Mirvac Group · ASX:MGR
Mirvac — H1 2023 Earnings Presentation
34 slides from Mirvac's earnings presentation, Feb 9, 2023
Slide 1: 1H23 Results
1HResults 23 REIMAGINE URBAN LIFE 09 FEBRUARY 2023 For personal use only Harbourside, Sydney (artist impression, final design is subject to approvals and may differ)
Slide 2: Acknowledgement of Country
1H23 RESULTS Reimagine Urban Life Acknowledgement of Country Mirvac acknowledges Aboriginal and Torres Strait Islander peoples For personal use only as the Traditional Owners of the lands and waters of Australia, and we offer our respect to their Elders past and present. ‘Reimagining Country’ by Rik
Slide 3: Agenda
1H23 RESULTS Reimagine Urban Life Agenda For personal use only 03 Overview Susan Lloyd-Hurwitz | CEO & Managing Director 08 Financial Performance Courtenay Smith | Chief Financial Officer 12 Integrated Investment Portfolio Campbell Hanan | Head of Integrated Investment Portfolio 17 Funds Management
Slide 4: Overview
1H23 RESULTS Reimagine Urban Life Overview For personal use only Susan Lloyd-Hurwitz | CEO & Managing Director ASSET CREATION Development Recurring income funds distributions and future developments Development EBIT ASSET CURATION NTA Uplift Integrated Investment Portfolio New recurring high quality
Slide 5: Results remain on track for full year
1H23 RESULTS Reimagine Urban Life 1H23 results remain on track for full year For personal use only 1H23 Operating Profit 1H23 DPS $305m 5.2¢+3% on pcp +2% on pcp 1H23 Statutory Profit External Assets and FUM $215m (62%) on pcp $17.9bn +75% on FY22 NTA1 1H23 EPS Gearing2 $2.79 7.7¢ 24.5% unchanged on
Slide 6: Delivering on our strategy and creating value for our stakeholders
1H23 RESULTS Reimagine Urban Life Delivering on our strategy and creating value for our stakeholders For personal use only 5 key pillars ENABLE US TO CREATE VALUE FOR OUR STAKEHOLDERS, EXECUTE OUR STRATEGY, AND MAINTAIN A HEALTHY AND RESILIENT BUSINESS PEOPLE PERFORMANCE PLACE PARTNERS PLANET People
Slide 7: Setting new ambitious goals for sustainability
1H23 RESULTS Reimagine Urban Life Setting new ambitious goals for sustainability For personal use only FY14 Reached net positive carbon in scope 1 and 2 emissions 2030 How we got there: Planet Positive – Our Maximising energy efficiency FY23 plan to reach net positive TARGET SET: carbon released FY2
Slide 8: Well positioned to navigate through challenging conditions
1H23 RESULTS Reimagine Urban Life Well positioned to navigate through challenging conditions For personal use only Integrated Capability > Unique Tier 1 developer, scale and in-house design and construction capabilities Unique Integrated > Award-winning brand Capability > 50 year track record of dev
Slide 9: Financial Performance
1H23 RESULTS Reimagine Urban Life Financial For personal use only Performance Courtenay Smith | Chief Financial Officer ASSET CREATION Development Recurring income funds distributions and future developments Development EBIT ASSET CURATION NTA Uplift Integrated Investment Portfolio New recurring hig
Slide 10: Earnings drivers
1H23 RESULTS Reimagine Urban Life 1H23 earnings drivers For personal use only 1H23 1H22 ($m) ($m) Investment Investment Integrated Investment Portfolio NOI 327 275 19% � Property NOI driven by +3.5% LFL NOI growth, recovery from COVID and positive impact of Asset & funds management EBIT 29 16 81% de
Slide 11: Strong balance sheet to provide resilience through cycle
1H23 RESULTS Reimagine Urban Life Strong balance sheet to provide resilience through cycle For personal use only > 24.5%1 gearing at the middle of our 20-30% target range Gearing at the middle of target range 1 > Interest cover ratio >5x provides significant headroom 60% > $1.2bn liquidity available
Slide 12: Lifting capital allocation to higher returning modern assets
1H23 RESULTS Reimagine Urban Life Lifting capital allocation to higher returning modern assets For personal use only > Maintaining 20% / 80% Active / Passive capital allocation target Optimising portfolio with non-core asset sales > Increasing capital allocation to BTR, Industrial and modern commerc
Slide 13: Integrated Investment Portfolio
1H23 RESULTS Reimagine Urban Life Integrated For personal use only Investment Portfolio Campbell Hanan | Head of Integrated Investment Portfolio ASSET CREATION Development Recurring income funds distributions and future developments Development EBIT ASSET CURATION NTA Uplift Integrated Investment Po
Slide 14: Market leading portfolio quality driving outperformance
1H23 RESULTS Reimagine Urban Life Market leading portfolio quality driving outperformance For personal use only Office portfolio quality further improved driving outperformance Mirvac office outperformance Mirvac portfolio vs market benchmark > Strong NOI growth of 13% on pcp to $205m, driven by com
Slide 15: 100% Sydney Industrial portfolio outperforming
1H23 RESULTS Reimagine Urban Life 100% Sydney Industrial portfolio outperforming supported by strong market fundamentals For personal use only Well-located, high-quality modern industrial portfolio to further benefit from development completions Mirvac industrial outperformance Mirvac portfolio vs m
Slide 16: Strong 1H supports ongoing confidence in retail resilience
1H23 RESULTS Reimagine Urban Life Strong 1H supports ongoing confidence in retail resilience For personal use only Solid portfolio performance Monthly sales growth % (compared to 2019) > Sales rates above pre‑COVID levels across portfolio ex CBD assets (5% of portfolio1) 15% 10 > Positive LFL NOI gr
