Slide 1: 2020 Full Year Results
2020 FULL YEAR RESULTS 19 February 2021
Slide 2: We create the space that enables extraordinary things to happen
WE CREATE THE SPACE THAT ENABLES EXTRAORDINARY THINGS TO HAPPEN Strong financial Record Investing to Confident results operating support further outlook performance growth
Slide 3: The SEGRO Centenary Fund
THE SEGRO CENTENARY FUND £10 million of funding over 10 years to make a positive impact across our local communities across the UK and Continental Europe - 2020 funding aimed at supporting those impacted by the Covid-19 pandemic - £967,000 of funding - 100 charities - Helping more than 77,000 people
Slide 4: Positioning SEGRO to deliver on its purpose
POSITIONING SEGRO TO DELIVER ON ITS PURPOSE Championing LOW-CARBON GROWTH Investing in our local COMMUNITIES and ENVIRONMENTS Nurturing TALENT 4
Slide 5: We create the space that enables extraordinary things to happen
WE CREATE THE SPACE THAT ENABLES EXTRAORDINARY THINGS TO HAPPEN Strong financial Record Investing to Confident results operating support further outlook performance growth
Slide 6: Strong financial results
STRONG FINANCIAL RESULTS £297m 25.4p 22.1p Adjusted profit before tax Adjusted earnings per share Dividend per share +10.8% +4.1% +6.8% £13bn 814p 24% Portfolio valuation Adjusted NAV per share Loan to value +10.3% +16.3% 1 Average number of shares increased to 1,149.8 million as of 31 December 2020
Slide 7: Consistently delivering strong returns
CONSISTENTLY DELIVERING STRONG RETURNS Passing Rent Adjusted NAV1 per share 500 900 Adjusted NAV per share, 450 800 Passing rent, £m 400 700 350 pence 600 300 462 814 250 350 378 500 650 700 324 556 288 400 200 478 150 300 2016 2017 2018 2019 2020 2016 2017 2018 2019 2020 Adjusted earnings per share
Slide 8: 9.3% growth in net rental income
9.3% GROWTH IN NET RENTAL INCOME Proportionally consolidated net rental income (excluding joint venture fees), 2019-20, £ million (excl bad debt £31.0m Like for like NRI provisions) £7.4m £394.7m Group +2.1% +2.9% £(0.5)m UK +0.9% +2.0% JVs £(10.9)m £90.1m CE +4.3% +4.6% £6.7m £361.0m JVs £79.7m Gro
Slide 9: 10.8% increase in adjusted PBT
10.8% INCREASE IN ADJUSTED PBT Adjusted income statement 2020 2019 Change £m £m Gross rental income 392.9 362.0 Property operating expenses (88.3) (80.7) Net rental income 304.6 281.3 +8.3% Share of joint ventures’ adjusted profit after tax1 61.5 54.0 Joint venture fee income 21.6 20.4 Total cost ra
Slide 10: 16.3% increase in adjusted NAV
16.3% INCREASE IN ADJUSTED NAV1 Components of Adjusted NAV change, 31 December 2019 to 31 December 2020 7p 4p 101p 814p (1)p 24p (21)p 700p 700p Standing assets: 75p Land & development: 26p 31 December 2019 2020 Dividends Realised and Early repayment of Issue of shares Exchange rate and 31 December
Slide 11: £1.2 billion valuation surplus
£1.2 BILLION VALUATION SURPLUS Portfolio UK Continental Europe +10.3% +9.6% +11.5% £1,400m Whole portfolio valuation uplift £1,200m £1,000m 650p £800m £600m £400m £200m £0m Total London Slough UK Big Box Germany France Poland Italy Spain Held throughout 9.5% 10.0% 6.8% 10.2% 18.1% 9.8% 2.1% 5.7% 9.4
Slide 12: Driven by yield shift, asset management and rental growth
DRIVEN BY YIELD SHIFT, ASSET MANAGEMENT AND RENTAL GROWTH1 Property yield2: 4.5% ERV growth: 2.5% London 4.0% +3.2% London ERV Thames 4.7% +3.7% UK: Heathrow +2.1% Valley +3.1% Park Royal +4.6% National +1.8% 4.6% N&E London +3.4% Logistics Germany 4.1% +2.4% Continental Europe (by owner) ERV France
Slide 13: £1.1bn of new financing: balance sheet positioned to support growth
