Slide 1: Full Year Results Presentation
December 2021 FULL YEAR RESULTS PRESENTATION Off. Persimmon Ple
Slide 2: Preserving and improving our unique balance of strengths and skills
Preserving and improving our unique balance of strengths and skills Delivering more, building better, enhancing value Excellent platform for future growth 2
Slide 3: Agenda
AGENDA Page Financial review 4 Mike Smith Group Financial Controller Enhancing our strengths; Creating further value 14 Dean Finch Group Chief Executive Investment in resource and operational capabilities 19 Martyn Clark Chief Commercial Officer Well defined sustainability approach 24 Julia
Slide 4: Strong Trading Performance
STRONG TRADING PERFORMANCE 2021 2020 Change New home legal completions 14,551 13,575 + 7% Average selling price £237,078 £230,534 + 2.8% New housing revenue £3,449.7m £3,129.5m + 10% Operating profits * £966.7m £862.8m + 12% Operating margin - New housing ** 28.0% 27.6% + 0.4% Profit before tax * £9
Slide 5: Strong Trading Performance
STRONG TRADING PERFORMANCE 2021 2020 Change Legal completions Strong levels of customer demand throughout the year Private 12,018 11,363 + 6% Partnerships 2,533 2,212 + 15% Total 14,551 13,575 + 7% • Full year average private sales rate per site c. 9% ahead year Average selling price Private £259,
Slide 6: Maintaining Industry-Leading Margins
MAINTAINING INDUSTRY-LEADING MARGINS New housing 2021 2020 2021 2020 Per plot: FY FY Change FY FY Change Revenue £237,078 £230,534 + 2.8% 100.0% 100.0% Land costs (£31,275) (£32,733) (4.5%) (13.2%) (14.2%) + 1.0% Build and other direct costs (£131,322) (£126,390) + 3.9% (55.4%) (54.8%) (0.6%) Gross
Slide 7: Future Margins Supported by High Quality Land Holdings
FUTURE MARGINS SUPPORTED BY HIGH QUALITY LAND HOLDINGS Number Anticipated Average Cost to of plots ave. revenue plot cost revenue Cost to revenue percentage of owned & controlled Plots owned with detailed planning 39,079 £232,208 £27,154 11.7% Plots owned proceeding to planning Total owned 28,010
Slide 8: Strong Platform for Disciplined Growth
STRONG PLATFORM FOR DISCIPLINED GROWTH 2021 2020 Change Disciplined land replacement strategy underpins the Land £1,798m £1,722m + £76m Group’s balance sheet strength Pre-pandemic levels of build achieved from reduced Work in progress £1,054m £1,092m (£38m) number of active developments Land cre
Slide 9: Effective Deployment of Capital
EFFECTIVE DEPLOYMENT OF CAPITAL 2021 2020 Change Strong levels of cash generation supporting future growth and the Capital Return Cash inflow from operations £986m £875m + £111m (Increase)/decrease in land (£67m) £226m (£293m) Programme Increase/(decrease) in land creditors £77m (£111m) + £188m De
Slide 10: Continued Strong Cash Generation
CONTINUED STRONG CASH GENERATION Strong track record of managing working capital effectively through the cycle Free cash generation before capital returns of £762m (2020: £741m) Strong net cash* of £839m (2020: £905m) - land creditors at £408m, majority settled over the next 3 years * Being ca
Slide 11: Sustaining Strength Through the Cycle
SUSTAINING STRENGTH THROUGH THE CYCLE Clear strategy recognising the cyclical nature of the UK housing market • Disciplined execution of land replacement strategy • Well-judged capital deployment - quality, timing and scale Supports the delivery of high quality new homes, widening the opportunit
Slide 12: Resilient Capital Return Programme
RESILIENT CAPITAL RETURN PROGRAMME 235p per share returned to shareholders in 2021 (£750m) in respect of the 2020 financial year • Regular annual distribution of 125p per share moved from early July and paid 26 March • Top up payment of surplus capital of 110p per share was paid on 13 August, acce
