Land Securities Group PLC · LSE:LAND
Land Securities — Landsec — H1 2022/23 Earnings Presentation
28 slides from Land Securities's earnings presentation, November 2022
Slide 1: Our half year results for 30 September 2022
Our half year results for 30 September 2022 @LandsecGroup Landsec.com
Slide 2: Half year results 2022
Half year results 2022 Mark Allan CHIEF EXECUTIVE OFFICER
Slide 3: 2020 strategy: two key principles of sustainable value creation
Landsec — Half year results 2022 3 2020 strategy: two key principles of sustainable value creation Focus on competitive advantage and preserving balance sheet strength Late 2020: Delivered since then: Capital markets SOLD – £2.0bn Interest rates and property yields near all-time lows £1.8bn of matur
Slide 4: Successful execution of strategy
Landsec — Half year results 2022 4 Successful execution of strategy Well positioned for new market environment High-quality portfolio Decisive capital allocation Future optionality Financial resilience Nova, SW1 MediaCity, Greater Manchester Red Lion Court, SE1 21 Moorfields, EC2 Quality of place in
Slide 5: Competitive advantage underpins strong operational results
Landsec — Half year results 2022 5 Competitive advantage underpins strong operational results High-quality portfolio and strong customer relationships pay off Central London Retail Mixed-use urban £10.9bn portfolio Portfolio split 13% One New Change, EC4 Trinity Leeds Mayfield, Manchester 8% £41m of
Slide 6: Financial results supported by strong operational performance
Landsec — Half year results 2022 6 Financial results supported by strong operational performance Strategic actions mitigate changing market conditions 30 September 2022 30 September 2021 % change EPRA earnings £197m £180m 9% EPRA earnings per share 26.6p 24.3p 9% Dividend per share 17.6p 15.5p 14% T
Slide 7: Focus on delivering sustainably
Landsec — Half year results 2022 7 Focus on delivering sustainably Progressing our sustainability commitments Build well Live well Act well Energy intensity stable YoY despite higher utilisation, on track to reduce by 45% by 2030 vs 2013/14 baseline White Rose PV Embodied carbon reduction on current
Slide 8: Operational review
Operational review Mark Allan CHIEF EXECUTIVE OFFICER
Slide 9: Central London: strong leasing momentum
Landsec — Half year results 2022 9 Central London Strong leasing momentum, as customer focus on quality intensifies Central London – operational performance High-quality portfolio underpins continued demand 30 September 2022 31 March 2022 — 48% of portfolio built or redeveloped over last ten years,
Slide 10: Central London: de-risked pipeline
Landsec — Half year results 2022 10 Central London De-risked pipeline. High quality, sustainable product drives ERV growth 564,000 sq ft 140,000 sq ft Completion March 2023 Completion December 2022 BREEAM Outstanding BREEAM Excellent Crystallised 25% profit on cost WELL Core Gold 21 Moorfields The F
Slide 11: Central London: optionality in future pipeline as new supply reduces
Landsec — Half year results 2022 11 Office construction starts in the City – forecast vs actual Million sq ft Actual Forecast 2000 Forecast 2006 Forecast 2014 Central London 5 Forecast 2018 Forecast Q1 2022 Optionality in future pipeline as Dot com bubble Global financial crisis Brexit vote Pandemic
Slide 12: Major retail destinations: demand continues to grow
Landsec — Half year results 2022 12 Major retail destinations Demand in high-quality retail destinations continues to grow Key trends driving shopping centre demand – last 12 months plus live deals Online and physical channels recognised as fully inter-connected by key brands Upsizing Flight to prim
Slide 13: Major retail destinations: growing brand relationships
Landsec — Half year results 2022 13 Major retail destinations Focus on growing brand relationships starting to drive growth Major retail destinations – operational performance Strengthened retail team with clear focus on brand 30 September 2022 31 March 2022 relationships and guest experience Number
Slide 14: Major retail destinations: return to growth underlines value opportunity
Landsec — Half year results 2022 14 Major retail destinations Return to growth underlines attractive value opportunity Movement in shopping centre sales, valuation and rents – March 2017 = 100 Strength of customer relationships and insights Net rental income Asset value growth Total sales in trading
