LENDLEASE GROUP - Annual Report 2017

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28 August 2017
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Lendlease Group FY17 Full Year Results Announcement, Presentation and Appendix

Lendlease Group today announced its results for the full year ended 30 June 2017. Attached is the FY17 Results Announcement, Presentation and Appendix.

ENDS

FOR FURTHER INFORMATION, PLEASE CONTACT:

Investors: Media: Justin McCarthy Stephen Ellaway Mob: 0422 800 321 Mob: 0417 851 287

Lendlease Corporation Limited ABN 32 000 226 228 and Lendlease Responsible Entity Limited ABN 72 122 883 185 AFS Licence 308983 as responsible entity for Lendlease Trust ABN 39 944 184 773 ARSN 128 052 595

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Level 14, Tower Three, International Towers Sydney Exchange Place, 300 Barangaroo Avenue Barangaroo NSW 2000 Australia

Telephone +61 2 9236 6111 Facsimile +61 2 9252 2192 lendlease.com

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28 August 2017
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Lendlease delivers strong earnings growth

For the full year ended 30 June 2017[1] :

Profit after Tax of $758.6 million, up 9 per cent and earnings per stapled security of 130.1 cents, up 8 per cent
Return on Equity of 12.9 per cent[2] , towards upper end of 10-14 per cent target range
Full year distributions of 66 cents per stapled security, up 10 per cent
Strong completions across Development and Construction
Capital solutions secured across four office developments
Approximately $10 billion of work in preferred bidder status in Construction
Funds Under Management (FUM) of $26.1 billion, up 11 per cent
Strong balance sheet with gearing of 5.0 per cent[3] and available liquidity of $3.5 billion

Group Chief Executive Officer and Managing Director, Steve McCann, said: “Lendlease generated strong financial returns for securityholders during the past year.”

“We demonstrated the full breadth and depth of our delivery capabilities with high levels of completions across multiple sectors and geographies. Residential development was a highlight with a 20 per cent increase in completions to 5,769, driven by the delivery of a record 2,533 apartments. We have settled approximately 90 per cent of these apartments to date, with a default rate of less than 1 per cent.”

“We made significant progress in Australian commercial development with strong office leasing and the completion of Tower One at Barangaroo South in Sydney. This marks an important step in what has become a vibrant new commercial precinct that helps define Sydney as a world-class city.”

Tenant commitments underpinned the forward sale of three office towers at Melbourne Quarter and Victoria Harbour in Melbourne, and Brisbane Showgrounds in Brisbane. In addition, the Group sold down a majority interest in the Circular Quay Tower development in Sydney.

1 Comparative period, year ended 30 June 2016 (the prior year).

2 Return on Equity is calculated using the statutory Profit after Tax attributable to securityholders divided by the arithmetic average of beginning, half year and year end securityholders’ equity.

3 Net debt to total tangible assets less cash.

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Level 14, Tower Three, International Towers Sydney Exchange Place, 300 Barangaroo Avenue Barangaroo NSW 2000 Australia

Telephone +61 2 9236 6111 Facsimile +61 2 9252 2192 lendlease.com

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28 August 2017
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The business achieved strong completions in construction including New York’s tallest residential tower and several high profile and large scale social infrastructure projects in Australia. These included International Convention Centre Sydney, and Sunshine Coast University and New Bendigo hospitals.

The Investments segment, representing 36 per cent of operating EBITDA, continues to deliver solid recurring earnings.

Group Financials

Group Chief Financial Officer, Tarun Gupta, said: “A highlight for Lendlease during the period was a 14 per cent increase in EBITDA – driven by strong contributions from all three operating segments.”

Return on Equity was 12.9 per cent for the year, towards the upper end of the 10-14 per cent target range. This return was achieved using low financial leverage with gearing reducing to 5.0 per cent, compared to the 10-15 per cent target range.

“We continue to maintain our position of financial strength, while our business model ensures diversity across segments, sectors and geographies,” said Mr Gupta.

At 30 June 2017, Lendlease held a cash balance of $1.2 billion[4] and undrawn debt facilities of $2.2 billion[4] . This provides flexibility to fund the development pipeline.

Outlook

Mr McCann said, “We are well placed for the future and remain focused on delivering strong performance for securityholders. We have been executing on our gateway cities strategy in a disciplined and focused manner.”

“Urbanisation projects moved into delivery in Chicago, Boston, New York and Kuala Lumpur and we secured new projects in Milan and San Francisco. Our strong position in London was consolidated with our selection as preferred partner by Haringey Council on the circa $7 billion Haringey Development Vehicle[5] . These projects further support our stated objective of rebalancing capital and earnings towards our international operations to drive growth.”

The global Construction segment had approximately $10 billion of work in preferred bidder status at 30 June 2017, with further success in Australia post balance date.

4 Total liquidity of $3.5 billion representing cash and undrawn debt facilities, component parts do not sum due to rounding.

5 Subject to contractual and financial close. Approximate number as at 30 June 2017 based on exchange rate at period end.

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Lendlease Corporation Limited ABN 32 000 226 228 and Lendlease Responsible Entity Limited ABN 72 122 883 185 AFS Licence 308983 as responsible entity for Lendlease Trust ABN 39 944 184 773 ARSN 128 052 595

Level 14, Tower Three, International Towers Sydney Exchange Place, 300 Barangaroo Avenue Barangaroo NSW 2000 Australia

Telephone +61 2 9236 6111 Facsimile +61 2 9252 2192 lendlease.com

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28 August 2017
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A solid base of recurring earnings is derived from the $3.3 billion of investments and the funds and asset management platforms.

“We are progressing well in the residential for rent sector with three buildings in delivery in the Americas as well as identified buildings in Europe. Going forward this asset class is expected to support growth in our global investment platform,” said Mr McCann.

Further information regarding Lendlease’s results is set out in the Group’s financial results presentation for the year ended 30 June 2017 and is available on www.lendlease.com.

ENDS

FOR FURTHER INFORMATION, PLEASE CONTACT:

Investors: Media: Justin McCarthy Stephen Ellaway Mob: 0422 800 321 Mob: 0417 851 287

2017 Key Dates for Investors
FY17 results released to market/final distribution declared	28 August
Securities quoted ex-dividend on the Australian Securities Exchange	1 September
Final distribution record date	4 September
Final distribution payable	20 September
Annual General Meetings	17 November

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Level 14, Tower Three, International Towers Sydney Exchange Place, 300 Barangaroo Avenue Barangaroo NSW 2000 Australia

Telephone +61 2 9236 6111 Facsimile +61 2 9252 2192 lendlease.com

Lendlease 2017 Full Year Results

28 August 2017

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LENDLEASE – FY17 FINANCIAL RESULTS

Indigenous engagement and reconciliation

Lendlease’s vision for Reconciliation is one in which all our employees acknowledge and celebrate the proud heritage of Australia’s First Peoples and promote opportunities for career development, sustainable business growth and economic participation of Aboriginal and Torres Strait Islander Australians within our sector

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LENDLEASE – FY17 FINANCIAL RESULTS

Topic	Speaker	Slide
Group Performance and Results Highlights	Steve McCann Group Chief Executive Officer and Managing Director	4
Financials	Tarun Gupta Group Chief Financial Officer	10
Operational Update	Steve McCann Group Chief Executive Officer and Managing Director	16
Outlook	Steve McCann Group Chief Executive Officer and Managing Director	20
	Steve McCann
	Group Chief Executive Officer and Managing Director
Q&A	Tarun Gupta Group Chief Financial Officer	23
	Dan Labbad
	Chief Executive Officer, International Operations

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Section 1 Group Performance and Results Highlights Steve McCann Group Chief Executive Officer and Managing Director

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Image: International House Sydney,
Barangaroo South, Sydney
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LENDLEASE – FY17 FINANCIAL RESULTS

Safety

Lendlease is saddened to report two fatalities occurred during FY17 on our operations in Australia, and unfortunately another fatality has occurred in New York post year end. We express our sincere condolences to the families and friends impacted by these tragic incidents.

These incidents serve as a sobering reminder of the critical importance of working safely and further strengthen our resolve to eliminate incidents and injuries from our operations.

We remain committed to the safety of our people and continuously strive to do our best so that every person who visits a Lendlease operation returns home safely.

FY17 Safety Metrics

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In FY17 two fatalities occurred on our operations
Lost Time Injury Frequency Rate in the last 12 months
1.6 (1.8 in FY16)
Percentage of operations without a critical incident in the last 12 months
90% (88% in FY16[1] )

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Modified to reflect updated management information and methodology used for FY17. Previously reported as 86%

LENDLEASE – FY17 FINANCIAL RESULTS

Vision: to create the best places

Strategic framework

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Competitive advantage

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Business model

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Pillars of value

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LENDLEASE – FY17 FINANCIAL RESULTS

Lendlease delivers strong earnings growth

Securityholder returns[1]

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Profit after Tax of $758.6 million, up 9%, and earnings per stapled security of 130.1 cents, up 8%
Full year distributions of 66 cents per security, representing a dividend payout ratio of 51%
Return on equity of 12.9%[2] , towards the upper end of our 10% – 14% target range

Performance highlights[1]

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2,533 residential apartment unit completions[3] – approximately 90% settled to date with a default rate of < 1%
Total residential completions of 5,769 units, up 20%
Capital solutions secured across four office developments – 134,000 square metres of space
Construction EBITDA margin up 30 bps to 2.7%
Engineering activity accelerating, on track for larger earnings contribution
Investments segment continues to deliver solid recurring earnings, representing 36% of operating EBITDA
Growth in Funds Under Management (FUM) of 11% to $26.1 billion
Operating and Investing cash flow of $216.1 million
Gearing of 5.0%[4] and liquidity of $3.5 billion, including cash and cash equivalents of $1.2 billion
Comparative period the year ended 30 June 2016 (the prior year)
Return on equity is calculated using the annual statutory profit after tax attributable to securityholders divided by the arithmetic average of beginning, half year and year end securityholders’ equity

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Pre-sold units on buildings completed during the period, and units sold in the period on buildings completed in prior periods
Net debt to total tangible assets less cash

LENDLEASE – FY17 FINANCIAL RESULTS

FY17 Achievements

Execution excellence across our portfolio

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Residential apartment unit completions – significant increase in delivery, more than double the prior year
Australian office leasing underpinned forward sales/development JV – more than 90,000 square metres of leasing
Australian social infrastructure completions: International Convention Centre Sydney, Sunshine Coast[1] and Bendigo[1] hospitals
US high-rise residential construction – strong market position

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International Convention Centre Sydney, New South Wales

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New Bendigo Hospital, Victoria

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Sunshine Coast University Hospital, Queensland

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432 Park Avenue, New York

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North Yard, Brisbane Showgrounds, Queensland[2]

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Toorak Park, Victoria[2]

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Sunshine Coast University Hospital, New Bendigo Hospital 2. Artist impression

LENDLEASE – FY17 FINANCIAL RESULTS

FY17 Achievements

Laying the foundations for future growth

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Significant progress in converting urbanisation projects in gateway cities:
Four additional cities with projects in delivery: Chicago, Boston, New York, Kuala Lumpur
Two new cities with projects secured: Milan, San Francisco
Consolidated position in London: preferred partner on c.$7 billion Haringey Development Vehicle[1]

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Riverline, Chicago[2]

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Clippership Wharf, Boston[2]

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Milano Santa Giulia, Milan[2]

Leveraging global trends that guide our strategy:

Infrastructure

Australian transport – post balance date announced preferred bidder on c.$6 billion Melbourne Metro Tunnel Project[3] and c.$500 million Ballarat Line Upgrade[4]
US Telecommunications – acquisition of mobile tower portfolio

Funds growth

More than $3 billion of additional secured funds under management across urbanisation projects in delivery
Future pipeline opportunities including new sectors for our investment platform – residential for rent, telco infrastructure