£1.1BN1 OF NEW FINANCING: BALANCE SHEET POSITIONED TO SUPPORT GROWTH SEGRO equity placing 7.5% of share capital at 820p per share £680m gross proceeds SEGRO US private placement 16.8 year average duration, 1.6% average coupon €450m of new debt SEGRO sterling bond buyback £79.3m 6.75% 2021 Redemption
Slide 14: Balance sheet positioned to support further growth
BALANCE SHEET POSITIONED TO SUPPORT FURTHER GROWTH LTV ratio and average cost of debt Net debt £3.1bn (incl share of joint ventures), 2012-20 (FY 2019: £2.5bn) 60% 4.6% 5.0% Debt maturity 9.9 years 4.2% 4.2% (from 10.0 years at end-2019) 3.5% 4.0% 3.4% Average cost of debt 40% £1.2bn liquidity 3.0%
Slide 15: Strong financial results
STRONG FINANCIAL RESULTS Strong earnings growth driven by record lettings and development 10.3% increase in the value of the portfolio £1.1bn of new financing to fund future growth 2020 full year dividend increased by 6.8% 15 SEGRO Park Enfield, London
Slide 16: We create the space that enables extraordinary things to happen
WE CREATE THE SPACE THAT ENABLES EXTRAORDINARY THINGS TO HAPPEN Strong financial Record Investing to Confident results operating support further outlook performance growth
Slide 17: Acceleration of structural drivers
ACCELERATION OF STRUCTURAL DRIVERS E-commerce penetration increased significantly during 2020 Source: CBRE 35 France Germany Italy Forecast 30 Netherlands Spain UK Internet share of all retail (%) DIGITALISATION SUPPLY CHAIN 25 OF OUR EFFICIENCY & 20 ECONOMIES RESILIENCE 15 10 5 0 2020e 2021e 2022e
Slide 18: Customers at the heart of our business
CUSTOMERS AT THE HEART OF OUR BUSINESS 99% of our customers would recommend SEGRO to others SEGRO Customer Helpdesk Customer Futures Forum 87% of our customers rate 91% of the pre-lets in the their experience with current development SEGRO as ‘very good’ pipeline are with an or ‘excellent’ existing
Slide 19: Strong operational metrics
STRONG OPERATIONAL METRICS High levels of customer retention Capturing reversion from Record leasing performance3 and continued low vacancy1 renewals and reviews2 90 9 95 80 Rent change on review and renewal, % 25 90 Annualised rental income, £m 70 8 85 +19.1% 20 +17.8% 60 Customer retention rate, %
Slide 20: Record year of development
RECORD YEAR OF DEVELOPMENT 50 835,900 sqm of new space completed 45 40 47 Potential new headline rent, £m 35 projects 30 25 £47m potential headline rent (84% leased) 20 15 6.8% average yield on cost 10 5 93% 0 targeting BREEAM ‘Excellent’ or ‘Very Good’ 2014 2015 2016 2017 2018 2019 2020 (or local e
Slide 21: 47 projects completed on schedule
47 PROJECTS COMPLETED ON SCHEDULE TO HELP OUR CUSTOMERS RESPOND TO INCREASED DEMAND SEGRO Park Enfield, North London SEGRO Park Kettering, UK Midlands SEGRO Park Collégien, Paris SEGRO Logistics Park Getafe, Madrid SEGRO CityPark Frankfurt SEGRO Logistics Park Warsaw
Slide 22: Continued momentum in the development pipeline
CONTINUED MOMENTUM IN THE DEVELOPMENT PIPELINE 838,100 sqm under construction 38 SEGRO Logistics Park – EMG SEGRO Park Rainham Phase 2 developments £54m potential rent (66% leased) 6.5% SEGRO CityPark Cologne SEGRO Business Park Ozarow average yield on cost Novara DC1 SEGRO Park St Esteve 22
Slide 23: Leading on environmental sustainability
LEADING ON ENVIRONMENTAL SUSTAINABLITY SEGRO Park Amsterdam Airport SEGRO Park Tottenham 23
Slide 24: We create the space that enables extraordinary things to happen
WE CREATE THE SPACE THAT ENABLES EXTRAORDINARY THINGS TO HAPPEN Strong financial Record Investing to Confident results operating support further outlook performance growth
Slide 25: A record year – £1.3 billion net investment
