Creating Together

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Creating Together Lendlease Annual Report 2020 Managing and Measuring Value 1 Creating together Lendlease Annual Report 2020 2 Lendlease Annual Report 2020 3 All financial amounts in this report are in Australian dollars unless otherwise specified. Lendlease Corporation Limited ABN 32 000 226 228 Incorporated in NSW Australia Lendlease Responsible Entity Limited ABN 72 122 883 185 | AFS Licence 308983 as responsible entity for Lendlease Trust Contents ABN 39 944 184 773 | ARSN 128 052 595 Directors’ Report 1. Overview 6 Chairman’s Report Group CEO and Managing Director’s Report FY20 snapshot 2. Our Business 14 Our vision: To create the best places Our strategy Global presence, local knowledge Development Construction Investments 3. Creating Together 28 By shaping cities Through creating the best places Through partnering By engaging with the community By looking into the future 4. Managing and Measuring Value 42 Our five focus areas of value creation Health and Safety Financial Our Customers Our People Sustainability 5. Risk 60 Risk governance and management Key risks and mitigation 6. Climate Related Risks and Opportunities 68 7. Performance and Outlook 76 8. Governance 90 Board of Directors’ information and profiles Remuneration Report Directors’ Report Lead Auditor’s Independence Declaration 9. Financial Statements 142 Front cover: Singapore: Paya Lebar Quarter 10. Other Information 214 c.$4 billion lifestyle precinct. Securityholder information This page: Glossary Sydney: Daramu House, Corporate directory Barangaroo South 4 Lendlease Annual Report 2020 5 About this About us report The Lendlease Annual Report 2020 has been prepared Lendlease is an international with reference to the International Integrated Reporting (IR) property and investments Framework that encourages businesses to consider what group with core expertise in creates value for them and how this value contributes to long shaping cities and creating term sustainable returns for securityholders. strong and connected communities. Founded in Sydney in 1958, Lendlease was Materiality The outcomes of these processes are the Reporting suite born out of a vision to create a company A matter is considered material if senior material issues noted on page 44 and 45, Our reporting suite provides information that could successfully combine the management and those charged with and in the section Our Business on pages about the organisation and its key financial disciplines of Development, Construction governance believe it could significantly 14 to 27. and operational achievements including: and Investments. impact the value created and delivered Directors’ Report and Operating and • The Annual Report Headquartered in Sydney, our people in the short, medium and long term. Financial Review (OFR) Features information about Lendlease, are located in four operating regions: We identify and capture material matters The required elements of the Directors’ our strategy, integrated financial and Australia, Asia, Europe and the Americas. through the following processes: Report, including the OFR, are featured operational performance, corporate We create award winning urban precincts, • Project Control Group (PCG) sessions, on pages 4 to 141 of this report and include governance, Directors’ Report, living options for any stage of life, retail which include key internal stakeholders the sections: Our Business, Creating Remuneration Report and Financial precincts and workplaces to the highest and represent the governance structure Together, Managing and Measuring Statements sustainability standards. for overseeing the completion of the Value, Risk, Climate Related Risks and • Biannual Results Presentation Annual Report Opportunities, Performance and Outlook, Our people and our partners are the The current reporting period’s financial and Governance. greatest contributors to our success and • Capturing feedback through results and detailed segment information underpin our ability to deliver our vision: engagement and research during The OFR is covered specifically on pages for projects including major urbanisation the financial year from key external 4 to 89. All non financial metrics included projects, investments and pipeline To create the best places stakeholders including investors, in the Directors’ Report on pages 4 to 75 • www.lendlease.com Places that we have created together with analysts, and other relevant groups have been verified through our internal Includes additional information on our customers, partners, securityholders, verification process. The Remuneration • Engagement with the Board sustainability reporting, corporate the community and our people. Report on pages 106 to 137 and the governance, tax compliance and • Confirming that the strategy is Financial Statements on pages 142 to 205 historical financial information. consistent and relevant with the have been audited by KPMG. information collected above. Our focus areas Health and Safety Everyone has the right to go home safely. We remain committed to the We have five focus areas that create health and safety of our people, and all of those who interact with a long term value. They underpin our Lendlease place. ability to create safe, economic and sustainable outcomes. Our success Financial is measured by the value we create in these five focus areas and can be A strong balance sheet and access to third party capital enables us to found throughout this report. fund the execution of our pipeline and deliver quality earnings for our securityholders. Our Customers Our customers love the places we create when we partner effectively, collaborate and innovate. Only through these actions can we respond to a changing world. Our People Our people are the greatest contributors to our success and enable us to fulfil our vision to create the best places. Sustainability Sustainability is core to our planning and clear in our outcomes. We have a proud history of giving emphasis to environmental, social and economic impacts. Sydney: One Sydney Harbour, Barangaroo South Artist’s impression 6 Lendlease Annual Report 2020 Overview 7 Overview Chicago: The Cooper, Southbank Lendlease is undertaking a major revitalisation on the banks of the Chicago River, on a site that has been mostly dormant for half a century. 8 Lendlease Annual Report 2020 Overview 9 Chairman’s The Board moved decisively to tackle COVID-19 related risks – including the health and safety of Report our people, our customers and the communities in which we operate. It is impossible to present our year in review to securityholders without first acknowledging COVID-19 and its impacts on the regions in which we operate and A range of measures were implemented in his tenure, Colin made an outstanding Sustainability our stakeholders including our people, the second half of the year to strengthen contribution, including oversight of the At Lendlease, we have a long and proud securityholders and customers. our financial position. This included raising Board’s long term renewal and succession history of achieving numerous sustainability $1.2 billion of new equity, arranging strategy and Board performance The pandemic has reshaped most aspects firsts. This continues to be the case. additional debt facilities, reducing assessment. His depth of experience in of society. Governments around the world Following deep engagement across our operating costs and reviewing project strategy, sustainability and governance quickly responded to help shield their entire business, including with the Board expenditure. The equity raising provides has helped shape Lendlease’s position on citizens and economies from the worst of and Global Leadership Team, Lendlease additional flexibility and capacity to these critical issues. On behalf of the Board, the virus’s effects. This was, and continues has committed to two bold new continue the delivery of our development I thank Colin for his unwavering support. to be, an entirely appropriate course of sustainability targets. First, market leading pipeline while pursuing further investment action. In a similar vein, the Board moved More broadly, I am confident the Board carbon targets to meet our vision to opportunities. The equity was allocated decisively to tackle COVID-19 related has the right mix of skills, experience and live in a world warmed by no more than 48.4 per cent to Lendlease Corporation risks – including the health and safety diversity to govern Lendlease in the best 1.5ºC. Second, we are aiming to create and 51.6 per cent to Lendlease Trust. of our people, our customers and the interests of all our stakeholders. $250 million of social value by 2025. This allocation will enable the Group to communities in which we operate, as well continue to implement its strategy of Executive Reward Strategy While recognising these new targets will as our operations and our balance sheet. conducting its active business in Lendlease In this challenging year, the Board has be difficult to achieve, we believe they are A Board subcommittee, which was formed Corporation, while holding its passive considered a number of factors when worthwhile striving for, as our leadership in March 2020, had primary oversight of assets in Lendlease in an efficient manner, determining remuneration outcomes position on sustainability continues to be the Group’s response to COVID-19. and will provide the Trust with additional for our CEO and senior executives. a key competitive advantage. Health and Safety capacity for investments to grow recurring While the business performed
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