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Monday 20 February 2017
HAMMERSON PLC – AUDITED RESULTS FOR THE YEAR ENDED 31 DECEMBER 2016 STRONG FINANCIAL RESULTS WITH SECTOR-LEADING EARNINGS AND DIVIDEND GROWTH 31 December 2016
31 December 2015
31 December 2016
31 December 2015
Change
ASSET MANAGEMENT – CREATING DIFFERENTIATED DESTINATIONS – – – –
INVESTMENT MANAGEMENT – ADDING PRIME SPACE IN HIGH-GROWTH CATCHMENTS – – – – –
DEVELOPING VENUES – TWO ICONIC NEW SCHEMES OPENED – – –
FINANCIAL EFFICIENCY – FURTHER REDUCED COST OF DEBT – –
Like-for-like increase
Contents: Page
Page
Results presentation today:
Financial calendar:
Enquiries:
Index to key data Income and operational – Year ended
31 December 2016
31 December 2015
Page
Capital and financing – As at
31 December 2016
31 December 2015
Page
INTRODUCTION WHO WE ARE
OUR MARKET
OUR STRATEGY –
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OUR BUSINESS MODEL – – – – –
– – – – – –
1
KEY PERFORMANCE INDICATORS Monitoring value creation
Financial KPIs Total property return 5.7% (Benchmark 3.4%)
Description
Performance
Growth in like-for-like NRI* 2.2%
Description
Performance
Growth in adjusted EPS 8.6% Description
Performance
Cost ratio* 22.6%
Description
Performance
2
Operational KPIs Occupancy* 97.5% Description
Performance
Global emissions intensity ratio 155mtCO2e/£m
Description
Performance
Leasing activity* £24.9 million Description
Performance
Voluntary staff turnover 10.9% Description
Performance
3
BUSINESS REVIEW
UK Shopping Centres
Operational summary Key metrics
Like-for-like NRI growth %
Occupancy %
Leasing activity £m
Leasing vs ERV %
Like-for-like ERV growth %
Retail sales growth %
Footfall growth %
Sector and portfolio overview
Net rental income
Leasing, occupancy and ERVs
– – – – –
4
Lease expiries and rent reviews
Sales, footfall and occupancy cost
Disposals, acquisitions and completed developments
5
UK Retail Parks Operational summary Key metrics
Like-for-like NRI growth %
Occupancy %
Leasing activity £m
Leasing vs ERV %
Like-for-like ERV growth %
Footfall growth %
Sector and portfolio overview
Net rental income
Leasing, occupancy and ERVs
– – –
Lease expiries and rent reviews
6
Customer insight and footfall
Disposals and developments
7
France
Operational summary Key metrics
Like-for-like NRI growth %
Occupancy %
Leasing activity £m
Leasing vs ERV %
Like-for-like ERV growth %
Retail sales growth %
Footfall growth %
Sector and portfolio overview
Net rental income
Leasing, occupancy and ERVs
– – – –
8
Sales, footfall and occupancy cost
Lease expiries and rent reviews
Disposals and developments
9
Ireland
Operational summary Key metrics
Occupancy %
Leasing activity £m
ERV growth %
Sector and portfolio overview
Net rental income
Leasing, occupancy and ERVs
10
Lease expiries and rent reviews
Sales and footfall
Future developments
11
Developments
On-site developments Scheme1
Lettable area m2
Expected completion
Current value2 £m
Estimated cost Estimated to complete3 annual income4 £m £m
Let5 %
Introduction
Completed developments
On-site developments
Future developments
Brent Cross extension
12
Croydon town centre
The Goodsyard
Les Trois Fontaines extension
Other schemes
13
Premium Outlets Operational summary
Value Retail1 Year ended 31 Year ended 31 December 2016 December 2015
VIA Outlets1 Year ended 31 Year ended 31 December 2016 December 2015
Sector and portfolio overview
Value Retail ('VR')
14
VIA Outlets ('VIA')
15
FINANCIAL REVIEW
Another strong financial performance Highlights
£317.3 million
29.2p
24.0p
£5,776 million
£7.39
5.7%
Presentation of financial information
Alternative Performance Measures ('APMs')
Profit for the year
16
Reconciliation of IFRS profit for the year to adjusted profit for the year Year ended 31 December 2016 £m
Proportionally consolidated, including premium outlets
Year ended 31 December 2015 £m
Reconciliation of adjusted profit for the year Including premium outlets
Reported Group £m
Share of joint ventures £m
Share of property joint ventures £m
Share of associates £m
Share of associates £m
Adjusted profit for the year £m
Adjusted EPS pence
