Mirvac Group · ASX:MGR
Mirvac — H1 2014 Earnings Presentation
33 slides from Mirvac's earnings presentation, Feb 11, 2016
Slide 1: 1H14 results
1H14 results 20 February 2014
Slide 2: Agenda
20 bond street, NSW Agenda 1H14 snapshot FY14 strategy 1H14 financial Operational Summary and scorecard results and capital update guidance progress update management mirvac I 1H14 results I 20 February 2014 I 01
Slide 3: 1H14 snapshot
pinnacle, NSW 1H14 snapshot mirvac I 1H14 results I 20 February 2014 I 02
Slide 4: 1H14 snapshot
1H14 snapshot 8 CHIFLEY, NSW > 1H14 operating EPS of 5.5cpss (statutory earnings of 6.7cpss) 1,2 and DPS of 4.4cpss > Narrowed FY14 EPS guidance to 11.8 to 12.0cpss (8.3% to 10.1% growth) following 92.2% of FY14 expected Development EBIT 3 now secured > $698.4m of strategic acquisitions across offic
Slide 5: FY14 strategy scorecard progress update
artist’s impression of Harold park, NSW FY14 strategy scorecard progress update mirvac I 1H14 results I 20 February 2014 I 04
Slide 6: Mirvac's vision
Mirvac’s vision Setting the standard as a world-class Australian property group that attracts the best Integrated Leveraging our integrated model to create, own, manage Diversified Maintaining an appropriate balance of passive and active invested capital through cycles, retaining capability across f
Slide 7: FY14 strategy scorecard
FY14 strategy scorecard FY14 action 1H14 achievements Office > Target continued IPD outperformance > Outperforming IPD on 3 and 5 year basis 1 > Substantially complete leasing balance of 8 Chifley, NSW > 8 Chifley, NSW 97.0% leased > Restock in line with acquisition mandate > Strategic acquisitions
Slide 8: FY14 strategy scorecard
FY14 strategy scorecard FY14 action 1H14 achievements Residential > $100m to $140m in provision release for FY14 > $24.5m released; on track for $100m to $140m in FY14 > De-risk forward earnings through pre-sales > Record $1.5bn of residential exchanged pre-sales contracts development > Continue imp
Slide 9: FY14 strategy scorecard
FY14 strategy scorecard FY14 action 1H14 achievements Operational > Continuous process re-engineering through Business Transformation Office > 5 projects completed and 16 projects underway excellence > HSE and Sustainability strategy implementation > HSE refined and approved strategy > “This Changes
Slide 10: 1H14 financial results and capital management
yarra’s edge, vic 1H14 financial results and capital management mirvac I 1H14 results I 20 February 2014 I 09
Slide 11: 1H14 financial results
1H14 financial results 1 1H14 ($m) 1H13 ($m) % change Statutory profit after tax attributable to Group securityholders 246.1 55.2 345.8% Statutory EPS 6.7cpss 1.6cpss Includes: Investment property revaluations (including IPUC) 67.1 67.9 Impairment of loans, investments and inventories 0.9 (273.2) De
Slide 12: 1H14 financial results
1H14 financial results 1H14 TO 1H13 SEGMENTED OPERATING EBIT 1 > 13.1% increase in Group $280m Operating EBIT in 1H14 270 23.0 (3.7) (10.1) from 1H13 > Strong contribution from 260 254.9 Investment through like‑for‑like NOI growth 250 21.3 (1.0) and asset purchases 240 > Development earnings underpi
Slide 13: Capital management update
Capital management update 1H14 capital management strategic progress 1H14 FY13 3 > S&P credit rating upgraded to BBB+ from BBB Balance sheet gearing 4 28.8% 23.6% Covenant gearing 5 36.9% 35.2% > Increased and extended syndicated bank facility to $1.7bn Look-through gearing 29.5% 24.4% > Issued A$50
Slide 14: Operational update
yarra’s edge, vic Operational update mirvac I 1H14 results I 20 February 2014 I 13
Slide 15: Strong MPT metrics underpin Group earnings
MPT > MPT continues to outperform IPD index over three and five years 1 > Strong like‑for-like NOI growth of 3.3% > Occupancy remained high across the portfolio at 97.8% 2 Strong MPT > Group earnings underpinned with a solid WALE of 5.0 years 3 metrics underpin > 222 leasing deals completed during t
Slide 16: Mirvac's office portfolio continues to deliver
Office — Passive > Office portfolio continues to outperform IPD index over three and five years 1 > Strong like-for-like NOI growth of 3.4% Mirvac’s office > Occupancy high at 96.1% 2 portfolio > Portfolio de-risked by WALE of 5.0 years 3 continues to deliver > Acquisitions of 367 and 477 Collins St
Slide 17: Office — Passive
Office — Passive Office CONDITIONS Mirvac’s response > Vacancy rates have increased across most CBD markets > Mirvac’s internal leasing team focused on: > Office supply remains below historical averages in — Maintaining effective rent growth; incentives remain below Melbourne and Sydney market at 19
Slide 18: Office — In development
