Shurgard Self Storage Limited · EURONEXT:SHUR
Shurgard Self Storage — Debt Investor Presentation (October 2024)
49 slides from Shurgard Self Storage's debt investor presentation, October 2024
Slide 1: Shurgard Presentation in the Context of the Bond Issuance
October 2024 SHURGARD PRESENTATION IN THE CONTEXT OF THE BOND ISSUANCE Classification : Confidential
Slide 2: Today's Speakers
TODAY’S SPEAKERS Marc Oursin Jean Kreusch Thomas Oversberg CEO CFO Finance Director • More than 30 years of • More than 30 years of • More than 15 years of experience in real estate / experience in real estate / experience in retail and real retail retail estate • With Shurgard since 2012 • Joined S
Slide 3: Agenda
AGENDA 1. Company overview 2. Key company highlights 3. Financial highlights and Policies 4. Acquisition of Lok’nStore group plc 5. Closing remarks 6. Appendix Classification : Confidential
Slide 4: Company Overview
1| COMPANY OVERVIEW 4
Slide 5: Shurgard Standalone at a Glance
SHURGARD STANDALONE AT A GLANCE Shurgard at a glance1 Key Financials1 • # 1 Self-storage European actor with unrivalled FY 2023 H1 2024 presence and brand Property Operating Revenue €357.7mio +9.0%2 €189.3mio +8.2%2 • 281 Stores in 7 European countries Income From Property (NOI) €237.2mio +9.9%2 €11
Slide 6: Shurgard's Standalone Geographic Coverage
SHURGARD’S STANDALONE GEOGRAPHIC COVERAGE1 Other 24% 10 Denmark Belgium 4% 44 stores 7% France 24% stores 39 Goteborg Germany 12% 13% London stores Copenhagen 100% 100% Stockholm 63% 281 Sweden 14% stores Stockholm Netherland Other Frankfurt 23% 26% 5% Berlin 25% United Kingdom Gothenburg 16% 66 sto
Slide 7: Historical Milestones
HISTORICAL MILESTONES STARTING AND SCALING UP CREATE THE PLATFORM AND DELEVERAGE Growing the platform 1995-2005 2018-today 2008-2014 • Shurgard Self-Storage Europe created in • Stop development to allow strong free cash flow • Strong financial performance with conservative financial policy 1993 by S
Slide 8: Our Unique Strategic Circle
OUR UNIQUE STRATEGIC CIRCLE Focus on highly urban regions: Ensures attractive demographics and high level of self- Focus on storage demand. Benefiting from strong performance of these regions, compared to rural Platform highly regions. Growth urban regions Brand Awareness: Increase customer awarenes
Slide 9: Key Company Highlights
2| KEY COMPANY HIGHLIGHTS
Slide 10: Key Company Highlights
KEY COMPANY HIGHLIGHTS Reference Shareholders with long term vision and ability to support Self-storage leader in Europe Strong ESG standards and Supportive demand trends in self-storage ambitions Strategically located and geographically diversified unencumbered properties Experienced management tea
Slide 11: Clear Leadership in European Self-Storage Industry
1 CLEAR LEADERSHIP IN EUROPEAN SELF-STORAGE INDUSTRY Sqm Geographic presence Number of stores (million) 1 1 2 1 2 1 2 1 Shurgard 281 L 1.4 Safestore 135 29 L 0.8 11 11 6 2.0X Homebox 165 0.6 SSG 90 49 L 0.2 Big Yellow 85 24 L 0.6 Nettolager 106 0.3 Bluespace 72 0.3 24 Storage + Green 27 40 0.3 MyPla
Slide 12: What Is Self Storage and Why Are People Using It?
