Lendlease Group · ASX:LLC
Lendlease — H1 FY2010 Earnings Presentation
52 slides from Lendlease's earnings presentation, Feb 25, 2010
Slide 1: Half Year Results – December 2009 ASX cover letter
25 February 2010 For personal use only The Manager The Manager Companies Section Companies Section ASX Limited New Zealand Stock Exchange Limited Pages: Fifty Two (52) Pages Half Year Results – December 2009 Further to Lend Lease Group’s earlier announcement today, attached are the following documen
Slide 2: Strong First Half Result With Significant Project Wins
ASX Announcement For personal use only Strong First Half Result With Significant Project Wins 25 February 2010 • Statutory Profit after Tax of A$204.9 million for the half year ended 31 December 2009 • Statutory Profit after Tax includes net property investment revaluation gains of A$17.0 million af
Slide 3: Profit, dividend and group debt summary
Dec 2009 Dec 2008 A$m A$m For personal use only Operating Profit after Tax 187.9 185.4 Property Investment Revaluations 17.0 (169.6) Other net write downs and charges (612.2) Statutory Profit / (Loss) after Tax 204.9 (596.4) Interim Dividend1 20 cps 25 cps Earnings Per Security (EPS) on Operating Pr
Slide 4: Outlook statement
“We remain confident of the Group’s outlook over the long term. The Group has demonstrated a capacity to perform well in the face of extraordinary global conditions. We have a well defined strategy, a clear view of where the opportunities lie and are well placed to leverage our competitive advantage
Slide 5: Half Year Results February 2010
Not for distribution in the United States or to US Persons Half Year Results For personal use only February 2010 Securing long term value
Slide 6: Disclaimer
Not for distribution in the United States or to US Persons Disclaimer For personal use only Important information This presentation has been prepared in good faith, but no representation or warranty, express or implied, is made as to the accuracy, adequacy or reliability of any statements, estimates
Slide 7: Result Summary
Not for distribution in the United States or to US Persons Result Summary For personal use only Statutory Profit after Tax of A$204.9m including net property investment revaluations of A$17.0m Profit ProfitAfter AfterTax Tax Difficult market environment, particularly in offshore construction S
Slide 8: The Key Points
Not for distribution in the United States or to US Persons The Key Points For personal use only Continued deal momentum – added cA$12b to development pipeline Strong Deal Disciplined capital allocation – investing at the bottom of the cycle Momentum Have established market leading positions an
Slide 9: High Quality Deal Momentum
Not for distribution in the United States or to US Persons High Quality Deal Momentum For personal use only Secured Pipeline Projects Business Unit Size A$b Opportunity Business Unit Status Elephant & Castle UK Communities 2.7 Stratford UK Communities Ongoing discussions RNA Asia Pacific 2.5 Parkvil
Slide 10: Barangaroo
Not for distribution in the United States or to US Persons Barangaroo Regaining Leadership In Home Market For personal use only Transaction Overview / Capital Model Significant de-risking has already taken place End development value - A$6b 3rd party investors have conditionally committed to joi
Slide 11: ING Retail
Not for distribution in the United States or to US Persons ING Retail The “Capital light” Model In Action For personal use only Transaction Overview / Capital Model Strategic Rationale for the Transaction A Lend Lease led consortium has been Secures relationship with a new sovereign wealth fund
Slide 12: Alkimos
Not for distribution in the United States or to US Persons Alkimos Broader Market Reach, Better Diversification For personal use only Transaction Overview / Capital Model Strategic Rationale for the Transaction End development value - A$400m for Stage 1 Establishes Delfin in the Western Australi
Slide 13: Lend Lease Primelife
