Safestore Holdings Plc · LSE:SAFE
Safestore — H1 2012 Earnings Presentation
44 slides from Safestore's earnings presentation, Jun 27, 2012
Slide 1: Safestore Holdings plc Half-Year Results to April 30 2012
Safestore the things you love Safestore Holdings plc Half-Year Results to April 30 2012 June 27 2012
Slide 2: Headlines
Headlines Peter Gowers sofestore
Slide 3: Strategic focus driving good performance
Strategic focus driving good performance Group RevPAF1 up 7.6% - strong growth in each region Closing occupancy up 11.8% year on year to 3.26 million sq ft Revenue up 6.4% to £48.4 million Store EBITDA1 up 4.7% to £29.9 million Underlying Group EBITDA up 0.9% to £24.5 million Interim Dividend up 5.7
Slide 4: Encouraging early progress on our 3-year strategic plan
Encouraging early progress on our 3-year strategic plan Decision to lead the industry by focusing on RevPAF is working: – Good growth in all markets – UK regions RevPAF up 6.4% as a result of pricing strategy On track with strategic priorities and investments Encouraging early results from strategic
Slide 5: Finance
Finance Richard Hodsden sofestore
Slide 6: Strong new let growth
Strong new let growth Year on year increase in new lets Q1 2011 vs Q2 2011 vs Q3 2011 vs Q4 2011 vs Q1 2012 vs Q2 2012 vs Q1 2010 Q2 2010 Q3 2010 Q4 2010 Q1 2011 Q2 2011 Personal +7% +3% +6% +16% +16% +9% customers Business +11% +3% +11% +13% +15% +7% customers Total +8% +3% +7% +16% +15% +8% Season
Slide 7: 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 RevPAF1 Revenue Occupancy Rate +8.6% +6.9% +11.4% -3.8% London & SE +6.4% +6.1% +16.7% -7.9% Rest of UK Paris +7.5% +7.8% +5.7% +1.2% Focusing on free cash flow generation 7 1 Re
Slide 8: Une Pièce en Plus continues to perform well
Une Pièce en Plus continues to perform well Total Revenue in €’000 Occupancy in m2 15,000 70,000 14,300 14,000 65,507 13,263 65,000 13,000 12,191 61,947 12,000 11,817 59,758 60,000 11,000 57,152 10,462 56,418 10,000 55,000 HY 2008 HY 2009 HY 2010 HY 2011 HY 2012 HY 2008 HY 2009 HY 2010 HY 2011 HY 20
Slide 9: Good revenue growth partially offset in the short-term by strategic investments
Good revenue growth partially offset in the short-term by strategic investments and costs of new stores Six Months to Six Months to EPRA Adjusted Income Statement 30 April 2012 30 April 2011 Movement (£m) (£m) Revenue 48.4 45.5 +6.4% Operating expenses (excluding exceptionals) (23.9) (21.3) -12.2% E
Slide 10: Operating cash flow remains strong
Operating cash flow remains strong Six Months ended Six Months ended 30 April 2012 30 April 2011 (£m) (£m) Operating profit (including exceptional items but before investment loss) 29.8 22.5 Working capital, non-cash movements and exchange gains (2.9) (0.4) Operating cash flow 26.9 22.1 Non-discreti
Slide 11: Full refinancing secured with extended maturities
Full refinancing secured with extended maturities Drawn as at Total Facility Term New Facilities 30 April 2012 UK Term Facility (in £) £230m Aug 16 £230m UK Revolver (in £) £40m Aug 16 £7m Bank debt (in €) €70m Aug 16 €53m US Private Placement (7 year) £43m May 19 £43m US Private Placement (12 year)
Slide 12: Property portfolio impacted by foreign exchange translation and VAT adjustment
Property portfolio impacted by foreign exchange translation and VAT adjustment France UK France Total (in Euro) £m £m £m €m Value as at 1 November 2011 546.6 167.8 714.4 191.1 New stores 13.3 4.1 17.4 5.1 FX movement (12.0) (12.0) Like for like stores revaluation (7.4) 1.0 (6.4) 1.2 Pre-VAT Value at
Slide 13: Strategic Progress
Strategic Progress Peter Gowers
Slide 14: Our strategy is to capitalise on our scale and drive operational gearing
Our strategy is to capitalise on our scale and drive operational gearing Capitalise on our market leadership and scale – Bring the product to wider audience, including more businesses – Strengthen marketing and yield management to optimise returns – Build enhanced focus on returns with ‘internal pro
Slide 15: We are making steady progress on our 3-year plan
We are making steady progress on our 3-year plan 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 Product innovation Branded experience Update website Build a powerful team Build a po
Slide 16: Encouraging early results on our key strategic measures
