Shurgard Self Storage Limited · EURONEXT:SHUR
Shurgard Self Storage — Investor Day (September 2021)
51 slides from Shurgard Self Storage's investor day presentation, Sep 9, 2021
Slide 1: Investor Day: Accelerating Growth
INVESTOR DAY September 9, 2021 ACCELERATING GROWTH
Slide 2: Legal Disclaimer
LEGAL DISCLAIMER All statements in this presentation, other than statements of historical facts, are forward-looking statements. These statements are based on the current expectations and views of future events and developments of the management of Shurgard and are naturally subject to uncertainty a
Slide 3: Today's Agenda
TODAY'S AGENDA Section Agenda Presenters Introduction Our growth ambitions and market opportunities Marc Oursin 1 Accelerating the expansion of our market-leading portfolio Isabel Neumann & Vincent Mesdom Q&A 2 Optimizing our platform through digitalization Duncan Bell & John Turner 3 New ambitious
Slide 4: A High Performing and Experienced Executive Team
A HIGH PERFORMING AND EXPERIENCED EXECUTIVE TEAM Marc Oursin Jean Kreusch Duncan Bell Ammar Kharouf Isabel Neumann CEO (since 2012) CFO (since 2013) VP Operations (since 2014) General Counsel, VP HR CIO (since 2021) (since 2014) • More than 30 years • More than 30 years of • 12 years of experience i
Slide 5: A Stable and Powerful Team
A STABLE AND POWERFUL TEAM Caroline Thirifay Vincent Mesdom John Turner Dany Bruggeman Olivier Ferrard J-S Levêques Thomas Oversberg Fanny Rosmawaty Director of Investor Director of Acquisitions Director of Marketing Director of IS Director of Internal Development Director Financial Director Design
Slide 6: Introduction: Our Growth Ambitions and Market Opportunities
INTRODUCTION OUR GROWTH AMBITIONS AND MARKET OPPORTUNITIES MARC OURSIN | CEO
Slide 7: Our Prime Pan-European Portfolio Is Unrivalled
OUR PRIME PAN-EUROPEAN PORTFOLIO IS UNRIVALLED 245 properties across 7 countries 1,200,000 total rentable sqm 5,000 sqm net rentable per property 47% 65% purpose built / 35% conversion 93% freehold 32% 15 years average age of buildings (purpose built) 92% same stores occupancy rate1
Slide 8: Clear Leadership in European Self-Storage Industry
CLEAR LEADERSHIP IN EUROPEAN SELF-STORAGE INDUSTRY #1 in Europe A unique prime portfolio Number of stores 245 % of stores in % of freehold 176 152 104 95 93% capital and tier 1 cities 93% rentable area SHURGARD SAFESTORE HOMEBOX BIG YELLOW SSG Freehold or long leasehold (long-term leases with at lea
Slide 9: Our Industry Benefits from Consistent Growth
OUR INDUSTRY BENEFITS FROM CONSISTENT GROWTH 12 10 8 Industry sqm (million) 6 4 2 0 2012 2013 2014 2015 2016 2017 2018 2019 2020 : Fedessa (2020) Source SHURGARD'S FOOTPRINT SPANS THE LARGEST MARKETS FOR SELF STORAGE INVESTOR DAY | 9
Slide 10: Industry Fueled by Positive Structural Drivers
INDUSTRY FUELED BY POSITIVE STRUCTURAL DRIVERS Strong fundamental demand drivers RESIDENTIAL CUSTOMERS • Density / 2020 self-storage area (sq. ft. per capita)1 Urbanization 9.5 • Purchase power • Life events (divorce, X13 ~80% marriage, birth, death) of the • Mobility Significant opportunity to grow
Slide 11: IPO Objectives Delivered
IPO OBJECTIVES DELIVERED IPO GUIDANCE SHURGARD PERFORMANCE REVENUE All store 4%-6% 5.2% avg 2019 - 2020 ✓ Same store 1.5%-2.5% 1.6% avg 2019 - 2020 EARNINGS GROWTH NOI +2pp NOI margin +2.5pp 2020 vs 2017 ✓ Adj. EPRA earnings no guidance 9.0% avg 2019 - 2020 ADDITIONAL SQM Total 46,000 in 2020 ✓ New
Slide 12: Clear Strategy to Accelerate Growth
CLEAR STRATEGY TO ACCELERATE GROWTH • Ramp up organic development • Maximize existing stores where possible Accelerate expansion of new stores • Double capex to €170 million p.a. of our market-leading • Target market consolidation • 90,000 sqm p.a. added to portfolio portfolio leveraging industry le
Slide 13: Accelerating the Expansion of Our Market-Leading Portfolio
