Slide 1: Half Year Results Presentation
HALF YEAR RESULTS PRESENTATION 30 June 2021 qs IX ; Ug) Persimmon is Together, we moke a home 2QP
Slide 2: A secure and strong platform for future growth
A secure and strong platform for future growth Good progress in delivering improving service and quality Focused on generating superior sustainable returns for the benefit of all stakeholders 2
Slide 3: Agenda
AGENDA Page Presented by Financial review 4 Mike Killoran Building on strength 15 Dean Finch Strong platform to deliver future growth 24 Dean Finch Strong trading, positive outlook 25 Dean Finch Appendices 1 - 5: Colleagues and Communities 27 Appendices 6 - 17: Financial information 33 3
Slide 4: Financial Review
FINANCIAL REVIEW Page Robust performance 5 Sustaining industry leading margins 7 High quality land holdings 8 Platform for future growth 9 Well judged capital deployment 10 Healthy liquidity 11 Sustaining strength through the cycle 12 Resilient capital return programme 13 Industry
Slide 5: Robust Performance
ROBUST PERFORMANCE H1 2021 H1 2020 Change New home legal completions 7,406 4,900 + 51% Operating profit Average selling price £236,199 £225,066 + 4.9% Underlying profit £483.0m New housing revenue £1,749.3m £1,102.8m + 59% Goodwill impairment (£3.9m) Operating profits * £483.0m £293.2m + 65% Reporte
Slide 6: Robust Performance
ROBUST PERFORMANCE H1 2021 H1 2020 Change Strong performance against backdrop of healthy customer demand Legal completions Private 6,104 4,029 + 52% Partnerships 1,302 871 + 49% • New home completions up 51% Total 7,406 4,900 + 51% Average selling price Private £246,208 + 5% • 59% increase in new
Slide 7: Sustaining Industry Leading Margins
SUSTAINING INDUSTRY LEADING MARGINS New housing 2021 2020 2021 2020 2020 2020 Per plot: H1 H1 Change H1 H1 Change H2 H2 Revenue £236,199 £225,066 + 4.9% 100.0% 100.0% £233,623 100.0% Land costs (£33,244) (£31,682) + 4.9% (14.1%) (14.1%) + 0.0% (£33,326) (14.3%) Build and other direct costs (£129,978
Slide 8: High Quality Land Holdings Underpin Future Margins
HIGH QUALITY LAND HOLDINGS UNDERPIN FUTURE MARGINS Number Anticipated of plots ave. revenue Average plot cost Cost to revenue Industry leading embedded returns Plots owned with detailed planning 42,039 £223,020 £27,880 12.5% Plots owned proceeding to planning 24,669 £215,595 £20,661 9.6% Cost to
Slide 9: Platform for Future Growth
PLATFORM FOR FUTURE GROWTH H1 2021 H1 2020 Change Resilient balance sheet - high quality land holdings Effective quality assurance procedures maintained Land £1,701m £1,897m (£196m) through work in progress investment Work in progress £1,046m £1,224m (£178m) • Pre-pandemic levels of build achiev
Slide 10: Well Judged Capital Deployment
WELL JUDGED CAPITAL DEPLOYMENT H1 2021 H1 2020 Change Sustainable business model delivering long term sustainable benefits for all Cash inflow from operations £492m £299m + £193m stakeholders Decrease in land £26m £47m (£21m) Increase/(decrease) in land creditors £35m (£63m) + £98m Disciplined l
Slide 11: Healthy Liquidity
HEALTHY LIQUIDITY Free cash generation before capital returns of £480m (2020: £15m absorbed) Working capital effectively managed through disciplined land replacement and pre-pandemic build rates Strong net cash* of £949m (2020: £454m) - land creditors at £366m, majority settled over the next 3
Slide 12: Sustaining Strength Through the Cycle
SUSTAINING STRENGTH THROUGH THE CYCLE Inherent cyclicality of the UK housing market recognised in the Group strategy - judging scale and timing of capital deployment critically important for all stakeholders Following a disciplined land replacement strategy Supporting the delivery of high qual
Slide 13: Resilient Capital Return Programme
