Safestore Holdings Plc · LSE:SAFE
Safestore — FY2011 Earnings Presentation
44 slides from Safestore's earnings presentation, Jan 26, 2012
Slide 1: Safestore Holdings plc Preliminary Results
More SpaceSM Safestore Holdings plc Preliminary Results 26 January 2012 1
Slide 2: Headlines
Headlines 2
Slide 3: Safestore has delivered another year of growth
Safestore has delivered another year of growth Revenue up 6.6% to £95.1m Store EBITDA up 5.1% to £59.8m Underlying Group EBITDA up 2.7% to £50.5m EPRA Adjusted Earnings up 4.8% to £16.1m Total Value of Property Portfolio up 4.0% to £714.4m Final Dividend up 9.2% to 3.55 pence per share 3
Slide 4: Safestore taking action to enhance our market leadership position
Safestore taking action to enhance our market leadership position Demand has been increasing and as market leaders we are driving growth – Self-storage demand has been increasing – Safestore RevPAF focus driving improved revenue performance and higher occupancy levels Targeted investments furthe
Slide 5: Safestore continues to deliver high quality, consistent growth
Safestore continues to deliver high quality, consistent growth Revenue EBITDA 100,000 95,060 55,000 89,214 50,512 90,000 49,178 84,433 50,000 82,875 46,330 45,145 80,000 45,000 74,303 40,725 70,000 40,000 60,000 35,000 FY2007 FY2008 FY2009 FY2010 FY2011 FY2007 FY2008 FY2009 FY2010 FY2011 Total Portf
Slide 6: Financial Review of 2010-2011
Financial Review of 2010-2011 6
Slide 7: Market leading position enables us to address multiple demand drivers
Market leading position enables us to address multiple demand drivers Lifestyle Demand Demand expected to remain strong and awareness of product rising e.g. students, marriage, new baby, divorce, bereavement Rental/Owner Occupier Demand Rental sector is growing and upside as owner-occupied market be
Slide 8: Market leadership position driving new let growth
Safestore‟s market leadership position driving new let growth Year on year increase in new lets Q1 2011 vs Q2 2011 vs Q3 2011 vs Q4 2011 vs Total for Q1 2010 Q2 2010 Q3 2010 Q4 2010 the year Personal customers +7% +3% +6% +16% +9% Business customers +11% +3% +11% +13% +10% Total +8% +3% +7% +16% +9%
Slide 9: Focus on RevPAF is helping drive yield and revenue gains
Focus on RevPAF is helping drive yield and revenue gains Occupancy, rate, revenue performance change in constant currency Occupancy Rate Revenue RevPAF +10.7% +1.3% +7.2% +3.4% London & SE +9.6% +0.8% +3.1% +2.0% Rest of UK Paris +5.5% +4.2% +8.8% +0.7% Management action to drive yield is driving gr
Slide 10: Underlying operating costs being controlled and strategic investments being made
Underlying operating costs being controlled and strategic investments being made to further enhance our position FY 2011 FY2010 Change Underlying cost of sales (including £0.3m of strategic £30.2m £28.9m +4.5% investments in the call centre) Additional operating costs from new stores £1.0m Reported
Slide 11: EPRA Adjusted Income Statement
EPRA Adjusted Income Statement Year ended Year ended 31 Oct 2011 31 Oct 2010 Movement (£m) (£m) Revenue 95.1 89.2 +6.6% Operating expenses (excluding exceptionals) (44.6) (40.0) EBITDA before exceptional items and investment gain 50.5 49.2 +2.7% Depreciation & Contingent Rent (0.8) (0.9) Exceptional
Slide 12: Cash flow reconciliation
Cash flow reconciliation Year ended Year ended 31 October 2011 31 October 2010 (£m) (£m) Operating profit (before investment (loss)/gain) 48.4 48.4 Working capital, non-cash movements and exchange gains (1.5) (2.2) Operating cash flow 46.9 46.2 Making investments deferred from peak Non-discretionary
Slide 13: Net debt and facilities
Net debt and facilities Year ended Year ended Net Debt Position 31 October 2011 31 October 2010 (£m) (£m) Available facilities at the year end* 385.1 384.7 Total bank borrowings (gross of FRS 4 Adjustment) 341.3 316.0 Cash (14.7) (15.5) Net debt 326.6 300.5 * €40m facility translated at €1.1391:£1 (
Slide 14: Property portfolio valuations – Cushman & Wakefield
Property portfolio valuations – Cushman & Wakefield Maximum Valuation Movemen Lettable as at 31 t since 31 ● New stores have contributed Location Tenure Stores Area* Oct 2011 Oct 2010 £25.2m of valuation uplift („000 sq (£) (£) ft) ● Pentonville Road moved from UK UK Freehold 56 2,442 427.8m 18.3m s
Slide 15: Property valuation metrics reflect economic conditions
