Half Year Results Presentation for the six months to 28 June 2020 29 July 2020
Disclaimer For the purposes of this notice, this “presentation” shall include these slides and any question -and-answer session that follows oral briefings by representatives of Taylor Wimpey plc. This presentation is for information purposes only and 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 and does not constitute a recommendation to sell or buy any such securities, 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 and should not be taken as a representation that trends or activities underlying past performance will continue in the future. No representations or warranties, express or implied, are made as to, and no reliance should be placed on, the accuracy, fairness or completeness of the information presented or contained in this presentation. 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 and Taylor Wimpey accepts no liability should the future results actually achieved fail to correspond to the forward-looking statements included in this presentation. 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 Half Year Results Presentation for the six months to 28 June 2020
Agenda UK operational Financial review Priorities, tactics overview and guidance and outlook Pete Redfern Chris Carney Pete Redfern 3 Half Year Results Presentation for the six months to 28 June 2020
UK operational overview Pete Redfern Chief Executive
Emerging from the crisis in a position of strength Near term Proactive Operational opportunities / management strength and long term through crisis planning strategy • Prioritised health and safety • Decisive and transparent • Resilient business model, decisions to stop and restart long term strategy intact • Positive interactions with operations • Improved flexibility of service customers, employees and - Detailed plan and effective subcontractors for customers communication of site return • Fast mobilisation due to • Equity raise: • Benefit of investments: investment in IT / agile - Buying land at right time to working - Site teams and quality maximise shareholder value - Customer service (protect • Supporting subcontractors - Existing operating structure and grow order book) with Pay It Forward scheme to support land acquisitions • Strong cost discipline and • Delivering PPE to care homes balance sheet throughout and NHS 5 Half Year Results Presentation for the six months to 28 June 2020
Operating overview • Safe and steady return to sites with capacity of c.80% achieved • Production Implications to costs and speed of build likely to be largely limited to 2020 • Continued to open new outlets • IT systems allowed us to successfully work throughout the crisis • Returned to sales offices with strong demand for visits by appointment only Sales • Good sales recovery with average sales rate since reopening of 0.70 per outlet per week • Progress with digital offering and opportunity to do things differently going forward • All major trades back on site and working well under COVID-19 Secure protocols Suppliers and • Enhanced communication and working relationships with suppliers and contractors contractors • No major bottlenecks encountered so far 6 Half Year Results Presentation for the six months to 28 June 2020
Medium to long term structural backdrop remains favourable ● Government recognition of importance of housebuilding to economy ● Welcome steps Government has taken to work with sector during the crisis Political environment ● Sustained desire to increase housebuilding volumes ● Ongoing improvement of planning environment ● Significant impact of crisis on 2020 and 2021 industry volumes Housing ● Prices stable – HPI shown modest increases over recent years, no ‘boom’ to precede a ‘bust’ market and cycle ● Historic low interest rates and supportive mortgage environment ● Unemployment increasing ● Help to Buy changes in pipeline, mitigation in place Risks ● New regulations and policies, particularly around the environment Customer drivers remain solid and risks manageable 7 Half Year Results Presentation for the six months to 28 June 2020
Positive sales momentum and forward indicators First quarter During shutdown Post shutdown pre-shutdown weeks 14-21 weeks 22-30 240 231* 243 Average outlets open 0.97 0.30 0.70 Net private sales rate per outlet per week 15% 29% 30% Cancellation rate (private) 0.8% 0.5% 1.1% Cancellations per week as % of private order book 10,917 11,152 12,014 Order book units 2,688 2,757 3,022 Order book value £m % of order book exchanged 69% 70% 67% • As at 26 July 2020 c.97% forward sold for private completions for 2020 (2019 equivalent period: 87%) and are building our order book for 2021 Customer interest – organic website visits** increased by 50% Appointments booked increased by 206% post shutdown post shutdown 1 4 7 10 13 16 19 22 25 28 31 34 37 40 43 46 49 52 1 4 7 10 13 16 19 22 25 28 31 34 37 40 43 46 49 52 Week number Week number 2018 2019 2020 2018 2019 2020 * All outlets were physically shut down but an average of 231 outlets remained open digitally ** Organic traffic i.e. traffic via a search engine, to our plot and development pages 8 Half Year Results Presentation for the six months to 28 June 2020
NHS and care workers discount scheme H2 2020 Reservations (w/e 26 July 2020) H1 2020 Order book £m 324.4 228.6 Order book units 1,164 830 Order book ASP £000 279 275 H2 2020 Completions (w/e 26 July 2020) H1 2020 Legal completions 42 6 ASP 319 422 • Net private sales rate for the year to date excluding care worker discount scheme is 0.62 9 Half Year Results Presentation for the six months to 28 June 2020
Land – significant near term land market opportunities ● Raised equity of c.£510 million net proceeds to pursue attractive land opportunities over next 6-12 months due to market dislocation ● Number of opportunities and strength of our negotiating position continues to improve ● Ability to add smaller sites at more favourable returns than previously available ● Since recommencing land activity in Q2 2020, we have approved or contracted 26 land deals at a total cost of £346 million ● Average return on capital of c.35% and average operating margin* above c.21-22% medium term target with average site size of 237 plots ● Broad geographical spread across all three divisions ● Opportunities across the South particularly interesting ● Pipeline continues to build, now over 80 sites and almost 30,000 plots under discussion and consideration ● Continuing to focus on geographic spread, smaller sites and delivering attractive returns and margins Our high-quality landbank is a key competitive advantage and value driver, increasing land buying now to benefit shareholder returns over coming years *See definitions slide in the appendix 10 Half Year Results Presentation for the six months to 28 June 2020
Quality additions to a strong landbank ● Approved 5,167 plots in H1 2020 (H1 39.0% 2019: 5,846 plots) at average contribution margin of 28.5% and ROCE 37.0% of 34.8% ● Six sites, with average plots of 166, 35.0% Site based ROCE* approved since the end of June 33.0% ● Short term landbank stood at c.77k plots at the end of June 2020 (Dec 2019: c.76k 31.0% plots) 29.0% ● Strategic land pipeline was c.138k potential plots at the end of June 2020 27.0% (Dec 2019: c.140k potential plots) 25.0% ● Converted 2,501 strategic pipeline plots into the short term landbank in H1 2020 23.0% ● 23.0% 24.0% 25.0% 26.0% 27.0% 28.0% 29.0% 30.0% 55% of H1 2020 completions were Contribution margin* sourced from the strategic land pipeline 2013 2014 2015 2016 2017 2018 2019 2020 At current costs and current selling prices in year of acquisition * See definitions slide in the appendix 11 Half Year Results Presentation for the six months to 28 June 2020
Financial review and guidance Chris Carney Group Finance Director
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