Safestore Holdings Plc · LSE:SAFE
Safestore — H1 2010 Earnings Presentation
37 slides from Safestore's earnings presentation, Jun 16, 2010
Slide 1: Interim Results
Interim Results 9 16 June 2010 self storage
Slide 2: Highlights
Highlights Rental rate and occupancy growth in both UK and Paris Revenue up 2.8% to £42.4m – Average rate per sq ft up 1.1% to £25.51 – +53,000 sq ft occupancy increase compared to -11,200 sq ft for the same period last year – Number of customers up by 6.5% to over 40,000 Underlying EBITDA up 2.3% t
Slide 3: Financial Review
Financial Review Richard Hodsden, Chief Financial Officer
Slide 4: Summary IFRS Income Statement
Summary IFRS Income Statement Six Months ended Six Months ended 30 Movement 30 April 2010 April 2009 # £m £m % Revenue 42.4 41.3 +2.8% Operating expenses (excluding exceptionals) (19.5) (18.9) EBITDA before exceptional items and investment gain 22.9 22.4 +2.3% Exceptional items/ FX swap/ Contingent
Slide 5: Cash Flow Reconciliation
Cash Flow Reconciliation Six Months ended Six Months ended 30 April 2010 30 April 2009 £m £m Operating profit (before investment gain/(loss)) 22.5 23.1 Working capital and non-cash movements (1.1) 1.8 Operating cash flow 21.4 24.9 Non-discretionary cash flow Maintenance capex (including signage) (1.
Slide 6: New Bank Facilities
New Bank Facilities • Facilities increased to £350m and €40m providing £69m of headroom • Facilities run to August 2013 (previously July 2011) • Only two covenants – Interest Cover Ratio and Loan to Value both of which are tested at consolidated level only (previously tested at Consolidated, UK and
Slide 7: Portfolio Analysis
Portfolio Analysis • As noted to at the year end we have reverted to analysing our portfolio performance in more detail • We have split the performance for H1 into four main categories: − Developing stores – open less than two full financial years − Established stores – open between two and five ful
Slide 8: Operational Review
Operational Review Steve Williams, Chief Executive Officer
Slide 9: Where Safestore is today
Where Safestore is today Safestore the No.1 self storage company in the UK and Paris 116 trading and nine pipeline stores 5.4 m sq ft of storage space when fully fitted out 95 UK stores providing national coverage plus 12 Space Maker stores 21 stores in Paris Experienced and highly motivated team Ma
Slide 10: Market Leadership & Cluster Strategy
Market Leadership & Cluster Strategy Enfield Chingford Borehamwood Friern Barnet Stanmore Wood Green Romford Edgware Alexandra Palace Staples Corner Stoke Newington Pentonville Road Ruislip Holloway Ilford Camden Paddington Barking Notting Hill Whitechapel Hayes Acton Bermondsey HanworthChiswick Ful
Slide 11: A Focused Business Model
A Focused Business Model Geographic spread & cluster strategy Low cost & flexible business model Diversified customer base Quality of earnings − Leasehold / Freehold flexibility − Management contracts − Operational gearing 11
Slide 12: Illustrative Operational Gearing
Illustrative Operational Gearing ● Currently 56% total occupancy (mature stores 64%) ● Significant scope for profit growth and value creation in portfolio through increasing overall occupancy and rates Illustrative EBITDA impact Total Occupancy 60% 70% 80% Incremental EBITDA* 5 19 32 (£m) Rate Incre
Slide 13: Market Trends & Drivers
Market Trends & Drivers Breakdown of Business and Percentage of Space Occupied Domestic Customers* by Customer Type* Enquiry levels up overall – Particularly Web – Increasing domestic demand Strong business demand – Especially in National Accounts HY – HY – HY - HY – HY – HY - Occupancy Sq Ft Custom
Slide 14: Brand and Marketing
Brand and Marketing Online: – Generating quality traffic – Strong growth in organic / natural Google traffic – Consistently top two position for organic and sponsored listings Focus on strategic alliances – Strengthening relationships with Tesco, eBay, Europcar, Wickes and DHL – Launch of partnershi
Slide 15: Une Piece en Plus
Une Piece en Plus Frederic Vecchioli - President
Slide 16: Overview of Une Pièce en Plus (“UPP”)
Overview of Une Pièce en Plus (“UPP”) Safestore is the biggest self storage company in central Paris trading as Une Pièce en Plus Founded by Frederic Vecchioli in 1998, acquired by Safestore in 2004 21 stores including 19 within a 5 mile radius of Central Paris Closing occupancy at 78% of MLA Highly
Slide 17: Cluster strategy
Cluster strategy UPP stores Competitors Market leader in Paris – More stores in Central Paris than any other operator Store cluster enables UPP to offer convenience at premium rates as well as affordability in 1st belt – 4m inhabitants suburban stores Operational and marketing Paris– 2m inhabitants
Slide 18: France Highlights
France Highlights Turnover €30 M Revenue for H1 up 3.2% to €12.2m EBITDA up 4.6% to €7.8m €25 M 5 year CAGR of Revenue 9.9% 5 year CAGR of EBITDA 37%* €20 M Portfolio value up 5.4% to €148.4m Cash generative business - strong operating cash flow H2 €15 M and bank facilities in place to August 2013 H
Slide 19: Occupancy & rate
Occupancy & rate Closing occupancy increase of 4.6% Total occupancy of 78% at 59,758 sq mt (643,000 sq ft) Occupancy increase of 5.8% on a like for like basis Average rate per sq mt up 1.9% to €32.90 on a like for like basis Total Occupancy – End of April Like-for-Like Storage Rental Rates 65,000 m²
