Shurgard Self Storage Limited · EURONEXT:SHUR
Shurgard Self Storage — H1 2024 Earnings Presentation
28 slides from Shurgard Self Storage's earnings presentation, Aug 14, 2024
Slide 1: Interim H1 2024 Results
August 14, 2024 INTERIM H1 2024 RESULTS JANUARY 1, 2024 TO JUNE 30, 2024
Slide 2: Agenda Today
AGENDA TODAY •Our continued strong execution •Our financial strength momentum •Overview of acquired modern Lok’nStore portfolio •Our growth potential SHURGARD IS A UNIQUE PLATFORM WITH SIGNIFICANT RUNWAY 2
Slide 3: Highlights: H1 Results - Growth Across All Markets
HIGHLIGHTS: H1 RESULTS(1) GROWTH ACROSS ALL MARKETS • Revenue up by 8.2%, in H1 2024, to €189.3 million. Supported by continued strong growth in Germany, the UK, the Netherlands, and Belgium. Continuing the positive trends of Q4-2023 and Q1-2024; • Same store property revenue growth of 4.5%, fueled
Slide 4: Continuing the Positive Trends of Q4-2023 and Q1-2024
CONTINUING THE POSITIVE TRENDS OF Q4-2023 AND Q1- 2024 Variances calculated on data at budget exchange rate 2024 SS definition 9% 8% 7% 6% 5% YTD var. Revenue; 4.5% 4% 3% YTD var. Average In-place rent; 5.1% 2% 1% YTD var. Average Occupancy 0% (sqm); -0.6% -1% -2% 1Q23 2Q23 3Q23 4Q23 1Q24 2Q24 Q1 AN
Slide 5: Highlights: H1 Results - Digitalization and Leading Operational Platform
HIGHLIGHTS: H1 RESULTS(1) DIGITALIZATION AND LEADING OPERATIONAL PLATFORM • Stable NOI margin at 62.9%, with same store operating expenses growth of 4.4%, reflecting the positive impact of digitalization initiatives on our cost structure. Same store NOI margin of 64.7% stable vs. prior year; • 7.5%
Slide 6: 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 ~50% Mobile App of moves-in Agreement E-rental penetration (as of June 30) 60% 50% Enabling customer access and Industry-lead
Slide 7: Highlights: H1 Results - Future Growth Supported by Development Pipeline
HIGHLIGHTS: H1 RESULTS FUTURE GROWTH SUPPORTED BY ATTRACTIVE DEVELOPMENT PIPELINE • Delivering new capacity from 2024 to 2026 representing c. 365,000 sqm (26.2% of our net rentable sqm); • Total investment of c. €1,047 million of direct project cost; • Expected yield at maturity of c. 8-9%; • Additi
Slide 8: Largest sqm Expansion p.a. in the Industry
LARGEST SQM EXPANSION P.A. IN THE INDUSTRY In thousands sqm % of 2023 rentable sqm A = Actuals F = Forecast (excluding future acquisitions) VERY LARGE PIPELINE, OVERDELIVERING OUR GUIDANCE 8
Slide 9: Highlights: Q2 Results (vs. Q2 2023)
HIGHLIGHTS: Q2 RESULTS (VS. Q2 2023) • 9.2% revenue growth, supported by double digit growth in Germany, but also significant progression in the Netherlands, Belgium and the UK; • 8.8% growth in NOI; • 4.9% same store revenue growth; • 89.8% same store average occupancy rate (90.4% in Q2 2023) and a
Slide 10: 2024 Outlook Excluding Lok'nStore Acquisition
2024 OUTLOOK EXCLUDING LOK’NSTORE ACQUISITION IMPROVED 2024 REVENUE GUIDANCE: • Based on our strong results, the previous guidance of c. 7.5% will be exceeded, and we expect to deliver at least 8% total revenue growth for the year 2024; 2024 GUIDANCE REMINDER: • In 2024, we are targeting a stable NO
Slide 11: Income Statement
INCOME STATEMENT Q2 H1 2024 2023 % var. % var.CER 2024 2023 % var. % var.CER REAL ESTATE OPERATING REVENUE1 96.0 87.6 9.5% 9.2% 189.4 174.4 8.6% 8.2% Real estate operating expenses (30.5) (27.6) 10.6% 10.1% (70.2) (63.9) 9.8% 9.4% NET INCOME FOR REAL ESTATE OPERATIONS 65.5 60.0 9.1% 8.8% 119.2 110.4
Slide 12: Same Store Property Operating Revenue
SAME STORE PROPERTY OPERATING REVENUE In € millions Q2 H1 % % (at actual exchange rate) 2024 2023 % var. 2024 2023 % var. var.CER var.CER France 20.2 19.6 3.0% 3.0% 40.2 39.4 2.0% 2.0% The Netherlands 18.9 17.9 6.0% 6.0% 37.6 35.3 6.5% 6.5% UK 17.8 16.5 7.5% 5.5% 35.3 32.7 8.0% 5.3% Sweden 11.1 11.1
Slide 13: Balance Sheet
BALANCE SHEET In € millions At actual exchange rate Jun 2024 Dec 2023 % var. €800m €130m 2.39% Drawn on a €450m floating Investment property 5,397.7 5,035.8 USPP indebtness (fixed interest committed bank loan Weighted average Other assets 1 62.6 40.3 interest rate) facility interest rate No encumber
Slide 14: Strong Balance Sheet, Modest Gearing and Significant Liquidity
