Mirvac Group · ASX:MGR
Mirvac — FY2022 Earnings Presentation
38 slides from Mirvac's earnings presentation, Aug 11, 2022
Slide 1: FY22 Results
iD) mien REIMAGINING URBAN LIFE SINCE 1972,___
Slide 2: Acknowledgement of Country
Celebrating 50 years | FY22 Results Acknowledgement of Country Mirvac acknowledges Aboriginal and Torres Strait Islander peoples as the Traditional Owners of ‘Reimagining Country’ by Riki Salam (Mualgal, Kaurareg, the lands and waters of Australia, and Kuku Yalanji), We are 27 Creative. we offer our
Slide 3: Agenda
Celebrating 50 years | FY22 Results Agenda Overview Financial Capital Commercial Integrated Residential Summary Susan Lloyd-Hurwitz Performance Allocation & Mixed Use Investment Stuart Penklis & Guidance Development Portfolio CEO & Managing Director Head of Residential Courtenay Smith Brett Draffen
Slide 4: Overview
Celebrating 50 years | FY22 Results Overview Susan Lloyd-Hurwitz CEO & Managing Director Heritage Lanes, 80 Ann Street, Brisbane 11 AUGUST 2022 | 3
Slide 5: Strong operating results achieved in FY22
Celebrating 50 years | FY22 Results Strong operating results achieved in FY22 FY22 OPERATING PROFIT FY22 DPS FY22 OPERATING CASH FLOW $596m +8% on pcp 10.2¢+3% on pcp $896m +41% on pcp EXTERNAL ASSETS FY22 STATUTORY PROFIT FY22 EPS UNDER MANAGEMENT $906m +1% on pcp 15.1¢ +8% on pcp $10.2bn +3% on FY
Slide 6: Creating value key pillars
Celebrating 50 years | FY22 Results Creating value 5 key pillars ENABLE US TO CREATE VALUE FOR OUR STAKEHOLDERS, EXECUTE OUR STRATEGY AND MAINTAIN A HEALTHY AND RESILIENT BUSINESS PLACE PERFORMANCE PEOPLE PARTNERS PLANET Asset creation & curation Financial People, culture & safety Customers & stakeh
Slide 7: Integrated model delivering outperformance
Celebrating 50 years | FY22 Results Integrated model delivering outperformance CONSISTENT INVESTMENT PORTFOLIO OUTPERFORMANCE Mirvac Investment Portfolio vs Australian Market Benchmark ASSET CREATION 12% Development 10.8% Funds distributions from recurring income and future developments 9.9% 9.3% 9.
Slide 8: Continuing to execute on our strategy in our 50th year
Celebrating 50 years | FY22 Results Continuing to execute on our strategy in our 50th year EXECUTING CORE COMPETENCIES OPTIMISING PORTFOLIO AND RECYCLING CAPITAL CLEAR RUNWAY FOR FUTURE GROWTH ~110,900 sqm leased $820m ACROSS THE INVESTMENT PORTFOLIO 1 FY22 completed 25% average sales sales 3 premiu
Slide 9: Acceleration of funds management strategy
Celebrating 50 years | FY22 Results Acceleration of funds management strategy WHOLESALE OFFICE FUND OVERVIEW 1 Fund Gross Assets: $7.7bn No. of assets: 11 Prime grade assets including interests in: > Secured management rights for $7.7bn AMP Wholesale Office Fund (AWOF) 1, growing external Quay Quart
Slide 10: Culture, safety & ESG leadership are critical competitive advantages
Celebrating 50 years | FY22 Results Culture, safety & ESG leadership are critical competitive advantages ESG AT THE HEART OF EVERYTHING THAT WE DO STRONG EMPLOYMENT BRAND & CULTURE IN COMPETITIVE MARKET Increased focus Joining the Science-Based Looking ahead: Creating a strong sense of belonging and
Slide 11: Financial Performance
Celebrating 50 years | FY22 Results Financial Performance Courtenay Smith Chief Financial Officer ASSET CREATION Development Funds distributions from recurring income and future developments Development EBIT ASSET CURATION Integrated NTA investment Uplift portfolio New recurring high Delivers new as
Slide 12: FY22 earnings drivers
Celebrating 50 years | FY22 Results FY22 earnings drivers $m FY22 FY21 INVESTMENT Investment EBIT 570 576 (1%) � Property NOI flat driven by 1.5% portfolio LFL growth, positive impact from development completions and improved COVID-19 impact offset by assets Integrated Investment Portfolio NOI 581 5
Slide 13: Recovery in cash collection during FY22
Celebrating 50 years | FY22 Results Recovery in cash collection during FY22 > Net billings $781m in FY22 with 97% collected an improvement on 1H22 1 CASH COLLECTION AFFECTED BY RESTRICTIONS 3 – High cash collection rates maintained across Office (99%) 100% 98% 95% 97% and Industrial (100%) impact co
Slide 14: Maintaining a strong capital structure
Celebrating 50 years | FY22 Results Maintaining a strong capital structure > Conservative 21.3%1 gearing at the low end of our 20-30% target range DEBT 55% HEDGED AT 30 JUNE 2022 IN LINE WITH POLICY 4 > $1.4bn liquidity available $2,500m 4.0% > Interest cover ratio >6x provides significant headroom
Slide 15: Capital Allocation
Celebrating 50 years | FY22 Results Capital Allocation Brett Draffen Chief Investment Officer ASSET CREATION Development Funds distributions from recurring income and future developments Development EBIT ASSET CURATION Integrated NTA investment Uplift portfolio New recurring high Delivers new assets