Slide 13: Industry-Leading Long Term Returns
INDUSTRY-LEADING LONG TERM RETURNS Persimmon plc - Long term margin and returns Total shareholder returns over the past 20 years (rebased to 100) 45.0% 5,000.0 2,500 Δ COVID 40.0% 4,500.0 Change (%) 20 years 10 years 5 years outbreak2 1 year 4,000.0 35.0% Persimmon 1,461% 639% 73% (17%) (6%) 2,000 3
Slide 14: Enhancing Our Strengths; Creating Further Value
ENHANCING OUR STRENGTHS; CREATING FURTHER VALUE Persimmon has a unique balance of strengths and skill-sets that will provide a strong, resilient platform for a sustainable future • Our market positioning • High quality land holdings • Highly experienced management team • Ongoing investment in reso
Slide 15: Creating Further Value
CREATING FURTHER VALUE Key areas of operational focus: • Build quality - ambition to “build right, first time, every time” 17% improvement in the number of NHBC Reportable Incidents • Reinforcing trust - customers at the heart of our business Anticipate 92.0% score for 2020/21 HBF customer sat
Slide 16: Strengthening Our Market Positioning
STRENGTHENING OUR MARKET POSITIONING Widening the opportunity of home ownership across each of our 31 regional operating businesses Strong core product range providing excellent choice for customers Private house prices range from £100,000 to £1,000,000 • 25% of private sales priced below £200
Slide 17: High Quality Land Holdings - With Good Visibility
HIGH QUALITY LAND HOLDINGS - WITH GOOD VISIBILITY Strategic Platform for high quality growth underpinned by disciplined land replacement interests acquired during strategy FY 2021 • Total land visibility of c. 123,100 plots Strategic sites pulled through • 88,043 plots owned and under control at 3
Slide 18: Well-Established Management Teams
WELL-ESTABLISHED MANAGEMENT TEAMS Established teams running each of our operational businesses - who have been at Persimmon for many years Undertaken a comprehensive Leadership Development Programme as part of the Group’s talent management and succession planning programmes New senior manageme
Slide 19: Build More, Build Better
BUILD MORE, BUILD BETTER Commitment to build quality - “build right, first time, every time” • Key focus of a responsible housebuilder • Strengthens the Persimmon brand • Enhances the value of our product - great quality new homes at outstanding value Good progress made • HBF customer satisfacti
Slide 20: Build More, Build Better
BUILD MORE, BUILD BETTER The Persimmon Way - identifying areas of further improvement, increasing build and operational efficiencies • Build rates improving in early weeks of 2022 • 107% increase in Independent Quality Controllers - strengthening oversight to enhance assurance Rewarding excellen
Slide 21: Increased Investment in Innovation and Technology
INCREASED INVESTMENT IN INNOVATION AND TECHNOLOGY Vertical integration - self help action • Securing continuity of supply of key products and materials • Providing operational efficiency gains • Supporting improvements in supply chain capacity and industry output • Will be key in helping to delive
Slide 22: Increased Investment in Innovation and Technology
INCREASED INVESTMENT IN INNOVATION AND TECHNOLOGY Brickworks - entirely focused on supplying bricks to the Group’s housebuilding operations • Capacity to produce c. 80m bricks and block pavers annually - approximately two thirds of Group’s annual brick requirements • Supplied c. 45m bricks in 2021
Slide 23: Move In, Be Connected
MOVE IN, BE CONNECTED Ultrafast, full fibre broadband service to the home well established and providing excellent levels of service Only UK housebuilder providing connectivity from moving in date • Considered a key utility by customers • Supporting more flexible working behaviours Nationwide
