Safestore Holdings Plc · LSE:SAFE
Safestore — H1 2023 Earnings Presentation
60 slides from Safestore's earnings presentation, Jun 14, 2023
Slide 1: Half Year Presentation
Half Year Presentation 14 June 2023
Slide 2: Safestore Strategy Delivery
Safestore Strategy Delivery 01 Maximise REVPAF - Leverage Scale and Technology 02 Develop a Pan-European Leader 03 Progress ESG 04 Maintain a Strong and Flexible Balance Sheet 05 Financials 2
Slide 3: Highlights
Highlights Operational and Strategic Progress: • REVPAF at £28.28 • Revenue up 9.0% and in CER up 7.7% − Like-for-like revenue up 3.1% in CER − UK up 2.7%, Paris up 4.3%, Spain up 4.7% − Like-for-like average storage rate for the period up 6.5% in CER − UK up 6.9%, Paris up 4.1%, Spain up 9.1% − Lik
Slide 4: Highlights
Highlights ESG: • Continued progress on track toward net zero operational commitment − GHG emission intensity further reduced by 12% in FY22 - cumulatively 70% below 2013 levels − Location-based emissions at 0.3 Kg CO2 / sq ft below self-storage industry average (property sector with lowest emission
Slide 5: Continued Strong Record of Value Creation
Continued Strong Record of Value Creation Group Revenue (£m) Group Underlying EBITDA (£m) 120.0 80 +134% +183% +8.9% CAGR 70 100.0 +11.0% CAGR 60 80.0 50 60.0 40 110.1 69.7 101.0 65.2 88.1 30 40.0 73.1 79.3 54.4 62.6 69.2 41.4 45.9 54.1 20 34.9 39.1 47.1 46.9 50.4 30.1 20.0 24.6 25.6 27.5 10 0.0 0 H
Slide 6: Maximise REVPAF - Leverage Scale and Technology
01 Maximise REVPAF - Leverage Scale and Technology
Slide 7: Group H1 Trading
Group H1 Trading Strong Operating Performance: • Group revenue up 9.0% and in CER up 7.7% • Group LFL storage revenue in CER up 3.2% and LFL total revenue in CER up 3.1% • Revenue growth driven by dynamic rate management • UK closing occupancy performance: − Driven by Business (-4.9%) versus Domesti
Slide 8: Maximise REVPAF
Maximise REVPAF Target is revenue growth with optimal combination of occupancy and rate Total Group Performance Total Group LFL Performance (CER) Closing Closing Occupancy Sq Ft Rate variance Revenue variance Occupancy Sq Ft Rate variance Revenue variance REVPAF Year variance (YoY) (YoY) (YoY) varia
Slide 9: Leading Like-for-Like REVPAF
Leading Like-for-Like REVPAF Region Total Revenue % Total MLA % Total REVPAF YoY (%) (CER’m) (m Sq Ft) (CER) UK Total 80.1 78% 5.538 79% 29.16 2.0% London (inside M25) 35.7 35% 1.827 26% 39.42 5.2% South East 14.4 14% 1.015 14% 28.61 -1.3% London and South East 50.1 49% 2.842 41% 35.56 3.2% Regions
Slide 10: Trading Delivery and MLA Extension
Trading Delivery and MLA Extension Closing Occupancy and Maximum Lettable Area 10.00 20% 24% 7% 9% 6% 7% 8% 10% 9.00 0% -1% 2% 1.40 1.46 8.00 0.09 7.00 1.38 1.87 Total MLA (‘m Sq Ft) 1.08 6.00 1.41 1.68 1.49 5.00 1.16 1.62 4.00 1.77 1.66 1.35 3.00 5.88 6.32 6.12 4.98 5.45 4.54 4.69 2.00 3.58 3.97 3.
