RBS Morgans

Queensland Conference 9 October 2013

DAVID KEIR

Managing Director & CEO

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2012 - 2013

FULL YEAR RESULTS

CONTENTS

1. Overview

2. Financial Performance

3. Business Unit Performance

4. Strategy and Outlook

5. Pipeline Summary

6. Summary

RBS Morgans

Queensland Conference 9 October 2013

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Results reflect challenging market conditions

• Consistent underlying results achieved in challenging

market conditions reflect foundations of the Group’s

diversity strategy

• Total revenue from operations of $311.1 million

(compared to $313.9 million in FY12) excludes $45.8

million of revenue representing Devine’s share of

apartment settlements at Hamilton Harbour

• Underlying after-tax profit of $6.4 million (compared to

$11.1 million in FY12) prior to impairments of $7.0

million after tax

• A statutory net loss after tax of $0.6 million after

impairments (compared to a loss of $12.9 million in

FY12)

• Delivered positive operating cash flow surplus of

$26.5 million

• Balance sheet and capital efficiency maintained with

gearing level of 25.5%

• No final dividend has been declared for FY13

1. OVERVIEW

The pool deck at the recently completed Riverside

at Hamilton Harbour

Ariel view of works to-date at River stone Rise,

Gladstone in Queensland

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Modest trading improvement reflects success of diversity strategy

• Increase in residential land settlements to 978 lots, up 30% on prior year

• Housing commencements increased 45% to 706 starts

• Commencement of settlements in the third residential tower at the Hamilton Harbour project

in December 2012; resulting in 92% of the total apartments in the Hamilton Harbour project

now being settled

• First settlements recorded at signature community developments; Orleans Waters

(Adelaide), River stone Rise (Gladstone) and Parks Edge (Melbourne)

• Completion by Devine Constructions of the KSD1 commercial and retail centre at Hamilton

Harbour

• 75% sales of DoubleOne3; triggering construction commencement in March 2013

• Commenced 130 wholesale builds, and attracted a further 87 to the wholesale building

pipeline for delivery over the next two years

• Secured new 157 apartment project site at Wanda Street (New stead) in the Brisbane CBD

fringe growth area

• Successfully negotiated a preferred tender position on key development opportunity in New

South Wales with 350 plus apartment site in Parramatta

1. OVERVIEW

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Underlying market fundamentals starting to show improvement

1. OVERVIEW

• Strong population growth is continuing

• Residential market remains in a state of undersupply in most regions

• Positive rental yields and tight vacancy rates maintain interest from the

investor markets

• Low interest rate environment expected to further stimulate activity

• Prices of established homes appear to have stabilized

Sources: ABS, BIS Shrapnel, Update Mismark, REIA, Westpac Economics, Melbourne Institute

• Housing approvals continue to track below long term averages

• Consumer confidence is improving albeit slowly, while uncertainty exists with regard to job

security and softening employment conditions

Consumer Sentiment Index

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Dwelling Approvals Consumer Sentiment Index

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FY13 Financial Overview

$ millions Full Year to

30 June 2013

Full Year to

30 June 2012

Revenue - Housing and Land 238.7 198.0

- Apartments and Other 78.5 1 124.8 1

Statutory Net Profit / (Loss) after Tax (0.6) (12.9)

Underlying Operating Profit after Tax 6.4 11.1

Earnings Per Share (0.4) cents (8.1) cents

2. FINANCIAL

PERFORMANCE

Dividend Per Share nil 4.0 cents

1 Excludes revenues from equity accounted joint ventures

• Statutory profit impacted by ‘impairments’ in both FY12 and FY13

• Reduction in underlying profit reflective of timing and number of

settlements in Apartments business and tight margins in housing

operations

• No Dividend declared for FY13

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2013

$ millions

2012

$ millions

Housing & Land

Segment Revenue 238.7 198.0

Underlying Profit Before Tax 3.8 (1.0)

Apartments & Construction

Segment Revenue 1 76.7 123.1

Underlying Profit Before Tax 8.3 21.9

Inventories and Property

Investments

Revenue

FY13 Divisional Results

2. FINANCIAL

PERFORMANCE

• Increases in Housing & Land revenue as a result of

improved land settlements, offset by a decrease in

apartment settlements

• Profitability impacted by challenges in housing

operations driven by the increased incentives and

marketing costs required to secure sales and site

starts

• One apartment tower commenced settlements in the

period, as compared to two towers in the prior period

1 Excludes revenues from equity accounted joint ventures

1 Excludes revenue from joint ventures

1

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$ millions Full Year to

30 June 2013

Full Year to

30 June 2012

Cash flows from operating activities

Receipts from customers (inclusive of GST) 348.6 363.9

Payments to suppliers and employees (inclusive of GST) (316.3) (331.6)

