Big Yellow Group Plc · LSE:BYG
Big Yellow — H1 2022/23 Earnings Presentation
57 slides from Big Yellow's earnings presentation, November 2022
Slide 1: Results for the Six Months ended 30 September 2022
Big Yellow Group PLC Results for the Six Months ended 30 September 2022 Kingston North, London, September 2022
Slide 2: Our Investment Case
Our Investment Case • UK self storage penetration in key urban conurbations remains relatively low Attractive Market • Limited new supply coming onto the market Dynamics • Resilient through the last economic downturn and performed well during the pandemic • Self storage is more part of the ecosystem
Slide 3: Key Financial Metrics
Key Financial Metrics Six Months Six Months Ended Ended 30.09.22 30.09.21 Revenue £93.8 million £81.8 million 15% Like-For-Like Store Revenue £81.3 million £75.1 million 8% Cash Flow From Operating Activities (After Net Finance Costs And Pre-Working Capital Movements) £55.2 million £47.4 million 16%
Slide 4: Key Operational Metrics
Key Operational Metrics Six Months Six Months Ended Ended 30.09.22 30.09.21 Store Maximum Lettable Area 6,295,000 6,062,000 4% Occupancy Growth in the Period (Sq Ft) 193,000 sq ft 318,000 sq ft (39%) Closing Occupancy 84.2% 89.5% (5.3 ppts) Occupancy Like-For-Like Stores 88.0% 90.2% (2.2 ppts) Closi
Slide 5: First Half Highlights
First Half Highlights • Revenue growth for the period was 15%, which includes new stores and an additional three months of Armadillo (acquired 1 July 2021) • Like-for-like store revenue up by 8%, mainly from increases in average achieved rents • Like-for-like occupancy increase of 2.0 ppts from 1 Ap
Slide 6: Operations Update
Operations Update • Opened two stores in the period (Harrow and Kingston North, both London) and acquired existing store in Aberdeen, adding a total of 191,000 sq ft of capacity • Camberwell, Bracknell and Battersea, which opened during the second half of 2020 are delivering an average EBITDA margin
Slide 7: Monthly Activity
Monthly Activity • Activity levels in 2020 significantly impacted by first lockdown • Current period saw growth in move-ins of 1% compared to prior period • June last year saw benefit of tapering off of stamp duty holiday, hence reduction in move-ins this year • Like-for-like occupancy was down 2.2
Slide 8: Daily Storage Revenue Growth
Daily Storage Revenue Growth • Graph shows Big Yellow stores only • Significant rate growth continued this six months, with pricing model driven by scarcity, increases in asking prices to new customers and annual price increases to existing customers • Scheduled rents increased in October 2022 in li
Slide 9: Financial Review
FINANCIAL REVIEW Harrow, London, September 2022
Slide 10: Portfolio Summary
Portfolio Summary • Portfolio summary showing Big Yellow and Armadillo stores in both periods, Armadillo’s Cheadle store was destroyed by fire in February 2022. It is included in the prior period comparatives, but not in the current period figures. • Like-for-like closing occupancy down 2.2 ppts to
Slide 11: Portfolio Summary
Portfolio Summary September 2022 September 2021 Big Yellow Big Yellow Total Big Armadillo Total Big Yellow Big Yellow Total Big Armadillo Total Established Developing Yellow Established Developing Yellow >3 years <3 years >3 years <3 years Number Of Stores 75 9 84 24 108 74 5 79 25 104 At 30 Septemb
Slide 12: Rental Growth Analysis
Rental Growth Analysis Average occupancy Number of Net rent per sq ft growth from Net rent per sq ft growth from in the six months stores 1 April to 30 September 2022 1 April to 30 September 2021 75% to 85% 30 4.9% 6.3% 85% to 90% 52 5.0% 6.9% Above 90% 17 5.9% 8.4% • Table shows the change in net r
Slide 13: Store Operating Expenses
Store Operating Expenses • Shows Big Yellow and Armadillo combined • New store openings account an extra £0.7 Category Period Ended Period Ended % % of store million of operating expense 30.09.22 30.09.21 change operating • Cost of sales down £0.6 million, switch to £000 £000 costs in selling Enhanc
Slide 14: Consolidated Income Statement
Consolidated Income Statement Six Months Ended 30.09.22 30.09.21 £m £m • Revenue up 15%, like-for-like store revenue up 8% Revenue 93.8 81.8 • Admin expenses decrease of £0.2 million, prior period Cost Of Sales (26.4) (23.8) includes non-recurring acquisition costs written off (on Armadillo) of £0.4
