Mirvac Group · ASX:MGR
Mirvac — FY2011 Earnings Presentation
29 slides from Mirvac's earnings presentation, Aug 23, 2011
Slide 1: Results by Mirvac
results by mirvac 23 August 2011
Slide 2: Agenda
agenda Mirvac’s vision and Strategy FY11 Key Achievements Financial Highlights Corporate Responsibility and Sustainability two core divisions Summary and guidance results By Mirvac 23 August 2011 page 1
Slide 3: Mirvac's Vision
MIRVAC’s VISION Sustainable model delivers across business cycles Defensive Active core upside $1.9bn 2 $5.9bn 1 1) By book value, including assets under development and indirect investments. 2) Development Division total inventory, investments and loans in associates and JVs. results By Mirvac 23 A
Slide 4: Mirvac's Strategy
MIRVAC’s strategy Investment — MPT 80% Development 20% Target average asset unlevered Target average project unlevered IRR of >11% IRR of >18% > Focus on high quality office > Focus on large, masterplanned and retail assets or infill: > Apartments > Internal portfolio management: > Land projects > S
Slide 5: FY11 Key Achievements
FY11 key achievements Group > Achieved FY11 operating EPS guidance delivering 13.7% growth > Increased distribution by 2.5% > Refinanced $2.1bn in facilities and extended debt maturity profile Investment Division – MPT > Achieved 4.1% like-for-like NOI growth > Increased occupancy to 98.1% 1 from 97
Slide 6: Financial Highlights
financial highlights 275 kent st, sydney nsw results By Mirvac 23 August 2011 page 5
Slide 7: Financial Highlights
financial highlights 1 FY11 ($m) FY10 ($m) % change Total operating EBIT 2 436.4 293.0 48.9% > Less net interest (92.0) (29.8) 208.7% > Add tax benefit 14.4 14.8 (2.7%) Operating profit attributable to Group securityholders 3 358.5 275.3 30.2% Statutory profit attributable to Group securityholders 1
Slide 8: Capital Position
capital position Maintaining a strong capital position > Refinanced $2.1bn in facilities and extended Drawn debt maturity profile 6 debt maturity profile $700m FY11 FY10 1 $600m Balance sheet gearing 2 26.3% 26.8% $500m Covenant gearing 3 39.1% 34.0% Look-through gearing 28.0% 29.1% $400m ICR 4 >4.0
Slide 9: Capital Position: Self Funding Model
capital position Mirvac has a self funding model Net Sources Uses of cash of cash FY12 position — Positive forecast — Distribution — Positive cash flow operating cash flow after interest — Maintenance capex — Approximately — Active commercial $200m forecast developments MPT asset sales + Funding Hea
Slide 10: Group Overhead Costs
group overhead costs Overhead cost reduction is an on-going focus for management Current cost base is scalable FY11 ($m) FY10 ($m) % change Employee benefit expense 1 90.2 111.4 (19.0%) Selling and marketing expenses 1 26.4 15.3 72.5% Other expenses 1 60.2 74.8 (19.5%) Total expense 1 176.8 201.5 (1
Slide 11: Corporate Responsibility and Sustainability
mirvac’s corporatetwo responsibility core divisions and sustainability waverley park, mulgrave, caption tba vic results By Mirvac 23 August 2011 page 10
Slide 12: Corporate Responsibility and Sustainability
corporate responsibility and sustainability Mirvac’s commitment to excellence in sustainability delivers tangible results > Investment in energy efficiency technology has delivered significant energy savings and improvement to our office and industrial portfolio NABERS rating: MPT Portfolio Energy S
Slide 13: Mirvac's Two Core Divisions
mirvac’s two core divisions 10–20 Bond Street, Sydney, NSW results By Mirvac 23 August 2011 page 12
Slide 14: Investment Division – MPT
investment division – MPT High quality portfolio with strong performance MPT Achievements FY11 Invested capital – $5.9bn 4 > Delivered 4.1% like-for-like NOI growth > Increased occupancy to 98.1% 1 from 97.6% 1 (FY10) > 2.2% 2 net valuation uplift for FY11 > Improved portfolio quality via $236.8m in
Slide 15: Portfolio Highlights – Office
portfolio highlights – office Strategic office overweight position delivers results > Strong FY11 like-for-like NOI growth of 4.2% > 2.8% 1 net valuation uplift for FY11 > Increased occupancy from 97.5% 2 (FY10) to 97.8% 2 > Leased 7.0% or 41,516sqm of portfolio 3 > 10–20 Bond Street reached 81.0% 4
Slide 16: Portfolio Highlights – Office
portfolio highlights – office High quality office portfolio > 88.8% of MPT now Premium or A Grade 1 > 87.3% of FY12 rent review contracts fixed or CPI > Modern portfolio with 58.8% of portfolio under 5 years old > MPT has the 3rd largest A-REIT office portfolio 2 MPT office portfolio weighted to key
Slide 17: Portfolio Highlights – Retail
portfolio highlights – retail Non-discretionary focused assets proving resilient Retail category by annualised base rent 6 4.3% Food mini majors 3% > Strong FY11 like-for-like NOI growth of Food majors 15% 99.0% Food retail 7% 1 > Increased occupancy to from Food catering 12% Non food majors 11% 97.