RESILIENT CAPITAL RETURN PROGRAMME £750m returned to shareholders in 2021 (235p per share) in respect of the 2020 financial year • Regular annual distribution of 125p per share accelerated from early July and paid 26 March • Top up payment of surplus capital of 110p per share paid on 13 August, ac
Slide 14: Industry Leading Long Term Returns
INDUSTRY LEADING LONG TERM RETURNS Persimmon plc - Long term margin and returns 45.0% 5,000.0 Total shareholder returns over the past 20 years (rebased to 100) Δ COVID 40.0% 4,500.0 Change (%) 20 years 15 years 10 years 5 years 1 year outbreak2 4,000.0 35.0% Persimmon 1,946% 405% 1,190% 147% 30% 0%
Slide 15: Building on Strength
BUILDING ON STRENGTH Key areas of operational focus: • Build quality - commitment to “build right, first time, every time” Current customer satisfaction score at 92% • Reinforcing trust - customers at the heart of our business Industry leading position on banned cladding and CMA leasehold enqu
Slide 16: Strong Platform for High Quality Growth
STRONG PLATFORM FOR HIGH QUALITY GROWTH Key areas of the business that will provide a strong, resilient platform for a sustainable future • People • Technology • Improving quality; Delivering value • High quality land holdings 16
Slide 17: Well Trained and Supported Site Management Teams
WELL TRAINED AND SUPPORTED SITE MANAGEMENT TEAMS Continued investment in the skills and capabilities of our teams to secure improvements in operational performance • c. 400 members of the site management team registered on NVQ courses Supporting colleague development through digital technology •
Slide 18: Staying Connected
STAYING CONNECTED Well established, ultra fast, full fibre broadband service to the home Focused on delivering the highest levels of service Only UK housebuilder providing connectivity from moving in date - supporting more flexible working behaviours Network coverage across the country • All
Slide 19: Clear Commitment to Putting Customers First
CLEAR COMMITMENT TO PUTTING CUSTOMERS FIRST Residents’ safety is our priority • Committed to undertake fire remedial works on buildings constructed using cladding materials that may no longer comply with current Government guidance and building regulations • £75m fund created to cover developments
Slide 20: Improving Quality; Delivering Value
IMPROVING QUALITY; DELIVERING VALUE Commitment to build quality - “build right, first time, every time” • HBF customer satisfaction score remains above 5* threshold • Continued reduction in construction related items reported by our warranty providers The Persimmon Way - identifying areas of fur
Slide 21: High Quality Land Holdings
HIGH QUALITY LAND HOLDINGS Strategic Disciplined land replacement strengthening our platform for high quality growth interests acquired during H1 2021 • Invested over £4.8bn in new land since 2011 - c. 156,500 plots added Strategic sites • Total land visibility of c. 125,000 plots pulled through d
Slide 22: Strong Financial Position
STRONG FINANCIAL POSITION High quality land holdings and healthy liquidity • A platform for disciplined growth • Providing confidence for strong shareholder returns Delivering sustained superior returns • Industry leading returns will remain resilient - accommodating an anticipated increase in o
Slide 23: Off-site Manufacturing – Securing Supply and Supporting Growth Potential
OFF-SITE MANUFACTURING – SECURING SUPPLY AND SUPPORTING GROWTH POTENTIAL Vertical integration securing a supply of key products and materials • Brickworks - has the capacity to produce c. 80m bricks and block pavers annually • Tileworks - supplied c. 4.0m roof tiles during the first half of 2021
Slide 24: Strong Platform to Deliver Future Growth
STRONG PLATFORM TO DELIVER FUTURE GROWTH Strong forward sales - £2.23bn Private weekly sales rate per site over 20% ahead of Half Year Forward Sales Units ASP Revenue 2019 June 2021 9,566 £190,548 £1,822.8m Customer enquiry levels remain strong and cancellation June 2020 10,105 £184,005 £1,859