Slide 24: Well Defined Sustainability Approach
WELL DEFINED SUSTAINABILITY APPROACH 24
Slide 25: Clear Commitment in Building for Tomorrow
CLEAR COMMITMENT IN BUILDING FOR TOMORROW Fully committed to reducing Group’s greenhouse gas emissions Aim to be net zero for homes in use by 2030 and in operations by 2040 Initiatives • Trialling new heating technologies • Zero carbon home at Fulford, York • Measuring embodied carbon of homes
Slide 26: Delivering Social Value to Our Communities
DELIVERING SOCIAL VALUE TO OUR COMMUNITIES Create social value in the communities we develop and in local areas Allowing customers to live more sustainably • 662 acres* of public open space and gardens provided during 2021 • Our new homes are c. 30% more energy efficient than current housing sto
Slide 27: Ever Greater Commitment to Employees (Safe and Inclusive)
EVER GREATER COMMITMENT TO EMPLOYEES (SAFE AND INCLUSIVE) Provide excellent career opportunities for all colleagues, offering industry-leading training and development • c. 13,200 training days delivered - c. 3,500 days provided online • Accredited National Vocational Qualification assessment cent
Slide 28: Leading the Industry as a Responsible Builder
LEADING THE INDUSTRY AS A RESPONSIBLE BUILDER Residents’ safety is our priority • Committed that leaseholders would not have to pay to remove any cladding or correct safety issues on any multi-storey buildings we constructed - 33 developments identified • Extended the “look back” 30 years in respo
Slide 29: Excellent Position to Deliver Future Growth
EXCELLENT POSITION TO DELIVER FUTURE GROWTH Strong forward sales - £2.21bn 1 January Forward Sales Units ASP Revenue Current private weekly sales rate per site c. 2% ahead of last 2022 8,394 £193,448 £1,623.8m year 2021 8,976 £188,190 £1,689.2m 2020 7,692 £176,347 £1,356.5m Customer enquiry le
Slide 30: Why We Will Maintain Our Industry-Leading Financial Performance
WHY WE WILL MAINTAIN OUR INDUSTRY-LEADING FINANCIAL PERFORMANCE History of effective management of the housing cycle delivering industry-leading margins Industry-leading land holdings • Embedded margins of c. 33% Disciplined approach to land replacement by our industry-leading land and plannin
Slide 31: Strong Start; Good Momentum
STRONG START; GOOD MOMENTUM Leading the industry as a responsible builder Improving build quality and strengthening the brand Meeting the “green” agenda Strong land holdings and growing outlets Investing further in our own vertical integration and people Disciplined growth ensures resili
Slide 32: Appendices
APPENDICES Appendix 1 - FibreNest - Staying connected Appendix 2 - FY 2021 performance Appendix 3 - Half yearly profit & loss Appendix 4 - Financial record: Income Statement and Balance Sheet Appendix 5 - Half yearly sales profile Appendix 6 - Trading performance - Brand Appendix 7 - T
Slide 33: Appendix 1: FibreNest - Staying Connected
APPENDIX 1: FIBRENEST - STAYING CONNECTED Price points and speeds to suit all customer needs Appendix 1 - 1 of 2 33
Slide 34: Appendix 1: FibreNest - Staying Connected
APPENDIX 1: FIBRENEST - STAYING CONNECTED December December Continued investment in 2019 2021 nationwide full fibre network c. 140% growth in live sites over the last 2 years Appendix 1 - 2 of 2 34
Slide 35: Appendix 2: FY 2021 Performance
APPENDIX 2: FY 2021 PERFORMANCE Underlying trading (adjusted for goodw ill im pairm ent) 2021 2020 New housing Total % of revenue Total % of revenue Revenue £3,449.7m- £3,129.5m Cost of sales: - land cost (£455.1m) (13.2%) (£444.3m) (14.2%) - build and other direct costs (£1,910.8m) (55.4%) (£1,715.