Slide 16: Capital recycling improving portfolio quality
Celebrating 50 years | FY22 Results Capital recycling improving portfolio quality > Accelerated portfolio repositioning towards prime, modern, sustainable assets OPTIMISING PORTFOLIO WITH NON-CORE ASSET SALES > Active recycling of non core assets Asset Sector Status Premium to Book – Tramsheds, Quay
Slide 17: Commercial & Mixed Use Development
Celebrating 50 years | FY22 Results Commercial & Mixed Use Development Brett Draffen Chief Investment Officer ASSET CREATION Development Funds distributions from recurring income and future developments Development EBIT ASSET CURATION Integrated NTA investment Uplift portfolio New recurring high Del
Slide 18: Integrated development capability creating value in rising cost environment
Celebrating 50 years | FY22 Results Integrated development capability creating value in rising cost environment se mixed use developm ASSET VALUE CREATION ou ent DEVELOPMENT FLEXIBILITY in-h ca pa ac b rv ili > $160m of value creation reported in FY22 1 > Utilise capital efficient structures i M ty
Slide 19: Creating world leading office developments – Heritage Lanes
Celebrating 50 years | FY22 Results Creating world leading office developments – Heritage Lanes 80 ANN STREET, BRISBANE Completed 80 Ann Street, Brisbane – Value (100% share) $867m 4 our smartest, most sustainable office development yet Cap rate 5.0% 5 PLACE Asset creation & curation $131m Mirvac Ow
Slide 20: ~$12.4bn development pipeline progress accelerating
Celebrating 50 years | FY22 Results ~$12.4bn development pipeline progress accelerating OFFICE USTRIA XED USE TO RE ND MI ILD BU NT L I ~$5.7bn 1 ~$2.5bn 1 ~$2.7bn 1 ~$1.5bn 5 FIRST NET POSITIVE EMBODIED CARBON DEVELOPMENT. 55 Pitt Street, Sydney Switchyard, Sydney Aspect, Kemps Creek, Sydney Harbou
Slide 21: Pipeline to drive considerable value to investors over time
Celebrating 50 years | FY22 Results Pipeline to drive considerable value to investors over time ASSET CREATION CAPABILITY DRIVING FUTURE INCOME AND RETURNS TRACK RECORD Potential future recurring annual NOI – 50% share 1 POTENTIAL OF RETURNS FUTURE RETURNS $300m Future secured developments ~$120m pa
Slide 22: Integrated Investment Portfolio
Celebrating 50 years | FY22 Results Integrated Investment Portfolio Campbell Hanan Head of Integrated Investment Portfolio ASSET CREATION Development Funds distributions from recurring income and future developments Development EBIT ASSET CURATION Integrated NTA investment Uplift portfolio New recur
Slide 23: Premium, modern, sustainable buildings driving the office recovery
Celebrating 50 years | FY22 Results Premium, modern, sustainable buildings driving the office recovery QUALITY ASSETS DRIVING OFFICE RECOVERY AND PORTFOLIO OUTPERFORMANCE MIRVAC OFFICE OUTPERFORMANCE Mirvac portfolio vs market benchmark > Office NOI up 1% on pcp to $369m, including LFL NOI growth of
Slide 24: Industrial portfolio continues to grow through development
Celebrating 50 years | FY22 Results Industrial portfolio continues to grow through development WELL LOCATED, HIGH QUALITY, MODERN INDUSTRIAL PORTFOLIO 100% SYDNEY PORTFOLIO 1 WILL GROW VIA ~$2.5BN SECURED DEVELOPMENT PIPELINE 6 > Strategically positioned 100% Sydney 1 Industrial portfolio benefiting
Slide 25: Strong retail recovery over 2H22
Celebrating 50 years | FY22 Results Strong retail recovery over 2H22 > Sales recovered to pre-COVID levels across portfolio ex CBD assets (~6% of portfolio1) TOOMBUL, BRISBANE > Leasing activity has improved with ~52,200 sqm leased across 348 deals (64% of deals executed in 2H22) DAMAGE > Positive l
Slide 26: Tight market vacancy driving Build to Rent
Celebrating 50 years | FY22 Results Tight market vacancy driving Build to Rent STRONG LEASING SUCCESS ACHIEVED AT LIV INDIGO RESIDENTIAL CAPITAL CITY VACANCY RATES (All Dwellings, Seasonally Adjusted) > Continued strong leasing momentum with asset now stabilised and high customer satisfaction > Futu
Slide 27: Residential
Celebrating 50 years | FY22 Results Residential Stuart Penklis Head of Residential ASSET CREATION Development Funds distributions from recurring income and future developments Development EBIT ASSET CURATION NTA Integrated Uplift investment portfolio New recurring high Delivers new assets quality re
Slide 28: Exceeded FY22 targets despite challenging conditions
Celebrating 50 years | FY22 Results Exceeded FY22 targets despite challenging conditions > Settlements of 2,523 lots (FY21: 2,526) exceeding >2,500 guidance > Weather and COVID related delays impacted construction programs with some forecast MPC settlements delayed into FY23 > Defaults 1 at 2.7% (0.
