Hammerson Plc · LSE:HMSO
Hammerson — FY2012 Earnings Presentation
47 slides from Hammerson's earnings presentation, Mar 1, 2013
Slide 1: Hammerson Full-Year Results
Hammerson Hammerson Full-Year Full-Year Results Results 1 March 2013 Creating winning 1 March 2013 retail locations 1
Slide 2: Today's presentation
Today’s presentation Overview and operations David Atkins – CEO Financials Timon Drakesmith – CFO Our business in France Jean-Philippe Mouton – MD France Capital allocation Peter Cole – CIO Conclusion David Atkins – CEO 2
Slide 3: Headline results
Headline results Operating results (continuing portfolio) 31 Dec 2012 31 Dec 2011 Occupancy 97.7% 97.9% Like-for-like income growth +2.1% +3.8% Leasing vs ERV +4% +1% Financial results YoY change EPS +8.3% 20.9p 19.3p Dividend per share +6.6% 17.7 p 16.6p NAV per share +2.3% 542p 530p 3
Slide 4: Vision
Vision Our vision is to be the best owner-manager and developer of retail property within Europe By capitalising on our strengths we aim to provide industry-leading shareholder returns 4
Slide 5: Our strategy in action...
Our strategy in action... 1 Recycling capital 2 A pure retail player Completion of office Year-End 2012(1) £541m re-invested into Year-End 2011 disposal programme winning retail locations Office 11% 7% premium to book value Retail 100% 89% Retail Strategic focus 5 1 Reducing costs 7% YoY savings in
Slide 6: ...And plenty more to come
...And plenty more to come Commitment to start Le Jeu de Paume, Beauvais Investment & Deliver Les Terrasses du Port – Spring 2014 Development Advance development pipeline of c.520,000 sq. m Further selective acquisitions Advance UK extension and refurbishment programme of c.200,000 sq. m Supports fu
Slide 7: Shopping centres: Experience and excitement
Shopping centres: Experience and excitement Our market position • 22 Shopping Centres • 2,200 shops / 250m visitors pa • 1.25m sq. m • Top three operator in both UK and France 2012 highlights • Occupancy 97.8% • 160 new leases / £12m rents pa at +4% ERV • Limited impact of administrations • Tenants’
Slide 8: Retail Parks: Bringing together clicks and bricks
Retail Parks: Bringing together clicks and bricks Our market position • £260million acquisition of Junction Fund • UK’s largest direct owner / 400,000 sq. m • 65% of open A1, £17 sq. ft. average rents • 11% units let to catering operators 2012 highlights • Occupancy 98.2% • 13 leases / £1.6m annual
Slide 9: Designer outlets; Luxury and tourism
Designer outlets; Luxury and tourism Our market position • 9 villages in Europe’s major cities, 165,000 sq. m floor space • 22% stake in VR holding companies • Total brand sales £1.3bn • 30 million annual shoppers 2012 highlights • Additional £100m invested • Tenants’ sales +13% • Extension complete
Slide 10: Financial Results
Financial Results Timon Drakesmith 10
Slide 11: Financial highlights
Financial highlights Income statement 31 Dec 2012 Change vs 31 Dec 2011 Net Rental Income (£m) (1) 258.8 +2.1%(2) Adjusted Profit Before Tax (£m) 152.5 +7.7% Adjusted EPS (pence) 20.9 +8.3% 10.0 7.5% Final Dividend (pence per share) 31 Dec 2012 Change vs Balance sheet 31 Dec 2011 Portfolio Value (£m
Slide 12: Growth in like-for-like net rental income
Growth in like-for-like net rental income(1) NRI to Dec 31 2012 % (£m) UK Shopping Centres 116.9 +3.6 UK Retail Parks 67.0 +0.5 France Retail 61.0 +1.4 Other Interests 13.9 +1.0 Group 258.8 +2.1 1. For continuing operations 12
Slide 13: Adjusted EPS vs 2011
Adjusted EPS vs 2011 Exchange Value Retail and other Admin cost reduction 0.6 (0.7) Interest 0.5 initiatives1 20.9 1.3 +8.3% Net disposals L for L NRI (0.9) 0.8 19.3 Dec 2012 Dec 2011 Adjusted EPS (pence) 1 Interest saving initiatives: • Buy back £220million 4.875% bonds saving £3.6million • Cancell
Slide 14: Cost management
Cost management Operating Cost/income(1)(2) Net interest Costs(1) (£m) ratio (%) expense (£m) WAIR(3) (%) (LHS) (RHS) (LHS) (RHS) 2011 2012 2011 2012 Operating cost control - £6.3m saving Interest expense management - £11.6m saving (1) Continuing operations (2) Cost ratio is defined as: net service
Slide 15: Portfolio value capital movement
Portfolio value capital movement Value at 31 % Change Dec 2012 From Dec £m 2011 UK Shopping Centres 2,413 -0.8 UK Retail Parks 1,423 -2.5 France Retail 1,188 +0.8 Current Developments 275 +11.5 Other UK interests(1) 159 -8.3 Discontinued Operations(2) 195 +5.3 Total(3)(4) 5,653 +0.1 - IPD UK Index -
Slide 16: NAV per share movement
NAV per share movement 550 Exchange Adjusted and other profit 540 21 1 Continuing inv. portfolio 542 +2.3% revaluation 530 (10) NAV Dec 2012 Cost of 530 bond Value Retail buybacks revaluation1 520 (8) 16 NAV Dec 2011 Dividends 510 (17) Profit on Dev disposals portfolio 6 500 revaluation 3 490 Adjust
