Full year results presentation October 2016
02 Redefine International P .L.C. Full Year 2016 Results Presentation Agenda Introduction & highlights Mike Watters (CEO) Financial results Donald Grant (CFO) Capital markets & strategy Stephen Oakenfull (Deputy CEO) Portfolio review Adrian Horsburgh (Property Director) Outlook Mike Watters (CEO) Q&A
03 Redefine International P .L.C. Full Year 2016 Results Presentation Introduction Redefine International P.L.C. Who we are and what we do Redefjne International is a FTSE 250 UK Real Estate Investment Trust focused on income driven total returns and committed to delivering superior distributions to its shareholders throughout the property cycle. Redefjne International holds a primary listing on the London Stock Exchange and a secondary listing on the Johannesburg Stock Exchange. The Company is included within the EPRA and FTSE 250 indices.
04 Redefine International P .L.C. Full Year 2016 Results Presentation Highlights Strengthened portfolio delivers resilient income performance Financial highlights Operational highlights • Earnings available for distribution • Completion and integration of transformational of £52.2m (+17.6%) AUK acquisition • EPS of 3.2p (in line) • Successful capital raise generated £115m • Full year dividend of 3.2p per share • Like‑for‑like occupancy at 97.7% (+20bps) • Portfolio valued at £1.5bn (+3.4% like‑for‑like) • £2.8m net profjt from pre‑completion disposal of 16 Grosvenor Street • £148m AUK revolving facility providing fmexibility • Sale of 10 petrol fjlling stations for £12m, • LTV of 53.4% 6.0% above August 2015 book value • EPRA NAV per share 40.0p (‑2.4%) • Sale of legacy interest in The Hague • Weighted average cost of debt reduced to • Two properties disposed post year end for 3.4% (‑50bps) £14.9m, 11.7% premium to book value Completed 25 leases totalling £2.6m gross annualised rental income since EU referendum. Little evidence to suggest a material change in occupational demand
05 Redefine International P .L.C. Full Year 2016 Results Presentation Financial results St George’s Shopping Centre, Harrow
06 Redefine International P .L.C. Full Year 2016 Results Presentation Earnings available for distribution (including share of joint ventures) 2016 2015 Change £m £m £m Net rental income 89.3 69.6 19.7 +14.7% Investment and other income 3.6 11.4 (7.8) Administrative costs and other fees (11.4) (11.4) — ICR ( 1 ) Net fjnance expense (33.1) (30.7) (2.4) 270% Other items 1.0 5.5 (4.5) Underlying earnings 49.4 44.4 5.0 +11.3% Profjt on disposal of 16 Grosvenor Street (non‑recurring) 2.8 — 2.8 Distributable earnings 52.2 44.4 7.8 +17.6% Per share 3.2p 3.2p — Dividend per share 3.2p 3.25p (0.05p) EPRA cost ratio excl. direct vacancy costs 14.9% (2015: 15.3%) (1) Interest cover ratio
07 Redefine International P .L.C. Full Year 2016 Results Presentation Rental income (including share of joint ventures) Like-for-like gross rental income (£m) 0.3 0.3 9.6 21.0 Like‑for‑like +1.0% (5.8) 0.3 0.3 0.3 (4.4) (0.6) (0.3) 75.6 64.8 65.4 96.6 Gross rental Acquisitions Disposals Developments Like‑for‑like UK UK UK Europe Like‑for‑like AUK Other Disposals Developments Gross rental income (during 2015) (Aug 2015) Retail Commercial Hotels (Aug 2016) acquisitions acquisitions (prior year) income (Aug 2015) (Aug 2016)
08 Redefine International P .L.C. Full Year 2016 Results Presentation Valuations (including share of joint ventures) Market Market EPRA value value Surplus/ Like‑for‑like net initial 2016 2015 (defjcit) (1) movement yield £m £m £m % % UK Retail 337.2 349.6 (15.5) (4.4) 6.3 UK Commercial 160.8 150.9 9.1 6.0 5.4 UK Hotels 229.2 234.7 (7.3) (3.1) 6.1 Total UK 727.2 735.2 (13.7) (1.9) 5.9 Europe 345.2 293.5 48.6 16.6 5.6 €+0.3% Total like-for-like 1,072.4 1,028.7 34.9 3.4 Acquisitions 456.6 — Disposals — 15.9 Total property portfolio 1,529.0 1,044.6 5.8 (1) Surplus/(defjcit) includes the effect of capital expenditure, tenant incentives and FX
09 Redefine International P .L.C. Full Year 2016 Results Presentation EPRA NA V per share 0.7 NAV per share (p) 0.8 3.2 (1.3) (1.2) (0.7) (3.2) 41.7 41.0 40.0 Adjusted NAV Negative EPRA NAV Distributable FX gains Disposal of AUK Residual Dividends EPRA NAV (Aug 2015) equity (1) (Aug 2015) earnings The Hague acquisition valuation loss (Aug 2016) costs (1) Negative equity position relates to The Hague (£10.2m). The property was disposed of in August 2016 Weighted average shares on issue during 2016: 1,637.2 million Total shares on issue 31 August 2016: 1,794.6 million
