Macquarie Australia Conference May 2011 Important Notice This - PowerPoint PPT Presentation

Macquarie Australia Conference May 2011

Important Notice This presentation has been prepared in good faith, but no representation or warranty, express or implied, is made as to the accuracy, adequacy or reliability of any statements, estimates, opinions or other information contained in the presentation (any of which may change without notice). To the maximum extent permitted by law, Lend Lease Corporation Limited, its related entities and their respective directors, officers, employees and agents disclaim all liability and responsibility (including without limitation any liability arising from fault or negligence) for any direct or indirect loss or damage which may be suffered through use or reliance on anything contained in or omitted from this presentation. Each recipient should consult with, and rely solely upon, their own legal, tax, business and/or financial advisors in connection with any decision made in connection with the information contained in this presentation. Lend Lease Corporation Limited does not undertake any obligation to provide recipients with further information to update this presentation or to correct any inaccuracies. Prospective financial information has been based on current expectations about future events and is, however, subject to risks, uncertainties and assumptions that could cause actual results to differ materially from the expectations described in such prospective financial information. 2

Integrated business model Project Management Development Investment Management Infrastructure Development and Construction Manages and invests in large Development of master-planned Provides real estate investment Provides project management and public private partnership (PPP) urban communities, inner-city management, retail property construction services, as well as projects mixed-use developments, management and asset infrastructure and engineering management services. apartments, retail and the senior services living sector We find We buy We fund We design We build We manage Sourcing the best Structuring the Providing the right Creating innovative Building and Continually property right deal investment and sustainable project managing enhancing the opportunities solutions property solutions using our global value of property construction reach over time 3

Continued focus on key growth trends  Leading urban renewal projects in Australia, UK and Singapore Urban Regeneration  Focus on delivery and execution  No. 1 senior living platform in Australia Ageing Population  70 retirement villages and 32 aged care facilities  Number of new PPP projects impacted by slowdown in government programs in the UK Infrastructure  Valemus acquisition gives the Group significant capability in the Australian engineering and infrastructure market  Continued focus on commercialising sustainability Sustainability  Continue to service our wholesale investor base Fund Growth Platform  Targeted opportunities which meet investor appetite 4

Progress since half year result  1 st half operating profit after tax of A$220.2m positions the Group well for the full year  Continued success in capital recycling and pipeline wins since first half result  Valemus integration on track  Progress on major projects  Positive long term outlook  Short term market conditions:  Impact from stronger Australian dollar  Weaker consumer sentiment Barangaroo South, Sydney 5

Positive performance across portfolio Dec 2010 June 2010 A$m A$m Funds under management (A$b) 10.7 10.1 Investments (A$b) 1.8 2.0 Residential units - zoned 63,068 54,615 Residential units - unzoned 26,148 33,295 Construction backlog revenue (A$m) excluding Valemus 6,556.1 7,152.7 backlog and internal development pipeline Number of PPP projects 41 40 6

Earnings split Sector Earnings Split 1 June 2010 Proforma 2 June 2010 Actual Investment Project Management Management Investment 22% & Construction Management Project 20% 28% Management & Construction 37% Infrastructure Development 11% Infrastructure Development Development 14% Development 38% 30% Geographical Earnings Split 1 June 2010 Proforma 2 June 2010 Actual Americas Americas 7% 6% Europe 22% Europe 28% Australia Asia 57% 6% Australia 66% Asia 8% 1. Based on Operating Profit after Tax from operating businesses. 2. Based on Valemus CY 2009 Pro Forma Operating Profit after Tax and Lend Lease’s FY 2010 Operating Profit after Tax. 7

