Investor presentation Spring 2014
Intu Properties plc Investor presentation Spring 2014 Corporate overview Financial details Asset management overview Appendices This presentation includes statements that are forward-looking in nature. Forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of Intu Properties plc to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Any information contained in this presentation on the price at which shares or other securities in Intu Properties plc have been bought or sold in the past, or on the yield on such shares or other securities, should not be relied upon as a guide to future performance Page 2
Corporate overview
Intu at a glance Over 21m sq ft of retail, catering and leisure space 12 of UK s top 25 shopping centres 1.2bn development pipeline 2/3 of the UK s population live within a 45 minute drive time of one of our centres 30m unique customers Our centres attract 400m customer visits a year 95% occupancy Page 4
Scale, focus and quality set Intu apart 2 Assets of which Intu s share is > 100m Page 5
Intu - leading owner, developer and manager of prime UK shopping centres Centre Location Centre Location 1 Westfield London London - Shepherds Bush 23 intu Bromley Bromley 2 Bluewater Greenhithe 24 intu Eldon Square Newcastle 3 Westfield Stratford City London - Stratford 25= intu Braehead Glasgow 4 Meadowhall Sheffield 25= Victoria Square Belfast 5 intu Trafford Centre Manchester 27 East Kilbride Shopping Centre Glasgow 6 St David's Cardiff 28 Victoria Quarter Leeds 7 intu Lakeside Thurrock 29 Silverburn Glasgow 8 intu Metrocentre Gateshead 30 White Rose Shopping Centre Leeds 9 Liverpool One Liverpool 31 The Oracle Reading 10 Bullring Birmingham 32 Buchanan Galleries Glasgow 11 Arndale Centre Manchester 33 Churchill Square Brighton 12 Brent Cross London 34 Golden Square Warrington 13 intu Merry Hill (2) Brierley Hill 35 Trinity Leeds Leeds 14 The Mall at Cribbs Causeway Bristol 15 Cabot Circus Bristol 16 Cabot Place, One Canada Square London 17 Highcross Leicester Leicester 45 intu Victoria Centre Nottingham 18 intu Derby (2) Derby 50 intu Potteries Stoke-on-Trent 19 thecentre: mk (3) Milton Keynes 52 intu Chapelfield Norwich 20 intu Watford Watford 60 intu Milton Keynes Milton Keynes 21 Festival Place Basingstoke 71 intu Uxbridge Uxbridge 22 West Quay Southampton 187 intu Broadmarsh Nottingham Source: PMA (1) Top shopping centres on basis of PMA Retail Score (December 2013). Intu shopping centres highlighted orange (2) Acquired on 1 May 2014 (3) Adjoined by Midsummer Place, which was acquired by Intu in March 2013 Page 6
Retail property market context Continuing trend for trade to concentrate into fewer retail locations (1) Notably lower vacancies in larger centres (2) International and successful domestic retailers want flagship stores in best locations complimented by full range of leisure and catering Shift to prime retail pitches reinforced by rising impact of e-commerce Limited new supply pipeline, long lead time (3) (1) Source: CBRE NSLSP. Comparison goods market share based on NSLSP shopping population (2) Source: PMA. Big shopping centres are classified as those shopping centres above 400,000 sq ft in the 70 largest city centres in the UK plus super-regional shopping centres (3) Source: PMA Page 7
Intu s priorities leading change Optimise performance of existing assets through active asset management focusing on customer experience, combining retail, catering and leisure Continue to improve financial flexibility including capital recycling and introducing partners Obtaining competitive advantage from intu brand and digital presence demonstrating the benefits of scale and national coverage Seizing opportunities for profitable expansion drive forward 1.2 billion development pipeline acquisition opportunities Page 8
Financial details
Robust financial position Net debt to assets 48.5% 31 December 2013 Total properties at market value 7,624m Net external debt (3,698)m Net debt to assets 48.5% Debt maturity profile as at 31 December 2013 Cash and short term investments 235m Undrawn committed corporate facilities 90m Net assets attributable to shareholders Adjusted net assets per share 3,519m 380p Weighted average cost of gross debt 4.8% Weighted average maturity of gross debt 8.0 years Illustrative enlarged group Adding newly acquired assets at valuation and debt secured thereon: Total properties at market value 8,490m Net external debt (4,096)m Net debt to assets 48.2% Page 10
2013 underlying earnings ( m) 2013 m 2012 m Net rental income 369.5 362.6 Administration expenses (27.7) (26.7) Net finance cost (underlying) (203.1) (204.0) Dividend from US investment 6.3 6.3 Other (4.8) (0.5) Underlying earnings 140.2 137.7 Interest cover 1.71x 1.69x EPRA cost ratio (1) 15.7% 16.4% Earnings per share (pence) 15.0 16.1 Average shares in issue (million) 935.3 853.8 Dividend per share (pence) 15.0 15.0 (1) The EPRA cost ratio presented excludes direct vacancy costs and is calculated in accordance with EPRA guidelines Page 11
Change in like-for-like net rental income (%) Page 12
2013 valuation surplus + 126 million, +1.8% Significant valuation movements: Market Like-for-like surplus value (deficit) m m % intu Trafford Centre 1,900 94 5.3 intu Lakeside 1,125 26 2.4 Manchester Arndale 399 15 3.7 St David s, Cardiff 272 16 6.4 Cribbs Causeway 242 7 2.8 intu Eldon Square 250-7 -2.9 intu Potteries 163-6 -3.6 intu Bromley 159-7 -4.1 Page 13
Asset management overview
Delivering change, delivering great experiences Page 15