1 ACCELERATING THE EXPANSION OF OUR MARKET-LEADING PORTFOLIO ISABEL NEUMANN | CIO VINCENT MESDOM | DIRECTOR OF ACQUISITIONS
Slide 14: 3 Levers to Accelerate Our Portfolio Expansion
3 LEVERS TO ACCELERATE OUR PORTFOLIO EXPANSION LEVER 3 Market consolidation + (bolt-on acquisitions) LEVER 2 PORTFOLIO EXPANSION New developments Investing €170 million + (purpose built and per year as of 2024 conversion) LEVER 1 Redevelopments (expand existing buildings) DOUBLE OUR OVERALL RATE OF
Slide 15: Redevelopments Will Add c. 1,000 sqm p.a. Beyond 2022
REDEVELOPMENTS WILL ADD C. 1,000 SQM P.A. BEYOND 2022 LEVER 1 LEVER 2 LEVER 3 2019 2020 2021 2022 3buildings 4 buildings 5buildings 2buildings Total cost: Total cost: Total cost: Total cost: €10.0 million €3.9 million €10.5 million €8.9 million BEFORE REDEVELOPMENT Total additional sqm: Total additi
Slide 16: Capture Strong Potential in Our Markets
CAPTURE STRONG POTENTIAL IN OUR MARKETS LEVER 1 LEVER 2 LEVER 3 Key urban Potential additional properties based on London penetration in Shurgard countries markets remain Paris 143 undersupplied Koln-Dusseldorf-… NRW1 133 Randstad 2 49 Berlin 33 Potential to add Munich 28 Birmingham 23 100 new s
Slide 17: Target Our Core Markets and New Cities
TARGET OUR CORE MARKETS AND NEW CITIES LEVER 1 LEVER 2 LEVER 3 Current status City Action Objectives Cities with • Paris Paris: increase leadership Continue / Shurgard presence • London London: grow market share accelerate and active • NRW NRW: increase leadership expansion development • Berlin Berl
Slide 18: Ambition to Double Our Current Program
AMBITION TO DOUBLE OUR CURRENT PROGRAM LEVER 1 LEVER 2 LEVER 3 POST IPO – 2021 2022 AND BEYOND 2015 London Same 2017 Berlin 2019 Paris + 2020 NRW NL – Randstad DE – Munich DE – Frankfurt DE – Stuttgart 4 zones 8 zones 5 properties per year 10 properties p.a. as of 2024 c. 1 property per zone c
Slide 19: 2-Year Lead Time to Reach Delivery Pace
2-YEAR LEAD TIME TO REACH DELIVERY PACE LEVER 1 LEVER 2 LEVER 3 Average process UK – FR – DE (2015-2021) From agreement with seller on price More than + 6 months for CPA (conditional purchase agreement) 2 years + 6-9 months for building permit incl. judicial period + 12 months for construction Stren
Slide 20: Doubling Our Investment in New Developments
DOUBLING OUR INVESTMENT IN NEW DEVELOPMENTS LEVER 1 LEVER 2 LEVER 3 (€ million) 120.0 120.0 120.0 84.0 66.8 62.6 60.0 17.4 22.9 2018 2019 2020 2021 2022 2023 2024 2025 2026 Growth plan Total CAPEX for projects by opening year 2020 includes two stores delayed to 2021 openings and 2021 estimate ACCELE
Slide 21: A Unique & Disciplined Strategy
A UNIQUE & DISCIPLINED STRATEGY LEVER 1 LEVER 2 LEVER 3 Since 2015 46 ACQUIRED STORES €416 MILLION OF INVESTMENT c. 8% NOI YIELD 2015 2016 2017 2018 2019 2020 5 stores 1 store 1 store 5 stores 1 store 2 stores 21 stores 1 store 1 store 4 stores 3 stores 1 store 1. Focus on our seven current markets
Slide 22: Experts in Integration
EXPERTS IN INTEGRATION SCALABILITY, STANDARDIZATION & SPEED LEVER 1 LEVER 2 LEVER 3 Scalability Standardization Call centers / IT Control / Training Store Manager SCRIPTS / QA KNOWLEDGE WAY TO MANAGE WAY TO SELL METHOD Website Support functions Branding / Visibility Office / Ancillaries EA
Slide 23: Immediate Revenue Uplift from Integration
IMMEDIATE REVENUE UPLIFT FROM INTEGRATION LEVER 1 LEVER 2 LEVER 3 Illustrative case Acquisition date Average monthly revenue -34 -32 -30 -28 -26 -24 -22 -20 -18 -16 -14 -12 -10 -8 -6 -4 -2 0 2 4 6 8 10 12 14 16 18 20 22 24 26 28 30 32 Months before and after Shurgard acquisition Trajectory pre-acqui
Slide 24: Fragmented Market with Multiple Opportunities
