Hammerson Plc · LSE:HMSO
Hammerson — H1 2023 Earnings Presentation
41 slides from Hammerson's earnings presentation, Jul 27, 2023
Slide 1: 2023 Half-year results
2023 Half-year results 27th July 2023 Late Night Out – Market First Event at Bullring, Birmingham
Slide 2: Agenda
2023 half-year results Agenda Overview Half-year results Operational & strategic update Q&A 2 Hammerson Plc Eurovision Event at Westquay, Southampton
Slide 3: Strong first half, return to cash dividend, confident in the future
Overview Strong first half, return to cash dividend, confident in the future Consistent execution of strategy underpinning operational and financial progress ▪ Adjusted earnings £56m, up 15% driven by strong operational performance ▪ Streamlined portfolio focused on prime city centre destinations in
Slide 4: Half-year results
Half-year results 3Festival at Cergy 3 Fontaines, France
Slide 5: Financial summary
2023 half-year financial results Financial summary £56m £4.7bn 52p Adjusted earnings up +15% Total portfolio value NTA per share 2.5% Total return (HY 22: £48m(1)) 2.8% Income return (FY 22: 53p) EPS: 1.1p (HY 22: 1.0p(1)) (0.3%) Capital return £1.3bn 33%/43% £36m Net debt Lower LTV Cash dividend 24
Slide 6: Adjusted earnings walk
2023 half-year financial results Adjusted earnings walk £m 2021 People (2.9) 2.0 80 Interest costs disposals Flagships LfL 1.5 0.4 2022 charge (1.6) Other 1.4 disposals Interest 3.5 Developments receivable 70 & other NRI 4.3 0.3 (0.3) 60 3.4 (4.5) 3.9 (1.1) 50 (2.7) 5.8 40 30 55.9 51.1 48.4 20 10 0
Slide 7: Value Retail – top-tier premium outlets platform
2023 half-year financial results Value Retail – top-tier premium outlets platform HY 23 HY 22 % Growth £m Footfall ('000) 17,287 15,327 +13% 25 Spend per visit (€) 85.3 84.6 +1% (1.4) Brand sales (€bn) 1.5 1.3 +14% 20 8.7 (5.0) Avg sales density m2 (€) 7,986 6,997 +14% 15 GRI HMSO% (£m) 74 65 +13% (
Slide 8: Returns and yields by geography
2023 half-year financial results Returns and yields by geography UK flagships France flagships Ireland flagships 8 8 8 Yield (NEY) 6 6 6 4 4 4 2 2 2 0 0 0 2017 2018 2019 2020 2021 2022 HY 2023 2017 2018 2019 2020 2021 2022 HY 2023 2017 2018 2019 2020 2021 2022 HY 2023 ERV (100% at peak) 100% 100% 10
Slide 9: Simplifying the portfolio through non-core disposals
2023 half-year financial results Simplifying the portfolio through non-core disposals £843m disposal proceeds since FY 20 £m 500 £433m 450 400 £410m of £500m target completed 350 300 250 £215m £195m 200 150 100 50 2021 2022 2023 UK non-core Silverburn Croydon France minorities Leeds Italie Deux Reta
Slide 10: Net debt analysis
2023 half-year financial results Net debt analysis(1) £m Italie Deux 145 1,900 Croydon 70 1,800 O’Parinor 45 Operating profit 65 1,700 Highcross 80 Working capital (7) movements 1,600 215 Non-cash items 2 1,500 125 1,400 1,732 60 1,300 43 (16) 26 (39) 1,200 1,318 1,100 1,000 Net debt Disposals De-re
Slide 11: NTA per share walk
2023 half-year financial results NTA per share walk pence 59 57 55 1 (1) 53 (1) 51 49 53 52 47 45 FY 2022 Adjusted Earnings Revaluation & Disposal losses O'Parinor/Highcross HY 2023 De-recognition 11 Hammerson Plc
Slide 12: Group debt covered by existing cash until 2025
2023 half-year financial results Group debt covered by existing cash until 2025(1) £1.3bn 2025 Group debt maturity (£m) Dundrum Secured Debt (1.9%) Private Placements (int 2.5%) (2) Sterling Bonds (int 5.3%) Euro Bonds (int 1.8%) Net debt No material Group refinancings required until 2025 not covere
