Slide 1: FY17 Results
Heading FY17 For personal use only RESULTS 17 AUGUST 2017 MIRVAC FY17 RESULTS 17 AUGUST 2017 A
Slide 2: Agenda
Agenda For personal use only Overview Financial Capital Office & Retail Residential Summary Results Allocation Industrial + Guidance Susan Lloyd-Hurwitz Shane Gannon Brett Draffen Campbell Hanan Susan MacDonald Stuart Penklis Susan Lloyd-Hurwitz CEO and Managing Chief Financial Chief Investment Head
Slide 3: Overview
OVERVIEW For personal use only Susan Lloyd-Hurwitz CEO and Managing Director MIRVAC FY17 RESULTS 17 AUGUST 2017 02
Slide 4: Reimagine urban life
Reimagine urban life For personal use only Continued to redefine landscapes in FY17, creating more sustainable, connected and vibrant urban environments 2 RIVERSIDE QUAY, MELBOURNE UNISON, BRISBANE BROADWAY, SYDNEY TRAMSHEDS, SYDNEY THE MORETON, SYDNEY TULLAMORE, MELBOURNE BRIGHTON LAKES, SYDNEY GRE
Slide 5: Another year delivering on our promises
Another year delivering on our promises For personal use only 14.4 cpss 18% Highly visible and defensive cash FY17 EPS flows, sustainable earnings growth and attractive return on 11% Residential ROIC exceeded target invested capital EPS Growth of 15% Delivered 10.4 cpss top end of FY17 DPS 7% EPS &
Slide 6: Transformed portfolio positioned for future growth
Transformed portfolio positioned for future growth For personal use only OFFICE & INDUSTRIAL RETAIL FUTURE GROWTH SUPPORTED BY FUTURE GROWTH SUPPORTED BY >> Young portfolio transformed through Mirvac’s >> Strategic weighting to the best and most resilient deep development capabilities urban markets
Slide 7: Success driven by high performing team
Success driven by high performing team For personal use only 2017 Employee engagement comparison 1 90% 85 3% 76% 88% 9% of Mirvac employees 80 have flexible work arrangements 75 Mirvac Global high performing norm Australian national norm 2017 Comparison of companies with low and high employee engage
Slide 8: Investing to support our future growth
Investing to support our future growth For personal use only Safety Innovation People + Leadership Technology Sustainability >> Renewed Health, Safety and >> Mirvac’s Hatch innovation >> Employee engagement >> Implemented technology >> First megawatt of renewable Environment (HSE) strategy, program
Slide 9: Financial Results
FINANCIAL RESULTS For personal use only Shane Gannon Chief Financial Officer MIRVAC FY17 RESULTS 17 AUGUST 2017 08
Slide 10: Continuing to deliver strong financial trajectory
Continuing to deliver strong financial trajectory For personal use only Statutory profit Operating EPS NTA per security DPS $1,250m $1,164m 14.5 cents 14.4c $2.25 10.5 cents 10.4c $1,033m $2.13 1,000 13.5 GR 10.0 CA GR 17 GR CA 9.9c 3– 2.00 CA 17 Y1 13.0c 3– 750 F –17 Y1 % 13 $1.92 F $610m 7.2 FY 6%
Slide 11: Delivered 11% earnings growth
Delivered 11% earnings growth For personal use only O&I EBIT growth impacted by repositioning activities, including prior year divestments Operating results and loss of income from assets transitioning FY17 FY16 to development phase, partially offset by $m $m contributions from completed development
Slide 12: Investing for future growth
Investing for future growth For personal use only >> Cost saving targets achieved to allow investments into Group operating overhead expenses 1 and EBIT profile strategic areas to support future growth $800m $750m —— Salesforce 700 owt h gr 17% —— Business Intelligence 7% grow th $640m 600 $600m ——
Slide 13: Solid platform underpins future earnings growth
Solid platform underpins future earnings growth For personal use only >> Strong capital position and flexible balance sheet maintained 23.4% 4.8% 6.2yrs >> FY17 gearing at lower end of target range of 20-30% Gearing 1 Average Average debt borrowing cost 2 maturity 5.0% FY16 4.0yrs FY16 >> $749m of c
Slide 14: Capital Allocation
CAPITAL ALLOCATION For personal use only Brett Draffen Chief Investment Officer MIRVAC FY17 RESULTS 17 AUGUST 2017 13
Slide 15: Disciplined approach — capital allocated to the strongest markets
Disciplined approach — capital allocated to the strongest markets For personal use only 75% CAPITAL ALLOCATION TO SYDNEY & MELBOURNE $111bn Australia’s Australia’s largest Australia’s largest and Main contributors Australia’s Largest beneficiaries Sydney & Melbourne largest & deepest populations mos
