Slide 1: 2023 Half Year Results
2023 HALF YEAR RESULTS 27 JULY 2023
Slide 2: Consistent strategy delivering strong results
CONSISTENT STRATEGY DELIVERING STRONG RESULTS +1.9% Adjusted earnings per share -1.4% Portfolio valuation +7.4% Dividend per share +3.7% ERV growth -3.0% Adjusted NAV per share £551m Net investment 34% LTV ratio £44m New rent contracted Uplift on rent reviews and 2.9% Cost of Debt +20% renewals 7.5
Slide 3: We create the space that enables extraordinary things to happen
WE CREATE THE SPACE THAT ENABLES EXTRAORDINARY THINGS TO HAPPEN Attractive Strong Resilient Positive market operational financial outlook fundamentals results performance
Slide 4: We create the space that enables extraordinary things to happen
WE CREATE THE SPACE THAT ENABLES EXTRAORDINARY THINGS TO HAPPEN Attractive Strong Resilient Positive market operational financial outlook fundamentals results performance
Slide 5: Long-term structural drivers supporting diverse occupier demand
LONG-TERM STRUCTURAL DRIVERS SUPPORTING DIVERSE OCCUPIER DEMAND DATA & URBANISATION DIGITALISATION SUPPLY CHAIN EFFICIENCY & SUSTAINABILITY RESILIENCE 5
Slide 6: Supply-demand balance remains favourable
SUPPLY-DEMAND BALANCE REMAINS FAVOURABLE European take-up1 normalising to historical averages, Available space remains less than 1 year of take-up2 vacancy2 remains low Years of supply 0.4 0.4 0.3 0.5 0.2 0.6 0.3 45 7 7 40 6 6 35 5 5 Take-up, million sq m 30 Millions, sq m Vacancy, % 25 4 4 20 3 3 1
Slide 7: Investment volumes low but activity returning and yields stable in Q2 2023
INVESTMENT VOLUMES LOW BUT ACTIVITY RETURNING AND YIELDS STABLE IN Q2 2023 European industrial investment volumes1 European industrial prime yields1 70 6 60 5.3% 5 50 4.5% By quarter, €bn 40 4 4.0% % 30 20 3 10 2 2018 2019 2020 2021 2022 2023 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 20
Slide 8: We create the space that enables extraordinary things to happen
WE CREATE THE SPACE THAT ENABLES EXTRAORDINARY THINGS TO HAPPEN Attractive Strong Resilient Positive market operational financial outlook fundamentals results performance
Slide 9: Strong and diverse leasing activity, outperforming broader market
STRONG AND DIVERSE LEASING ACTIVITY, OUTPERFORMING BROADER MARKET Contracted rent1 70 60 Annualised rental income, £m 50 40 30 20 10 0 1H16 2H16 1H17 2H17 1H18 2H18 1H19 2H19 1H20 2H20 1H21 2H21 1H22 2H22 1H23 Existing space Developments 1 New rent contracted is total headline rent secured or (in th
Slide 10: Capturing reversion, maintaining occupancy
CAPTURING REVERSION, MAINTAINING OCCUPANCY Strong uplift from renewals and reviews High levels of customer retention and occupancy2 (excluding indexation)1 Occupancy 96% 100 25 Customer retention rate and occupancy rate, % 90 +23% Rent change on review and renewal, % 80 20 +19% +20% +18% 70 Retentio
Slide 11: Creating value through asset management
CREATING VALUE THROUGH ASSET MANAGEMENT SEGRO Park Tottenham, UK SEGRO Logistics Park Krefeld Süd, Germany Responding to changing customer requirements Capturing reversion through asset management SEGRO Park Greenford, UK SEGRO Logistics Park Granollers, Spain Highly sustainable refurbishments Retro
Slide 12: Profitable growth through development
PROFITABLE GROWTH THROUGH DEVELOPMENT Development completions H2 70 estimate £28m 60 potential headline rent (83% leased) Potential new headline rent, £m 50 340,900 sqm 40 of new space completed (18 projects) 30 6.1% yield on cost1 20 10 85% rated BREEAM ‘Excellent’ or better 0 (or local equivalent)
Slide 13: Continuing to be disciplined in our approach to capital allocation
CONTINUING TO BE DISCIPLINED IN OUR APPROACH TO CAPITAL ALLOCATION DEVELOPMENT ACQUISITIONS DISPOSALS • Developing on land we already own • Limited to rare, super prime opportunities • Capex increasingly funded by selective disposals • Yield on new money: c.10% • Strong bias to pre-let developments