Not for distribution in the United States or to US Persons Lend Lease Primelife Leadership In A Growth Market For personal use only Transaction Overview / Capital Model Update on the Integration Process In Dec 2009, Lend Lease acquired the Lend Lease will merge Primelife with its RbD business re
Slide 14: Group Operating Profit After Tax
Not for distribution in the United States or to US Persons Group Operating Profit After Tax Conditions Mixed, But Improved Result For personal use only Dec 2009 Dec 2008 (A$m) (A$m) Retail 31.5 37.4 Sale of Communities 71.4 71.1 Romford Public Private Partnerships 49.5 30.8 Impact of Investment Mana
Slide 15: Diversified Earnings Base
Not for distribution in the United States or to US Persons Diversified Earnings Base Smoothing Mixed Conditions For personal use only Retail Communities Public Private Project Investment Partnerships Management & Management Construction Core Activities Asset ownership, Masterplanned Military housing
Slide 16: Retail
Not for distribution in the United States or to US Persons Retail 14% Valuations stabilising For personal use only Asia Pacific – increased fees from development projects and Operating Dec 2009 Dec 2008 reduced overheads Profit after Tax A$m A$m Operating Europe – declined due to a decrease in r
Slide 17: Communities
Not for distribution in the United States or to US Persons Communities 33% Significant pipeline conversion and improved trading conditions For personal use only Asia Pacific – lower profit due to capital recycling in prior Operating Dec 2009 Dec 2008 period Profit after Tax A$m A$m Operating Acq
Slide 18: Public Private Partnerships
Not for distribution in the United States or to US Persons Public Private Partnerships 22% Entered Canadian and Australian markets For personal use only Americas – increased development fees due to financial Operating Dec 2009 Dec 2008 close on PAL Phase 1 Profit after Tax A$m A$m Operating Euro
Slide 19: Project Management & Construction
Not for distribution in the United States or to US Persons Project Management & Construction 25% Record profit in Asia Pacific offset by weak markets elsewhere For personal use only Asia Pacific – record profit Operating Dec 2009 Dec 2008 Americas – loss due to poor trading conditions, restructu
Slide 20: Investment Management
Not for distribution in the United States or to US Persons Investment Management 6% Significant new Funds Under Management secured For personal use only Operating Dec 2009 Dec 2008 Asia Pacific profit lower as no performance fees Profit after Tax A$m A$m Operating Europe – loss includes investme
Slide 21: Outlook
Not for distribution in the United States or to US Persons Outlook Well placed for growth in the long term For personal use only Australian economy remains resilient Australian residential market momentum positive Asian opportunities emerging Market View UK market is likely to underperform i
Slide 22: Group Financial Results
For personal use only Not for distribution in the United States or to US Persons Group Financial Results Brad Soller Chief Financial Officer
Slide 23: Maintaining Financial Discipline
Not for distribution in the United States or to US Persons Maintaining Financial Discipline For personal use only Asset recycling is core to the Group’s strategy Capital Recycling Lend Lease sells mature assets and reinvests the proceeds into the business Lend Lease has a track record of recyc
Slide 24: Group Profit/(Loss) After Tax
Not for distribution in the United States or to US Persons Group Profit/ (Loss) After Tax Key Financial Points For personal use only Dec 2009 Dec 2008 (A$m) (A$m) Group Services reduced Operating Businesses 220.7 248.3 Group Services & Amortisation (26.9) (40.5) Lower drawdown in Group Treasury (5.9
Slide 25: Statement of Cash Flows
Not for distribution in the United States or to US Persons Statement of Cash Flows For personal use only 1350 107.3 (263.7) 1200 1,120.8 81.2 (78.1) 1050 967.5 900 750 Acquisition of A$m remaining interest in 600 Primelife and PTN assets 450 300 The Group 150 continues to have significant cash reser
Slide 26: Key Liquidity Metrics
