Safestore Holdings Plc · LSE:SAFE
Safestore — FY2013 Earnings Presentation
59 slides from Safestore's earnings presentation, Jan 30, 2014
Slide 1: Annual Results Presentation 30 Jan 2014
Picture for UPP, have asked Marketing to sort Annual Results Presentation 30 Jan 2014 1
Slide 2: Disclaimer
Disclaimer THIS PRESENTATION IS STRICTLY CONFIDENTIAL AND IS BEING PROVIDED TO YOU SOLELY FOR YOUR INFORMATION. THIS PRESENTATION MAY NOT BE REPRODUCED IN ANY FORM, FURTHER DISTRIBUTED OR PASSED ON, DIRECTLY OR INDIRECTLY, TO ANY OTHER PERSON, OR PUBLISHED, IN WHOLE OR IN PART, FOR ANY PURPOSE. ANY
Slide 3: Introduction
Introduction Frederic Vecchioli
Slide 4: Highlights
Highlights Financial results slightly ahead of expectations – revenues down on last year as a result of VAT impact but in line with guidance – EBITDA improved through leaner corporate structure and strength of France – Dividend increased to 5.75 pence per share VAT impact in-line with earlier
Slide 5: Strategic Overview
Strategic Overview Frederic Vecchioli
Slide 6: Investment Case
Investment Case Priority 1 Capital structure Operational delivery: Strong Portfolio Priority 2 Enquiries generation Operational Improvements Priority 3 Asset Management 6
Slide 7: Store operations: Une Pièce en Plus performance
Store operations: Une Pièce en Plus performance Store team actively managed – Permanent recruitment process § Focus on values, behaviours and potentials § In house training: management and sales skills – Individual performance management § Performance improvement plans § Positive team turnove
Slide 8: Current position of UK business
Current position of UK business Business Strengths Focus areas: Strong portfolio Store operations § Closer store management Online enquiry generating platform § Consistent skills, performance Customer service and behaviours Central support functions focused on § Store team recruitm
Slide 9: Strong portfolio
Strong portfolio Paris UK London 9
Slide 10: Strong portfolio
Strong portfolio • Leading positions in the high density capital city markets of London and Paris (68% of store portfolio and 76% of revenue) • Strong national presence in regional UK focused on key metropolitan conurbations such as Manchester, Birmingham, Bristol, Glasgow, Edinburgh 10
Slide 11: Leading online enquiry generating platform
Leading online enquiry generating platform Online enquiries now 81% (58% in FR) of all enquiries. Focus shifted from display advertising to search which drives the most value for money. Refreshed Mobile and Desktop websites. Advanced cost per click and life of customer return on investme
Slide 12: Store operations: UK focus
Store operations: UK focus Improve enquiry conversion – Review management process R1 – Two new regions R2 – Under-performance management – Recruitment and training process – Store team bonus based on locally key business R3 R7 controllable measures R8 R4 R6 R5 Increase rate R9 – Central pricin
Slide 13: Growth focused central support functions
Growth focused central support functions Growth focused central support functions § National Accounts Strategy § Customer support centre § Business analysis and pricing management Leaner cost base 13
Slide 14: Priority 3: Selective portfolio management opportunities
Priority 3: Selective portfolio management opportunities Disposed of Whitechapel for £41m- almost 60% above previous property valuation. Lease re-gears completed to drive additional property values Permanent planning consent for Notting Hill obtained, valuation improved by £1.8m Leasehol
Slide 15: Capital Structure Strategy
Capital Structure Strategy Andy Jones 15
Slide 16: Capital Structure Changes
Capital Structure Changes • Our aim has been to bring Group LTV (gross debt/ total property valuation) down from 50% to 40% • Required circa £75m pay-down of debt • Strategy was as follows 1. Sell Whitechapel- completed for £41m 2. Internal resources- Dividends from France totalling £9m 3. Equity Pl
