Mirvac Group · ASX:MGR
Mirvac — H1 2022 Earnings Presentation
35 slides from Mirvac's earnings presentation, Feb 10, 2022
Slide 1: 1H22 Results
1H22 The Fabric, Melbourne (artist impression, final design may differ) Results Reimagine Urban Life 10 February 2022
Slide 2: Acknowledgement of Country
1H22 RESULTS Acknowledgement of Country Mirvac pays its respect to all Aboriginal and Torres Strait Islander peoples, Traditional Custodians of the lands and waters of Australia where we live, work and play. ‘Reimagining Country’ by Riki Salam (Mualgal, Kaurareg, Kuku Yalanji), We are 27 Creative. 1
Slide 3: Agenda
1H22 RESULTS Agenda Overview Financial Capital Commercial Susan Lloyd-Hurwitz Results Allocation & Mixed Use Development CEO & Managing Director Courtenay Smith Brett Draffen 3 Chief Financial Officer Chief Investment Officer Brett Draffen 9 13 Chief Investment Officer 15 Integrated Residential Summ
Slide 4: Overview
Overview Susan Lloyd-Hurwitz CEO & Managing Director Harbourside, Sydney (artist impression, final design may differ) 10 FEBRUARY 2022 — 3
Slide 5: Key achievements – delivering on our strategy despite lockdowns
1H22 RESULTS Key achievements – delivering on our strategy despite lockdowns COMMERCIAL & PEOPLE AND PLANET INTEGRATED INVESTMENT PORTFOLIO RESIDENTIAL MIXED USE DEVELOPMENT Artist impression, final design may differ Office Industrial Artist impression, final design may differ > Achieved net positiv
Slide 6: Results momentum on track for full year
1H22 RESULTS Results momentum on track for full year 1H22 OPERATING PROFIT 1H22 DPS 1H22 OPERATING CASH FLOW $297m +9% on pcp 1 5.1¢ +6% on pcp $413m (7%) on pcp 1 NTA 2 1H22 EPS $2.76 7.5¢ $10.3bn EXTERNAL ASSETS AND FUM +3% on FY21 +9% on pcp 1 +4% on FY21 1H22 STATUTORY PROFIT GEARING 3 $565m 22.
Slide 7: The Mirvac difference
1H22 RESULTS The Mirvac difference INTEGRATED ASSET CREATION AND CURATION CAPABILITY IS A KEY COMPETITIVE ADVANTAGE: 'FLY-WHEEL' EFFECT HAS CONSIDERABLE BENEFITS TO STAKEHOLDERS > Development capability and in-house > Active EBIT re-invested into construction supports cost, risk management ASSET CRE
Slide 8: Net positive carbon – adding value across the business
1H22 RESULTS Net positive carbon – adding value across the business NET POSITIVE CARBON ACHIEVED 9 YEARS AHEAD OF 2030 TARGET MAXIMISE USE BUILD PURCHASE ENERGY 100% RENEWABLE 100% ELECTRIC HIGH-QUALITY EFFICIENCY ELECTRICITY ASSETS OFFSETS CONTINUE TO PROGRESS OUR TARGETS > Ambitious waste and wate
Slide 9: Our people and culture are key to our success
1H22 RESULTS Our people and culture are key to our success of competitiv source ea al dv it ic an HIGHLY MOTIVATED WORKFORCE 92% 93% r t STRONG EMPLOYMENT LAUNCHED WORK WELL, STAY WELL – MIRVAC'S GRANTED A WEEK OF C ag WITH EMPLOYEE BRAND AND CULTURE WELLBEING AND MENTAL THANK YOU DAYS e ENGAGEMENT
Slide 10: Financial Results
Financial Results Courtenay Smith Chief Financial Officer ASSET CREATION Development Recurring income funds distributions and future developments Development EBIT ASSET CURATION NTA Integrated Uplift Investment Portfolio New recurring Delivers new assets high quality rental income Asset & funds mana
Slide 11: 1H22 earnings
1H22 RESULTS 1H22 earnings INVESTMENT 1H22 ($m) 1H21 ($m) 1 � Property NOI impacted by lower retail cash collection, asset reclassification to Commercial & Mixed Use and disposal of Cherrybrook Village Investment EBIT 270 284 (5%) and 340 Adelaide Street > Asset and funds management impacted by lowe
Slide 12: 1H22 impacted by lockdowns as expected
1H22 RESULTS 1H22 impacted by lockdowns as expected > Net $25m COVID-19 EBIT impact in 1H22 ($20m in FY21 and $48m in FY20) CASH COLLECTION AFFECTED BY RESTRICTIONS 2 > Net billings $381m in 1H22 with 92% collected, down vs FY21 but 100% 98% an improvement on Q122 1 90% 95% 92% 88% – Impact concentr
Slide 13: Capital management position remains strong
