Hammerson Plc · LSE:HMSO
Hammerson — H1 2024 Earnings Presentation
37 slides from Hammerson's earnings presentation, Jul 25, 2024
Slide 1: 2024 Half year results
2024 Half year results 25th July 2024 10 YEAR ANNIVERSARY – LES TERRASSES DU PORT, MARSEILLE
Slide 2: Overview
Overview Half year results Investment for growth & value creation Q&A BULLRING, BIRMINGHAM
Slide 3: Repositioning and investing for growth driving strong first half performance
Repositioning and investing for growth Transformational £1.5bn transaction driving strong first half performance generating cash proceeds of c.£600m • Continued operational and leasing momentum driving top • Disposal of non-controlling and yield dilutive Value Retail line growth: interest ensures cl
Slide 4: Half year results
Half year results PENNEYS - DUNDRUM, DUBLIN
Slide 5: Financial highlights
2024 Half year financial results Financial highlights +4% / +5% £50m Underlying Adjusted earnings GRI / NRI growth(1) (HY 23: £56m) (HY 23: +3% / +2%) EPS: 1.0p (HY 23: 1.1p) £(517)m 38p IFRS loss NTA per share IFRS loss per share (10.4)p (FY 23: 51p) 1 Excluding Cabot Circus for HY 24 5 Hammerson P
Slide 6: Adjusted earnings walk
2024 Half year financial results Adjusted earnings walk £m 65 Interest income 6.3 NRI (7.4) Interest payable 0.1 Non-LFL NRI (4.9) 60 Fee income (2.8) FX & tax (1.2) (1.7) 55 6.4 (6.1) (10) 50 4.2 56 1.0 45 50 46 40 HY 23 Disposals HY 23 rebased LFL NRI Gross admin costs Net finance cost Value Retai
Slide 7: Valuation movements by territory
2024 Half year financial results Valuation movements by territory UK flagships France flagships Ireland flagships 8.0 8.0 8.0 Yield % (NEY) 7.0 7.0 7.0 6.0 6.0 6.0 5.0 5.0 5.0 4.0 4.0 4.0 3.0 3.0 3.0 2.0 2.0 2.0 1.0 1.0 1.0 0.0 2017 2018 2019 2020 2021 2022 2023 H1 24 0.0 0.0 2017 2018 2019 2020 202
Slide 8: NTA per share walk
2024 Half year financial results NTA per share walk pence 60 55 50 45 (11) 40 51 (2) (1) 1 35 38 30 FY 23 Disposal of Value Retail Revaluation & Disposal losses FY23 Dividend Adjusted earnings HY 24 8 Hammerson Plc
Slide 9: Balance sheet and credit metrics
2024 Half year financial results Balance sheet and credit metrics £1.2bn £0.6bn Net debt Pro forma Net debt (8% lower vs FY 23) (71% lower than FY 20) 5.3x 25% Pro forma Pro forma LTV Net debt:EBITDA (FY 20: 14.1x) (FY 20: 40%/46%) (headline/FPC(1)) 1 Fully proportionally consolidated including Grou
Slide 10: Near term Group debt covered by existing cash
2024 Half year financial results Near term Group debt covered by existing cash(1) Dundrum Secured Debt (1.9%) Pro forma liquidity position: £1.7bn Group debt maturity (£m) Private Placements (int 2.5%) Cash (30 Jun 2024): £538m (2) Sterling Bonds (int 5.3%) Cash proceeds from VR disposal c.£600m Eur
Slide 11: Investment for growth & value creation
Investment for growth & value creation DIZZEE RASCAL EVENT – CABOT CIRCUS, BRISTOL
Slide 12: A unique portfolio of city centre destinations and land with growth potential
Investment for growth & value creation A unique portfolio of city centre destinations and land with growth potential HAMMERSON’S POST-VALUE RETAIL GEOGRAPHIC FOOTPRINT HAMMERSON’S REPOSITIONED PORTFOLIO • Ten core city centre destinations • 93% of destinations A rated by Green Street, remainder B+(2
Slide 13: Ongoing high demand and strong leasing
Investment for growth & value creation Ongoing high demand and strong leasing • 81%/19% split: principal vs temporary(5) 140/£23m (1) +61% • 49%/51% split: new leases to renewals(5) • Diverse mix: Leases/value +24% YoY vs previous passing(2) • Fashion 52% +29% exc. nil passing rent (1) • Non fashion
Slide 14: Leasing to a high quality, diverse and complementary mix
Investment for growth & value creation Leasing to a high quality, diverse and complementary mix Partnerships with best-in-class brands Investing in innovative new offers 14 Hammerson Plc
Slide 15: Driving momentum through reinvestment and proactive asset management