Slide 15: Adjusted PBT Bridge
Adjusted PBT Bridge Reduction in Increase Increase in Increase in Increase in Increase in capitalised share of in gross administrative other net profit \ expenses \ operating \ interest interest adjusted profit of income payable associates £9.3m (£0.2m) £0.9m (£2.6m) £0.7m (£0.4m) £54.6m Adjusted PB
Slide 16: Cash Flow and Net Debt Movement
Cash Flow and Net Debt Movement 30.09.22 30.09.21 £m £m Opening Net Debt (411.8) (325.0) Cash Generated from Operations 64.0 53.6 Net Finance Costs (6.9) (5.0) • Operating cash flow after net finance costs and pre- Interest on Obligations under Lease Liabilities (0.4) (0.4) working capital movements
Slide 17: Capital Structure
Capital Structure 30.09.22 30.09.21 Net Debt / Gross Property Assets 18% 18% Net Debt / Adjusted Net Assets 21% 21% Net Debt / Market Capitalisation 24% 15% Pre-Interest Operating Cash Flow Cover 9.3x 10.6x • Balance sheet gearing ratios in line with prior year, despite higher absolute levels of deb
Slide 18: Debt Facilities
Debt Facilities 30 September 2022 Debt Expiry Facility Drawn Average Interest Cost Aviva Loan September 2028 £160.4 million £160.4 million 3.4% M&G Loan September 2029 £120 million £120 million 3.8% Revolving Bank Facility (Lloyds, HSBC and B of I) October 2024 £240 million £198 million 3.6% Total A
Slide 19: Property Review
PROPERTY REVIEW Manchester, May 2019 19
Slide 20: New Site Development
New Site Development • Planning consent received since April 2022 on Staines and Slough Farnham Road. Seven of the development sites now have planning • Acquired sites in Old Kent Road (London) and Slough Farnham Road in the period • Slough Farnham Road has planning for a replacement to our existing
Slide 21: Development Pipeline – With Planning
Development Pipeline – With Planning Site Location Status Anticipated Capacity Sq Ft Kings Cross, Prominent location on York Way Planning consent granted. Demolition commenced in January 2021 with a 103,000 London view to opening in Summer 2023. Wembley, Prominent location on Towers Planning consent
Slide 22: Development Pipeline – Without Planning
Development Pipeline – Without Planning Site Location Status Anticipated Capacity Sq Ft Wapping, Prominent location on the Site acquired in July 2020. Planning application refusal likely to be Additional 95,000 London Highway, adjacent to existing appealed. Big Yellow store Epsom, Prominent location
Slide 23: Stores Under Development
Slough Farnham Road, planning granted Newcastle, planning granted Stores Under Development Wembley, planning granted Wapping, proposed Kings Cross, under construction Queensbury, planning granted Staines, planning granted Slough Bath Road, planning granted Epsom, proposed 23
Slide 24: Our Portfolio November 2022
Our Portfolio November 2022 24
Slide 25: Strategic Summary
Strategic Summary • Solid growth in revenue, earnings and cash flow in a challenging macro and geo-political environment • We remain confident in our business model which has proved to be resilient through several economic crises • Our revenue management and control of costs has seen an improvement
Slide 26: Appendix
APPENDIX Sustainability Marketing Review Additional Operational and Financial Information Store Portfolio 26
Slide 27: Sustainability Update
Sustainability Update • We have set 3 new long-term, ambitious environmental goals: 1. Net Renewable Energy Positive by 2030 2. Net Zero Scope 1 & 2 Emissions by 2030 3. Net Zero Scope 3 by 2040 • The detailed strategy was published with our full CSR Report in summer 2021 • Current five-year horizon
Slide 28: Big Yellow's Pathway To 100% Renewable Energy And Zero Carbon Emission Plan
Big Yellow’s Pathway To 100% Renewable Energy And Zero Carbon Emission Plan To 2030 & 2040 • Our ambition is for Big Yellow to be fully aligned to the UK Government’s commitments to sustainability by addressing our Emissions by 2050, at the latest • Our two 2030 targets are interconnected, insofar a
Slide 29: Armadillo Programme Of Works
Armadillo Programme Of Works Immediately • Upgrade energy metering infrastructure and integrate with current Big Yellow platform by summer 2022 - Completed • Review EPC performance and refresh certificates where necessary – 1 store left to be certified, 2 in process of being refreshed. All to be ach
Slide 30: Decarbonising Our Business to March 2022