Slide 11: Leverage Scale and Technology
Leverage Scale and Technology Customer journey begins online - Scalable digital platform Multi-channel sales to suit every needs benefits all territories • E-contracts in two ways: • Enquiries through online channels: 1) Full online sale, reservation, contract and payment available − UK 89% online –
Slide 12: Central IT Investment and Support
Central IT Investment and Support Central IT investments benefit all countries • CRM and Customer online sales process • Centralised Marketing • Centralised Pricing − Dedicated Data analyst teams − Experience and data of more than 1.6m move-ins • Centralised IT • Centralised Finance support / Busine
Slide 13: Develop a Pan-European Leader
02 Develop a Pan-European Leader
Slide 14: Develop a Pan-European Leader
Develop a Pan-European Leader Store openings, acquisitions and extensions added 289,000 sq ft MLA in 2023 to date: • London Morden, London Crayford (extension), Wigan, Northern Madrid, Southern Madrid, Northern Barcelona and Apeldoorn (acquisition) Expanded development pipeline to c. 1.5m sq ft of f
Slide 15: Focus on Key Metropolitan Areas
Focus on Key Metropolitan Areas Self Storage Supply in Sq Ft per Inhabitant Australia USA UK Paris Spain Netherlands Belgium 2.00 10.00 0.82 0.24 0.24 0.60 0.20 L O N D O N R E G I O N A L U K F R E S B E N Share of Property Valuation (including IPUCs) Apr-23 (%) BARCELONA MAJOR CITIES MADRID REGION
Slide 16: Building Spanish Regional Clusters
Building Spanish Regional Clusters Barcelona (5.7m population): Current location Pipeline location • 4 central LH stores purchased in December 2019 C.de Caracas 5 Hospital Ramon y Cajal • Purchase of 2 FH interest since • Opening of 1 store in the centre in 2022 Plaza Glòries • 2 openings in 2023 No
Slide 17: Benelux Development
Benelux Development Current location Pipeline location • 6 Stores purchased in 2019 as part of JV • Expanded to 15 stores – before buyout of JV partner in 2022 • Acquisition of local self storage business in Apeldoorn • Portfolio currently 660,000 sq ft covering key metropolitan areas Development: •
Slide 18: New, Pipeline and Extension Stores
New, Pipeline and Extension Stores Opening 2024 Total Pipeline MLA (let sq ft- c. 1.455 million) New Developments Total Outstanding CAPEX (£’m) c. 134.0 London- Paddington Park West FH C, UC 13,000 Conversion, Satellite London- Lea Bridge FH C, UC 76,500 New build Opening 2023 South West Madrid FH C
Slide 19: Portfolio Development
Portfolio Development Group London and UK Regions Paris Spain Benelux South East Current Maximum lettable area (MLA) (m sq ft) 7.99 2.97 2.75 1.36 0.25 0.66 Let Square Feet (m sq ft) 6.12 2.28 2.13 1.09 0.11 0.52 Current Available space (m sq ft) 1.87 0.69 0.62 0.27 0.15 0.14 Future Pipeline / Exten
Slide 20: Strong Returns on All Stores
Strong Returns on All Stores Cash-on-Cash Yield of Total Portfolio Split by Financial Year of Opening or Acquisition (%) 25.0% 20.0% Average 15.0% Investment Hurdle 10.0% 20.4% 18.9% 11.1% 12.5% 5.0% 10.6% 8.6% 1.6% 2.2% 0.0% Pre-2016 2016 2017 2018 2019 2020 2021 2022 • Maturity on average 4-5 year
Slide 21: Flexible Investment Model
Flexible Investment Model UK Lease regears – demonstrable track record: Average Unexpired Lease Term (Years) • Lease extensions in Edinburgh Fort Kinnaird, London Charlton and 14.5 Burnley • c. 83% of UK leases regeared since 2012 14.0 • All leases in England within renewal protection rights of the
Slide 22: ESG Achievements
03 ESG Achievements
Slide 23: Safe, Sustainable Storage
Safe, Sustainable Storage ESG • Continued progress on track toward net zero operational commitment − GHG emission intensity further reduced by 12% in FY22 - cumulatively 70% below 2013 levels − Location-based emissions at 0.3 Kg CO2 / sq ft below self-storage industry average (property sector with l
Slide 24: Significant Progress on GHG
Significant Progress on GHG Total operational GHG* 54% below 2013 baseline despite 50% Intensity of GHG emission 70% below 2013 level (newer growth in Group floor space stores, energy mix, efficiency initiatives) 1.4 10,000 9,192 8,824 1.16 Total Operational GHG CO2e (Tonnes) 1.2 1.1 7,833 7,911 7,8
Slide 25: Strategy for Operational Net Zero
Strategy for Operational Net Zero We will achieve operational carbon net zero by 2035, through: a) reducing & optimising what we use & b) using only zero carbon energy • Completion of lighting efficiency programme (external signage • Installation of solar PV on new-build stores where viable and cust
Slide 26: H1 Progress Towards Operational Net Zero