Slide 17: Capital Structure Changes
Capital Structure Changes New Comparison of Previous and New Capital Structure Previous * (proforma) Gross Debt (£’m) 343 268 Group LTV 50% 40% UK LTV 57% 47% Interest Cover Ratio 2.1x 2.75x Proforma annual Interest Charge (same hedge levels/ rates) (£’m) 18.4 c. 14.0 Estimated 2014 Interest Charge
Slide 18: Financials
Financials Andy Jones
Slide 19: Financial Highlights
Financial Highlights Year ended Change vs y/e Oct Income Statement 31 Oct 2013 2012 Revenue (£’m) 96.1 (2.7%) Underlying EBITDA (£’m) 50.8 1.0% Cash Tax Adjusted EPS (pence) 11.12 5.3% Dividend per share (pence) 5.75 1.8% As at Oct Change vs Balance Sheet 2013 October 2012 Investment Properties Valu
Slide 20: Trading Update
Trading Update London Rest of UK Total France Group / SE UK Total Act 47.7 22.5 70.2 25.1 95.3 Revenue £m (in CER1) YoY (5.6%) (7.6%) (6.2%) 4.8% (3.6%) Act 66.5% 59.9% 63.5% 71.9% 65.3% Occupancy % (of MLA) YoY 3.1ppt (0.1ppt) 1.6ppt 0.3ppt 1.4ppt Act 26.40 16.64 22.19 30.67 24.17 Rate (£ per SqFt)
Slide 21: Summary Group P&L
Summary Group P&L FY 2013 FY 2012 UK France Total UK France Total (£'m) (£'m) (£'m) (£'m) (£'m) (£'m) Revenue 70.2 25.9 96.1 74.9 23.9 98.8 Costs (35.4) (9.9) (45.3) (38.0) (10.5) (48.5) Underlying EBITDA 34.8 16.0 50.8 36.9 13.4 50.3 EBITDA Margin 50% 62% 53% 49% 56% 51% Leasehold Rent (5.4) (4.8)
Slide 22: Property portfolio boosted by revaluation of Whitechapel, lease re-gears and FX
Property portfolio boosted by revaluation of Whitechapel, lease re-gears and foreign exchange translation Overall valuations have increased by £39.7 million since Nov 12 Noted items of impact: – Currency translation movement - £10.4m – Whitechapel - £14.6m – Lease re-gears - £9m Average exi
Slide 23: Operating cash flow remains strong
Operating cash flow remains strong Financial Year 2013 2012 (£'m) (£'m) Underlying EBITDA 50.8 50.3 Working Capital/ Exceptionals/ Other 1.5 2.3 Operating Cashflow 52.3 52.6 New Store Capital Expenditure- investment properties (4.7) (20.2) investment Capital Expenditure- property, plant and equipmen
Slide 24: Current Trading and Outlook
Current Trading and Outlook Frederic Vecchioli
Slide 25: Current Trading- KPI's for the current year to date
Current Trading- KPI’s for the current year to date Variance Variance UK Trading France Trading YoY YoY Enquiries 6.8% Enquiries 7.4% New Lets 5.9% New Lets 14.1% Occupancy 2.2% Occupancy 4.6% Rate (5.0%) Rate 1.8% 25
Slide 26: Outlook
Outlook Improving macro-economic outlook Appropriate capital structure established – Placing of up to 18,594,987 shares (which will rank for dividend), significant management participation Strong strategic presence in key markets – Significant upside from filling existing stores – Unrivalle
Slide 27: Appendices
Appendices
Slide 28: Financial
Financial
Slide 29: Detailed P&L
Detailed P&L Group 2013 2012 £’m £’m Revenue 96.1 98.8 Cost of sales (31.8) (34.6) Gross profit 64.3 64.2 Administrative expenses (16.6) (9.8) EBITDA before exceptional items and investment gain/loss 50.8 50.3 Exceptional items (0.7) 4.9 Change in fair value of derivatives (1.3) 0.4 Depreciation and
Slide 30: Non-underlying Items
Non-underlying Items Financial Year 2013 2012 (£'m) (£'m) Underlying EBITDA 50.8 50.3 Gain/ (loss) on investment properties 21.5 (37.5) Depreciation (0.4) (0.4) Contingent rent (0.7) (0.8) Change in fair value of derivatives (1.3) 0.4 Exceptional Items - insurance Proceeds 1.6 5.3 - VAT and REIT rel
Slide 31: Detailed Balance Sheet
Detailed Balance Sheet Group 2013 2012 £’m £’m Assets Non-current assets Investment properties 780.3 743.1 Investment properties under construction 5.6 5.4 Other non-current assets 11.5 16.8 Non-current assets 797.4 765.3 Current assets 33.0 27.7 Liabilities Current liabilities (49.6) (44.5) Non-cur