Property valuation metrics reflect economic conditions Key variables October 2011 April 2011 October 2010 Average Self Storage Rate per Sq Ft £26.11 £26.33 £25.55 Exit Cap Rate 7.82% 7.88% 7.87% Weighted average stabilised occupancy 78.72% 78.80% 79.46% Stabilised Occupancy in Sq Ft 4.02m 3.80m 3.97
Slide 16: Strategy
Strategy 16
Slide 17: There is a strategic opportunity to grow the self-storage market
There is a strategic opportunity to grow the self-storage market More than 8m UK people and companies may have a ...yet the industry has c.400,000 customers and a need for more space... fraction of the penetration found in the U.S. Market potential market Self-storage square foot for UK self-storage
Slide 18: Safestore's scale creates competitive advantage
Safestore‟s scale creates competitive advantage As at 31st October 2011: No. of UK Stores Enfield 120 Chingford Borehamwood 96 Stanmore Friern Barnet Wood Green 100 Edgware Romford Alexandra Palace Staples Corner Stoke Newington 80 Ruislip Holloway Pentonville Road Ilford 65 Paddington Barking 54 Ca
Slide 19: Our strategy is to capitalise on our market leadership and scale
Our strategy is to capitalise on our market leadership and scale Our aim is to deliver More SpaceSM Our strategy is to capitalise on our market leadership and scale – Bring the product to wider audience, including more businesses – Strengthen marketing and yield management to optimise returns –
Slide 20: Our strategy is underpinned by four strategic priorities
Our strategy is underpinned by four strategic priorities that are measured throughout the business EBITDA Enquiries RevPAF Sq.ft Growth 20
Slide 21: Strengthen the brand update
Strengthen the brand update: Safestore leads with stronger branding, new website and national accounts National Accounts up 16% London New Southgate 21 New Website
Slide 22: Build a powerful team update
Build a powerful team update: Safestore leads with training to enhance sales performance and productivity 2.5 percentage point conversion gain in the UK contributed to record H2 for occupancy growth Store teams represent largest element of cost base Targeted investment to enhance customer serv
Slide 23: Drive operational excellence update
Drive operational excellence update: Safestore leads with call centre expansion to drive yield Scale in UK and France creates sales opportunity and economies of scale in call centre operations Call centres handle tollfree calls, call diverts from store and out of hours French call centre opene
Slide 24: Create value update: ongoing asset management
Create value update: Safestore leads with ongoing asset management Portfolio Review Active Management Self-storage remains highest and Pentonville Road freehold acquired best use for overwhelming majority in June 2011 of sites Secured site that was closed to Potential for profitable consolid
Slide 25: Targeted investment in marketing and yield management planned for 2011-2012
Targeted investment in marketing and yield management planned for 2011-2012 to drive occupancy and RevPAF growth Strategic Agenda for 2011-2012 Strengthen pricing and yield management Extend marketing activities Build out call centre operations in UK and France Expected further £2.0m investm
Slide 26: Marketing and yield management enhancements support operational gearing
Marketing and yield management enhancements support our focus on driving value from operational gearing Illustrative incremental revenue potential to drive operational gearing 12 10 c.£1-2m 8 Potential Revenue c.£3-5m £m 6 Growth Opportunity 4 2 c.£3-4m 0 Increase occupancy to Mature store Increase
Slide 27: Selective capital investments in new stores
Selective capital investments in new stores support our ability to drive value from extending our network Selective focus on London/Paris and consolidation Example: London Chingford – Opened May 2008 Freehold acquired for £5.9m Current property valuation of £8.9m Annual EBITDA >£0.6m leads to operat
Slide 28: Outlook
Outlook 28
Slide 29: Monitoring wider economic conditions but performing well with net growth
Outlook Another strong operational performance Fifth successive year of growth in sales, profits and total property portfolio value Market leadership position gives us scale and power to seize opportunities Significant further growth potential for the self-storage market Market leader main
