Safestore Holdings Plc · LSE:SAFE
Safestore — H1 2024 Earnings Presentation
56 slides from Safestore's earnings presentation, Jun 12, 2024
Slide 1: Half Year Results
Half Year Results 12 June 2024
Slide 2: Safestore Strategy Delivery
Safestore Strategy Delivery 01 REVPAF Maximisation through Scale and Technology 02 Pan-European Portfolio Growth 03 Financials 04 Appendices 2
Slide 3: Highlights
Highlights Robust Financial Performance: • Industry leading Group REVPAF at £26.74 • Revenue down 0.8% and in CER down 0.3%. Revenue up 0.7% in CER when excluding impact of prior year IPT. 49.3% increase since HY 2019 − UK: Post-covid normalisation. Occupancy up 635,000 Sq Ft and rate up 25.2% on HY
Slide 4: Europe Development Opportunity
Europe Development Opportunity Self Storage Supply (Sq Ft per head) 9.39 Self Storage Supply 2.11 0.89 0.55 0.50 0.47 0.46 0.35 0.34 0.32 0.32 0.22 0.21 0.20 0.10 0.05 0.04 0.03 0.02 Czechia Norway Spain Netherlands Hungary US Australia France Finland Austria Denmark Sweden Germany Belgium Italy Swi
Slide 5: Continued Strong Record of Value Creation
Continued Strong Record of Value Creation Group Revenue (£m) Group Underlying EBITDA (£m) 120.0 +132% 80.0 +173% +7.9% CAGR 70.0 +9.6% CAGR 100.0 60.0 80.0 50.0 60.0 40.0 110.1 109.2 69.7 101.0 65.2 67.1 88.1 30.0 40.0 73.1 79.3 54.4 62.6 69.2 41.4 45.9 54.1 20.0 34.9 39.1 47.1 46.9 50.4 30.1 20.0 2
Slide 6: Well Positioned for Further Growth
Well Positioned for Further Growth Attractive market • Immature and growing industry with low level of supply • Very constrained supply growth Unique portfolio • Leading presence in London, Paris and key markets • 94% of the portfolio (including pipeline) in capital and major cities with very high b
Slide 7: REVPAF Maximisation through Scale and Technology
FV-SK 01 REVPAF Maximisation through Scale and Technology
Slide 8: Leverage Scale and Technology
Leverage Scale and Technology Customer journey begins online Multi-channel sales to suit every needs • Enquiries through online channels - 89% online – 66% • E-contracts in two ways: smartphone 1) Full online sale, reservation, contract and • Scale allows for superior digital platform – higher impre
Slide 9: Group Full Year Trading
Group Full Year Trading Domestic and Business Split (%) • Group Revenue in CER up 0.7% net of IPT • UK enquiries up +39% on pre-covid - down 11% on FY 2022 (peak) − London versus non-London split of enquiries and move-ins remarkably stable over the last 10 years and growing consistently over the per
Slide 10: UK Trading Normalisation at Higher Level
UK Trading Normalisation at Higher Level Closing Occupancy and MLA (‘m Sq Ft) Closing Occupancy and MLA Movement (‘m Sq Ft) 6.000 1.200 5.500 1.000 5.000 0.800 4.500 0.600 4.000 0.400 3.500 0.200 3.000 0.000 HY FY HY FY HY FY HY FY HY FY HY HY FY HY FY HY FY HY FY HY FY HY 2019 2019 2020 2020 2021 2
Slide 11: FR Trading Normalisation at Higher Level
FR Trading Normalisation at Higher Level Closing Occupancy and MLA (‘m Sq Ft) Closing Occupancy and MLA Movement (‘m Sq Ft) 1.400 0.160 0.140 1.300 0.120 1.200 0.100 1.100 0.080 0.060 1.000 0.040 0.900 0.020 0.800 0.000 HY FY HY FY HY FY HY FY HY FY HY HY FY HY FY HY FY HY FY HY FY HY 2019 2019 2020
Slide 12: Spain and Benelux Trading and MLA Extension
Spain and Benelux Trading and MLA Extension Spain Benelux 1.20 2.84 1.20 6.32 1.00 1.00 5.47 0.16 1.95 4.69 4.42 Total MLA (‘m Sq Ft) Total MLA (‘m Sq Ft) 0.80 0.80 0.28 0.16 1.73 3.86 0.28 1.57 0.60 0.60 0.19 0.14 0.19 0.13 0.26 0.13 0.96 0.40 0.40 0.16 0.07 0.00 0.35 0.21 0.16 0.47 0.52 0.53 0.20
Slide 13: Leading Revenue per Available Foot (REVPAF)
