Lendlease Group · ASX:LLC
Lendlease — FY2009 Earnings Presentation
39 slides from Lendlease's earnings presentation, August 2009
Slide 1: Full Year Results August 2009
Full Year Results August 2009 Cautious but Confident
Slide 2: Result Summary
Result Summary Net Operating Profit after Tax of A$307.5m despite a difficult market environment Profit After Tax Slightly above market guidance given on 11 May 2009 of circa A$300m Statutory Loss after Tax of A$653.6m reflecting asset writedowns and charges Final dividend of 16 cents per sh
Slide 3: Group Net Operating Profit After Tax – year ended 30 June 2009
Group Net Operating Profit After Tax – year ended 30 June 2009 435.9 1 (5.8) 15.4 18.9 (108.4) (12.0) 450 400 (36.5) 350 307.5 300 A$m 250 200 150 100 50 0 t 8 9 n l ry ie s en P tai 00 00 o PP su cti m Re it e2 e2 un ea ge tru n n Tr m a Ju Ju ns an m & Co AT AT tM Co s ic e NP NP n me v er st pS v
Slide 4: Statutory Loss After Tax
Statutory Loss After Tax June 2009 (A$m) Net Operating Profit after Tax 307.5 Inventory carrying value adjustments (188.3) Goodwill impairments (252.9) Other carrying value adjustments (204.7) Property investment revaluations (263.0) Savings implementation costs (83.9) Net gain on Bovis UK pension s
Slide 5: Operating Business – Summary
Operating Business – Summary Retail sales slowing in all regions but prime assets relatively defensive Retail No significant capex required over next 12 to 18 months Cap rates – continued weakening cap rates, particularly UK Weak trading conditions in UK and NSW Communities Preferred bidde
Slide 6: Retail
Retail Asia Pacific Operating Result (A$m) June 09 June 08 NOI growth of 4.4% across Asia Pacific portfolio Valuation impact to LLC limited Operating Profit after Tax 60.3 66.1 Somerset project in Singapore remains on budget and Property management (8.4) (14.2) timetable and is expected to o
Slide 7: Communities
Communities Asia Pacific Completed acquisition of 43.2% stake in LLP and related Operating Result (A$m) June 09 June 08 management rights Operating Profit after Tax 88.3 100.3 Sold 7 retirement villages to LLP Selected as preferred bidder on RNA – value of A$2.5b Asia Pacific 99.9 82.7 Lan
Slide 8: Public Private Partnerships
Public Private Partnerships Europe – PPP Operating Result (A$m) June 09 June 08 Financial close on Birmingham Schools program expected Operating Profit after Tax 74.4 59.0 pre December Europe1 6.2 (13.2) Reached financial close on Lancashire Schools Americas 68.2 72.2 Operational handover
Slide 9: Project Management & Construction
Project Management & Construction Asia Pacific Operating Result (A$m) June 09 June 08 Profit 37%/ Backlog GPM 15% Operating Profit after Tax 168.9 150.0 Continued strong market conditions, particularly for social infrastructure – secured circa $1b of education Asia Pacific 94.7 69.0 work u
Slide 10: Investment Management
Investment Management APPF Retail and APPF Industrial were top two Operating Result (A$m) June 09 June 08 performing funds over last year in their index Operating Profit after Tax 28.9 137.3 Net FUM increase of A$0.6b including acquisition of LLP Funds management 8.4 54.1 management rights W
Slide 11: Group Financial Results
Group Financial Results Brad Soller Acting Chief Financial Officer
Slide 12: Group Profit/ (Loss) After Tax
Group Profit/ (Loss) After Tax June 2009 (A$m) June 2008 (A$m)1 Retail 60.3 66.1 Communities 88.3 100.3 Public Private Partnerships 74.4 59.0 Investment Management 28.9 137.3 Project Management & Construction 168.9 150.0 Operating Businesses 420.8 512.7 Group Services & Amortisation (71.9) (62.0) Gr
Slide 13: Earnings Composition – 30 June 2009
Earnings Composition – 30 June 2009 Earnings Composition by Geography1 Earnings Composition by Business Unit1 30% 7% 14% 40% 55% 21% 15% 18% Asia Pacific Investment Management Europe / UK Retail Americas Communities Public Private Partnerships 1 Based on operating profit after tax from operating bus
Slide 14: Cashflow
Cashflow A$m Ca sh 0 150 300 450 600 750 900 1050 1200 1350 at J un e0 8 Op e 842.8 rat i ng c as h flo w I nv es 382.2 ti ng ca s hf lo w F in an ci n (473.9) g ca s hf lo w 356.0 FX im pa ct 13.7 Ca sh at J un e0 9 1,120.8 14
Slide 15: Financial Strength
Financial Strength Key Liquidity Metrics 30 June 2009 30 June 2008 Credit Rating – S&P/Moody’s BBB- / Baa3 BBB- / Baa3 Weighted average debt maturity1 8 years 10 years Fixed / floating debt 1 76% / 24% 85% / 15% Cash (A$m) 1,120.8 842.8 Undrawn bank facilities (A$m) 612.0 808.6 Net debt2 195.8 287.3
Slide 16: Debt Maturity and Financial Covenants
Debt Maturity and Financial Covenants Key financial covenants Consolidated net borrowings must not exceed 50% of total tangible assets, less cash under the Group facilities Consolidated EBITDA to net finance charges must not be less than 2.5x Lend Lease has ample headroom under its covenants 800
Slide 17: Opportunities and Funding
Opportunities and Funding Pipeline of Existing Total spend to be $1bn–$2bn up to June 2012 Projects Sources of Debt/Available liquidity Operating Cashflow Asset Sales Capital PPP Equity Communities IM Co- Mixed Use Key Projects Stakes Projects investments Opportunities 17
