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>OPERATIONAL DELIVERY
Half Year Results23 August 2011
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>OPERATIONAL DELIVERY
Overview
Focus on:
1. Leasing
2. Pro-active customer and asset
management
3. Tight control of costs
4. Development
Outcomes:
• Significant income generated - £20.2m
versus £19.8m
• Retention rate up - 74% versus 58%
• Vacancy rate reduced - 11.4% versus 12.0%
• Total cost ratio down - 23.6% versus 28.9%
• Expanded development pipeline – represents
£24m of annualised rental income
Delivering
Strong operating performance despite the economic climate
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>OPERATIONAL DELIVERY
FinancialReviewAndrew Pilsworth, Acting CFO and Group Treasurer
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>OPERATIONAL DELIVERY
Key financial highlights
4.34.74.9Interim dividend per share (pence)
Change
%
FY 2010H1 2011
2.24647LTV (%)
4.52,203.22,303.1Net borrowings (£m)
0.3376377EPRA NAV per share¹ (pence)
8.08.79.4EPRA EPS (pence)
10.664.371.1EPRA PBT (£m)
Change
%
H1 2010H1 2011
1. EPRA NAV per share and excluding fair value of derivatives but including trading property uplifts
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>OPERATIONAL DELIVERY
EPRA profit before tax
2.69.7Share of joint ventures’ EPRA profit after tax1
(35.3)(26.0)Property operating expenses
144.3135.5Net rental income
-1.8Joint venture management fee
(17.7)(15.8)Administration expenses (excluding exceptionals)
129.2131.2EPRA operating profit
64.371.1EPRA profit before tax
(64.9)(60.1)Net finance costs (excluding fair value movements on derivatives)
179.6161.5Gross rental income
H1 2010£m
H1 2011£m
1. Net property rental income less administrative expenses, net interest expenses and taxation.
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>OPERATIONAL DELIVERY
144.3
(4.8)
(4.9)
(5.1)
6.10.7 0.2
(1.0) 135.5
Net rental
income 30
June 2010
Like-for-like
rent
Development
(lettings net of
takebacks)
Acquisitions Lease
surrenders
(premium net of
rent lost)
Disposals
(excluding to
APP)
Disposals to
APP
Other income Net rental
income 30
June 2011
Net rental income (£m)
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>OPERATIONAL DELIVERY
EPRA NAV per share (pence)
377
(4)
(10)
376
14
10
EPRA NAV per
share as 31 Dec
2010
EPRA PBT Currency translation Other Dividends Realised and
unrealised property
gains including joint
venture adjustments
EPRA NAV per
share as 30 Jun
2011
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>OPERATIONAL DELIVERY
Cash flow summary
-(25.5)Net settlement of foreign exchange derivatives
(180.1)(0.4)Investment in joint ventures
288.321.8Investment property sales (including joint ventures)
(41.8)(66.0)Dividends paid
(14.0)(65.6)Capital expenditure (excluding trading properties)
90.0(75.3)Net funds flow
(0.2)7.0Other items
37.853.4Free cash flow
(2.3)(2.1)Tax paid
2.43.3Dividends received (net)
(66.5)(54.3)Net finance costs
104.2106.5Cash flow from operations
H1 2010£m
H1 2011£m
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>OPERATIONAL DELIVERY
0.0
100.0
200.0
300.0
400.0
500.0
600.0
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024+
Year
Bonds and Notes Bank Debt drawn Cash Undrawn facilities
£m
Strong financial position
� Net borrowings of £2.3bn and adjusted gearing of 83%
� £454.6m of funds available from cash balances and undrawn facilities
� Weighted average cost of debt 5.2% (5.5% including commitment fees and amortised costs)
� 97% of debt unsecured
� Limited interest rate exposure (80% of net borrowings at fixed rates)
Average weighted
maturity = 9.0 years
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>OPERATIONAL DELIVERY
� EPRA NAV broadly flat at 377 pence per share