Leading Revenue per Available Foot (REVPAF) Region Total Revenue Occupancy REVPAF HY 2024 (CER’m) % Total (%) % Total (CER) YoY (%) London- M25 36.5 33% 75.7% 24% 37.11 (0.3%) London- Thames Valley 2.1 2% 82.0% 2% 26.40 (3.9%) Paris 22.1 20% 81.1% 18% 32.61 (1.4%) South East UK 12.3 11% 72.5% 11% 26
Slide 14: Focused on Maximising REVPAF
Focused on Maximising REVPAF Target is revenue growth with optimal combination of occupancy and rate Total Group Performance Total Group LFL Performance (CER) Closing Closing Occupancy Sq Ft Rate variance Revenue variance Occupancy Sq Ft Rate variance Revenue variance REVPAF Year variance (YoY) (YoY
Slide 15: Group Trading and MLA Extension
Group Trading and MLA Extension Closing Occupancy and Maximum Lettable Area Unlet space at 90% occupancy 12.00 24% 24% 10.00 20% 1.49 10% 1.45 9% 8% 1.40 0.23 Total MLA (‘m Sq Ft) 8.00 7% 6% 7% 0.09 2.83 2% 1.38 1.86 2.10 0% (1%) 1.41 1.08 6.00 82.1% 77.0% 1.68 1.49 84.5% 74.4% 1.16 79.5% 1.62 77.0%
Slide 16: Pan-European Portfolio Growth
02 Pan-European Portfolio Growth
Slide 17: Pan-European Portfolio Expansion
Pan-European Portfolio Expansion Store openings, acquisitions and extensions added c. 0.3m Sq Ft MLA in 2024 to date1: • 1 in London (satellite), 3 in Randstad, Netherlands, 1 in Madrid, and 1 in regional cities Expanded development pipeline to c. 1.5m Sq Ft of future MLA and 30 stores: • 11 London
Slide 18: Store Pipeline
Store Pipeline Total Pipeline MLA (let Sq Ft- million) c. 1.486 Opening 2025…continued Total Outstanding CAPEX (£’m) c. 170.0 New Developments Paris- North West 1 FH C, PG 54,000 Conversion Opening 2024 Paris- West 1 FH C, PG 56,000 New build Redevelopments and Extensions Paris- West 4 FH CE, PG 53,
Slide 19: Portfolio Development
Portfolio Development Group UK Paris Spain Netherlands Belgium Current Maximum lettable area (MLA) (m Sq Ft) 8.23 5.82 1.36 0.34 0.49 0.22 Let Square Feet (m Sq Ft) 6.13 4.32 1.10 0.18 0.35 0.18 Current Available space (m Sq Ft) 2.10 1.50 0.26 0.16 0.14 0.04 Future Post-Period Openings MLA (m Sq Ft)
Slide 20: Strong Returns on All Stores
Strong Returns on All Stores Cash-on-Cash Yield (before tax) of Total Portfolio Split by Financial Year of Opening or Acquisition (%) 25.0% 20.0% Average 15.0% 21.8% Investment Hurdle 10.0% 19.1% 12.1% 12.9% 11.7% 5.0% 8.5% 5.7% 4.4% 0.0% 0.0% Pre-2016 2016 2017 2018 2019 2020 2021 2022 2023 • Histo
Slide 21: Cash-on-Cash Ramp-Up
Cash-on-Cash Ramp-Up Financial Year Opening Date Cash-on-Cash Ramp-Up 20.0% 15.0% CoC % Yield (Store EBITDA) 10.0% 5.0% 0.0% -5.0% -10.0% Yr 1 Yr 2 Yr 3 Yr 4 Yr 5 Yr 6 Yr 7 Year of Store Opening 2016 2017 2018 2019 2020 2021 Chart includes new store developments from 2016, excluding acquisitions 21
Slide 22: Flexible Investment Model
Flexible Investment Model UK Lease regears – demonstrable track record: Average Unexpired Lease Term (Years) • Lease extension Bermondsey. New lease in Eastleigh 16.0 • c. 85% of UK leases regeared since 2012 • All leases in England within renewal protection rights of the Landlord 14.0 and Tenant Ac
Slide 23: Financials
03 Financials
Slide 24: Financial Highlights
Financial Highlights Income Statement and Cash Flow Change HY 2023 HY 2024 Absolute CER 1 Revenue (£’m) like-for-like 107.0 (0.8%) (0.3%) Underlying EBITDA (£’m) like-for-like 66.7 (3.3%) (2.8%) Revenue (£’m) 109.2 (0.8%) (0.3%) Underlying EBITDA (£’m) 67.1 (3.7%) (3.3%) Adjusted Diluted EPRA EPS (p
Slide 25: Underlying Income Statement
Underlying Income Statement HY 2024 HY 2023 Variance £m £m % Revenue 109.2 110.1 (0.8%) Underlying costs (42.1) (40.4) 4.2% Underlying EBITDA 67.1 69.7 (3.7%) Leasehold costs (7.7) (7.2) 6.9% Underlying EBITDA after leasehold costs 59.4 62.5 (5.0%) Depreciation (0.7) (0.6) 16.7% Finance charges (9.7
Slide 26: UK Revenue