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Subject to contractual and financial close. Approximate number as at 30 June 2017 based on exchange rate at period end
Artist impression
One third share and responsibility for financial arrangement of the PPP
Joint Venture arrangement

Section 2 Financials

Tarun Gupta Group Chief Financial Officer

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Artist impression:
Tun Razak Exchange,
Lifestyle Quarter, Kuala Lumpur
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LENDLEASE – FY17 FINANCIAL RESULTS

Financial performance

$ million	FY16	FY17	Change
Development	500.2	552.4	10%	•	Significant contribution from Australia, ongoing investment offshore
Construction	288.1	338.3	17%	•	Solid improvement, strong recovery in the Americas
Investments	457.7	495.3	8%	•	Ownership and operating earnings continue to grow
Operating EBITDA	1,246.0	1,386.0	11%
Corporate costs	(191.1)	(184.2)	4%	•	FY17 Group Services costs of $154.4 million1, down 8%2
Group EBITDA	1,054.9	1,201.8	14%
Depreciation and amortisation	(82.7)	(98.2)	(19%)	•	Reflective of higher occupancy and technology related costs
EBIT	972.2	1,103.6	14%
Net finance costs	(109.4)	(96.6)	(12%)	•	Decline in finance costs due to lower average net debt
PBT	862.8	1,007.0	17%
Income tax expense	(164.7)	(248.3)	(51%)	•	Effective tax rate of 24.7%, up 5.6 percentage points2
External non-controlling interests	0.1	(0.1)	-
NPAT	698.2	758.6	9%
Weighted avg. securities	581.4	583.0	0%
EPS cents	120.1	130.1	8%

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Remaining FY17 corporate costs represent Group Treasury of $29.8 million 2. Comparative period the year ended 30 June 2016 (the prior year)

LENDLEASE – FY17 FINANCIAL RESULTS

Cash flow movements ($b)[1]

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Barangaroo Commercial $1.3b
Other urbanisation $2.2b
Communities $0.5b
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Urbanisation ($3.3b) Communities ($0.5b)

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Denotes major movements
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International urbanisation ($0.2b)
Barangaroo Commercial – Tower 1 ($0.1b)
Retirement Living ($0.1b)
4.2 (4.1)
Circular Quay Tower $0.3b
NZ Retirement disposal [2] $0.2b
Net repayment of GBP
Club Revolving Credit
Facility ($0.1b)
0.7 (0.6)
1.2
1.0
FY16 closing cash Operating inflow Operating outflow Investing inflow Investing outflow Net financing and 3 FY17 closing cash
other adjustments
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Represents an indicative analysis of operating cash inflows and outflows. Operating cash inflows and outflows relating to Construction have been included as a net position in the above chart

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The Group divested the New Zealand Retirement business in FY16, proceeds received in FY17
Includes the impact of foreign exchange movements on opening cash

LENDLEASE – FY17 FINANCIAL RESULTS

Financial position

$ million	30 Jun 16	30 Jun 17
Assets
Cash and cash equivalents 1,008.4 1,249.2 Inventories 4,602.9 5,127.4 Equity accounted investments 1,152.6 834.6 Investment properties1 5,940.7 6,967.4 Other assets (including financial) 5,888.3 6,675.6
Total assets 18,592.9 20,854.2

Key areas of capital employed

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Development inventories of $4.1 billion
Investments of $3.3 billion[3] including:
Co-Investments of $1.5 billion
Retirement Ownership of $1.7 billion[4]
Infrastructure of $0.2 billion

Liabilities

Borrowings and financial arrangements	2,031.3	2,152.4
Other liabilities (including financial)1	10,946.9	12,535.3
Total liabilities	12,978.2	14,687.7

Net assets	5,614.7	6,166.5

Gearing2	6.5%	5.0%

Funding and liquidity

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$1.2 billion of cash and $2.2 billion in undrawn debt facilities[5]
• Interest coverage of 10.3 times
Gearing of 5.0%[2]
Prudent debt maturity profile, no material concentrations
As at 30 June 2017, investment properties includes retirement properties of $6,443.4 million, and other liabilities includes retirement resident liabilities of $4,573.0 million
Net debt to total tangible assets less cash
Components do not sum due to rounding

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Excludes capital balances relating to Retirement development activities
Total liquidity of $3.5 billion, components do not sum due to rounding

LENDLEASE – FY17 FINANCIAL RESULTS

Portfolio Management Framework

EBITDA mix

Invested capital

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By segment

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24%
52%
$1.4b [1] 48% $6.3b [2]
40%
36%
Development Construction Investments Development Investments
Target
weighting (35 – 45%) (20 – 30%) (30 – 40%) (40 – 60%) (40 – 60%)
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By region

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10%
12%
8%
$6.7b [3]
70%
Australia Asia Europe Americas
(50 – 70%) (5 – 20%) (5 – 20%) (5 – 20%)
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Returns

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Development – ROIC[4]

Investments – ROIC[4]

Construction – EBITDA margin

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Target 9 – 12% [5]
13.7%
11.7%
FY16 FY17
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Target 8 – 11% [5] Target 3 – 4%
11.7%
11.2%
2.4% 2.7%
FY16 FY17 FY16 FY17
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Operating EBITDA
Invested capital for Development and Investments

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Invested capital for Australia, Asia, Europe and the Americas. Total Lendlease invested capital as at 30 June 2017 was $7.0 billion ($0.3 billion Corporate) 4. Return on Invested Capital (ROIC) is calculated using the annual operating profit after tax divided by the arithmetic average of beginning, half year and year end invested capital. FY16 Investments ROIC restated reflecting inclusion of half year end invested capital in calculation
Through-cycle target based on rolling 3-5 year timeline

LENDLEASE – FY17 FINANCIAL RESULTS

Portfolio Management Framework

Return on equity (ROE)[1]

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18.2% [2]
Target 10 – 14%
13.6%
13.0% 12.9%
12.4%
FY13 FY14 FY15 FY16 FY17
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Gearing[3]

Distributions

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cents
Target 40 – 60%
80 70%
70
60%
60
50%
50 33
49 [2] 30
40 27 40%
30 20
30%
20
27 30 33 20%
10 22 22
0 10%
FY13 FY14 FY15 FY16 FY17
Interim distribution (LHS) Final distribution (LHS)
Payout ratio (RHS)
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10.5%
Target 10 – 15%
6.5%
5.4% 5.7%
5.0%
FY13 FY14 FY15 FY16 FY17
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Return on equity is calculated using the annual statutory profit after tax attributable to securityholders divided by the arithmetic average of beginning, half year and year end securityholders’ equity
FY14 includes Bluewater sale
Net debt to total tangible assets less cash

Section 3 Operational Update

Steve McCann Group Chief Executive Officer and Managing Director

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Artist impression: Riverline, Chicago

LENDLEASE – FY17 FINANCIAL RESULTS

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40%
of operating
Commercial building completion profile [4] ($b) EBITDA
By estimated total end value
Paya Lebar Quarter Office
and Retail, Singapore, Tun Razak Exchange
International Quarter Brisbane Showgrounds, Retail, Kuala Lumpur,
London and Darling Melbourne Quarter and Circular Quay Tower,
Square Office and Hotel, Victoria Harbour, Melbourne Sydney
Sydney
3.3 3.0
1.7 0.0
FY18 FY19 FY20 FY21
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Development

Performance highlights[1]

ROIC of 13.7%, above target range
Over 90,000 square metres of office leasing achieved largely in Sydney and Melbourne
Barangaroo South T1 completion, c.91% let[2]
Capital solutions across four office developments – total of 134,000 square metres
Commercial development in delivery with total end value of c.$8 billion
Residential completions of 5,769 units, up 20%:

Residential presales and residential for rent ($b)

Apartments 2,533 units[3] (default rate <1%)

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Communities 3,060 units
Retirement 176 units
Total Apartment presales of 4,167 units ($3.9 billion)
850 units for rent in delivery ($0.5 billion)
Record Communities presales of 3,896 units ($0.9 billion)

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5.3
(0.3) 0.5
(2.5) 1.7
5.2
Presales Presales 3.9
5.9 4.8
0.7 0.9
FY16 Completions Sales FX FY17
5
Communities Apartments for Sale Americas - Resi for Rent
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Comparative period the year ended 30 June 2016 (the prior year)

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Based on expected completion date of buildings, subject to change. Not indicative of cash or profit recognition
Including agreed Heads of Terms post balance date. As at 30 June 2017 c.80% let

Represents estimated end value of apartments for rent product in delivery

Pre sold units on buildings completed during the period, and units sold in the 5. period on buildings completed in prior periods

LENDLEASE – FY17 FINANCIAL RESULTS

Construction

Performance highlights[1]

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Global EBITDA margin up 30 bps to 2.7%
Six major building project completions in excess of c.$6 billion
Australian margin impacted by performance across a small number of projects and increased bidding activity
Americas EBITDA up 87%, strong revenue and margin boosted by successful project close outs
Europe starting to recover from challenging market conditions
Focus in Asia remains on internal pipeline
Backlog revenue of $20.6 billion
New work secured of $13.2 billion, including Jacob K. Javits Convention Center, New York and Western Sydney Stadium
Preferred bidder status of c.$10 billion[2] including Google Headquarters, London
Post balance date announced preferred bidder on c.$6 billion Melbourne Metro Tunnel Project[3] and c.$500 million Ballarat Line Upgrade[4]

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24%
of operating
EBITDA ($m) EBITDA
FY16 FY17
338
288
232
201
105
56
32
6
(6) (0)
Australia Asia Europe Americas Total
EBITDA Margin (%)
FY16 3.7% (1.7%) 0.4% 1.4% 2.4%
FY17 3.1% 0.0% 2.8% 2.3% 2.7%
Backlog ($b)
13.2 (12.6)
(0.7)
20.7
20.6
5
FY16 New work Revenue Other FY17
secured realised
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Comparative period the year ended 30 June 2016 (the prior year) 2. As at 30 June 2017
One third share and responsibility for financial arrangement of the PPP
Joint Venture arrangement
Includes foreign exchange

LENDLEASE – FY17 FINANCIAL RESULTS

Investments

Performance highlights[1]

ROIC of 11.7%, above target range, driven by solid performance in Australia
Ownership earnings derived from investments increased by 8% to $379.2 million
Solid growth in the Retirement Living business
- Average unit resale prices increased 11%
- Two additional villages acquired
- Exploring the potential introduction of capital partners
Higher investment income, including co-investments in the three office towers at Barangaroo South, Sydney

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36%
of operating
EBITDA
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Investments EBITDA by activity ($m)

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FY16 FY17
379
350
108 116
Ownership interest Operating earnings
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FUM ($b)

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Uplift in operating earnings of 7% to $116.1 million
FUM of $26.1 billion, up 11%
- New equity raised of $0.9 billion
- Over $3 billion[2] of additional secured FUM
- New asset class opportunities in residential for rent and telecommunications infrastructure
High quality military housing fee income

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2.1 (0.3) 0.8 (0.1)
26.1
23.6
3
FY16 Additions Divestments Net revals Other FY17
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Comparative period the year ended 30 June 2016 (the prior year)

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Represents secured future FUM from funds with development projects in delivery 3. Includes foreign exchange

Section 4 Outlook

Steve McCann Group Chief Executive Officer and Managing Director

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Artist impression:
Elephant Park, London
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LENDLEASE – FY17 FINANCIAL RESULTS

Outlook

Well positioned for future success:
Earnings visibility from extensive pipeline across our business segments
Financial strength and resilient business model with diversity across segments, sectors and geographies
Diversifying capital and earnings through growth in international operations:
Four additional cities with projects in delivery: Chicago, Boston, New York, Kuala Lumpur
Two new cities with projects secured: Milan, San Francisco
Consolidated position in London; preferred partner on c.$7 billion Haringey Development Vehicle[1]
Strong construction backlog revenue of $20.6 billion:
Preferred bidder status in construction work globally of c.$10 billion[2]
Post balance date announced preferred on Melbourne Metro Tunnel Project and Ballarat Line Upgrade
Focused on execution excellence through strong risk and governance frameworks:
Unwavering commitment to health and safety
Disciplined approach to origination
Managing individual project, property cycle and sovereign risk

