2019 HA 2019 HALF Y YEAR R RESULT LTS 24 JULY 2019
Strong H1 2019 performance, on-track for another good year Strong H1 2019 results Driven by operational excellence Continued disciplined approach to capital allocation Good momentum going into H2 2
Strong H1 2019 performance, on-track for another good year Strong H1 2019 results Driven by operational excellence Continued disciplined approach to capital allocation Good momentum going into H2 SEGRO Park Rainham, London 3
Another set of strong financial results Adjusted £130. £130.6m 6m pre-tax profit 13% adjusted EPS growth to 12.2p Like-for-like net rental +3. 3.7% 7% income growth Portfolio value £9.9bn £9.9b (3.5% valuation gain) 3.5% NAV growth to 673p Loan to Value ratio 24% 24% (FY 2018: 29%) Interim dividend per 2019 interim dividend increased by 13.5% 6. 6.30p 30p share (H1 2018: 5.55p) 4
13% increase in Adjusted EPS H1 2019 1 2019 H1 2018 1 2018 Adjusted income statement £m £m Gross rental income 161.3 145.1 £5.2m from growth in like-for-like • net rental income (Group: +3.7%, Property operating expenses (24.8) (23.9) UK: +4.3%, CE: +2.5%) Net r rent ntal i inc ncome 136. 136.5 121. 121.2 £15m growth from development • Share of joint ventures’ adjusted profit 1 27.7 24.6 £5m lost from disposals (mainly • 2018) Administration expenses (23.6) (20.7) Joint venture fee income 9.4 8.7 Finance costs £5m lower Adj djus usted o d ope perating ng pr profit 150.0 150. 133.8 133. • Net finance costs (18.2) (23.2) Cost ratio of 22.0% Adj djus usted pr d profit be before tax 131. 131.8 110. 110.6 • (H1 2018: 22.5%) Tax on adjusted profit 0.8% 1.5% 19.2% excluding share based • Adj djus usted pr d profit after tax 130. 130.6 108. 108.6 payments (H1 2018: 19.3%) Adj djus usted E d EPS 12. 12.2 10. 10.8 Average share count 1,067.1 1,004.9 1 Net property rental income less administrative expenses, net interest expenses and taxation 5+
3.5% increase in EPRA NAV Components of EPRA NAV change, 31 December 2018 to 30 June 2019 29p 12p 673p (4)p (1)p 650p (13)p Standing assets: 25p Land & development: 4p 31 December H1 2019 2018 final dividend Realised and Financing Exchange rate and 30 June 2019 2018 Adjusted EPS unrealised gains other 6
£334m valuation surplus Portfolio: +3.5% UK: +2.3% Continental Europe: +5.8% £400m Whole portfolio valuation uplift £300m £200m £100m £0m Total London Slough UK Big Box Germany France Poland Italy Held throughout 2.5% 1.8% 0.8% (0.4)% 5.7% 8.1% 1.4% 3.3% Whole portfolio (including 3.5% 1.9% 2.6% 3.5% 6.2% 8.4% 1.6% 5.8% developments) 7
Driven by asset management and rental growth 1 ERV growth: 1.4% Equivalent yield: 4.9% 2 +1.9% Lon ondon on ERV ER London 4.4% 30-Jun-19 Heathrow +0.5% UK: +1.0% Slough 4.9% +1.4% Park Royal +3.0% Change since 31 Dec 0.0% UK Big Box 5.0% 2018 N&E London +5.1% By ow By owner ER ERV +1.6% Germany 5.1% SEGRO +1.5% +0.1% Italy 5.4% Cont. Urban +1.9% Eur. warehouses +3.0% France 5.4% +1.5% SELP +1.5% +0.7% Poland 6.6% 0% 2% 4% 6% 8% 1 Yield on standing assets at 30 June 2019; ERV growth based on assets held throughout H1 2019. 2 Net true equivalent yield 8
£826m 1 of net financing: balance sheet positioned to support growth SEGRO equi quity pl placing ng 71m new shares • £451m gross proceeds 635p per share, 2% discount to previous closing price • 7.5yr duration, 1.5% coupon SELP b P bon ond • Proceeds used to refinance RCF and fund future €500m of new debt • acquisitions and developments SELP c credit it facilit ilities ies €500m of available facilities • Two additional lenders to SELP €200m new syndicated facility • SEGRO b bond nd buy buyback One of the last remaining high coupon bonds • Reduced cost of debt and improved average duration £250m 2020 maturity • 1 sterling equivalent 9
