SEGRO plc · LSE:SGRO
SEGRO — Investor Presentation (October 2005)
37 slides from SEGRO's investor presentation, October 2005
Slide 1: SEUSA Life Sciences Strategy - Agenda
SEUSA Life Sciences Strategy - Agenda 1. Welcome and Introduction Ian Coull (Group CEO) 2. U.S. Strategy – Background & Overview Marshall Lees (SEUSA – President) 3. Bay Area Life Sciences Overview Chris Jacobs Dino Perazzo (CB Richard Ellis) 4. Financial Summary and Performance Randy Rohner (SEUSA
Slide 2: US Strategy – Slough Estates USA, October 2005
US Strategy Slough Estates USA October 2005
Slide 3: Background/Overview
SEUSA Life Sciences Strategy – Background/Overview o Early 1990s – Re-evaluation of Slough U.S. Strategy o Competition vs. Fee Developers o Focus on Unique Attributes / Strengths o Growth of Life Science Industry
Slide 4: Real Estate Drivers
SEUSA Life Sciences Strategy – Real Estate Drivers o Demographics o Economics – Macro o Lifestyle – Healthcare o Industry Growth & Development
Slide 5: Demographics: USA Population Profile
Demographics USA Population Profile (Millions) 410.0 360.0 310.0 260.0 210.0 160.0 110.0 60.0 10.0 2000 2010 2020 2030 2040 2050 Year Population >65 Years Old U.S. Population
Slide 6: Demographics: Over 65 Years % of Population
Demographics > 65 Years % Total U.S. Population 25.0% 20.0% 15.0% 10.0% 5.0% 0.0% 2000 2010 2020 2030 2040 2050 Years
Slide 7: Economics: Real U.S. GDP
Economics Real U.S. GDP (1974 - 2004) ($ Trillions) $12,000 $11.0 $10,000 $8.0 $8,000 $5.9 $6,000 $4.2 $4,000 $2,000 $0 1974 1984 1994 2004 Year
Slide 8: Real GDP Per Capita (USA)
Economics Real GDP Per Capita (USA) $12,000 $10,000 $8,000 $6,000 $4,000 $2,000 $0 1974 1984 1994 2004 Year
Slide 9: National Health Spend % GDP (USA)
Healthcare Economics National Health Spend % GDP (USA) 20.00% 16.00% 12.00% 8.00% 4.00% 0.00% 1993 1998 2002 2006 2014 Year
Slide 10: Real National Health Spend Per Capita (USA)
Healthcare Economics Real National Health Spend Per Capita (USA) $12,000 $10,000 $8,000 $6,000 $4,000 $2,000 $0 1993 1998 2002 2006 2014 Year
Slide 11: Spend on Prescription Drugs (USA)
Healthcare Economics Spend on Prescription Drugs (USA) ($ Billions) $600.0 $500.0 $400.0 $300.0 $200.0 $100.0 $0.0 1993 1998 2002 2006 2014 Year
Slide 12: Biotechnology Patents Granted (USA)
Biotech Statistics Biotechnology Patents Granted (USA) 8000 7000 6000 5000 4000 3000 2000 1000 0 1989 1991 1993 1995 1997 1999 2001 Year
Slide 13: Drug/Vaccine & New Indication Approvals (USA)
Biotech Statistics Drug/Vaccine & New Indication Approvals (USA) 40 35 30 25 20 15 10 5 0 1989 1991 1993 1995 1997 1999 2001 2003 Year
Slide 14: Industry - Attributes
SEUSA Life Sciences Industry - Attributes o Rapidly-growing industry o Proliferation of new companies o Science and technology driven o “Infinite” product, technology and market potential o Convergence o Real Estate Fundamentals – v Supply constrained / Demand growth v Locationally clustered v Gener
Slide 15: Life Sciences Industry Convergence
Life Sciences Industry Convergence INTEGRATION INVESTMENT INDUSTRY METHODOLOGY OF TECHNOLOGIES CAPITAL Pharmaceutical Traditional Chemistry • Computing Institutionalization Companies and Biology • Robotics • Mechanical Industry Credibility Molecular Sciences Engineering • Electrical Engineering Biot
Slide 16: Growth of US Biotechnology Industry (1994 – 2003)