Encouraging early results on our key strategic measures Store EBITDA1 up 4.7% Enquiries up 28% EBITDA Enquiries RevPAF Sq.ft Growth RevPAF1 up 7.6% Occupancy up 5.4pts 16 1 calculation excludes the four stores opened since 30 April 2011
Slide 17: Brand: improved customer appeal through more premium feel
Brand: improved customer appeal through more premium feel 17
Slide 18: Brand: growing Safestore awareness through integrated marketing
Brand: growing Safestore awareness through integrated marketing May/June 2012 targeted television campaign drives awareness Digital display drives clicks Search presence drives traffic Initial gains in brand awareness, web visits and enquiries 18
Slide 19: Brand: growing enquiries through leading online customer experience
Brand: growing enquiries through leading online customer experience New website and mobile platform First in the industry with quick quote engine Multiple store pricing Web traffic up c.30% on prior year since web launch 20% more web visitors interact and enquire through the Safestore website 19
Slide 20: Brand: extending the reach and value of national accounts
Brand: extending the reach and value of national accounts H1 2012 occupancy growth of 37% Now drives c.170,000 square ft and 6.7% of UK occupancy Targets resilient, large companies Leverages national scale Invested in extending the sales team 20
Slide 21: Team: improving sales conversion through call centre
Team: improving sales conversion through call centre Multi-channel approach: - Stores as primary channel - Call centre to support peak times, out of hours and multi-quote - Web as growing online reservation channel Further investment in the call centre during H1 2012 which now handles 16% of all enq
Slide 22: Operations: maximising yield through sophisticated pricing
Operations: maximising yield through sophisticated pricing Customer segmentation identified profitability potential – Trial of segment-led offers in UK provinces – More balanced rate led strategy in London to fuel long-term growth Improving yield in a recession – UK regions RevPAF1 up 6.4% by tradin
Slide 23: Value: selective investment driving future growth - London-Staines
Value: selective investment driving future growth London-Staines Opened February 2012 Freehold MLA 43,100 23
Slide 24: Value: selective investment driving future growth - London-New Southgate
Value: selective investment driving future growth London-New Southgate Opened November 2011 Freehold MLA 48,000 24
Slide 25: Value: selective investment driving further growth - Paris-Gonesse
Value: selective investment driving further growth Paris-Gonesse Opened December 2011 Freehold MLA 46,000
Slide 26: Early days in our plan – progress is on-track
Early days in our plan – progress is on-track Illustrative incremental revenue potential from operational gearing Drive Get ancillary 12 mature income stores 10 growing c.£1-2m 8 Potential Fill Revenue Recently 6 £m Opened c.£3-5m 3-Year Stores Growth 4 Opportunity 2 c.£3-4m 0 Increase occupancy to
Slide 27: Safestore is well positioned to address the VAT issue
Safestore is well positioned to address the VAT issue UK Government proposal to introduce VAT on self-storage from 1 October 2012 – Presently engaged in consultation Approximately 60% of the business should see little or no impact – France unaffected (c.30% of revenues) – Ancillary products unaffect
Slide 28: Initial estimates suggest earnings impact but potential cash neutrality
Initial estimates suggest earnings impact but potential cash neutrality Challenges 20% price increase may led to occupancy loss or us absorbing part of the cost – Our approach would be to target discounts according to value and longevity Opportunities Recovery of VAT paid on operating costs and leas
Slide 29: Current corporate status and dividend policy remain appropriate
Current corporate status and dividend policy remain appropriate REIT status – Shareholder value and strategic flexibility remain our focus – Not expected to be a significant UK taxpayer in 2012 or 2013 – Current dividend level already exceeds implied PID level – No change to status expected this yea
Slide 30: Outlook