Slide 14: We create the space that enables extraordinary things to happen
WE CREATE THE SPACE THAT ENABLES EXTRAORDINARY THINGS TO HAPPEN Attractive Strong Resilient Positive market operational financial outlook fundamentals results performance
Slide 15: Resilient H1 2023 financial results
RESILIENT H1 2023 FINANCIAL RESULTS £198m 15.9p 8.7p Adjusted profit before tax1 Adjusted earnings per share1,2 Dividend per share +2.6% +1.9% +7.4% £18.1bn 937p 34% Portfolio valuation Adjusted NAV per share4 Loan to value -1.4%3 -3.0% 1 Adjusted profit before tax and Adjusted earnings per share ha
Slide 16: 12% growth in net rental income
12% GROWTH IN NET RENTAL INCOME Proportionally consolidated net rental income (excluding joint venture fees) Like for like NRI Group +5.1% +£2m +£21m £286m Reversion UK +4.3% Indexation CE +6.4% -£4m JVs £62m +£12m Proportion ally £255m consolidate d net rental income (excluding joint venture fees),
Slide 17: 5.1% like-for-like income growth driven by capturing reversion and indexation
5.1% LIKE-FOR-LIKE INCOME GROWTH DRIVEN BY CAPTURING REVERSION AND INDEXATION Components of like-for-like net rental income +£12.2m Net lettings: +£7.1m Lettings +£9.7m Takebacks -£7.0m +£5.5m Total cost ratio1: Broadly flat at 20.4%, 18.8% excl share based +£2.7m payments -£3.1m Net lettings Rent r
Slide 18: Driving 2% increase in earnings
DRIVING 2% INCREASE IN EARNINGS Adjusted income statement H1 2023 H1 20221 Change £m £m Gross rental income 266 239 Property operating expenses (42) (36) Net rental income 224 203 +10% Joint venture management fee income 16 15 Other income 3 3 SELP performance fee: • No performance fee recognised du
Slide 19: H1 2023 values relatively stable
H1 2023 VALUES RELATIVELY STABLE Portfolio value at 30 June 2023: £18.1 billion (at share) Portfolio UK Continental Europe -1.4% -0.6% -2.7% Whole portfolio valuation change, £m £0m (£500m) 650p (£1,000m) H1 2023 (£1,500m) FY 2022 (£2,000m) (£2,500m) Total London Thames Valley UK Big Box Germany Fra
Slide 20: Yield expansion largely offset by rental growth
YIELD EXPANSION LARGELY OFFSET BY RENTAL GROWTH Property yield1: 5.1% Yield change ERV growth2: +3.7% 31 December 2022: 4.8% London 4.7% +10bps +2.5% Thames UK: Valley 5.4% +10bps +4.5% +3.0% National Logistics 5.4% +10bps +2.3% Germany 4.5% +20bps +4.8% France 5.3% +50bps +5.4% Cont. Eur: Italy 5.2
Slide 21: Balance sheet remains strong
BALANCE SHEET REMAINS STRONG LTV ratio and average cost of debt £1.7bn committed liquidity (incl share of joint ventures), 2014-23 cash and available bank facilities 60% 5.0% A- (Fitch senior unsecured) 4.2% credit rating 3.5% 4.0% 12.2x 3.4% net debt/EBITDA1 Average cost of debt 40% 2.9% 3.0% 2.5%
Slide 22: Low refinancing risk
LOW REFINANCING RISK Diverse, long duration debt profile (as at 30 June 2023) 2,000 Debt maturity 7.5 years 1,800 (FY22: 8.6 years) 1,600 1,400 Interest rate exposure 1,200 76% fixed, 91% fixed or capped £ million 1,000 800 600 400 200 0 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 20
Slide 23: H1 2023 financial summary
H1 2023 FINANCIAL SUMMARY 5.1% like-for-like rental growth and 1.9% adjusted earnings growth 2023 half year dividend increased by 7.4% 1.4% decrease in the value of the portfolio Balance sheet remains strong 23 SEGRO Logistics Park Leipzig Airport, Germany
Slide 24: We create the space that enables extraordinary things to happen
WE CREATE THE SPACE THAT ENABLES EXTRAORDINARY THINGS TO HAPPEN Attractive Strong Resilient Positive market operational financial outlook fundamentals results performance
Slide 25: A prime portfolio of assets and a pan-European operating platform