Slide 32: FY 11/12 Underlying to Statutory Adjustments
FY 11/12 Underlying to Statutory Adjustments FY 11/12 Underlying to Statutory Adjustments Underlying Derivative Contingent Valuation Finance Dep'n LH Statutory Underlying Headings Exceptionals Tax Statutory Headings P&L Movements Rent/ Dep'n Movement Lease Int properties P&L Sales 98.8 98.8 Revenue
Slide 33: FY 12/13 Underlying to Statutory Adjustments
FY 12/13 Underlying to Statutory Adjustments FY 12/13 Underlying to Statutory Adjustments Underlying Derivative Contingent Valuation Finance Dep'n LH Statutory Underlying Headings Exceptionals Tax Statutory Headings P&L Movements Rent/ Dep'n Movement Lease Int properties P&L Sales 96.1 96.1 Revenue
Slide 34: Movement in Cost Base
Movement in Cost Base Cost of Sales Financial Year Administrative Expenses Financial Year 2013 2012 2013 2012 (£'m) (£'m) (£'m) (£'m) Underlying Administrative Expenses (13.5) (13.9) Underlying Cost of Sales (31.8) (34.6) TV advertising Expenditure not repeated 1.1 Nanterre Insurance Proceeds 0.8 Ma
Slide 35: Group Exceptional Items – Oct 2013 Reported
Group Exceptional Items – Oct 2013 Reported Year ended 31 Year ended Exceptional Costs Oct 2013 31 Oct 2012 (£m) (£m) Insurance proceeds 1.6 5.3 Restructuring costs (1.7) (0.2) VAT and REIT related costs (0.3) (0.2) Other Exceptional items (0.3) - Total exceptional costs (0.7) 4.9 35
Slide 36: 2013 Bank Facilities and Finance Costs
2013 Bank Facilities and Finance Costs Facility Drawn Hedged Hedged Bank Hedged Floating Total £/€/$'m £'m £'m % Margin Rate Rate Rate UK Term Loan £ 230.0 £230.0 £196.7 86% 3.25% 1.71% 0.60% 4.80% UK Revolver £ 30.0 - - - 3.25% 1.71% 0.60% 4.80% UK Revolver- non-utilisation £ 30.0 - - - 1.46% - - 1
Slide 37: Full refinancing secured in 2013 with extended maturities
Full refinancing secured in 2013 with extended maturities Previous facilities New Facilities Drawn as Total Term at Total New Facilities Facility Term Proforma 31 Oct Facility 2013 UK Term Facility (in £) £230m Aug 16 £230m £181m Jun 18 £181m UK Revolver (in £) £30m Aug 16 £0m £50m Jun 18 £0m Bank d
Slide 38: Group Banking Facilities – Oct 2013 Reported
Group Banking Facilities – Oct 2013 Reported Current Facility Covenants Interest Cover Ratio Loan to Value Consolidated level Sterling Loan to Value Quarterly to Apr 2013 Not less than 1.80:1 Quarterly to Apr 2014 Not more than 0.625:1 Quarterly to Apr 2014 Not less than 2.00:1 Thereafter Not more t
Slide 39: Group has hedged approximately two-thirds of its French profit exposure
The group has hedged approximately two-thirds of its French profit exposure and partially mitigated the negative currency impact Actual € cover Swapped Rate Actual Rate Gain/(loss) €'000 € € £'000 H1 FY13 6,000 1.1392 1.1921 233 H2 FY13 4,500 1.2393 1.1700 (216) Total 10,500 17 Future € cover Swappe
Slide 40: Property valuation metrics reflect economic conditions
Property valuation metrics reflect economic conditions October October Key variables April 2013 2013 2012 Average Self Storage Rate per Sq Ft £24.39 £24.68 £24.91 Exit Cap Rate 7.73% 7.85% 7.85% Weighted average stabilised occupancy 77.12% 77.61% 78.36% Stabilised Occupancy in Sq Ft 3.90m 3.96m 4.03
Slide 41: No new stores opened in FY 12-13. Pipeline unchanged
No new stores opened in FY 12-13. Pipeline unchanged; three UK sites acquired and planning permission obtained Opened / Pipeline store / site Full planning MLA sq ft estimated • No new stores opened in FY2013 opening Stores opened in FY2013 • Pipeline unchanged. Three UK expansion stores totalling 8
Slide 42: Portfolio
Portfolio
Slide 43: A fully invested portfolio with strong strategic positioning
A fully invested portfolio with strong strategic positioning London & Rest of Store Portfolio by Region UK Paris Group South East UK Number of Stores 58 39 97 25 122 Let Square Feet (m Sq Ft) 1.45 1.10 2.55 0.76 3.31 Maximum Lettable Area (m Sq Ft) 2.18 1.84 4.02 1.06 5.08 Let Square Feet per store
