Mirvac Group · ASX:MGR
Mirvac — FY2023 Earnings Presentation
31 slides from Mirvac's earnings presentation, Aug 16, 2023
Slide 1: FY23 Results
FY23 Results 16 August 2023 The Fabric, Melbourne
Slide 2: Acknowledgement of Country
FY23 RESULTS Acknowledgement of Country Mirvac acknowledges Aboriginal and Torres Strait Islander peoples as the Traditional Owners of the lands and waters of Australia, and we offer our respect to their Elders past and present. Artwork: ‘Reimagining Country’, created by Riki Salam (Mualgal, Kaurare
Slide 3: Agenda
FY23 RESULTS Agenda Overview3 Financial Performance 8 Investment 12 Campbell Hanan Courtenay Smith Richard Seddon Group CEO & Managing Director Chief Financial Officer CEO, Investment Funds 18 Development 21 Summary & Guidance 26 Scott Mosely Stuart Penklis Campbell Hanan CEO, Funds Management CEO,
Slide 4: Overview
FY23 RESULTS Overview Campbell Hanan CEO & Managing Director S E T C R E AT I O AS elopment N Dev Development EBIT NTA Uplift T C U R AT I Delivers new assets SE ON AS tm Inves ent New recurring high quality rental income New recurring asset & funds management fee & co‑investment income F u nd s Ass
Slide 5: Executing on strategic objectives
FY23 RESULTS Executing on strategic objectives Retain balance sheet Expand Funds Increase cash flow resilience Leverage integrated Continued leadership in flexibility Management offering of Investment portfolio Development capability sustainability and culture FY23 ACHIEVEMENTS FY23 ACHIEVEMENTS FY2
Slide 6: FY23 results highlights
FY23 RESULTS FY23 results highlights FY23 Operating Profit FY23 EPS FY23 DPS FY23 Statutory Result $580m (3%) on pcp 14.7¢ (3%) on pcp 10.5¢ +3% on pcp ($165m) (118%) on pcp Investment portfolio1 Development pipeline2 3rd Party Capital Under Management3 Assets Under Management4 ~$11.9bn ~$29bn ~$17b
Slide 7: Our integrated platform driving superior returns
FY23 RESULTS Our integrated platform driving superior returns DEVELOPMENT INVESTMENT +200bp MPT portfolio long-term outperformance6 >$4bn 96.9% 5.3 star MIRVAC PORTFOLIO CONSISTENT OUTPERFORMANCE Based on compound average annual returns C R E AT asset portfolio NABERS SET IO AS elopment N disposals1
Slide 8: ESG progress, including scope 3 plans released in FY23
FY23 RESULTS ESG progress, including scope 3 plans released in FY23 Continued leadership in sustainability and culture ESG FOCUS AREA TARGET TRACKING Carbon emissions Net positive in scope 1, 2, 3 emissions1 Nothing wasted Zero waste to landfill Planet positive in carbon, waste and water by 2030 Eve
Slide 9: Financial Performance
FY23 RESULTS Financial Performance Courtenay Smith Chief Financial Officer S E T C R E AT I O AS elopment N Dev Development EBIT NTA Uplift T C U R AT I Delivers new assets SE ON AS tm Inves ent New recurring high quality rental income New recurring asset & funds management fee & co‑investment incom
Slide 10: FY23 earnings drivers
FY23 RESULTS FY23 earnings drivers INVESTMENT > Property NOI driven by +2% LFL NOI growth, recovery from COVID and positive impact of FY23 FY22 development completions at Heritage Lanes, Brisbane and Locomotive Workshop, Sydney ($m) ($m) 4 FUNDS Investment > Funds and Asset Management EBIT growth dr
Slide 11: Solid balance sheet position
FY23 RESULTS Solid balance sheet position Retain balance sheet flexibility > Robust balance sheet (25.9% geared1) and liquidity position, with >$1.3bn available > Significant coverage over leverage and interest cover covenants > Only $250m of debt maturing in FY24 > Increase in average borrowing cos
