Hammerson plc · LSE:HMSO
Hammerson — FY2023 Earnings Presentation
40 slides from Hammerson's earnings presentation, Feb 29, 2024
Slide 1: 2023 Full year results
2023 Full year results 29th February 2024 Aardman Mural – Cabot Circus, Bristol
Slide 2: Overview
Overview Full year results Investment for growth & value creation Q&A Late Night Out - Bullring, Birmingham Hammerson Plc
Slide 3: Consistent execution of strategy driving strong operational and financial performance
Consistent execution of strategy driving strong operational and financial performance ▪ Adjusted earnings +11% to £116m driven by strong operational performance: ▪ Another year of record leasing value, up 23% LfL; stable occupancy 95%; increased footfall and sales ▪ A new and more efficient operatin
Slide 4: Full year results
Full year results Bullring, Birmingham
Slide 5: Financial highlights
2023 Full year financial results Financial highlights 31 Dec 2023 31 Dec 2022 Change Income Net Rental Income change (like-for-like) (1)(2) 3.6% 29.2% N/A Adjusted earnings £116m £105m +11% IFRS loss £(51)m £(164)m +69% Cash dividend per share 1.5p 0.2p N/A Capital Total Accounting Return (2.1)% (6.
Slide 6: Adjusted earnings walk
2023 Full year financial results Adjusted earnings walk Property income & JV (2.1) fees 2022 NRI People (3.6) 3.5 disposals £m Interest costs (0.9) 2023 NRI Flagships LfL 4.8 payable (7.5) Other 4.8 disposals Interest 140 9.0 Developments receivable (1.0) & other NRI (0.3) 4.7 120 8.3 (13.2) 8.1 3.8
Slide 7: Value Retail – top-tier premium outlets platform
2023 Full year financial results Value Retail – top-tier premium outlets platform Adjusted earnings walk FY 23 FY 22 % Growth £m Footfall (m) 38.2 35.2 +9% 50 45 Spend per visit (€) 87.1 86.2 +1% 0.5 40 (3.4) Brand sales (€bn) 3.3 3.0 +10% 35 14.4 (7.5) 0.7 30 Avg sales density m2 (€) 17,857 16,337
Slide 8: Cost reduction tracking ahead of guidance
2023 Full year financial results Cost reduction tracking ahead of guidance Cumulative reduction of >30% FY 20 – FY 24 ✓ Significant progress made to increase efficiency, integration, ways of working, engagement, digitalisation and automation £71.7m -17% YoY £67.8m savings delivered -14% YoY for FY 2
Slide 9: Portfolio valuation summary: positive income return offset by modest yield shift
2023 Full year financial results Portfolio valuation summary: positive income return offset by modest yield shift(1) Value Total Income Capital Yield ERV Devlp & other NEY 5 year FY 23 property return return impact impact impact range Swap(2) £m return % % % % % % % UK 863 6.1 8.7 (2.4) (1.9) 0.1 (0
Slide 10: NTA per share walk
2023 Full year financial results NTA per share walk pence 59 57 55 2 (2) 53 (1) (1) 51 49 53 51 47 45 FY 2022 Adjusted Earnings Revaluation & Disposal losses O'Parinor De-recognition Interim Dividend FY 2023 10 Hammerson Plc
Slide 11: Net debt analysis
2023 Full year financial results Net debt analysis(1) Italie Deux 145 £m Croydon 70 Non-core 1,900 1 land 1,800 O’Parinor 45 Operating 117 1,700 Highcross 80 profit Working 1,600 216 capital (13) movements 1,500 125 FY 19 – FY 23 1,400 1,732 104 1,300 (43) 74 (46) 1,200 6 (30) 1,326 1,100 1,000 Net
Slide 12: Near term Group debt covered by existing cash
2023 Full year financial results Near term Group debt covered by existing cash(1) Liquidity position: £1.2bn Group debt maturity (£m) New tap issuance (9.1%) RCFs – undrawn: £655m Dundrum Secured Debt (1.9%) Private Placements (int 2.5%) (2) Sterling Bonds (int 5.3%) Euro Bonds (int 1.8%) Cash (31 D
Slide 13: Investment for growth & value creation
Investment for growth & value creation LuluLemon yoga event – Dundrum, Dublin
Slide 14: Three-year improvement: positioned for growth and value creation
Investment for growth & value creation Three-year improvement: positioned for growth and value creation £130m +3.3% -24% Total Leasing Value(1): strong Growth in LfL Passing Rent Lower Gross Admin costs occupier demand Since FY 20 Since FY 20 Since FY 20 -46% 32%/43% 8.1x Reduced Net Debt(2) Reduced
Slide 15: Key takeaways: well positioned for growth and value creation