UK Revenue HY 2023 to HY 2024 (£m) 82.0 (1.5%) +0.2% (1.1%) 81.5 1.2 81.0 0.2 80.5 1.0 81.7 80.0 79.5 79.7 79.0 78.5 HY 2023 Revenue Like-for-like New Stores and IPT on Insurance (1) HY 2024 Revenue Developments 1 HY 2023 revenue from Customer Goods Protection attracted IPT, in 2024 different contra
Slide 27: European Market Revenue Growth
European Market Revenue Growth Revenue increased across our growing EU markets with 3.4% LFL growth plus new developments France (€m) Spain (€m) 30.0 3.0 LFL +1.4% 25.0 2.5 0.8 LFL +2.4% 20.0 2.0 15.0 1.5 24.8 25.1 10.0 1.0 1.9 2.0 5.0 0.5 0.0 0.0 HY 2023 HY 2024 HY 2023 HY 2024 LFL Non-LFL LFL Non-
Slide 28: Steady LFL Revenue Performance
Steady LFL Revenue Performance London / SE Rest of UK UK Total Paris Spain Netherlands Belgium Group Total m Sq Ft 2.227 2.054 4.281 1.107 0.092 0.310 0.170 5.960 Average Occupancy YOY (2.4%) (3.0%) (2.7%) 1.1% 1.1% 3.7% (0.6%) (1.6%) £ / Sq Ft 36.96 23.38 30.45 36.69 32.23 18.56 20.72 30.74 Average
Slide 29: Movement in Cost Base
Movement in Cost Base HY 2024 HY 2023 Variance Variance (£’m) (£’m) (£’m) (%) Cost of Sales Volume related including bad debt (2.7) (2.4) (0.3) 12.5% Store employee and related (11.4) (11.0) (0.4) 3.6% Marketing (4.2) (3.9) (0.3) 7.7% Business rates (7.3) (7.0) (0.3) 4.3% Facilities and premises ins
Slide 30: Strong Cash Generation
Strong Cash Generation HY 2024 HY 2023 (£’m) (£’m) Underlying EBITDA after leasehold cost payments 59.4 62.5 Working Capital/ Exceptionals/ Other (6.3) (19.8) 1 Adjusted operating cash inflow after leasehold payments 53.1 42.7 Interest payments (9.0) (7.1) Tax payments (3.1) (3.7) Free cash flow (be
Slide 31: Strong Capital Structure
Strong Capital Structure Apr 24 Oct 23 Variance Property valuation (£’m) 2,952.7 2,789.7 5.8% UK (£’m) 2,036.2 1,934.0 5.3% Paris (€’m) 728.2 676.7 7.6% Spain (€’m) 114.2 95.7 19.3% Benelux (€’m) 231.0 208.7 10.7% Net Debt (£’m) 757.4 708.9 6.8% LTV 25.7% 25.4% 30 bps Debt capacity (£’m) 245.4 197.0
Slide 32: Indicative Non-LFL and Current Pipeline Impact
Indicative Non-LFL and Current Pipeline Impact £’m EPS (p) 50 25 40 14.3p EPS (+30% v 20 FY23) 30 15 8.2p EPS (+17% v 20 FY23) 10 12.6 13.5 14.3 10 10.2 11.5 5 8.2 4.8 0 2.7 0 (2.6) (3.3) (0.7) (10) (5) (20) (10) FY24 FY25 FY26 FY27 FY28 FY29 FY30 FY31 FY32 FY33 FY34 EPS (RHS) EBITDA (LHS) Interest
Slide 33: Guidance – Non-Trading and One-Off Items
Guidance – Non-Trading and One-Off Items Item Guidance Foreign exchange impact Weakening of the Euro (1.163 in HY 2024, 1.149 in FY 2023, 1.139 in HY 2023) contributed a £0.2m loss of EBITDA after leasehold costs In the second half, each 10c fluctuation from the HY 2024 FX rate of 1.163 would equate
Slide 34: Summary
Summary Robust Operating Performance − Steady like-for-like revenue, down 0.3% year on year − Resilient results in UK following strong prior years: like-for-like down 1.5% − Stable performance in Paris: like-for-like up 1.4% − Growth in Spain, Netherlands and Belgium − Continued strong cash generati
Slide 35: Appendices
Appendices
Slide 36: Appendices
Appendices Strategic − 37 Industry-Leading EPS Portfolio − 53 Customer Type − 38 Long-term Self-Storage Growth Summary − 54 By Country CSR − 39 CSR Update − 55 Freehold and Leasehold − 56 Store Maturity Financial − 44 Detailed Income Statement − 45 Group Income Statement − 46 Non-Underlying Items −
Slide 37: Operational and Investment Strategies Deliver Industry-Leading EPS Growth
Operational and Investment Strategies Deliver Industry-Leading EPS Growth Indexed EPS Performance 450 400 350 300 250 200 150 100 FY2013 FY2014 FY2015 FY2016 FY2017 FY2018 FY2019 FY2020 FY2021 FY2022 FY2023 SAFE BYG SHU SAFE: Adjusted Diluted EPRA Earnings per Share BYG: Adjusted Diluted EPRA Earnin