Net rental income Analysis of net rental income Proportionally consolidated, excluding premium outlets
Reported Group £m
Year ended 31 December 2016 £m
Year ended 31 December 2015 £m
Change £m
17
Administration expenses Administration expenses analysis Year ended 31 December 2016 £m
Proportionally consolidated, excluding premium outlets
Year ended 31 December 2015 £m
Cost ratio
Loss on the sale of properties
Share of results of joint ventures and associates, including investments in premium outlets
Analysis of share of results of joint ventures
Group’s share of results including premium outlets
Property joint ventures £m
VIA Outlets £m
Year ended 31 December 2016 Total £m
Property joint ventures £m
VIA Outlets £m
Year ended 31 December 2015 Total £m
18
Finance costs
Tax
Dividend
South African secondary listing
19
Net assets
Movement in net assets Proportionally consolidated, including premium outlets
Equity shareholders’ funds £m
Adjustments1 £m
EPRA net assets £m
EPRA NAV pence per share
Share of Property interests £m
Total £m
Investment £m
Development £m
Investment and development properties Movement in portfolio value Proportionally consolidated, excluding premium outlets
Reported Group £m
20
Components of valuation change in 2016 (£m)
Proportionally consolidated, excluding premium outlets
Returns Returns summary Proportionally consolidated, including premium outlets Return
%
Benchmark
%
21
Investment in joint ventures and associates, including investments in premium outlets
Analysis of movements in investment in joint ventures Group’s share of investment, including premium outlets
Share of Property joint ventures £m
VIA Outlets £m
Total £m
22
Financing and cash flow
Key financing metrics Proportionally consolidated, excluding premium outlets
Movement in net debt
Guideline1
31 December 2016
31 December 2015
Total £m
– –
–
23
Loan to value (“LTV”) – New calculation methodology
Debt maturity profile at 31 December 2016 (£m) Proportionally consolidated, excluding premium outlets
24
RISKS AND UNCERTAINTIES
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25
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26
RESPONSIBILITY STATEMENT OF THE DIRECTORS ON THE ANNUAL REPORT
– –
–
David Atkins
Timon Drakesmith
27
INDEPENDENT AUDITORS’ REPORT TO THE SHAREHOLDERS OF HAMMERSON PLC ON THE AUDITED FINANCIAL RESULTS OF HAMMERSON PLC
–
– –
–
– –
–
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–
–
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–
Deloitte LLP
28
CONSOLIDATED INCOME STATEMENT FOR THE YEAR ENDED 31 DECEMBER 2016
Notes
2016 £m
2015 £m
29
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED 31 DECEMBER 2016
2016 £m
2015 £m
30
CONSOLIDATED BALANCE SHEET AS AT 31 DECEMBER 2016 Notes
2016 £m
2015 £m
31
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 31 DECEMBER 2016
Share capital £m
Share Translation premium reserve £m £m
Hedging reserve £m
Merger reserve £m
Other reserves £m
Retained earnings £m
Investment Equity Non in own shareholders’ controlling shares* funds interests £m £m £m
Total equity £m
32
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 31 DECEMBER 2015
Share capital £m
Share premium £m
Translation reserve £m
Hedging reserve £m
Merger reserve Other Retained £m reserves £m earnings £m
Investment in own shares* £m
Equity shareholders’ funds £m
Noncontrolling interests Total equity £m £m
33
CONSOLIDATED CASH FLOW STATEMENT FOR THE YEAR ENDED 31 DECEMBER 2016
Notes
2016 £m
2015 £m
34
NOTES TO THE ACCOUNTS FOR THE YEAR ENDED 31 DECEMBER 2016
1: Financial information
– – –
Going Concern
35
2: Profit for the year
2016 Proportionally consolidated
Notes
Reported Group £m
Share of Property interests £m
Proportionally consolidated £m
Adjusted £m
Capital and other £m
Notes
36
2015 Proportionally consolidated
Notes
Reported Group £m
Share of Property interests £m
Proportionally consolidated £m
Adjusted £m
Capital and other £m
Notes (see page 36)
37
3: Segmental analysis
2016 Gross rental income £m
Net rental income £m
2015 Gross rental income £m
Net rental income £m
38
2016 Property valuation £m
Property additions £m
Revaluation gains/(losses) £m
2015 Property valuation £m