10 Redefine International P .L.C. Full Year 2016 Results Presentation Cash flow Timely deployment of cash generated 332.5 Cash flow (£m) (137.6) 118.8 109.1 39.6 57.3 93.6 (489.9) 23.0 (29.4) (2.4) 34.3 Cash Operating Placing (net Disposals Debt drawn Debt repaid Property Dividends Other Cash and (Aug 2015) cash flow proceeds) acquisitions available facilities & development (Aug 2016) Commitments of £15.8m and undrawn committed facilities of £23.0m
11 Redefine International P .L.C. Full Year 2016 Results Presentation Debt & gearing Key statistics 2016 2015 LTV (%) 53.4 51.8 Weighted average debt maturity (years) 6.9 7.8 Weighted average interest rate (%) 3.4 3.9 Debt with interest rate protection (%) 95.4 94.7 Interest cover (times) (1) 2.7 2.3 (1) Group interest cover calculated as net rental income divided by net fjnance cost An active year with facilities exceeding £160m repaid, prepaid or extended
12 Redefine International P .L.C. Full Year 2016 Results Presentation Capital markets & strategy Enfjeld Travelodge, London
13 Redefine International P .L.C. Full Year 2016 Results Presentation Market context Outlook supportive of our income focused investment case Tailwinds Headwinds • Low interest rates • Uncertainty following EU referendum • Investment demand supported by: • Slow economic growth • Depreciation of Sterling and foreign demand • Continued structural change within retail sector • Demand for asset‑backed income returns • Capital and occupational markets remain supportive • 22% portfolio exposure to Euro supporting income and asset value Schloss Strassen Shopping Center, Berlin, Germany
14 Redefine International P .L.C. Full Year 2016 Results Presentation Extending maturities at current lower rates Weighted average debt maturity of 6.9 years • Over £160m repaid, prepaid or extended • Medium term opportunity to access debt capital markets • 24% of gross debt has no LTV covenants • Euro debt maturities represents opportunity to secure lower rates Debt maturity pr ofile (£m) 52.7 GBP Euro 52.6 320.5 £17.2m extensions agreed post year end 178.2 98.0 110.5 1.7 9.0 40.8 21.1 5.4 12.7 FY2017 FY2018 FY2019 FY2020 FY2021 FY2022 FY2023 FY2024 FY2025 FY2026 No material Sterling debt maturing until 2021 and near term Euro facilities presenting further upside
15 Redefine International P .L.C. Full Year 2016 Results Presentation Successful track record in managing debt & gearing Efficient capital structure provides ability to capitalise on low interest rate environment • Cost of debt reduced by further 50 bps to 3.4% • AUK facility provides fmexible capital structure and • All recent refjnancing and extensions completed cost of debt effjciencies at 2.3% average cost of debt • Over 95% of debt at fjxed or capped rates Historic weighted average cost of debt and LTV Cost of LTV (%) debt (%) 85% 5.5% 80% 5.0% 5.0% 75% 75.4% 70% 4.5% 65% 60% 4.0% 53.4% 55% 50% 3.5% LTV (%) Weighted cost of debt (%) 3.4% 45% 40% 3.0% FY2011 FY2012 FY2013 FY2014 FY2015 FY2016 Medium term target to strengthen our balance sheet by incrementally reducing LTV to within target range of 40% – 50%
16 Redefine International P .L.C. Full Year 2016 Results Presentation Income security Solid income visibility with WAULT of 7.8 years supported by diversified portfolio Tenant Profjle Lease expiries to first break by gross rental income (%) • Diverse and high quality 44.7 sources of rental income • Over 550 tenants • Over 30% of portfolio subject to index‑linked rents Top 10 tenants As at % of gross 31 August 2016 rental income Units UK Government 5.4 10 B&Q 3.9 5 10.4 9.7 7.5 VBG (1) 3.5 4 7.1 6.8 5.0 4.1 Tesco 3.5 1 3.1 1.6 Edeka 3.3 34 FY2017 FY2018 FY2019 FY2020 FY2021 FY2022 FY2023 FY2024 FY2025 FY2026+ Royal Mail 2.2 2 Primark 1.9 1 UK Retail UK Commercial UK Hotels Europe OBI 1.8 3 Debenhams 1.6 2 Wilko 1.6 4 Resilient income profile with 20.5% of gross rental income coming up to its first break option in the next 5 years (1) German government‑backed social insurance body
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