2014 2014 Full Y ll Year Results ults 25th February 2015 - PowerPoint PPT Presentation

2014 2014 Full Y ll Year Results ults 25th February 2015

STRATEGI GIC PROGR GRESS I IS P PAYING NG DIVIDENDS  Strategic repositioning programme largely complete  Strong operational performance  23% increase in NAV  Well placed to deliver in 2015 and beyond 0.3 pe penc nce inc ncreas ase i in t n the he final nal di divi vide dend t nd to 1 10.2p 2

Fin inancia ial R l Revie iew Justin Read, Group Finance Director SR Technics, North Feltham

FINANC NCIAL H HIGH GHLIGH GHTS 2014 2014 2013 2013 Cha hange nge EPRA PBT (£m) 129.7 134.1 (3.3)% EPRA EPS (pence) 17.2 17.7 (2.8)% Dividend per share (pence) 15.1 14.8 2.0% 31 D 31 Dec 2014 2014 31 D 31 Dec 2013 2013 Cha hange nge EPRA NAV per share 1 384p 312p +23.1% Loan to value ratio (inc. JVs at 40% 42% -2ppts share) 2 1 EPRA NAV per share excludes fair value of interest rate derivatives and deferred tax provisions, but includes trading property uplifts 2 Includes £119.9m deferred consideration from the creation of the SELP JV 4

EPRA I EP INCOME STATEM EMEN ENT Limited impact of 2013/2014 disposal activity on earnings 2014 2014 2013 2013 £m £m Gross rental income 215.1 273.8 Property operating expenses (40.5) (50.4) Net r rent ntal i inc ncome 174. 174.6 223. 223.4 Share of joint ventures’ EPRA profit 1 46.3 26.3 Joint venture fee income 11.8 7.1 Administration expenses (28.3) (26.1) EPRA o ope perating pr ng profit 204. 204.4 230. 230.7 Int nto 2015… 2015… EPRA net finance costs (74.7) (96.6)  Based on current portfolio, 2015 EPRA pr profit be before tax 129. 129.7 134. 134.1 JV fee income will be c£13m Tax on EPRA profit 1.5% 2.0% 1 Net property rental income less administrative expenses, net interest expenses and taxation 5

DRIVE VERS OF F NET R RENTAL AL I INCOME CHAN ANGE Like for like net rental income +2.4% £263.9m JVs at £3.3m £6.2m share £15.8m £238.0m £40.5m £(2.9)m £(4.7)m £(4.7)m JVs at share £(38.9)m +2.4% exc. allocated central admin £63.4m and property operating costs Group Group £223.4m £174.6m 2013 Disposals Acquisitions Completed Space taken Like-for-like Surrender Currency 2014 developments back for net rental premiums translation development income & other 6

VA VACANCY R RAT ATE R RECONCILIAT ATION Vacancy rate improvement to 6.3% 8.5% 0.3% (1.6)% (0.6)% (0.3)% 6.3% 2013 Net take-up New developments Acquisitions Disposals 2014 7

EUR URO C CUR URRENCY EXPOSUR URE A AND ND HE HEDGIN ING Balance sheet, £m €1.29:£1 as at 31 December 2014 • 31 December 2014 € assets 90% hedged by € liabilities 2,000 • Assets 90% hedged €164m (£127m) of residual exposure – 4% of Group NAV • Other Euro 1,500 liabilities Illustrative NAV sensitivity vs €1.29: • Euro currency +5% (€1.35) = –c.£6m (c.0.8p per share) • 1,000 swaps +10% (€1.42) = –c.£12m (c.1.6p per share) • Euro debt 500 Loan to Value (on look through basis) at €1.29:£1 is 40%, sensitivity vs €1.29: Euro gross assets +5% (€1.35) LTV –0.6%-points 0 • +10% (€1.42) LTV –1.2%-points • Income Statement, £m Year to 31 December 2014 120 Average rate for 12 months to 31 December 2014 €1.24:£1 • Income 58% hedged 100 € income 58% hedged by € expenditure (including interest) • 80 Euro income Net € income for the period €40m (£31m) – 24% of Group • 60 Euro costs Illustrative annualised net income sensitivity versus €1.24: • 40 +5% (€1.30) = –c.£1.5m (c.0.2p per share) • +10% (€1.36) = –c.£3.0m (c.0.4p per share) 20 • 0 8

PRO RO-FORMA ACCOUNT NTING G NET R RENT NTAL I INCOME £5.7m lower after adjusting for major 2014 transaction activity Exclude udes: Group up JV JVs To Total £m £m £m  Full year impact of lower vacancy rate and rent roll growth 2014 ne net r rent ntal i inc ncome 174. 174.6 63.4 63. 238. 238.0 Inc ncrement ntal i impa pact of:  £4.2m of potential annual gross rent 1 from completed, speculative Disposals since 1 January 2014 (19.3) (6.5) (25.8) developments not yet let Acquisitions since 1 January 2014 8.1 6.4 14.5 £17.1m of potential gross rent 1 to  Developments completed and let during 2014 8.0 1.0 9.0 come from current development Receipt from Neckermann administrator (3.4) – (3.4) pipeline (of which £7.5m pre-let) Pro-forma 2014 ne net r rent ntal i inc ncome 168.0 168. 64.3 64. 232.3 232.  Impact of any further disposals (c£18m of rent from remaining non-core)  Impact of foreign exchange 1 Annualised headline rental income (on a cash flow basis) after the expiry of rent-free periods 9