Slide 13: Dividend Policy
Overview Dividend Policy Sustainable policy ▪ Cash dividend of 60-70% of annual adjusted earnings, to be paid semi-annually, reflecting the continuing investment in our core assets, disposals & acquisitions, LTV, and changes in financing operating conditions ▪ The Board has declared an interim divid
Slide 14: Operational & strategic update
Operational & strategic update Penneys Grand Opening at Dundrum, Ireland
Slide 15: Operational trends remain positive and our customer resilient
Operational & strategic update Operational trends remain positive and our customer resilient ▪ Footfall vs HY 22 is resilient 95% +4% ▪ UK +2%, France +7%, Ireland +7%(1) Flagship occupancy +1pt Group footfall(1) ▪ Return of footfall to cities benefitting our assets(3) vs HY 22 vs HY 22 levels ▪ Bir
Slide 16: Our leasing momentum is continuing
Operational & strategic update Our leasing momentum is continuing ▪ 70% principal vs temporary(4) 134/£18m +20% ▪ 50/50 split: new leases to renewals(4) Leases/income ahead of previous passing ▪ Diverse mix: £11m at share (+13% LFL)(1) HY 22: +31% ▪ Fashion 46% HY 22: 143/£18m ▪ Non fashion and serv
Slide 17: High-quality assets with unique exposure to fast-growing cities in Europe
Operational & strategic update High-quality assets with unique exposure to fast-growing cities in Europe GEOGRAPHIC FOOTPRINT HIGHLIGHTS Eleven city centre estates with complementary land and two standalone developments Union Square ▪ 86% of destinations A-rated, remainder B+(1) ▪ c.175m visitors pe
Slide 18: We are a cities business
Operational & strategic update We are a cities business Sustainable and resilient capital Investing in our assets An agile platform structure Environmental, Social and Governance at the heart of everything we do ✓ Prime destinations in the centres of ✓ Transformed operating platform and ✓ Resilient
Slide 19: We are actively investing in our core assets
Operational & strategic update We are actively investing in our core assets Department store repurposing to drive repositioning ▪ Repurposing of House of Fraser to Brown Thomas (Selfridges) and Penneys (Primark) at Dundrum complete; Nike backfill opened; Dunnes backfill opening H2 ▪ Former Debenhams
Slide 20: We are placemakers
Operational & strategic update We are placemakers We are securing new deals and key renewals with best-in-class brands We are bringing in new occupiers & concepts Commercialisation We are increasing focus on commercialisation & placemaking Cabot Circus Skate Park TDP Jul Pop-Up Brand Building Placem
Slide 21: Investment and enabling works to maximise value and optionality
Operational & strategic update Investment and enabling works to maximise value and optionality Integral The Ironworks, Dundrum Structural steelwork commenced on programme, agreement for long lease of 15 affordable apartments Drum, Grand Central Planning consent achieved for amenity rich workplace pr
Slide 22: Dundrum: from retail pureplay to multi-use estate
Operational & strategic update Dundrum: from retail pureplay to multi-use estate A Ireland’s only super-prime retail-anchored asset, well connected B Investments to repurpose former department store space to A broaden mix of uses, enhance environment and increase income streams – delivered IRR of c.