Slide 30: Safestore
Safestore Strong demand for self-storage and further growth potential Safestore is the market leader in UK and Paris with scale to win Track record of delivering growth and dividends Management driving change in the industry and the company – Strategic RevPAF focus driving yield management –
Slide 31: More Space
More SpaceSM Safestore Preliminary Results 26 January 2012 31
Slide 32: Appendices
Appendices 32
Slide 33: Portfolio summary under IFRS
Portfolio summary under IFRS Year Ended 31 October 2011 Year ended 31 October 2010 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) „000) Num
Slide 34: Portfolio summary split between freehold & leasehold
Portfolio summary split between freehold & leasehold October – 2011 October - 2010 UK France Group UK France Group Freehold Leasehold Freehold Leasehold Freehold Leasehold Freehold Leasehold Freehold Leasehold Freehold Leasehold Number of Stores 62 34 10 13 72 47 60 36 8 14 68 50 Self storage income
Slide 35: Improved EBITDA performance: Summary IFRS income statement
Improved EBITDA performance Summary IFRS income statement Year ended Year ended 31 October 31 October Movement 2011 2010 (£m) (£m) Revenue 95.1 89.2 +6.6% Operating expenses (excluding exceptionals) (44.6) (40.0) EBITDA before exceptional items and investment gain 50.5 49.2 +2.7% Exceptional items D
Slide 36: Summary IFRS balance sheet
Summary IFRS balance sheet Year ended Year ended 31 Oct 2011 31 Oct 2010 (£m) (£m) Assets Non-current assets Investment properties 714 686 Development properties 15 18 Other non-current assets 72 80 Non-current assets 801 784 Current assets 32 32 Liabilities Current liabilities (55) (49) Non-current
Slide 37: Net debt and facilities
Net debt and facilities Year ended Year ended Net Debt Position 31 October 2011 31 October 2010 (£m) (£m) Available facilities at the year end* 385.1 384.7 Total bank borrowings (gross of FRS 4 Adjustment) 341.3 316.0 Cash (14.7) (15.5) Net debt 326.6 300.5 * €40m facility translated at €1.1391:£1 (
Slide 38: Property portfolio valuation - movement in the period
Property portfolio valuation - movement in the period Non-valuation Investment October 2011 October 2010 Movement movements Gain £m £m £m £m £m UK like for like assets 1 534 542 (8) (12)1 (20) French like for like assets 2 155 145 10 (2)2 8 Group like for like assets 689 687 2 (14) (12) Development
Slide 39: 4 stores opened in year delivering over 160,000 sq ft of MLA
4 stores opened in year delivering over 160,000 sq ft of MLA Pipeline MLA Opened / ● Pipeline of 7 expansion stores totalling Pipeline store / site Full planning sq ft estimated opening 268,500 sq ft of MLA. Of these: Stores opened in FY2011 – Six are freehold, one (Birmingham) is Bolton * 19,700
Slide 40: Customer average length of stay - Group
Customer average length of stay - Group Portfolio at Portfolio at Age of Store < 1year 1-2 Years 2-5 Years > 5 Years Oct 2011 Oct 2010 N0 of Stores 4 3 20 90 117 116 (wks) (mths) (wks) (mths) (wks) (mths) (wks) (mths) (wks) (mths) (wks) (mths) Business Existing 27 6.3 25 5.7 64 14.7 134 30.9 121 27.
Slide 41: Customer average length of stay in the UK
Customer average length of stay in the UK Portfolio at Portfolio at Age of Store < 1year 1-2 Years 2-5 Years > 5 Years Oct 2011 Oct 2010 N0 of Stores 2 2 17 73 94 94 (wks) (mths) (wks) (mths) (wks) (mths) (wks) (mths) (wks) (mths) (wks) (mths) Business Existing 34 7.8 24 5.4 65 15.1 132 30.5 119 27.
Slide 42: Customer average length of stay in France
Customer average length of stay in France Portfolio at Portfolio at Age of Store < 1year 1-2 Years 2-5 Years > 5 Years Oct 2011 Oct 2010 N0 of Stores 2 1 3 17 23 22 (wks) (mths) (wks) (mths) (wks) (mths) (wks) (mths) (wks) (mths) (wks) (mths) Business Existing 15 3.5 27 6.2 54 12.5 133 30.7 120 27.7
Slide 43: Customer split
Customer split Occupancy Number 100% 100% 90% 90% 80% 80% 70% 70% 60% 60% 50% 50% 40% 40% 30% 30% 20% 20% 10% 10% 0% 0% April-10 April-11 April-10 April-11 Business Domestic Business Domestic Excluding La Défense Domestic includes students Unless otherwise stated comparisons are to H1 2010 43
Slide 44: London and Paris drive the majority of performance
London and Paris drive the majority of performance 100% 90% 80% 70% 60% Rest of UK 50% Paris London & SE 40% 30% 20% 10% 0% No of Stores EBITDA Valuation 44