Slide 20: Operational highlights
Operational highlights Motivated employees critical to achieve high rates and sales High levels of enquiries and improving conversion rate Record new lets levels (+17%) Number of new lets H1 Strong marketing presence - marketing budget is stable at €1.0m 4500 Marketing cost per new let down 25% on 4
Slide 21: Market potential
Market potential Key focus remains to leverage the Parisian Cluster UPP could not be duplicated today Low storage density in Paris region compared to London/UK Population of 12 million people within the Paris region Estimate potential for 50 new UPP stores within the Paris region At least 2 store op
Slide 22: Property Review
Property Review Richard Hodsden, Chief Financial Officer
Slide 23: Property Portfolio Valuations
Property Portfolio Valuations Key Variables Apr-10 Oct-09 Apr-09 Average Rate per Sq Ft 25.51 £25.24 £25.24 Exit Cap Rate 7.90% 8.14% 8.17% Weighted average stabilised occupancy 77.40% 77.79% 78.38% Average number of months to stabilised occupancy 43 43 46 DCF based valuations Several key variables
Slide 24: Property Portfolio Valuation – Cushman & Wakefield
Property Portfolio Valuation – Cushman & Wakefield Maximum Lettable Valuation as at Movement since Location Tenure Stores Area* 30 April 2010 October 2009 ‘000 sq ft £m £m UK Freehold 55 2,461 403 7 Long Leasehold 5 280 34 - Short Leasehold 1 35 1,483 89 (2) France Freehold 8 331 73 5 Short Leasehol
Slide 25: Expansion Stores
Expansion Stores Tenure Full Pipeline Opened / Planning MLA Estimated Pipeline of 9 expansion stores which will Sq. Ft Opening add 413,600 sq ft of MLA. Of these: – 6 are freehold Development Stores due to open 2010/11 Crystal Palace LL 42,350 July 2010 – 2 are long leasehold MacDonald (Paris) LH 37
Slide 26: Outlook
Outlook Steve Williams, Chief Executive Officer
Slide 27: Outlook
Outlook Market leadership maintained – well positioned to increase market share Clear but flexible strategy Balanced approach to rate and occupancy should maintain margins Strong and robust positive cash flow Selective new store acquisitions Trading conditions improved in H1 which has continued into
Slide 28: Appendix
Appendix self storage
Slide 29: Net Debt and Covenants
Net Debt and Covenants Six Months ended Six Months ended Net Debt Position 30 April 2010 30 April 2009 £m £m Available facilities at the year end* 384.7 349.9 Total bank borrowings (gross of FRS 4 Adjustment) (316.0) (302.9) Cash 21.3 29.2 Net debt (294.7) (273.7) * €40m facility translated at €1.15
Slide 30: Portfolio Summary Under IFRS
Portfolio Summary Under IFRS April 2010 Developing Established Mature Large Total Number of Stores 14 14 80 8 116 Sq Ft ’000 Sq Ft ’000 Sq Ft ’000 Sq Ft ’000 Sq Ft ’000 MLA (self storage only) 710 645 2,896 770 5,021 Occupancy (self storage only) 224 334 1,866 380 2,804 Occupancy (%age) 32% 52% 64%
Slide 31: Property Portfolio Valuation - Movement in the Period
Property Portfolio Valuation - Movement in the Period Non-valuation Investment April 2010 October 2009 Movement movements Gain £m £m £m £m £m UK Like for Like Assets 1 526 522 5 (2) 3 French Like for Like Assets 2 129 126 3 4 7 Group Like for Like Assets 655 648 8 2 10 Development Properties 3 - - -
Slide 32: Summary IFRS Balance Sheet
Summary IFRS Balance Sheet Six months ended Six months ended 30 April 2010 30 April 2009 £m £m Assets Non-current assets Investment properties 717.5 715.4 Development properties 17.8 23.6 Other non-current assets 13.4 8.8 Non-current assets 748.7 747.8 Current assets 38.4 44.3 Liabilities Current li
Slide 33: Rate and Occupancy
Rate and Occupancy Rate (annual average £/sq ft) Safestore continues to increase market share 27.35 26.84 28 25.39 25.10 26 24.68 24.25 24.89 Good rate growth across all store classes 24 23.21 22.07 22 Occupancy performance improved across all store 20 classes 18 16.85 16 14.26 5.41 14 Group Develop
Slide 34: Why Use Safestore? Top Five Reasons
Why Use Safestore? Top Five Reasons Business % Store stock 38 Store equipment 24 Archive documents 14 Office 4 New premises 3 Domestic % New house not ready 34 Need more space 32 Declutter to sell house 14 Moving to rented 11 Abroad / travelling 9 Source: Company Information 34
Slide 35: Customer Average Length of Stay in the UK
Customer Average Length of Stay in the UK As at Age of Store < 1year 1-2 Years 2-5 Years > 5 Years Portfolio 30/04/2009 Portfolio N0 of Stores 4 8 11 69 92 90 (wks) (mths) (wks) (mths) (wks) (mths) (wks) (mths) (wks) (mths) (wks) (mths) Business Existing 22 5.1 42 9.8 71 16.4 131 30.2 116 26.7 112 2
Slide 36: Customer Average Length of Stay in France
Customer Average Length of Stay in France As at Age of Store < 1year 1-2 Years 2-5 Years > 5 Years Portfolio 30/04/2009 Portfolio N0 of Stores 1 1 3 17 22 21 (wks) (mths) (wks) (mths) (wks) (mths) (wks) (mths) (wks) (mths) (wks) (mths) Business Existing 10 2.3 34 7.8 60 13.9 129 29.8 117 27.1 120 27
Slide 37: Disclaimer
Disclaimer This document has been prepared by the Company solely for use at presentations held in connection with the announcement of its interim Results for the six months ended 30 April 2010. The information in this document has not been independently verified and no representation or warranty, ex