Safestore Holdings Plc · LSE:SAFE
Safestore — H1 2009 Earnings Presentation
35 slides from Safestore's earnings presentation, 2009
Slide 1: Interim Results
Interim Results 30 J une 2009 self storage
Slide 2: Interim Results Highlights
Interim Results Highlights y A good performance across key metrics despite a difficult economic climate y Revenue up 3.3% to £41.3m – Average rate per sq ft up 7.2% to £25.24 – Occupancy movement of -12,000 12,000 sq ft compared to -73,000 73,000 sq ft for the same period last year – Ancillary sales
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 April 2009 30 April 2008 £m £m Revenue 41.3 40.0 Operating expenses (excluding exceptionals) (19.2) (18.9) EBITDA before exceptional items and investment gain 22.0 21.1 Exceptional items/FX swap 1.2 - Depreciation (0.1) - Operating p
Slide 5: Cash Flow Reconciliation
Cash Flow Reconciliation Six Months ended Six Months ended 30 April 2009 30 April 2008 £m £m Operating profit (before investment (loss)/gain) 23.3 21.1 Working capital and non-cash movements 1.6 1.2 Operating cash flow 24 9 24.9 22 3 22.3 Non-discretionary cash flow Maintenance capex (including sign
Slide 6: Net Debt
Net Debt Six Months ended Six Months ended 30 April 2009 30 April 2008 £m £m Available facilities at the year end* 349.9 302.0 Total bank borrowings (gross of FRS 4 Adjustment) (302 9) (302.9) (261 7) (261.7) Cash 29.2 8.9 Net debt (273.7) (252.8) Proportion of net debt covered by interest hedge 65%
Slide 7: Existing Covenants
Existing Covenants y Loan to Value Covenant (only tested annually at year end) – LTV (UK assets only) at 52% on 31 October 2008 – Valuations at April 2009 broadly flat with October 2008 – Theoretical LTV on UK onlyy assets remains at 52% – LTV covenant moves to 65% from 31 July 2009 until July 2011
Slide 8: Cost of Banking Facilities
Cost of Banking Facilities Weighted Average Debt at June 2009 Interest at June 2009 £m % Fixed rate debt (UK only) 177.5 6.11 Floating rate debt (UK only) 98.5 2.90 French Facility 26.9 4.02 302.9 4.88 y UK margin at 90bps y French margin at 175bps. y €24m of €30m drawn on the French facility swappe
Slide 9: Portfolio Summary Under IFRS
Portfolio Summary Under IFRS April 2009 April 2008 Developing Established Total Developing Established Total Number of Stores 17 97 114 15 94 109 Sq ft ’000 Sq ft ’000 Sq ft ’000 Sq ft ’000 Sq ft ’000 Sq ft ’000 MLA (self storage only) 693 4,076 4,769 728 3,931 4,659 Occupancy (self storage only) 22
Slide 10: Operational Review
Operational Review Steve Williams, Chief Executive Officer
Slide 11: Market Trends & Drivers
Market Trends & Drivers y Positive trends with the change of demand and use of self storage – Demand for smaller units has risen which results in a higher rate per square foot – Length of stay has increased and occupancy performance is improving y Demand from business customers remains strong – Upsi
Slide 12: A Focused Business Model
A Focused Business Model y A customer led retail focused business y The Safestore model provides vital flexibility to respond rapidly in current environment y Clear but flexible operational strategy y Balancing rate per sq ft and occupancy y Innovative approach to USP’s and strategic alliances y Bal
Slide 13: The UK Market Leader
The UK Market Leader Safestore the No.1 self storage company in the UK y 114 trading & 9 pipeline stores:- which will provide 5.4m sq ft of storage space when fully fitted out y 93 UK stores, the only self storage operator with a geographically diverse spread across the UK y More stores that any oth
Slide 14: Une Pièce en Plus ("UPP") – Paris
Une Pièce en Plus (“UPP”) – Paris y Safestore is the biggest self storage company in central Paris trading as Une Pièce en Plus y UPP has an excellent management team led by Frederic Vecchioli y 22 stores mainly l situated d in centrall Paris (including ( l d one open since the h half h lf year end)
Slide 15: Customer Mix – UK
Customer Mix – UK Breakdown of Business and Percentage of Space Occupied Domestic Customers by Customer Type Business Business 57% 32% Domestic 43% Domestic 68% Average Length of Stay (in weeks) H1-2009 91 H1-2008 85 H1-2007 77 70 75 80 85 90 95 15
Slide 16: Rate and Occupancy
Rate and Occupancy Rate (average) (£/sq ft) y Safestore continues to increase market share 27.05 £28.00 25.26 £26.00 24.76 24.85 y Good rate growth across all store classes 23.51 22.85 £24.00 £22.00 19.35 y Occupancy performance improved across all store £20.00 classes £18.00 16.60 £16.00 £14.00 y I
Slide 17: Brand And Marketing - UK