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Subject to contractual and financial close. Approximate number as at 30 June 2017 based on exchange rate at period end 2. As at 30 June 2017

LENDLEASE – FY17 FINANCIAL RESULTS

Earnings visibility from strong pipeline across all segments

Development pipeline of $49.3 billion

Construction backlog revenue of $20.6 billion

FUM of $26.1 billion

Development pipeline ($b)

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60
50
40
30
20
10
0
FY13 FY14 FY15 FY16 FY17
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Construction backlog revenue ($b)

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22
20
18
16
14
12
FY13 FY14 FY15 FY16 FY17
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Funds under management
($b)
25
20
15
10
5
0
FY13 FY14 FY15 FY16 FY17
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Section 5 Q&A

Steve McCann

Group Chief Executive Officer and Managing Director

Tarun Gupta

Group Chief Financial Officer

Dan Labbad

Chief Executive Officer, International Operations

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Image: Pacific Highway – Nambucca to Urunga, NSW

Appendix

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Image: International Convention Centre Sydney

Group

LENDLEASE – FY17 FINANCIAL RESULTS

Our business model

Our business model is how we generate earnings. The model is integrated when more than one segment is engaged on a single project

DEVELOPMENT

Core Financial Returns:

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The Development segment is involved in the development of communities, inner city mixed use developments, apartments, retirement, retail, commercial assets and social and economic infrastructure

Development margins
Development management fees received from external co-investors
Origination fees for infrastructure PPPs

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CONSTRUCTION

The Construction segment provides a project management, design, and construction service, predominantly in the infrastructure, defence, mixed use, commercial and residential sectors

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Core Financial Returns:

Project management and construction management fees
• Construction margin

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INVESTMENTS

The Investments segment includes a leading wholesale investment management platform and also includes the Group’s ownership interests in property and infrastructure co-investments, Retirement and US Military Housing

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Core Financial Returns:

Fund, asset and property management fees
Investment yields and capital growth on coinvestments, and returns from the Group’s Retirement portfolio and US Military Housing business

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LENDLEASE – FY17 FINANCIAL RESULTS

Income Statement

Income Statement ($ million)	Jun-16	Jun-17
Revenue	15,088.5	16,659.0
Cost of sales	(13,388.5)	(14,841.0)
Grossprofit	1,700.0	1,818.0
Share of profit of equity accounted investments	151.6	77.9
Other income	256.9	247.2
Other expenses	(1,136.3)	(1,039.5)
Results from operating activities	972.2	1,103.6
Finance revenue	16.8	12.0
Finance costs	(126.2)	(108.6)
Net finance costs	(109.4)	(96.6)
Profit before Tax	862.8	1,007.0
Income tax expense	(164.7)	(248.3)
Profit after Tax	698.1	758.7
Profit after Tax attributable to:
Members of Lendlease Corporation Limited	557.8	645.7
Unitholders of Lendlease Trust	140.4	112.9
Profit after Tax attributable to securityholders	698.2	758.6
External non controllinginterests	(0.1)	0.1
Profit after Tax	698.1	758.7
Basic/Diluted Earnings per Lendlease Group Stapled Security (cents)	120.1	130.1

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LENDLEASE – FY17 FINANCIAL RESULTS

Statement of Financial Position

Statement of Financial Position ($m)	Jun-16	Jun-17
Current Assets
Cash and cash equivalents	1,008.4	1,249.2
Loans and receivables	2,785.0	2,749.2
Inventories	1,923.0	2,152.0
Current tax assets	21.6	-
Other financial assets	50.7	33.0
Other assets	69.2	77.9
Total current assets	5,857.9	6,261.3
Non Current Assets
Loans and receivables	285.4	507.7
Inventories	2,679.9	2,975.4
Equity accounted investments	1,152.6	834.6
Investment properties	5,940.7	6,967.4
Other financial assets	628.8	1,203.3
Deferred tax assets	109.5	129.4
Property, plant and equipment	432.3	425.8
Intangible assets	1,446.8	1,415.1
Defined benefit plan asset	7.5	64.3
Other assets	51.5	69.9
Total non current assets	12,735.0	14,592.9
Total assets	18,592.9	20,854.2

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Statement of Financial Position ($m)		Jun-16	Jun-17
Current Liabilities
Trade and other payables		4,328.8	5,578.8
Resident liabilities		4,119.5	4,573.0
Provisions		292.4	285.6
Borrowings and financing arrangements		-	291.9
Current tax liabilities		-	6.4
Other financial liabilities		83.6	22.0
Total current liabilities		8,824.3	10,757.7
Non Current Liabilities
Trade and other payables		1,909.4	1,772.1
Provisions		70.6	58.4
Borrowings and financing arrangements		2,031.3	1,860.5
Defined benefit plan liability		3.4	-
Other financial liabilities		9.7	0.8
Deferred tax liabilities		129.5	238.2
Total non current liabilities		4,153.9	3,930.0
Total liabilities		12,978.2	14,687.7
Net assets		5,614.7	6,166.5
Equity
Issued capital		1,276.3	1,289.8
Treasury shares		(99.5)	(24.7)
Reserves		98.0	(5.3)
Retained earnings		3,289.6	3,686.6
Total equity attributable to equity holders	of	4,564.4	4,946.4
Lendlease Corporation Limited
Total equityattributable to unitholders of LLT	1	1,048.6	1,117.0
Total equity attributable to securityholders		5,613.0	6,063.4
External non controllinginterests		1.7	103.1
Total equity		5,614.7	6,166.5

Lendlease Trust

LENDLEASE – FY17 FINANCIAL RESULTS

Statement of Cash Flows

Statement of Cash Flows ($ million)	Jun-16	Jun-17
Cash Flows from Operating Activities
Cash receipts in the course of operations	16,028.4	16,254.6
Cash payments in the course of operations	(15,154.9)	(15,928.7)
Interest received	12.8	9.9
Interest paid	(134.8)	(120.4)
Dividends/distributions received	90.0	75.4
Income tax received/(paid) in respect of operations	11.5	(144.8)
Net cash provided by/(used in) operating activities	853.0	146.0
Cash Flows from Investing Activities
Sale/redemption of investments	330.5	164.9
Acquisition of investments	(563.2)	(257.3)
Acquisition of/capital expenditure on investment properties	(25.7)	(244.4)
Net loans to associates and joint ventures	38.6	5.7
Disposal of consolidated entities (net of cash disposed and transaction costs)	382.5	548.4
Disposal of property, plant and equipment	16.7	13.1
Acquisition of property, plant and equipment	(132.7)	(136.4)
Net acquisition/disposal of intangible assets	(46.1)	(23.9)
Net cash provided by/(used in) investing activities	0.6	70.1
Cash Flows from Financing Activities
Proceeds from borrowings	5,327.6	2,800.6
Repayment of borrowings	(5,626.0)	(2,576.8)
Dividends/distributions paid	(293.2)	(337.9)
Proceeds from the sale of treasury securities	-	106.5
Other financing activities	(28.8)	(20.9)
Increase in capital of non controlling interest	-	37.0
Net cash used in financing activities	(620.4)	8.5
Other Cash Flow Items
Effect of foreign exchange rate movements on cash and cash equivalents	25.1	16.2
Net increase/(decrease) in cash and cash equivalents	258.3	240.8
Cash and cash equivalents at beginning of financial year	750.1	1,008.4
Cash and cash equivalents at end of financial year	1,008.4	1,249.2

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LENDLEASE – FY17 FINANCIAL RESULTS

Securityholder returns

Return on equity (ROE)[1]

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Distributions

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2
18.2%
13.6%
13.0% 12.9%
12.4%
FY13 FY14 FY15 FY16 FY17
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cents
80 70%
70
60%
60
50%
50 2 33
49
30
40 27 40%
20
30
30%
20
33
30
27 20%
10 22 22
0 10%
FY13 FY14 FY15 FY16 FY17
Interim distribution (LHS) Final distribution (LHS)
Payout ratio (RHS)
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Return on equity is calculated using the annual statutory profit after tax attributable to securityholders divided by the arithmetic average of beginning, half year and year end securityholders’ equity
FY14 includes Bluewater sale

LENDLEASE – FY17 FINANCIAL RESULTS

Segment financial metrics

Operating Profit after Tax ($m)

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FY16 FY17
397.8
366.4 370.7 381.4
211.7
190.9
Development Investments Construction
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EBITDA ($m)

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FY16 FY17
552.4
500.2 495.3
457.7
338.3
288.1
Development Investments Construction
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ROIC[1] (Development and Investments), EBITDA margin (Construction)

Invested Capital[2] (Development and Investments) ($b)

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ROIC FY16 FY17 EBITDA margin
13.7%
2.7
%
2.4
11.7% 11.7%
%
11.2%
Development Investments Construction
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FY16 FY17
3.3
3.2
3.0
2.9
Development Investments
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Return on Invested Capital (ROIC) is calculated using the annual operating profit after tax divided by the arithmetic average of beginning, half year and year end invested capital. FY16 Investments ROIC restated reflecting inclusion of half year end invested capital in calculation
Total Lendlease Invested Capital at 30 June 2017 was $7.0 billion. Development, Investments and Construction totalled $6.7 billion, with remaining Invested Capital representing Corporate ($0.3 billion)

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LENDLEASE – FY17 FINANCIAL RESULTS

Segment and region financial metrics

By segment

	Revenue ($m)	Revenue ($m)	EBITDA ($m)		Profit After Tax ($m)	Profit After Tax ($m)	Invested Capital ($b)	Invested Capital ($b)
	FY16	FY17	FY16	FY17	FY16	FY17	FY16	FY17
Development	2,543.9	3,433.0	500.2	552.4	366.4	397.8	2.9	3.0
Investments	510.5	566.7	457.7	495.3	370.7	381.4	3.2	3.3
Construction	12,032.4	12,644.5	288.1	338.3	190.9	211.7
Corporate1	18.5	26.8	(191.1)	(184.2)	(229.8)	(232.3)
Group	15,105.3	16,671.0	1,054.9	1,201.8	698.2	758.6

By region

	Revenue ($m)	Revenue ($m)	EBITDA ($m)		Profit After Tax ($m)	Profit After Tax ($m)	Invested Capital ($b)	Invested Capital ($b)
	FY16	FY17	FY16	FY17	FY16	FY17	FY16	FY17
Australia	8,665.1	10,029.7	971.8	1,092.5	719.1	778.9	4.8	4.7
Asia	406.6	574.2	(10.4)	21.4	(20.3)	13.7	0.5	0.7
Europe	1,798.1	1,328.8	180.1	110.2	150.8	95.4	0.8	0.8
Americas	4,217.0	4,711.5	104.5	161.9	78.4	102.9	0.4	0.5
Corporate	18.5	26.8	(191.1)	(184.2)	(229.8)	(232.3)
Group	15,105.3	16,671.0	1,054.9	1,201.8	698.2	758.6

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Comprises Group Services and Group Treasury costs. FY17 EBITDA: Group Services ($154.4m) and Group Treasury ($29.8m). FY16 EBITDA: Group Services ($168.7m) and Group Treasury ($22.4m).