Slide 18: Linking MPT and Development
linking mpt and development Mirvac’s two core divisions have a Mirvac’s history as a strong relationship commercial developer 345 George St, Egis Tower, 45 Clarence St, 40 Miller St, Sydney Chatswood Sydney North Sydney investment — MPT Development NLA: 21,191 sqm NLA: 15,180 sqm NLA: 32,200 sqm NLA
Slide 19: Development – FY11 Activity
development — fy11 activity Development Division on track for 2014 Target Achievement 1,700 residential lots to settle Delivered 1,724 lots Improve gross margin Increased to 14.2% (FY10: 11.4%) 1 Improve residential development EBIT Achieved a 46.8% increase on FY10 Englobo non-core sales program On
Slide 20: Development Division – FY12 Outlook
development division – FY12 outlook Pre-sales delivers forward visibility and de-risking > Strong position of $980.3m 1 in exchanged pre-sales contracts, a 22.2% increase over FY10 > 55.8% of forecast FY12 development revenue secured by exchanged pre-sales contracts FY12 major development EBIT contr
Slide 21: Residential Development – Strategic Positioning
residential development – strategic positioning Expanding Mirvac’s brand into mid price At least 50% of government planning point delivers a larger purchaser base targets are for infill developments Average price of Mirvac’s apartments 1 Mirvac’s 39 years of experience in 100% apartments captures st
Slide 22: Development Pipeline Delivers Diversification and Visibility
development pipeline delivers diversification and visability Profit recognition profile 1 FY12 FY13 FY14 FY15 FY16 Project Stage Ownership Project status key Settlements have commenced Under construction Active Marketing Planning Under negotiation Commercial projects Currently marketing part share s
Slide 23: Return to Normalised Performance by 2014
return to normalised performance by 2014 “On strategy” projects and new acquisitions will deliver improved performance Profile of margin segments $1.4bn Average Margin 18-22% $1.2 Harold Park Hamilton $1.0 Yarra Towers Chatswood, ERA Average Margin 15%-20% $0.8 Jane Brook Gainsborough Greens Forecas
Slide 24: Development Drivers to 2014
development drivers to 2014 Execution forecast to deliver increased ROIC by 2014 FY11 FY12 FY13 FY14 Acquisitions: > Harold Park, NSW Acquisitions of “on strategy” Fast track projects due for completion 10-12% > Eastern Golf Course, VIC projects Non-core asset sales: > Park Precinct Waterfront, QLD
Slide 25: Summary and Guidance
summary and Guidance artist impression of harold park, nsw results By Mirvac 23 August 2011 page 24
Slide 26: Summary
SUMMARY Overweight office position is delivering results High quality MPT portfolio provides stable performance Development Division leverages commercial expertise Strong pre-sales de-risk future earnings Residential brand expansion captures apartment demand Robust capital position Defensive Active
Slide 27: Guidance
GUIDANCE Guidance FY12 Forecast Group operating profits $360 – $363m 1 Forecast operating EPS 10.5 – 10.6cpss 1 Forecast DPS 8.2 – 8.4cpss Forecast weighted average securities 3,427m 1) Subject to change based on strategic review of hotel division. results By Mirvac 23 August 2011 page 26
Slide 28: Disclaimer and Important Notice
DISCLAIMER AND IMPORTANT NOTICE Mirvac Group comprises Mirvac Limited ABN 92 003 280 699 and Mirvac Property This Presentation contains certain “forward looking” statements. The words Trust ARSN 086 780 645. This presentation (“Presentation”) has been prepared “anticipated”, “expected”, “projections
Slide 29: By Mirvac
hoxton park distribution centre, hoxton park, nsw by mirvac