A RECORD YEAR – £1.3 BILLION NET INVESTMENT ASSET ACQUISITIONS LAND AND DEVELOPMENT DISPOSALS • Strategic acquisitions in London and Paris • £531m of development capex • SEGRO sales to SELP • Big box warehouse in Poland in SELP • £286m invested in land acquisitions • Remaining assets and land in Aus
Slide 26: Acquisitions of rare strategic assets
ACQUISITIONS OF RARE STRATEGIC ASSETS PERIVALE PARK, WEST SEGRO PARK CANNING PARC D’ACTIVITÉS DES LONDON TOWN, EAST LONDON PETITS CARREAUX, PARIS • 55,100 sq m space across 23 units • 21,200 sq m of space across 10 units • 149,000 sq m space across 35 units • 3 hectares of development land • 17 hect
Slide 27: Significant land acquisitions add more development capacity
SIGNIFICANT LAND ACQUISITIONS ADD MORE DEVELOPMENT CAPACITY BARCELONA AND MADRID, SEGRO LOGISTICS PARK SEGRO PARK COVENTRY SPAIN NORTHAMPTON GATEWAY, GATEWAY, UK UK Potential for 250,000 sq m of Potential for 500,000 sq m of Potential for 350,000 sq m of mostly big box warehouses big box warehouses
Slide 28: We create the space that enables extraordinary things to happen
WE CREATE THE SPACE THAT ENABLES EXTRAORDINARY THINGS TO HAPPEN Strong financial Record Investing to Confident results operating support further outlook performance growth
Slide 29: 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 31 December 2020) Other, £0.7bn Poland £1.1bn Italy London £1.3bn £4.9bn AUM France £2.0bn £15.3bn Germany Thames Valley £2.1bn £2.0bn National Logistics £1.2bn Other (2%) Urban (66%) Bi
Slide 30: £270m+ of potential rental income from future development
£270M+ OF POTENTIAL RENTAL INCOME FROM FUTURE DEVELOPMENT SEGRO land bank (31 December 2020) gross rent (£m) Estimated cost Development Development to complete Proportion Expected Potential delivery pipeline pre-let (sq m) yield3 (£m) Area 1-12 Current 838,086 3972 54 6.5% 66% months Near-term 12-18
Slide 31: Potential for significant income growth
POTENTIAL FOR SIGNIFICANT INCOME GROWTH Annualised gross cash passing rent1, £ million (as at 31 December 2020) £180m potential from current activity £192m from land bank and land options 624 1304 834 27 54 53 46 462 Plus: further growth potential from rising ERVs and indexation Passing rent at Rent
Slide 32: Demand-supply conditions supportive of further rental growth
DEMAND-SUPPLY CONDITIONS SUPPORTIVE OF FURTHER RENTAL GROWTH SEGRO SEGRO Demand Supply Property Type Region % of portfolio1 3 year average ERV growth conditions conditions ERV growth expectations UK 53% STRONG LIMITED 4.1% Urban 2-5% pa warehouses Continental 13% STRONG LIMITED 2.0% Europe UK 8%2 ST
Slide 33: Confident outlook
CONFIDENT OUTLOOK Supportive structural trends Restricted Pan-European land operating availability platform limits supply response Strong balance Prime sheet portfolio of existing assets Exceptional landbank for development 33
Slide 34: Q&A 2020 Full Year Results
Q&A 2020 Full Year Results SEGR°
Slide 35: Appendix: Portfolio and Financial Data
APPENDIX 1 Portfolio and Financial Data
Slide 36: Adjusted income statement
ADJUSTED INCOME STATEMENT (JVS PROPORTIONALLY CONSOLIDATED) 2020 2019 Group JVs Total Group JVs Total £m £m £m £m £m £m Gross rental income 392.9 121.2 514.1 362.0 107.1 469.1 Property operating expenses (88.3) (31.1) (119.4) (80.7) (27.4) (108.1) Net rental income 304.6 90.1 394.7 281.3 79.7 361.0
Slide 37: Balance sheet
BALANCE SHEET (JVS PROPORTIONALLY CONSOLIDATED) 31 December 2020 31 December 2019 Group JVs Total Group JVs Total £m £m £m £m £m £m Investment properties 10,671.4 2,347.7 13,019.1 8,401.7 1,898.3 10,300.0 Trading properties 52.1 - 52.1 20.2 1.0 21.2 Total properties 10,723.5 2,347.7 13,071.2 8,421.9
Slide 38: Pro forma 2020 accounting net rental income