Slide 29: Successful launch program drove FY22 sales
Celebrating 50 years | FY22 Results Successful launch program drove FY22 sales ACCELERATED LAUNCHES UNDERPINS FUTURE EARNINGS OUTLOOK EXCHANGES AND RELEASE PROFILE > Strong sales success with 2,898 sales achieved in FY22 2,500 > MPC sales (2,400 lots sold) returned to normalised levels supported 2,0
Slide 30: Launch program underpins FY23/24+ earnings
Celebrating 50 years | FY22 Results Launch program underpins FY23/24+ earnings RAMP UP IN MAJOR LAUNCHES AND PRE-SALES IN FY22 MAJOR RELEASES EXPECTED OVER FY23 2 > Released 2,748 lots including 704 apartments in FY22 > 6+ apartment launches planned for FY23 2 > >2,000 new lot releases across MPC si
Slide 31: Proven track record navigating challenging market conditions
Celebrating 50 years | FY22 Results Proven track record navigating challenging market conditions ACTIVE RISK MANAGEMENT he Mirvac Difference UTILISING SCALE AND INDUSTRY RELATIONSHIPS T > Continuous market testing provides real-time cost planning inputs > Strategic procurement source of value > Stra
Slide 32: Residential fundamentals remain sound despite rising interest rates
Celebrating 50 years | FY22 Results Residential fundamentals remain sound despite rising interest rates > Tight market vacancy <2%1 and rising rents >+10% YoY 2 > Constrained developer finance leading to lower supply outlook > Increasing levels of net overseas migration > Unemployment at close to 50
Slide 33: Residential earnings in FY23 & beyond supported by attractive pipeline
Celebrating 50 years | FY22 Results Residential earnings in FY23 & beyond supported by attractive pipeline MAJOR PROJECT SETTLEMENT PROFILE 4 ROBUST PIPELINE OF AVERAGE AGE OF >25,000 lots ~8 years FY23 FY24 FY25 FY26 FY27+ 1 Olivine, VIC I Land 3,021 lots I Built Form 725 lots across a diverse prod
Slide 34: Summary & Guidance
Celebrating 50 years | FY22 Results Summary & Guidance Susan Lloyd-Hurwitz CEO & Managing Director ASSET CREATION Development Funds distributions from recurring income and future developments Development EBIT ASSET CURATION Integrated NTA investment Uplift portfolio New recurring high Delivers new a
Slide 35: FY23 guidance & outlook
Celebrating 50 years | FY22 Results FY23 guidance & outlook FY23 GUIDANCE 1 OPERATING EPS AND DPS Subject to no material changes to the operating environment, the group is targeting: > Operating EPS of at least 15.5 cpss (2.6% growth) 16.0 cents > Distribution of at least 10.5 cpss (2.9% growth) at
Slide 36: Positioned for medium term earnings growth
Celebrating 50 years | FY22 Results Positioned for medium term earnings growth Multiple levers to drive growth over time INVESTMENT PORTFOLIO Resilient modern high quality assets benefiting from growing tenant preference for quality, normalisation of trading conditions, and development completions F
Slide 37: Important notice
Celebrating 50 years | FY22 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
Slide 38: Thank you
Celebrating 50 years | FY22 Results AUTHORISED FOR RELEASE BY Thank you The Mirvac Group Board CONTACT Gavin Peacock, CFA MIRVAC GROUP General Manager Investor Relations Level 28, 200 George Street, investor.relations@mirvac.com Sydney NSW 2000 11 AUGUST 2022 | 37