TOTAL C COST T RATI TIO Lower cost ratio due to more efficient portfolio; 12% reduction in total costs  Gross rental income includes £3.4m Incl. joint ventures at share 2014 2014 2013 2013 Cha hange nge receipt from Neckermann administrator £m £m %  Property operating expenses reflect Gross r rent ntal inc ncome 289.7 322.3 (10.1) lower cost of vacancy (by £3.8m) Property operating expenses 40.5 50.4  £2.3m increase in share based Administration expenses 28.3 26.1 payment costs and termination benefits JV operating and administration expenses 12.2 7.3  Less: JV fee income (excl. performance fees) (12.2) (5.4) Some re-allocation of costs from property operating expenses to central Total c To costs 68. 68.8 78. 78.4 (12. 12.2) 2) administrative expenses Total cost r To ratio 23.7% 23. 7% 24.3% 24. 3% Int nto 2015… 2015…  Administrative expenses expected to be flat in 2015 Note: total costs include vacant property costs of £10.6m for 2014 (2013: £14.4m) 10

FINANCIAL P POSI OSITION ON 40% LTV target achieved 2014 2014 2013 2013 £m £m  Net debt (incl JVs) increased £152m reflecting net investment Group o up onl nly Net borrowings (£m) 1,679 1,459  Secured/amended €668m of bank Group cash and undrawn facilities (£m) 429 982 facilities at reduced cost and extended maturity (€564m at Weighted average cost of debt 1 (%) 4.4 4.5 share) Interest cover 2 (times) 2.2 2.2  Attractive marginal cost of Group Inc ncludi uding J ng JVs at s sha hare borrowings of 1.4% (€), 1.9% (£) Net borrowings (£m) 2,040 1,889 LTV ratio 3 (%) 40 42 Int nto 2015… 2015…  £208m 2015 bond redemptions Average duration of debt (years) 6.9 7.6 part-funded by £120m deferred Fixed rate debt as proportion of net debt (%) 80 71 consideration. Minimal net impact Weighted average cost of debt 1 (%) on interest cost 4.2 4.2 1 Based on gross debt, excluding commitment fees and amortised costs 2 Net rental income / EPRA net finance costs (before capitalisation) on an annualised basis 11 3 Includes £119.9m deferred consideration from the creation of the SELP JV

MAI AIN D DRIVE VERS O OF E F EPRA N A NAV V GROWTH 23% increase in EPRA NAV per share reflects valuation rise and tax refund 4.5p 69.9p (5.1)p 384p 17.2p (14.8)p 312p 2013 EPRA EPS Dividends paid Realised and US tax refund Other movements 2014 unrealised gains incl FX 12

PORTFOLIO V VALUE CHANGE NGE A AND ERV GR GROWTH BY GE GEOGR GRAPHY 1 12.9% portfolio valuation movement (UK +17.1%; Continental Europe +2.2%) £600m 12.9% £500m Slough Trading Estate +15.5% SELP (big box logistics) +3.3% UK big box logistics +23.4% SEGRO (light industrial) +1.8% £400m 18.4% £300m 15.6% £200m £100m 2.6% 5.9% (0.9)% £0m Greater London Thames Valley & Northern Europe Southern Europe Central Europe Total National Logistics (£100m) 3. 3.0% 0% 3. 3.4% 4% (0.8)% (2.6)% 0. 0.4% 4% ERV gr growth 1. 1.8% 8% UK: 3. 3.2% 2% Cont nt. Eur urope pe: ( (1.3%) 1 Percentage change relates to completed properties, including JVs at share 13

FINAN ANCIAL AL S SUMMAR ARY  Results reflect successful implementation of strategy  Improved operating metrics, strong NAV growth  Final dividend increased to reflect confidence in medium-term outlook  Introduction of optional scrip dividend to provide shareholder choice 14

Del eliveri ering o ng on t n the s he strategy gy — buildi bui ding ng for t the f he fut uture ure 15 Sonoko, Strykow

STRA RATEGIC P PRO ROGRE RESS – THREE Y E YEA EARS O ON Disciplined capital allocation £0.9bn of acquisitions in our core markets at 7.0% topped up initial yield £1.6bn of disposals at blended topped-up £0.4bn of capex on new development at £1.6bn £1.3bn initial yield of 7.5% average yield on TDC of >9% Operational excellence Vacancy rate improved to 6.3% (2011: 9.1%); residual/long-term land bank 0.7% total Cost ratio reduced from 24.5%, assisted by 6.3% 23.7% portfolio (2011: 3.3%) £19m reduction in total costs Efficient capital structure Continental Europe big box logistics JV established – grown from €1bn to €1.7bn in Group net debt cut by 27% (>£0.6bn); LTV at SELP 40% 12 months 40% from peak of 52% 16