2015 Full-year Results 15 February 2016 Agenda 01 2015 - PowerPoint PPT Presentation

2015 Full-year Results 15 February 2016

Agenda 01 2015 highlights and strategy David Atkins – CEO 02 Financial results Timon Drakesmith – CFO 03 Portfolio update David Atkins – CEO 04 Conclusion and Q+A David Atkins – CEO 2

2015 highlights Consistently strong performance EPS +12.6% NAVPS +11.3% TPR 12.4% New European market Dublin, Ireland Portfolio recycling £360m disposals Completed four developments 64,900m 2 Total 25% profit on cost Capturing rental growth LfL NRI +3.1% (1) 2015 highlights and strategy 3 (1) LfL NRI including premium outlets

Investment management driving performance 1 2 European countries or cities with Leading position in the strong macro indicators and European market segment infrastructure investment Investment management strategy 4 Identified asset management 3 Venues matched to consumer opportunities trends, in particular experience, convenience and luxury shopping tourism 2015 highlights and strategy 4

Building our portfolio to secure future growth Acquisitions Market-leading Quality retail in Birmingham, Fast-growth premium platform in Ireland UK’s second city outlets Irish loan portfolio, Dublin Grand Central, Birmingham Festival Park, Majorca Kildare Village, Dublin £690m £175m £46m Positive engagement with 50:50 joint venture signed with New VIA Outlet and increased borrowers CPPIB stake in Kildare Village, Dublin 2015 highlights and strategy 5

On-going review of lower-return assets Disposals Recycling capital Lower-return Standalone retail Completed in UK retail smaller shopping park in France successful asset parks centres management Monument Mall, Newcastle Drakehouse, Sheffield Bercy 2, Paris Villebon 2, Paris Irish platform (hits all filters): immediate scale, Europe’s £75m £62m £47m £116m B’Ham the UK’s fastest growing regional 46% PoC 4% premium to BV 1 1% premium to BV 16% premium to BV B’Ham £360m of disposals in last twelve months Completed first tranche of £200m to finance Irish loan acquisition Planned £300m of further disposals in course of 2016 2015 highlights and strategy 6 Note: Premium for disposals versus 31 December 2014 book value

Focus on strategic priorities continues to deliver strong results NAVPS (pence) EPS (pence) DPS (pence) 750 30 25 +11% +9% +13% 28 23 700 710 22.3 26 21 26.9 650 24 19 22 17 600 20 15 550 18 13 16 11 500 14 9 450 12 7 400 10 5 2011 2012 2013 2014 2015 2011 2012 2013 2014 2015 2011 2012 2013 2014 2015 CAGR +7.6% CAGR +8.7% CAGR +7.7% 2015 highlights and strategy 7

02 Financial results Timon Drakesmith – CFO Review of 2015 financial performance • Analysis of valuation trends • Details on recent changes in debt levels • Funding capacity for our development pipeline • 8

Headline results Income statement 31 Dec 2015 31 Dec 2014 Change Net rental income (£m) 318.6 305.6 +4.3% Adjusted profit (£m) (1) 210.9 174.3 +21.0% Adjusted EPS (p) (1) 26.9 23.9 +12.6% Total dividend (p) 22.3 20.4 +9.3% Balance sheet Portfolio value (£m) (2) 8,374 7,734 +7.1% EPRA NAVPS (p) 710 638 +1 1.3% LTV (%) 38 34 +4 p.p. Financial results 9 (1) Adjusted profit and adjusted EPS restated from £85.0m and 11.6p respectively to exclude restructuring costs of £3.0m, which were excluded when calculating adjusted earnings figures for 31 December 2014 (2) Valuation for total portfolio including premium outlets at constant currency. Uplift is underlying capital return

Positive LfL net rental income growth 2015 LfL NRI growth by sector (%) 9 8 7 7.3 6 5 4 3 3.1 2.6 2.5 2 2.3 2.1 1 0 (1) (2) (1) UK shopping centres UK retail parks France Total exc. Premium Premium outlets Total outlets Financial results 10 (1) Includes LfL movement of UK other properties – principally assets held for development and non-core (2) Includes Value Retail only as VIA Outlets was acquired in July 2014

Strong profit growth Adjusted profit movement (£m) +21.0% 220 12.3 0.2 (3.0) 5.9 210.9 9.7 200 5.5 6.0 180 174.3 160 140 120 100 LfL NRI Acquisitions Developments Premium Admin Financing FX & other 2014 2015 and disposals outlets Financial results 11