Slide 36: Appendix 2: FY 2021 Performance
APPENDIX 2: FY 2021 PERFORMANCE Brand Profile - 12 months ended 31 December 2021: Unit Completions Average selling Average price Plots owned and Plot count completions change price change under control change 6,112 + 9% £225,431 + 6% 35,964 + 10% Persimmon North 42% 41% 4,853 + 3% £279,810 + 3% 27,2
Slide 37: Appendix 3: Half Yearly Profit & Loss
APPENDIX 3: HALF YEARLY PROFIT & LOSS Underlying performance: 2021 2021 2020 2020 H2 H1 H2 H1 New housing Unit completions 7,145 7,406 8,675 4,900 Revenue £1,700.4m £1,749.3m £2,026.7m £1,102.8m Operating profit * £483.7m £483.0m £569.6m £293.2m Operating margin * 28.4% 27.6% 28.1% 26.6% Net finance
Slide 38: Appendix 4: Financial Record - Income Statement
APPENDIX 4: FINANCIAL RECORD - INCOME STATEMENT 2017 2018 2019 2020 2021 Unit completions 16,043 16,449 15,855 13,575 14,551 New housing revenue £3,422.3m £3,545.8m £3,420.1m £3,129.5m £3,449.7m Average Selling Price £213,321 £215,563 £215,709 £230,534 £237,078 Operating profit * £966.1m £1,091.9m £
Slide 39: Appendix 4: Financial Record - Balance Sheet
APPENDIX 4: FINANCIAL RECORD - BALANCE SHEET 2017 2018 2019 2020 2021 Shareholders' funds £3,201.6m £3,194.5m £3,258.3m £3,518.4m £3,625.2m Cash £1,302.7m £1,048.1m £843.9m £1,234.1m £1,246.6m Net asset value per share 1036.6p 1006.0p 1021.7p 1102.7p 1135.7p Work in progress £723.9m £881.8m £1,094.6
Slide 40: Appendix 5: Half Yearly Sales Profile
APPENDIX 5: HALF YEARLY SALES PROFILE Appendix 5 40
Slide 41: Appendix 6: Trading Performance - Brand
APPENDIX 6: TRADING PERFORMANCE - BRAND 2021 2020 New housing FY FY Change No. No. Units Persimmon Core 10,965 10,283 + 7% Charles Church 1,053 1,080 (3%) Partnerships 2,533 2,212 + 15% Total 14,551 13,575 + 7% £ £ Average Selling Price Persimmon Core 249,498 239,318 + 4% Charles Church 360,575 361,
Slide 42: Appendix 6: Trading Performance - Brand
APPENDIX 6: TRADING PERFORMANCE - BRAND 2021 2020 New housing FY FY Change £m £m Gross Profit * Persimmon Core 913.9 799.2 + 14% Charles Church 108.3 117.8 (8%) Partnerships 61.6 52.4 + 18% Total 1,083.8 969.4 + 12% Gross Margin ** Persimmon Core 33.4% 32.5% + 0.9% Charles Church 28.5% 30.2% (1.7%)
Slide 43: Appendix 6: Trading Performance - Brand
APPENDIX 6: TRADING PERFORMANCE - BRAND 2021 2020 New housing H2 H2 Change No. No. Units Persimmon Core 5,447 6,628 (18%) Charles Church 467 706 (34%) Partnerships 1,231 1,341 (8%) Total 7,145 8,675 (18%) £ £ Average Selling Price Persimmon Core 251,796 240,724 + 5% Charles Church 359,150 373,169 (4
Slide 44: Appendix 6: Trading Performance - Brand
APPENDIX 6: TRADING PERFORMANCE - BRAND 2021 2020 New housing H2 H2 Change £m £m Gross Profit * Persimmon Core 471.0 510.6 (8%) Charles Church 42.8 81.3 (47%) Partnerships 29.5 32.3 (9%) Total 543.3 624.2 (13%) Gross Margin ** Persimmon Core 34.3% 32.0% + 2.3% Charles Church 25.5% 30.9% (5.4%) Partn
Slide 45: Appendix 6: Trading Performance - Brand
APPENDIX 6: TRADING PERFORMANCE - BRAND 2021 2020 New housing H1 H1 Change No. No. Units Persimmon Core 5,518 3,655 + 51% Charles Church 586 374 + 57% Partnerships 1,302 871 + 49% Total 7,406 4,900 + 51% £ £ Average Selling Price Persimmon Core 247,230 236,769 + 4% Charles Church 361,710 338,455 + 7
Slide 46: Appendix 6: Trading Performance - Brand
APPENDIX 6: TRADING PERFORMANCE - BRAND 2021 2020 New housing H1 H1 Change £m £m Gross Profit Persimmon Core 442.9 288.6 + 53% Charles Church 65.5 36.5 + 79% Partnerships 32.1 20.1 + 60% Total 540.5 345.2 + 57% Gross Margin Persimmon Core 32.5% 33.3% (0.8%) Charles Church 30.9% 28.8% + 2.1% Partners