Slide 25: Strong Trading, Positive Outlook
STRONG TRADING, POSITIVE OUTLOOK Strong trading performance and positive outlook underpinned by our core fundamentals Strength of our balance sheet will support both growth and returns Good replacement of land holdings enhances our ability to sell into a strong market An intense focus on eff
Slide 26: Appendices
APPENDICES Appendix 1 - Promoting good health and wellbeing Appendix 2 - Significant employment opportunities Appendix 3 - Building sustainable communities Appendix 4 - Helping to safeguard our environment Appendix 5 - FibreNest - Staying connected Appendix 6 - H1 2021 performance Appe
Slide 27: Appendix 1: Promoting Good Health and Wellbeing
APPENDIX 1: PROMOTING GOOD HEALTH AND WELLBEING Health and wellbeing of our workforce and customers is of paramount importance to us Covid secure operating protocols have been largely maintained across all operations • 2 metre social distancing rule remains in place • Sales offices continue to a
Slide 28: Appendix 2: Significant Employment Opportunities
APPENDIX 2: SIGNIFICANT EMPLOYMENT OPPORTUNITIES Provide significant social value, creating career opportunities within our direct workforce and the communities we serve • Currently employ over 5,000 people across the UK • Support approximately 86,000* jobs across our supply chain Continued to i
Slide 29: Appendix 3: Building Sustainable Communities
APPENDIX 3: BUILDING SUSTAINABLE COMMUNITIES 31 regional operating businesses delivering “homes for all” House prices range from £45,000 to £1,000,000 • 26% of private sales priced below £200,000 • 7% of private sales priced lower than £150,000 • Average private selling price c. 15% lower than t
Slide 30: Appendix 4: Helping to Safeguard Our Environment
APPENDIX 4: HELPING TO SAFEGUARD OUR ENVIRONMENT Fully committed to reducing global greenhouse gas emissions • Have set challenging carbon reduction targets - net zero carbon emissions in our homes “in use” by 2030 and across our operations by 2040 • Set fully accredited interim science based carb
Slide 31: Appendix 5: FibreNest - Staying Connected
APPENDIX 5: FIBRENEST - STAYING CONNECTED Price points and speeds to suit all customer needs Appendix 5 - 1 of 2 31
Slide 32: Appendix 5: FibreNest - Staying Connected
APPENDIX 5: FIBRENEST - STAYING CONNECTED December June Nationwide full fibre 2019 2021 network c. 75% growth in live sites over the last 18 months Appendix 5 - 2 of 2 32
Slide 33: Appendix 6: H1 2021 Performance
APPENDIX 6: H1 2021 PERFORMANCE Underlying trading (adjusted for goodw ill im pairm ent) H1 2021 H1 2020 New housing Total % of revenue Total % of revenue Revenue £1,749.3m- £1,102.8m Cost of sales: - land cost (£246.2m) (14.1%) (£155.2m) (14.1%) - build and other direct costs (£962.6m) (55.0%) (£60
Slide 34: Appendix 6: H1 2021 Performance
APPENDIX 6: H1 2021 PERFORMANCE Brand Profile - 6 months ended 30 June 2021: Unit Completions Average selling Average price Plots owned and Plot count completions change price change under control change 3,058 + 63% £219,942 + 6% 34,841 (0%) Persimmon North 41% 41% 2,460 + 38% £281,152 + 5% 27,295 (
Slide 35: Appendix 7: Half Yearly Profit & Loss
APPENDIX 7: HALF YEARLY PROFIT & LOSS Underlying performance: 2021 2020 2020 H1 H1 Change FY New housing Unit completions 7,406 4,900 + 2,506 13,575 Revenue £1,749.3m £1,102.8m + £646.5m £3,129.5m Operating profit * £483.0m £293.2m + £189.8m £862.8m Operating margin * 27.6% 26.6% + 1.0% 27.6% Net fi
Slide 36: Appendix 8: Financial Record - Income Statement
APPENDIX 8: FINANCIAL RECORD - INCOME STATEMENT 2019 2019 2020 2020 2021 HY FY HY FY HY Unit completions 7,584 15,855 4,900 13,575 7,406 New housing revenue £1,645.3m £3,420.1m £1,102.8m £3,129.5m £1,749.3m Average Selling Price £216,942 £215,709 £225,066 £230,534 £236,199 Operating profit * £510.1m