PRO FORMA 2020 ACCOUNTING NET RENTAL INCOME Group JVs Total - Pro forma 2020 net rental income assuming £m £m £m disposals, acquisitions and let developments completed as at 1 January 2020 2020 net rental income 304.6 90.1 394.7 - One-off items (e.g. rates refunds) removed Full year impact of: Dispo
Slide 39: Total cost ratio
TOTAL COST RATIO Total cost ratio, 2019-20 (proportionally consolidated) 2020 2019 Incl. joint ventures at share £m £m Gross rental income (less reimbursed costs) 448.4 414.9 Property operating expenses 88.3 80.7 Administration expenses 51.5 51.5 JV operating expenses 42.3 37.6 JV management fees2 (
Slide 40: EPRA performance measures
EPRA PERFORMANCE MEASURES 31 December 2020 31 December 2019 £m £p per share £m £p per share EPRA Earnings 292.3 25.4 264.1 24.4 EPRA NTA 9,725.2 814 7,712.1 700 EPRA NRV 10,571.2 885 8,370.7 760 EPRA NDA 9,155.3 766 7,425.8 674 EPRA net initial yield 3.8% 3.8% EPRA topped-up net initial yield 4.1% 4
Slide 41: EPRA capital expenditure analysis
EPRA CAPITAL EXPENDITURE ANALYSIS 2020 2019 - Just over 60% of completed properties capex was for major Group JVs Total Group JVs Total £m £m £m £m £m £m refurbishment, infrastructure and fit- out costs prior to re-letting which is Acquisitions 858.5 82.0 940.5 233.9 164.1 398.0 expected to be value
Slide 42: Rent collection update
RENT COLLECTION UPDATE As of 16th February 2021 FY 2020 Q1 2021 - UK rents typically billed quarterly in advance UK CE Group UK CE Group - CE rents vary between monthly and quarterly billing by markets Paid % 98 98 98 93 94 93 Deferrals (including % 2 0 1 5 - 3 payment plans) Outstanding % - 2 1 2 6
Slide 43: Further improvements to the debt structure
FURTHER IMPROVEMENTS TO THE DEBT STRUCTURE Debt maturity by type and year, £ millions (as at 31 December 2020) 1,400 1,200 1,000 800 600 400 200 0 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040 SEGRO bank debt JV undrawn at share SEGRO undrawn JV
Slide 44: Euro currency exposure and hedging
EURO CURRENCY EXPOSURE AND HEDGING Balance sheet, £m - €1.12:£1 as at 31 December 2020 (31 December 2020) - € assets 61% hedged by € liabilities 5,000 - €1,942m (£1,734m) of residual exposure – 18% of Group NAV 4,000 Assets 61% - Illustrative NAV sensitivity vs €1.12: hedged 3,000 - +5% (€1.18) = -£
Slide 45: Look-through loan-to-value ratio and cost of debt
LOOK-THROUGH LOAN-TO-VALUE RATIO AND COST OF DEBT 31 December Weighted average cost of 2020 debt, % £m Gross debt, Net debt, including excluding commitment fees commitment fees and non-cash and non-cash interest interest Group gross borrowings 2,414 1.7 Group cash & equivalents (89) Group net borrow
Slide 46: 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 47: 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 31 December 2020 - Diverse range of uses (including ‘last mile’ -
Slide 48: A very diversified customer base
A VERY DIVERSIFIED CUSTOMER BASE Customer sectors (headline rent, SEGRO share) 1,383 customers Services & Other utilities 7% 7% Transport and logistics Top 20 customers = 31% of total group Technology, 23% Media and Telecoms 8% headline rent Wholesale and Retail Distribution 10% Retail 18% Post and
Slide 49: EPRA vacancy rate
EPRA VACANCY RATE Vacancy rate reconciliation, 31 December 2019 to 31 December 2020 4.0% 3.9% 0.1% 0.3% 0.1% Speculative Speculative (0.3)% development1 (0.1)% development1 1.4% (0.2)% 1.4% Existing Existing standing assets standing assets 2.6% 2.5% 31 December 2019 Long-term lettings Short-term let
Slide 50: Enhanced, de-risked development programme
ENHANCED, DE-RISKED DEVELOPMENT PROGRAMME Development-led growth1 The majority of which is pre-let 600 100% 500 80% Development capex, £m 400 60% 300 40% 200 100 20% 0 0% 2012 2013 2014 2015 2016 2017 2018 2019 2020 2013 2014 2015 2016 2017 2018 2019 2020 1 Capex on developments and infrastructure £