Slide 16: Strong returns on invested capital
Strong returns on invested capital For personal use only >> Attractive risk adjusted returns on invested capital >> Office & Industrial and Retail benefiting from 12.4% 13.1% 6.4% net valuation gains totalling $540m Group ROIC Office & Industrial >> Residential ROIC driven by record EBIT contributio
Slide 17: Leverage capital partnerships to secure opportunities
Leverage capital partnerships to secure opportunities For personal use only Third-party Total Balance capital under assets under sheet assets management management Office & Industrial 6.2bn >> Deliver $2.3bn of active developments 1 —— 71% committed 2 $ $ 4.9bn $ 11.1 bn >> Continue to grow, leverag
Slide 18: Future returns driven by development activities
Future returns driven by development activities For personal use only >> The proportion of total returns since FY15 from capital Shifting return composition — Office, Industrial, Retail 100% ROIC composition has been driven higher by cap rate compression 26% 35% 75 53% >> Over the last 3 to 5 years
Slide 19: Office & Industrial
OFFICE & INDUSTRIAL For personal use only Campbell Hanan Head of Office & Industrial MIRVAC FY17 RESULTS 17 AUGUST 2017 18
Slide 20: Office portfolio transition now accelerating
Office portfolio transition now accelerating For personal use only 97.6% 5.92% 6.5yrs FY17 Key Achievements Office Occupancy Office Cap Rate Office WALE >> Maintained 6.5yr WALE 96.5% FY16 6.23% FY16 6.5yrs FY16 >> Strong 8.3% valuation uplift >> Completed 2 Riverside Quay development ahead of sched
Slide 21: Industrial portfolio providing high quality and resilient income
Industrial portfolio providing high quality and resilient income For personal use only FY17 Key Achievements 95.3% 6.37% 7.0yrs 94% >> Maintained attractive 7.0yr WALE Industrial Occupancy 1 Industrial Cap Rate Industrial WALE 1 Weighted to Sydney 100% FY16 6.56% FY16 7.9yrs FY16 and Melbourne 2 >>
Slide 22: Modernisation of Office & Industrial portfolio driving future earnings growth
Modernisation of Office & Industrial portfolio driving future earnings growth Additional high quality income from office and industrial developments 1 FY17-21 Recent development completions and For personal use only $90m NOI Recent completions $2.3bn active development pipeline $2.3bn active develop
Slide 23: Transformation of Office portfolio since FY12
Transformation of Office portfolio since FY12 For personal use only Evolution of Office portfolio 664 Collins Street case study $6.0bn 4.2bn >> >> 100% committed 2 4.0 ~$ >> 10.3 year WALE New office assets >> Quality tenant covenants 2.0 created or being >> 50% sale at 4.97% cap rate created betwee
Slide 24: Strong FY18 outlook
Strong FY18 outlook For personal use only Office & Industrial portfolio benefiting from high allocation 5-year Office lease expiry profile (by income) to Sydney and Melbourne markets 15% 12% 12% >> 84% of portfolio strategically weighted to the strongly performing Sydney and Melbourne markets 10 >>
Slide 25: Retail
RETAIL For personal use only Susan MacDonald Head of Retail MIRVAC FY17 RESULTS 17 AUGUST 2017 24
Slide 26: Achieved FY17 targets
Achieved FY17 targets For personal use only FY17 TARGETS $10,048/sqm √ Increase sales productivity to $10,000/sqm Total sales productivity 99.4% 5.6% 3.5% √ Occupancy >99% $9,864/sqm Occupancy (by area) Comparable Comparable foot √ Leasing spreads >2% Specialty 99.4% FY16 specialty sales traffic gro
Slide 27: Acquisitions and developments in urban catchments underpin growth and value
Acquisitions and developments in urban catchments underpin growth and value RECENT COMPLETIONS STABILISING WELL For personal use only ORION, SPRINGFIELD, BRISBANE BROADWAY, SYDNEY TRAMSHEDS, SYDNEY SPECIALTY COMPARABLE 1 SPECIALTY COMPARABLE 1 > AVERAGE > AVERAGE SALES SPECIALTY MAT UP PRODUCTIVITY
Slide 28: Not all retail is created equal
Not all retail is created equal Superior urban market fundamentals For personal use only ~ 65% Higher ~ 27% Higher median total ~ Lower 21% ~ 10X Greater High exposure population growth personal weekly income unemployment population density to e-resilient MIRVAC CATCHMENTS MIRVAC CATCHMENTS MIRVAC C