H1 Progress Towards Operational Net Zero We will achieve operational carbon net zero by 2035, through: a) reducing & optimising what we use & b) using only zero carbon energy • Continued progress on lighting efficiency – external and aisle • France stores transitioned to certified 100% renewable lig
Slide 27: Strong and Flexible Balance Sheet – EPS focus
04 Strong and Flexible Balance Sheet – EPS focus
Slide 28: Strong and Flexible Balance Sheet
Strong and Flexible Balance Sheet Strong and Flexible Balance Sheet − Group loan-to-value ratio (“LTV”) at 25.3% and interest cover ratio (“ICR”) at 10.8x − Financing in place to fund pipeline – Unused debt facility of £227.1m − Free cash flow after dividend and maintenance capex of £30m per year −
Slide 29: Sector Leading Total Shareholder Return
Sector Leading Total Shareholder Return Indexed TSR Performance since Safestore IPO (2007) Indexed TSR Performance since Oct-2013 1,200.00 1200 1,000.00 1000 800.00 800 600.00 600 400.00 400 200.00 200 0.00 0 01/10/2007 01/05/2008 01/12/2008 01/07/2009 01/02/2010 01/09/2010 01/04/2011 01/11/2011 01/
Slide 30: Financials
05 Financials
Slide 31: Financial Highlights
Financial Highlights Income Statement and Cash Flow Change HY 2022 HY 2023 Absolute CER 2 1 Revenue (£’m) like-for-like 103.5 4.1% 3.1% Underlying EBITDA (£’m) like-for-like1 66.7 4.1% 2.8% Revenue (£’m) 110.1 9.0% 7.7% Underlying EBITDA (£’m) 69.7 6.9% 5.4% Underlying EBITDA (post leasehold costs)
Slide 32: Solid Revenue Growth Driven by Average Rate
Solid Revenue Growth Driven by Average Rate London / SE Rest of UK UK Total Paris Spain Group Total Act 2.242 2.106 4.348 1.095 0.087 5.530 Average Occupancy LFL1 (sq ft 'm) YOY -4.5% -3.4% -4.0% 0.7% -6.5% -3.1% Act 78.9% 78.2% 78.6% 80.1% 78.3% 78.9% 1 Closing Occupancy LFL % YOY -4.3% ppt -2.5% p
Slide 33: Group Income Statement
Group Income Statement HY 2023 HY 2022 UK Paris Spain Benelux Total (CER) UK Paris Spain Benelux Total (CER) (£’m) (€’m) (€’m) (€’m) (£’m) (£’m) (€’m) (€’m) (€’m) (£’m) Revenue 81.7 24.8 1.8 5.5 108.8 78.9 23.8 1.7 0.8 101.0 Cost of sales** (25.2) (6.4) (0.8) (2.3) (33.5) (23.0) (5.9) (0.4) (0.3) (2
Slide 34: Revenue Growth Drives Improved EBITDA
Revenue Growth Drives Improved EBITDA (after leasehold rent) HY 2022 to HY 2023 EBITDA (CER) 68 Facilities and rates: (1.2) Volume related/remuneration: (1.1) 66 UK: 0.7 Enquiry generation: (0.3) New stores: (2.3) Spain: 0.1 64 Benelux: 3.9 4.7 4.9 62 0.8 0.5 60 3.1 3.3% LFL CER cost increase 58 LFL
Slide 35: Working Capital Movement Impacts Cash flow
Working Capital Movement Impacts Cash flow HY 2023 HY 2022 (£’m) (£’m) Underlying EBITDA 69.7 65.2 Working Capital/ Exceptionals/ Other (19.8) (0.1) Adjusted operating cash inflow 49.9 65.1 Interest payments (7.1) (5.0) Leasehold rent payments (7.2) (6.5) Tax payments (3.7) (2.9) Free cash flow (bef
Slide 36: Strong and Flexible Balance Sheet
Strong and Flexible Balance Sheet Capital Structure Apr 23 Oct 22 Variance Apr 22 Property valuation (£’m) 1 2,680.3 2,552.3 5.0% 2,332.0 UK (£’m) 1 1,869.4 1,815.5 3.0% 1,674.9 FR (€’m) 1 649.6 625.9 3.8% 576.0 1 ES (€’m) 87.2 67.1 30.0% 54.4 1 NL/BE (€’m) 188.5 164.2 14.8% 153.3 7 Property valuati
Slide 37: Impact of New RCF on Capital Structure
Impact of New RCF on Capital Structure RCF Item New Terms Quantum £400m multi-currency facility increasing RCF capacity by £90m Accordion £100m uncommitted in addition to the above. Margin 125bps in line with previous facility Non-utilisation fee 43.75bps reduced from 50bps Tenor 4 years plus 2 one
Slide 38: Consistent Store Margin Progression over 9.5 years
Consistent Store Margin Progression over 9.5 years Group Store EBITDA Margin % in CER – Same 112 stores open at October 2013 (%) 76.0% 74.9% 74.2% 73.5% 74.0% 72.0% 70.0% 68.0% 66.0% 64.4% 64.0% 62.0% 60.0% 58.0% FY2013 FY2014 FY2015 FY2016 FY2017 FY2018 FY2019 FY2020 H1 2021 FY2021 H1 2022 FY2022 H
Slide 39: Indicative non-LFL and current pipeline impact
Indicative non-LFL and current pipeline impact Non-LFL & Pipeline Outlook 50.0 12.5p EPS (+26% v 15.0 FY22) 40.0 10.0 30.0 6.1p EPS (+13% v EPS Growth (p) 20.0 FY22) 11.7 12.5 13.2 9.7 10.7 5.0 8.2 6.1 £’m 10.0 3.8 0.0 1.0 0.0 -1.5 -4.3 -2.0 -10.0 -5.0 -20.0 -30.0 -10.0 FY23 FY24 FY25 FY26 FY27 FY28
Slide 40: Guidance – Non-Trading and One-Off Items
Guidance – Non-Trading and One-Off Items Item Guidance Foreign exchange Strengthening of the Euro (1.139 in HY2023, 1.178 in FY2022, 1.190 in HY2022) contributed a £0.8m gain of EBITDA impact after leasehold costs In the year, each 10c fluctuation from the HY2023 FX rate of 1.139 would equate to c.