1H22 RESULTS Capital management position remains strong A3/A- CREDIT RATINGS 22.3% GEARING 1 $750m CASH & UNDRAWN 6.1 yrs AVERAGE DEBT MOODY’S / FITCH FACILITIES MATURITY PROFILE 3.3% AVERAGE <6% OF TOTAL DEBT $413m 1H22 OPERATING 57%OF TOTAL BORROWING COST 2 MATURING BEFORE FY24 CASH FLOW DEBT HEDG
Slide 14: Capital Allocation
Capital Allocation Brett Draffen Chief Investment Officer ASSET CREATION Development Recurring income funds distributions and future developments Development EBIT ASSET CURATION NTA Integrated Uplift Investment Portfolio New recurring Delivers new assets high quality rental income Asset & funds mana
Slide 15: Capital allocation focused on urbanisation of major cities
1H22 RESULTS Capital allocation focused on urbanisation of major cities > Asset sales progressing well OPTIMISING PORTFOLIO WITH NON-CORE ASSET SALES – Tramsheds Sydney and Quay West, Sydney exchanged at 53% and 35% premium to Asset Sector Status Premium to Book book value respectively 340 Adelaide
Slide 16: Commercial & Mixed Use Development
Commercial & Mixed Use Development Brett Draffen Chief Investment Officer ASSET CREATION Development Recurring income funds distributions and future developments Development EBIT ASSET CURATION NTA Integrated Uplift Investment Portfolio New recurring Delivers new assets high quality rental income As
Slide 17: Integrated development capability creating value
1H22 RESULTS Integrated development capability creating value xed use develop ASSET VALUE CREATION ouse mi men DEVELOPMENT FLEXIBILITY n-h t ca c i pa a bi ri v l M ity > $1bn of value created over last 6.5 years > Adjust designs to meet evolving including $121m in 1H22 customer requirements – $566m
Slide 18: Commercial and Mixed use development pipeline has expanded
1H22 RESULTS Commercial and Mixed use development pipeline has expanded DEMONSTRATED DEVELOPMENT CAPABILITY AND TRACK RECORD > Moving from a predominately residential and office developer to a recognised creator and curator of leading mixed use precincts and places JUN 15 DEC 21 Office 50% > Pipelin
Slide 19: Momentum building for Harbourside mixed use development site
1H22 RESULTS Momentum building for Harbourside mixed use development site 100% MIRVAC OWNED – URBAN MIXED USE SITE > Purchased retail shopping centre in 2013 and achieved higher and better use for the site > IPC stage 1 DA approval received Jun 2021 > International Design competition winner announce
Slide 20: Progressing ~$29bn development pipeline
1H22 RESULTS Progressing ~$29bn development pipeline 1 ~$29bn OFFICE / MIXED USE INDUSTRIAL BUILD TO RENT RESIDENTIAL ~$9.2bn 1 ~$2.3bn 1 ~$1.4bn 1 ~$16.4bn 1 EXPECTED END VALUE 1 FY22 FY23 & beyond CONSTRUCTION COMPLETED CONSTRUCTION COMPLETED Industrial Aspect, Kemps Creek, SYD Elizabeth Enterpris
Slide 21: Integrated Investment Portfolio
Integrated Investment Portfolio Campbell Hanan Head of Integrated Investment Portfolio ASSET CREATION Development Recurring income funds distributions and future developments Development EBIT ASSET CURATION NTA Integrated Uplift Investment Portfolio New recurring Delivers new assets high quality ren
Slide 22: Modern sustainable office portfolio driving outperformance
1H22 RESULTS Modern sustainable office portfolio driving outperformance RESILIENT OFFICE PORTFOLIO BIFURCATION OF TENANT DEMAND IS SUPPORTING OUR OFFICE STRATEGY > Office NOI up 0.6% on pcp to $181m, including LFL NOI growth of 0.8% including COVID-19 impacts > Early signs of recovering demand – str
Slide 23: Industrial portfolio leveraging strong Sydney market
1H22 RESULTS Industrial portfolio leveraging strong Sydney market WELL-LOCATED, HIGH-QUALITY, MODERN INDUSTRIAL PORTFOLIO INDUSTRIAL LAND SECURED ON ATTRACTIVE TERMS 6 HYARD, AUBUR ITC N7 > Strategically positioned 100% Sydney 1 Industrial portfolio benefiting from $1,200/sqm SW 10% e-commerce, robu
Slide 24: Retail turning a corner