Slide 12: Capital allocation
FY23 RESULTS Capital allocation > Maintain balance sheet flexibility through capital discipline: PROGRESSED NON-CORE ASSET SALES – Progressed asset sales program with ~$0.5bn settled, further ~$1.2bn of disposals and settlements targeted for FY24 ~$0.5bn Asset Sector Status FY23 asset Allendale Squa
Slide 13: Investment
FY23 RESULTS Investment Richard Seddon CEO, Investment S E T C R E AT I O AS elopment N Dev Development EBIT NTA Uplift T C U R AT I Delivers new assets SE ON AS tm Inves ent New recurring high quality rental income New recurring asset & funds management fee & co‑investment income F u nd s Ass t et
Slide 14: Quality portfolio underpins strong performance
FY23 RESULTS Quality portfolio underpins strong performance Continue to increase cash flow resilience of Investment portfolio ACTIVE MANAGEMENT HAS DRIVEN STRONG UPLIFT IN PORTFOLIO QUALITY > ~$4.2bn of assets disposed over last 10 years > ~$6bn of assets created over last 10 years (13 new assets ac
Slide 15: Prime, modern, sustainable office buildings providing resilience
FY23 RESULTS Prime, modern, sustainable office buildings providing resilience 95.0% PORTFOLIO QUALITY DRIVING OUTPERFORMANCE MIRVAC OFFICE OUTPERFORMANCE Mirvac portfolio vs market benchmark > Strong NOI growth of 7% on pcp to $395m, driven by completion of new developments, leasing performance and
Slide 16: Industrial benefiting from continued strong market
FY23 RESULTS Industrial benefiting from continued strong market WELL-LOCATED, HIGH-QUALITY MODERN PORTFOLIO > 100% Sydney located portfolio1 benefiting from strong occupier demand, tight market vacancy 100% Occupancy2 and restricted future supply (FY22: 100%) > LFL NOI up 4.3% to $57m supported by s
Slide 17: Urban retail portfolio benefiting from population growth
FY23 RESULTS Urban retail portfolio benefiting from population growth 97.5% STRONG SALES AND SOLID LEASING PERFORMANCE MAT SALES GROWTH % Compared to 2019 > Sales 10.5% above 2019 levels across portfolio Occupancy1 30% > Strong leasing activity with ~91,000 sqm leased across 307 transactions includi
Slide 18: Robust market fundamentals supporting Build to Rent offering
FY23 RESULTS Robust market fundamentals supporting Build to Rent offering MAINTAINING OPERATIONAL RESILIENCE AUSTRALIAN KNOWN PROFESSIONALLY LIV Munro POTENTIAL BTR SUPPLY MANAGED HOUSING STOCK 62% > LIV Indigo, Sydney (315 apartments) high occupancy of 94% 1 AS % OF TOTAL STOCK > LIV Munro, Melbour
Slide 19: Funds
FY23 RESULTS Funds Scott Mosely CEO, Funds Management S E T C R E AT I O AS elopment N Dev Development EBIT NTA Uplift T C U R AT I Delivers new assets SE ON AS tm Inves ent New recurring high quality rental income New recurring asset & funds management fee & co‑investment income F u nd s Ass t et m
Slide 20: Diversifying and growing our external funds offering
FY23 RESULTS Diversifying and growing our external funds offering Expand Funds Management offering > Restructured organisation establishing Funds division, ensuring leading corporate governance and performance driven culture > Added 3 major new aligned partnerships over FY23 with strong growth manda
Slide 21: Strong capital partnering momentum across sectors