Property additions £m
Revaluation gains £m
Non-current assets employed 2016 £m
2015 £m
4: Net finance costs 2016 £m
2015 £m
39
5: Tax
Notes
2016 £m
2015 £m
2016 £m
2015 £m
40
6: Dividends
PID pence per share
Non-PID pence per share
Total pence per share
Equity dividends 2016 £m
Equity dividends 2015 £m
41
7: Earnings and headline earnings per share and net asset value per share
2016 Shares million
2016 Notes
Earnings £m
Pence per share
2015 Shares million
2015 Earnings £m
Pence per share
42
Notes
2016 Earnings £m
2015 Earnings £m
Reconciliation of headline earnings to adjusted earnings
2016 Equity shareholders’ funds Notes £m
Shares million
Net asset value per share £
2015 Equity shareholders’ funds £m
Shares million
Net asset value per share £
43
8: Investment and development properties 2016 Investment Development properties properties Valuation Valuation £m £m
Total Valuation £m
2015 Investment properties Valuation £m
Development properties Valuation £m
Total Valuation £m
44
9: Investment in joint ventures
Partner
Principal property1
Group share %
45
9: Investment in joint ventures (continued)
See page 48 for footnotes. Brent Cross £m
Cabot Circus £m
Bullring £m
Grand Central £m
The Oracle £m
Westquay £m
Brent Cross £m
Cabot Circus £m
Bullring £m
Grand Central £m
The Oracle £m
Westquay £m
46
Hammerson share Silverburn Centrale/Whitgift £m £m
Irish portfolio £m
Silverburn Centrale/Whitgift £m £m
Irish portfolio £m
O‘Parinor £m
Other £m
Total 2016 £m
Property joint ventures £m
Other £m
Total 2016 £m
Property joint ventures £m
VIA Outlets £m
Total 2016 £m
Hammerson share O‘Parinor £m
VIA Outlets £m
Total 2016 £m
47
9: Investment in joint ventures (continued)
Brent Cross £m
Cabot Circus £m
Bullring £m
The Oracle £m
Westquay £m
Brent Cross £m
Cabot Circus £m
Bullring £m
The Oracle £m
Westquay £m
48
Hammerson share Silverburn £m
Centrale/Whitgift £m
Irish portfolio £m
Centrale/Whitgift £m
Irish portfolio £m
O‘Parinor £m
Other £m
Total 2015 £m
Property joint ventures £m
Other £m
Total 2015 £m
Property joint ventures £m
VIA Outlets £m
Total 2015 £m
Hammerson share Silverburn £m
O‘Parinor £m
VIA Outlets £m
Total 2015 £m
49
9: Investment in joint ventures (continued) Property joint ventures £m
VIA Outlets £m
Total 2016 £m
Property joint ventures £m
VIA Outlets £m
Total 2015 £m
Property joint ventures £m
VIA Outlets £m
Total 2016 £m
Property joint ventures £m
VIA Outlets £m
Total 2015 £m
2016 £m
2015 £m
50
10: Investment in associates
2016
100% £m
2015
VR
Nicetoile
Total
Total
Hammerson share £m
Hammerson share £m
Hammerson share £m
Hammerson share £m
100% £m
100% £m
100% £m
2016
100% £m
2015
VR
Nicetoile
Total
Total
Hammerson share £m
Hammerson share £m
Hammerson share £m
Hammerson share £m
100% £m
100% £m
100% £m
51
10: Investment in associates (continued) 2016
100% £m
2015
VR
Nicetoile
Total
Total
Hammerson share £m
Hammerson share £m
Hammerson share £m
Hammerson share £m
100% £m
100% £m
100% £m
VR £m
Nicetoile £m
2016 £m
2015 £m
VR £m
Nicetoile £m
2016 £m
2015 £m
52
11: Receivables: non-current assets 2016 £m
2015 £m
2016 £m
2015 £m
2016 £m
2015 £m
2016 £m
2015 £m
2016 £m
2015 £m
2016 £m
2015 £m
12: Receivables: current assets
13: Restricted monetary assets
14: Cash and deposits
15: Payables: current liabilities
53
16: Borrowings Bank loans and overdrafts £m
Other borrowings £m
Total 2016 £m
Bank loans and overdrafts £m
Other borrowings £m
Total 2015 £m
2016 £m
2015 £m
2016 £m
2015 £m
Book value £m
Fair value £m
17: Fair values of financial instruments 2016 Book value £m
Fair value £m
2015
54
18: Payables: non-current liabilities 2016 £m
2015 £m
19: Share capital Called up, allotted and fully paid 2016 £m
2015 £m
Number
20: Analysis of movement in net debt Short-term deposits £m
Current borrowings including Cash at bank currency swaps £m £m
Short-term deposits £m
Current borrowings including currency swaps £m
Cash at bank £m
Non-current borrowings £m
Total borrowings including currency swaps £m
Net debt £m
Non-current borrowings £m
Total borrowings including currency swaps £m
Net debt £m
2016 £m
2015 £m
21: Adjustment for non-cash items in the cash flow statement