Investment for growth & value creation Driving momentum through reinvestment and proactive asset management DUNDRUM, DUBLIN BULLRING, BIRMINGHAM ASSET MANAGEMENT INITATIVES AND STRONG LEASING (1) ASSET MANAGEMENT INITATIVES AND STRONG LEASING (1) €31m total investment, generating: £26m total investm
Slide 16: Bristol case study
Investment for growth & value creation Investing to improve the offer for occupiers and customers, and generate value: BRISTOL CASE STUDY KEY VALUE CREATION INITIATIVES HIGHLIGHTS Re-anchored destination with new uses and improved leisure offer Reinvigoration of Bristol • Department store repurposin
Slide 17: Placemaking to improve vibrancy, income and value
Investment for growth & value creation Placemaking to improve vibrancy, income and value PLACE • Bigger, better events attracting new audiences: +7,000 visitors during recent Dizzee Rascal performances, Olympic Flame at TdP +40% footfall • Cultural partnerships driving commercialisation revenue and
Slide 18: Committed to our climate goals and improving our social impact
Investment for growth & value creation Committed to our climate goals and improving our social impact ENVIRONMENT • Progressing Net Zero Asset Plans (NZAPs) with a focus on early delivery and innovation to maximise returns • Physical Climate Risk Reviews and Nature Assets Plans (NAPs) revised in H1
Slide 19: Disciplined capital allocation to invest with confidence for growth
Investment for growth & value creation Disciplined capital allocation to invest with confidence for growth and value creation Stable and resilient capital structure: IG credit rating Sustainable cash dividend Total return focus Required returns > cost of capital Remain opportunistic on capital deplo
Slide 20: Opportunity-rich portfolio near, medium and long term
Investment for growth & value creation Opportunity-rich portfolio near, medium and long term ASSET REPURPOSING AND EXISTING ASSET ENHANCEMENTS Ability to rotate the low yielding Value Retail stake into higher yielding opportunities, Near-term focus on repurposing and existing Selectively bring forwa
Slide 21: Repositioning and investing for growth drives strong first half performance
Investment for growth & value creation Repositioning and investing for growth drives strong first half performance TRANSFORMATIONAL £1.5BN DISPOSAL OF VALUE RETAIL, CASH PROCEEDS OF c.£600M • Proceeds deployed to strengthen balance sheet, invest for growth and enhance distributions • Build on our tr
Slide 22: Q&A
Q&A ZAMBRERO OPENING – BULLRING, BIRMINGHAM
Slide 23: 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 24: Additional disclosures
Additional disclosures SEPHORA HOARDING CGI – BULLRING, BIRMINGHAM
Slide 25: Net debt analysis
Additional disclosures Net debt analysis Union 110 Square £m Operating Interest O’Parinor 54 23 6 profit received ancillary Working Interest 1,400 capital (13) paid (57) movements 1,300 116 1,200 41 20 12 34 36 45 1,100 1,000 900 1,326 598 1,220 800 700 600 15 637 500 Net debt Disposals Cash Value R
Slide 26: Like-for-like GRI & NRI analysis (HY 24 YoY) – all flagships
Additional disclosures Like-for-like GRI & NRI analysis (HY 24 YoY) – all flagships Group GRI Group NRI Base Rent 0.4% Rental income 0.2% Surrender premiums 1.8% Surrender premiums 2.2% Car park income 0.6% Car park 1.5% Turnover rent 0.6% Bad debt & TI impairments -0.1% Commercial income -0.8% Unre
Slide 27: Like-for-like GRI & NRI analysis excluding Cabot Circus
Additional disclosures Like-for-like GRI & NRI analysis (HY 24 YoY) – all flagships, excluding Cabot Circus Group GRI Group NRI Base Rent 1.8% Rental income 2.0% Surrender premiums 2.0% Surrender premiums 2.4% Turnover rent 0.7% Car park 1.2% Car park income 0.2% Bad debt & TI impairments 0.4% Comme
Slide 28: Rent collection performance and top 10 occupier exposure
Additional disclosures 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 11.5 6.8 3.6 H&M 5.6 3.3 2.7 HY 24 96 92 94 95 Next 4.8 2.8 2.1 JD Sports 3.8 2.2 0.