Outlook Current performance remains good – Continuing solid demand – Revenue growth in UK and Paris Changing business mix – with growth from new stores reducing blended rate Tough comparisons – H2 last year was an all-time record occupancy growth – Impact of strategic investments – FX movements from
Slide 31: Strategic focus driving good performance
Strategic focus driving good performance Good underlying operational performance Encouraging early results from our strategic investments Refinancing completed in full On track to deliver – Recently opened new stores filling well – Mature stores now showing growth Potential VAT impact an unwelcome h
Slide 32: Appendices
Appendices sofestore
Slide 33: Portfolio summary under IFRS
Portfolio summary under IFRS Half Year ended 30 April 2012 Half Year ended 30 April 2011 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 34: Portfolio summary split between freehold & leasehold
Portfolio summary split between freehold & leasehold April – 2012 April - 2011 UK France Group UK France Group Freehold Leasehold Freehold Leasehold Freehold Leasehold Freehold Leasehold Freehold Leasehold Freehold Leasehold Number of Stores 64 34 11 13 75 47 61 35 9 13 70 48 Self storage income 17,
Slide 35: Strategic investments having positive impact on revenue but not yet fully feeding through to EBITDA
Strategic investments having positive impact on revenue but not yet fully feeding through to improved EBITDA performance Summary IFRS income statement Six Months ended 30 April 2012 Six Months ended 30 April 2011 Movement (£m) (£m) Revenue 48.4 45.5 +6.4% Operating expenses (excluding exceptionals)
Slide 36: Property valuation metrics reflect economic conditions
Property valuation metrics reflect economic conditions Key variables April 2012 October 2011 April 2011 Average Self Storage Rate per Sq Ft £25.09 £26.11 £26.33 Exit Cap Rate 7.88% 7.83% 7.88% Weighted average stabilised occupancy 78.80% 78.72% 78.80% Stabilised Occupancy in Sq Ft 4.03m 4.02m 3.80m
Slide 37: New banking facilities
New banking facilities Half Year Year ended Net Debt Position 30 April 2012 31 October 2011 (£m) (£m) Available facilities at the reporting date* 377.6 385.1 Total bank borrowings (gross of FRS 4 Adjustment) 351.5 341.3 Cash (17.2) (14.7) Net debt 334.3 326.6 * €40m facility translated at €1.2264:£1
Slide 38: Summary IFRS balance sheet
Summary IFRS balance sheet As at As at 30 April 2012 30 April 2011 (£m) (£m) Assets Non-current assets Investment properties 690 692 Development properties 9 15 Other non-current assets 67 75 Non-current assets 766 782 Current assets 40 37 Liabilities Current liabilities (58) (53) Non-current liabil
Slide 39: Three stores opened in H1 delivering over 137,000 sq ft of MLA
Three stores opened in H1 delivering over 137,000 sq ft of MLA Pipeline MLA Opened / ● Pipeline of four expansion stores totalling Pipeline store / site Full planning sq ft estimated opening 131,400 sq ft of MLA. Of these: Stores opened in H1 FY2012 – Three are freehold, one New Southgate 48,000 Ope
Slide 40: 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 2012 Oct 2011 N0 of Stores 7 3 20 90 120 117 (wks) (mths) (wks) (mths) (wks) (mths) (wks) (mths) (wks) (mths) (wks) (mths) Business Existing 32 7.4 35 8.1 70 16.2 136 31.5 122
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 < 1 year 1-2 Years 2-5 Years > 5 Years April 2012 Oct 2011 N0 of Stores 4 2 17 73 96 94 (wks) (mths) (wks) (mths) (wks) (mths) (wks) (mths) (wks) (mths) (wks) (mths) Business Existing 39 9.1 35 8.1 70 16.4 133 30.7 119
Slide 42: 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 2012 Oct 2011 N0 of Stores 3 1 3 17 24 23 (wks) (mths) (wks) (mths) (wks) (mths) (wks) (mths) (wks) (mths) (wks) (mths) Business Existing 22 5.1 35 8.1 64 14.8 139 32.0 124 2
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-11 April-12 April-11 April-12 Business Domestic Business Domestic Excluding La Défense Domestic includes students Unless otherwise stated comparisons are to H1 2011 43
Slide 44: Safestore continues to deliver high quality, consistent growth
Safestore continues to deliver high quality, consistent growth Revenue EBITDA 50,000 48,434 25,000 24,483 24,275 45,528 24,000 45,000 42,435 22,928 41,293 23,000 39,986 22,033 40,000 22,000 21,128 21,000 35,000 20,000 30,000 19,000 HY2008 HY2009 HY2010 HY2011 HY2012 HY2008 HY2009 HY2010 HY2011 HY201