� Strong balance sheet with LTV maintained at 47%
� Strong EPRA earnings growth driven by good operating performance
Summary
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>OPERATIONAL DELIVERY
Operational ReviewDavid Sleath, Chief Executive
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>OPERATIONAL DELIVERY
Overview
Focus on:
1. Leasing
2. Pro-active customer and asset
management
3. Tight control of costs
4. Development
Outcomes:
• Significant income generated - £20.2m
versus £19.8m
• Retention rate up - 74% versus 58%
• Vacancy rate reduced - 11.4% versus 12.0%
• Total cost ratio down - 23.6% versus 28.9%
• Expanded development pipeline – represents
£24m of annualised rental income
Delivering
Strong operating performance despite the economic climate
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>OPERATIONAL DELIVERY
H1 Activity
DEVELOPMENT
•10 new pre-let developments signed
•5 speculative schemes approved
•Expanded pipeline* - £24m of annualised
rental income and £205m of capex
COST CONTROL
•Active management of property costs
•Reduction of administration expenses
•Total cost ratio improved from 28.9% to
23.6%
CUSTOMER & ASSET MANAGEMENT
•185 lease renewals and break options
successfully negotiated
•£18.9m of income secured (247,500 sq m)
•116 rent reviews concluded with 2.2%
average uplift
LEASING
•138 new leases signed - £13.9m of
annualised rental income (203,100 sq
m)
•Transactional rental values 2.9% above
December 2010 ERVs
•Incentives of 7.7%
* Completed and under construction developments plus contracted pre-lets and approved spec projects
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>OPERATIONAL DELIVERY
Leasing
Park Royal, UK – 1,500 sq m to High Point Global Solutions
Park Royal, UK – 1,600 sq m to Magnet
Frankfurt, Germany – 1,800 sq m to TSE Systems
Willich, Germany – 6,500 sq m to Comcoplast
Holzwickede, Germany – 9,500 sq m to Kruse Warenhandel
Heathrow, UK – 4,400 sq m to Velocity Supply Chain Logistics
Heathrow (APP), UK – 3,700 sq m to Worldwide Flight Services
Warsaw, Poland – 6,500 sq m to Pepsi-Cola Bottlers Poland
Paris, France – 6,700 sq m to CMP
Warsaw, Poland – 8,200 sq m to ACTION SA
Paris, France – 21,200 sq m to Bovis Transports
Slough, UK – 2,200 sq m to Southern Express Storage
Warsaw, Poland – 2,900 sq m to NAVO
Hemel Hempstead, UK – 7,900 sq m to Gyron Internet
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>OPERATIONAL DELIVERY
Customer and asset management
Prague, Czech Republic – 13,300 sq m – Kuehne & Nagel
Strykow, Poland – 17,000 sq m – Hellmann Worldwide Logistics
Paris, France – 17,300 sq m – Cinram
Pegasus Park, Belgium – 3,500 sq m - Emerson
Heathrow, UK – 2,400 sq m - Airworld Services
Heathrow (APP), UK – 3,100 sq m - Bonded Services
Park Royal, UK – 4,000 sq m - leading high street retailer
Dusseldorf, Germany – 20,100 sq m - Kleine Logistik
Portsmouth, UK – 4,700 sq m - Contego Packaging (Nampak)
Park Royal, UK – 4,200 sq m - Claire O Aceti GMBH
Newbury, UK – 10,100 sq m - SPX International
Paris, France – 26,000 sq m – Geodis
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>OPERATIONAL DELIVERY
Development – completed developments
Takko, Hamburg
Lodz, PolandAdler, Czech Republic
Selco, Slough
Gliwice, Poland
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>OPERATIONAL DELIVERY
Development – in process
Alcatel, Italy
D B Schenker, Heathrow
Casino, Paris
Selig, Slough
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>OPERATIONAL DELIVERY
Development Pipeline – 30 June 201173% pre-let
UK
Speculative projects
5,900-Ajax Avenue, STE
2,800-Galvin Road, STE
1,200Family BargainsFarnham Road, STE
200KFCFarnham Road - STE
51,900Total
3,100-Galvin Road, STE
9,900DB SchenkerHeathrow, London
3,800Budget hotelEdmonton, London
Contracted pre-let projects