Key takeaways: well positioned for growth and value creation ▪ Our core city centre estates are in high demand with visitors and occupiers ▪ We have strong momentum on leasing ▪ Our operational metrics in sales, footfall, collections and vacancy are robust ▪ We have a wealth of near and long term op
Slide 16: Today, our core portfolio is focused on city centre locations with growth potential
Investment for growth & value creation Today, our core portfolio is focused on city centre locations with growth potential CORE GEOGRAPHIC FOOTPRINT THE CHARACTERISTICS OF OUR CORE Ten city centre estates with complementary land and two standalone developments Swords Pavilions & land ▪ 85% of destin
Slide 17: High demand for our urban locations means our leasing momentum is continuing
Investment for growth & value creation High demand for our urban locations means our leasing momentum is continuing ▪ 77/23 split: principal vs temporary(4) 306/£46m +37% ▪ 49/51 split: new leases to renewals(4) ▪ Diverse mix: Leases/income Ahead of previous passing ▪ Fashion 52% £29m at share (+23%
Slide 18: Underpinned by best-in-class offers and exciting new concepts
Investment for growth & value creation Underpinned by best-in-class offers and exciting new concepts Enduring partnerships with best-in-class brands Investing in innovative new offers 18 Hammerson Plc
Slide 19: With enhanced appeal, relevance, and income through placemaking and marketing
Investment for growth & value creation With enhanced appeal, relevance, and income through placemaking and marketing Placemaking & ART, MUSIC, CULTURE, PURPOSE Commercialisation COMMERCIALISATION, EVENTS, PARTNERSHIPS, AND PORTFOLIO FIRSTS +10% digital audience YoY Brand & Digital +11% impressions a
Slide 20: As a result, operational trends are strong
Investment for growth & value creation As a result, operational trends are strong ▪ Footfall continues to grow 95% +3% ▪ UK +1%, France +7%, Ireland +4%(1) ▪ Largest footfall gains where we have invested(3) Flagship occupancy flat Group footfall(1) ▪ Birmingham +5% vs FY 22 vs FY 22 ▪ Paris +9% ▪ Du
Slide 21: Disciplined capital allocation to invest with confidence for growth and value creation
Investment for growth & value creation Disciplined capital allocation to invest with confidence for growth and value creation Stable and resilient capital structure: IG credit rating Sustainable cash dividend Total return focus Required returns > cost of capital Remain opportunistic on capital deplo
Slide 22: Repurposing in Bullring has delivered ERV growth of 5%, +£35m of value
Investment for growth & value creation Repurposing in Bullring has delivered ERV growth of 5%, +£35m(1) of value ▪ Consolidation of the city centre retail offer: ▪ M&S relocated from old high street location into Bullring with a full-line store, including food hall, opened November 2023 ▪ Creation o
Slide 23: Quote from James Air, Director, JD Sports
“A notable success for us in the last year has been our relocation within Bullring. We are delighted with how well received our store has been, alongside the other significant lettings Hammerson have made within Bullring this year. The JD store has been a great success commercially and acts as a sig
Slide 24: Wealth of similar opportunities in the Group's core portfolio
Investment for growth & value creation Wealth of similar opportunities in the Group’s core portfolio The Oracle, Reading Further opportunities Cabot Circus, Bristol The Ironworks, Dundrum Repurposing underway: Reading Riverside: • Break option on House of Fraser exercised • Planning application comp
Slide 25: Attractive pipeline of near and long term opportunities in our cities
Investment for growth & value creation Attractive pipeline of near and long term opportunities in our cities Near Term Medium Term Long Term DRUM (workspace) Edgbaston Street car park (residential) Birmingham Bullring department store repurposing Ladywood House (workspace) Martineau Galleries Phase
Slide 26: A clear vision: a value-generating platform, with more opportunities ahead
