Lendlease Group · ASX:LLC
Lendlease — H1 FY2009 Earnings Presentation
33 slides from Lendlease's earnings presentation, February 2009
Slide 1: Half Year Results February 2009
Half Year Results February 2009
Slide 2: Result Summary
Result Summary Unprecedented market conditions have seen a significant slowdown in LLC’s key markets and a general lack of liquidity which has placed pressure on asset values This has resulted in a statutory loss after tax of A$596.4m Net operating profit after tax was A$185.4m for the half de
Slide 3: Group Net Operating Profit After Tax – as at 31 December 2008
Group Net Operating Profit After Tax – as at 31 December 2008 350 25.3 14.4 (83.0) 300 (4.9)1 254.1 3.3 250 (23.8) 185.4 200 A$m 150 100 50 0 nt 7 8 on te l ie s P tai 00 00 me PP ra cti Re nit c2 c2 po ge tru mu De De r a Co ns an m AT AT Co tM Co NP NP n me 1 December 2007 has been adjusted to ref
Slide 4: Reconciliation of Net Operating Profit After Tax to Statutory Profit After Tax
Reconciliation of Net Operating Profit After Tax to Statutory Profit After Tax Dec 2008 A$m Net operating profit after tax 185.4 Inventory carrying value adjustments (190.7) Goodwill impairments (252.9) Other unrealised carrying value adjustments (150.0) Property investment revaluations (169.6) Savi
Slide 5: Diversified Earnings Base
Diversified Earnings Base Retail Communities Public Private Project Investment Partnerships Management & Management Construction Core Activities Asset ownership, Masterplanned Military housing, Project management Asset ownership, real development, urban communities, healthcare, and construction esta
Slide 6: Operating Business – Summary
Operating Business – Summary Retail Retail sales slowing in all regions Development pipeline will be continually reviewed to conserve capital Cap rates – continued weakening cap rates, particularly US & UK Communities US & UK markets remain very challenging Australia - sold 7 retirement vi
Slide 7: Retail
Retail Asia Pacific Operating Result A$m Dec 08 Dec 07 NOI growth of 3.8% across Asia Pacific portfolio Operating profit after tax 37.4 34.1 Little valuation impact to LLC as mainly asset management model Property management 1.3 (1.9) 8 centres under planning/development with cost of circa A
Slide 8: Communities
Communities Asia Pacific Operating Result A$m Dec 08 Dec 07 Acquired 43.2% stake in Lend Lease Primelife and management rights Operating profit after tax 71.1 56.7 Sold 7 retirement villages into Primelife as part of capital recycling Asia Pacific 75.6 39.4 Continued deal flow – Casey 2/ Bla
Slide 9: Public Private Partnerships
Public Private Partnerships Europe – PPP Post balance date awarded preferred bidder on £1.2b Operating Result Dec 08 Dec 07 Birmingham Schools program Operating profit after tax A$m 30.8 35.7 Reached financial close on Lancashire Schools Phase 2A Europe 3.3 (3.9)1 Operational handover of 3 s
Slide 10: Project Management & Construction
Project Management & Construction Asia Pacific Profit increase of 10% Operating Result Dec 08 Dec 07 Continued strong market conditions, particularly for social Operating profit after tax A$m 88.1 62.8 infrastructure – secured Gold Coast Hospital Asia Pacific 40.6 36.8 Backlog GPM Ï 17% Euro
Slide 11: Investment Management
Investment Management Continued strong performance of Funds Operating Result A$m Dec 08 Dec 07 APPF Retail 16.3% total return over 3 years APIC II 23.2% total return over 3 years Operating profit after tax 20.9 103.9 Funds management 10.7 45.5 APPF Retail and APPF Industrial were top two
Slide 12: Update on Lend Lease Primelife (LLP)
Update on Lend Lease Primelife (LLP) Executive team and management structure established: New CEO Rod Fehring and CFO Paul Walsh Closed deal 30 December: Security holders voted in favour of the Lend Lease proposal Existing banking facilities have been re-negotiated Bank covenants waived
Slide 13: Group Financial Results
Group Financial Results Steve McCann Chief Executive Officer
Slide 14: Group Profit After Tax
Group Profit After Tax Dec 2008 A$m Dec 2007 A$m 1 Retail 37.4 34.1 Communities 71.1 56.7 Public Private Partnerships 30.8 35.7 Investment Management 20.9 103.9 Project Management & Construction 88.1 62.8 Operating Businesses 248.3 293.2 Group Services & Amortisation (40.5) (31.7) Group Treasury (22
Slide 15: Cashflow
Cashflow Issue of 50m 302.5 new shares 1950 1800 c1.7+ Includes acquisition of 94.2 1650 Lend Lease Primelife 709.2 1500 1350 1200 195.0 (277.9) A$m 1050 842.8 900 750 600 450 Includes drawdown of £350m 300 bank facility 150 0 9 s w w w sh ct b'0 ed flo flo flo pa ca ce Fe h h sh im as ing as o ca a
Slide 16: Balance Sheet and Debt Maturity