FRAGMENTED MARKET WITH MULTIPLE OPPORTUNITIES LEVER 1 LEVER 2 LEVER 3 FOCUS AREA “BOLT-ON” LARGE & SMALL MEDIUM TRANSFORMATIONAL <5 5-15 >15 properties properties properties Number of potential >65 <15 >10 existing opportunities Total number >100 <100 <500 of stores Average size of portfolio 1.5 pro
Slide 25: Adding 2% (20,000 sqm) to Our Platform Every Year
ADDING 2% (20,000 SQM) TO OUR PLATFORM EVERY YEAR LEVER 1 LEVER 2 LEVER 3 (€ million) 97.7 64.2 50.0 50.0 50.0 50.0 50.0 50.0 14.6 17.2 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 Growth plan 2018 excludes Kensington acquisition (36million) and 2021 estimate €50 MILLION ANNUAL CAPITAL SPEND OR
Slide 26: Double the Investment for Growth as of 2024
DOUBLE THE INVESTMENT FOR GROWTH AS OF 2024 LEVER 1 LEVER 2 LEVER 3 Redevelopments New developments Market consolidation (expand existing buildings) (purpose built and conversion) (bolt-on acquisitions) Invest €120 million p.a. to: Invest €50 million p.a. to: • Double our footprint in target markets
Slide 27: Q&A
Q&A
Slide 28: Optimizing Our Platform Through Digitalization
2 OPTIMIZING OUR PLATFORM THROUGH DIGITALIZATION DUNCAN BELL | VP OPERATIONS JOHN TURNER | DIRECTOR OF MARKETING & PRICING
Slide 29: Key Patterns: Same Across Countries
KEY PATTERNS: SAME ACROSS COUNTRIES What is self storage Why do they need self storage? Where are they? for our customers? “My attic or basement in a remote location” • Life events (birth, death, divorce, mobility) Close property catchment areas • Short distance catchment combined with • 10min drive
Slide 30: Best in Class Customer Experience
BEST IN CLASS CUSTOMER EXPERIENCE GOOGLE OMNICHANNEL CUSTOMER EXPERIENCE HIGH CUSTOMER SATISFACTION “EXCELLENT SERVICE” 4.72 RATING After 12 months customers are considered “long-term 61% customers” Stores/buildings 39% OF TOTAL OF TOTAL CUSTOMERS ~120,000 CUSTOMERS ~680 customers Move-ins / store P
Slide 31: Focus on Brand Visibility: Buildings and Web
FOCUS ON BRAND VISIBILITY: BUILDINGS AND WEB Unified store image & standardized assets 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 Total move-in
Slide 32: Digitalization Captures and Converts Customer Leads
DIGITALIZATION CAPTURES AND CONVERTS CUSTOMER LEADS Web Traffic & Mobile Share Forecast penetration per channel of net contracts 700 X2 100% 100% 90% 90% 600 80% 80% 500 70% 70% 60% 400 60% 60% 50% 50% 300 40% 40% 200 30% 30% 20% 20% 100 10% 10% 0 0% 0% 2013 2014 2015 2016 2017 2018 2019 2020 H121 Q
Slide 33: Successful Launch & Roll Out of E-Rental Offer
SUCCESSFUL LAUNCH & ROLL OUT OF E-RENTAL OFFER What is e-rental? Insights Seamless end-to-end digital experience 15,000 e-rental customers at end of August 2021 across all markets Automated rental process, operating 24/7 (6-minute rental time) Comprises between 20-25% of all move ins Part
Slide 34: Access to More and Better Customer Data
ACCESS TO MORE AND BETTER CUSTOMER DATA Customer Touchpoint Volume & quality of customer data increasing • 2M website visits Facility / Sensor • 11M paid search impressions • 41M unpaid search impressions Web / Clickstream • 420K service calls • 280K sales calls Competitive Intelligence Demographic
Slide 35: Continuing to Invest in Best-in-Class Customer Touchpoints
CONTINUING TO INVEST IN BEST-IN-CLASS CUSTOMER TOUCHPOINTS Maximizing customer conversions, complementing people interaction & technology e-rental ++ Chatbot Augmented Reality (AR) App Use your phone to open Gates, Doors & Elevators ENHANCE AND UPDATE THE CUSTOMER EXPERIENCE INVESTOR DAY | 35
Slide 36: Improve Digitalization, Sustainability and Security
IMPROVE DIGITALIZATION, SUSTAINABILITY AND SECURITY A total of €10 million per year over 2022- 2026 or €7/sqm/year Other Investments Customer experience Lobbies protection Access control Improved CCTV Reduce electricity and gas consumption LED technology Heating optimization Solar panels Increase br
Slide 37: Platform Optimization Through Digitalization