2 WHAT IS SELF STORAGE AND WHY ARE PEOPLE USING IT? What is self-storage Why do they need self-storage? Where do they live? for our customers? “My attic or basement in a remote location” • Life events (birth, death, divorce, mobility, hybrid Close to property, catchment areas • Short distance catchm
Slide 13: Overview of the European Self-Storage Market
2 OVERVIEW OF THE EUROPEAN SELF-STORAGE MARKET IN EUROPE Varying market maturity in Europe High customer demand across Europe resulting in high average occupancy Self-Storage market: number of stores (including containers) by country Total floorspace and average occupancy by country in the largest E
Slide 14: Strong Market Position in an Industry with Long Term Growth Prospects
2 SHURGARD HAS A STRONG MARKET POSITION IN AN INDUSTRY WHICH BENEFITS FROM LONG TERM GROWTH PROSPECTS Shurgard’s footprint results in leading positions across capital cities Long term growth perspective Self-storage sq ft. per capita in 2023 self-storage area (sq ft. per capita)1 our 7 markets versu
Slide 15: Strategically Located and Geographically Diversified Unencumbered Storage Properties
3 STRATEGICALLY LOCATED AND GEOGRAPHICALLY DIVERSIFIED UNENCUMBERED STORAGE PROPERTIES Geographically diversified1 Strategic advantages of 63% purpose-built portfolio 281 Shurgard stores 77 66 66 186 44 39 35 21 10 France The United Sweden Germany Belgium Denmark 1,200 miles Netherlands Kingdom A un
Slide 16: Attractive & Resilient Business Model
4 ATTRACTIVE & RESILIENT BUSINESS MODEL Low break-even occupancy and high margins Economics of a typical Shurgard store Track record of strong and resilient (€ ‘000) cash flow generation 1,200 Revenue 1. Resilient revenue 900 - Granular and diversified customer base: ~700 customers per store1 600 Pr
Slide 17: First European Self-Storage Operator Awarded BBB+ Rating by S&P
4 FIRST EUROPEAN SELF-STORAGE OPERATOR AWARDED A BBB+ (STABLE OUTLOOK) CREDIT RATING BY S&P S&P rating rationale: • “Leading market position in the self-storage market in Western Europe, as well as its large customer Rating Framework: base and broad geographic diversification” • Debt / Total Assets:
Slide 18: 3 Levers Are Driving Our Portfolio Expansion
5 3 LEVERS ARE DRIVING OUR PORTFOLIO EXPANSION LEVER 1 LEVER 2 LEVER 3 Re-developments New Developments Market Consolidation (expand existing buildings) (purpose built and conversion) (bolt-on acquisitions) Ambition to increase our footprint by 90,000 sqm p.a.: • Invest c.€200 million p.a. • Doublin
Slide 19: Redevelopments: Leveraging Our Freeholds
5 REDEVELOPMENTS: LEVERAGING OUR FREEHOLDS LEVER 1 LEVER 2 LEVER 3 2022 2023 2024 2025/2026 1 5 6 4 building buildings buildings buildings Total cost: Total cost: Total cost: Total cost: €0.9 million €9.6 million €19.6 million €20.5 million Total additional Total additional Total additional Total ad
Slide 20: New Developments: Key Growth Lever
5 NEW DEVELOPMENTS: KEY GROWTH LEVER LEVER 1 LEVER 2 LEVER 3 Extrapolation of potential additional properties based on London penetration in Shurgard countries: FR - Paris 143 DE - NRW1 Koln-Dusseldorf-… 133 Typical process UK – FR – DE – NL: NL - Randstad 2 49 From agreement with seller on price DE
Slide 21: Market Consolidation: Our Targeted Approach
5 MARKET CONSOLIDATION: OUR TARGETED APPROACH LEVER 1 LEVER 2 LEVER 3 Note: All data presented are 2015 – Present Unique & Disciplined 2023 2024 …targeting a fragmented market with multiple opportunities M&A Strategy… achievements achievements FOCUS AREA 104 “ BOLT ON” ACQUIRED STORES 5 STORES 35 ST
Slide 22: Supported by Digitalization Through an Optimized Digital Platform
5 SUPPORTED BY DIGITALIZATION THROUGH AN OPTIMIZED DIGITAL PLATFORM… Enhancing the customer proposition… …while driving margin expansion Web Leads & Mobile Share 180,000 90% Customer Centric Digitalization Better operating efficiency 160,000 140,000 80% 70% 120,000 60% • Improved customer service: G
Slide 23: ...and Brand Visibility (Buildings and Web)
5 …AND BRAND VISIBILITY (BUILDINGS AND WEB)… Unified store image & standardized assets (2016-2018) Highest Google ranking Volume of paid search Cost of paid search Germany 30% Sweden 70% Shurgard 30% Non 20% Shurgard Shurgard 50% keywords Non Shurgard of high visibility 50% keywords 80% properties T
