Safestore Holdings Plc · LSE:SAFE
Safestore — H1 2013 Earnings Presentation
43 slides from Safestore's earnings presentation, Jun 27, 2013
Slide 1: Interim Results to April 30, 2013
Safestore the things you love Safestore Holdings plc Interim Results to April 30, 2013 June 27, 2013 1
Slide 2: Headlines
Headlines Peter Gowers sofestore
Slide 3: Strategic progress driving in-line performance
Strategic progress driving in-line performance Strategy starting to deliver sales and cost efficiencies – national accounts up 34% driving business customer growth – call centre delivering revenue and cost savings VAT impact in-line with earlier guidance – gross transaction value up 9.6% demonst
Slide 4: Finance
Finance Andy Jones sofestore
Slide 5: Financial Highlights
Financial Highlights 6m/e Change vs 6m/e Income Statement April 2013 April 2012 Revenue (£’m) 47.1 (2.7%) Underlying EBITDA (£’m) 24.5 Maintained Cash Tax Adjusted EPS (pence) 5.0 +2.0% Interim Dividend per share (pence) 1.85 Maintained Change vs Balance Sheet April 2013 October 2012 Investment Prop
Slide 6: Regional Performance Overview
Regional Performance Overview 1st Half 2012/13 v’s 1st Half 2011/12 Occupancy, rate, revenue performance change in constant currency RevPAF Revenue Average Rate Occupancy (5.2%) (4.8%) (1.4%) (4.0%) London & SE Rest of UK (5.3%) (5.9%) (2.3%) (3.6%) Paris (in CER ) 1 +1.3% +4.7% +3.9% +1.7% Group (i
Slide 7: Group Revenue reduction driven by the impact of VAT in the UK
Group Revenue reduction driven by the impact of VAT in the UK 49.0 48.5 48.0 1.7 47.5 48.4 47.0 0.5 46.5 0.3 47.1 0.2 46.0 Actual Revenue H12011/12 UK Self-Storage UK Ancillary Revenue UK Other Revenue FR Revenue Actual Revenue H12012/13 7
Slide 8: Cost improvements mitigate revenue shortfall to maintain EBITDA at £24.5m
Cost improvements mitigate revenue shortfall to maintain EBITDA at £24.5m 25.0 24.5 0.3 24.0 1.3 0.7 23.5 24.5 24.5 23.0 0.4 1.3 0.3 22.5 0.2 22.0 H1 EBITDA 2012 Revenue Insurance Timing Rates New store costs VAT recovery Reprioritised Restructuring H1 EBITDA 2013 Difference Marketing Benefits 8
Slide 9: Segmental Income Statement Analysis
Segmental Income Statement Analysis First Half 2013 vs First Half 2012 UK France Other Group £’m (unless stated otherwise) Var Var Var Var Revenue 34.5 (5.2%) 12.5 4.3% - - 47.1 (2.7%) EBITDA 16.9 (0.7) 7.8 0.8 (0.1) (0.1) 24.5 - Exceptional Items (0.5) (0.4) 0.1 (5.3) - - (0.4) (5.7) Derivatives -
Slide 10: Earnings Per Share reconciliation
Earnings Per Share reconciliation 6 months ended 6 months ended EPS EPS 30 April 2013 30 April 2012 (pence) (pence) (£m) (£m) Profit/ (Loss) before Tax 12.9 (11.8) Tax 61.8 5.6 Basic Earnings 74.7 39.8 (6.2) (3.3) Adjustments (Gain)/ Loss on Investment Properties (3.1) 32.4 Exceptionals 0.4 (5.2) FV
Slide 11: Cash Tax Adjusted Earnings
Cash Tax Adjusted Earnings 10.0 9.5 9.0 1.2 8.5 8.0 1.0 7.5 9.4 0.2 7.0 0.1 8.2 6.5 1.3 1.3 6.0 6.9 5.5 5.0 H1 2012 EPRA Revenue Costs Lease Payments Underlying Finance EPRA Tax H1 2013 EPRA Deferred Tax Cash Tax Adjusted Earnings Charges Earnings Addback Earnings 11
Slide 12: Operating cash flow remains strong
Operating cash flow remains strong 6 months ended 6 months ended 30 April 2013 30 April 2012 (£m) (£m) Underlying EBITDA 24.5 24.5 Exceptional Items/ Working Capital/ Other 1.4 2.4 Operating cash flow 25.9 26.9 Investing Activities Maintenance capex (including branding & signage) (2.5) (3.0) Expansi
Slide 13: Property portfolio boosted by foreign exchange translation and upward revaluation
Property portfolio boosted by foreign exchange translation and upward revaluation of French properties France UK France Total (in Euro) £m £m £m €m Value as at 1 November 520.7 164.4 685.1 199.9 2012 FX movement - 7.6 7.6 - Like for like stores revaluation (0.6) 5.7 5.1 11.0 Value as at 30 April 201
Slide 14: Guidance on non-trading items
Guidance on non-trading items Capex Maintenance capex expected to continue at £6m to £7m pa until the end of 2013/ 2014 and then revert to £4m to £5m ongoing Interest Debt levels are not expected to move materially for the rest of the year The blended interest rate is expected to be circa 5.3%
Slide 15: Initial impressions