Slide 38: Long-term Structural Growth of Self Storage
Long-term Structural Growth of Self Storage UK-FR Storage Revenue (Total)1 (£m) • Storage revenue CAGR over 20 years: 8%3 180 • IPO in 2007 - One single £30 million equity raise in 2014 • Investment Historical Cost: £1.3 billion3 - Net Debt: £757 million 160 • Gross Asset Value: £3.1 billion 140 • C
Slide 39: Safe, Sustainable Storage
Safe, Sustainable Storage ESG • Continued progress on track toward net zero operational commitment − Removal of gas appliances from 6 UK stores (38 stores now gas free) − Lighting upgrades to high efficiency , motion-sensitive LED fitments in over 300 customer units − New buildings achieving or exce
Slide 40: Strategy for Operational Net Zero
Strategy for Operational Net Zero We will achieve operational carbon net zero by 2035, through: a) reducing & optimising what we use & b) using only zero carbon energy • Completion of lighting efficiency programme (external signage • Installation of solar PV on new-build stores where viable and cust
Slide 41: Progress Towards Operational Net Zero
Progress Towards Operational Net Zero We will achieve operational carbon net zero by 2035, through: a) reducing & optimising what we use & b) using only zero carbon energy • Continued progress on lighting efficiency – customer unit • All new stores in Netherlands with solar PV installations and EV l
Slide 42: Emissions Reductions on Track
Emissions Reductions on Track 17% reduction in absolute market-based emissions despite growth in portfolio; 19% reduction in emissions intensity Location-Based Market-Based Group Floor Area (Sq M million) 9,000 1.20 8,000 Group Total Floor Area (Sq M million) 7,911 7,864 1.00 Total Operational CO2e
Slide 43: Safestore ESG Commitments
Safestore ESG Commitments Sustainability targets and KPIs This table outlines the latest targets we set ourselves in each of the four ‘pillar’ areas of our Sustainability strategy. We are pleased to have met the majority of the FY 2022 targets set in 2019 including absolute emissions reductions and
Slide 44: Detailed Income Statement
Detailed Income Statement HY 2024 HY 2023 (£’m) (£’m) Revenue 109.2 110.1 Cost of sales (35.7) (34.5) Gross profit 73.5 75.6 Administrative expenses (8.9) (8.0) Underlying EBITDA * 67.1 69.7 Exceptional Items - - Depreciation and variable lease payments (1.1) (0.8) Share based payments (1.4) (1.3) S
Slide 45: Group Income Statement
Group Income Statement HY 2024 HY 2023 UK Paris Spain Benelux Total (CER) UK Paris Spain Benelux Total (CER) (£’m) (€’m) (€’m) (€’m) (£’m) (£’m) (€’m) (€’m) (€’m) (£’m) Revenue 79.7 25.1 2.8 6.3 109.8 81.7 24.8 1.8 5.5 110.1 Cost of sales** (24.4) (7.6) (1.3) (2.9) (34.9) (25.2) (6.4) (0.8) (2.3) (3
Slide 46: Non-Underlying Items
Non-Underlying Items HY 2024 HY 2023 (£’m) (£’m) Underlying EBITDA 67.1 69.7 Gain on investment properties and investment properties under construction 121.7 47.3 Depreciation (0.7) (0.6) Variable lease payments (0.4) (0.2) Share-based payments (1.4) (1.3) Exceptional items - - Share of associate's
Slide 47: Balance Sheet
Balance Sheet HY 2024 HY 2023 (£’m) (£’m) Assets Non-current assets Investment properties 2,838.8 2,586.6 Investment properties under construction 113.9 93.7 Other non-current assets 121.4 104.6 Non-current assets 3,074.1 2,784.9 Current assets 44.7 55.0 Liabilities Non-current liabilities Bank borr
Slide 48: Over 94% of Portfolio in Key Metropolitan Areas
Over 94% of Portfolio in Key Metropolitan Areas Population % Property MLA MLA Pipeline3 MLA Future3 Region (k) Valuation 1 Cum. % Total (m Sq Ft) % Total (Sq Ft m) (Sq Ft m) % Total Cum. % Total London- Inside M25 9,405 36% 36% 1.98 24% 0.51 2.49 25% 25% London- Thames Valley 2,228 2% 38% 0.16 2% 0.