LENDLEASE – FY17 FINANCIAL RESULTS

Revenue and EBITDA by segment and geography

EBITDA by segment ($m)	EBITDA by segment ($m)	EBITDA by segment ($m)
EBITDA by geography ($m) - 200 400 600 800 1,000 1,200 1,400 1,600 Development Construction Investments Total Operating FY16 FY17
(200) - 200 400 600 800 1,000 1,200 1,400 1,600		FY16 FY17
	(200) - 200 400 600 800 1,000 1,200 1,400 1,600	FY16 FY17
		Australia Asia Europe Americas Total Oeratin
		pg

1,400 1,600		FY16
1,200
1,000
800
600
400
200
(200) -	Australia Asia	Europe	Americas Total Operating

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LENDLEASE – FY17 FINANCIAL RESULTS

Revenue and EBITDA by segment and geography, local currency

Asia

EBITDA, local currency (m)

Local currency Revenue EBITDA FY16 FY17 FY16 FY17 Asia (SGDm) Development 17.7 20.6 (19.3) (14.2) Construction 337.5 527.7 (5.7) (0.2) Investments 55.4 54.6 14.4 36.9 Total operating 410.6 602.9 (10.6) 22.5 Europe (30) (10) 10 30 50	FY16 FY17
	Development Construction Investments Total

Europe

Europe

Local currency	Revenue		EBITDA
	FY16	FY17	FY16	FY17
Europe (GBPm)
Development	215.9	122.2	69.8	41.0
Construction	670.7	670.4	2.8	19.0
Investments Total operating	12.6 899.2	4.7 797.3	17.6 90.2	6.1 66.1

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100 FY16 FY17 80 60 40 20 - Developmentpmentment Construction FY16 140

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Americas

Developmentpmentment Construction Investments Total

Americas

Local currency	Revenue		EBITDA
	FY16	FY17	FY16	FY17
Americas (USDm)
Development	44.0	51.5	(8.5)	(0.2)
Construction	2,982.7	3,483.9	41.2	80.1
Investments	51.7	45.3	43.7	43.1
Total operating	3,078.4	3,580.7	76.4	123.0

FY16 FY17

90 40 (10) Development Construction Investments Total

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LENDLEASE – FY17 FINANCIAL RESULTS

Exchange rates

	Income	Statement			Statement of	Financial Position	Financial Position
Local	Foreign	FY161	FY172	Local	Foreign	FY163	FY174
AUD	USD	0.73	0.76	AUD	USD	0.75	0.77
AUD	GBP	0.50	0.60	AUD	GBP	0.56	0.59
AUD	SGD	1.01	1.05	AUD	SGD	1.00	1.06


	USD	GBP	SGD
Income Statement
+10% blended FX rate (strengthening AUD)	0.84	0.66	1.16
Change as % of Group PAT (A$m)	(1.08%)	(0.92%)	(0.37%)
-10% blended FX rate (weakening AUD)	0.68	0.54	0.95
Change as % of Group PAT (A$m)	1.34%	1.11%	0.40%
Statement of Financial Position
+10% spot FX rate (strengthening AUD)	0.85	0.65	1.17
Change as % of Group Net Assets (A$m)	(0.51%)	(0.27%)	0.04%
-10% spot FX rate (weakening AUD)	0.69	0.53	0.95
Change as % of Group Net Assets (A$m)	0.63%	0.33%	(0.05%)

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Average foreign exchange rate for the financial year 2016 2. Average foreign exchange rate for the financial year 2017
At spot foreign exchange rate 30 June 2016 4. At spot foreign exchange rate 30 June 2017

LENDLEASE – FY17 FINANCIAL RESULTS

Regional EBITDA to PAT reconciliation

FY17 EBITDA to PAT Reconciliation

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Region	EBITDA	Net Interest	D&A1	PBT	Tax	Non Cont. Int.2	PAT
Australia
Development	497.8	1.2	(1.4)	497.6	(149.5)	-	348.1
Construction	201.4	0.3	(26.4)	175.3	(50.4)	-	124.9
Investments	393.3	-	(7.2)	386.1	(80.2)	-	305.9
Total Australia	1,092.5	1.5	(35.0)	1,059.0	(280.1)	-	778.9
Asia
Development	(13.5)	-	(0.8)	(14.3)	2.3	0.1	(11.9)
Construction	(0.2)	-	(0.9)	(1.1)	(1.4)	-	(2.5)
Investments	35.1	-	(0.1)	35.0	(6.9)	-	28.1
Total Asia	21.4	-	(1.8)	19.6	(6.0)	0.1	13.7
Europe
Development	68.3	-	(1.7)	66.6	(6.4)	-	60.2
Construction	31.7	(0.9)	(1.6)	29.2	(5.7)	-	23.5
Investments	10.2	-	(0.5)	9.7	2.0	-	11.7
Total Europe	110.2	(0.9)	(3.8)	105.5	(10.1)	-	95.4
Americas
Development	(0.2)	-	(0.2)	(0.4)	1.8	-	1.4
Construction	105.4	-	(5.7)	99.7	(33.7)	(0.2)	65.8
Investments	56.7	1.6	(0.4)	57.9	(22.2)	-	35.7
Total Americas	161.9	1.6	(6.3)	157.2	(54.1)	(0.2)	102.9
Corporate
Group Services	(154.4)	(0.1)	(51.3)	(205.8)	61.0	-	(144.8)
GroupTreasury	(29.8)	(98.7)	-	(128.5)	41.0	-	(87.5)
Total Corporate	(184.2)	(98.8)	(51.3)	(334.3)	102.0	-	(232.3)
Total	1,201.8	(96.6)	(98.2)	1,007.0	(248.3)	(0.1)	758.6

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Depreciation and Amortisation 2. Non Controlling Interests

LENDLEASE – FY17 FINANCIAL RESULTS

Debt metrics

	Jun-16 Jun-17
Net debt $ million 1,052.0 912.8
Borrowings to total equity plus borrowings % 26.6 25.9
Net debt to total tangible assets, less cash % 6.5 5.0
Interest coverage1 times 8.0 10.3
Average cost of debt including margins % 4.6 4.9
Average debt duration years 5.3 5.1
Debt mix fixed : floating ratio 91 : 9 96 : 4
Undrawn debt facilities $ million 2,172.6 2,225.2

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EBITDA plus interest income, divided by interest finance costs, including capitalised finance costs

LENDLEASE – FY17 FINANCIAL RESULTS

Debt facilities and maturity profile

Debt facilities ($m)[1]

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Drawn Facility

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1,500
678
505 505 514 514 476 476
259 259 281 281
76 33 33
Syndicated Multi- UK Bond Issue Club Revolving US $ Reg. S US Private Singapore Singapore Australian
Option Facility Credit Facility Notes Placement Bond S$275m Bond S$300m Medium Term
Notes
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Debt maturity profile ($m)[2]

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225
602
250
76
900
600
509
259
33
FY18 FY19 FY20 FY21 FY22
Syndicated Multi-Option Facility UK bond issue
US$ Reg. S notes US Private Placement
Singapore Bond S$300m Australian medium term notes
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UK bond issue
US Private Placement
Australian medium term notes
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Values are shown at amortised cost
Values are shown at gross facility value

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520
283
FY23 FY26 FY27
Club Revolving Credit Facility
Singapore Bond S$275m
Undrawn
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LENDLEASE – FY17 FINANCIAL RESULTS

Key dates for investors

	Date
FY17 results released to market/final distribution declared	28 August 2017
Securities quoted ex-dividend on the Australian Securities Exchange	1 September 2017
Final distribution record date	4 September 2017
Final distribution payable	20 September 2017
Annual General Meetings	17 November 2017

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Development

LENDLEASE – FY17 FINANCIAL RESULTS

Development FY17

Performance

Overview



	% Operating EBITDA ROIC (%) Invested Capital ($b)	FY16 40 11.7 2.9	FY17 40 13.7 3.0

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Involved in the development of communities, inner city mixed use developments, apartments, retirement, retail, commercial assets and social and economic infrastructure
Financial returns are generated via Development margins, Development management fees from external co-investors and origination fees for the facilitation of infrastructure PPP transactions

Drivers[1]

Outlook

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Forward sale of three commercial buildings and Development JV:
21 major apartment buildings in delivery across eight gateway cities
839 Collins Street, Victoria Harbour
c.3,850 units across seven gateway cities for sale (82% presold, $3.3 billion)
One Melbourne Quarter
850 units for rent across two gateway cities, $0.5 billion
25 King Street, Brisbane Showgrounds
3,896 communities units presold
Circular Quay Tower, Sydney (development Joint Venture)
537,000 sqm of commercial in delivery across 13 major buildings
Total commercial leasing of 92,000 sqm[2] in Australia including 28,900 sqm of leasing at Barangaroo South T1 – 80% let[2]
A further 513,000 sqm of commercial space remaining
Profit release for Barangaroo South T1, T2, T3 and International House Sydney (converted to operational status)
Barangaroo South T1 – HoTs[4] on additional 15,000 sqm, taking occupancy to 91%
Crown nomination rights at Barangaroo South
Further US telco development opportunities
Residential completions of 5,769 units, up 20.4%:
Preferred partner/bidder[5] :
Communities completions of 3,060 units, down 10.0%
Haringey Development Vehicle, London c.$7 billion[6]
Retirement completions of 176 units, down from 185 units
Carlton Connect, Melbourne
Apartment completions[3] of 2,533 units, up 110.6%
Melbourne Metro Tunnel Project
Capital partner introduced to residential project at Wandsworth, London
MHPI development management fees from next phase of Island Palm Communities and Army Lodging
Pre sold units on buildings completed during the period, and units sold in the period on buildings completed in prior periods
Initial contribution from US telco tower portfolio
Includes Heads of Terms post balance date

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Remain subject to contractual close
Comparative period the year ended 30 June 2016 (the prior year) 2. Includes Heads of Terms
Approximate number as at 30 June 2017 based on exchange rate at period end

LENDLEASE – FY17 FINANCIAL RESULTS

Development earnings / pipeline

EBITDA by geography ($m)

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Development pipeline by geography ($b)

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FY16 FY17 48.8 49.3
FY16 FY17
552.4
497.8 500.2
30.9
391.5 29.0
139.5 10.5
8.0
68.3 5.9 6.1 3.4 4.3
(19.1) (13.5) (11.7) (0.2)
Australia Asia Europe Americas Total Australia Asia Europe Americas Total
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Urbanisation pipeline by geography ($b)

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Historical development pipeline ($b)

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4.3
Australia
Asia
8.0 16.2 Europe
$34.6b [1]
Americas
6.1
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Urbanisation Pipeline Communities Pipeline
48.8 49.3
44.9
37.4 37.7 11.5 14.7
12.1
14.3 12.7
32.8 37.3 34.6
23.1 25.0
FY13 FY14 FY15 FY16 FY17
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As at 30 June 2017

LENDLEASE – FY17 FINANCIAL RESULTS

Residential development

Communities and Retirement (completions by state)[1]

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	FY16		FY17
	Units	$m	Units	$m
Communities
QLD	1,527	275	1,314	264
NSW2	761	302	577	220
VIC	823	150	876	178
SA	169	24	183	25
WA	122	31	110	29
Retirement
Australia	185	88	176	81
Total	3,587	8683	3,236	797

Communities and Retirement (sales by state)

	FY16		FY17
	Units	$m	Units	$m
Communities
QLD	1,524	296	1,522	315
NSW2	1,101	414	628	226
VIC	1,116	220	1,823	387
SA	222	28	95	15
WA	95	25	94	23
Retirement
Australia	185	88	176	81
Total	4,243	1,071	4,338	1,047

FY17 Apartment completions[4,5]

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	Units	$m
Australia
Victoria Harbour–888 Collins	445	287
Victoria Harbour–889 Collins	529	362
Brisbane Showgrounds–North Yard	207	111
Darling Square – St Leon	181	160
Darling Square – Wirth House	24	22
Toorak Park – East, North, Park	409	370
Other	12	14
Total	1,807	1,3273
Europe
IQL6 – Glasshouse Gardens	332	255
Elephant Park7 – South Gardens	205	153
Hungate	187	79
Other	2	2
Total	726	490