Slide 29: Mirvac positioning and outlook
Mirvac positioning and outlook For personal use only Management agility is key >> Broadening capability through consumer insights, tourism and food and beverage specialists to extract greater sales productivity >> Development focused on experience and enhancing overall asset performance >> Accelerat
Slide 30: Residential
RESIDENTIAL For personal use only Stuart Penklis Head of Residential MIRVAC FY17 RESULTS 17 AUGUST 2017 29
Slide 31: FY17 targets exceeded with 54% EBIT growth
FY17 targets exceeded with 54% EBIT growth For personal use only 25.0% 18.0% 3,311 Gross development Residential ROIC Lots settled in FY17 Strong residential performance margin 12.4% FY16 Ω 17% on FY16 $300m EBIT $302m 30% 24.4% FY16 54% 18.0% >> Total of 3,094 lot sales achieved in FY17 200 $196m 2
Slide 32: Pipeline restocked when pricing attractive
Pipeline restocked when pricing attractive Greater capital city 12-month For personal use only >> Embedded margins within Residential median house price, Mirvac pipeline reflects our ability to read the MPC lots acquired (NSW & VIC) 12,229 2,465 400% Median house price Lots lots acquired in lots acq
Slide 33: Taking advantage of strong residential markets
Taking advantage of strong residential markets 63% For personal use only Greater capital city 12-month median house price, >> Project launches accelerated Mirvac MPC lots released (NSW & VIC) weighting to VIC into strong residential markets Median house price FY15-17 MPC Lots 45% lots released 1 $1,
Slide 34: Pre-sales pipeline supports earnings visibility
Pre-sales pipeline supports earnings visibility For personal use only >> $2.7bn 1 pre-sales pipeline and strong embedded margins support $2.7bn pre-sales by buyer profile earnings visibility Domestic owner occupier: 42% >> FIRB pre-sales exposure reduced to 24% (26% at HY17) Domestic investor: 34% M
Slide 35: Outlook underpinned by high quality pipeline
Outlook underpinned by high quality pipeline >> Sustainability of Residential earnings supported by Residential EBIT contribution For personal use only —— Strong embedded margins —— Strength of brand and customer loyalty FY14-17 FY18-20 (expected) —— High quality product designed for the owner-occup
Slide 36: Well positioned to benefit from strong Sydney and Melbourne conditions
Well positioned to benefit from strong Sydney and Melbourne conditions, Government policy and urbanisation trends For personal use only Mirvac transport oriented developments expected to benefit from Sydney Metro project >> Mirvac benefiting from strategic weighting to Sydney and Melbourne CASTLE HI
Slide 37: Expect to maintain improved profitability and capital efficiency in FY18
Expect to maintain improved profitability and capital efficiency in FY18 For personal use only FY18 expected major EBIT contributors EBIT 3,400 lots 74% 80% ~ FY18 % Masterplanned FY18 % expected FY18 lot Apartments lot target pre-sold communities lot target pre-sold settlement target to be skewed ~
Slide 38: Summary & Guidance
SUMMARY & GUIDANCE For personal use only Susan Lloyd-Hurwitz CEO and Managing Director MIRVAC FY17 RESULTS 17 AUGUST 2017 37
Slide 39: Strong income growth and earnings visibility underpinned by urban strategy
Strong income growth and earnings visibility underpinned by urban strategy For personal use only Urban Strategy SECURE YIELD DISCIPLINED GROWTH >$9.0bn modern investment portfolio Potential Proven asset creation track record to deliver 9%+ High portfolio occupancy Attractive returns Long average lea
Slide 40: FY18 guidance
FY18 guidance For personal use only FY18 EPS FY18 DPS 6-8% 6% Growth Growth on FY17 on FY17 Operating EPS DPS 16.0 cents 15.3-15.6c 12.0 cents FY18 guidance AGR PS C 14.4c -18 E FY14 (FY17 guidance: 0% 14.0-14.4c) 6.5–7. 11.0c 14.0 11.0 FY18 guidance AGR 13.0c PS C (FY16 guidance: -18 D 10.4c 12.7-1
Slide 41: Important Notice
Important Notice For personal use only Mirvac Group comprises Mirvac Limited (ABN 92 003 280 699) and Mirvac Property Trust (ARSN 086 An investment in Mirvac stapled securities is subject to investment and other known and unknown 780 645). This presentation (“Presentation”) has been prepared by Mirv
Slide 42: Thank you
THANK For personal use only YOU 17 AUGUST 2017