Lendlease Annual Report 2024

Performance and Outlook 51 Group performance continued Outlook In May 2024, a refreshed strategy was announced, to improve securityholder value and position the Group for profitable future growth by focussing on our high returning integrated Australian business and our international investment management capabilities. Details of the strategy are outlined on page 15 of this Report. As part of the strategy, a Capital Release Unit (CRU) was established to recycle more than $4.5b of capital and to divest international Construction operations. The new structures and processes that will support the strategy were implemented on 1 July 2024. Accordingly, from 1H25, the Group will report the CRU as a stand-alone operating segment that will include: • International Construction operations; • International Development projects; • Australian assets to be divested, including 12 Communities projects and Keyton Retirement Living; and • Retained Engineering and Services. The Group has also updated the definition of its core performance measure, OPAT, introducing a higher threshold for measuring performance and greater alignment with securityholder outcomes. From 1H25, the OPAT definition will more closely align with statutory reporting, with the only exclusion being investment property revaluations in the Investments segment. The revised strategy also sees the replacement of the Portfolio Management Framework (PMF), with the targets announced on 27 May 2024. A Capital Allocation Framework has been established to provide a transparent hierarchy for capital deployment, with securityholder value and returns to be assessed against debt reduction, return of capital to securityholders and investing for growth. Allocation of capital will reflect the Group’s continued focus on securityholder returns, with the Group targeting a return on equity greater than its cost of equity, through-the-cycle. The Group also introduced a lower revised target gearing range of 5-15 per cent that it targets to achieve by the end of FY26. Refer to page 28 of this Report for a summary of current Group targets from its May 2024 strategy update. The Group’s operational priorities for FY25 are progressing CRU initiatives, replenishing the Australian Development pipeline, growing the international Investments platform, and furthering cost out initiatives. Within the CRU, $1.9b 1 of asset recycling has been announced to date, with at least a further $0.9b targeted for recycling in FY25. These assets include The Exchange TRX (retail), Keyton Retirement Living and our China senior living project, Ardor Gardens, with sale processes underway for each asset. The divestment of international Construction operations is progressing, with terms agreed in principle for the sale of the US East Coast construction operations and the UK construction business being prepared for sale. Approximately $40b of new development opportunities have been identified in the Australian market, of which $13b are in an advanced stage, with Lendlease being either one of two parties competing for the project or in exclusive discussions. The Group remains well positioned to win new projects across mixed-use, residential and commercial, and will seek to add to its existing $11.8b Urban domestic pipeline. In Investments, increased profitability will be targeted through recycling of assets and redeployment of capital, increasing performance and transaction fees, achieving greater scale in the platform and reducing operating costs. The Group has achieved strong early progress against its targets as it transitions to a higher performing, lower risk business. The focus for FY25 remains on execution of the refreshed strategy as the Group seeks to maximise securityholder returns as it further simplifies its operations and recycles capital. 1. Includes $1.3b Communities transaction, including $239m for certain land parcels in respect of which the right to buy is now an agreement to negotiate due to the passage of time and in respect of which various conditions to the creation of those land parcels continue.

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