Total completions	2,533	1,817

As at 30 June 2017, 65% apartment completions across Australia and Europe were settled. Approximately 90% settled to date. Profit on pre sold apartments recognised on practical completion

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Retirement metrics reflect sales/completions in the development business and not resales in investment portfolio
New South Wales includes the Australian Capital Territory
Components do not sum due to rounding
Pre sold units on buildings completed during the period, and units sold in the period on buildings completed in prior periods
International Quarter London
Portion of affordable apartments

LENDLEASE – FY17 FINANCIAL RESULTS

Commercial development

Commercial completions

City	Project	Building	Sector	Deal type1	Est end value2 ($m)	Sqm (‘000)
FY17
Sydney	Barangaroo South	Tower One	Office	Fund Through	2.0	102
Sydney	Barangaroo South	International House	Office	Fund Through	0.1	7
		Sydney

Commercial commencements[1]

City	Project	Building	Sector	Deal type	Est end value2 ($m)	Sqm (‘000)	Est completion date
FY17
Brisbane	Brisbane Showgrounds	25 King	Office	Fund Through	0.1	15	FY19
Melbourne	Victoria Harbour	839 Collins	Office	Fund Through	0.4	38	FY19
Sydney	Circular Quay Tower3	Office building	Office	Joint Venture	1.7	55	FY21
Melbourne	Melbourne Quarter	One Melbourne Quarter	Office	Fund Through	0.3	26	FY19
Kuala Lumpur	Tun Razak Exchange	Retail	Retail	Joint Venture	1.3	154	FY21

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Profit recognition dependent on deal structure, refer to slide 29 for typical deal structures 2. Subject to market conditions and other movements
Construction start remains subject to certain preconditions

LENDLEASE – FY17 FINANCIAL RESULTS

Residential presales and apartments for rent[1]

Apartments[2]

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By units By value $m
723
786
(251)
1,373
1,635 512
850 (1,817) 228 4 2
40
(2,533) 210 850
1,124 Presales
Presales Presales 3,874 5,247 Presales
4,279
5,914 4,167 3,902
2,793 2,782
FY16 Sales Completions FY17 FY16 Sales Impact of Fx Completions FY17
3
Australia Europe Asia Americas - Resi For Sale Americas - Resi For Rent 3 Australia Europe Asia Americas - Resi For Sale Americas - Resi For Rent
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Communities presales

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By units By value $m
(716)
966
(3,060)
4,162
3,896 947
2,794 697
FY16 Sales Completions FY17 FY16 Sales Completions FY17
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Excludes retirement and includes 100% of revenue from Joint Venture projects
For sale is total presales, and for rent is in delivery
Represents estimated end value of apartments for rent product

LENDLEASE – FY17 FINANCIAL RESULTS

Apartment presales – by location and customer

Apartments for sale – presales (by value, as at 30 June 2017)[1] Run-off profile by location[2] By customer

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51%
39%
FY18 FY19
13%
Local
23% China
Other offshore
20% 18% 64%
15%
12% 12%
8%
7%
3% 3%
1%
0% 0% 0%
Sydney Brisbane Melbourne London Singapore Boston
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Apartment projects in delivery only reflecting total presales of $3.3 billion, including 100% of revenue from Joint Venture projects 2. Based on expected completion date of underlying buildings, subject to change in delivery program

LENDLEASE – FY17 FINANCIAL RESULTS

Development pipeline provides long term earnings visibility[1] Record secured pipeline of $49.3b controlled by invested capital of $3.0b

Apartments

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Estimated annual turnover[4]

21 major apartment buildings in delivery, across 3,177 presold units and 850 units for rent, estimated completion FY18 – FY19

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3,177 850 units 18,325 units
units presold [1] for rent remaining 22,352 units
~1,000 - 2,000
completions
$3.3b presold [1] [$0.5b for ] $17.9b remaining $21.7 billion
rent
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Commercial

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13 major buildings in delivery, estimated completion FY18 – FY21

537,000 sqm in 513,000 sqm 1,050,000 sqm delivery remaining ~2 - 3 buildings commenced $6.5b in delivery[2] $6.4b remaining $12.9 billion

Communities[3]

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3,896 53,219 lots remaining Lots presold $0.9b $13.8b remaining presold

57,115 lots

~3,500 - 4,500 completions $14.7 billion

$49.3 billion Total pipeline end value

Represents presales balance on buildings in delivery only

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Total end value of c.$8.0 billion, with c.$1.5 billion delivered to date
Includes Retirement units and built form units to be sold with land lots
Subject to market conditions

LENDLEASE – FY17 FINANCIAL RESULTS

Major project summary

Project	Project secured	Delivery commenced	Expected completion date1	Residential backlog (units)	Commercial backlog sqm2 (‘000)	Total remaining end value ($b)4
Barangaroo South, Sydney	2009	2012	2023	775	13	3.5
Victoria Harbour, Melbourne	2001	2004	2025	2,712	46	2.8
Melbourne Quarter, Melbourne	2013	2016	2022	1,683	136	2.5
Brisbane Showgrounds, Brisbane	2009	2011	2029	2,372	84	2.3
Darling Square, Sydney	2013	2013	2019	1,302	69	2.1
Circular Quay Tower, Sydney	2017	2017	2021	-	55	1.7
Waterbank, Perth	2013	-	2026	1,225	16	1.3
Paya Lebar Quarter, Singapore	2015	2016	2019	429	1133	3.0
The Lifestyle Quarter at Tun Razak Exchange, Kuala Lumpur	2014	2017	2025	2,326	1543	2.7
Elephant Park, London	2010	2012	2025	2,264	19	3.2
International Quarter, London	2010	2014	2026	-	273	2.9
The Wharves, Deptford, London	2014	2016	2024	1,132	7	1.1
Riverline, Chicago	2014	2016	2026	3,750	-	2.5
Other Urbanisation Projects				2,382	65	3.0
Total Urbanisation				22,352	1,050	34.6

Subject to change in delivery program

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Net lettable area and are subject to change
Net lettable area, figures previously quoted as gross lettable area
Reflects the remaining estimated total project end development value. Values for any project can vary and are subject to change

LENDLEASE – FY17 FINANCIAL RESULTS

Apartment projects in delivery – completion profile[1]

Project City	Building Ownership (%) Total Units Pre sold (%) Units Pre sold1 Pre-sales Revenue1 ($m) Completion Date2	Building Ownership (%) Total Units Pre sold (%) Units Pre sold1 Pre-sales Revenue1 ($m) Completion Date2	Building Ownership (%) Total Units Pre sold (%) Units Pre sold1 Pre-sales Revenue1 ($m) Completion Date2
Residential for sale
Darling Square Sydney	DarlingHouse 100 334 100 334	402	FY18
	Darling North, Harbour Place and Trinity House 100 577 100 577	808	FY19
	Darling Rise, Barker House & Arena 100 391 100 391	493	FY19
Victoria Harbour Melbourne	883 Collins 100 528 97 512	358	FY18
	Collins Wharf 1 100 321 87 278	255	FY19
Brisbane Showgrounds Brisbane	South Yard 100 193 96 186	101	FY18
Toorak Park Melbourne	Terrace Homes 100 18 78 14	35	FY18
Paya Lebar Quarter Singapore	Residential 30 429 49 210	228	FY19
Wandsworth London	Victoria Drive 50 110 36 40	41	FY18 / FY19
Elephant Park London	South Gardens 100 155 76 118	101	FY18
	West Grove(Building1 & 2) 100 593 80 477	446	FY19
5th Avenue New York	277 5th Avenue 40 130 - -	-	FY19
ClippershipWharf Boston	Building3 100 80 50 40	42	FY19
Total	3,859 3,177	3,310

Project	City	Building	Ownership (%)	Total Units	Est end value ($m)	Completion Date2
Residential for rent
ClippershipWharf	Boston	Building1&2	100	398	260	FY19
Riverline	Chicago	BuildingD	79	452	252	FY19
Total				850	512

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Closing presales balance as at 30 June 2017 on apartments in delivery only. Excludes completions recognised in FY17 2. Expected completion date, subject to change in delivery program

LENDLEASE – FY17 FINANCIAL RESULTS

Major commercial development pipeline Commercial building completion profile[1]

City	Project	Capital model	sqm ('000)	Building	Completion date
Kuala Lumpur	Tun Razak Exchange	Joint Venture	1543	Retail	FY21
Singapore	Paya Lebar Quarter	Joint Venture	843 293	Commercial (3 buildings) Retail	FY19 FY19
Sydney	Barangaroo South	Fund Through2	102 7	Tower One International House Sydney	FY17 FY17
London	International Quarter London	Fund Through2	73	Stage 1 Commercial (2 buildings)	FY18
Sydney	Darling Square	Fund Through2	26 37	Commercial Hotel	FY18 FY18
Sydney	Circular Quay Tower4	Joint Venture	55	Commercial	FY21
Melbourne	Victoria Harbour	Fund Through2	38	Commercial 839 Collins Street	FY19
Total			537

Indicative conversion timing of secured commercial pipeline to FY21 (sqm ‘000)[5]

City	Project	# Buildings	Sector	sqm ('000)	FY18
Melbourne	Melbourne Quarter	3	Office	110
Brisbane	Brisbane Showgrounds	2	Office	33
Sydney	Barangaroo South	1	Office	10
London	International Quarter London	6	Office	200
San Francisco	30 Van Ness	1	Office	17
Total		13		370	Targeting 2-3 building commencements p.a.

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Not indicative of cash or profit recognition. Based on expected completion date of buildings
A funding model structured through a forward sale to a capital partner resulting in staged payments prior to building completion
Net lettable area, figures previously quoted as gross lettable area
Construction start remains subject to certain preconditions 5. Indicative project execution timing, subject to tenant precommitment, planning and other conditions

LENDLEASE – FY17 FINANCIAL RESULTS

Communities and Retirement projects

Communities				Residential	Commercial
Include Horizon in this …. Project	Location	Ownership Interest	Estimated Completion Date1	Backlog Land Units2	Backlog sqm / ‘000s3
Bingara Gorge	NSW	Land management	2025	1,160	43
Calderwood Valley	NSW	Land management	2040	4,585	57
St Marys - Jordan Springs	NSW	Owned	2023	850	556
The New Rouse Hill	NSW	Land management	2018	445	-
Fernbrooke Ridge	QLD	Land management	2018	85	-
Elliot Springs	QLD	Land management	2058	10,675	1,037
Springfield Lakes	QLD	Land management	2026	4,365	47
Yarrabilba	QLD	Staged acquisition	2043	14,055	2,189
Blakes Crossing	SA	Staged acquisition	2019	430	9
Atherstone	VIC	Land management	2028	3,870	364
Aurora	VIC	Owned	2025	2,710	139
Harpley	VIC	Land management	2024	3,255	-
Mayfield	VIC	Owned	2018	5	-
Alkimos	WA	Land management	2024	1,370	36
Alkimos Vista (formerly Alkimos Central)	WA	Land management	2021	570	-
The Assembly at Coolbellup	WA	Land management	2017	5	-
Horizon Uptown	Americas	Owned	2033	3,860	371
Sub-total				52,295	4,848
Retirement				4,820	-
Total				57,115	4,848

Estimated completion date represents the expected financial year in which the last unit will be settled, subject to change

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Represents estimated backlog (including Retirement units and built form units to be sold with land lots) and includes the total number of units in Group owned, Joint Venture and managed projects. The actual number of units for any particular project can vary as planning approvals are obtained
Represents the net developable land in relation to master-planned urban communities. The actual land area for any particular project can vary as planning approvals are obtained

