Mirvac Group · ASX:MGR
Mirvac — FY2009 Earnings Presentation
28 slides from Mirvac's earnings presentation, Aug 25, 2009
Slide 1: Mirvac Group FY09 results presentation
Mirvac Group FY09 results presentation 25 August 2009 Ephraim Island, qld
Slide 2: Disclaimer and Important Notice
DISCLAIMER AND IMPORTANT NOTICE The information made available through this presentation and annexure, including any expression of opinion or forecast, has been obtained from or based on sources believed by Mirvac Group to be reliable. Mirvac Group does not warrant the accuracy, completeness or curr
Slide 3: Market conditions
market conditions Mirvac has operated through many market cycles since 1972 and its continued success is attributable to its ability to adapt to changing market conditions: > Australian economic performance has provided rationale to be cautiously optomistic > Equity pricing increasingly driven by in
Slide 4: Key Achievements
KEY ACHIEVEMENTS Group Financial > Achieved high end NPAT earnings guidance 3 > Achieved S&P BBB upgrade with positive outlook Capital management > Equity Issuance: 3 > $1,100m $1.00 cpss — reducing balance sheet gearing to 18.7% 1 > $500m $0.90 cpss > Revised distribution to reflect Trust taxable e
Slide 5: Mirvac well positioned
mirvac well positioned > Australian focused: 99.2% by asset value > Group earnings underpinned by secure rental income > Balance sheet strength – balance sheet gearing 18.7% 1 > Simplified operating model with 2 core Divisions: Investment and Development positioned to drive earnings growth > Targete
Slide 6: Financial results
Financial results justin mitchell 60 margaret street, sydney, nsw MIRVAC GROUP FY09 results presentation 25 august 2009 page 5
Slide 7: Operating result
operating result > Achieved November 2008 NPAT guidance which equates to high range June 2009 capital raising guidance > Corporate Division’s low cycle earnings, resulted in Mirvac Property Trust accounting for 121% NPAT > Results reflect core business, no contribution from: — Trust asset sales — Re
Slide 8: Summary of results
summary of results FY09 Operating profit $200.8m 1 Specific non-cash items ($756.4m) 2 Net loss from fair value of: > Investment properties > Derivative financial instruments > Share of associates profit/losses Other significant items 3 ($522.5m) 2 Impairments: > Loans > Investments > Inventory > Ma
Slide 9: Debt profile
debt profile FY09 FY08 Drawn debt facility maturity profile S&P rating BBB BBB $m (positive outlook) 1 1000 Total interest bearing debt $2,145m $2,453m 800 Avg borrowing rate 2 6.72% 7.07% Wtd avg debt maturity 3.3 yrs 3.8 yrs 600 % hedged 60.3% 79.7% Wtd avg hedged maturity 3 6.4 yrs 4.4 yrs 400 Ba
Slide 10: Liquidity profile
liquidity profile > Strong liquidity profile; able to meet all debt maturities and capital commitments in FY10 and beyond FY11 > Assume no trust asset sales, no distribution reinvestment plan and no rollover of MTNs Available Assumed facility Forecast available Funding source Facility limit ($m) Dra
Slide 11: Finance update
finance update Key debt covenants Definition Covenant FY09 Total liabilities/total tangible assets Covenant gearing (per stat accounts) <55.0% 34.2% Adjusted EBITDA / (interest expense per stat Interest cover ratio (ICR) accounts + lease expenses) >2.25:1 3.42:1 FY09 Activities FY10 Focus Capital ma
Slide 12: Development
development Brett Draffen the peninsula, burswood, wa MIRVAC GROUP FY09 results presentation 25 august 2009 page 11
Slide 13: Development model
development model Residential Development Value Chain Sales and Acquisition Design Development Construction Marketing Mirvac’s competitive advantage Premium brand driving repeat customers, allows apartment de-risking via pre-sales Superior product quality and design, established over 37 years of res
Slide 14: Residential pipeline
residential pipeline Residential > Committed and in progress Lots > 4,398 (17.3% pipeline) No funding commitments for non-residential developments are in progress 1 Diversified residential pipeline of 25,353 lots 2 > 35.0%: 100% owned > 25.4%: 50% joint venture > 12.7% held through managed funds (2
Slide 15: FY09 Settlements