Initial impressions Strong competitive position in both the UK and Paris Encouraging signs of strategic progress Opportunities: – business customers – greater ability to manage yield and fill existing stores – possible longer-term opportunities from consolidation – future funding strategy – ac
Slide 16: Strategy Update
Strategy Update Peter Gowers
Slide 17: We are now into the second year of the 'More Space' strategy
We are now into the second year of the ‘More Space’ strategy I 2011-2012 II Strengthen Platform 2012-2013 III Exploit Scale 2013-2014 Extend Reach Strengthen the brand Brand visibility Strengthen the brand Strengthen the brand Update website Branded experience Product innovation Build a powerful
Slide 18: Brand – 13% growth in internet enquiries in the UK
Brand – 13% growth in internet enquiries in the UK Focus on enquiry quality and efficiency of marketing spend Refinements to web and new mobile platform 30% of unique visitors to our website from the new mobile platform Internet enquiries up 13% Web now drives 81% of all enquiries 18
Slide 19: Brand – business customers growing and now 52% of all UK space
Brand – business customers growing and now 52% of all UK space Industry-leading national accounts team Service offer – National network – Single point of contact – Large units and loading areas – On-site team support for logistics National Accounts – 34% growth on prior year – 224,000 sq ft le
Slide 20: Brand – further growth in national accounts
Brand – further growth in national accounts Major healthcare business Supporting field teams Healthcare sector Increasing our share: - 1 store in October 2011 Started with 1 store now using 22 nationwide - 24 stores by June 2012 Using our national scale: - UK regional capitals Occupyin
Slide 21: Team – call centre driving performance and cost efficiency
Team – call centre driving performance and cost efficiency Investment in team Dedicated facility Sales and service culture Now handling 19% of new lets Driving cost savings in-store Quick repayment on investment 21
Slide 22: Operations – yield management mitigating VAT impact
Operations – yield management mitigating VAT impact Investment in new pricing platform and yield team Analytical approach to determining discounts from the inception of VAT 20% VAT for all customers – 1.2pt loss in average occupancy – Rate loss protected at -3.7% – Long-term customers now 52%
Slide 23: Value – active asset management creating value
Value – active asset management creating value Portfolio* – 78 freeholds – 44 leaseholds Action to drive freehold value Lease re-gearings and renewals create value uplift of £3.3m Whitechapel site – existing store with high valuation – potential for redevelopment * At June 2013- following En
Slide 24: Une Pièce en Plus - strategic position driving performance
Une Pièce en Plus - strategic position driving performance 25 stores in Paris and Ile de France Unique competitive position Occupancy up 4.5% Occupancy rate of 72.6% 4.7% revenue growth (CER) 13.4% EBITDA growth (CER) 24
Slide 25: Outlook
Outlook Return to modest enquiry growth in third quarter Vacates returned to normal levels Price increases implemented in H2 Current revenue trends more positive and further cost efficiencies to come On-track for full-year expectations 25
Slide 26: Summary – strong business with attractive prospects
Summary – strong business with attractive prospects Our strategy is delivering – growth in business customers – call centre investment driving growth and cost savings – yield management benefits Self-storage business model continues to be attractive – resilience despite a flat economy and a 20%
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Slide 28: Appendices
Appendices sofestore
Slide 29: Summary IFRS income statement
Strategic investments having positive impact with VAT impact temporarily impacting revenue performance Summary IFRS income statement Six months to 30 Six months to 30 Year ended 31 Movement Income Statement April 2013 April 2012 October 2012 (£m) (£m) (£m) (£m) Revenue 47.1 48.4 (1.3) 98.8 Operating
Slide 30: Group Summary Balance Sheet – April 2013 Reported
Group Summary Balance Sheet – April 2013 Reported As at 31 October As at 30 April 2013 As at 30 April 2012 Balance Sheet 2012 (£m) (£m) (£m) Assets Current assets 36.5 40.3 27.7 Non-current assets Investment properties 697.8 689.7 685.1 Development properties 5.4 9.0 5.4 Other non-current assets 64.