Investment for growth & value creation A clear vision: a value-generating platform, with more opportunities ahead A REALIGNED PORTFOLIO AND OPERATING MODEL Core city centre estates and consolidated ownership of assets Near term repurposing programme delivered Asset quality significantly enhanced, op
Slide 27: Q&A
Q&A
Slide 28: Important Notice
Important Notice Certain statements included or incorporated by reference within this presentation may constitute “forward-looking statements” in respect of the company’s operations, performance, prospects and/or financial condition. By their nature, forward-looking statements involve a number of ri
Slide 29: Additional disclosures
Additional disclosures Solar array – Les Terrasses du Port, Marseille
Slide 30: ESG underpins everything we do
Additional disclosure: Managed portfolio ESG underpins everything we do In motion More to come E E nvironment nvironment ▪ Net Zero Asset plan delivery ▪ Complete a corporate power purchase ▪ Physical climate risk reviews for UK & Ireland agreement ▪ Broadening reach to nature plan by asset ▪ Nature
Slide 31: Returns and yields by geography
Additional disclosure: Managed portfolio Returns and yields by geography UK flagships France flagships Ireland flagships 8 8 8 Yield (NEY) 6 6 6 4 4 4 2 2 2 0 0 0 2017 2018 2019 2020 2021 2022 2023 2017 2018 2019 2020 2021 2022 2023 -2 2017 2018 2019 2020 2021 2022 2023 ERV (100% at peak) 100% 100%
Slide 32: Like-for-like GRI & NRI analysis (FY23 YoY) - Flagships only
Additional disclosure: Managed portfolio Like-for-like GRI & NRI analysis (FY23 YoY) - Flagships only Group GRI Group NRI Base Rent 3.2% Rental income 4.5% Turnover rent 0.6% Surrender premiums -0.2% Car park income 0.7% Car park 0.7% Commercial income 0.6% Bad debt & TI impairments -2.6% Surrender
Slide 33: Forecasting overall uplift in centre performance
Additional disclosure: Managed portfolio Forecasting overall uplift in centre performance • Our improved proposition moving from legacy, high street retail to modern, global flagship retail supported by a more compelling F&B and leisure offer has resulted in: • New / repurposed space outperforming p
Slide 34: Rent collection performance and top 10 occupier exposure
Additional disclosure: Managed portfolio Rent collection performance and top 10 occupier exposure Rent UK France Ireland Group Rental % of passing collection – Occupier exposure % of NIA rent (£m) flagships(1) (%) (%) (%) (%) Inditex 9.6 5.1 3.7 H&M 3.8 2.0 2.6 FY 22 98 98 99 98 Next 3.4 1.8 2.3 Sel
Slide 35: Top ten occupiers by region
Additional disclosure: Managed portfolio Top ten occupiers by region(1) UK France Ireland Rental % of Rental % of Rental % of Occupier exposure passing % of NIA Occupier exposure passing % of NIA Occupier exposure passing % of NIA (£m) rent (£m) rent (£m) rent Inditex 5.3 2.8 2.1 Inditex 1.7 0.9 0.6
Slide 36: LTV methodology
Additional disclosure: Managed portfolio LTV methodology 31 December 2023 31 December 2022 With Value Retail Fully proportionally With Value Retail Fully proportionally net asset value consolidated net asset value consolidated Net debt (£m) (£m) (£m) (£m) Managed portfolio 1,326 1,326 1,732 1,732 Va
Slide 37: Value Retail villages
Additional disclosure: Value Retail Value Retail villages Bicester Village, Oxford GLA: 28,000m2 Boutiques: 159 La Roca Village, Barcelona GLA: 25,900m2 Boutiques: 146 Las Rozas Village, Madrid GLA: 15,600m2 Boutiques: 99 La Vallée Village, Paris GLA: 21,600m2 Boutiques: 109 Maasmechelen Village, Br
Slide 38: Hammerson's interest in Value Retail
Additional disclosure: Value Retail Hammerson’s interest in Value Retail Maas-- Village Bicester La Roca Las Rozas La Vallée mechelen Fidenza Wertheim Ingolstadt Kildare Opened 1995 1998 2000 2001 2002 2003 2003 2005 2006 Sponsor interest 13.7% 12.4% 12.4% 12.4% 12.4% 12.4% 12.4% 12.4% 12.4% Investo
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Slide 40: Enquiries
Enquiries For further enquiries please contact: Josh Warren, Director of Strategy, Commercial Finance and IR Tel: +44 (0)20 7887 1053 josh.warren@hammerson.com Natalie Gunson, Group Director of Communications Tel: +44 (0)20 7887 4672 natalie.gunson@hammerson.com 39