Slide 15: Mixed-use urban neighbourhoods: significant optionality
Landsec — Half year results 2022 15 Mixed-use urban neighbourhoods Significant optionality supported by structural growth trends Supported by long-term trends of demographic growth, urbanisation, growing sustainability requirements and changing cities £269m U+I acquisition in late 2021 added to long
Slide 16: Mixed-use urban neighbourhoods: progressing preparations
Landsec — Half year results 2022 16 Mixed-use urban neighbourhoods Progressing preparations but full flexibility on any potential starts Preparation of pipeline on track, but retaining flexibility on future capex commitments Optionality to start first phases at Mayfield CGI of Mayfield Buchanan Gall
Slide 17: Financial review
Financial review Vanessa Simms CHIEF FINANCIAL OFFICER
Slide 18: Financial summary
Landsec — Half year results 2022 18 Financial summary Continued growth in earnings and further strengthened balance sheet 30 September 2022 30 September 2021 % change Gross rental income(1) £325m £282m 15% EPRA earnings(1) £197m £180m 9% EPRA earnings per share(1) 26.6p 24.3p 9% Dividend per share 1
Slide 19: EPRA earnings up 9%
Landsec — Half year results 2022 19 30 September 2022 30 September 2021 EPRA earnings up 9% £m £m Continued growth in income Gross rental income(1) 325 282 Net service charge (9) (6) Strong growth in income, with gross rental income Net direct property expenditure (38) (25) up £43m and net rental in
Slide 20: Like-for-like gross rental income up 8.3%
Landsec — Half year results 2022 20 Like-for-like gross rental income up 8.3% Positive growth across all sectors Movement in gross rental income (£m) Gross rental income increased to £325m Positive net impact from our investment activity Central London LFL income up 5.5%, driven by +23.3% strong lea
Slide 21: Portfolio valuation down 2.9%
Landsec — Half year results 2022 21 Portfolio valuation down 2.9% Yield movement drives office values lower, retail portfolio up 0.4% Valuation as at LFL equivalent 30 September Surplus / Equivalent yield LFL ERV Valuation surplus / (deficit) % – H1 22/23 vs FY 22 2022 (deficit) yield movement movem
Slide 22: Total accounting return -2.9%
Landsec — Half year results 2022 22 Total accounting return -2.9% Strong operational performance offset by impact of rising bond yields Movement in EPRA NTA and NTA per share (£m) EPRA NTA down 5.0% Diluted pps 1,063 27 (21) (44) (13) (2) 1,010 c. 95% of valuation deficit driven by London offices Sa
Slide 23: Delivering on more decisive capital allocation
Landsec — Half year results 2022 23 Delivering on more decisive capital allocation Actions driven by clear view on returns TOTAL £2.0BN TOTAL £1.5BN Decisive capital allocation based on clear view Disposals since September 2020 (£m) Investments since September 2020 (£m) on return expectations 1&2 Ne
Slide 24: Further improved balance sheet strength
Landsec — Half year results 2022 24 Further improved balance sheet strength Low LTV and net debt/EBITDA provide resilience 30 September 2022 31 March 2022 Debt maturity – calendar year(1) Adjusted net debt £3,441m £4,179m £m Bond debt Drawn bank debt/Commercial paper Undrawn bank facilities 2,500 Gr
Slide 25: Strong financial position provides optionality
Landsec — Half year results 2022 25 Strong financial position provides optionality Long-dated debt profile supports visibility Expect underlying EPRA EPS for this year to grow low to mid single digit percent, excluding benefit of increase in surrender premiums Dividend to grow in line with underlyin
Slide 26: Overview
Landsec — Overview Mark Allan CHIEF EXECUTIVE OFFICER
Slide 27: A rapidly changing market
Landsec — Half year results 2022 27 A rapidly changing market Well placed as markets adjust to new reality Long-term perspective – property yields vs 10-year gilt yields Capital markets adjusting to new normal, as bond % 16 All property equivalent yield 10-year gilt yield yields rise and decade of s
Slide 28: Our focus for the next 12 months
Landsec — Half year results 2022 28 Our focus for the next 12 months Right strategy – Well positioned for future opportunities Position Landsec to capitalise on market recovery Maintain strong operational momentum Culture, cost base and customer relationships Monetise assets where we cannot add furt