Slide 18: Outlook & Strategy
Outlook & Strategy Steve McCann Chief Executive Officer
Slide 19: Strategic path forward
Strategic path forward LEAD BUILD World Class Property RESTORE Solutions Company Reshape Portfolio Right Structure Grow Platforms Strong Integrated Offering Cost Out Operational Excellence Drive Efficiency Trusted Investment Manager Invest in People Capital Management P
Slide 20: Key short term tactical actions
Key short term tactical actions Tactic Strategies Implemented Achieved Vigorous cashflow management Preservation of capital Minimal capital for new projects. Strict criteria and portfolio fit Active capital management for current projects Redefine Closure of non-performing businesses / off
Slide 21: Long Term Vision
Long Term Vision Tactic Strategies Implemented On Track Identify and retain key talent Enhance senior management ‘bench strength’ Invest in people Redeploy ‘talent float’ into dedicated teams to investigate new initiatives / up skilling Simplify and clarify business model Adapt our current
Slide 22: Growth Opportunities
Growth Opportunities Trend LL Capability 50% of the world’s population urbanised by 2008 and to increase to Fully integrated mixed use Urbanisation 70% by 2050 expertise Australian Superannuation FUM is forecast to triple in size to $2.8 Continued growth trillion by 2020 Strong investment in sup
Slide 23: Lend Lease's Strong Positioning – Cautious but Confident
Lend Lease’s Strong Positioning – Cautious but Confident Short term focus on cash preservation/ cost management Focusedstrategy Long term focus on maximising returns and driving earnings Invest available liquidity at attractive returns Economic Slowdown LLC has strong base of recurring earni
Slide 24: Lend Lease Competitive Advantage
Lend Lease Competitive Advantage We see more value in property… Integrated end-to-end property solutions Approach Our unique asset creation capabilities Core Competency Flexibility in our model for property cycles Agility Global and local property expertise Knowledge Leader in sustainable property s
Slide 25: Full Year Results August 2009
Full Year Results August 2009
Slide 26: Athletes Village Update
Athletes Village Update Dan Labbad CEO, Lend Lease EMEA
Slide 27: Athletes Village – Update
Athletes Village — Update Lend Lease
Slide 28: Athletes Village – Update
Athletes Village – Update 28
Slide 29: Athletes Village During Games Time
Athletes Village During Games Time 29
Slide 30: Full Year Results August 2009
Full Year Results August 2009
Slide 31: Annexures
Lend Lease op) ca) Se = ~< sa) = c <x
Slide 32: EPS & Dividend
EPS & Dividend EPS1 Dividend cents cents 108.73 77 77 120 103.32 80 100 88.7 61 57 71.6 46.5 72.5 60 34 80 42 41 46.8 70.5 31 60 28.1 26.4 40 29 40 16 62.2 20 43 20 43.5 41.9 46.1 28 30 35 32.8 25 0 0 2005 2006 2007 2008 2009 2005 2006 2007 2008 2009 1st Half 2nd Half Interim Final 1 Calculated base
Slide 33: Existing Debt Facilities
Existing Debt Facilities Undrawn debt facilities A$612.0m as at 30 June 2009 Facility Mix – 30 June 2009 (Drawn & Undrawn) Cash and cash equivalents A$1,120.8m as at 30 June 2009 Interest rate profile as at 30 June 2009 Bank facilities £300m UK public bond @ 6.125% A$765.1m US$300m private
Slide 34: Diversified Earnings Base
Diversified Earnings Base Retail Communities Public Private Project Investment Partnerships Management & Management Construction Core Activities Asset ownership, Masterplanned Military housing, Project management Asset ownership, real development, urban communities, healthcare, and construction esta
Slide 35: Bovis Project Wins / Backlog Growth
Bovis Project Wins / Backlog Growth New Work Secured Backlog GPM 400 800 350 700 300 600 500 250 400 200 300 200 150 265 285 196 387 329 283 209 100 681 625 717 788 690 100 0 Jun 06 Dec 06 Jun 07 Dec 07 Jun 08 Dec 08 Jun 09 Jun 05 Jun 06 Jun 07 Jun 08 Jun 09 A$m A$m 35
Slide 36: Bovis Lend Lease Backlog GPM by region and sector
Bovis Lend Lease Backlog GPM by region and sector As at 30 June 2009 Asia Pacific Americas Europe Total GPM % GPM % GPM % GPM % Commercial/Office 16 8 18 15 Communications 2 1 Education 11 16 17 14 Government/Civic 13 12 11 12 Healthcare 37 20 2 22 Industrial/Technology 6 5 4 Mixed-use 2 3 6 3 Pharm
Slide 37: Financial Metrics
Financial Metrics Payout Ratio on Operating Profit Gearing – Gross Borrowings to Total Tangible Assets 45% 85% 40% 80% 35% Gearing range 75% 30% 70% 25% Payout 65% ratio 20% 60% range 15% 55% 10% 50% 5% 0% 2005 2006 2007 2008 2009 2005 2006 2007 2008 2009 35% % of Annuity Income Interest Coverage (t
Slide 38: Operating Metrics
Operating Metrics Ratio of Current Assets to Current Liabilities (times) Full Time Employees 1.4 1.2 12500 1 11500 0.8 10500 0.6 0.4 9500 0.2 8500 0 7500 2005 2006 2007 2008 2009 2005 2006 2007 2008 2009 Operating Cash Flow Net Asset Backing per share (A$) $10 800 $8 600 $6 400 $4 200 $2 0 $0 2005 2
Slide 39: Full Year Results August 2009
Full Year Results August 2009