Slide 31: Portfolio summary under IFRS
Portfolio summary under IFRS Half Year ended 30 April 2013 Half Year ended 30 April 2012 Mature Large Total Mature Large Total Developing Established Developing Established (Sq ft (Sq ft (Sq ft (Sq ft (Sq ft (Sq ft (Sq ft ‘000) (Sq ft ‘000) (Sq ft ‘000) (Sq ft ‘000) ‘000) ‘000) ‘000) ‘000) ‘000) ‘00
Slide 32: Portfolio summary split between freehold & leasehold
Portfolio summary split between freehold & leasehold April – 2013 April – 2012 UK France Group UK France Group Freehold Leasehold Freehold Leasehold Freehold Leasehold Freehold Leasehold Freehold Leasehold Freehold Leasehold Number of Stores 66 32 12 13 78 45 64 34 11 13 75 47 Self storage income 17
Slide 33: Portfolio summary split between UK and France
Portfolio summary split between UK and France April - 2013 April - 2012 UK France Group UK France Group Number of Stores 98 25 123 98 24 122 Self storage income 26,743 11,322 38,065 28,483 10,789 39,272 Ancillary income 5,231 1,102 6,333 5,568 1,129 6,697 Other income 2,573 84 2,657 2,390 75 2,465 T
Slide 34: Customer average length of stay - Group
Customer average length of stay - Group Portfolio at Portfolio at Age of Store < 1 year 1-2 Years 2-5 Years > 5 Years April 2013 Oct 2012 N0 of Stores 4 4 19 94 121 121 (wks) (mths) (wks) (mths) (wks) (mths) (wks) (mths) (wks) (mths) (wks) (mths) Business Existing 29 6.7 57 13.2 78 18.0 144 33.2 129
Slide 35: Customer average length of stay in the UK
Customer average length of stay in the UK Portfolio at Portfolio at Age of Store < 1 year 1-2 Years 2-5 Years > 5 Years April 2013 Oct 2012 N0 of Stores 2 2 16 76 96 96 (wks) (mths) (wks) (mths) (wks) (mths) (wks) (mths) (wks) (mths) (wks) (mths) Business Existing 30 7.0 72 16.7 78 18.1 139 32.1 127
Slide 36: Customer average length of stay in France
Customer average length of stay in France Portfolio at Portfolio at Age of Store < 1 year 1-2 Years 2-5 Years > 5 Years April 2013 Oct 2012 N0 of Stores 2 2 3 18 25 25 (wks) (mths) (wks) (mths) (wks) (mths) (wks) (mths) (wks) (mths) (wks) (mths) Business Existing 28 6.4 42 9.7 76 17.6 150 34.5 130 3
Slide 37: Full refinancing secured in 2012 with extended maturities
Full refinancing secured in 2012 with extended maturities Drawn as at Total Facility Term 30 April New Facilities 2013 UK Term Facility (in £) £230m Aug 16 £230m UK Revolver (in £) £30m Aug 16 £2m Bank debt (in €) €70m Aug 16 €53m US Private Placement (7 year) £43m May 19 £43m US Private Placement (
Slide 38: Group Banking Facilities – April 2013 Reported
Group Banking Facilities – April 2013 Reported 6 months ended 30 April Year 31 October 2012 Net Debt Position 2013 (£m) (£m) Available facilities at the reporting date* 392.1 398.0 Total bank borrowings (gross of FRS 4 Adjustment) 350.8 344.0 Cash (12.6) (6.9) Net debt 338.2 337.1 * €70m facility tr
Slide 39: Group Exceptional Items – April 2013 Reported
Group Exceptional Items – April 2013 Reported 6 months ended 30 April 6 months ended 30 April Exceptional Costs 2013 2012 (£k) (£m) Insurance proceeds 334 5,360 Restructuring costs (610) (121) VAT and REIT related costs (165) - Total exceptional costs (441) 5,239
Slide 40: Property valuation metrics reflect economic conditions
Property valuation metrics reflect economic conditions October Key variables April 2013 April 2012 2012 Average Self Storage Rate per Sq Ft £24.68 £24.91 £25.16 Exit Cap Rate 7.85% 7.85% 7.84% Weighted average stabilised occupancy 77.61% 78.36% 78.80% Stabilised Occupancy in Sq Ft 3.96m 4.03m 4.03m
Slide 41: No new stores opened in HY 12-13. Pipeline unchanged
No new stores opened in HY 12-13. Pipeline unchanged; three UK sites acquired and planning permission obtained Pipeline store / site Full planning MLA sq ft Opened / estimated opening ● No new stores opened in H1 Stores opened in HY2013 No openings ● Pipeline unchanged. Three UK expansion Total sq f
Slide 42: The 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 5,500 1.1392 1.1964 231 Total 5,500 231 Future € cover Swapped Rate €'000 € H2 FY13 4,500 1.239
Slide 43: VAT impacts Progression in 2013
VAT impacts Progression in 2013 43