Development pipeline 2.6 million sq ft, 1.8 million sq ft consented, with 30 planning approvals 2013 million sq. ft. 2018* million sq. ft. 2023* million sq. ft. Total size 18.2 19.3 20.8 Catering and leisure 1.9 2.8 3.4 * Indicative timings actual timing of expenditure will be dependent on a number of factors including timing of planning permission and tenant demand. Page 16
Nationwide opportunities Page 17
Nationwide consumer-facing brand, intu Significant benefits Reinforcing scale of intu and importance of intu centres with retailers Extending dwell time and spend Engagement with consumers ancillary income from new services Operational efficiencies Nationwide marketing partnerships Media benefits of same company and centre name Data collection and analysis Driving footfall between online and physical Page 18
Digitally connected 11 centres free Wi-Fi - approximately 3m registrations Ownership model infrastructure and data 60% of Wi-Fi registrants opted in to marketing 9 million unique visitors to our websites intu.co.uk up and running Page 19
Page 20 Q&A
Appendices
Super-regional centres Page 22
Top in-town centres Page 23
In-town centres 11 intu Milton Keynes Page 24
Newly acquired centres intu Merry Hill intu Derby Market value 408m* 390m Occupancy 96% 99% Size (m sq.ft.) 1.4** 1.3 Net annual 22.6m 28.2m rent*** % ownership 50% 100% Headline rent ITZA 150 110 Number of stores Approx 215 Over 180 Key stores M&S, Debenhams, Primark, Asda M&S, Debenhams, Next, Cinema De Lux * Intu s 50% share ** Size of covered shopping centre. Total retail space, including retail parks, c 1.7m sq ft *** Net Annual Rent as at 20 March 2014 per valuation report Page 25
Parque Principado, Oviedo The prime regional destination for Asturias, Northern Spain Acquired October 2013 with CPPIB Occupancy increased to 98% from 97% Five new lettings since acquisition Footfall 9 million 67% of catchment in CACI top 2 (Spain average 44%) Potential developments at Malaga, Valencia and Vigo Page 26
Development pipeline Page 27 Indicative Expected Intu Size 1 construction investment Committed 000 sq ft timing 2 m intu Lakeside food court refurbishment 3 2013-14 7 intu Victoria Centre refurbishment 4 2014-15 40 intu Potteries leisure extension 58 2014-15 19 Other committed 5 41 2014-15 20 86 Active management pipeline intu Trafford Centre - Barton Square courtyard enclosure and second floor retail 112 2014-15 40 intu Bromley Queen s Gardens restaurants 14 2014-15 4 intu Eldon Square Sidgate redevelopment and restaurants 2014-15 12 intu Metrocentre Qube II restaurants 2014-15 11 intu Lakeside hotel 6 8 2014-15 7 Other active management 5 89 2014-18 141 215 Major projects intu Watford Charter Place 380 2014-17 100 intu Broadmarsh redevelopment 51 2015-16 78 intu Lakeside leisure extension 6 225 2015-17 80 intu Lakeside Northern extension 438 2016-18 180 intu Braehead extension 7 475 2016-18 200 Cribbs Causeway extension 8 200 2018-20 30 intu Victoria Centre extension 505 2018-20 240 2,274 908 2,596 1,209 1 Represents net additional floor space of retail, catering and leisure 2 Timing subject to change due to a number of internal and external factors 3 Total project cost 9 million of which 2 million has already been spent 4 Total project cost 42 million of which 2 million has already been spent 5 Smaller committed and pipeline projects do not necessarily involve the creation of additional floor space 6 Size refers to catering element only 7 Size excludes arena and hotel 8 Intu share 33% of total project cost 90 million
Corporate responsibility highlights 18% CO 2 reduction 96% of waste diverted from landfill 22 Community projects Reduced our carbon emissions by 18% (like-for-like portfolio) compared with 2011 saving enough CO 2 in 2013 to cover the emissions of a medium car driving over 28 million miles Diverted 96% of waste from landfill, of which 71% was recycled that s over 23,000 tonnes of waste, or the equivalent of over 3,800 male African elephants, diverted from landfill One of only 40 UK companies to hold BitC CommunityMark 22 community projects working with 12 charity partners Included in FTSE4Good, Dow Jones Sustainability Global Index and JSE SRI Increased our CDP climate change survey score by 25% over past 4 years Page 28
Highly experienced executive management team David Fischel Chief Executive David Fischel was appointed Finance Director in 1988, Managing Director in 1992 and Chief Executive in March 2001. During his 27 year career with Intu, David has gained significant executive experience in numerous aspects of the shopping centre industry including shopping centre acquisitions and developments. He has also been closely involved with the group s corporate development including equity and debt financings and a wide range of other corporate transactions, including the 2010 demerger of Capital & Counties from CSC. Matthew Roberts Finance Director Matthew Roberts (FCA) joined Intu as Finance Director in May 2010 and was part of the team which acquired The Trafford Centre, Manchester, in the UK's largest ever single property transaction. In Spring 2013 he led the establishment of Intu s Secured Group Structure with initial issue of 1.15 billion of bond and bank debt. Previously the Finance Director of Debenhams plc from 1996 to 2003, and Chief Financial Officer of Gala (subsequently Gala Coral Group) from 2004 to 2008. Mike Butterworth Chief Operating Officer Mike Butterworth was appointed Chief Operating Officer on 3 October 2011. He joined the Group as Chairman, CSC Trafford in January 2011. Mike was formerly the Property Director of Peel Holdings and the Managing Director of The Trafford Centre Limited and is a fellow of the Royal Institution of Chartered Surveyors. Page 29