2018 HA 2018 HALF Y YEAR R RESULT LTS 26 JULY 2018
H1 2018 — Another period of delivery Strong financial results and capital structure Disciplined capital allocation — improving portfolio scale and quality, reducing risk Operational excellence — delivering strong operating results and development growth Significant further growth opportunities 2
Strong momentum Powerful structural drivers of occupational demand Modest new speculative supply in most markets Significant further income growth potential from development and asset management Strong capital structure Amazon, Milan Delivery Station 3
2018: Delivering on our strategy Strong financial results and capital structure Disciplined capital allocation — improving portfolio scale and quality, reducing risk Operational excellence — delivering strong operating results and development growth Significant further growth opportunities SEGRO Park Düsseldorf-Sud 4
Strong financial results and capital structure Adjusted Earnings growth +21.3% 21.3% pre-tax profit – Development completions Adjusted EPS, +11.3% 11.3% 10.8p – Like-for-like rental growth Like-for-like net rental – Reduced financing costs +2. 2.3% 3% income growth EPRA NAV per share +8. 8.5% 5% Strong capital structure 603p – 5.9% portfolio value growth Loan to Value ratio 29% 29% – Net investment of £251 million (FY 2017: 30%) Interim dividend per 2018 interim dividend increased by 5.7% 5. 5.55p 55p share (H1 2017: 5.25p) 5
2.3% growth in 6 month like-for-like net rental income Proportionally consolidated net rental income (excluding joint venture fees), H1 2017-18 £8.0m £152.5m £0.8m £150.8m £12.7m £130.7m £2.3m £7.9m £(1.0)m JVs JVs £31.3m £31.4m JVs £(8.9)m £27.3m Including lower share of Group: up: +2. 2.3% 3% JV fees paid within UK: +2.9% property operating costs CE: +1.0% Group Group Group £103.4m £121.2m £119.4m Mainly 2017 activity Vacancy at 4.8% rental income Disposals Acquisitions Like-for-like developments Take-backs for Other Currency rental income Pro forma H1 2017 net H1 2018 net H1 2018 development Completed NRI 6
21% increase in Adjusted PBT Adjusted income statement H1 2018 1 2018 H1 2017 1 2017 £m £m Cost ratio of 22.5% • Gross rental income 145.1 127.3 (H1 2017: 22.9%) Property operating expenses (23.9) (23.9) 19.3% excl LTIPs • (H1 2017: 20.4%) Net r rent ntal i inc ncome 121. 121.2 103. 103.4 Share of joint ventures’ adjusted profit 1 24.6 22.1 Administration expenses (20.7) (17.5) Joint nt v vent ntur ure fee i inc ncome Joint venture fee income 8.7 16.5 APP fees in H1 2017 • Adj djus usted o d ope perating ng pr profit 133. 133.8 124. 124.5 FY 2018 underlying JV fee income • expected to be c£17m Net finance costs (23.2) (33.3) c£10m net impact of SELP • Adj djus usted pr d profit be before tax 110. 110.6 91. 91.2 performance fee to be recognised in Tax on adjusted profit 1.5% 0.8% 2H 2018 adjusted earnings 1 Net property rental income less administrative expenses, net interest expenses and taxation 7
8.5% increase in EPRA NAV Components of EPRA NAV change, 31 December 2017 to 30 June 2018 48p Land & dev’pt 11p (1)p 603p Standing assets 11p 37p (11)p 556p 31 December 2017 H1 2018 2017 final dividend Realised and Exchange rate and 30 June 2018 Adjusted EPS unrealised gains other 8
£488m valuation surplus UK: +6.4% Continental Europe: +2.6% +3.6% £500m +1.4% +4.5% +5.3% +2.1% £400m +3.0% +4.2% £300m +8.1% £200m £100m £0m Total London Slough Midlands Big Germany France Poland Italy Box Percentage change relates to properties held throughout H1 2018, including JVs at share. 9
Driven by asset management, yield shift and rental growth 1 ERV growth: 1.7% Equivalent yield: 5.1% 2 At 30 June 2018 Lon ondon on ERV ER London +3.1% 4.6% Heathrow +3.3% UK: Change since 31 Slough +1.6% 5.0% +2.3% Dec 2017 Park Royal +2.4% Midlands Big Box +0.4% 5.2% N&E London +4.7% Germany By By ow owner ER ERV +0.6% 5.4% SEGRO +0.9% Italy 5.7% +2.1% Cont. SELP +0.4% Eur. France 5.7% +0.3% +0.6% Poland 6.8% +0.2% 0.0% 2.0% 4.0% 6.0% 8.0% 1 Yield on standing assets at 30 June 2018; ERV growth based on assets held throughout H1 2018. 2 Net true equivalent yield 10
Efficient capital structure LTV ratio and average cost of debt (incl share of joint ventures), 2012-18 Average debt duration of 10 years 60% 4.6% 5.0% 4.2% 4.2% 4.0% Average cost of debt 3.5% £500m+ estimated development 3.4% 40% capex (of which £100m is LTV ratio 3.0% infrastructure and land) 2.1% 2.0% 2.0% 20% 2018 disposals expected to be 1.0% £300-350m 51% 42% 40% 38% 33% 30% 29% 0% 0.0% £1.2bn of cash and available 2012 2013 2014 2015 2016 2017 1H18 facilities LTV ratio Ave cost of debt 11