Slide 24: Best-in-Class Customer Experience and Long-Term Customer Relationships
5 …RESULTING IN BEST-IN-CLASS CUSTOMER EXPERIENCE AND LONG- TERM CUSTOMER RELATIONSHIPS GOOGLE OMNICHANNEL CUSTOMER EXPERIENCE HIGH CUSTOMER SATISFACTION “EXCELLENT SERVICE” 4.8 RATING (350 REVIEWS / STORE) After 12 months customers are considered “long-term 63% customers” Stores/buildings 37% OF TO
Slide 25: Highly Experienced Management Team with Proven Track Record
6 HIGHLY EXPERIENCED MANAGEMENT TEAM WITH PROVEN TRACK RECORD TO EXECUTE STRATEGY Marc Oursin Duncan Bell Ammar Kharouf Jean Kreusch Isabel Neumann CEO (since 2012) COO (since 2014) General Counsel, VP HR CFO (since 2003) CIO (since 2021) (since 2014) • More than 30 years • 14 years of experience in
Slide 26: Our Successful ESG Strategy
7 OUR SUCCESSFUL ESG STRATEGY Our Commitments ESG Priorities Strong Ratings PHASE ONE As of January 2021, zero carbon emissions from: Invest to reduce our 100% of our electricity consumption carbon footprint 91/100 Green certified buildings, LED, 60% of our natural gas consumption heat pumps, so
Slide 27: Support from Strong Shareholders with a Long-Term Vision
8 SUPPORT FROM STRONG SHAREHOLDERS WITH A LONG-TERM VISION PUBLIC STORAGE NEW YORK STATE COMMON RETIREMENT FUND • Participation in Shurgard: 35% • Participation in Shurgard: 34% • Shareholder since 2006 • Shareholder since 2008 • Largest owner and operator of self-storage facilities • Third largest
Slide 28: Financial Highlights and Policies
3| FINANCIAL HIGHLIGHTS AND POLICIES
Slide 29: A Conservative Financial Policy and a Balanced Capital Structure
A CONSERVATIVE FINANCIAL POLICY AND A BALANCED CAPITAL STRUCTURE Flexible financing structure1 Supporting growth and capacity to seize opportunities1 Debt maturity Net debt/underlying Loan-to-Value €800m €130m 3.7y 2 EBITDA Drawn 500 3 15.4% per H1’24 Drawn on a €450m floating interest Average 130
Slide 30: Successful and Diverse Capital Market Strategy
SUCCESSFUL AND DIVERSE CAPITAL MARKET STRATEGY PROVIDING FLEXIBILITY IN FINANCING THE CAPITAL STRUCTURE 2018: €575 MILLION 2021: €300 MILLION 2023: €450 MILLION 2023: €300 MILLION 2024: IPO GREEN NOTE BANK FACILITY CAPITAL RAISE SCRIP DIVIDEND In November 2023, Shurgard In February 2021, Shurgard su
Slide 31: A Conservative Financial Policy
A CONSERVATIVE FINANCIAL POLICY Leverage Dividend Investments Maintain a conservative financial policy with a target to keep : • LTV at c.25% Flexible dividend policy: Disciplined increase of footprint annually by approx. 90.000 sqm • Leverage at 4.0x to 5.0x Net • of €1.17 dividend per share per th
Slide 32: Acquisition of Lok'nStore Group plc
4| ACQUISITION OF LOK’NSTORE GROUP PLC
Slide 33: Strategic Rationale
STRATEGIC RATIONALE Doubles UK portfolio by stores in one acquisition COMBINED (NO. OF STORES) UK ASSETS 3,4 – NO. STORES Operating - owned/leased 135 6 11% 100% 10% Pipeline (incl. managed) + 5 Operating - managed 100 109 32% 28% 16% 16% Owned stores 52 48 Increased UK (incl. pipeline) exposure: 18
Slide 34: Strategic Rationale
STRATEGIC RATIONALE Acquisition of Lok’nStore provides an additional 171,000 sqm MLA, representing two full years of Shurgard’s targeted annual expansion (2x 90,000 sqm) BLENDED OCCUPANCY – OWNED STORES PIPELINE MLA At January 2024 Target occupancy 90% Pro 67% 26 operating stores1 3 Forma (121k sqm)
Slide 35: Operational Integration Completed
OPERATIONAL INTEGRATION COMPLETED • Integration of validated data into our CRM system as of D+1 (August 1 2024) Successful Integration • Integration on our website as of D+1 (August 1) • Integration on our pricing model with promotions in place Focus on • E-rental availability as of D+2 (50% of move
Slide 36: Lok'nStore Acquisition Impact
LOK’NSTORE ACQUISITION IMPACT LOK’NSTORE ACQUISITION IMPACT: • Q3-2024 Financial communication on November 5th 2024 will be the first quarter incorporating former Lok’nStore portfolio being consolidated as of August 1; • Accretion on Shurgard adjusted EPRA earnings per share: neutral in 2025 and acc
Slide 37: Closing Remarks
5| CLOSING REMARKS 37
Slide 38: Why Investing in Shurgard?