Joint venture profit distributions received 4.0 11.5

Net finance costs (10.1) (14.3)

Income taxes 0.3 (2.0)

Net cash inflow from operating activities 26.5 27.5

Resilient operating cash flow

2. FINANCIAL

PERFORMANCE

• Cash flow benefited from some asset sales

• Further capital recycling initiatives are underway

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Residential Communities

• FY13 remained a tough year for the residential property

markets in which the Group operates

• 978 land settlements nationally; up 30% on prior year

• Signature projects in each region made significant

contribution accounting for 440 settlements, with first

settlements achieved at Riverstone Rise (Gladstone),

Parks Edge (Melbourne) and Orleana Waters (Adelaide)

• Other FY13 highlights include:

3. BUSINESS UNIT

PERFORMANCE

• Securing approval for the 871 lot Newbridge

community at Wallan, Victoria. The project is

expected to launch in early 2014

• Significant progress on delivery of key infrastructure

across signature projects, and first residents

welcomed to Stonehill (Vic), Riverstone Rise (Qld)

and Orleana Waters (SA) master planned

communities

• Shortlisted by RenewalSA to negotiate the

acquisition of a key landholding adjacent Devine’s

Orleana Waters community

Devine’s Stonehill at Bacchus Marsh is

impressing visitors with its progress

The adventure playground at the entry to Corimba Village at

Devine’s Riverstone Rise in Gladstone

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Residential Homes

• While home commencements increased over FY13, the

performance of the housing business was impacted by

pressures on selling prices and subsequently margins

• A detailed review of the housing business has resulted in

the appointment of a General Manager (Housing) and a

realignment of staff numbers to reflect activity

• 706 homes commenced construction in FY13; up 45%

on FY12

• Wholesale building operations played a key role in

maintaining volumes with 130 commencements, off-

setting the slow down in ‘retail’ business

• The wholesale building pipeline was maintained with

new work secured for key clients including Places

Victoria, Defence Housing Australia and other retirement

and mining industry partners

• New cost base and operational structure has been

established; and market responsive housing product is

being introduced in FY14

3. BUSINESS UNIT

PERFORMANCE

Devine’s new Loft House design, the first of many

new products to be delivered

The Vibe display home at Stonehill, Victoria

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Residential Apartments and Mixed-Use

3. BUSINESS UNIT

PERFORMANCE

• Commencement of settlements in the third residential

tower at Hamilton Harbour in December 2012; resulting

in 179 apartment settlements for the year

• 92% of total apartments in Hamilton Harbour project are

now sold and settled

• Retail and commercial elements of Hamilton Harbour

well advanced with major retail tenants now trading

• 75% sales of DoubleOne3; triggering construction

commencement in March 2013

• Sold 50% interest in DoubleOne3 project into a joint

venture with Investec; releasing capital to pursue new

opportunities

• Secured new 157 apartment project site at Wyandra

Street (Newstead) in the Brisbane fringe growth area

• Successfully negotiated a preferred tender position on

key opportunity in New South Wales with a 350

apartment multi-stage site in Parramatta

• The Group is committed to expanding its apartment

operations via further projects in New South Wales and

new mid-scale projects in south-east Queensland

Artist impression of the new Wyandra Street,

Newstead apartment project

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Construction

• Completion by Devine Constructions of the KSD1

commercial and retail centre at Hamilton Harbour

• Commencement of Devine’s DoubleOne3 Apartments

project (Brisbane) in March 2013; with a forecast

completion date in May 2014

• The Construction business is actively increasing its

focus on delivering projects for clients external to the

Devine Group

• Appointed experienced construction industry leader to

the position of General Manager, Devine

Constructions

3. BUSINESS UNIT

PERFORMANCE

KSD1 at Hamilton Harbour is fulfilling the promise of a true

mixed use development

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Focused strategy

• Expanding the Apartment business through

re-entering the NSW market

• Increasing “land only” transactions across Devine

Communities to partner builder clients and investors

• Innovative product offerings from the Group’s

Communities and Homes business

• Expanding the “wholesale” building operations to

supplement challenging “retail” environments

• Continuing to diversify the Devine Construction

business by securing build contracts for external

clients within targeted sectors of capability

4. STRATEGY AND OUTLOOK

• The Group’s growth strategy remains focused on:

