2017 2017 FULL Y YEAR R RESULT LTS 16 FEBRUARY 2018
2017: Delivering in line with strategy £1.1 .1 b billio illion in invested Attrac active ve r retur urns ns f for shar hareho holde ders Asset acquisitions £610m Total property return 18.9% • • Development capex £414m NAV growth 16.3% • • Land acquisitions £92m Adjusted EPS growth 5.9% • • Final dividend growth 6.1% £525 m millio illion dis isposals ls • Asset sales £432m • Land sales £92m • £2.7 .7 b billio illion of fin inancin ing Record o d ope perat ating ng metrics Equity £0.6bn £53m new rent contracted 19% • • Debt £2.1bn Customer satisfaction 87% • • LTV ratio 30% Lowest ever vacancy rate 4.0% • • ERV growth 3.1% • 2
A well located portfolio of modern warehouses Portfolio split by geography and asset type (at 31 December 2017) Other, £0.5bn Italy, £0.4bn Greater London, Poland, £3.2bn £0.8bn France, AUM £0.9bn £9.3bn Germany, £1.2bn Thames Valley, Midlands Logistics, £1.5bn £0.8bn Other (4%) Big box (41%) Urban (55%) 3
Strong momentum going into 2018 Supportive market with structural drivers Further rental income growth potential Profitable development pipeline Strong balance sheet OneExpress, Vailog Interporto Bologna 4
2017: Another year of delivery Strong financial results and significantly improved capital structure Disciplined capital allocation improving portfolio scale and quality Operational excellence delivers strong operating and development performance Significant growth opportunities within our control SEGRO Park Düsseldorf-Sud 5
Strong financial results and balance sheet Adjusted Earnings growth +25.7% 25.7% pre-tax profit – Capturing rental growth in reviews and renewals Adjusted EPS 1 , +5. 5.9% 9% 19.9p – Development completions in 2016 and 2017 Like-for-like net rental – Reduced financing costs +2. 2.6% 6% income growth Strong balance sheet EPRA NAV per share 1 +16.3% 16.3% 556p – 13.6% portfolio value growth – £2.7 billion of financing, including rights issue and Loan to Value ratio 30% 30% (FY 2016: 33%) inaugural US private placement Final dividend per share 1 11.35p 11.35p (2016: 10.7p) 2017 final dividend increased by 6.1% – Total 2017 dividend increased by 5.7% Total dividend per share 1 16.6p 16.6p (2016: 15.7p) 1 Historic per share metrics have been adjusted for the Rights Issue bonus adjustment factor of 1.046 6
2.6% growth in like-for-like net rental income Proportionally consolidated net rental income (excluding joint venture fees), 2016-17, £ million £284.0m £279.2m £20.4m £5.9m £4.5m £250.7m £19.9m £(1.5)m £(1.8)m JVs JVs JVs £(18.8)m £70.1m £58.5m £61.8m APP acquisition Group: up: +2. 2.6% 6% UK: +5.1% Mainly 2016 disposals CE: (2.5)% and disposals to part-fund Group Group Group £180.6m £220.7m £222.2m APP acquisition Vacancy reduced to 4.0% rental income Disposals Acquisitions Like-for-like developments Take-backs for Other Currency rental income Pro forma 2017 development Completed (see slide 35) 2016 net 2017 net NRI 7
26% increase in Adjusted PBT Adjusted income statement 2017 2017 2016 2016 APP performance fee generated non- • £m £m recurring profit of £3.2m Gross rental income 272.9 225.5 Property operating expenses (52.2) (44.9) FY 2018 JV fee income expected to • be c£16m Net r rent ntal i inc ncome 220. 220.7 180. 180.6 Share of joint ventures’ adjusted profit 1 47.6 55.4 Cost ratio of 24.6% • Joint venture fee income 24.3 18.6 (2016: 23.0%) Administration expenses (39.7) (31.4) 21.7% excl LTIPs • (2016: 21.0%) Adj djus usted o d ope perating ng pr profit 252. 252.9 223. 223.2 Net finance costs (58.7) (68.7) 2017 adjusted EPS based on average • Adj djus usted pr d profit be before tax 194.2 194. 154.5 154. 967m shares; 1,007m outstanding at year-end Tax on adjusted profit 0.6% 1.2% 1 Net property rental income less administrative expenses, net interest expenses and taxation 8
17% increase in EPRA NAV Components of EPRA NAV change, 31 December 2016 to 31 December 2017 96p Development 17p (20)p (2)p 556p Assets & Land 79p 20p (16)p 478p (after applying bonus adjustment factor of 1.046 to reported 500p) 31 December 2017 Dividends Realised and Net impact of Exchange rate and 31 December 2016 Adjusted EPS unrealised gains financing activity other 2017 9