Slide 49: Property Valuation Movement
Property Valuation Movement (including investment properties under construction) Property Valuation (£m) 3,000.0 2,950.0 2,900.0 126.1 2,850.0 2,800.0 55.6 2,952.7 18.7 2,750.0 2,789.7 2,700.0 2,650.0 Value at 31 October 2023 Currency translation Additions incl Acquisitions Revaluation Value at 30 A
Slide 50: Group Debt Position at April 2024
Group Debt Position at 30 April 2024 Facility Fixed-rate borrowings Floating-rate Total borrowings £/€'m £'m £'m Rate UK Revolver (GBP) £500.0 - £211.0 6.39% UK Revolver (EUR) - - £43.6 5.05% UK Revolver- non-utilisation - £245.4 - 0.42% US Private Placement 2024 €50.9 £43.5 - 1.59% US Private Place
Slide 51: HY 2024 Underlying to Statutory Adjustments
HY 2024 Underlying to Statutory Adjustments Variable Underlying Share Statutory Derivative lease Valuation Finance Dep'n LH Share of Tax / CGS / Underlying Headings Income Exceptional based Income Statutory Headings Movements payments/ Movement Lease Int properties Associate FX Statement payments St
Slide 52: HY 2023 Underlying to Statutory Adjustments
HY 2023 Underlying to Statutory Adjustments Variable Underlying Share Statutory Derivative lease Valuation Finance Dep'n LH Share of Tax / CGS / Underlying Headings Income Exceptional based Income Statutory Headings Movements payments/ Movement Lease Int properties Associate FX Statement payments St
Slide 53: Portfolio Summary: Customer Type
Portfolio Summary: Customer Type 2016 2017 2018 2019 2020 2021 2022 2023 HY 2024 Personal Customers Numbers (% of total) 75% 75% 76% 77% 78% 78% 79% 79% 80% Square feet occupied (% of total) 54% 55% 56% 58% 59% 59% 61% 61% 62% Square feet occupied (‘m) 2.05 2.25 2.59 2.85 3.23 3.49 3.84 3.81 3.77 Av
Slide 54: Portfolio Summary: By Country
Portfolio Summary: By Country Leading positions in the high-density capital city markets of London and Paris (42% of store portfolio and 53% of revenue) UK Paris Spain Netherlands Belgium Group Number of stores 135 29 11 11 6 192 Let Square Feet (m Sq Ft) 4.318 1.104 0.179 0.354 0.176 6.131 Maximum
Slide 55: Portfolio Summary: Freehold and Leasehold
Portfolio Summary: Freehold and Leasehold HY 2024 HY 2023 Freehold Leasehold Total Freehold Leasehold Total Total Portfolio Number of stores 140 52 192 135 50 185 MLA self storage only (m) 6.262 1.972 8.234 6.068 1.921 7.989 LFL Portfolio Number of stores 129 50 179 129 50 179 MLA self storage only
Slide 56: Portfolio Summary: Store Maturity
Portfolio Summary: Store Maturity HY 2024 HY 2023 Developing Established Mature Total Developing Established Mature Total Total Portfolio Number of stores 17 11 164 192 12 13 160 185 MLA self-storage (m) 0.643 0.469 7.122 8.234 0.528 0.617 6.844 7.989 % of portfolio MLA 9% 6% 85% 100% 6% 7% 86% 100%