Not for distribution in the United States or to US Persons Key Liquidity Metrics For personal use only Key Liquidity Metrics Dec 2009 June 2009 Weighted average debt maturity 6 years 8 years Fixed / floating debt 60% / 40% 76% / 24% Cash (A$m) 967.5 1,120.8 Undrawn bank facilities (A$m) 536.8 612.0
Slide 27: Strategy & Capital Raising Overview
For personal use only Not for distribution in the United States or to US Persons Strategy & Capital Raising Overview Steve McCann Chief Executive
Slide 28: We Have Made Significant Progress On Our Strategy
Not for distribution in the United States or to US Persons We Have Made Significant Progress On Our Strategy For personal use only Disciplined Outperformance A Focused Core Business Expansion LEAD BUILD World Class Property Reshape Portfolio Solutions Company RESTORE Growth Platforms Strong
Slide 29: Capital Raising and Rationale
Not for distribution in the United States or to US Persons Capital Raising and Rationale For personal use only A$806 million pro-rata Single-bookbuild Accelerated Renounceable Entitlement Capital Raising Offer In May 2009 Lend Lease announced the intention to invest A$1b-A$2b of capital over 3 y
Slide 30: Recent Acquisitions
Not for distribution in the United States or to US Persons Recent Acquisitions For personal use only Three acquisitions completed recently – A$1.2b capital deployed Recent Acquisitions Privatisation of Lend Lease Primelife Acquisition of the A$1.4b (investment ~A$0.9b); and ING Retail Fund Acquisiti
Slide 31: Recent Project Wins
Not for distribution in the United States or to US Persons Recent Project Wins Lend Lease has been successful in securing key projects For personal use only Recent project wins offer potential for attractive returns – Lend Lease intends to commit additional capital Development Project Wins1 Prefer
Slide 32: Rationale for Lend Lease Investment Strategy
Not for distribution in the United States or to US Persons Rationale for Lend Lease Investment Strategy Why now? The right time in the cycle to make investments For personal use only Right point in the property cycle for investment1 Lend Lease’s Hurdle Rates Hurdle Rates for New Type of Project Proj
Slide 33: Identified Capital Opportunities
Not for distribution in the United States or to US Persons Identified Capital Opportunities Accelerating growth opportunities of Lend Lease For personal use only Identified potential capital opportunities of ~$1.6b 1 Secured development projects 2 PPP opportunities 3 Targeted new developments 6 pr
Slide 34: Secured development projects
Not for distribution in the United States or to US Persons 1 Secured development projects For personal use only Potential to increase exposure to selected projects Share of Incremental Expected to Expected to Indicative Selected Projects Project3 Investment1,2 Commence4 Complete4 Returns5 (%) Melbou
Slide 35: Approach to development projects
Not for distribution in the United States or to US Persons 1 Secured development projects For personal use only The Group has not changed its approach to development Market timing: Assess the market cycle and supply/demand fundamentals Risk mitigation: Approach to Tenancy pre-commitments Devel
Slide 36: PPP Opportunities
Not for distribution in the United States or to US Persons 2 PPP Opportunities For personal use only Identified new PPP opportunities (~A$23b of total project value) Identified opportunities of ~A$9.6b in project value Identified opportunities of ~A$5.6b in project value Created Capella Capita
Slide 37: Targeted new developments
Not for distribution in the United States or to US Persons 3 Targeted new developments For personal use only Intention to continue growth in Australian pipeline Examples of targeted new developments A further 2 potential projects Right time in the cycle to invest in currently identified, 1 in SE
Slide 38: Capital employment opportunities
Not for distribution in the United States or to US Persons Capital employment opportunities For personal use only Potential capital investment pipeline Targeted Capital Investment Additional Capital Sources Secured development Equity raising A$806m projects ~A$0.8b Cashflow from operations Cap
