Hammerson plc · LSE:HMSO
Hammerson — Merger or Acquisition (July 2024)
21 slides from Hammerson's merger presentation, Jul 22, 2024
Slide 1: Agreed Disposal of Value Retail
Agreed Disposal of Value Retail Investor presentation 22 July 2024 BULLRING, BIRMINGHAM
Slide 2: Transforms Hammerson to accelerate strategy and enhance returns
Transforms Hammerson to accelerate strategy and enhance returns 1 2 3 Sale of overweight, non- Proceeds deployed to strengthen Accelerates strategic and controlling and dilutive interest balance sheet, invest for growth financial delivery to create in Value Retail and enhance distributions value c.£
Slide 3: Sale of overweight, yield-dilutive, non-controlling interest in Value Retail for cash proceeds of c.£600m
Sale of overweight, yield-dilutive, non-controlling interest in Value Retail for cash proceeds of c.£600m Value Retail Key Metrics (Hammerson Group Share) As of Dec-23 (Last Reported) Adjusted Earnings £32m • Has been treated as non-core since May 2023 EPRA NTA £1,194m due to: o Limited information
Slide 4: Build on track record of value creation in core city centre destinations
Build on track record of value creation in core city centre destinations STRONG HAMMERSON 3 YEAR TRACK RECORD: FY20 – FY23 Portfolio realigned to core o £950m of disposals: 4% discount to book city centre estates o -46% reduction in net debt(1) Robust and sustainable o 32%/43% reduced LTV (headline/
Slide 5: The repositioned business has a unique portfolio of city centre destinations and land with growth potential
The repositioned business has a unique portfolio of city centre destinations and land with growth potential HAMMERSON’S POST-VALUE RETAIL GEOGRAPHIC FOOTPRINT HAMMERSON’S REPOSITIONED PORTFOLIO • Ten core city centre destinations • 93% of destinations A rated by Green Street, remainder B+(2) • c.80
Slide 6: Consistent and disciplined approach to capital allocation
Consistent and disciplined approach to capital allocation Stable and resilient capital structure: IG credit rating Sustainable cash dividend Total return focus Required returns > cost of capital Remain opportunistic on capital deployment SOURCES USES Investment for Growth and Value Creation Sustaina
Slide 7: Disposal is transformational to accelerate strategy, value creation and enhance returns
Disposal is transformational to accelerate strategy, value creation and enhance returns Proceeds supplement existing cash position to give a strong and flexible balance sheet, invest for growth and enhance distributions to shareholders (£m) Strong and flexible balance sheet 1,300 1,200 1,100 1,000 c
Slide 8: Debt maturities covered until 2027 with low weighted average interest rate until 2028
Debt maturities covered until 2027 with low weighted average interest rate until 2028 (2) Notes: 1. Indicatively assuming timely reinvestment of proceeds and completion of share buy back 2. Repaid in January and June 2024 8 Hammerson Plc
Slide 9: Attractive and sizeable pipeline of opportunities in the existing portfolio for growth and value creation
Attractive and sizeable pipeline of opportunities in the existing portfolio for growth and value creation ASSET REPURPOSING AND EXISTING ASSET ENHANCEMENTS Ability to rotate the low yielding Value Retail stake into higher yielding opportunities, Near-term focus on repurposing and existing asset Sele
Slide 10: Clearly identified combination of existing and new opportunities to drive growth and returns
Clearly identified combination of existing and new opportunities to drive growth and returns For FY24, earnings outlook in line with market consensus Medium-Term Financial Existing Portfolio + New Opportunities = Framework(1) Portfolio Portfolio • Reduce vacancy • Consolidate JV GRI growth: 4-6% CAG
Slide 11: Disposal of Value Retail enables enhanced shareholder returns
Disposal of Value Retail enables enhanced shareholder returns Shareholder returns Share buy back Ordinary dividend • On market share buy back of up to £140m • Ordinary dividend payout ratio enhanced from 60- • c.10% of pre-announcement market 70% to 80-85% of adjusted earnings capitalisation1 • Brin
Slide 12: Timetable and next steps
Timetable and next steps Transaction is a Class 1 at the date of announcement: • Disposal will not require shareholder approval as the amended UK Listing Rules come into effect on 29 July 2024 as announced by FCA on 11 July 2024. • 1 for 10 share consolidation to be executed prior to commencement of
Slide 13: Summary: sale of Value Retail unlocks Hammerson's potential
Summary: sale of Value Retail unlocks Hammerson’s potential 1 Transformational £1.5bn transaction generating cash proceeds of c.£600m Proceeds deployed to strengthen balance sheet, invest for growth 2 and enhance distributions Build on our track record and momentum to accelerate strategic and financ
Slide 14: Important notice
Important notice This presentation has been issued by and is the sole responsibility of Hammerson Plc (the “Company”). The information contained in this presentation is for background purposes and does not purport to be full or complete. The information contained in this presentation is for backgrou
Slide 15: Appendices
Appendices LES TERRASSES DU PORT
Slide 16: Appendices: Key Value Retail financials, key metrics and terms of sale
Appendices: Key Value Retail financials, key metrics and terms of sale GAV reconciliation € (5) ARA €m Income Statement 2023 IFRS GAV as reported £1,886m converted to € pg. 153 2,224 ARA (1) £m Equity portion of Participative loans (6) 175 GRI pg.152 162 GAV (including equity portion of participativ
Slide 17: Appendices: LTV, Net debt:EBITDA & NTA per share pro formas
Appendices: LTV, Net debt:EBITDA & NTA per share pro formas Credit Metrics Valuation Net debt EBITDA £m £m £m Dec-23 3,891 1,326 166 Net Proceeds from disposals of: - Union Square (121) (111) (15) - O'Parinor(1) (7) (7) - - Coral (1,115) (600) (32) Pro forma 2,648 608 119 Pro forma LTV 23% Pro forma
Slide 18: Appendices: Proactive asset management is driving value: Bristol case study
Appendices: Proactive asset management is driving value: BRISTOL CASE STUDY KEY VALUE CREATION INITIATIVES HIGHLIGHTS Re-anchored destination with new uses and improved leisure offer Reinvigoration of Bristol • Department store repurposing targeting to significantly enhance ERV and increase NRI, wit
Slide 19: Appendices: Proactive asset management is driving value: Birmingham case study
Appendices: Proactive asset management is driving value: BIRMINGHAM CASE STUDY KEY VALUE CREATION INITIATIVES HIGHLIGHTS Repurposing of former Debenhams and neighbouring units: Re-anchored destination with new uses driving double digit NRI growth • Investment has transformed the destination and deli
Slide 20: Appendices: Proactive asset management is driving value: Dundrum case study
Appendices: Proactive asset management is driving value: DUNDRUM CASE STUDY KEY VALUE CREATION INITIATIVES HIGHLIGHTS Repurposing major space users, bringing new brands and Re-anchored destination with new uses driving double digit NRI growth upgrading offer and returns • c.£3.5m NRI pa uplift(1) •
Slide 21: Appendices: Proactive asset management is driving value: Reading case study
Appendices: Proactive asset management is driving value: READING CASE STUDY KEY VALUE CREATION INITIATIVES HIGHLIGHTS Upgraded retail offer with new leisure offer in 140,000 sq.ft former dept. store c.140,000 sqft. Department store repurposed to leisure and retail, • Target IRR above cost of capital