Slide 17: BTR developments completing into favourable environment
1H23 RESULTS Reimagine Urban Life BTR developments completing into favourable environment For personal use only Maintaining operational resilience Target market population forecast to exhibit strong growth > LIV Indigo, Sydney, high occupancy of 95% and 5.9% leasing spreads 4,200,000 people +18%6 >
Slide 18: Funds Management
1H23 RESULTS Reimagine Urban Life Funds For personal use only Management Scott Mosely | Head of Funds Management ASSET CREATION Development Recurring income funds distributions and future developments Development EBIT ASSET CURATION NTA Uplift Integrated Investment Portfolio New recurring high quali
Slide 19: Acceleration of funds management strategy
1H23 RESULTS Reimagine Urban Life Acceleration of funds management strategy For personal use only BENEFITS OF FUNDS MANAGEMENT STRATEGY EXPANSION Diversifies Accelerates Co-invest Improves Unique Alignment Utilises In-house AUM Scale Capital Sources Development Opportunities ROIC of Interest Model D
Slide 20: MWOF integration expands external AUM to ~$18bn
1H23 RESULTS Reimagine Urban Life MWOF integration expands external AUM to ~$18bn For personal use only > Successfully completed the transition of management of AMP Capital Wholesale Office Fund to Mirvac at the end MIRVAC WHOLESALE OFFICE FUND OVERVIEW 1 of September, now known as Mirvac Wholesale
Slide 21: Development
1H23 RESULTS Reimagine Urban Life Development For personal use only Stuart Penklis | Head of Development ASSET CREATION Development Recurring income funds distributions and future developments Development EBIT ASSET CURATION NTA Uplift Integrated Investment Portfolio New recurring high quality renta
Slide 22: Commercial & Mixed Use Development
1H23 RESULTS Reimagine Urban Life Commercial & Mixed Use For personal use only Development Stuart Penklis | Head of Development ASSET CREATION Development Recurring income funds distributions and future developments Development EBIT ASSET CURATION NTA Uplift Integrated Investment Portfolio New recur
Slide 23: Selective commitment of capital towards ~$12.5bn pipeline
1H23 RESULTS Reimagine Urban Life Selective commitment of capital towards ~$12.5bn pipeline For personal use only > Completed 490 apartment LIV Munro BTR development with active leasing underway and unlocked significant development value through the disposal of 34 Waterloo Road, Sydney > Selective c
Slide 24: LIV Munro – our first BTR community in Melbourne
1H23 RESULTS Reimagine Urban Life LIV Munro – our first BTR community in Melbourne For personal use only PLACE Asset creation & curation LIV MUNRO > Fund through agreement with PDG, leveraging Mirvac’s integrated delivery model > Designed by Bates Smart, LIV Munro forms part of a mixed-use precinct
Slide 25: Residential Development
1H23 RESULTS Reimagine Urban Life Residential For personal use only Development Stuart Penklis | Head of Development ASSET CREATION Development Recurring income funds distributions and future developments Development EBIT ASSET CURATION NTA Uplift Integrated Investment Portfolio New recurring high q
Slide 26: Residential sales have moderated from peak levels
1H23 RESULTS Reimagine Urban Life Residential sales have moderated from peak levels For personal use only > 807 lot settlements, impacted by weather and COVID-19-related delays affecting construction 1H23 key sales highlights programs with a 2H23 skew expected. Monitoring closely and at this stage r
Slide 27: Market fundamentals supported by under-supply
1H23 RESULTS Reimagine Urban Life Market fundamentals supported by under-supply For personal use only Uncertainty over interest rates is expected to weigh on buyer sentiment until there High density completions vs net population additions is more clarity on where rates will peak. Despite this, many
Slide 28: Well placed to capture demand in under supplied market
1H23 RESULTS Reimagine Urban Life Well placed to capture demand in under supplied market For personal use only POTENTIAL LAUNCHES OVER NEXT 12 MONTHS 1 Masterplanned Communities 330 LOTS 1 456 LOTS 1 200 LOTS 1 235 LOTS 1 Smiths Lane, VIC 2 Woodlea, VIC Cobbitty, NSW 2 Olivine, VIC 2 Apartments 168
Slide 29: Summary & Guidance
1H23 RESULTS Reimagine Urban Life Summary For personal use only & Guidance Susan Lloyd-Hurwitz | CEO & Managing Director ASSET CREATION Development Recurring income funds distributions and future developments Development EBIT ASSET CURATION NTA Uplift Integrated Investment Portfolio New recurring hi
Slide 30: FY23 guidance & outlook
1H23 RESULTS Reimagine Urban Life FY23 guidance & outlook For personal use only FY23 guidance1 Operating EPS and DPS Subject to no material changes to the market and delivery conditions, the group is targeting: 16.0 cents FY23 OPERATING > Operating EPS of at least 15.5 cpss (2.6% growth) at least 15
Slide 31: Positioned for medium term earnings growth
1H23 RESULTS Reimagine Urban Life Positioned for medium term earnings growth For personal use only Multiple levers to drive growth over time INVESTMENT PORTFOLIO Resilient modern high quality assets benefiting from growing tenant and capital preference for quality, modern, sustainable assets and dev
Slide 32: Important notice
1H23 RESULTS Reimagine Urban Life Important notice For personal use only 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 prese
Slide 33: For personal use only
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Slide 34: Thank you
1H23 RESULTS Reimagine Urban Life Thank you For personal use only 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