Slide 17: Positive impact of Value Retail investment
Positive impact of Value Retail investment Hammerson’s summer 2012 transactions provide economic interest in VR’s operating profit of 29%1 Value Retail’s business had a stellar 2012 • Retail sales up 13% • EBITDA increase of 20% • Village valuations up by 18.3% Hammerson’s share of key VR figures £m
Slide 18: Healthy financing ratios
Healthy financing ratios Financing 31 Dec 31 Dec policies 2012 2011 Net debt £2,036m £1,964m Gearing <85% 53% 52% Loan to value <40% 36% 34% Cash/undrawn facilities £696m £696m(1) Weighted average (cost of finance) 5.0% 5.2% Interest cover >2.0x 2.8x 2.6x Net debt/EBITDA <10x 7.9x 7.7x Debt fixed/he
Slide 19: Growing net rental income 2012 – 2015
Growing net rental income 2012 – 2015(1) £m 330 320 29 (4) 310 320 300 290 +24% 280 18 (3) 270 14 (2) 260 250 259 240 230 NRI 2012 Full year effect of Like for like NRI Developments & NRI Forecast 2015 Acquisitions and disposals extensions Notes: (1) Excludes Value Retail (2) Full year impact of acq
Slide 20: Converting revenue growth to EPS uplifts
Converting revenue growth to EPS uplifts Full year impact of 2012 Developments and Like for like growth in NRI acquisitions extensions Share of Value Retail Profits Brand sales growth of over 10% pa anticipated Village extensions at Paris and Barcelona Rise in tourism drives spend per visit Growth i
Slide 21: Our Business in France
Our Business in France Jean-Philippe Mouton 21
Slide 22: Our business in France
Our business in France Paris region Halles en Ville , • O’Parinor Nine retail assets, concentrated in the greater Paris region Mantes • Bercy 2 • Italie 2 Le Jeu de Paume, • Espace Saint Quentin Beauvais • Les 3 Fontaines 400,000 sq. m and 928 retail tenants • SQY Ouest Gross rents of £69m per annum
Slide 23: Investing in our assets
Investing in our assets Italie 2 O’Parinor Refurbishment Extension & redevelopment • Only Parisian shopping centre with a department store • New 7,200 sq. m, 14 screen cinema and food court • Adjacent one of Paris’ busiest metro stations extension • Renovation to be complete by Q3 2013 • Anchor lett
Slide 24: Le Jeu de Paume, Beauvais
Le Jeu de Paume, Beauvais Catchment population of 250,000 people with limited competition Located 60km north west of Paris 23,700 sq. m, 76 shops and 5 restaurants. Anchored by Carrefour, H&M and Le Furet du Nord Land acquired January 2013 Good progress on lettings; 34% pre-let. Start on site Q4 201
Slide 25: Les Terrasses du Port, Marseille
Les Terrasses du Port, Marseille 83% pre-let including all MSU’s Construction 75% completed Agreement for lease exchanged with Printemps 1,200 sq. m letting to Deltaccord completes letting of lower level Lettings agreed with high quality fashion retailers; Sandro, Maje, Michael Kors, G-Star Key fina
Slide 26: Multi-channel retail
Multi-channel retail Jean-Philippe Mouton 26
Slide 27: A busy year for digital engagement
A busy year for digital engagement Venteprivee.com Foursquare Aps “Drive to store” for each shopping center Venteprivee.com “Drive to operation store” operation Average basket : Average basket : +30% +34% Google indoor Full portfolio websites mapping – BX/WQ Google product launched/mobile enabled se
Slide 28: Slide 28
Slide 29: Capital Allocation
Capital Allocation Peter Cole 29
Slide 30: Our investment criteria and recent acquisitions
Our investment criteria and recent acquisitions Our investment criteria Experience Luxury Convenience • Principle cities and dominant market • Value Retail investments • Well located and good transport links positions • City centres and tourist destinations • Open A1 planning consents • Well anchore
Slide 31: Whitgift, Croydon: The south London retail opportunity
Whitgift, Croydon: The south London retail opportunity • Joint venture announced January 2013 • 50% stake in Centrale sold to Westfield • Outline planning anticipated Q2 2013 Whitgift • 200,000 sq. m project • £1 billion total forecast investment Centrale • Accelerated programme targets 2015 start o
Slide 32: Commitment to Eastgate Quarters, Leeds
Commitment to Eastgate Quarters, Leeds • Agreement for lease exchanged with John Lewis • Outline planning consent already achieved • Detailed planning application in Q2 2013 • Start on site Spring 2014 – Completion Autumn 2016 • 37,000 sq. m scheme initial phase • £130m total development cost • Gros
Slide 33: Excellent progress on Junction Fund
Excellent progress on Junction Fund • 100,000 sq. m • 70% floor space openly consented • Low average rents of £19 psf • 7% yield rising to 8% with fixed uplifts Thurrock • Development of former UCI Cinema completed • UK’s first Nike retail park store • 6 hectare conditional land sale agreed for £18.