Slide 41: Well Positioned for Further Growth
Well Positioned for Further Growth Attractive market • Immature and growing industry • Very constrained supply growth Unique portfolio • Leading presence in London, Paris and key markets • 71% of revenue from London, South East England, Paris, Amsterdam and the Randstad area, Brussels and Barcelona
Slide 42: Appendices
Appendices
Slide 43: Appendices
Appendices CSR − 44 CSR Update Portfolio − 53 Property Valuation Movement Management Financial − 45 Detailed Income Statement Portfolio − 54 Geographic − 46 Non-underlying items Summary − 55 Freehold / Leasehold − 47 Detailed Balance Sheet − 56 Freehold / Leasehold (LFL CER) − 48 Underlying to Statu
Slide 44: Safestore ESG Commitments
Safestore ESG Commitments Target for Net Zero (MB) from operations by 2035 Safestore operational emissions include scope 1, 2 and selected scope 3 categories (electricity transmission, waste, water and business travel) LB = Location-based emissions, calculated using average emission factors relating
Slide 45: Detailed Income Statement
Detailed Income Statement HY 2023 HY 2022 (£’m) (£’m) Revenue 110.1 101.0 Cost of sales (34.5) (29.1) Gross profit 75.6 71.9 Administrative expenses (8.0) (13.4) Underlying EBITDA * 69.7 65.2 Exceptional Items - - Depreciation and variable lease payments (0.8) (0.5) Share based payments (1.3) (6.0)
Slide 46: Non-Underlying Items
Non-Underlying Items HY 2023 HY 2022 (£’m) (£’m) Underlying EBITDA 69.7 65.2 Gain on investment properties and investment properties under construction 47.3 223.9 Depreciation (0.6) (0.5) Variable lease payments (0.2) - Share-based payments (1.3) (6.0) Exceptional items - 10.5 Share of associate's g
Slide 47: Detailed Balance Sheet
Detailed Balance Sheet HY 2023 HY 2022 (£’m) (£’m) Assets Non-current assets Investment properties 2,586.6 2,271.1 Investment properties under construction 93.7 60.9 Other non-current assets 104.6 89.7 Non-current assets 2,784.9 2,421.7 Current assets 55.0 76.4 Liabilities Non-current liabilities Ba
Slide 48: HY 2023 Underlying to Statutory Adjustments
HY 2023 Underlying to Statutory Adjustments Variable Underlying Share Statutory Derivative lease Valuation Finance Dep'n LH Share of Tax / CGS / Underlying Headings Income Exceptional based Income Statutory Headings Movements payments/ Movement Lease Int properties Associate FX Statement payments St
Slide 49: HY 2022 Underlying to Statutory Adjustments
HY 2022 Underlying to Statutory Adjustments Variable Underlying Share Statutory Derivative lease Valuation Finance Dep'n LH Share of Tax / CGS / Underlying Headings Income Exceptional based Income Statutory Headings Movements payments/ Movement Lease Int properties Associate FX Statement payments St
Slide 50: Movement in Cost Base
Movement in Cost Base Cost of Sales Administrative Expenses HY 2023 HY 2022 HY 2023 HY 2022 (£’m) (£’m) (£’m) (£’m) Reported cost of sales (34.5) (29.1) Reported administrative expenses (8.0) (13.4) Adjusted for: Adjusted for: Depreciation 0.6 0.5 Share based payments 1.3 6.0 Variable lease payments
Slide 51: Group Debt Position at 30 April 2023
Group Debt Position at 30 April 2023 Term Facility Drawn Hedged Hedged Bank Hedged Floating Total Margin £/€'m £'m £'m % % Rate Rate Rate UK Revolver (GBP) Nov-26 £400.0 £137.0 £55.0 40% 1.25% 0.69% 4.18% 4.03% UK Revolver (EUR) Nov-26 - £35.9 - - 1.25% - 2.89% 4.14% UK Revolver- non-utilisation - £
Slide 52: Diversified Drivers and Business Geography Generate Resilient Revenue and Profits
Diversified Drivers and Business Geography Generate Resilient Revenue and Profits 2016 2017 2018 2019 2020 2021 2022 Personal Customers Numbers (% of total) 75% 75% 76% 77% 78% 78% 79% Square feet occupied (% of total) 54% 55% 56% 58% 59% 59% 61% Square feet occupied (‘m) 2.05 2.25 2.59 2.85 3.23 3.