3,300Ragus SugarsYeovil Road, STE
5,500LonzaBath Road, STE
7,000SeligAjax Avenue, STE
3,500GeoPostEnfield, London
5,700HCHPoyle, London
Pre-let projects under construction
Space to be built (sq m)
CustomerProject
34,000Alcatel-LucentMilan, Italy
CONTINENTAL EUROPE
Speculative projects
8,200-Paris, France
12,200-Berlin, Germany
18,900ZabkaTychy, Poland
1,200EurocashPoznan, Poland
171,400Total
12,200-Dusseldorf, Germany
Contracted pre-let projects
11,200IT & Consumer electronics (72%)
Milan, Italy
26,000GM/ S&T Polska/ Muller (62%)
Gliwice, Poland
17,000Navo/Nexteer (68%)Tychy, Poland
2,500CumminsRumst, Belgium
28,000CasinoParis, France
Pre-let projects under construction
Space to be built (sq m)
CustomerProject
£21m of annualised rental income and £180m of capex
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>OPERATIONAL DELIVERY
£20.2m of new annualised rental income generated
0
5
10
15
20
25
H1 2010 H1 2011
Lettings of existing vacant space Pre-lets contracted but not taken up in the period
Take up (Lettings and pre-lets completed)
£m
an
nu
ali
sed
ren
tal
inco
me
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>OPERATIONAL DELIVERY
Retention rates significantly improved
55
65 64
5255
72
0
10
20
30
40
50
60
70
80
FY 2006 FY 2007 FY 2008 FY 2009 FY 2010 H1 2011
UK
•Continental European retention rate also improved to 83% (H1 2010: 66%)
% o
f cu
sto
mers
reta
ined
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>OPERATIONAL DELIVERY
Takebacks down significantly
0
5
10
15
20
H1 2010 H1 2011
UK Continental Europe
£m
an
nu
ali
sed
ren
tal
inco
me
• 71% of 2011 income at risk from potential break or expiry decided with only £11.4 million at risk in H2
£19.2m
£13.1m
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>OPERATIONAL DELIVERY
Vacancy further reduced
10
12
14
Jun-1
0
Jul-1
0
Aug-1
0
Sep-1
0
Oct-1
0
Nov-1
0
Dec-1
0
Jan-1
1
Feb-1
1
Mar-1
1
Apr-1
1
May-1
1
Jun-1
1
Group vacancy
% b
y r
enta
l valu
e
14.0%
11.4%
12.0%
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>OPERATIONAL DELIVERY
Group vacancy bridge
11.4%
(6.4)%(0.1)%
12.0%
(0.1)%(0.2)%6.2%
Vacancy rate as at 31
December 2010
Space returned Space made redundant Disposals Other (ERV changes) Space let Vacancy Rate as at 30
June 2011
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>OPERATIONAL DELIVERY
Operational summary
Focus on:
1. Leasing
2. Pro-active customer and asset
management
3. Tight control of costs
4. Development
Outcomes:
• Significant income generated - £20.2m
versus £19.8m
• Retention rate up - 74% versus 58%
• Vacancy rate reduced - 11.4% versus 12.0%
• Total cost ratio down - 23.6% versus 28.9%
• Expanded development pipeline – represents
£24m of annualised rental income
Delivering
Strong operating performance despite the economic climate
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>OPERATIONAL DELIVERY
Property valuation – UKIPD UK Industrial +0.1%
-5
-4
-3
-2
-1
0
1
2
3
% v
alu
ati
on
mo
vem
en
t
31.4
214.8
Heathrow
(wholly owned)
12.9
3,468.4
UK overall
15.3
317.3
Rest of Greater London
7.5
447.8
APP/
Big Box
22.35.411.211.9Vacancy (%)
264.1378.71,313.9531.8Value* (£m)
Midlands & North
South & West
Thames Valley
Park Royal
•Value and valuation movement relate to the completed portfolio.
Joint ventures shown at share.
1.6%
0.8%0.4%
0.3% 0.1% (0.3)% (1.3)% (4.1)%
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>OPERATIONAL DELIVERY
Property valuation – Continental Europe
-5
-4
-3
-2
-1
0
1
2
3
% v
alu
ati
on
mo
vem
en
t
8.0
1,486.1
CE Overall
3.4
233.1
Poland
8.4
298.7
Rest of Germany
9.218.93.1Vacancy (%)
343.1213.9397.3Value* (£m)
Neckermann/ Pegasus Park &
Vimercate
Other
(incl. Benelux)
France
•Value and valuation movement relate to the completed portfolio.
Joint ventures shown at share.