Strong financial results and capital structure Growing earnings Strong capital structure 2018 interim dividend increased by 5.7% SEGRO Logistics Park Aulnay 12
2018: Delivering on our strategy Strong financial results and capital structure Disciplined capital allocation — improving portfolio scale and quality, reducing risk Operational excellence — delivering strong operating results and development growth Significant further growth opportunities Vailog Logistics Park Castel San Giovanni 13
Improving portfolio scale and quality, reducing risk £280m £280m o of f development c t capex £56m £56m o of a f acquisiti tions Development capex Continental European and infrastructure urban warehouses Air2, Paris Skyline Park, Heathrow Pont Yblon London, 3% Poland, 2% Netherlands, 8% £50m of 19% interest Germany, 9% Italy, 47% development land in Sofibus Spain, 11% France, 20% SEGRO Business Park Warsaw Land acquisitions £85m o £85m of d f disposals Big box warehouse Less core assets sales to SELP Gonesse Gay Lussac Milan 14
2018: Delivering on our strategy Strong financial results and capital structure Disciplined capital allocation — improving portfolio scale and quality, reducing risk Operational excellence — delivering strong operating results and development growth Significant further growth opportunities SEGRO Park Bracknell 15
Driving performance through asset management… Strong leasing success in 2018… 1 …high levels of occupancy and … and capturing reversion from customer retention… 2 renewals and reviews 3 New rent contracted 9 95 10 60 Net new rent on existing space Rent change on review and renewal, % Annualised rental income, £m 8 90 50 8 Customer retention rate, % 7 85 40 6 80 Vacancy rate, % 6 5 75 30 4 70 4 20 3 65 2 60 2 10 1 55 0 0 50 0 2014 2015 2016 2017 1H17 1H18 2013 2014 2015 2016 2017 1H18 2014 2015 2016 2017 1H18 1 Net new rent on existing space reflects headline rent agreed on new leases less passing rent lost from space taken back during the year; new rent contracted is total headline rent secured or (in the case of developments) agreed in the year. 2 Vacancy rate based on ERV; customer retention rate based on headline rent retained in the same or alternative SEGRO premises. 3 Headline rent agreed on lease renewals, reviews and re-gears compared to previous headline rent. 16
…and through development Urban warehouses Big box warehouses DPD, SEGRO Park Newham SEGRO Park Morfelden SEGRO Logistics Park Bischofsheim SEGRO Park Amsterdam Airport SEGRO Park Rainham Enterprise Quarter, SEGRO Park Rainham SEGRO Logistics Park Aulnay Vailog Logistics Park Castel San Giovanni 280, 280,000 000 £19m £19m 8.0% 8.0% £108m £108m sq m sq m Completed Potential Yield on cost Uplift on development 1 developments rent (at share) (at 100%) —78% secured 1 Completed developments and buildings under construction 17
2018: Delivering on our strategy Strong financial results and capital structure Disciplined capital allocation — improving portfolio scale and quality, reducing risk Operational excellence — delivering strong operating results and development growth Significant further growth opportunities SEGRO Business Park Zeran, Warsaw 18
Powerful structural drivers of occupational demand Urbanisation Technological revolution SEGRO Park Le Blanc Mesnil, Paris Vailog Logistics Park Milan South Warehouse Reduced land More demand for E-commerce automation availability goods and services growth Intensification of “Green” delivery Digital data and Power and data land use vehicles the cloud connectivity 19
Favourable market conditions Structural tailwinds Benign economic backdrop Low vacancy rates across Europe (5.0% estimated aggregate pan-European vacancy rate; source: JLL) Take-up levels remain strong, new development 5.0 Big box warehouse vacancy rate, 31 March 2018 mostly pre-let Supply and availability well balanced with demand 5.0 8.0 6.8 7.5 4.0 European warehouse development remains substantially pre-let 4.5 3.3 (Logistics space under construction at 31 March 2018; source: JLL) 6.1 3.0 3.0 Under construction, Pre-let Speculative million sqm 2.0 3.3 2.0 1.0 0.0 3.5 UK Germany France Belgium Neth. Poland Italy Spain 4.3 20
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