Decarbonising Our Business to March 2022 Scope 1 & Scope 2 carbon dioxide emissions (tCO2e) • All electricity, gas and solar data now includes Armadillo – we have restated to include Armadillo (where possible) from the year ended 31 3,200 3,100 3,159 March 2020 3,000 2,900 2,800 2,805 • Due to the m
Slide 31: Social
Social • Three successful work placements: All of have been extended • Maidenhead: An individual placed by the Down’s Syndrome Association recently celebrated completing a year working at Big Yellow • Battersea: An individual placed by Breaking Barriers progressed from being shy and lacking in self-
Slide 32: ESG Investor Benchmarks, ESG Standards & Campaigns
ESG Investor Benchmarks, ESG Standards & Campaigns Benchmarks CDP (Carbon Disclosure Project) MSCI Rating of AA (May 2021) Big Yellow participated since 2012; achieved B in 2021 Campaigns Big Yellow recognised as a Supplier Engagement Leader for the second year Official supporter of the TCFD (Task F
Slide 33: Marketing and Sales Update
Marketing and Sales Update • Big Yellow has market-leading brand awareness – over five times higher than the next nearest competitor • Continued investment in digital to drive prospect growth – key to our success with over 90% of prospects online, 66% of visits from mobile devices • Reducing cost of
Slide 34: The Importance of the Brand
The Importance of the Brand • Self storage is a consumer facing business for both domestic and small business markets • Done right, brand sits at the heart of a business and drives its performance • Self storage is an immature market with 70% first time users – the interaction at the prospect stage
Slide 35: Research of Brand and Market Awareness
Research of Brand and Market Awareness • YouGov commissioned survey by the UK Self Storage Association in January 2022 • Measures unprompted brand awareness • 2,057 adults sample size • Statistically selected and weighted sample that represents a sample of the demographics of the adult UK population
Slide 36: High Brand Awareness = High Online Market Share
High Brand Awareness = High Online Market Share • Over 90% of our prospects come from our digital platforms. 66% of web visits are from smartphones, 32% from desktop and laptop use with the remaining 2% of web visits from tablets (April 2022 to September 2022) • A significant proportion of these web
Slide 37: Customer Insights
Customer Insights • Wide-ranging demographic and domestic customer base; extended families, couples, singles, renters, students, downsizers, space constrained home dwellers • Over 70% of our customers are in the top 3 ACORN categories; Affluent Achievers, Rising Prosperity and Comfortable Communitie
Slide 38: Social Media & PR
Social Media & PR • Targeted YouTube advertising to domestic and business audiences in need of self storage • CSR focussed social media content on Twitter, Instagram and Facebook • Linkedin spotlights our company culture, employee development, recruitment, CSR initiatives and the Big Yellow Foundati
Slide 39: Reasons for Using Self Storage
Reasons for Using Self Storage Overall Occupied Space 30 September 2022 Demand Profile of Move-ins April to September 2022 April to September 2021 Residential Owner Occupied 25% Residential Rental Sector 17% Student storage 14% Other 13% Business storage 12% Decluttering 11% Home improvements 5% 39
Slide 40: Local Economy Value of Business Customers
Local Economy Value of Business Customers • External business survey previously commissioned to assess impact of average Big Yellow store on the local economy • 36% of the Group’s current space is occupied by business customers • The average store has over 100 different businesses who between them e
Slide 41: National Customers
National Customers • Businesses can store at multiple locations nationwide through one dedicated point of contact • Our extended network of third party providers enables customers to have a single self storage supplier relationship • We provide a range of business services. These include accepting d
Slide 42: Length of Stay of Customers Vacating in the Rolling 12 Months to 30 September
Length of Stay of Customers Vacating in the Rolling 12 Months to 30 September 42
Slide 43: Customer Average Length of Stay