Slide 29: Top ten occupiers by region
Additional disclosures Top ten occupiers by region(1) UK France Ireland Rental % of Rental % of Rental % of Occupier exposure passing % of NIA Occupier exposure passing % of NIA Occupier exposure passing % of NIA (£m) rent (£m) rent (£m) rent Inditex 7.1 4.2 2.0 Inditex 1.6 1.0 0.6 Inditex 2.7 1.6 1
Slide 30: VR disposal transforms Hammerson to accelerate strategy and enhance returns
Additional disclosures VR disposal transforms Hammerson to accelerate strategy and enhance returns 1 2 3 Proceeds deployed to strengthen Sale of overweight, non-controlling Accelerates strategic and balance sheet, invest for growth and dilutive interest in Value Retail financial delivery to create v
Slide 31: Medium Term Financial Framework
Additional disclosures Medium Term Financial Framework: clearly identified combination of existing and new opportunities to drive growth and returns For FY24, earnings outlook in line with market consensus Medium-Term Financial Existing Portfolio + New Opportunities = Framework(1) Portfolio Portfoli
Slide 32: Disposal of VR enables enhanced shareholder returns
Additional disclosures Disposal of VR enables enhanced shareholder returns Shareholder returns Share buy back Ordinary dividend • Ordinary dividend payout ratio enhanced from • On market share buy back of up to £140m 60-70% to 80-85% of adjusted earnings from • c.10% of pre-announcement market compl
Slide 33: Disposal of VR: timetable and next steps
Additional disclosures Disposal of VR: timetable and next steps Transaction is a Class 1 at the date of announcement: • Disposal will not require shareholder approval as the amended UK Listing Rules come into effect on 29 July 2024 as announced by FCA on 11 July 2024 • 1 for 10 share consolidation t
Slide 34: Disposal of VR: LTV & Net debt:EBITDA pro formas
Additional disclosures Disposal of VR: LTV & Net debt:EBITDA pro formas Credit Metrics Valuation Net debt EBITDA £m £m £m Jun-24 3,162 1,220 152 Net Proceeds from disposals of: - Value Retail(1) (583) (583) (30) Pro forma 2,579 637 122 Pro forma LTV 25% Pro forma Net debt:EBITDA 5.3x 1. FX rate as a
Slide 35: Reading case study
Additional disclosures Investing to improve the offer for occupiers and customers, and generate value: READING CASE STUDY KEY VALUE CREATION INITIATIVES HIGHLIGHTS Upgraded retail offer with new leisure offer in 140,000 sq.ft former dept. store c.140,000 sqft. department store repurposed to leisure
Slide 36: Celebrating and supporting our communities
Celebrating and supporting our communities
Slide 37: Enquiries
Enquiries For further enquiries please contact: Josh Warren, Director of Strategy, Commercial Finance and IR Tel: +44 (0)20 7887 1053 [email protected] Oliver Hughes, Ollie Hoare and Charles Hirst, MHP Group Tel: +44 (0)20 3128 8100 [email protected] 37