PLATFORM OPTIMIZATION THROUGH DIGITALIZATION Improve customer experience Better customer service Expedited self-service leasing Frictionless property use Enhance properties Customer Properties Brand visibility Technology Increase security Low environmental impact Better operating efficiency Increase
Slide 38: New Ambitious ESG Targets
3 NEW AMBITIOUS ESG TARGETS MARC OURSIN | CEO AMMAR KHAROUF | GENERAL COUNSEL, VP HR
Slide 39: Great Achievement Within Three Years
GREAT ACHIEVEMENT WITHIN THREE YEARS GRESB EPRA ESG Sustainalytics Global Real Estate Sustainability Benchmark European Public Real Estate Association ESG Risk Ratings Report 2019 2020 2019 2020 60 100 78 100 21.7 13.2 1 Star 4 Stars Medium Low risk High adherence to sBPR. Score Award recipients who
Slide 40: New ESG Targets in Place
NEW ESG TARGETS IN PLACE PHASE PHASE PHASE ONE TWO THREE As of January 2021, zero carbon emissions from: Operational Material 100% of our electricity Net Zero Carbon Net Zero Carbon consumption by 2030 by 2040, or sooner 60% of our natural gas consumption Net Zero Carbon strategy and policy to b
Slide 41: Social – Employee Development and Engagement
SOCIAL – EMPLOYEE DEVELOPMENT AND ENGAGEMENT Employee Training, Employee performance Shurgard academy Satisfaction surveys Development and appraisals Performance 95% Would recommend 66 73 79% 87% 91% 95% 2019 2020 2019 2020 Average hours of training undertaken % of total employees who received regul
Slide 42: Shurgard Invests in Local Communities
SHURGARD INVESTS IN LOCAL COMMUNITIES Supports children with Supports new-born’s Supports children critical illness in hospital and their families with critical illness Coaching young Shelter and counseling for Supports children jobseekers runaway children living in poverty SHURGARD SUPPORTS CHARITI
Slide 43: Continuing Excellence in Governance
CONTINUING EXCELLENCE IN GOVERNANCE 100% MEETINGS 55% SIX NATIONALITIES ATTENDANCE AND DIVERSE 3 BACKGROUNDS Board Independence of the Board diversity Women Commiting to have Men4 8 45% female Board members Independent Non - Independent by 2024 ESG is part of our DNA “Skin in the game” ESG Commitmen
Slide 44: Financing Profitable Growth
4 FINANCING PROFITABLE GROWTH JEAN KREUSCH | CFO
Slide 45: Driving Growth
DRIVING GROWTH REVENUE All store c. 6% per year as from 2022 MARGIN GROWTH NOI c. +2pp NOI margin vs. 2020 in the medium term ADDITIONAL SQM Total c. 90,000 sqm (16 properties) per year, as of 2024 New developments c. 70,000 sqm (10 properties) per year, as of 2024 Acquisitions c. 20,000 sqm (6 prop
Slide 46: Growth Oriented Balance Sheet
GROWTH ORIENTED BALANCE SHEET c. € 300 m 4.0x/19.8% 4.0x/19.8% 2.29% 6.9 years Available cash & Net Debt to Weighted average Weighted average facilities EBITDA / LTV interest rate maturity at end of August 2021 at end of June 2021 2021 estimate 2021 estimate Strongest balance sheet among peer group
Slide 47: Balanced Capital Allocation to Support Profitable Growth
BALANCED CAPITAL ALLOCATION TO SUPPORT PROFITABLE GROWTH Total Shareholder Return driven by Improve store Significant Strong profitability increase in dividend profitable policy new sqm 1. 2. 3. UNDERPINS SUSTAINABLE RETURN FOR STAKEHOLDERS INVESTOR DAY | 47
Slide 48: Concluding Remarks: The Next Chapter
CONCLUDING REMARKS THE NEXT CHAPTER MARC OURSIN | CEO
Slide 49: The Next Chapter: Accelerate Growth
THE NEXT CHAPTER: ACCELERATE GROWTH Our strategy Our objectives Leverage on our achievements Deliver a profitable growth Accelerating growth, taking advantage Doubling our capital of positive structural trends expenditure to €170 million Enlarging portfolio & optimizing platform Improving ou
Slide 50: Q&A
Q&A
Slide 51: Thank you for your attention
Thank you for your attention
Shurgard Self Storage — Investor Day (September 2021) on 6ix