Growth of US Biotechnology Industry (1994 – 2003) ($ BILLIONS) 1994 2003 % Per Annum Sales $7.7 $28.4 15.6 Revenues $11.2 $39.2 14.9 R&D Expense $7.0 $17.9 11.0 Market Cap $45.0 $311.0 24.0 # Public Companies 265 314 -- # Companies 1,311 1,473 -- # Employees 103,000 198,300 -- # Cummulative Drug 52
Slide 17: Indices
Indices INDICES - Jan 1995 = 100 1200 Index Jan '95 = 100 1000 800 600 400 200 0 95 00 05 19 20 20 Year AMEX Biotech AMEX Pharma Index DJA Industrial DJA Composite NASDAQ Composite
Slide 18: Biotech's Big Boys – Market Capitalization (Sept. 2005)
Biotech’s Big Boys – Market Capitalization (Sept. 2005) ($ Bns) Amgen AMGN 99.1 Genentech DNA 100.6 Genzyme GENZ 18.4 Biogen IDEC BIIB 14.5 Agilent Technologies A 15.9 Gilead Sciences GILD 19.6 Medimmune MEDI 7.3 Chiron CHIR 8.1 Sepracor SEPR 5.3 Invitrogen IVGN 4.5 TOP 50 $349.5
Slide 19: The Biotech Risk Continuum – Elements of Risk
The Biotech Risk Continuum – Elements of Risk Industry Financing Physical Product (Seismic) BIOTECH REAL ESTATE Market Location DEVELOPMENT & OWNERSHIP Real General Estate Economic Business
Slide 20: The Biotech Risk Continuum – Elements of Risk
The Biotech Risk Continuum – Elements of Risk DECREASING • Proximity of clusters • Access to specialized labour • Sources of funding RISK • Lease economics Slough Target Area INCREASING • Product specialization • Product financial exposure • Concentration of product(s) and technology platforms FACTO
Slide 21: Target Market
SEUSA Life Sciences Strategy – Target Market o Access firms with ‘beyond proof of concept’ achievements o More sophisticated and complex in terms of product(s), technology(ies), platform(s) and financing. o Prefer at least two or more vectors of R&D (product/technology) except device companies o Exc
Slide 22: Organization – Virtual Integration
Organization – Virtual Integration M. LEES R. ROHNER J. BERGSCHNEIDER Accounts Admin S. M. Ramamoorthy J. Safran A. Law K O’ O ’Brien A. Chung SERVICE COMPANIES Bay Area San Diego Project Management Project Management Advisors Project Management Project Management Advisors Property Management Britan
Slide 23: Managing Change: Portfolio Breakdown
SEUSA Life Sciences Strategy – Managing Change PORTFOLIO BREAKDOWN (Area – 000’s sf) Dec 1995 Dec 2000 Jun 2005 Regional Breakdown Florida 502 --- --- Virginia 89 --- --- Georgia 208 --- --- Illinois 2,846 1,355 199 California • East Bay 671 1,294 1,294 • SF Peninsula --- 1,182 2,882 • San Diego 422
Slide 24: Managing Change: Balance Sheet
SEUSA Life Sciences Strategy – Managing Change BALANCE SHEET - Unaudited ($ Millions) Dec 1995 Dec 2000 Jun 2005 Real Estate • Direct $193 $632 $1,490 • JVs $ 16 $ 42 $ 72 Sub Total Real Estate $209 $674 $1,562 Other * $ 99 $198 $ 128 Total Assets $308 $872 $1,690 Memo: • Total Liabilities $188 $425
Slide 25: Transaction History: Sale Proceeds
SEUSA Life Sciences Strategy – Transaction History Sale Proceeds $ Mns Excess Pleasanton Portfolio (764,000 Sq Ft) Sale Proceeds - October 2005 * $ 179 Valuation prior to Sale $ 137 30.7% Cumulative Cost $ 86 208.1% * Subject to completion Torrey Pines Pfizer Campus (772,000 Sq Ft) Sale Proceeds - O
Slide 26: Cash Flow Summary
SEUSA Life Sciences Strategy – Cash Flow Summary ($ Millions) 2000 2001 2002 2003 2004 2005 LE Cumulative Core Property EBITDA 39.4 46.8 68.9 74.3 86.5 142.0 * 458.0 Property Sales 1.1 39.1 0.6 2.3 373.3 125.0 541.3 Property Acquisitions Raw Land (70.2) 0.0 0.0 0.0 (47.8) (36.0) (154.0) Existing Bui
Slide 27: Leasing Performance