Balance Sheet and Debt Maturity 31 Dec 2008 30 June 2008 Credit Rating – S&P/Moody’s BBB- / Baa3 BBB- / Baa3 Weighted average debt maturity1 2 6.5 years 10 years Fixed / floating debt 1 54% / 46%3 84% / 16% Cash (A$m) 1,563.3 842.8 Undrawn bank facilities A$61.7m A$808.6m Weighted average cost of de
Slide 17: Debt Covenants
Debt Covenants Key financial covenants under the Group facilities are: Consolidated net borrowings must not exceed 50% of total tangible assets, less cash Consolidated EBITDA to net finance charges must not be less than 2.5x Lend Lease has ample headroom under these covenants 1 Impairments and
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 Right Structure Reshape Portfolio 3 Strong Integrated Offering Cost Out 3 Grow Platforms Drive Efficiency 3 Operational Excellence Trusted Investment Manager Capital Management 3 Invest in People 3
Slide 20: Tactical Actions in the Short Term: Cash Preservation and Cost Management
Tactical Actions in the Short Term: Cash Preservation and Cost Management Tactic… Strategies Implemented Progress •‘Rightsize’ cost base to align to current business volumes Cost Reduction •Targeted headcount reduction 3 •Enhance operational performance plus sustainable ‘cost out’ •Minimal capital f
Slide 21: Proactive Cost Management
Proactive Cost Management We have put in place a number of cost management initiatives to resize our overhead in line with current business volumes Targeted headcount reduction Delayering of management/ collapsing of inefficient structures Rationalisation of regional offices/ back office con
Slide 22: Executive Management Team
Executive Management Team Steve McCann CHIEF EXECUTIVE OFFICER Lend Lease Businesses CEO CEO CEO Head of APAC EMEA Americas PPP, PM & Construction Global Disciplines Rod Leaver Dan Labbad Gary Buechler Mark Menhinnitt Head Global CEO of Development BLL Development Development Development David Hutto
Slide 23: PPP Growth Opportunity - Government Stimulus Packages
PPP Growth Opportunity - Government Stimulus Packages Our PPP business today generates circa 12% of net operating profit after tax: Established platform in UK in health, education, waste Market leading position in US military housing In Australia, significant design and construction presence
Slide 24: Outlook and Focus in Difficult Market Conditions
Outlook and Focus in Difficult Market Conditions 2009 Earnings Guidance • 2009 earnings guidance of 10-15% below 2008 reaffirmed • Included in this is capital recycling and transactions where Lend Lease is preferred bidder and expected to reach financial close • 30% downside risk to current guidance
Slide 25: Full Year Results 1st Half 2009
Full Year Results 1st Half 2009
Slide 26: Annexures
Lend Lease i
Slide 27: Earnings Composition
Earnings Composition Earnings Composition by Geography Earnings Composition by Business Unit 8% 25% 36% 15% 55% 20% 12% 29% Asia Pacific Investment Management Europe / UK Retail Americas Communities Public Private Partnerships Project Management & Construction 1 Based on profit after tax from operat
Slide 28: EPS & Dividend
EPS & Dividend EPS (1) Dividend cents 110.4 (3) cents 120 103.3 (2) 77 77 88.7 100 80 71.6 61 47.1 57 80 60 42 34 46.8 70.5 60 28.1 29 31 40 40 63.3 20 43.5 41.9 46.1 20 43 32.8 28 30 35 25 0 2005 2006 2007 2008 2009 0 2005 2006 2007 2008 2009 1st Half 2nd Half Interim Final (1) Calculated based on
Slide 29: Existing Debt Facilities
Existing Debt Facilities Undrawn debt facilities as at 31 December 2008 A$61.7m Facility Mix – 31 December 2008 (Drawn & Undrawn) Cash and cash equivalents A$1,563.3m at 31 December 2008 Interest rate profile as at 31 December 2008 Bank facilities £300m UK public bond @ 6.125% A$790.9m US$
Slide 30: Bovis Project Wins / Backlog Growth
Bovis Project Wins / Backlog Growth New Work Secured Backlog GPM 400 800 700 350 600 300 500 250 400 300 200 200 150 100 522 265 285 196 387 283 681 625 717 788 774 329 100 0 Jun 04 Jun 05 Jun 06 Jun 07 Jun 08 Dec 08 Jun 06 Dec 06 Jun 07 Dec 07 Jun 08 Dec 08 30
Slide 31: Strong Bovis Pipeline
Strong Bovis Pipeline Region Value A$m* FY2009 FY2010 FY2011 Gold Coast University Hospital Asia Pacific 1,400 Royal Children’s Hospital (Melbourne) Asia Pacific 1,064 Renewable Energy Corp B & I Plant (Singapore) (2) Asia Pacific 631 ANZ Melbourne Asia Pacific 577 Commonwealth New Build (ACT) Asia
Slide 32: Realised Gross Profit Margin Analysis by Region & Sector
Realised Gross Profit Margin Analysis by Region & Sector As at 31 December 2008 Asia Pacific Americas Europe Total GPM % GPM % GPM % GPM % Commercial/Office 36 17 29 30 Communications 6 - 5 5 Education 2 8 4 4 Government/Civic 2 4 9 9 Healthcare 4 13 1 1 Industrial/Technology 20 1 9 8 Mixed-use - 9
Slide 33: Half Year Results February 2009
Half Year Results February 2009