£965m valuation surplus UK: +15.8% Continental Europe: +6.2% £1,000m +2.9% +1.4% +10.3% +13.2% +7.5% £800m +8.1% +15.8% £600m +17.6% £400m £200m £0m Total London Slough Midlands Big Germany France Poland Italy Box Percentage change relates to properties held throughout 2017, including JVs at share. 10
Driven by asset management, yield shift and rental growth 1 ERV growth: 3.1% Equivalent yield: 5.3% 2 Lon ondon on ER ERV London +4.6% 4.8% Heathrow +2.1% UK: Slough +3.5% 5.1% +3.9% Park Royal +7.1% Midlands Big Box +1.7% 5.3% N&E London +9.0% 31-Dec-17 31-Dec-16 Germany By ow By owner ER ERV +1.9% 5.4% SEGRO +2.1% Italy 5.9% +1.9% Cont. SELP +0.6% Eur. France 6.1% +1.4% +1.2% Poland 6.9% +0.1% 0.0% 2.0% 4.0% 6.0% 8.0% 1 Yield on standing assets at 31 December 2017; ERV growth based on assets held throughout 2017. 2 Net true equivalent yield 11
£2.7bn of new financing to strengthen balance sheet £216m cash consideration for APP Rights I Issue • £341m for future development capex £573m gross proceeds • 70% identified projects committed or completed (£557m net) • Priv ivate P e Pla lacem emen ent Issue 11yr ave duration, 1.9% ave coupon • Repaid 2018 bonds and APP secured debt €650m of new debt • Bond t nd tende nder Longer dated bonds tendered • Increased average debt duration by 3 years £550m of bonds tendered • £750m of new bonds 8yr duration, 1.5% coupon SELP b P bon ond • Repaid most of remaining secured debt €500m of new debt • Credit Cr it f facilit ilities ies €1.3bn of cash and available facilities • Marginal cost of 1% Extended by €440m • 12
Efficient, conservative capital structure LTV ratio and average cost of debt (incl share of joint ventures), 2012-17 Debt maturity improved to 10.8 years (from 6.2 years at end- 60% 4.6% 5.0% 2016) 4.2% 4.2% 4.0% Average cost of debt 3.5% 3.4% 40% 2018: £350m+ estimated LTV ratio 3.0% development capex (and further 2.1% c£50m of infrastructure capex) 2.0% 20% 2018: c£200m estimated 1.0% 51% 42% 40% 38% 33% 30% disposals 0% 0.0% 2012 2013 2014 2015 2016 2017 LTV ratio Ave cost of debt 13
Strong financial results and balance sheet Growing earnings Strong balance sheet 2017 final dividend increased by 6% BidFood, Slough Trading Estate 14
2017: Another year of delivery Strong financial results and significantly improved capital structure Disciplined capital allocation improving portfolio scale and quality Operational excellence delivers strong operating and development performance Significant growth opportunities within our control Camden Town Brewery, Navigation Park 15
Improving portfolio quality and scale through disciplined capital allocation £414m o £414m of f development c t capex £702m £702m o of f acquisiti tions Development capex APP portfolio and infrastructure Yoox, Bologna Skyline Park, Heathrow London, 3% Poland, 1% Midlands UK, Big box warehouses — Italy, 9% Development land 43% Germany, UK and France 18% Spain, 26% Butchers Pet Care, Crick £525m £525m o of f disposals Disposals to part-fund Asset and land APP portfolio recycling, primarily in acquisition UK and Germany Nelson Trade Park, London Neuss Business Park, Germany 16
Creating a scale position in Continental European warehouses Assets under management, €bn (as at 31 December 2017) 1.6 Spain assets under management, €m €1.3bn 1.4 Assets under management 500 1.2 €1.1bn 400 €1.0bn 1.0 300 0.8 0.6 200 €0.5bn €0.4bn 0.4 100 0.2 0 At 31 Dec 17 development added value Acquisitions Target under offer 0.0 Estimated Current Germany France Poland/Czech Italy Other European SELP SEGRO wholly-owned 17
Creating a sustainable portfolio Second carbon-neutral development delivered 50% increase in solar energy capacity in 2017 80% construction waste recycled or re- used 18
2017: Another year of delivery Strong financial results and significantly improved capital structure Disciplined capital allocation improving portfolio scale and quality Operational excellence delivers strong operating and development performance Significant growth opportunities within our control XPO Logistics, SEGRO Logistics Park Bondouffle 19
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