Slide 37: Appendix 8: Financial Record - Balance Sheet
APPENDIX 8: FINANCIAL RECORD - BALANCE SHEET 2019 2019 2020 2020 2021 HY FY HY FY HY Shareholders' funds £2,837.5m £3,258.3m £3,450.6m £3,518.4m £3,567.4m Cash £832.8m £843.9m £828.9m £1,234.1m £1,315.2m Net asset value per share 890.8p 1021.7p 1081.9p 1102.7p 1117.9p Work in progress £1,024.0m £1,0
Slide 38: Appendix 9: Half Yearly Sales Profile
APPENDIX 9: HALF YEARLY SALES PROFILE Appendix 9 38
Slide 39: Appendix 10: Trading Performance - Brand
APPENDIX 10: 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 +
Slide 40: Appendix 10: Trading Performance - Brand
APPENDIX 10: 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% Partner
Slide 41: Appendix 11: Trading Performance - Divisional
APPENDIX 11: TRADING PERFORMANCE - DIVISIONAL 30 June 2021 New housing Units Average Sale Annual average Plots owned and No. Price (£) price change under control Yorkshire 562 195,950 + 3% 5,180 Scotland 677 216,824 + 6% 8,422 North West 401 177,127 + 7% 4,702 North East 608 198,612 + 10% 11,643 Mid
Slide 42: Appendix 11: Trading Performance - Divisional
APPENDIX 11: TRADING PERFORMANCE - DIVISIONAL 30 June 2021 New housing Units Average Sale Annual average Plots owned and No. Price (£) price change under control Shires 1,358 272,139 - 10,955 Western 897 231,959 + 2% 11,029 Southern 543 272,017 + 9% 8,594 Wales 338 207,559 + 22% 5,173 Persimmon Sout
Slide 43: Appendix 11: Trading Performance - Divisional
APPENDIX 11: TRADING PERFORMANCE - DIVISIONAL 30 June 2021 New housing Units Average Sale Plots owned and No. Price (£) under control Charles Church 689 331,800 8,675 30 June 2020 474 301,920 10,148 Change + 45% + 10% (15%) Appendix 11 - 3 of 3 43
Slide 44: Appendix 12: Analysis of Unit Sales
APPENDIX 12: ANALYSIS OF UNIT SALES * Persimmon data represents completions in the period ** NHBC data represents registrations in the period NHBC Source: NHBC Housing Market Report (July 2021) Appendix 12 - 1 of 3 44
Slide 45: Appendix 12: Analysis of Unit Sales - Product Mix
APPENDIX 12: 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 (July 2021) Appendix 12 - 2 of 3 45
Slide 46: Appendix 12: Analysis of Unit Sales - Price Range
APPENDIX 12: ANALYSIS OF UNIT SALES - PRICE RANGE Appendix 12 - 3 of 3 46
Slide 47: Appendix 13: Land Holdings at 30 June 2021
APPENDIX 13: LAND HOLDINGS AT 30 JUNE 2021 Number Number Number Anticipated Average Cost to Cost to of plots of plots of plots ave. revenue plot cost revenue revenue Dec 2020 Jun 2021 Change Jun 2021 Dec 2020 Plots owned with detailed planning 42,963 42,039 (924) £223,020 £27,880 12.5% 13.0% Plots o
Slide 48: Appendix 14: Balance Sheet
APPENDIX 14: BALANCE SHEET 2021 2020 2020 H1 H1 Change FY Work in progress £1,046.0m £1,223.7m (£177.7m) £1,091.6m Land £1,701.0m £1,896.6m (£195.6m) £1,722.1m Land creditors £365.7m £374.5m (£8.8m) £329.3m Part exchange stock £23.9m £55.2m (£31.3m) £40.9m Shared equity debt £49.0m £62.7m (£13.7m) £
Slide 49: Appendix 15: Cash Flows
APPENDIX 15: CASH FLOWS H1 21 H1 20 Change £m £m Operating cash (before working capital movements) 491.8 298.6 +65% Movement in working capital: Decrease in gross land 25.9 46.8 Increase / (decrease) in land creditors 35.5 (63.4) Net land movement 61.4 (16.6) Decrease / (increase) in WIP, part excha
Slide 50: Appendix 16: Mortgage Approvals
APPENDIX 16: MORTGAGE APPROVALS 150 Average monthly approvals since beginning of 1993: 79,980 Dec 2020: 100,700 Approvals - Volume ('000) 100 Dec 2013: Dec 2019: 72,800 65,900 Dec 2015: Dec 2017: Jun 2021: 71,000 62,000 81,300 Dec 2009: Dec 2011: 59,000 52,300 Dec 2014: Dec 2016: Dec 2018: 60,100 68
Slide 51: Appendix 17: New Housing Starts
APPENDIX 17: NEW HOUSING STARTS Source: NHBC Housing Market Report (July 2021) Appendix 17 51
Slide 52: 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