Full Year Results Presentation for the year ended 31 December 2015 1 March 2016 1
Disclaimer This presentation is not intended to, and does not constitute or form part of, any offer, invitation or the solicitation of an offer to purchase, otherwise acquire, subscribe for, sell or otherwise dispose of, any securities in Taylor Wimpey plc or any other invitation or inducement to engage in investment activities, nor shall this presentation (or any part of it) nor the fact of its distribution form the basis of, or be relied on in connection with, any contract or investment decision. Past performance of Taylor Wimpey plc cannot be relied upon as a guide to its future performance. Certain statements made in this presentation are forward looking statements. Such statements are based on Taylor Wimpey’s current expectations and beliefs concerning future events and are subject to a number of known and unknown risks and uncertainties that could cause actual events or results to differ materially from any expected future events or results referred to in these forward looking statements. Such statements are also based on numerous assumptions regarding Taylor Wimpey plc’s present and future strategy and the environment in which it operates, which may not be accurate. Taylor Wimpey plc will not release any updates or revisions to forward looking statements contained in this presentation except as required by law or regulation. 2
Agenda Pete Redfern Summary and operations Sustainable financial Ryan Mangold performance Pete Redfern Outlook 3
Summary and operations Pete Redfern Chief Executive 4
Financial highlights Operating profit* margin Return on net operating assets* 25 30 27.1 20.3 25 Medium 20 22.5 17.9 term target Medium 20 15 16.8 13.6 term target 15 % % 10 10 5 5 0 0 2013 2014 2015 2013 2014 2015 Net asset annual growth NAV Conversion of operating profit* to (pre-cash distribution)* operating cash flow* 19.6 20 80 67.0 70 15.8 14.2 Medium Medium 15 60 term target term target 50 43.1 42.3 10 40 % % 30 5 20 10 0 0 2013 2014 2015 2013 2014 2015 * See definitions slide in the appendix 5
UK operating highlights £1.8bn 14.1% £59.4k Total value of record Increase in ASP in Contribution per year end order book private order book to completion 31 Dec 2015 0.73 20.3% 8.7k Private net sales rate Operating Plots converted from (per outlet per week) profit* margin strategic pipeline * See definitions slide in the appendix 6
TW UK market performance 2012 2013 2014 2015 2016 Customer interest Sales rate Number of outlets 7
Our UK market performance H2 2015 H1 2015 H2 2014 H1 2014 Average outlets open 300 302 298 307 Private sales rate (net) 0.66 0.78 0.58 0.71 Private sales price £000 273 257 248 238 Cancellation rate (private) 13% 11% 16% 11% • c.37% of total 2015 sales using Help to Buy • 123 new outlets opened in 2015 (2014: 103) • 2015 private sales price excluding Central London – £246k (2014: £228k) Data based on reservations excluding JVs 8
North Division • Average selling price on 1,603 completions completions ASP £206k – 2015: £196k +7% 0.60 sales rate* • Private sales rate* 1,785 completions – 2015: 0.65 +12% ASP £192k 2,132 0.68 sales rate* completions • Net operating assets** ASP £191k – 2015: £813.0m +5% 0.68 sales rate* Data based on completions excluding JVs Percentage comparisons are compared to Full Year 2014 * Private sales rate (net) ** See definitions slide in the appendix 9
Central and South West Division • Average selling price on 2,558 completions completions – 2015: £218k +8% ASP £230k 0.78 sales rate* • Private sales rate* – 2015: 0.75 +15% 2,252 completions • Net operating assets** ASP £205k – 2015: £705.1m -3% 0.72 sales rate* Data based on completions excluding JVs Percentage comparisons are compared to Full Year 2014 * Private sales rate (net) ** See definitions slide in the appendix 10
London and South East Division including Central London • Average selling price on completions – 2015: £313k +11% • Private sales rate* 1,910 – 2015: 0.89 +14% completions ASP £277k • Net operating assets** 979 0.83 sales rate* completions † – 2015: £994.2m +21% ASP £381k † 0.96 sales rate* Data based on completions excluding JVs Percentage comparisons are compared to Full Year 2014 * Private sales rate (net) ** See definitions slide in the appendix † The London market includes the area inside the M25 11