LENDLEASE – FY17 FINANCIAL RESULTS

Development deal structuring tailored to local market

	Communities / Retirement	Urbanisation	Urbanisation	Urbanisation
		Apartments (Australia, Europe)	Commercial Forward Sale	JV Structure / LP-GP1
Project examples	• Jordan Springs, Sydney • Yarrabilba, Brisbane	• Darling Square, Sydney • Elephant Park, London	• Barangaroo (ITS), Sydney • Phase 1 International Quarter, London	• Paya Lebar Quarter, Singapore • Phase 1 Riverline, Chicago
Land funding2	• Land ownership • Land management • Staged payments	• Land management • Staged payments	• Land management • Staged payments	• Land ownership via JV (including project financing)
Production funding2	• 100% on-balance sheet	• Largely 100% on-balance sheet	• Capital partner progress or staged payments	• Funded via JV (including project financing)
P&L returns	• Development profit on completion • Construction margin on infrastructure delivery	• Development profit on practical completion • Construction margin on practical completion3	• Development profit typically upfront at time of sale • Development management fees, Construction margin4 and Investment Management fees4 during delivery	• Development profit tied to equity interests • Development management fees, Construction margin4 and Investment Management fees4 (including performance fees) during delivery
Cash returns (Development only)	• On completion	• On completion	• Over life of project during delivery	• Linked to cash equity returns or sell down of investment typically post practical completion

Limited Partnership / General Partnership
Reflects typical funding models used across segment examples

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Based on apartment projects delivered 100% on-balance sheet
Only where Construction and / or Investments segments are engaged to play a role in the project

Construction

LENDLEASE – FY17 FINANCIAL RESULTS

Construction FY17

Overview

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Provides a project management, design, and construction service, predominantly in the infrastructure, defence, mixed-use, commercial and residential sectors
Financial returns are generated via project management and construction management fees, in addition to construction margin

Drivers[1]

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EBITDA up 17.4% to $338 million
Revenue up 5.1% to $12.6 billion
Margin up 30bps to 2.7%

 Australia

Revenue up 2.7% to $6.4 billion, margin down 60bps to 3.1%
Australian margin impacted by performance across a small number of projects and increased bidding activity

 Asia

Revenue up 50.4% to $0.5 billion, margin breakeven

Focus remains on internal pipeline

 Europe

Revenue down 16.7% to $1.1 billion, margin up 240bps to 2.8%
Recovery despite challenging industry conditions

 Americas

Revenue up 12.2% to $4.6 billion, margin up 90bps to 2.3%

Performance

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	FY16	FY17
% Operating EBITDA	23	24
EBITDA margin (%)	2.4	2.7
New Work Secured ($b)	14.6	13.2
Backlog Revenue ($b)	20.7	20.6

Outlook

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Target EBITDA margin of 3-4% globally, 4-5% Australia
Diversity by region, client and sector
New work secured - $13.2 billion:
- Australia impacted by lag in engineering contract wins
- Asia internal pipeline increasing
- Europe remains a challenging industry environment
- US continued momentum
Preferred bidder status – c.$10 billion including:
- Australia: Quay Quarter, Carlton Connect
- Asia: The Lifestyle Quarter
- Europe: Google Headquarters, St John’s Wood
Preferred bidder status in Australia (post balance date):
- Melbourne Metro Tunnel Project
- Ballarat Line Upgrade Project
- Sydney Metro Station, Martin Place (commercial building project)
Successful close out on a number of projects positively impacted overall result

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Comparative period the year ended 30 June 2016 (the prior year)

LENDLEASE – FY17 FINANCIAL RESULTS

Construction earnings

EBITDA ($m)

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EBITDA margins (%)

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FY16 FY17 FY16 FY17
3.7%
338.3
3.1%
288.1 2.8% 2.7%
2.3% 2.4%
231.8
201.4
1.4%
0.4%
105.4 -
56.4
31.7
(0.2) 5.5
(5.6)
Australia Asia Europe Americas Total
(1.7%)
Australia Asia Europe Americas Total
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EBITDA Europe (GBPm)

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EBITDA Americas (USDm)

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19.0
2.8
FY16 FY17
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80.1
41.2
FY16 FY17
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LENDLEASE – FY17 FINANCIAL RESULTS

Construction backlog

Backlog revenue ($b)

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20.7 20.6
17.3
16.2 16.2
FY13 FY14 FY15 FY16 FY17
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Backlog revenue by region ($b)[1]

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Asia
Aus Services
Europe
0.80.8
1.8
Aus Engineering
3.1
$20.6b
7.8 Americas
6.3
Aus Building
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Backlog revenue by client[1,2]

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Backlog revenue by sector[1,2]

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Other
Transport
8%
18%
Commercial
17%
13%
Defence
38%
6% Residential
Hotel /
Entertainment
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Lendlease
14%
Corporate
51%
35%
Government
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As at 30 June 2017

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Includes all construction projects greater than $100 million, which represents 78% ($16.1 billion) of secured backlog

LENDLEASE – FY17 FINANCIAL RESULTS

Construction new work secured / backlog

New work secured revenue

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($b)	Australia		Asia		Europe		Americas		Total
	Jun-16	Jun-17	Jun-16	Jun-17	Jun-16	Jun-17	Jun-16	Jun-17	Jun-16	Jun-17
New work secured revenue1
Building	4.5	3.9	0.5	0.7	1.3	0.7	4.5	5.8	10.8	11.1
Engineering	2.7	1.0	-	0.1	-	-	-	-	2.8	1.1
Services	1.0	1.0	-	-	-	-	-	-	1.0	1.0
Total new work secured revenue	8.3	5.9	0.5	0.8	1.3	0.7	4.5	5.8	14.6	13.2

Backlog revenue

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($b)	Australia		Asia		Europe		Americas		Total
	Jun-16	Jun-17	Jun-16	Jun-17	Jun-16	Jun-17	Jun-16	Jun-17	Jun-16	Jun-17
Backlog revenue2
Building	6.3	6.3	0.6	0.8	1.5	0.8	6.7	7.8	15.1	15.7
Engineering	3.8	3.1	-	-	-	-	-	-	3.8	3.1
Services	1.7	1.8	-	-	-	-	-	-	1.7	1.8
Total backlog revenue	11.9	11.2	0.6	0.8	1.5	0.8	6.7	7.8	20.7	20.6
Backlog realisation (%)
Year ending June 2017	47	57	91	69	71	66	49	53	51	56
Year ending June 2018	30	28	7	2	17	28	33	31	29	28
Post June 2018	23	15	2	29	12	6	18	16	20	16
Total	100	100	100	100	100	100	100	100	100	100

Total revenue to be earned from projects secured during the year, rounded to the nearest $100 million

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Current period backlog revenue is the total revenue expected to be earned from projects in future financial periods, based on the average foreign exchange rate for that period. Although backlog revenue is realised over several periods, the average foreign exchange rate for the current period has been applied to the closing backlog revenue balance in its entirety, as the average rates for later years cannot be predicted

LENDLEASE – FY17 FINANCIAL RESULTS

Construction backlog revenue by region

Group ($b)

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Australia ($b)

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13.2 (12.6)
5.9 (6.4)
(0.7)
(0.2)
Book to bill [1] : 1:05
20.7 20.6 11.9 Book to bill [1] : 0.92 11.2
FY16 New work Revenue Other FY17 FY16 New work Revenue Other FY17
secured realised secured realised
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Europe ($b)

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Americas ($b)

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----- Start of picture text -----

0.7 5.8 (4.6)
(1.1)
(0.1)
(0.3)
1.5 Book to bill [1] : 1:26 7.8
Book to bill [1] : 0.64 6.7
0.8
FY16 New work Revenue Other FY17 FY16 New work Revenue Other FY17
secured realised secured realised
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Ratio calculated as new work secured over revenue realised

LENDLEASE – FY17 FINANCIAL RESULTS

Market opportunity for Engineering & Services in Australia

Engineering construction[1] ~$75b[2] Major transport construction[1,4] ($b)

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Value of work done, inflation adjusted[5]

Projected composition[1] :

Transport ~$30b
• Resources ~$15b 13.5
• Utilities ~$25b • Other civil ~$5b 10.8

Forecast

Sector outlook[1,3] :

8.1 5.4 2.7 0.0 FY04 FY06 FY08 FY10 FY12 FY14 FY16 FY18 FY20 FY22 FY24 FY26

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Transport
Resources
Utilities
Other civil

Transport project outlook[1,3,4] :

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Major
Minor
Lendlease Group Research estimates
Direction of activity versus previous decade 4. Includes major projects > $500m 5. FY15 prices
Estimated annual engineering construction activity in real terms, adjusted for imported component of mining

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LENDLEASE – FY17 FINANCIAL RESULTS

Australia: Major Projects – Building[1,2]

Project	Location	Contract Type3	Contract Value ($m)	Secured Date	Completion Date4	Sector
Crown SydneyHotel Resort	NSW	MC	1,084.0	2015	2021	Hotel / Entertainment
New Air Combat Capability- RAAF Williamtown	NSW	MC	845.0	2015	2019	Defence
New Air Combat Capability- RAAF Tindal	NT	MC	450.0	2016	2021	Defence
Air 7000 Phase 2B	SA	MC	383.3	2016	2019	Defence
Adelaide Convention Centre Redevelopment	SA	MC	361.0	2011	2018	Commercial
ADF Air Traffic Control Complex Infrastructure Project	National	MC	349.0	2016	2020	Defence
Sunshine Plaza Redevelopment	Qld	LS	295.0	2017	2019	Other
Western SydneyStadium	NSW	LS	281.1	2017	2019	Hotel/Entertainment
60 Martin Place	NSW	LS	274.9	2016	2020	Commercial
Land 121 Stage 2 Unit Sustainment Facilities	National	MC	244.0	2016	2020	Defence
Gosford Hospital Redevelopment	NSW	LS	219.9	2016	2020	Other
Campbell Barracks Redevelopment Project	WA	LS	214.0	2016	2019	Defence
Victoria Harbour - 839 Collins	Vic	LS	197.0	2017	2019	Commercial
Western Women's & Children's Hospital	Vic	MC	187.2	2016	2019	Other
Hunter Correctional Centre	NSW	D&C	183.6	2017	2018	Other
BaptistCare SAHF	NSW	D&C	183.0	2017	2020	Residential
Victoria Harbour - 883 Collins	Vic	CM	174.3	2016	2018	Residential
Melbourne Quarter - Commercial One	Vic	LS	174.0	2017	2019	Commercial
Rod Laver Arena	Vic	MC	169.0	2016	2019	Hotel/Entertainment
Palmerston Hospital	NT	MC	165.7	2016	2018	Other
Macarthur Square Development	NSW	LS	163.1	2016	2018	Other
Delamere Air Weapons Range Redevelopment Project	NT	MC	143.7	2017	2018	Defence
Victoria Harbour - Collins Wharf 1	Vic	CM	140.0	2017	2019	Residential
Growler Airbourne Attack FacilityPhase 1 Project	Qld	MC	140.0	2016	2018	Defence
South Coast Correctional Centre Nowra	NSW	LS	119.9	2017	2019	Other

Disclosure of major projects is subject to client approval. This could impact the projects available for disclosure
Backlog revenue as at 30 June 2017 for the projects listed totals $4.7 billion, representing 75% of the total backlog revenue

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Contract types are Lump Sum (LS), Managing Contractor (MC), Construction Management (CM) and Design & Construct (D&C) 4. Based on expected completion date of buildings, subject to change in delivery program

LENDLEASE – FY17 FINANCIAL RESULTS

Australia: Major Projects – Engineering[1,2]

Project	Location	Contract Type3	Contract Value ($m)	Secured Date	Completion Date4	Sector
NorthConnex M1 / M2 Tunnel	NSW	D&C	1,283.0	2015	2020	Transport
Northern Connector	SA	D&C	604.0	2016	2019	Transport
Gateway Upgrade North	Qld	D&C	985.0	2016	2018	Transport
Oxley Highway to Kundabung, Pacific Highway	NSW	D&C	693.5	2014	2018	Transport
Caulfield to Dandenong	Vic	ALL	600.0	2016	2019	Transport
Kingsford Smith Drive	Qld	D&C	441.0	2016	2019	Transport
Northern Road 2	NSW	CM	396.0	2017	2020	Transport
CityLink Tulla Widening	Vic	D&C	288.9	2016	2019	Transport
Northern Road 3	NSW	D&C	191.0	2016	2019	Transport