FY23 RESULTS Strong capital partnering momentum across sectors BUILD TO RENT INDUSTRIAL OFFICE Established new BTR venture Formed new industrial venture New office partnership $1.8bn Venture1 ~$0.4bn Seed asset 1 ~$0.6bn Partnership1 Secured a new capital partnership Established BTR Venture with for
Slide 22: Development
FY23 RESULTS Development Stuart Penklis CEO, Development S E T C R E AT I O AS elopment N Dev Development EBIT NTA Uplift T C U R AT I Delivers new assets SE ON AS tm Inves ent New recurring high quality rental income New recurring asset & funds management fee & co‑investment income F u nd s Ass t e
Slide 23: Leveraging our integrated development capability
FY23 RESULTS Leveraging our integrated development capability Leverage integrated Development capability > 50-year track record of developing through cycles > Integrated development, design and construction capability and reputation for quality is a critical competitive advantage > Multi-sector deve
Slide 24: Selectively unlocking value from ~$11.6bn commercial & mixed use pipeline
FY23 RESULTS Selectively unlocking value from ~$11.6bn commercial & mixed use pipeline MIXED USE: ~$3.0bn1 OFFICE: ~$5.0bn1 INDUSTRIAL: ~$2.4bn1 BUILD TO RENT: ~ $1.2bn1,3 Committed: ~$0.2bn 1 Committed: ~$0.6bn 1 Committed: ~$1.1bn 1 Committed: ~$1.2bn 1,3 Size: Size ~62,000 sqm Size ~72,000 sqm Si
Slide 25: Solid Residential results in challenging market conditions
FY23 RESULTS Solid Residential results in challenging market conditions > Settlements of 2,298 lots (FY22: 2,523) exceeding revised guidance of ~2,200 > Defaults remain low 0.1%1 > 26% gross margin, above through cycle target of 18-22% reflecting significant skew FY23 KEY SALES HIGHLIGHTS ~$1.8bn Pr
Slide 26: Positioned to capture demand in acutely under supplied market
FY23 RESULTS Positioned to capture demand in acutely under supplied market RESTRICTED APARTMENT SUPPLY OUTLOOK MARKET FUNDAMENTALS REMAIN POSITIVE Sydney, Melbourne & Brisbane market high density apartment completions 70,000 apartments 400,000 people 60,000 300,000 50,000 200,000 Supply Demand Vacan
Slide 27: Summary & Guidance
FY23 RESULTS Summary & Guidance Campbell Hanan Group CEO & Managing Director S E T C R E AT I O AS elopment N Dev Development EBIT NTA Uplift T C U R AT I Delivers new assets SE ON AS tm Inves ent New recurring high quality rental income New recurring asset & funds management fee & co‑investment inc
Slide 28: FY24 guidance
FY23 RESULTS FY24 guidance SUBJECT TO NO MATERIAL CHANGES TO THE OPERATING ENVIRONMENT MIRVAC IS TARGETING: > Operating EPS of 14.0-14.3c > Distribution of 10.5c The Langlee, Sydney (artist impression, final design may differ). 16 AUGUST 2023 27
Slide 29: Positioned for medium-term earnings growth
FY23 RESULTS Positioned for medium-term earnings growth Multiple levers to drive growth over time INVESTMENT PORTFOLIO FUNDS MANAGEMENT RESIDENTIAL COMPLETIONS DEVELOPMENT PIPELINE Resilient modern high quality assets benefiting from Expanded aligned ~$17bn1 platform (~29% pa growth2) Delivery of re
Slide 30: Important notice
FY23 RESULTS Important notice Mirvac Group comprises Mirvac Limited (ABN 92 003 280 699) and Mirvac Property Trust (ARSN 086 780 645). This Presentation contains certain “forward looking” statements. The words “expected”, “forecast”, “estimates”, This presentation (“Presentation”) has been prepared
Slide 31: Thank you
Thank you CONTACT Gavin Peacock, CFA | General Manager Investor Relations investor.relations@mirvac.com AUTHORISED FOR RELEASE BY The Mirvac Group Board MIRVAC GROUP Level 28, 200 George Street, Sydney NSW 2000