Valuation analysis 2015 capital Components of underlying valuation Value at 31 Dec 2015 (2) return (1) change (%) Yield shift Income Other (£m) (%) (%) (%) UK shopping centres +6.8 +4.4 +2.3 - 3,065 UK retail parks +1.3 − 0.2 +1.5 − 0.1 1,656 France +7.1 +9.3 − 0.9 − 1.7 1,861 UK other interests (3) +1.7 +1.8 +0.7 − 1.4 160 Developments +12.3 - - +12.3 388 Premium outlets (4) +16.4 +7.2 +9.4 +0.2 1,244 Total ex Ireland +7.1 +4.9 +2.4 −0.1 8,374 Irish loan portfolio 690 9,064 Total inc Ireland Financial results 12 (1) At constant exchange rates (2) Figures on a proportionally consolidated basis (3) Principally assets held for redevelopment and non-core (4) Premium outlet figures relate to Hammerson interests

NAVPS uplift Adjusted NAV movement (pence per share) +11.3% 760 740 (21) 27 720 (3) 710 700 22 680 47 660 640 638 620 600 580 Portfolio Premium Adjusted Dividends FX & other Dec 2014 Dec 2015 revaluation outlets profit revaluation Financial results 13

Healthy financing ratios Financing policy 31 Dec 2015 31 Dec 2014 £2,968m Net debt - £2,265m Gearing <85% 54% 46% Loan to value <40% 38% 34% Cash/undrawn facilities - £931m £648m Weighted average cost of finance - 3.8% 4.7% Interest cover 3.6x >2.0x 2.8x Net debt/EBITDA 9.6x <10x 8.0x 61% Fixed rate debt >50% 79% 90% GBP/EUR fixed balance sheet hedging 80% - 90% 88% Financial results 14

Management of leverage Today Proformas Actual Post 50% Grand Conversion of £300m disposals 31 Dec 2015 (1) Central and Irish loans to by end 2016 announced property by disposals (1) summer 2016 (2) £2,951m Net debt £2,968m £3,164m £2,864m LTV 38% 38% 39% 37% Financial results 15 (1) Value denominator includes £690m acquisition cost of Irish loan portfolio (2) Payment for conversion to property including balancing payment to Allianz (total £220m)

Controlled deployment of capex Forecast development expenditure (£m) 300 250 Average annual capex 2013-2015 200 150 Committed capex at on-site developments (1) 100 Discretionary capex The Goodsyard (2) 50 Croydon town centre Brent Cross extension - 2016 2017 2018 2019 2020 Financial results 16 (1) On-site developments include Victoria Gate, Leeds and WestQuay Watermark, Southampton (2) The Goodsyard - Phase 1 only . Note: Additional pipeline development opportunities shown in Appendix

Debt maturities and refinancing plan Debt maturity profile (£m) (1) 800 Recent financings (£1.7bn) £1.1bn credit facility (£691m drawn down at 31 December 2015) • £350m 2025 bond issue (2.5% effective coupon) • 700 £272m bond redemption originally due December 2016 • Future funding plans 600 Refinancing of 2017 RCF with new debt issuance and disposals • Credit agencies reaffirmed ratings • 500 400 Revolving credit facilities 300 US private placement Sterling bonds 200 Euro bonds 100 Secured debt 0 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 Financial results 17 (1) As at 31 December 2015 shown on a proportionally consolidated basis

03 Portfolio update David Atkins - CEO Shopping centres • UK • Ireland • France Retail parks Premium outlets Developments 18

Positioned in prime assets delivering growth across the group Our portfolio today Occupancy 97.7% Other/developments (1) 6% Leases signed 400 leases (£28m) Premium Leasing vs previous passing UK outlets shopping +9.5% 14% centres 34% Retail parks 18% French shopping centres Irish shopping 20% centres (loans) 8% Portfolio update 19 (1) Includes UK other interests – principally assets held for redevelopment and non-core

Portfolio update: Shopping centres, UK Brent Cross, London

Grand Central: highly-prized new addition 50:50 JV with CPPIB; Hammerson £175m net investment Adjacent to Bullring Largest John Lewis store outside London Birmingham economic growth second only to London in UK (1) £750m New Street Station regeneration 12% rental reversion on retail 7-8% IRR Size 40,400m 2 Forecast run-rate annual centre footfall 22m % catering 18% Portfolio update: Shopping centres, UK 21 (1) GVA per head (ONS)

Sales patterns YoY sales growth by category in Hammerson UK shopping centre portfolio(%) reflect shopper 7% confidence 6% 5% 4% 3% 2% 1% 0% -1% Fashion Department Gifts & cards Fashion Footwear Catering Leisure & Jewellery Technology Health & Sport & accessories stores travel beauty Outdoors Hammerson UK shopping centres Retail sales (1) +1.3% (+80bps vs index (2) ) Footfall +1.1% 50]% of Hammerson’s base rent, recognising Car park usage (3) +4.1% – Portfolio update: Shopping centres, UK 22 (1) Hammerson UK same-centre retail sales growth (2) VISA face-to-face spending index (2015: 0.5%) (3) Car count at Hammerson UK shopping centres