FY09 Settlements 1,574 lot settlements consisting of: 777 — 100% owned > 1H09 — 562 95 — joint ventures > 2H09 — 1,012 259 — MWRDP 443 — project development agreements > NSW Homes Division positioned to deliver capital repatriation, entry level price point set to drive volume > Gross margin of 16.5%
Slide 16: Securing future earnings
Securing future earnings Mirvac’s position as Australia’s pre-eminent residential developer is evidenced by $759m 1 of exchanged residential pre-sales contracts 6 month exchanged contract reconciliation 1H09 exchanged contracts $955m Net settlements and exchanges ($196m) FY09 exchanged contracts $75
Slide 17: Major FY10 projects
Major FY10 projects Top 10 projects make up 65% of Development Division’s forecast FY10 EBIT 53% 1 of Development Division’s budgeted FY10 EBIT is contracted pre-sales FY10 concludes restructuring as Division will be ‘right sized’ and streamlined to pursue next cycle opportunities FY10 focused on dr
Slide 18: Positioned for residential recovery
positioned for residential recovery FY10, including one-off restructuring charges, forecast to be the low point of the cycle for Development Division’s operating earnings Settlement date Lots settled Operating profit 1 FY06 2,463 $91.7m FY07 1,958 $140.1m FY08 2,089 $154.1m FY09 1,574 $29.1m FY11 Ma
Slide 19: Investment
investment nick collishaw 60 margaret street, sydney, nsw MIRVAC GROUP FY09 results presentation 25 august 2009 page 18
Slide 20: Mirvac Property Trust valuation
MIRVAC PROPERTY TRUST VALUATION All properties have been valued in the 6 months to 30 June 2009 1 In the year to 30 June 2009 the portfolio weighted average capitalisation rate (WACR) has expanded by 100 basis points External valuations were undertaken on 83.0% of the portfolio in the year to 30 Jun
Slide 21: Mirvac property trust underpins group earnings
Mirvac property trust underpins group earnings > 56.8% of revenue derived from Australian Government, ASX listed and multinational tenants > Earnings highly visible with 94% of rent reviews fixed or CPI > Commercial portfolio 3.3% under rented 1 > 26% of FY10 portfolio gross income expiry secured, l
Slide 22: Secure portfolio
secure portfolio > Stable Investment Division is well positioned to deliver FY10 earnings Key FY10 assumptions for MPT > Rental abatement contingency increased > High proportion of fixed and CPI reviews and benefit of development completions > 18% decrease in profits from joint ventures and associat
Slide 23: Streamlining investment management
streamlining investment management Progressing alignment of Investment Management with Group’s core competencies > Domaine Funds – Responsible entity disposed > Mirvac AQUA – Heads of Agreement has been entered into to dispose of the joint venture > Mirvac Tourist Park Fund – Deed of Appointment and
Slide 24: Hotel management
Hotel management > Achieved 5 new management contracts in the year to 30 June 2009 > Achieved 73% occupancy > Achieved $177 average room rate > Focused on Australian expansion in existing sub-markets — 4 hotels over next 2 years Hotels as at Rooms as at Mirvac Hotels & Resorts brand 30 June 09 30 Ju
Slide 25: Strategy
strategy 101 miller street, north sydney, nsw MIRVAC GROUP FY09 results presentation 25 august 2009 page 24
Slide 26: Strategy: A Simplified Approach
Strategy A Simplified Approach > Investment — Secure recurring income through ownership of Australian investment grade assets — Active portfolio management, maximising returns — Recycle assets that face income, obsolescence or asset class risk > Development — Maintain pre-eminent residential brand a
Slide 27: FY10 Operating Earnings Guidance
FY10 Operating Earnings Guidance Guidance FY10 guidance Group $253m 1 Group EPS / DPS EPS 9 cpss 2 DPS 8 – 9 cpss Assuming no material change to market conditions 1) Excluding specific, non-cash and other significant items. 2) Diluted earnings excluding specific, non-cash and other significant items
Slide 28: Our strategy
our strategy Our strategy continues to be realistic and relevant, it brings simplicity to our model, focusing on our two core divisions, Investment and Development with Investment Management facilitating capital interaction. Mirvac has operated through many market cycles since 1972 and its continued