Slide 39: Barangaroo Update
For personal use only Not for distribution in the United States or to US Persons Barangaroo Update David Hutton COO, Lend Lease Asia Pacific
Slide 40: Barangaroo site pre and post redevelopment
Not for distribution in the United States or to US Persons BARANGAROO SITE PRE-REDEVELOPMENT For personal use only BARANGAROO SITE POST-REDEVELOPMENT 36
Slide 41: Barangaroo Snapshot
Not for distribution in the United States or to US Persons BARANGAROO SNAPSHOT The Location For personal use only • Estimated $A6 billion end value • Completion in 10 to 15 years • 7.5 hectare site area • 490,000 m² total GFA • Integrates and redefines Sydney’s CBD • New global sustainability benchm
Slide 42: An Extension of the Sydney CBD
Not for distribution in the United States or to US Persons AN EXTENSION OF THE SYDNEY CBD For personal use only • 23,000 daytime workers • 65,000 within 5 minutes walk • Est. 25 million visitors p.a. • 2km’s of renewed waterfront • 355,000m² office • 30,000m² retail / food & beverage • 610 apartment
Slide 43: Next Generation Office
Not for distribution in the United States or to US Persons NEXT GENERATION OFFICE For personal use only • Sydney CBD maturing, limiting supply • Unique site – scale, master plan, integrated uses • Possibly last new build/large floor plate CBD opportunity • World leading design, technology and sustai
Slide 44: Precinct Wide Sustainability
Not for distribution in the United States or to US Persons PRECINCT WIDE SUSTAINABILITY Barangaroo Today Healthy buildings For personal use only Renewable energy Active public spaces 6 Star Green Star minimum + Precinct Infrastructure Centralised Cooling Blackwater treatment Precinct waste managemen
Slide 45: Annexures
For personal use only Not for distribution in the United States or to US Persons Annexures
Slide 46: EPS & Dividend
EPS & Dividend For personal use only EPS1 Dividend cents cents 77 77 120 108.73 80 103.32 88.7 61 100 46.5 72.5 60 42 34 80 41 46.8 70.5 31 60 26.4 40 16 40 62.2 20 35 43 20 41.9 32.8 46.1 40.9 30 25 20 0 0 4 2006 2007 2008 2009 2010 2006 2007 2008 2009 2010 1st Half 2nd Half Interim Final 1 Calcula
Slide 47: Existing Debt Facilities as at December 2009
Existing Debt Facilities as at 31 December 2009 For personal use only Undrawn debt facilities A$536.8m as at 31 December 2009 Facility Mix – 31 December 2009 Cash and cash equivalents A$967.5m as at 31 December 2009 (Drawn & Undrawn) Interest rate profile as at 31 December 2009 Debt capital ma
Slide 48: Bovis Project Wins / Backlog Growth
Bovis Project Wins / Backlog Growth For personal use only New Work Secured Backlog GPM 400 800 350 700 300 600 500 250 400 200 300 200 150 196 387 329 283 209 173 625 717 788 690 546 100 100 0 Jun 07 Dec 07 Jun 08 Dec 08 Jun 09 Dec 09 Jun 06 Jun 07 Jun 08 Jun 09 Dec 09 A$m A$m 44
Slide 49: Bovis Lend Lease Backlog GPM by region and sector
Bovis Lend Lease Backlog GPM by region and sector For personal use only As at 31 December 2009 Asia Pacific Americas Europe Total GPM % GPM % GPM % GPM % Commercial/Office 14 6 12 12 Communications 3 1 2 Education 15 22 18 17 Government/Civic 14 14 11 13 Healthcare 36 26 7 25 Industrial/Technology 4
Slide 50: Earnings Composition – December 2009
Earnings Composition – 31 December 2009 For personal use only Earnings Composition by Geography1 Earnings Composition by Business Unit1 9% 6% 25% 14% 29% 62% 22% 33% Asia Pacific Investment Management Europe / UK Retail Americas Communities Public Private Partnerships Project Management & Constructi
Slide 51: Lend Lease is a leader in Sustainability
Lend Lease is a leader in Sustainability Our sustainability credentials are a key source of competitive advantage For personal use only Lend Lease acts as a leader: Lend Lease is recognised on the following globally recognised sustainability reputation indices: Sustainable Buildings & Climate In
Slide 52: Half Year Results February 2010
For personal use only Not for distribution in the United States or to US Persons Half Year Results February 2010