WHY INVESTING IN SHURGARD ? Largest provider of self-storage in Europe with unrivalled presence, scale and brand Operational 307 stores (281 Shurgard + 26 newly acquired Lok’nStore stores) in 7 European countries focusing on capital- and major cities, selected for their demographics and urban densit
Slide 39: Appendix
Pas O Zz in a a. = 6
Slide 40: Simplified Group Corporate Structure
SIMPLIFIED GROUP CORPORATE STRUCTURE New York Common Public Storage Free float State Retirement Fund Operating entities Shareholders 31% Holding / Financing entities Captive / reinsurance 35% Shurgard Self Storage 34% Ltd 100% 100% Shurgard UK Ltd Shurgard Luxembourg sàrl Parental guarantee / financ
Slide 41: Management Team
MANAGEMENT TEAM Caroline Thirifay Thomas Oversberg Dany Bruggeman Olivier Ferrard Vincent Mesdom Chris Clare Matthieu Varaldo Fanny Rosmawaty Director of Investor Financial Director Director of IS Director of Internal Director of Acquisitions Development Director Construction Director Design Directo
Slide 42: Delivering the Digital Customer Experience
DELIVERING THE DIGITAL CUSTOMER EXPERIENCE Finding a Space Lease Execution Account Management Daily Property Use Website Digital Rental Comprehensive Digital Property Access1 Agreement Mobile App Leading adoption by customers High customer utilization Enabling customer access and Industry-leading pl
Slide 43: Operational Excellence
OPERATIONAL EXCELLENCE Continuously optimized platform • High scalability and critical size The scalability of our business is reflected in our increasing • Centralized and lean organization same store NOI margin • Prop-tech platform c. +10pp Dynamic pricing and occupancy management 68% 480 67.4% •
Slide 44: Monthly Move Out Ratio by Month Since 2014
MONTHLY MOVE OUT RATIO BY MONTH SINCE 2014 c. 86% Move out ratio 1 7.5% 7.1% 7.0% 6.9% 6.9% 6.7% 6.5% 6.3% 6.1% 6.0% c. 61% 5.7% 5.6% 5.6% 5.6% 5.5% 5.1% 5.0% 2014 (178 SS) 2015 (187 SS) 2016 (192 SS) 2017 (213 SS) 2018 (214 SS) 2019 (217 SS) 2020 (225 SS) 2021 (228 SS) 2022 (234 SS) 2023 (240 SS) 2
Slide 45: Proven Model, Best in Class Self-Storage Platform
PROVEN MODEL, BEST IN CLASS SELF-STORAGE PLATFORM Supportive Customer Resilient Model Strong Branding Prop-Tech Platform Dynamics4 89.5% #1 brand recognition2 Driving digital data • 62 months average stay • 90% of prospects connecting via digital • Increasing revenue through price Same store platfor
Slide 46: Lok'nStore Has a High-Quality Portfolio
LOK’NSTORE HAS A HIGH-QUALITY PORTFOLIO Portfolio characteristics (excl. management contract, including pipeline) Freehold (% of sqm) Purpose built Modern Average sqm Average unit size 82% 76% 43% c. 5,000 sqm 6.9 sqm (Built since Jan 2022 vs c. 13% for (vs. c. 5.0 sqm for Shurgard) (vs. 93% for Shu
Slide 47: Attractive Underlying Market Dynamics and Demographics
ATTRACTIVE UNDERLYING MARKET DYNAMICS AND DEMOGRAPHICS HIGHLY CONCENTRATED AND EFFICIENT PORTFOLIO STRONG DEMOGRAPHICS AND MARKET DYNAMICS LOKN Owned (Operating and Pipeline) LOKN Stores under management contract London / South-East / (Operating and Pipeline) London Manchester Proportion in Capital
Slide 48: Legal Disclaimer (1/2)
LEGAL DISCLAIMER (1/2) NOT FOR DISTRIBUTION IN OR INTO THE UNITED STATES OR TO ANY U.S. PERSON By attending the meeting where this presentation is made, or by reading the presentation slides, you agree to be bound by the following limitations: The information in this document has been prepared by Sh
Slide 49: Legal Disclaimer (2/2)
LEGAL DISCLAIMER (2/2) The Securities may be held only by, and transferred only to, eligible investors referred to in Article 4 of the Belgian Royal Decree of 26 May 1994, holding their securities in an exempt securities account (X-account) that has been opened with a financial institution that is a
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