A PRIME PORTFOLIO OF ASSETS AND A PAN-EUROPEAN OPERATING PLATFORM Portfolio split by geography and asset type (at 30 June 2023) Other £1.2bn Poland £1.3bn Italy London £1.6bn £6.3bn AUM France £2.6bn £21.0bn Germany Thames Valley £2.8bn £3.2bn National Logistics £2.0bn Other (2%) Urban (66%) Big box
Slide 26: A very diversified customer base
A VERY DIVERSIFIED CUSTOMER BASE Customer sectors (headline rent, SEGRO share) 1,444 customers Other Services & 6% ultilities 7% Transport and logistics Top 20 customers = Technology, Media and Telecoms 23% 32% of total group 10% Wholesale and headline rent Retail Distribution 10% Retail 20% Manufac
Slide 27: £147m reversionary potential to be captured
£147M REVERSIONARY POTENTIAL TO BE CAPTURED Accumulated reversion to ERV in the portfolio1 Portfolio 24% reversionary 150 130 £57m uplift opportunity over next 18 months 110 Reversion to ERV, £m 90 70 50 30 10 -10 2016 2017 2018 2019 2020 2021 2022 1H23 Continental Europe UK 1 Reversion on let space
Slide 28: ERV growth expectations unchanged
ERV GROWTH EXPECTATIONS UNCHANGED Like-for-like ERV growth Demand-supply conditions remain favourable for continued rental growth 20 18 ERV growth remains above pre- pandemic levels 16 Like-for-like ERV growth, % 14 12 No change to future expectations 10 8 6 SEGRO 4 ERV growth expectations 2 0 2016
Slide 29: >£550 million of potential rental income from future development
>£550 MILLION OF POTENTIAL RENTAL INCOME FROM FUTURE DEVELOPMENT SEGRO land bank (30 June 2023) gross rent (£m) Estimated cost Development Development to complete Proportion Expected Potential delivery pipeline pre-let (sq m) yield3 (£m) Area 1-12 Current 616,464 2712 66 7.2% 65% months Near-term 12
Slide 30: Potential >£1.4 billion rental income
POTENTIAL >£1.4 BILLION RENTAL INCOME Annualised gross cash passing rent1, £ million (as at 30 June 2023) £316m potential from current activity £510m from land bank (£365m capex required) and land options 150 4 +137% 4 360 66 10 +52% 185 147 1,431 55 921 Plus: further growth potential from Plus: fur
Slide 31: SEGRO structurally advantaged to outperform
SEGRO STRUCTURALLY ADVANTAGED TO OUTPERFORM Supportive structural trends On track for another strong year of rent roll growth Restricted Strong land balance availability sheet limits supply response Significant embedded growth within our portfolio Market leading pan-European Prime operating portfoli
Slide 32: Q&A
Q&A 2023 Half Year Results SEGR°
Slide 33: Appendix
APPENDIX Portfolio and Financial Data
Slide 34: Adjusted income statement
ADJUSTED INCOME STATEMENT (JVS PROPORTIONALLY CONSOLIDATED) H1 2023 H1 20221 Group JVs Total Group JVs Total £m £m £m £m £m £m Gross rental income 266 66 332 239 56 295 Property operating expenses (42) (4) (46) (36) (4) (40) Net rental income 224 62 286 203 52 255 JV management fee income2 16 (6) 10
Slide 35: Pro forma H1 2023 accounting net rental income
PRO FORMA H1 2023 ACCOUNTING NET RENTAL INCOME Group JVs Total Pro forma H1 2023 net rental income assuming £m £m £m disposals, acquisitions and let developments completed as at 1 January 2023 H123 net rental income 224 62 286 Half year impact of: One-off items (e.g. rates refunds) removed Disposals
Slide 36: Total cost ratio
TOTAL COST RATIO Total cost ratio, Half year 2022-23 (proportionally consolidated) Half year to 30 Half year to 30 Incl. joint ventures at share June 2023 June 2022 £m £m Gross rental income (less reimbursed costs) 331 294 Property operating expenses 42 36 Administration expenses 33 31 JV operating
Slide 37: Balance sheet
BALANCE SHEET (JVS PROPORTIONALLY CONSOLIDATED) 30 June 2023 31 December 2022 Group JVs Total Group JVs Total £m £m £m £m £m £m Investment properties 15,234 2,929 18,163 14,939 3,022 17,961 Trading properties 2 - 2 35 - 35 Total properties 15,236 2,929 18,165 14,974 3,022 17,996 Investment in joint
Slide 38: 3% decrease in adjusted NAV