1H22 RESULTS Retail turning a corner > Retail sales are recovering, but remain subdued in CBD locations RETAIL MAT OUTSIDE OF CBD HAS RECOVERED WELL > Valuations improving, rising $75m or +2.5% (28% of portfolio externally % Portfolio Dec 21 MAT Dec 21 MAT Net valuation (by income) vs Dec 20 vs Dec
Slide 25: ~$1bn of Build to Rent pipeline now under construction
1H22 RESULTS ~$1bn of Build to Rent pipeline now under construction 2 > Resumption of positive leasing momentum at LIV Indigo, Sydney following temporary COVID-19 LEASING AT LIV INDIGO, MOMENTUM RESUMED WITH LIFTING OF RESTRICTIONS related disruption in September quarter, now 93% 1 leased and approa
Slide 26: Residential
Residential Stuart Penklis Head of Residential ASSET CREATION Development Recurring income funds distributions and future developments Development EBIT ASSET CURATION NTA Integrated Uplift Investment Portfolio New recurring Delivers new assets high quality rental income Asset & funds management fee
Slide 27: Residential sales momentum underpins future earnings
1H22 RESULTS Residential sales momentum underpins future earnings REMAIN ON TRACK FOR >2,500 SETTLEMENT GUIDANCE REPUTATION, BRAND AND HIGH-QUALITY PRODUCT DRIVING DEMAND > 1,303 settlements (+21% on pcp), remain on track to achieve >2,500 settlement guidance > Strong sales momentum continues with 1
Slide 28: Major apartment launches progressing with pre-sales at ~$1.5bn
1H22 RESULTS Major apartment launches progressing with pre-sales at ~$1.5bn PROJECT VALUE PROJECT VALUE PROJECT VALUE PROJECT VALUE PROJECT VALUE PROJECT VALUE PROJECT VALUE PROJECT VALUE PROJECT VALUE $216m 1 $197m 1 $82m 1 $768m 2 $207m 2 $96m 1 $143m 1 ~$125m 1 ~$185m 1 63% 100% 48% 70% 29% 24% 5
Slide 29: The Mirvac difference
1H22 RESULTS The Mirvac difference Mirvac capability and track record winning market share QUALITY PRODUCT, DEEP TRACK RECORD DEVELOPMENT FLEXIBILITY SCALE & RISK MANAGEMENT > Upfront community amenity and infrastructure > Operate across residential spectrum (land subdivision, homes, > Leverage scal
Slide 30: Demonstrated track record of strategy execution
1H22 RESULTS Demonstrated track record of strategy execution > Disciplined approach to restocking at the right time, in the right place and for the right price to unlock value and benefit from price growth > Track record of securing sites at the right time, right place and on capital efficient terms
Slide 31: Apartment outlook supported by value proposition and supply shortages
1H22 RESULTS Apartment outlook supported by value proposition and supply shortages APARTMENT LAUNCHES WELL-TIMED TO MEET FUTURE IMPROVING APARTMENT DEMAND LACK OF SUPPLY AND POPULATION REBOUND > Apartment relative affordability (vs established detached housing) is at all time high > We expect 2023/2
Slide 32: Summary & Guidance
Summary & Guidance Susan Lloyd-Hurwitz CEO & Managing Director ASSET CREATION Development Recurring income funds distributions and future developments Development EBIT ASSET CURATION NTA Integrated Uplift Investment Portfolio New recurring Delivers new assets high quality rental income Asset & funds
Slide 33: 2H22 outlook & guidance
1H22 RESULTS 2H22 outlook & guidance We have a resilient business with increasing momentum, and we continue to deliver strong, visible cash flows, sustainable distribution growth and attractive returns for our securityholders MAINTAIN EARNINGS GUIDANCE FOR FY22 OPERATING EPS AND DPS Whilst the recen
Slide 34: Important notice
1H22 RESULTS Important notice Mirvac Group comprises Mirvac Limited (ABN 92 003 280 699) and Mirvac Property Trust An investment in Mirvac stapled securities is subject to investment and other known and unknown risks, (ARSN 086 780 645). This presentation (“Presentation”) has been prepared by Mirvac
Slide 35: Thank you
Page heading to go here Thank you CONTACT Gavin Peacock, CFA MIRVAC GROUP General Manager Investor Relations Level 28, 200 George Street, investor.relations@mirvac.com Sydney NSW 2000