Customer Average Length of Stay As at Stores (No of Months) 30/09/2022 0-3 Years >3 Years Big Armadillo All All Stores Yellow Stores 31/03/2022 Business Existing 10.1 36.0 34.3 37.3 34.0 33.6 Vacated 4.3 12.0 11.9 14.9 12.2 12.1 Total 6.8 14.1 14.0 17.1 14.4 14.2 Domestic Existing 6.6 28.7 27.3 24.3
Slide 44: Self Storage Market
Self Storage Market Key Influencers – Growing public awareness – Change in economic activity and GDP growth – Population mobility and investment in existing homes – Physical planning and constraints, smaller homes – Focus on high density development on brownfield sites – Housing demand, divorce, sin
Slide 45: Self Storage Market
Self Storage Market – US Market (2020 SSA/Cushman & Wakefield Report) – Population 328.2 million – 55,000 self storage centres – 3.1 billion sq ft – 9.4 sq ft per person – Australian Market (2021 Australasian Self Storage Association Industry Snapshot) – Population 25.4 million – 1,570 self storage
Slide 46: 2022 Self Storage Association Survey
2022 Self Storage Association Survey • Only 2.3% of those surveyed were currently using self storage and 6.2% were thinking of using self storage in the next year (source: SSA YouGov Survey January 2022) • Increasing customer repeat use and referrals with 41% of customers having used self storage be
Slide 47: Per Store Analysis
Per Store Analysis Six Months Ended 30 September 2022 Established Developing Armadillo All Stores Stores Stores Stores Average Store Capacity 63,000 64,900 41,125 58,300 Average Sq Ft Occupied Per Store 55,575 35,200 33,925 49,075 Average % Occupancy 88.3% 54.3% 82.5% 84.2% Average Revenue Per Store
Slide 48: Track Record Since 2007
Track Record Since 2007 • 3.8 million sq ft increase in MLA capacity and 3.5 million sq ft increase in occupied space from 1 April 2007 to 30 September 2022 • Revenue for March 2022 more than tripled since 2008 to £171.3 million • More than fourfold increase in adjusted EPS since 2008 to 52.5p and m
Slide 49: Track Record Since 2007
Track Record Since 2007 Revenue Occupancy 180.0 90% 160.0 80% 140.0 70% 120.0 60% 100.0 50% 80.0 40% 60.0 30% 40.0 20% 20.0 10% 0.0 0% 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 Avg annual rent
Slide 50: Big Yellow Relative TSR Performance
Big Yellow Relative TSR Performance Source: Datastream as at 30 September 2022 50
Slide 51: Harrow, September 2022 Kingston North, September 2022
Harrow, September 2022 Kingston North, Soptomber 2022 _ MLA - 82,000 sq ft MLA 56000 sqitt i Le en ~ Aberdeen, June 2022 Hayes, January 2022 Uxbridge, June 2021 Battorsea, November 2020 MLA-540005q ft MLA - 73,000 sq ft MLA - 54,000 sq ft MLA -~ 70,000 sq ft Bracknell, September 2020 Camberwell, Jul
Slide 52: Twickenham 2, April 2016
Twickenham 2, April 2016 MLA- 22000 sqft Gypsy Corner, April 2014 MLA - 70,000 sqft High Wycombe, June 2010 MLA - 60000 sq tt [. ae Twickenham, May 2009 MLA - 73000 sq ft Nine Elm: April 2016 MLA - 65,000 sq ft Chiswick, April 2012 MLA -73,000 sq tt Reading, December 2009 MLA - 62,000 sq ft Liverpoo
Slide 53: rer ares ——
r= rer ares —— as Kennington, May 2008 Merton, March 2008 Pulham, March 2008 Balham, March 2008 Barking, November 2007 Ealing Southall, November 2007 MLA - 66,000 sq tt MLA - 70,000 sq tt MLA ~ 138,000 sq ft MLA ~ 61000 sq ft MLA - 64,000 sq ft MLA - 57000 sqft Sutton, July 2007 Gloucester, December
Slide 54: West Norwood, January 2003 Colchester, December 2002
=== = ST = - West Norwood, January 2003 Colchester, December 2002 Bow, November 2002 Brighton, October 2002 Guildford Slyfield, June 2002 New Malden, May 2002 MLA - 57,000 sq tt MLA - 54000 sq tt MLA -132000 sqit MLA - 59000 sq tt MLA - 55,000 sqitt MLA - 81000 sq tt Hounslow, December 2001 Ilford,
Slide 55: Canterbury Exeter Gateshead
Canterbury Exeter Gateshead MLA - 35 000sqit MLA - 33000 sq tt MLA - 46000sq tt Tce Mi | Liverpool Aintree Liverpool Bootle Liverpool South Macclesfield MLA - 49,000 sq ft MLA - 35000 sq ft MLA - 50000sqft MLA - 63000 sq ft He GAD, Newcastle Peterborough Plymouth Shettield Parkway Sheffield West Bar
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Slide 57: Disclaimer
Disclaimer This presentation contains certain statements that are neither reported financial results nor other historical information. These statements are forward-looking in nature and are subject to risks and uncertainties. Actual future results may differ materially from those expressed in or imp