Balance sheet positioned to support further development-led growth LTV ratio and average cost of debt (incl share of joint ventures), 2012-19 Net debt: £2.4bn (FY 2018: £2.7bn) • 60% 4.6% 5.0% 4.2% 4.2% • Debt maturity 10.5 years (from 4.0% Average cost of debt 3.5% 10.2 years at end-2018) 3.4% 40% • £1.6bn cash and available bank LTV ratio 3.0% 2.1% 1.9% facilities (2022-23), fully undrawn 1.5% at half year 2.0% 20% 1.0% 51% 42% 40% 38% 33% 30% 29% 24% 2019: c.£600m estimated development capex (incl 0% 0.0% infrastructure capex and land 2012 2013 2014 2015 2016 2017 2018 1H19 acquisitions) LTV ratio Ave cost of debt 2019: c£150-250m estimated disposals 10
Another set of strong financial results 13% adjusted EPS growth 3.5% NAV growth to 673p Loan-to-value ratio of 24% 2019 interim dividend increased by 13.5% Gennevilliers, Paris 11
Strong H1 2019 performance, on-track for another good year Strong H1 2019 results Driven by operational excellence - record development completions - active asset management Continued disciplined approach to capital allocation Good momentum going into H2 SEGRO Park Düsseldorf Süd 12
A record period of development completions 729,800 sq m of new space • 26 projects • £31m headline rent (84% leased) • 7.1% average yield on cost • 16.5% uplift on development • SEGRO Logistics Park EMG, Midlands SEGRO Logistics Park EMG, Midlands 800 Development completions, ‘000 sq m 700 600 500 Zalando, Verona SEGRO Logistics Park Bischofsheim, Frankfurt 400 300 200 100 0 2014 2015 2016 2017 2018 1H19 SEGRO Airport Park, Berlin SEGRO City Park, Düsseldorf 13
Driving performance from active asset management Strong leasing success in 2019 1 Capturing reversion from renewals Record levels of customer retention and reviews and sustained high occupancy 2 New rent contracted +12.8% 9 100 Annualised rental income, £m Rent change on review and renewal, % 14 Net new rent on existing space 8 45 95 Customer retention rate, % 40 12 7 +9.5% 90 +8.8% 35 6 Vacancy rate, % 10 85 30 5 8 +5.4% 80 25 4 6 20 75 +3.3% 3 15 4 70 2 10 65 2 1 5 0 60 0 0 2013 2014 2015 2016 2017 2018 1H19 2015 2016 2017 2018 1H19 1H15 2H15 1H16 2H16 1H17 2H17 1H18 2H18 1H19 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 at 30 June 2019; customer retention rate based on headline rent retained in the same or alternative SEGRO premises. 14
Driving performance from active asset management Park Royal, London SEGRO Logistics Park Stryków SEGRO City Park Düsseldorf Verona 15
Strong H1 2019 performance, on-track for another good year Strong H1 2019 results Driven by operational excellence Continued disciplined approach to capital allocation Good momentum going into H2 SEGRO CityPark, Düsseldorf SEGRO Logistics Park Tilburg II, Netherlands 16
Continuing a disciplined approach to capital allocation Acquisitions Active recycling Land and development • £27m off-market acquisitions, big box • £17m vacant UK big box in the • £195m of development capex warehouses in Barcelona, Lille and Midlands • £25m invested in 6 land acquisitions in Wrocław • £51m turnkey development for Shop Italy, Poland & France • Continuing to seek further opportunities Direct • Continuing to progress larger land that meet our investment criteria • £33m SEGRO sales to SELP acquisitions for 2019/20 completion £106m £220m £27m of selective asset and land of land and development of asset acquisitions disposals spend 17
Strong H1 2019 performance, on-track for another good year Strong H1 2019 results Driven by operational excellence Continued disciplined approach to capital allocation Good momentum going into H2 SEGRO Airport Park, Berlin 18
Good momentum going into H2 Current market conditions remain positive, supported by powerful structural tailwinds Prime portfolio of warehouses in strong locations Substantial land bank to generate development led growth VAILOG Logistics Park Castel San Giovanni 19
Future performance supported by powerful structural tailwinds Urbanisation Technological revolution SEGRO Park Le Blanc Mesnil, Paris Vailog Logistics Park Milan South E-commerce Growth of digital Reducing land Population growth growth data and the cloud availability Warehouse Power and data Increasing demand Environmental and automation and connectivity for goods and services regulatory pressures robotics 20
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