Acquisition of Valemus in line with strategy  In line with strategy to capitalise on key growth trend of infrastructure Strategic rationale  Ability to self perform internal Lend Lease infrastructure work where previously there was limited capability  Order book in excess of A$5.3b as at December 2010 Performance  Significant visibility on future pipeline (in excess A$1.85b of work pending)  The transaction is expected to provide ~15% EPS accretion on a full year basis in the financial year ending 30 June 2012 Strong earnings accretion  Minimal contribution to FY2011 earnings  Retained financial flexibility to fund its development pipeline Balance sheet  Rating agencies have confirmed investment grade credit rating with a stable outlook  Midway through a 90 day post acquisition integration process Integration  New Managing Director of Conneq - David Marchant previously CEO of Australian Rail and Track Corporation 8

Australia business update  Long term fundamentals of residential market remain solid, short term impacted by market Operating Profit Dec 2010 Dec 2009 after Tax A$m A$m uncertainty and consumer sentiment Development 79.8 44.0  NSW/ ACT remain strong, Victoria is solid but Development PM & C 43.5 61.2 SA and South East Queensland subdued  Senior living – reflects 100% ownership Investment 17.2 11.9 Management  Focus on rezoning and replenishing backlog Infrastructure (3.8) (0.9) Development  Major projects progressing well Total 136.7 116.2  Lower profit in first half versus prior period Project  A number of major projects were < 50% Management & complete Construction  Backlog revenue of A$3.2b  Profit up due to income from ING retail assets Investment Management  FUM increased by 7% to A$7.6b  Small loss due to costs of bidding on projects Infrastructure  1 of 3 shortlisted on Victoria Comprehensive Development Gold Coast University Hospital, Queensland Cancer Centre in Melbourne 9

Barangaroo South, Sydney  Extension of the Sydney CBD  Estimated $A6b end value  Development period 10 to 15 years  Stage 1 - 7.5 hectare site area  Up to 490,000 sqm total GFA  Commercial, Residential and Retail 10

Asia business update Operating Profit Dec 2010 Dec 2009  Finalised purchase of Jurong Gateway mixed- after Tax A$m A$m Development use site with Asian Retail Investment Fund Development (0.2) 0.5 PM & C 10.7 12.5 Investment 5.3 8.5 Management  New work secured up 163% as at December Project 2010 - including major project in Taiwan Total 15.8 21.5 Management &  Profitability ratio maintained at 56% at Construction December 2010  FUM increased to A$2b due to Asian Retail Fund being fully invested  Lower profit in first half as previous period Investment Management included final distribution from APIC I  Interest in PoMo Shopping Centre sold in March 2011 Nokia Beijing Campus, China 11

Europe business update Operating Profit Dec 2010 Dec 2009  Approvals for major projects on track after Tax A$m A$m Development  Pier Walk building sold Development 4.8 24.5 PM & C 4.4 2.1  New work secured up 42% - includes Regents Investment 27.1 14.2 Project Management Place and Scottish National Arena projects Management & Infrastructure 58.3 23.2  Market conditions remain tough but activity Development Construction levels showing signs of improvement Total 94.6 64.0  Launch of £220 million Infrastructure Fund  Extension of Retail Partnership for 7 years Investment Management  Sale of Group’s interest in Overgate shopping centre  Reached financial close in March 2011 on Infrastructure £70m Wandsworth Schools program Development redevelopment Greenwich Peninsula, UK 12

Americas business update  Completed acquisition of healthcare Operating Profit Dec 2010 Dec 2009 Development developer Dasco after Tax A$m A$m Development (0.5) 0.1  Settlement reached with NY City DOI – PM & C (3.2) (19.9) restores standing to win NYC agency work Investment 12.4 11.6 Management Project  Business made small loss after tax in first half Infrastructure Management & 20.2 27.2  Increase in activity levels – healthcare Development Construction opportunities Total 28.9 19.0  Backlog Revenue up 24% Investment  Valuation of King of Prussia firmer Management  Secured US$350m second phase (Group B) of Privatization of Army Lodgings program  Reached financial close on US$377m Infrastructure Development Wainwright Greely project in Alaska  Includes costs incurred in bidding for opportunities in Canada Privatization of Army Lodgings program 13