2.2%
0.8%
0.2% (0.8)% (1.2)% (4.7)%
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>OPERATIONAL DELIVERY
Outlook
� Satisfactory pipeline of leasing enquiries and negotiations
� Growing development programme – 73% pre-let
� Macro economic uncertainty
� SEGRO remains focused on operational delivery and prudent financial
management
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>OPERATIONAL DELIVERY
Half Year Results23 August 2011
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>OPERATIONAL DELIVERY
APPENDICES
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>OPERATIONAL DELIVERY
Pre-let Development - UK
Q4 2011200RetailKFC100Farnham Road - STE
47,200Total
Q2 20121,200RetailFamily Bargains100Farnham Road, STE
Q4 20129,900Air freight handlingDB Schenker100Heathrow, London
Q4 20123,800Budget HotelBudget Hotel100Edmonton, London
Contracted projects
Q1 20123,300ManufacturingRagus Sugars100Yeovil Road, STE
Q2 20125,500R&D and officeLonza100Bath Road, STE
-3,700Trade CounterSelco100Farnham Road, STE
Q4 20117,000ManufacturingSelig100Ajax Avenue, STE
Q3 20113,500DistributionGeoPost100Enfield, London
Q4 20115,700Air freight handlingHCH100Poyle, London
Projects under construction
Sold3,400DistributionGeoPost100Southall, London
Completed projects
Expected completionSpace to be built (sq m)
Building useCustomer% pre-let
Project
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>OPERATIONAL DELIVERY
Pre-let Development – Continental Europe
August 201128,000LogisticsCasino100Paris, France
177,900Total
Q4 201118,900LogisticsZabka100Tychy, Poland
Contracted projects
Q2 201334,000OfficeAlcatel-Lucent100Milan, Italy
Q3 201211,200OfficeIT & Consumer electronics
72Milan, Italy
Q1 20121,200OfficeEurocash100Poznan, Poland
Q3 201126,000LogisticsGM Poland/ S&T Polska/ Muller
62Gliwice, Poland
Q4 201117,000LogisticsNavo/Nexteer68Tychy, Poland
-20,700LogisticsTakko100Hamburg, Germany
Q4 20112,500OfficeCummins100Rumst, Belgium
Projects under construction
-8,700Light IndustrialAdler/Templin79Ostrava, Czech Republic
-9,700Light IndustrialHL Display100Gilwice, Silesia, Poland
Completed projects
Expected completionSpace to be built (sq
m)
Building useCustomer% pre-let
Project
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>OPERATIONAL DELIVERY
Development - Speculative
47,800Total
Q3 20123,100Other business spaceSTE, Galvin Road
Approved projects
Q2 201212,200Light industrialDusseldorf, Germany
Q1 201212,200Light industrialBerlin, Germany
Q1 20128,200Light IndustrialParis, France
Q1 20122,800Other business spaceSTE, Galvin Road
Q1 20125,900DatacentreSTE, Ajax Avenue
Projects under construction
-3,400Small Business UnitsLodz, Poland
Completed projects
Expected completionSpace to be built (sq m)
Building useProject
£5 million of annualised rental income and £35 million of capex
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>OPERATIONAL DELIVERY
UK Vacancy – 30 June 2011 – by region
Rest of Thames
Valley
21%
Slough Trading
Estate
12%
Heathrow
21%
Park Royal
13%
Rest of London
14%
Midlands & North
15%
Rest of UK South
4%
Split of current UK vacancy of 12.9% by region
Joint ventures included at share
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>OPERATIONAL DELIVERY
UK Vacancy – 30 June 2011 – by age of building
UK vacancy and lettings by rental value excluding acquired properties where no age data is available. Age of construction or latest major refurbishment.