SEUSA Life Sciences Strategy – Leasing Performance (Cumulative 2000 – 2005 LE) (000s SF) Beginning Vacancy – January 2000 189 Completed Construction 1,949 Purchase Vacant Buildings 368 Sale of Vacant Buildings (220) Redundant Space / Other Adjustments (384) Absorption New Buildings / New Space 1,732
Slide 28: Leasing Performance: Vacancy Rate
SEUSA Life Sciences Strategy – Leasing Performance Leasing Performance 25.0% 20.0% Vacancy Rate 15.0% 10.0% 5.0% 0.0% 2000 2001 2002 2003 2004 2005 Year End
Slide 29: Opportunity Space Profile
SEUSA Life Sciences Strategy – Opportunity Space Profile Opportunity Space Profile 900,000 800,000 700,000 600,000 Vacancy (Sq Ft) 500,000 Redevelopment 400,000 New Space 300,000 Existing Space 200,000 100,000 0 2000 2001 2002 2003 2004 2005 Year End
Slide 30: Available Space (30 – Sept – 05)
SEUSA Life Sciences Strategy – Available Space (30 – Sept – 05) % of Total % of Square Feet Voids Portfolio South San Francisco Britannia Oyster Point - Bld D 81,250 7.8% 1.8% Britannia Modular Labs I 64,903 6.2% 1.4% 494 Forbes 162,838 15.6% 3.5% Total SSF 308,991 29.5% 6.7% Mid -Peninsula Seaport
Slide 31: Available Space (30 – Sept – 05) – continued
SEUSA Life Sciences Strategy – Available Space (30 – Sept – 05) – continued % of Total % of Square Feet Voids Portfolio Poway 14250 Kirkham 125,000 11.9% 2.7% 14170 Kirkham 80,00 7.6% 1.7% 14200 Kirkham 76,000 7.3% 1.6% Total Poway 281,000 26.8% 6.1% Torrey Pines Torrey Pines Science Park 96,508 9.2
Slide 32: Available Space – Voids by Type
SEUSA Life Sciences Strategy – Available Space (30 – Sept – 05) – continued % of Total % of Summary - Voids by Type Square Feet Voids Portfolio New Space 427,153 40.8% 9.2% Redevelopment Space 207,236 19.8% 4.5% Redundant Space 162,838 15.6% 3.5% Existing Space 249,345 23.8% 5.4% Total Available Spa
Slide 33: Profit Before Tax
SEUSA Life Sciences Strategy – Profit Before Tax Actual PBT $160,000,000 $140,000,000 $120,000,000 $100,000,000 Millions $80,000,000 $60,000,000 $40,000,000 $20,000,000 $0 1997 1998 1999 2000 2001 2002 2003 2004 2005 * Year * Estimate including surrender premium of $68m
Slide 34: Profit Before Tax (Excl. Sugen)
SEUSA Life Sciences Strategy – Profit Before Tax (Excl. Sugen) PBT Excluding Sugen Break Fee $100,000,000 $90,000,000 $80,000,000 $70,000,000 Millions $60,000,000 $50,000,000 $40,000,000 $30,000,000 $20,000,000 $10,000,000 $0 1997 1998 1999 2000 2001 2002 2003 2004 2005 Est Year
Slide 35: Profit Before Tax (w/ Pfizer)
SEUSA Life Sciences Strategy – Profit Before Tax (w/ Pfizer) PBT With Pfizer added back $120,000,000 $100,000,000 $80,000,000 $ Millions $60,000,000 $40,000,000 $20,000,000 $0 1997 1998 1999 2000 2001 2002 2003 2004 2005 Year Est Actual PBT Previously Contracted Pfizer Income
Slide 36: Lease Expiration Profile
SEUSA Life Sciences Strategy – Lease Expiration Profile SEUSA Lease Expiration Profile 800,000 700,000 Expiring Area (Sq. Ft.) 600,000 500,000 400,000 300,000 200,000 100,000 0 200 200 200 200 200 201 201 201 201 201 201 201 201 201 201 202 202 5 6 7 8 9 0 1 2 3 4 5 6 7 8 9 0 1 Year Lease expiration
Slide 37: Contracted Rents Profile
SEUSA Life Sciences Strategy – Contracted Rents Profile Contracted Rents by Business Park by Year $140,000,000 $120,000,000 TPSP $100,000,000 TPSC Total Rents $80,000,000 BOP Gateway $60,000,000 BEG $40,000,000 Pt Grand $20,000,000 Seaport Shoreline $- Pt Eden 5 6 7 8 9 0 1 2 3 4 5 200 200 200 200 2