, Brisbane
Slide 22: Quality of urban retail portfolio continues to drive performance
1H20 RESULTS Quality of urban retail portfolio continues to drive performance LEVERAGING A GROWING URBAN AUDIENCE 1H20 FY19 > Strong leasing across 190 deals covering ~29,300 sqm of GLA 1H20 Comparable Comparable RETAIL SALES BY CATEGORY Total MAT MAT growth MAT growth > Positive leasing spreads of
Slide 23: Connected Urban Hubs will be integrated, experiential and dynamic
1H20 RESULTS Connected Urban Hubs will be integrated, experiential and dynamic THE VALUE OF CONNECTION FOR OUR AUDIENCES ENABLING PROGRESSIVE PARTNERSHIPS Value & scale Proximity, On the of our existing accessibility immediate audience - & parking in the pathway 120m+ retail most desirable to purcha
Slide 24: Embracing progressiveness to create greater value for Mirvac and our partners
1H20 RESULTS Embracing progressiveness to create greater value for Mirvac and our partners TO DRIVE OUTPERFORMANCE PROGRESSIVE URBAN AUDIENCE > 20% higher productivity vs Urbis 1 Mirvac’s most valuable consumer attributes: > ~60% higher productivity of progressive & advanced partners 2 > Progressive
Slide 25: Residential
Residential Stuart Penklis Head of Residential Folia, Tullamore, Melbourne (artist impression)
Slide 26: FY20 on track to be a record year for apartment settlements
1H20 RESULTS FY20 on track to be a record year for apartment settlements 88% MIRVAC’S RESIDENTIAL BRAND, TRACK RECORD AND HIGH-QUALITY PRODUCT CONTINUES TO PRODUCE STRONG RESULTS > 1,232 settlements, on track for target of >2,500 lot settlements OF FY20 EXPECTED > EBIT margins of 21% supported by JV
Slide 27: Delivering for Mirvac's Customers: Marrick & Co Case Study
1H20 RESULTS Delivering for Mirvac’s Customers: Marrick & Co Case Study > 5,300 sqm of community space > First One Planet Living certified community in NSW > Library dedicated to the Inner S > Up-cycled heritage buildings West Council along with 9 affordable > Reduced operating costs from solar PV/b
Slide 28: Strategic restocking and accelerated releases
1H20 RESULTS Strategic restocking and accelerated releases RESTOCKING AT THE RIGHT TIME, AT THE RIGHT PRICE AND IN RESIDENTIAL ACQUISITIONS & ADDITIONAL THE RIGHT PLACE PIPELINE PROJECTS SECURED OVER THE LAST ~18 MONTHS > Took advantage of a slower residential market and lower competition to No of P
Slide 29: Residential outlook – high quality product & pipeline
1H20 RESULTS Residential outlook – high quality product & pipeline RECOVERY IN THE RESIDENTIAL MARKET SHIFTING TO A GREATER PROPORTION OF EBIT GENERATED FROM MPC > Established market strength continuing with leading indicators signalling ongoing momentum into 2H20 FY16-19 FY20-23 FORECAST Apartments
Slide 30: Summary & Guidance
Summary Pavilions, Sydney (artist impression) & Guidance Susan Lloyd-Hurwitz CEO & Managing Director
Slide 31: FY20 Guidance
1H20 RESULTS FY20 Guidance DPS 13.0 cents 1 AGR 5% 12.0 FY20 guidance PS C 12.2c ar D FY20 guidance 3-4% 7 ye 5% 11.6c 11.0 DPS growth 11.0c 10.4c 10.0 EPS growth 9.9c (17.6 – 17.8 cpss) 9.4c 9.0 9.0c 8.7c 8.0 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 Guidance 1. Period of FY13 (DPS 8.7 cpss) to FY20,
Slide 32: Important Notice
1H20 RESULTS Important Notice Mirvac Group comprises Mirvac Limited (ABN 92 003 280 699) and Mirvac Property Trust (ARSN 086 780 645). An investment in Mirvac stapled securities is subject to investment and other known and unknown risks, some of This presentation (“Presentation”) has been prepared b
Slide 33: Thank you
Thank you Reimagine Urban Life Harold Park, Sydney