June 2011 vacant portfolio and H1 2011 lettings by age
Blue = vacant portfolio , Grey = Lettings by Age
22%
16%
26%
17%
19%
31%
28%
12%
10%
19%
0%
5%
10%
15%
20%
25%
30%
35%
< 10 years 10 - 20 years 20 - 30 years 30 - 40 years > 40 years
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>OPERATIONAL DELIVERY
< 12 months,
56%
12 - 24
months, 36%
> 24 months,
8%
UK Vacancy – 30 June 2011By number of months vacant
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>OPERATIONAL DELIVERY
Profit before tax
2.01.4Profit on sale of investment properties
148.964.6Profit before tax
84.6(6.5)Total adjustments
22.319.7Net fair value gain on interest rate swaps and other derivatives
(13.8)(0.1)Amounts written off on acquisitions
2.01.9Other investment income
(1.4)-Loss on sale of investments in JVs
(3.6)(2.3)Increase in provision for impairment of trading properties
1.84.6Profit on sale of trading properties
64.6(35.6)Valuation (deficit)/surplus on investment and owner occupied properties
10.73.9Adjustments to share of profit from JVs after tax
Adjustments:
64.371.1EPRA profit before tax
H1 2010£m
H1 2011£m
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>OPERATIONAL DELIVERY
Breakdown of Joint VenturesIncome Statement
Jun-10
APP Big Box Other Total Total
Gross rental income 12.3 3.6 1.0 16.9 6.1
Property operating expenses (1.8) (0.2) (0.2) (2.2) (0.7)Net rental income 10.5 3.4 0.8 14.7 5.4
Net finance costs (3.2) (1.1) (0.7) (5.0) (3.0)
EPRA profit before tax 7.3 2.3 0.1 9.7 2.4
Tax - - - - 0.2
EPRA profit after tax 7.3 2.3 0.1 9.7 2.6
Adjustments:
Profit on sale of investment properties 0.7 - - 0.7 -
Valuation surplus/(deficit) on investment properties 2.7 1.1 (0.6) 3.2 9.9
Profit on sale of trading properties - - 0.2 0.2 0.1
(Increase)/decrease in provision for impairment of trading properties - - (0.7) (0.7) 0.4
Net fair value gain on interest rate swaps and other derivatives 0.1 0.3 - 0.4 -
Other investment income - - - - 0.2
Tax on additional adjustments - - 0.1 0.1 0.1
Total adjustments 3.5 1.4 (1.0) 3.9 10.7
Profit/(loss) after tax 10.8 3.7 (0.9) 13.6 13.3
Jun-11
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>OPERATIONAL DELIVERY
Breakdown of Joint VenturesBalance Sheet
Jun-11 Jun-10
APP Big Box Other Total Total
Investment properties (completed and development) 360.2 103.5 4.0 467.7 446.7
Other investments 8.4 - 0.1 8.5 8.8 Total non-current assets 368.6 103.5 4.1 476.2 455.5
Trading properties - - 34.1 34.1 35.3
Other receivables 4.2 0.1 15.7 20.0 11.5
Cash 12.6 2.4 3.3 18.3 11.8
Total current assets 16.8 2.5 53.1 72.4 58.6
Total assets 385.4 106.0 57.2 548.6 514.1
Borrowings - 45.0 6.5 51.5 216.7
Deferred tax - - 1.5 1.5 1.1
Other liabilities 0.3 - 7.2 7.5 15.9
Total non-current liabilities 0.3 45.0 15.2 60.5 233.7
Borrowings 159.3 - 12.0 171.3 11.0
Other liabilities 13.9 3.5 4.2 21.6 16.6 Total current liabilities 173.2 3.5 16.2 192.9 27.6
Total liabilities 173.5 48.5 31.4 253.4 261.3
Group share of net assets 211.9 57.5 25.8 295.2 252.8
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>OPERATIONAL DELIVERY
Euro currency exposure and hedging
2,015
527
954
119
Balance sheet as at 30 June 2011
Euro gross assets
Euro debt
Euro currency swaps
Other Euro liabilities
€m
illio
n
•€1.11:£1 as at 30 June 2011
•€ assets 79% hedged by € liabilities
•€415m (£374m) of residual exposure – 14% of Group NAV
•Sensitivity:
•+/- 10% (€1.22/€1.00) = +/- c.£37m (c5.1p per share)
56
39
Income statement six months to 30 June 2011
Euro income
Euro costs (incl €32m interest)
€m
illio
n
•Average rate for 6 months to 30 June 2011 €1.15:£1
•€ income 70% hedged by € expenditure (including interest)
•Net € income for the period €17m (£15m) – 22% of Group
•Sensitivity versus €1.15
•+/- 10% (€1.26/€1.03) = +/- c.£1.5m (c0.2p per share)
1,600
39
>OPERATIONAL DELIVERY
Forward-looking statements
This presentation may contain certain forward-looking statements with respect to
SEGRO’s expectations and plans, strategy, management’s objectives, future
performance, costs, revenues and other trend information. These statements and
forecasts involve risk and uncertainty because they relate to events and depend
upon circumstances that may occur in the future. There are a number of factors
which could cause actual results or developments to differ materially from those
expressed or implied by these forward looking statements and forecasts. The
statements have been made with reference to forecast price changes, economic
conditions and the current regulatory environment. Nothing in this presentation
should be construed as a profit forecast. Past share performance cannot be relied on
as a guide to future performance.