Slide 47: Appendix 7: Trading Performance - Divisional
APPENDIX 7: TRADING PERFORMANCE - DIVISIONAL 31 December 2021 New housing Units Average Sale Annual average Plots owned and No. Price (£) price change under control Yorkshire 985 206,434 + 5% 5,400 Scotland 1,535 212,607 + 1% 10,047 North West 791 184,690 + 10% 4,428 North East 1,273 196,934 + 6% 11
Slide 48: Appendix 7: Trading Performance - Divisional
APPENDIX 7: TRADING PERFORMANCE - DIVISIONAL 31 December 2021 New housing Units Average Sale Annual average Plots owned and No. Price (£) price change under control Shires 2,613 269,272 (1%) 11,443 Western 1,933 231,524 - 11,878 Southern 917 274,552 + 12% 8,338 Wales 706 211,041 + 14% 4,584 Persimmo
Slide 49: Appendix 7: Trading Performance - Divisional
APPENDIX 7: TRADING PERFORMANCE - DIVISIONAL 31 December 2021 New housing Units Average Sale Plots owned and No. Price (£) under control Charles Church 1,224 332,792 9,059 31 December 2020 1,298 326,508 9,224 Change (6%) + 2% (2%) Appendix 7 - 3 of 3 49
Slide 50: Appendix 8: Analysis of Unit Sales
APPENDIX 8: ANALYSIS OF UNIT SALES * Persimmon data represents completions in the period ** NHBC data represents registrations in the period NHBC Source: NHBC Housing Market Report (January 2022) Appendix 8 - 1 of 3 50
Slide 51: Appendix 8: Analysis of Unit Sales - Product Mix
APPENDIX 8: ANALYSIS OF UNIT SALES - PRODUCT MIX Persimmon data represents completions in the period and NHBC data represents registrations in the period NHBC Source: NHBC Housing Market Report (January 2022) Appendix 8 - 2 of 3 51
Slide 52: Appendix 8: Analysis of Unit Sales - Price Range
APPENDIX 8: ANALYSIS OF UNIT SALES - PRICE RANGE Appendix 8 - 3 of 3 52
Slide 53: Appendix 9: Land Holdings at 31 December 2021
APPENDIX 9: LAND HOLDINGS AT 31 DECEMBER 2021 Number Number Number Anticipated Average Cost to Cost to of plots of plots of plots ave. revenue plot cost revenue revenue Dec 2020 Dec 2021 Change Dec 2021 Dec 2020 Plots owned with detailed planning 42,963 39,079 (3,884) £232,208 £27,154 11.7% 13.0% Pl
Slide 54: Appendix 10: Balance Sheet
APPENDIX 10: BALANCE SHEET 2021 2020 Change Work in progress £1,054.1m £1,091.6m (£37.5m) Land £1,798.2m £1,722.1m + £76.1m Land creditors £407.6m £329.3m + £78.3m Part exchange stock £24.8m £40.9m (£16.1m) Shared equity debt £45.6m £56.2m (£10.6m) Cash £1,246.6m £1,234.1m + £12.5m Shareholders' fun
Slide 55: Appendix 11: Cash Flows
APPENDIX 11: CASH FLOWS H1 21 H2 21 FY 21 FY 20 Change £m £m £m £m Operating cash (before working capital movements) 491.8 494.0 985.8 874.6 +13% Movement in working capital: Decrease / (increase) in gross land 25.9 (92.4) (66.5) 226.0 Increase / (decrease) in land creditors 35.5 41.0 76.5 (111.3) N
Slide 56: Appendix 12: Mortgage Approvals
APPENDIX 12: MORTGAGE APPROVALS 150 Average monthly approvals since beginning of 1993: 79,830 Dec 2020: Approvals - Volume ('000) 100 101,200 Dec 2013: 72,800 Dec 2015: 71,000 Dec 2017: Dec 2019: 62,000 65,900 Dec 2009: Dec 2011: 59,000 52,300 Dec 2021: 71,000 Dec 2016: Dec 2018: Dec 2014: 68,400 64
Slide 57: Appendix 13: New Housing Starts
APPENDIX 13: NEW HOUSING STARTS Source: NHBC Housing Market Report (January 2022) Appendix 13 57
Slide 58: Important Notice
DISCLAIMER Important Notice Certain statements in this results presentation are forward looking statements. Forward looking statements involve evaluating a number of risks, uncertainties or assumptions that could cause actual results to differ materially from those expressed or implied by those stat