Office — In development > 1H14 Commercial Development EBIT of $25.1m 1; major contribution from 8 Chifley, NSW > Projects under construction de-risked; 87.9% pre-leased > Office development pipeline increased to $3.1bn 2 from $2.2bn 2 via income producing strategic restocking > Planning progressing
Slide 19: 8 Chifley, NSW office development
Case study 8 Chifley, NSW OFFICE DEVELOPMENT 8 CHIFLEY, NSW MIRVAC’S flagship office development complete and ahead of Feasibility Project results: > $23.8m profit delivered to Development Division; $11.9m profit delivered to the Group > $333.5m value on completion > 8.0% yield on cost > External va
Slide 20: Strategy underway to drive retail portfolio
Retail — Passive > Retail portfolio outperforming IPD index over one and three years 1 > 2.1% like-for-like NOI growth Strategy > Increased occupancy to 99.6% 2 > Specialty occupancy costs manageable at 15.9% 3 (15.2% on a like-for-like portfolio basis) underway to drive > Delivered positive leasing
Slide 21: Retail — Passive
Retail — Passive Retail CONDITIONS Mirvac’s response > Retail conditions continue to be challenging, however > Mirvac’s retail team has been focused on repositioning improving household wealth is resulting in less caution and uplifting the portfolio quality by: on discretionary spending in key metro
Slide 22: Retail — In development
Retail — In development Unlocking value via $800m 1 retail development pipeline > 35% of development pipeline completed and underway Stanhope Village, NSW Orion springfield central, QLD Kawana Shoppingworld, QLD projects Underway GLA increase 3,100sqm GLA increase: Padsites 5,108sqm GLA increase 8,9
Slide 23: Stanhope Village, NSW — Stage 3 retail development
Case study Stanhope Village, NSW — Stage 3 Retail development The first project in Mirvac’s $800m 1 retail development pipeline complete Stanhope Village, NSW and ahead of feasibility Project results: > Prior to development asset valued at $73.8m 2 > Spend of $14.8m delivering $97.0m value on comple
Slide 24: Industrial portfolio performing well
Industrial — Passive > Industrial portfolio outperforming IPD index over one year 1 > Occupancy strong at 99.5% 2 > 5.2% like-for-like NOI growth > Strong portfolio WALE of 9.3 3 years Industrial portfolio > Acquisition of 60 Wallgrove Road, NSW; strategic income producing asset with development pot
Slide 25: Industrial — Passive
Industrial — Passive Industrial CONDITIONS Mirvac’s response > Leasing demand for industrial is currently stable, however > 92.2% of Mirvac’s industrial exposure is held in strongest improvements expected in line with business and consumer markets Sydney and Melbourne confidence > Strategic acquisit
Slide 26: Residential pipeline providing earnings visibility
Residential — 1H14 activity > 1H14 Residential EBIT of $44.2m 1; settlement of 1,032 lots > Record $1.5bn 2 of residential exchanged pre-sales contracts; $670.2m secured in 1H14 > 1,097 lots released in 1H14 with 87.5% pre-sold Residential pipeline > Strategic acquisitions of >1,100 lots across NSW,
Slide 27: Development — FY14 expectations
Development — FY14 expectations Chatswood, Era, NSW > On track to achieve >10% Development ROIC and normalised gross margin within target of 18% to 22% > 92.2% of FY14 expected Development EBIT 1 secured > Strong price growth and sales volume in MPC north west and south west corridors of NSW > Offse
Slide 28: Residential — Market outlook
Residential — Market outlook 1 > Fundamentals underpinning the housing market remain supportive of both prices and volumes > Construction activity continues to remain strong across Melbourne and Sydney > Affordability, weak labour market conditions and consumer caution will make for a subdued uplift
Slide 29: Residential — Mirvac's outlook
Residential — Mirvac’s outlook > FY15 expected Development EBIT 56.6% secured > $453m new exchanged pre-sales contracts to be settled in FY15 and FY16: — Harold Park, Precinct 3, NSW (82.9% pre-sold) — Yarra’s Edge, Array, VIC (78.5% pre-sold) > Recent pre-sales success provides confidence for upcom
Slide 30: Summary and guidance
8 CHIFLEY, SYDNEY, NSW Summary and guidance mirvac I 1H14 results I 20 February 2014 I 29
Slide 31: Summary and guidance
Summary and guidance GuidanceFY14 Group operating profit $432 – $443m Operating EPS 11.8 – 12.0cpss DPS 8.8 – 9.0cpss Weighted average securities 3,673m Target Development ROIC in FY14 >10% mirvac I 1H14 results I 20 February 2014 I 30
Slide 32: Disclaimer and important notice
Disclaimer and important notice 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 Mirvac Limi
Slide 33: Thank you
THANKYOU Follow us Mirvac Investor Mirvac 1H14 on twitter relations Property @MirvacIR website compendium