3% DECREASE IN ADJUSTED NAV1 Components of Adjusted NAV change, 31 December 2022 to 30 June 2023 +16p -20p -22p -3p Standing assets: -21p 966p Land & development: -1p 937p 31 December 2022 H1 2023 Adjusted EPS Dividends Realised and unrealised Exchange rate and other 30 June 2023 gains 1 Adjusted NA
Slide 39: EPRA performance measures
EPRA PERFORMANCE MEASURES Half year to 30 June 2023 Half year to 30 June 2022 £m £p per share £m £p per share EPRA Earnings 193 15.9 204 16.9 EPRA NTA (Adjusted NAV) 11,500 937 15,139 1,249 EPRA NRV 12,669 1,032 16,520 1,363 EPRA NDV 11,983 976 15,257 1,259 EPRA LTV 36.1% 25.3% EPRA net initial yiel
Slide 40: EPRA capital expenditure analysis
EPRA CAPITAL EXPENDITURE ANALYSIS Six months to 30 June 2023 Six months to 30 June 2022 - Just over 63% of completed properties capex was for major Group JVs Total Group JVs Total refurbishment, infrastructure and fit- £m £m £m £m £m £m out costs prior to re-letting which is Acquisitions 323 3 326 3
Slide 41: Euro currency exposure and hedging
EURO CURRENCY EXPOSURE AND HEDGING Balance sheet, £m - €1.16:£1 as at 30 June 2023 (30 June 2023) - € assets 77% hedged by € liabilities 7,000 6,000 - €1,584m (£1,365m) of residual exposure – 12% of Group NAV Assets 77% - Illustrative NAV sensitivity vs €1.16: 5,000 hedged 4,000 - +5% (€1.22) = -£65
Slide 42: Look-through loan-to-value ratio and cost of debt
LOOK-THROUGH LOAN-TO-VALUE RATIO AND COST OF DEBT 30 June 2023 Weighted average cost of debt Fixed Interest Cover £m % % Gross debt, Net debt, including excluding Fixed and Capped cover commitment fees and Fixed Cover of Net debt commitment fees of net debt non-cash interest and non-cash interest Gr
Slide 43: Urban and big box warehouses – complementary asset types
URBAN AND BIG BOX WAREHOUSES – COMPLEMENTARY ASSET TYPES Urban warehouses (66%) Big boxes (32%) Portfolio by type: - Smaller units, generally <10,000 sq m - Larger units, generally over 10,000 sq m (valuation, SEGRO share) Data as at 30 June 2023 - Diverse range of uses (including ‘last mile’ - Main
Slide 44: Enhanced, de-risked development programme
ENHANCED, DE-RISKED DEVELOPMENT PROGRAMME Development-led growth1 The majority of which is pre-let 900 100% 800 700 80% Development capex, £m 600 60% 500 400 40% 300 200 20% 100 0 0% 1H23 2012 2013 2014 2015 2016 2017 2018 2019 2021 2022 1H23 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 Pre-let
Slide 45: Land bank provides optionality and opportunity for growth
LAND BANK PROVIDES OPTIONALITY AND OPPORTUNITY FOR GROWTH 2,000 12% Net land utilisation, 2015-1H23 1,800 (Based on opening book value or acquisition value) 10% 800 433 1,600 600 1,400 Land bank value, £m 8% 400 (40) 238 86 Land value, £m 1,200 135 68 (28) 200 (84) (118) 1,000 6% 0 800 -200 4% 600 -
Slide 46: SEGRO European Logistics Partnership (SELP) headline figures
SEGRO EUROPEAN LOGISTICS PARTNERSHIP (SELP) HEADLINE FIGURES Assets under Management Land and assets Equivalent yield (as at 30 June 2023) €6.8bn 5.1% 2.2 €1,965m Capital value change ERV growth 2.0 Assets under management, €bn 1.8 €1,551m -2.4% 5.4% 1.6 1.4 €1,157m €1,203m Headline rent ERV 1.2 1.0
Slide 47: Positioning SEGRO to deliver on its purpose
POSITIONING SEGRO TO DELIVER ON ITS PURPOSE Investing in our local Championing Low-carbon growth Nurturing talent communities and environments Segro recognises that the world faces a climate SEGRO is an integral part of the communities in SEGRO’s people are vital to and inseparable from emergency an
Slide 48: Forward-looking statements and disclaimer
FORWARD-LOOKING STATEMENTS AND DISCLAIMER This document has been prepared by SEGRO plc (SEGRO) solely for use at the presentation of SEGRO’s results announcement in respect of the period ended 30 June 2023 (the Results Announcement). For the purposes of this disclaimer, ‘Presentation’ shall mean thi