Brand And Marketing - UK y We continue to see significant increases in awareness of Self Storage in the UK and of the Safestore brand y Marketing spend targeted at online enquiry generation and will be circa 5% above last year y Our strategy gy has been consistent for the last four yyears with p par
Slide 18: Illustrative Growth Potential from Existing Portfolio
Illustrative Growth Potential from Existing Portfolio y Potential outcome at 85% occupancy – Revenue at stabilisation in excess of £200m – EBITDA at stabilisation in excess of £140m – Total occupancy at stabilisation of circa 4.6m sq ft y Key Assumptions – MLA of 5.4m sq ft (based on existing portfo
Slide 19: Cardiff Newport Road
Cardiff Newport Road ¢<\ iy self storage
Slide 20: Clapham
Clapham ce) —— SLES OLGy Self storage
Slide 21: Property Review
Property Review Richard Hodsden, Chief Financial Officer
Slide 22: Property Portfolio Valuations
Property Portfolio Valuations Key Variables Apr-09 Oct-08 Apr-08 Average Rate per Sq Ft £25.24 £24.06 £23.55 Exit Cap Rate 8.17% 7.88% 7.14% Weighted average stabilised occupancy 78.38% 79.30% 80.15% Average number of months to stabilised occupancy 47 43 31 y DCF based valuations y Several key varia
Slide 23: Property Portfolio Valuation – Cushman & Wakefield
Property Portfolio Valuation – Cushman & Wakefield Maximum Lettable Movement since Location Tenure Stores Valuation** Area* October 2008 ‘000 sq ft £m £m UK Freehold 53 2,389 392 (4) Long Leasehold 5 280 39 - Short Leasehold 35 1,489 95 (9) France Freehold 7 292 62 8 Short Leasehold 14 572 53 7 Tota
Slide 24: Revaluation Movement in the Year
Revaluation Movement in the Year 30 April 2009 31 October 2008 Movement £m £m £m Like for Like portfolio UK portfolio 511 539 (28) French portfolio 114 99 15 Like for Like total 625 638 (13) New stores 15 15 Valuation 640 638 2 y UK like for like portfolio valuation down 5.2% 5 2% since October 2008
Slide 25: Expansion Stores
Expansion Stores Tenure Full Pipeline Opened Opened / y Pipeline of 9 expansion stores which will Planning MLA MLA Estimated add 428,200 sq ft of MLA. Of these: Sq. ft Sq ft Opening – 7 are freehold Stores opened year to date – 2 are long leasehold Clapham FH 52 000 52,000 Jan 2009 Cardiff FH 78,000
Slide 26: Outlook
Outlook Steve Williams, Chief Executive Officer
Slide 27: Outlook
Outlook y Trading conditions in H1 showing some encouraging signs which has continued into H2 y Safestore positioned to continue to increase market share and maintain competitive advantage due to: – Scale – Market leadership – Geographic spread y A balanced approach to rate and occupancy will mainta
Slide 28: Appendix
Appendix self storage
Slide 29: Costs to Complete Pipeline
Costs to Complete Pipeline Six months ended 30 April 2009 £m Costs of stores spent to date 20.7 Estimated costs to complete 28.4 Total Estimated Cost 49.1 Estimated net sq q ft added 428,200 , Cost per sq ft (freehold/long leasehold) £115 y Relatively low risk pipeline in terms of cost per sq ft and
Slide 30: Summary IFRS Balance Sheet
Summary IFRS Balance Sheet Six months ended Six months ended 30 April 2009 30 April 2008 £m £m Assets Non-current assets Investment properties 715.4 712.3 Development properties 23.6 25.1 Other non-current assets 8.8 9.9 Non-current assets 747.8 747.3 Current assets 44.3 25.5 Liabilities Current lia
Slide 31: Market Leadership & Cluster Strategy
Market Leadership & Cluster Strategy Enfield Chingford Borehamwood Friern Barnet Stanmore Wood Green Edgware Alexandra Palace Staples Corner Stoke Newington Ruislip Holloway Camden Pentonville Road Ilford Paddington Barking As at 30 April 2009: Hayes Notting Hill Whitechapel Acton Bermondsey Earls C
Slide 32: Sales Mix and Contribution Analysis
Sales Mix and Contribution Analysis Rental Rate Improvement – Group EBITDA Growth – Group (average rate) 30 £26.00 25.26 25 25.6 EBITDA (£m) £24.00 24.8 23 51 23.51 E 20 £22.00 22.13 17.4 £20.00 15 2007 HY 2008 HY 2009 HY 2007 HY 2008 HY 2009 HY Total Revenue Growth - Group Ancillary Revenue Growth
Slide 33: 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 30/04/2008 Portfolio N0 of Stores 4 10 9 67 90 86 (wks (mths) (wks) (mths) (wks) (mths) (wks) (mths) (wks) (mths) (wks) (mths) Business Existing 19 4.4 32 7.4 63 14.4 126 29.1 112 25.8 110 25
Slide 34: 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 30/04/2008 Portfolio N0 of Stores 1 1 2 17 21 20 (wks (mths) (wks) (mths) (wks) (mths) (wks) (mths) (wks) (mths) (wks) (mths) Business Existing 19 4.4 27 6.2 54 12.4 128 29.6 120 27.6 115 26.
Slide 35: 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 2009. 2009 The information in this document has not been independently verified and no representation or warrant