Disclosure of major projects is subject to client approval. This could impact the projects available for disclosure
Backlog revenue as at 30 June 2017 for the projects listed totals $2.9 billion, representing 93% of the total backlog revenue

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Contract types are Design and Construct (D&C), Alliance (ALL) and Construction Management (CM)
Based on expected completion date of infrastructure, subject to change in delivery program

LENDLEASE – FY17 FINANCIAL RESULTS

Asia: Major Projects – Building[1,2]

Project	Location	Contract Type3	Contract Value($m)	Secured Date	Completion Date4	Sector
Paya Lebar Quarter	Singapore	GMP	794.9	2016	2020	Commercial & Residential

Europe: Major Projects – Building[1,2]

Project	Location	Contract Type3	Contract Value($m)	Secured Date	Completion Date4	Sector
Elephant Park-West Grove	London	LS	356.4	2016	2019	Residential
International Quarter London-Building 1	London	LS	347.2	2016	2018	Commercial
Rathbone Square	London	LS	333.3	2015	2018	Commercial & Residential
North Wales Prison	Wales	LS	277.5	2015	2018	Other
International Quarter London-Building 2	London	LS	204.8	2016	2018	Commercial
Elephant Park-South Gardens	London	LS	201.5	2015	2018	Residential
245 Hammersmith Road	London	LS	171.7	2017	2019	Commercial

Disclosure of major projects is subject to client approval. This could impact the projects available for disclosure

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Backlog revenue as at 30 June 2017 for the projects listed totals $0.6 billion (Asia) and $0.5 billion (Europe), representing 70% (Asia) and 63% (Europe) of total backlog revenue for these regions
Contract types are Lump Sum (LS) and Guaranteed Maximum Price (GMP)
Based on expected completion date of buildings, subject to change in delivery program

LENDLEASE – FY17 FINANCIAL RESULTS

Americas: Major Projects – Building[1,2]

Project	Location	Contract Type3	Contract Value ($m)	Secured Date	Completion Date4	Sector
Jacob K. Javits Convention Center	New York	LS	798.0	2017	2021	Government
520 Park Avenue	New York	GMP	398.9	2014	2018	Residential
277 Fifth Avenue	New York	CM	275.1	2017	2019	Residential
Avalon - 1865 Broadway	New York	CM	222.2	2016	2019	Residential
9 W Walton	Chicago	GMP	206.7	2015	2018	Residential
New York Methodist Hospital	New York	CM	149.2	2016	2019	Healthcare
Half and N Street	Washington, D.C.	GMP	144.5	2017	2019	Residential
Clippership Wharf	Boston	GMP	131.3	2016	2020	Residential

Disclosure of major projects is subject to client approval. This could impact the projects available for disclosure
Backlog revenue as at 30 June 2017 for the projects listed totals $1.8 billion, representing 23% of total backlog revenue

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Contract type is Guaranteed Maximum Price (GMP), Lump Sum (LS) and Construction Management (CM)
Based on expected completion date of buildings, subject to change in delivery program

Investments

LENDLEASE – FY17 FINANCIAL RESULTS

Investments FY17

Overview

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Owns and / or manages investments including a leading wholesale investment management platform and also the Group’s ownership interests in property and infrastructure co-investments, Retirement and US Military Housing
Financial returns include fund and property management fees, yield and capital growth on investment positions, and returns from the Group’s Retirement portfolio and US Military Housing business

Drivers[1]

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Ownership earnings increased by 9% to $379.2 million
Solid growth in the Retirement Living business
- Average unit prices on resales increased 11%
- Two additional villages acquired
Co-investments:
- Australia: Higher income and revaluations following the completion of the three office towers at Barangaroo South
- Asia: Steady income and non-recurrence of devaluations from prior period
Infrastructure:
- Americas: Equity returns on military housing portfolio
Operating earnings increased 7% to $116.1 million
FUM of $26.1 billion, up 11% on the prior year
- Growth in base fees in line with FUM
- Performance fees immaterial
High quality earnings from military housing portfolio

Performance

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	% Operating EBITDA ROIC2 (%) Invested Capital ($b)	FY16 37 11.2 3.2	FY17 36 11.7 3.3
	Co-Investment Revaluations ($m)	43.6	66.6
	Revaluations / Operating EBITDA (%)	3.5	4.8

Outlook

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Well positioned to deliver future recurring earnings through:
- FUM of $26.1 billion, ~150 institutional investors
- $1.5 billion co-invested in funds
- $1.7 billion[3] of capital across 71 retirement villages
- 53,105 military housing units under management
Retirement Living – opportunity for introduction of capital partner
Growing FUM and asset management income
- c.$3 billion[4] of additional secured FUM across the Group’s urbanisation projects in delivery
New asset class opportunities:
- Residential for rent
  - Americas: c.850 units currently in delivery (in Development segment)
  - Europe: opportunities within existing urbanisation projects
Telecommunications infrastructure (Americas):
- 135 towers completed
Comparative period the year ended 30 June 2016 (the prior year)

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Return on Invested Capital (ROIC) is calculated using the annual operating profit after tax divided by the arithmetic average of beginning, half year and year end invested capital. FY16 Investments ROIC restated reflecting inclusion of half year end invested capital in calculation
Excludes capital balances relating to Retirement development activities
Represents secured future FUM increase from funds with development projects in delivery

LENDLEASE – FY17 FINANCIAL RESULTS

Investments earnings / ownership

EBITDA by region ($m)

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EBITDA by activity ($m)

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FY16 FY17 FY16 FY17
495.3
457.7
393.3
348.5
379
350
35.1 35.1 59.8 56.7 108 116
14.3 10.2
1 2
Australia Asia Europe Americas Total Ownership interests Operating earnings
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Investments by product ($b)[3]

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3.0 3.3
4% 5%
50% 51%
46% 44%
FY16 FY17
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Investments by region ($b)[3]

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3.0 3.3
4%
4%
2%
10%
11%
83% 86%
FY16 FY17
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Co-Investments Retirement ownership Infrastructure

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Australia Asia Europe Americas
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Earnings derived from co-investments, the Retirement business and equity returns from US Military Housing

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Earnings derived from the investment management platform and the management of the US Military Housing 3. Represents the Group’s assessment of market value

LENDLEASE – FY17 FINANCIAL RESULTS

Funds Under Management (FUM) Growth in FUM ($b)

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CAGR of 14.9% 26.1
23.6
21.3 -
16.3
15.0
FY13 FY14 FY15 FY16 FY17
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FUM by asset class [1]
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Industrial
3%
Commercial
45% $26.1b 50%
Retail
2%
Other
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FUM by region [1]
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Europe
5%
Asia
21%
$26.1b
Australia
74%
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As at 30 June 2017

LENDLEASE – FY17 FINANCIAL RESULTS

FUM by region

Group ($b)

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Australia ($b)

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2.1 (0.3) 0.8 (0.1) 2.0 (0.2) 0.7 0.3
26.1 19.3
23.6 16.5
FY16 Additions Divestments Net revals Other 1 FY17 FY16 Additions Divestments Net revals Other FY17
Europe ($b) Asia ($b)
- - - (0.1) 0.1 (0.1) 0.1
(0.3)
1.5
1.4 5.6
5.4
1 1
FY16 Additions Divestments Net revals Other FY17 FY16 Additions Divestments Net revals Other FY17
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Includes foreign exchange

LENDLEASE – FY17 FINANCIAL RESULTS

Major fund summary

			Funds Management Platform1	Funds Management Platform1	Funds Management Platform1
	APPFR2	APPFC3	APPFI4	LLITST5	LLOITST6	ARIF7 1 (Somerset)	ARIF7 3 (Jem)	PPPL8	LLRP9
Total assets ($ billion)	5.210	3.810	0.8	3.5	2.0	0.8	1.4	1.2	1.4
Gearing (%)	12.910	12.510	5.2	19.6	15.5	66.0	45.5	38.6	2.3
LL co-investment (%)	1.7	6.8	10.6	15.0	12.5	10.1	20.1	6.1	-
LL co-investment ($ million)	73.2	211.6	71.0	411.5	202.7	24.9	151.8	37.2	-
Region	Aus	Aus	Aus	Aus	Aus	Asia	Asia	Asia	Europe
Asset class	Retail	Commercial	Industrial	Commercial	Commercial	Retail	Retail	Retail	Retail
Number of assets	12	19	29	411	1	1	1	1	2
Occupancy (%)	98.1	86.7	96.2	80.4	91.012	97.6	99.1	100.0	93.7
Weighted average cap rate (%)	5.4	5.6	7.3	5.1	5.3	4.5	4.6	5.3	4.6

Lendlease One International Towers Sydney Trust (Barangaroo South T1)

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The above highlights only selected major funds and does not comprise Lendlease’s complete Funds Management Platform
Australian Prime Property Fund Retail
Australian Prime Property Fund Commercial
Australian Prime Property Fund Industrial
Lendlease International Towers Sydney Trust (Barangaroo South T2 and T3)
Asian Retail Investment Fund
Parkway Parade Partnership Limited
Lendlease Retail LP
Assets and gearing calculated on a look through basis
Includes car park asset
Includes post balance date Heads of Terms

LENDLEASE – FY17 FINANCIAL RESULTS

Retirement summary

Value drivers

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Valuation drivers	FY16	FY17
Long term growth rate	3.7%	3.6%
Discount rate	13.3%	13.0%
Average length of stay – ILUs (years)	11.5	11.0
Number of established units	13,384	12,626
Units resold	1,038	939

Investments[3] ($m)

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1,488
FY161
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1,711
2
FY17
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Villages / units

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Location	Number of villages	Units
QLD	12	2,931
NSW	17	3,296
VIC	26	4,070
SA	4	509
WA	10	1,628
ACT	2	192
Total	71	12,626

Units by state

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4,070
3,296
2,931
1,628
509
192
VIC NSW QLD WA SA ACT
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In FY16, the Group divested its NZ Retirement business, consisting of 996 units and 5 sites 2. Includes acquisition of two villages 3. Excludes capital balances relating to Retirement development activities

LENDLEASE – FY17 FINANCIAL RESULTS

Investments

Australia Co-Investments	Lendlease Interest (%)	Market Value1 June 2016 ($m)	Market Value1 June 2017 ($m)
Australian Prime Property Fund Retail	1.7	44.5	73.2
Lendlease International Towers Sydney Trust	15.0	380.3	411.5
Australian Prime Property Fund Commercial	6.8	197.3	211.6
Lendlease One International Towers Sydney Trust	12.5	107.5	202.7
Australian Prime Property Fund Industrial	10.6	78.3	71.0
Lendlease Sub Regional Retail Fund	10.0	38.0	39.3
Lendlease Public Infrastructure Investment Company	10.0	40.5	40.7
Lendlease Real Estate Partners New Zealand	5.3	8.1	9.5
Lendlease Communities Fund 1	20.8	1.4	1.2
Lendlease Core Plus Fund	n/a	0.5	-
Craigieburn Central	25.0	78.3	79.0
Total		974.7	1,139.7
Asia Co-Investments	Lendlease Interest (%)	Market Value1 June 2016 ($m)	Market Value1 June 2017 ($m)
Lendlease Asian Retail Investment Fund (ARIF)
ARIF 1 (313@somerset)	10.1	29.1	24.9
ARIF 2 (Setia City Mall)	36.4	24.0	23.4
ARIF 3 (Jem)	20.1	156.4	151.8
Parkway Parade Partnership Limited	6.1	35.0	37.2
313@somerset	25.0	95.3	80.1
Total		339.8	317.4