STRONG BALANCE SHEET, WITH A MODEST LEVEL OF GEARING AND SIGNIFICANT LIQUIDITY • Shurgard has a cash balance of €209.6 million(1) and a low LTV: 15.4%(1) positioning the business to support further growth and refinancing. • Net debt/Underlying EBITDA: 3.8x(1) (2) and ICR (interest coverage ratio): 1
Slide 15: First European Self-Storage Operator Awarded BBB+ Rating by S&P
FIRST EUROPEAN SELF-STORAGE OPERATOR AWARDED A BBB+ (STABLE OUTLOOK) CREDIT RATING BY S&P • Assigned 'BBB+' Rating – Stable Outlook • The strong investment grade rating will further widen our access to debt capital markets, incl. rated • Rating Framework: public bond market. LTV: 25% - 35% Net D
Slide 16: Optional Scrip Dividend Will Be Offered
OPTIONAL SCRIP DIVIDEND WILL BE OFFERED • A gross dividend of €0.58 per share – payment on or about September 26, 2024. • The Board also decided that it will offer shareholders the option of getting cash or shares (“scrip dividend”). • Major shareholders confirmed their intention to opt for shares i
Slide 17: Acquisition of Lok'nStore - Modern, High Quality Portfolio
ACQUISITION OF LOK’NSTORE – A MODERN, HIGH QUALITY, PURPOSE-BUILT PORTFOLIO AND ATTRACTIVE PIPELINE BASILDON Successfully HEMEL BEDFORD acquired leasehold HEMPSTEAD (August 2024) KETTERING PETERBOROUGH STAINES STEVENAGE WARRINGTON WELLINGBOROUGH ACQUISITION PROVIDES AN ADDITIONAL 171,000 SQM REPRESE
Slide 18: High-Quality Portfolio
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% (vs. c. 5.0 sqm for Shurgard) (vs. 93% for Shurgard) (vs. 63% for S
Slide 19: 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 London / South East / contract (Operating and Pipeline) London Manchester Proportion in Capital
Slide 20: Achieving a Lok'nStore NOI Yield of 8% via Shurgard
ACHIEVING A LOK’NSTORE NOI YIELD OF 8% VIA SHURGARD Revenue increase (1) Proven growth in Shurgard UK Occupancy c. 67% 90% in 2 years All Stores as of August 1 400 owned Rate (CAGR to 383.4 stabilization) 2% in 5-6 years 380 CAGR: +9% 360 348.8 340 320 313.3 in 2 years Occupancy 0% 90% post store op
Slide 21: Operational Integration Completed
OPERATIONAL INTEGRATION COMPLETED •Integration of validated data into our CRM system as of D+1 (August 1) Successful •Integration on our website as of D+1 (August 1) Integration •Integration on our pricing model with promotions in place Focus on •E-rental availability as of D+2 (50% of move-ins in U
Slide 22: 2024 Outlook
2024 OUTLOOK FUTURE LOK’NSTORE ACQUISITION IMPACT: • Q3-2024 Financial communication will be the first quarter incorporating former Lok’nStore portfolio being consolidated as of August 1st; • Accretion on Shurgard adjusted EPRA earnings per share: neutral in 2025 and accretive from 2026 onwards; • W
Slide 23: Conclusion
CONCLUSION • Operational execution excellence • Raise of our FY revenue guidance • Growth across all markets • Digitalization and leading operational platform • Growth accelerated • Acquisition of Lok’nStore (UK), a modern, purpose-built portfolio and attractive pipeline; representing a full two yea
Slide 24: Next: German Market Day and Q3 Conference Call
NEXT German market day • On September 17, 2024, during the EPRA conference in Berlin, we will host an asset tour; • Followed by a presentation on Germany; • Register for our presentation via email to: investor.relations@shurgard.co.uk Q3 conference call • A conference call will be scheduled for Tues
Slide 25: Appendices
APPENDICES
Slide 26: Same Store Average Occupancy by Country
SAME STORE AVERAGE OCCUPANCY BY COUNTRY Q2 H1 2024 2023 Diff. 2024 2023 Diff. France 89.3% 89.2% 0.1pp 88.9% 88.8% 0.1pp The Netherlands 90.9% 91.6% -0.6pp 90.9% 91.1% -0.2pp UK 87.1% 87.8% -0.6pp 86.6% 87.7% -1.1pp Sweden 90.9% 91.7% -0.8pp 90.4% 91.3% -1.0pp Germany 88.7% 90.3% -1.6pp 88.9% 90.2%
Slide 27: Same Store Property Average In-Place Rent by Country
SAME STORE PROPERTY AVERAGE IN-PLACE RENT BY COUNTRY In € per sqm / year Q2 H1 2024 2023 % var. % var. CER 2024 2023 % var. % var. CER France 271.1 262.8 3.2% 3.2% 270.4 264.4 2.3% 2.3% The Netherlands 243.1 228.8 6.2% 6.2% 242.2 227.5 6.5% 6.5% UK 390.4 356.0 9.7% 7.6% 388.4 352.4 10.2% 7.5% Sweden
Slide 28: 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
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