Slide 44: Portfolio summary under IFRS
Portfolio summary under IFRS Year ended 31 October 2013 Year ended 31 October 2012 Total Total Developing Established Mature Large Developing Established Mature Large (Sq ft (Sq ft (Sq ft ‘000) (Sq ft ‘000) (Sq ft ‘000) (Sq ft ‘000) (Sq ft ‘000) (Sq ft ‘000) (Sq ft ‘000) (Sq ft ‘000) ‘000) ‘000) Num
Slide 45: Portfolio summary split between freehold & leasehold
Portfolio summary split between freehold & leasehold October – 2013 October – 2012 UK France Group UK France Group Freehold Leasehold Freehold Leasehold Freehold Leasehold Freehold Leasehold Freehold Leasehold Freehold Leasehold Number of Stores 64 33 12 13 76 46 65 33 12 13 77 46 Self storage incom
Slide 46: Customer average length of stay - Group
Customer average length of stay - Group Portfolio at Portfolio at Age of Store 1-2 Years 2-5 Years > 5 Years Oct 2013 Oct 2012 N0 of Stores 4 12 104 120 121 (wks) (mths) (wks) (mths) (wks) (mths) (wks) (mths) (wks) (mths) Business Existing 35 8.0 70 16.2 139 32.1 131 30.2 123 28.5 Vacated 18 4.2 25
Slide 47: Customer average length of stay in the UK
Customer average length of stay in the UK Portfolio at Portfolio at Age of Store 1-2 Years 2-5 Years > 5 Years Oct 2013 Oct 2012 N0 of Stores 2 8 85 95 96 (wks) (mths) (wks) (mths) (wks) (mths) (wks) (mths) (wks) (mths) Business Existing 33 7.6 75 17.3 134 30.8 128 29.5 121 27.9 Vacated 17 4.0 24 5.
Slide 48: Customer average length of stay in France
Customer average length of stay in France Portfolio at Portfolio at Age of Store 1-2 Years 2-5 Years > 5 Years Oct 2013 Oct 2012 N0 of Stores 2 4 19 25 25 (wks) (mths) (wks) (mths) (wks) (mths) (wks) (mths) (wks) (mths) Business Existing 37 8.4 60 13.8 149 34.5 133 30.7 124 28.6 Vacated 19 4.4 26 6.
Slide 49: Group Customer split
Group Customer split 100% 90% 80% 70% 60% 50% 40% 30% 20% 28% 27% 10% 0% Customers FY11/12 Customers FY12/13 SqFt Let FY11/12 SqFt Let FY12/13 Business M™ Personal ° | safestore |
Slide 50: Store Portfolio
Store Portfolio
Slide 51: London and South East 1
London and South East 1 Acton Alexandra Palace Barking & Dagenham Basildon Battersea Lombard Battersea Park Bermondsey Camden Charlton Chingford Clapham Crystal Palace Deptford Earls Court Edgware 51
Slide 52: London and South East 2
London and South East 2 Feltham Fulham Hanworth Hayes Holloway Merton New Cross New Malden Notting Hill Paddington Stoke Newington Pentonville Road Ruislip Stanmore Staples Corner 52
Slide 53: London and South East 3
London and South East 3 Wandsworth Whitechapel Wimbledon Wood Green Bath Crayford Enfield Harlow High Wycombe Ilford Southend Ipswich Orpington Reading Slough 53
Slide 54: London and South East 4
London and South East 4 Staines Swanley Crawley Croydon Guildford Eastbourne Portsmouth Southampton Bedford Borehamwood Dunstable Milton Keynes New Southgate Stevenage 54
Slide 55: UK Regions 1
UK Regions 1 Birmingham Central Bristol Ashton Gate Bristol Filton Bristol Pennywell Road Cardiff Central Cardiff Newport Road Cheltenham Coventry Digbeth Leicester Oldbury Bolton Burnley Bury Liverpool Central 55
Slide 56: UK Regions 2
UK Regions 2 Manchester Central Manchester Old Trafford Manchester Worsley Oldham Preston Stockport Bryant Stockport Central Stockport Reddish Warrington Edinburgh Fort Kinnaird Edinburgh Gyle Edinburgh Leith Glasgow Central Glasgow North Glasgow Rutherglen 56
Slide 57: UK Regions 3
UK Regions 3 Glasgow Southside Leeds Central Leeds York Road Newcastle Central Newcastle Wallsend Sunderland 57
Slide 58: Paris 1
Paris 1 Arcueil Boulogne Cardinet Charenton Clichy Convention Gentilly Gonesse Irvy Italie Kremlin Pleyel Lafayette Longpont Mac Donald 58
Slide 59: Paris 2
Paris 2 Montmagny Marais Montparnasse Pyrenees Saint Denis 1 Saint Denis 2 Saint Ouen Trappes Torcy/Bussy Vélizy 59