Devine’s new Queensland headquarters at

KSD1, Hamilton Harbour

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Diversity approach removes reliance on any one geography,

buyer segment or product type

4. STRATEGY AND OUTLOOK

• Across the communities and apartments businesses,

Devine’s diversity strategy is playing to the market’s

desire for choice

• Devine has continued to grow it’s presence in key

geographic corridors across Australia, delivering on its

goal to re-enter the New South Wales market

• Buyer segment diversity has been achieved by

addressing the needs of a number of different market

segments including First Home Buyers, Investors and

Up-graders; plus servicing the retirement sector via the

Group’s wholesale building operations

• This multi-layered market reach, coupled with the

integration of operations across residential delivery

streams provides a point of difference to the business

• Product development and the geographic growth plan

will further strengthen penetration in key trading

corridors

• The current platform maintains the ability for the

business to grow in multiple directions

From affordable terrace homes to exclusive penthouse

living (above), Devine caters to diverse market segments

The Vibe display home at Stonehill, Victoria

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Market outlooks

4. STRATEGY AND OUTLOOK

Source: BIS Shrapnel, ABS, RPData Rismark, Residex (March 2013)

BRISBANE – tentative signs of a recovery

• House sale volumes increased 12.6% over the twelve months to March 2013

• Dwelling approvals experienced strong growth, up 10.5% (June ‘12 to June ’13) but still below long

term average

• Housing affordability continues to improve; median price down 0.3% at March 2013 quarter

• Rental vacancies remain tight (1.7% June ’13 Qtr), demonstrating the stock deficiency that is

forcing rents and yields up

SYDNEY – continuing to improve

• Building approvals up 11% year on year to June 2013 and forecast to continue into FY14,

adding to the housing stock deficiency

• Combination of low interest rates, higher consumer confidence and limited stock has

contributed to median price increasing by 3.6% over 12 months to March 2013

• Stock deficiency impacting on level of rental vacancy (2.1% June ’13 Qtr)

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Market outlooks (continued)

4. STRATEGY AND OUTLOOK

Source: BIS Shrapnel, ABS, RPData Rismark

MELBOURNE – cooling of market continues

• Market conditions are expected to remain challenging throughout remainder of 2013

• Sales volumes remain below five year average

• Melbourne dwelling prices up 1.1% over 12 months to March 2013

ADELAIDE – cautiously improving

• Market appears to have reached bottom of property cycle and is entering early stages of

recovery

• Combination of global uncertainty and struggling local economy having negative impact

• House prices have continued to fall, although the rate of decline has slowed, down 0.1% at

March 2013 quarter

• Stimulus incentives have driven good enquiry levels and activity, however post-stimulus

environment will likely deliver a slowdown in 2014

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Healthy pipeline to be enhanced as new opportunities are realised

5. PIPELINE SUMMARY

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In summary

6. SUMMARY

• FY13 results reflect challenging market conditions

• Success of diversity strategy demonstrated by:

• Underlying market fundamentals showing early signs

of improvement

• Devine is well placed to benefit from improvement in

the residential sector, with:

• Improved trading outcomes in housing and land

• Resilient cash flows and strong balance sheet

maintained

• Strong development and construction capabilities

• Market re-entry into New South Wales

• An attractive and evolving product portfolio

• A healthy development pipeline

The Hill Top Park at The Summit

community in Mt. Barker, South Australia

Stunning river and city views

from Hamilton Harbour, Brisbane

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DISCLAIMER

While every effort is made to provide accurate and complete information, Devine does not warrant or represent that the information in this

presentation is free from errors or omissions or is suitable for your intended use. The information provided in this presentation may not be suitable

for your specific situation or needs and should not be relied upon by you in substitution of you obtaining independent advice. Subject to any terms

implied by law and which cannot be excluded, Devine accepts no responsibility for any loss, damage, cost or expense (whether direct or indirect)

incurred by you as a result of any error, omission or misrepresentation in information in this presentation. All information in this presentation is

subject to change without notice.