Land market • Land market remains stable and positive, with acquisition margins remaining at c.20% • TW focus is on: – Continued improvement to site quality – Maintaining high margin land acquisition, with additional focus on margin v risks – Continual improvement to ROCE – Strategic capital allocation – Remaining active in all key geographies • Strategic land environment remains good, some new competition in last 24 months from listed competitors 12
Quality of land acquisitions Capital allocation of land approvals Micro location – position within in the period macro location 31% Total: 458 sites in short A B C D 30% Site based ROCE term owned landbank 29% Macro Q1 – A 33 62 10 2 location – City, 28% broken Q2 – B 79 156 17 - down by 27% major suburb, Q3 – C 16 73 8 - town, 26% village or 23.0% 24.0% 25.0% 26.0% rural area Q4 - D 1 1 - - Contribution margin* 2012 Average 2013 Average 2014 Average 2015 Average * See definitions slide in the appendix 13
Short term landbank 100,000 8,660 13,341 90,000 6,971 80,000 1,004 712 75,710 75,136 Plots 70,000 60,000 50,000 31 December Plots acquired Strategic land Completions Land sales Scope changes 31 December 2014 conversion 2015 Movement in year 14
Strategic pipeline 140,000 16,033 8,660 10,259 120,000 109,586 106,700 100,000 80,000 Plots 60,000 40,000 20,000 0 31 December Plots acquired Strategic land Land sales Review and scope 31 December 2014 conversion changes 2015 Movement in year • Strategic land conversion target: average of c.6,000 plots per year • Revenue in strategic pipeline – c.£22bn • Continue to manage actively adding and removing to optimise planning pedigree and value creation opportunity 15
Continuous business improvement • Health and safety • Business operating methods • Customer service • People • Product 16
Customer service 8 Week Customer Service Survey Score – 3 Month Average 2012-2015: ‘Would you Recommend a Friend?’ 100% 90% % Score 80% 70% 17
Customer service • Completed an in-depth review of every aspect and stage of our Customer Journey in mid-2015 • 2015 actions have been focused on delivering existing process uniformly well • 2016 will focus on implementing changes in three main areas: – New Head of Customer Service role in each business unit – Named Customer Relationship Manager for each customer – New Home Quality Inspection to complement existing Build Quality process • Changes to be completed between April and August 2016 18
Product • Standard house floorplans – working well and in place across over 70% of sites • Full review of product specification – Focus on customer added value – Changes to doors, bathroom fittings etc – Ties in to online specification project • R&D and innovation – Longer term R&D – aims to shape, design and future-proof product and production methodology – Working with customers and suppliers to explore and evaluate trends, changes and new innovations in design, architecture, technology, materials and methodology 19
Sustainable financial performance Ryan Mangold Group Finance Director 20
Summary Group results FY 2015 FY 2014 Change £m Revenue 3,139.8 2,686.1 16.9% Gross profit 788.0 620.9 26.9% Gross profit margin % 25.1 23.1 2.0ppt Operating profit* 637.0 480.7 32.5% Operating profit* margin % 20.3 17.9 2.4ppt Profit before tax and exceptional 603.8 450.1 34.1% items Adjusted basic earnings per share* 14.9p 11.2p 33.0% Tangible NAV per share* 83.5p 77.9p 7.2% Return on net operating assets* % 27.1 22.5 4.6ppt * See definitions slide in the appendix 21
Group segmental analysis FY 2015 FY 2014 Operating Operating RONOA* Operating Operating RONOA* profit* profit* % profit* profit* % £m margin £m margin % % North 251.0 22.9 31.8 203.5 21.8 29.0 Central and South 243.2 22.6 34.1 179.5 20.2 25.3 West London and South 203.2 22.3 22.4 154.8 18.7 20.6 East Corporate (70.4) - - (61.3) - - UK 627.0 20.3 27.2 476.5 18.0 22.9 Spain 10.0 17.2 21.8 4.2 12.5 9.3 Group 637.0 20.3 27.1 480.7 17.9 22.5 * See definitions slide in the appendix 22
Finance charges £m FY 2015 FY 2014 Change Financial indebtedness 11.6 14.4 (19.4)% Land creditor unwind 15.9 12.3 29.3% Pensions 6.0 7.5 (20.0)% Other 0.4 (3.0) 113.3% Total 33.9 31.2 8.7% • Finance charges include £1.5m of interest charges in relation to tax • The ‘amend and extend’ to the revolving credit facility of £550m completed in February 2015 23
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