Slide 51: Land bank provides optionality and opportunity for growth
LAND BANK PROVIDES OPTIONALITY AND OPPORTUNITY FOR GROWTH 700 7.0% Net land utilisation, 2015-2020 Land bank value, £m 600 6.0% (Based on opening book value or acquisition value) 500 5.0% 400 300 400 4.0% Land value, £m 200 134 100 95 300 3.0% 69 0 (28) (74) 200 2.0% -100 (97) -200 100 1.0% -300 201
Slide 52: SEGRO European Logistics Partnership (SELP) headline figures
SEGRO EUROPEAN LOGISTICS PARTNERSHIP (SELP) HEADLINE FIGURES Assets under Management Land and assets Equivalent yield (as at 31 December 2020) €5.3bn 4.7% 1.8 €1,598m Assets under management, €bn 1.6 Capital value change ERV growth 1.4 €1,202m 10.3% 1.2% 1.2 €1,015m 1.0 Headline rent ERV €812m 0.8 €
Slide 53: Appendix II: Market Data
APPENDIX II Market Data SEGRO
Slide 54: European industrial investment volumes
EUROPEAN INDUSTRIAL INVESTMENT VOLUMES European industrial investment volumes European industrial investment volumes By geography, €bn By quarter, €bn 50 50 45 45 40 40 35 35 30 30 25 25 20 20 15 15 10 10 5 5 0 0 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2006 2007 20
Slide 55: Prime logistics yields vs 10 year bond yields
PRIME LOGISTICS YIELDS VS 10 YEAR BOND YIELDS 12.0 10.0 8.0 6.0 Warsaw: 5.5% London: 4.2% 4.0 Paris: 3.8% Dusseldorf: 3.4% 2.0 UK 10yr bond: 0.2% 0.0 Germany 10yr bond: (0.6)% -2.0 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Source: CBRE, Bloomberg (data corr
Slide 56: Favourable demand-supply conditions: UK supply shortage
FAVOURABLE DEMAND-SUPPLY CONDITIONS: UK SUPPLY SHORTAGE UK Big Box supply-demand dynamics1 Speculative UK Big Box completions2 (m sq m) (m sq m) 3.5 2.5 3.0 14% Take-up / availability, m sq m 3.0 2.5 12% 2.0 No. of years’ supply Completions, m sq m 2.5 10% 2.0 Vacancy rate 1.5 8% 2.0 1.5 1.5 6% 1.0
Slide 57: European industrial and logistics supply dynamics
EUROPEAN INDUSTRIAL AND LOGISTICS SUPPLY DYNAMICS Logistics space under construction1 France logistics supply-demand dynamics2 (m sq m) (m sq m) Take-up / availability, m sq m No. of years’ supply 4.5 5.0 2.5 4.0 3.5 4.0 2.0 3.0 3.0 1.5 2.5 2.0 2.0 1.0 1.5 1.0 1.0 0.5 0.5 0.0 0.0 0.0 2010 2011 2012
Slide 58: European industrial and logistics take-up statistics
EUROPEAN INDUSTRIAL AND LOGISTICS — TAKE-UP STATISTICS Take-up of warehouse space >100,000 sq ft – UK1 Take-up of warehouse space >5,000 sq m – France2 (m sq m) (m sq m) 3.5 5.0 3.0 4.0 2.5 2.0 3.0 1.5 2.0 1.0 0.5 1.0 0.0 0.0 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2008
Slide 59: European industrial and logistics availability statistics
EUROPEAN INDUSTRIAL AND LOGISTICS — AVAILABILITY STATISTICS Availability of Grade A warehouse space >100,000 sq ft– UK1 Availability of warehouse space >5,000 sq m – France2 (m sq m) (m sq m) 3.0 5.0 4.5 2.5 4.0 3.5 2.0 3.0 1.5 2.5 2.0 1.0 1.5 1.0 0.5 0.5 0.0 0.0 2010 2011 2012 2013 2014 2015 2016 2
Slide 60: European logistics vacancy
EUROPEAN LOGISTICS VACANCY Low European big box vacancy rate of 4.5% 8.0 3.6 (Rates at 31 December 2020) 8.0 7.1 6.0 3.5 4.6 2.1 1.7 2.0 2.6 9.6 1 Source: JLL 60
Slide 61: Heathrow Airport cargo and passenger volumes
HEATHROW AIRPORT CARGO AND PASSENGER VOLUMES Heathrow Airport cargo volumes Heathrow Airport passenger volumes (million metric tonnes) (millions) 160,000 90 85 140,000 80 75 120,000 70 65 60 100,000 55 50 80,000 45 40 60,000 35 30 40,000 25 20 20,000 15 10 5 0 0 Aug-20 Aug-19 Feb-20 Oct-20 Feb-19 Oc
Slide 62: 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 year ended 31 December 2020 (the Results Announcement). For the purposes of this disclaimer, ‘Presentation’ shall mean t