Slide 34: Conclusion
Conclusion David Atkins 34
Slide 35: Delivering against our vision
Delivering against our vision Reorientation to a specialist retail REIT complete Delivering on our Operating expenses lower by 7% strategy Les Terrasses du Port 83% let JV agreed for Whitgift, Croydon Focused on NRI +2.1% Leases agreed 4% above ERV winning retail Digital engagement with consumers ve
Slide 36: Questions
Questions 36
Slide 37: Disclaimer
Disclaimer This presentation contains certain statements that are neither reported financial results nor other historical information. These statements are forward-looking in nature and are subject to risks and uncertainties. Actual future results may differ materially from those expressed in or imp
Slide 38: Appendices
Appendices 38
Slide 39: Our assets
Our assets £5.5 billion property portfolio Assets in UK and France 20 shopping centres 22 retail parks Investment in Value Retail 2,800 shop units 250 million annual visitors
Slide 40: Developments and extensions
Developments and extensions Scheme Lettable Earliest start Potential Value at Estimated Estimated Let area completion 31/12/12 costs to annual complete income m2 £m £m £m % ON SITE Les Terrasses du Port, Marseille 61,000 Commenced Q2 2014 229 178 27 83 Manor Walks, Cramlington 5,900 Commenced Q2 201
Slide 41: Value Retail performance drivers
Value Retail performance drivers (1) Year ended Year ended 31 December 31 December Value Retail 2012 2011 £m £m Income statement Distributions received 4.9 6.1 Share of results of associate 47.5 - Interest receivable 3.4 2.1 Less: EPRA adjustments (43.2) - Total impact of VR on income statement – EP
Slide 42: Hammerson's Investments in Value Retail
Hammerson’s Investments in Value Retail Hammerson Holding Companies £47 m shareholder 22% equity loan Bicester La Roca Las Rozas La Vallée Maasmechelen Fidenza Wertheim Ingolstadt Kildare Village Village Village Village Village Village Village Village Village Village Ownership via LP’s (%) 33 15 15
Slide 43: Value Retail investment to associate
Value Retail investment to associate £m EPRA Share of Distribution adjustments 16 440 Income (1) (2) 444 48 400 Revaluation 74 382 360 320 Additions 94 280 240 214 200 1 Jan 2012 31 Aug 2012 31 Dec 2012 Investment Associate Associate 1. Includes £38 million portfolio revaluation uplift 43
Slide 44: Debt maturity
Debt maturity (1) £m 900.0 800.0 700.0 600.0 500.0 400.0 300.0 200.0 100.0 0.0 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 Bank debt drawn Secured debt Euro bonds Sterling bonds Undrawn facilities 1 Does not include new £175m credit facility with April 2018 maturi
Slide 45: 2012 components of valuation change
2012 components of valuation change 60 Yield £m 37.9 Income 40 Development and 20.7 other 20 15.3 15.2 Total 8.8 6.3 0 (4.0) (7.1) (4.9) (6.7) (6.6) (9.2) -20 (21.2) (15.6) (17.3) (25.9) (30.4) (30.7) -40 (48.6) -60 (70.0) -80 UK shopping centres France retail UK retail parks UK other Total continui
Slide 46: Rental uplifts from reversions
Rental uplifts from reversions Outstanding rent reviews 2012 2013 2014 Total £m £m £m £m £m Expiries and breaks (UK and France) ERV 45.8 19.5 17.4 82.7 Passing rents 40.0 19.3 16.8 76.1 Uplift 5.8 0.2 0.6 6.6 Rent reviews (UK only) ERV 44.5 26.0 43.5 27.5 141.5 Passing rents 41.3 24.3 41.8 25.0 132.
Slide 47: Trading environment
Trading environment Sales & Footfall UK Shopping Centres France Shopping Centres Sales +0.4% Sales -3.3% Footfall -2.3% Footfall -3.4% Rent:Sales 12.3% (Dec 2011: 13.2%) Rent:Sales 10.3% (Dec 2011: 9.7%) Group administrations – 2800 units in portfolio 31 Dec 2012 27 Feb 2013 63 units in administrati