Slide 23: Transformed operating model and platform
Operational & strategic update Transformed operating model and platform ✓ Transformed platform with an investor mindset ✓ Significant progress made to increase efficiency, integration, -17% YoY savings delivered ways of working, digitalisation and automation £72m -12% YoY for HY 23 ✓ Asset centric o
Slide 24: Our approach to capital allocation is disciplined
Operational & strategic update Our approach to capital allocation is disciplined Sources Uses Sustainable De-lever Distributions to Organic investment Consolidate cash flow shareholders in existing assets ownership in core Retain IG credit and development assets and markets rating opportunities Disp
Slide 25: Looking forward
Looking forward HY 23 FY 23 Near-term priorities Maintain strong operational grip on business: ▪ Deliver another year of robust underlying earnings and cash flow ▪ Achieve our cost reduction target of -20% by 2024 ▪ Conclude our £500m disposal programme Another half year of Medium-term priorities op
Slide 26: A value-generating platform, with more opportunities ahead
A value-generating Strategic & operational updateplatform, with more opportunities ahead FUTURE PLATFORM Core city centre estates and consolidated ownership of assets Integral development programme delivered Asset quality significantly enhanced Complementary and Standalone developments progressed fo
Slide 27: Q&A
Q&A
Slide 28: Important Notice
Important Notice Certain statements included or incorporated by reference within this presentation may constitute “forward-looking statements” in respect of the company’s operations, performance, prospects and/or financial condition. By their nature, forward-looking statements involve a number of ri
Slide 29: Additional disclosures
Additional disclosures Charity Super.Mkt, the first multi-charity retail store launch at Brent Cross
Slide 30: Contents
Additional disclosures – 2023 half-year results Contents Managed portfolio ESG Value Retail Sunset Live at Terrasses du Port, Marseille
Slide 31: Over two years of strategic progress
Additional disclosures – 2023 half-year results Over two years of strategic progress Sustainable and resilient Accelerated development An agile platform Reinvigorated assets capital structure pipeline Environmental, Social and Governance ✓ Strengthened balance sheet with £843m of ✓ Significant progr
Slide 32: Managed portfolio
Managed portfolio H&M Grand Opening of Upsized Store at Cabot Circus, Bristol
Slide 33: Birmingham estate super-prime multi-use estate
Additional disclosures – Managed portfolio Birmingham estate super-prime multi-use estate A A. Consolidation of the city centre retail offer: M&S relocating from their historic high street location into the Bullring with a full-line store – including food hall - opening by Christmas 2023 A B B. Crea
Slide 34: We have categorised and refined our development opportunities
Additional disclosures – Managed portfolio We have categorised and refined our development opportunities CAPITAL INTENSITY STAND-ALONE TO OUR CORE URBAN ESTATE Stand-alone schemes on self-contained land. Have the strength of location and potential scale to create critical mass and returns of their o
Slide 35: Rent collection performance and top 10 occupier exposure
Additional disclosures – Managed portfolio Rent collection performance and top 10 occupier exposure Rent UK France Ireland Group Rental % of passing collection – Occupier exposure % of NIA rent (£m) flagships(1) (%) (%) (%) (%) Inditex 7.6 4.1 3.3 H&M 3.7 2.0 3.0 FY 22 97 98 99 98 Next 2.9 1.6 3.5 J
Slide 36: LTV methodology
Additional disclosures – Managed portfolio LTV methodology 31 June 2023 31 December 2022 With Value Retail Fully proportionally With Value Retail Fully proportionally net asset value consolidated net asset value consolidated Net debt (£m) (£m) (£m) (£m) Managed portfolio 1,318 1,318 1,732 1,732 Valu
Slide 37: ESG
ESG Dundrum Solar Installation, Dublin
Slide 38: ESG continues to be a focus across Hammerson
Additional disclosures – ESG ESG continues to be a focus across Hammerson Environmental Social Governance HY HY % 2023 Benchmarks HY 2023 HY 2022 % Change 2023 2022 Change Target Carbon Organisations 96 76 26% emissions 3.1 3.2 -5% -5% supported Rating: C+ Prime (‘000 tCO2e) People engaged 3,195 3,2
Slide 39: Value Retail
Value Retail Bicester Village
Slide 40: Hammerson's interest in Value Retail
Additional disclosures – Value Retail Hammerson’s interest in Value Retail Maas-- Village Bicester La Roca Las Rozas La Vallée mechelen Fidenza Wertheim Ingolstadt Kildare Opening 1995 1998 2000 2001 2002 2003 2003 2005 2006 Sponsor interest 13.7% 12.4% 12.4% 12.4% 12.4% 12.4% 12.4% 12.4% 12.4% Inve
Slide 41: Birmingham Weekender at Bullring, Birmingham
Birmingham Weekender at Bullring, Birmingham