22: Contingent liabilities and capital commitments
55
ADDITIONAL DISCLOSURES UNAUDITED
Table
Page
EPRA measures
Table
Page
Share of Property interests
Portfolio analysis Premium outlets
Proportionally consolidated information
EPRA measures
Performance measure
2016 performance
2015 performance
Definition
Page
56
Portfolio analysis Rental data for the year ended 31 December 2016 Gross rental income £m
Proportionally consolidated excluding premium outlets
Net rental income Vacancy rate £m %
Average rents passingA £/m²
Rents Estimated Reversion/ passing rental valueB (over-rented) £m £m %
Selected data for the year ended 31 December 2015
Rent reviews as at 31 December 2016 Proportionally consolidated excluding premium outlets
Outstanding £m
Rents passing subject to review inA 2017 2018 2019 Total £m £m £m £m
Outstanding £m
Current ERV of leases subject to review inB 2017 2018 2019 Total £m £m £m £m
57
Lease expiries and breaks as at 31 December 2016 Proportionally consolidated excluding premium outlets
Rents passing that expire/break inA 2017 2018 2019 Total £m £m £m £m
ERV of leases that expire/break inB 2017 2018 2019 Total £m £m £m £m
Weighted average unexpired lease term to break to expiry years years
Net rental income for the year ended 31 December 2016
Proportionally consolidated excluding premium outlets
Properties owned throughout 2015/16 £m
Increase for properties owned throughout 2015/16 %
Acquisitions £m
Disposals £m
Developments and other £m
Total net rental income £m
Acquisitions £m
Disposals £m
Developments and other £m
Total net rental income £m
Net rental income for the year ended 31 December 2015
Proportionally consolidated excluding premium outlets
Properties owned throughout 2015/16 £m
Exchange £m
58
Ranked by passing rent at 31 December 2016 Proportionally consolidated excluding premium outlets
Passing rent £m
% of total passing rent
Year ended 31 December 2016 £m
Year ended 31 December 2015 £m
Cost ratio analysis
Proportionally consolidated excluding premium outlets
59
Valuation analysis at 31 December 2016
Proportionally consolidated including premium outlets
Properties at valuation £m
Revaluation in the year £m
Capital return %
Total return %
Initial yield %
True equivalent yield %
Nominal equivalent yieldA %
Selected data for the year ended 31 December 2015
Investment portfolio as at 31 December 2016 Proportionally consolidated excluding premium outlets
Income £m
Gross value £m
Net book value £m
60
Share of Property interests
Aggregated Property interests income statements Year ended 31 December 2016 Property Share of joint Property ventures Nicetoile interests £m £m £m
Property joint ventures £m
Year ended 31 December 2016 Property Share of joint Property ventures Nicetoile interests £m £m £m
Property joint ventures £m
Year ended 31 December 2015
Nicetoile £m
Share of Property interests £m
Aggregated Property interests balance sheets Year ended 31 December 2015
Nicetoile £m
Share of Property interests £m
61
Premium outlets
Aggregated premium outlets income summary Value Retail £m
VIA Outlets £m
2016 Total £m
Value Retail £m
VIA Outlets £m
2015 Total £m
VIA Outlets £m
2016 Total £m
Value Retail £m
VIA Outlets £m
2015 Total £m
Aggregated premium outlets investment summary Value Retail £m
62
Proportionally consolidated information
Balance sheet as at 31 December 2016 Reported Group £m
2016 Share of Property Proportionally interests consolidated £m £m
2015 Reported Group £m
Share of Property interests £m
2016 £m
Proportionally consolidated £m
2015 £m
63
Net debt as at 31 December 2016 2016 Reported Group £m
Share of Property interests £m
Total £m
2015 Reported Group £m
Share of Property interests £m
Total £m
Notes
Loan to value as at 31 December 2016 31 December 2016 New Old methodology methodology
31 December 2015 New Old methodology methodology
Underlying finance costs for the year ended 31 December 2016 2016 Reported Group £m
Share of Property interests £m
Total £m
2015 Reported Group £m
Share of Property interests £m
Total £m
Notes
64
DEVELOPMENT PIPELINE UNAUDITED Scheme
Area m2 Key facts
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65
GLOSSARY
66
67