Slide 53: Property Valuation Movement
Property Valuation Movement (excluding investment properties under construction) Property Valuation (£m) 2,600.0 52.3 2,550.0 29.9 2,500.0 33.2 13.4 2,586.6 2,450.0 2,400.0 2,457.8 2,350.0 Value at 31 October Currency translation Additions Reclassifications Revaluation Value at 30 April 2023 2022 mo
Slide 54: Portfolio Summary: Geographically Split
Portfolio Summary: Geographically Split London and Rest of UK UK Paris Spain Benelux Group South East Number of stores 73 59 132 29 8 16 185 Let Square Feet (m sq ft) 2.284 2.126 4.410 1.091 0.105 0.518 6.124 Maximum Lettable Area (m sq ft) 2.970 2.750 5.720 1.360 0.250 0.660 7.990 Let Square Feet p
Slide 55: Portfolio Summary: Freehold and Leasehold
Portfolio Summary: Freehold and Leasehold HY 2023 HY 2022 Freehold Leasehold Total Freehold Leasehold Total Number of stores 135 50 185 126 52 178 MLA self storage only (m) 6.068 1.921 7.989 5.670 1.997 7.667 Closing occupancy (m) 4.597 1.527 6.124 4.533 1.652 6.186 Occupancy (%) 75.8% 79.5% 76.7% 8
Slide 56: Portfolio Summary: Freehold and Leasehold (LFL CER)
Portfolio Summary: Freehold and Leasehold (LFL CER) HY 2023 HY 2022 Freehold Leasehold Total Freehold Leasehold Total Number of stores 112 49 161 112 49 161 MLA self storage only (m) 5.102 1.906 7.008 5.073 1.906 6.979 Closing occupancy (m) 4.014 1.513 5.527 4.134 1.573 5.707 Occupancy (%) 78.7% 79.
Slide 57: Portfolio Summary: Store Maturity
Portfolio Summary: Store Maturity HY 2023 HY 2022 Developing Established Mature Total Developing Established Mature Total Number of stores 12 13 160 185 15 9 154 178 MLA self storage only (m) 0.528 0.617 6.844 7.989 0.676 0.479 6.512 7.667 Closing occupancy (m) 0.219 0.489 5.416 6.124 0.427 0.363 5.
Slide 58: Portfolio Summary: Store Maturity (LFL CER)
Portfolio Summary: Store Maturity (LFL CER) HY 2023 HY 2022 Developing Established Mature Total Developing Established Mature Total Number of stores 2 12 147 161 2 12 147 161 MLA self storage only (m) 0.109 0.540 6.360 7.008 0.109 0.540 6.331 6.979 Closing occupancy (m) 0.071 0.434 5.021 5.526 0.051
Slide 59: Average Customer Contract Length
Average Customer Contract Length UK Paris Spain Benelux Group HY 2023 HY 2022 HY 2023 HY 2022 HY 2023 HY 2022 HY 2023 HY 2022 HY 2023 HY 2022 (mths) (mths) (mths) (mths) (mths) (mths) (mths) (mths) (mths) (mths) Business Existing 25.8 27.2 29.4 31.7 28.5 28.0 29.8 28.6 26.9 28.1 Vacated 12.6 12.7 14
Slide 60: Personal and Business Customers at 30 April 2023
Personal and Business Customers at 30 April 2023 Share of Customers (%) Share of Occupancy (%) UK Paris Spain Benelux Personal Customers Numbers (% of total) 77% 81% 89% 84% 61% 61% Square feet occupied (% of 58% 64% 82% 75% 79% 79% total) Average length of stay (months) 17.2 28.3 21.5 29.1 Business