Europe Co-Investments	Lendlease Interest (%)	Market Value1 June 2016 ($m)	Market Value1 June 2017 ($m)
Lendlease Retail LP	-	65.7	-

Americas		June 2016	June 2017
MHPI Portfolio, invested equity1($m)		109.4	101.9
US Telecommunications Infrastructure, invested equity1 ($m)		-	43.7
Completed telecommunications towers (number)		-	135

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Represents the Group's assessment of the market value (A$)

LENDLEASE – FY17 FINANCIAL RESULTS

Funds Under Management

Australia FUM	Fund Type	Asset Class	Market Value1 June 2016($b)	Market Value1 June 2017($b)
Australian Prime Property Fund Retail	Core	Retail	5.0	5.2
Lendlease International Towers Sydney Trust	Core	Commercial	3.2	3.5
Australian Prime Property Fund Commercial	Core	Commercial	2.9	3.8
Managed Investment Mandates	Core	Various	2.0	2.7
Lendlease One International Towers Sydney Trust	Core	Commercial	1.3	2.0
Australian Prime Property Fund Industrial	Core	Industrial	0.9	0.8
Lendlease Sub Regional Retail Fund	Core	Retail	0.6	0.6
Lendlease Public Infrastructure Investment Company	Core	Various	0.4	0.4
Lendlease Real Estate Partners New Zealand	Core	Retail	0.2	0.3
Total			16.5	19.3

Asia FUM	Fund Type	Asset Class	Market Value1 June 2016 ($b)	Market Value1 June 2017($b)
Lendlease Asian Retail Investment Fund	Core	Retail and Commercial	2.5	2.3
Managed Investment Mandate	Value Add	Retail and Commercial	1.4	1.4
Parkway Parade Partnership Limited	Core Plus	Retail and Commercial	1.2	1.2
Lendlease Jem Partners Fund Limited	Core	Retail and Commercial	0.5	0.5
Total			5.6	5.4

Europe FUM	Fund Type	Asset Class	Market Value1 June 2016 ($b)	Market Value1 June 2017($b)
Lendlease Retail LP	Core	Retail	1.5	1.4
Total			1.5	1.4

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Represents the Group's assessment of the market value (A$)

LENDLEASE – FY17 FINANCIAL RESULTS

Assets Under Management

Australia		Asset Class	GLA sqm/‘000s1	Market Value2 June 2016($b)	Market Value2 June 2016($b)	Market Value2 June 2017($b)
Retail		Retail	747.3	6.4		7.2

Asia		Asset Class	GLA sqm/‘000s1	Market Value2 June 2016($b)		Market Value2 June 2017($b)
Retail		Retail	312.5	4.4		4.2

Europe		Asset Class	GLA sqm/‘000s1	Market Value2 June 2016($b)		Market Value2 June 2017($b)
Retail		Retail	141.7	0.9		0.8
Americas	Housing Units	Lodging Units	Total Units		Avg	Portfolio Life (years)
FY16	40,605	12,450	53,055			40
FY17	40,605	12,500	53,105			39

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Gross Lettable Area
Represents the Group's assessment of the market value (A$)

Lendlease overview

LENDLEASE – FY17 FINANCIAL RESULTS

Vision: to create the best places

Strategic framework

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Competitive advantage

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Business model

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Pillars of value

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LENDLEASE – FY17 FINANCIAL RESULTS

Globally diverse pipeline

Our globally diverse pipeline provides long term earnings visibility[1]

$49.3b $20.6b $26.1b $3.3b Development Construction FUM Investments pipeline backlog revenue

Europe

Americas

$4.3b Development pipeline $7.8b Construction backlog revenue $0.1b Investments

$8.0b Development pipeline $0.8b Construction backlog revenue $1.4b FUM

Asia

$6.1b Development pipeline $0.8b Construction backlog revenue $5.4b FUM

$0.3b Investments

Australia

$30.9b Development pipeline $11.2b Construction backlog revenue $19.3b FUM $2.9b Investments

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All data as at 30 June 2017

LENDLEASE – FY17 FINANCIAL RESULTS

Global trends influencing our strategy

By 2014, 54% of the world’s population were estimated to live in urban areas; this will reach 60% by 2030[1]

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Urbanisation

•

Lendlease leadership

$34.6b[2] Urbanisation pipeline 13 major urbanisation projects[3] across 8 gateway cities

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Worldwide infrastructure spending will grow from US$4 trillion per year Infrastructure in 2012 to more than US$9 trillion by 2025[4]

A leading tier 1 Engineering business in Australia
• $4b+ PPPs secured in last 6 years[5]

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Global assets under management are Funds growth forecast to rise from US$64 trillion in 2012 to US$102 trillion by 2020[6]

Lendlease accounted for ~10% of new equity raised globally for core wholesale mandates since 2009[7]

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Cities occupy 2% of the world’s land Sustainability mass, but are responsible for up to 70% of harmful greenhouse gases[8]

Recognised by GRESB as an international leader[9]
Development pipeline targeting 98% green certification

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Internationally, people aged 60+ will Ageing grow the most in number between population 2015 and 2050[10]

A market leader in retirement living sector in Australia
• Actively seeking to transfer skills offshore

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A pioneer of new delivery technologies e.g. Cross Laminated Timber, pre-fab and modular; a leader in new safety initiatives

Global investment in real estate Technology technology start-ups has grown from $0.2b in 2012 to $1.7b in 2015[11]

World Urbanization Prospects: The 2014 Revision, United Nations
Preqin Ltd; represents period 2009 to 2015
As at 30 June 2017
UN-HABITAT’s Global Report on Human Settlements 2011
Urbanisation development projects with end value >$1b
Global Real Estate Sustainability Benchmark (GRESB) 2016 survey; 5 funds achieved no.1 ranking in respective global or regional category
World Population Prospects: The 2015 Revision, United Nations 11. CB Insights: Real Estate Tech Start-ups Funding Overview 2016
Capital project and infrastructure spending outlook to 2025, PwC 2015 5. Cumulative data from FY12 – FY17
Asset Management 2020: A Brave New World, PwC 2014

LENDLEASE – FY17 FINANCIAL RESULTS

Portfolio Management Framework summary

Business model

Integrated model synergies

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•
Target EBITDA mix:
35-45% Development
30-40% Investments
20-30% Construction
Capital allocation Target returns
2
• •
Focussed on Gateway Cities Group ROE 10-14%
• •
50-70% capital in Australia Development ROIC 9-12% [1]
• 20% max per International region 1 Maximising 3 • Investments ROIC 8-11% [1]
•
long term Construction EBITDA margin 3-4%
securityholder
value
5 4
Distribution policy Capital structure
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•
Payout 40-60% of earnings
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Capital management discipline
Investment grade credit rating
• Optimised WACC
Gearing[2] 10-15% (max 20%)

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Through-cycle target based on rolling 3-5 year timeline
Gearing definition: Net debt to total tangible assets less cash

LENDLEASE – FY17 FINANCIAL RESULTS

Pillars of value – non-financial

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Safety Our Customers [1,2]
Percentage of operations
without a critical incident in Group Lost Time Injury
the last 12 months Frequency Rate c.280 MILLION MILITARY HOUSING FOR
90% 1.8 RETAIL VISITORS c.125,000
ANNUALLY RESIDENTS IN THE US
88%
1.6
c.16,000 c.150
RETIREMENT GLOBAL
FY16 FY17 FY16 FY17 LIVING RESIDENTS INSTITUTIONAL PARTNERS
Our People Sustainability
Employee engagement Senior Executive positions Total development pipeline achieved
score [3,4] held by women [5] or targeting green certification
85% 84% 21% 98% 98%
5
19%
LENDLEASE FUNDS
TOP-RANKED IN 2016
GRESB SURVEY [6]
FY15 FY16 FY16 FY17 FY16 FY17
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Internal data capture
As at 30 June 2017
Survey managed by Willis Towers Watson. Employee engagement is a measure of overall employee satisfaction across our business

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We are developing a new approach to measuring employee engagement. As a result of this change we did not conduct an employee engagement survey in 2017 5. Employees who hold a position at Executive level according to the Lendlease Career Job Framework. This generally includes Regional Business Unit Heads, Regional Function Heads and in some cases, direct reports to Global Function Heads
Global Real Estate Sustainability Benchmark (GRESB) 2016 survey; 5 funds achieved no.1 ranking in respective global or regional category

LENDLEASE – FY17 FINANCIAL RESULTS

Important notice

This document (including the appendices) has been prepared and is issued by Lendlease Corporation Limited (ACN 000 226 228) ( Lendlease ) in good faith. Neither Lendlease, nor any of its controlled entities including Lendlease Trust (together referred to as the Lendlease Group ) makes any representation or warranty, express or implied, as to the accuracy, completeness, adequacy or reliability of any statements, estimates, opinions or other information contained in this document (any of which may change without notice). To the maximum extent permitted by law, Lendlease, the Lendlease Group 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, howsoever arising, through use or reliance on anything contained in or omitted from this document.

This document has been prepared without regard to the specific investment objectives, financial situation or needs of any recipient of 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 relation to the information contained in this presentation.

Prospective financial information and forward looking statements, if any, have been based on current expectations about future events and are subject to risks, uncertainties and assumptions that could cause actual results to differ materially from the expectations expressed in or implied from such information or statements.

Lendlease Group’s statutory results are prepared in accordance with International Financial Reporting Standards (IFRS). This document also includes material that is not included in Lendlease Group’s statutory results and contains non-IFRS measures. Material that is not included in Lendlease Group’s statutory results has not been subject to audit. Lendlease Group’s auditors, KPMG, performed agreed upon procedures to ensure consistency of this document with Lendlease Group’s statutory results, other publicly disclosed material and management reports.

A reference to FY17 refers to the full year period ended 30 June 2017 unless otherwise stated. All figures are in AUD unless otherwise stated.

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AI assistant

LENDLEASE GROUP — Annual Report 2017

65243_rns_2017-08-27_0f457c4e-d370-457c-9216-823b818fa4d2.pdf

Lendlease Group FY17 Full Year Results Announcement, Presentation and Appendix

ENDS

Lendlease delivers strong earnings growth

Group Financials

Outlook

ENDS

FOR FURTHER INFORMATION, PLEASE CONTACT:

Indigenous engagement and reconciliation

Contents

Safety

FY17 Safety Metrics

Vision: to create the best places

Strategic framework

Business model

Lendlease delivers strong earnings growth

Securityholder returns[1]

Performance highlights[1]

FY17 Achievements

Execution excellence across our portfolio

FY17 Achievements

Laying the foundations for future growth

Infrastructure

Funds growth

Section 2 Financials

Financial performance

Cash flow movements ($b)[1]

Financial position

Key areas of capital employed

Liabilities

Funding and liquidity

Portfolio Management Framework

EBITDA mix

Invested capital

By segment

By region

Returns

Development – ROIC[4]

Investments – ROIC[4]

Construction – EBITDA margin

Portfolio Management Framework

Return on equity (ROE)[1]

Gearing[3]

Distributions

Section 3 Operational Update

Development

Performance highlights[1]

Residential presales and residential for rent ($b)

Construction

Performance highlights[1]

Investments

Performance highlights[1]

Investments EBITDA by activity ($m)

FUM ($b)

Section 4 Outlook

Outlook

Earnings visibility from strong pipeline across all segments

Development pipeline ($b)

Section 5

Q&A

Steve McCann

Tarun Gupta

Dan Labbad

Appendix

Our business model

DEVELOPMENT

Core Financial Returns:

CONSTRUCTION

Core Financial Returns:

INVESTMENTS

Core Financial Returns:

Income Statement

Statement of Financial Position

Statement of Cash Flows

Securityholder returns

Return on equity (ROE)[1]

Distributions

Segment financial metrics

LENDLEASE GROUP Annual Report 2017