Safestore Holdings Plc · LSE:SAFE
Safestore — FY2023 Earnings Presentation
61 slides from Safestore's earnings presentation, Jan 17, 2024
Slide 1: Full Year Presentation
Full Year Presentation 17 January 2024
Slide 2: Safestore Strategy Delivery
Safestore Strategy Delivery 01 REVPAF Maximisation through Scale and Technology 02 Pan-European Portfolio Growth 03 ESG Progress 04 Strong and Flexible Balance Sheet 05 Financials 2
Slide 3: Long-term structural growth of self storage
Long-term structural growth of self storage UK-FR Storage Revenue (Total)1 (£m) • Storage revenue CAGR over 20 years: 8% 180 • IPO in 2007 - One single £30 million equity raise in 2014 • Investment Historical Cost: £1.3 billion - Net Debt: £709 million 160 • Gross Asset Value: £3.0 billion 140 • Cur
Slide 4: Continued Strong Record of Value Creation
Continued Strong Record of Value Creation Group Revenue (£m) Group Underlying EBITDA (£m) 250.0 160.0 +133% +179% +8.8% CAGR 140.0 200.0 +10.8% CAGR 120.0 150.0 100.0 80.0 212.5 224.2 135.1 142.2 100.0 186.8 60.0 118.0 151.8 162.3 93.9 129.9 143.9 82.9 87.5 115.4 40.0 74.4 50.0 96.1 97.9 104.8 58.6
Slide 5: Highlights
Highlights Solid Financial Performance: • Industry leading Group REVPAF up 0.4% at £27.70 • Revenue up 5.5% and in CER up 4.8% − Like-for-like revenue up 2.2% and in CER up 1.7% – industry leading 27.5% increase over the last 3 years • Group like-for-like EBITDAR margin in CER at 64.8% (FY2022 64.1%
Slide 6: REVPAF Maximisation through Scale and Technology
01 REVPAF Maximisation through Scale and Technology
Slide 7: Leverage Scale and Technology
Leverage Scale and Technology Customer journey begins online Multi-channel sales to suit every needs • Enquiries through online channels - 89% online – 66% • E-contracts in two ways: smartphone 1) Full online sale, reservation, contract and • Scale allows for superior digital platform – higher impre
Slide 8: Enquiry growth: new supply creates awareness and demand
FY 2007 FY 2008 FY 2009 FY 2010 FY 2011 demand FY 2012 UK Enquiries (number) FY 2013 Chart enquiry scales differ by geography FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 FY 2019 FY 2020 FY 2021 FY 2022 FY 2023 8 FY 2008 FY 2009 FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 Paris Enquiries (number) FY 2015 FY
Slide 9: Enquiry growth in new geographies post-Safestore acquisition
Enquiry growth in new geographies post-Safestore acquisition – benefits of the Safestore Platform Spain Enquiries (number) Benelux Enquiries (number) FY 2016 FY 2017 FY 2018 FY 2019 FY 2020 FY 2021 FY 2022 FY 2023 FY 2016 FY 2017 FY 2018 FY 2019 FY 2020 FY 2021 FY 2022 FY 2023 1 OMB SA acquired by S
Slide 10: Group Full Year Trading
Group Full Year Trading Split by Number of Customers (%) • Group Revenue up 5.5% • 2023 trading consolidation following 3 years of material market outperformance • UK enquiries up +41% on pre-covid - down 7.4% on FY2022 79% 79% 80% − London versus non-London split of enquiries and move-ins remarkabl
Slide 11: Leading Revenue per Available Foot (REVPAF)
Leading Revenue per Available Foot (REVPAF) Region Total Revenue Occupancy REVPAF FY2023 (CER’m) % Total (%) % Total (CER) YoY (%) London- M25 75.7 34% 78.9% 25% 38.60 2.6% London- Thames Valley 4.3 2% 84.5% 2% 27.44 - Paris 42.9 19% 81.3% 18% 31.50 3.6% South East UK 26.0 12% 76.4% 11% 28.41 -1.7%
Slide 12: Focused on Maximising REVPAF
Focused on Maximising 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
Slide 13: Trading Delivery and MLA Extension
Trading Delivery and MLA Extension Closing Occupancy and Maximum Lettable Area 12.00 20% 24% 7% 9% 6% 7% 8% 10% 0% -1% 2% 10.00 1.45 1.40 Total MLA (‘m Sq Ft) 8.00 0.09 1.38 1.86 1.41 1.08 6.00 1.68 1.49 1.16 1.62 4.00 1.77 1.66 1.35 5.88 6.32 6.23 4.98 5.45 4.54 4.69 2.00 3.58 3.97 3.31 3.38 0.00 2
Slide 14: Pan-European Portfolio Growth
02 Pan-European Portfolio Growth
Slide 15: Pan-European Portfolio Expansion
Pan-European Portfolio Expansion Store openings, acquisitions and extensions added c. 0.5m sq ft MLA in 2023 to date: • 3 in London (2 extensions), 1 in Randstad, Netherlands, 3 in Barcelona, 3 in Madrid, and 4 in regional cities (1 acquisition, 1 post year-end) Expanded development pipeline to c. 1
Slide 16: Over 95% of Portfolio in Key Metropolitan Areas
Over 95% of Portfolio in Key Metropolitan Areas Population % Property MLA MLA Pipeline MLA Future Region (k) Valuation 1 Cum. % Total (m Sq Ft) % Total (Sq Ft m) (Sq Ft m) % Total Cum. % Total London- Inside M25 9,405 36% 36% 1.96 25% 0.46 2.42 25% 25% London- Thames Valley 2,228 2% 38% 0.16 2% - 0.
Slide 17: Store Pipeline
Store Pipeline Randstad- Almere FH C, UC 44,500 Conversion Total Pipeline MLA (let sq ft- million) c. 1.454 Randstad- Aalsmeer FH C, UC 48,400 New build Total Outstanding CAPEX (£’m) c. 128.0 Randstad- Rotterdam FH C, UC 71,000 New build Opening 2025 Opening 2024 New Developments Redevelopments and
Slide 18: Portfolio Development
Portfolio Development Group UK Paris Spain Netherlands Belgium Current Maximum lettable area (MLA) (m sq ft) 8.09 5.73 1.36 0.34 0.44 0.22 Let Square Feet (m sq ft) 6.23 4.47 1.11 0.13 0.35 0.16 Current Available space (m sq ft) 1.86 1.26 0.25 0.21 0.09 0.06 Future Pipeline / Extensions MLA (m sq ft
Slide 19: Strong Returns on All Stores
Strong Returns on All Stores Cash-on-Cash Yield (before tax) of Total Portfolio Split by Financial Year of Opening or Acquisition (%) 25.0% 20.0% Average 15.0% 21.8% Investment Hurdle 10.0% 19.1% 12.1% 12.9% 11.7% 5.0% 8.5% 5.7% 4.4% 0.0% 0.0% Pre-2016 2016 2017 2018 2019 2020 2021 2022 2023 • Histo
Slide 20: Cash-on-Cash Ramp-Up
Cash-on-Cash Ramp-Up Financial Year Opening Date Cash-on-Cash Ramp-Up 20.0% 15.0% CoC % Yield (Store EBITDA) 10.0% 5.0% 0.0% -5.0% -10.0% Yr 1 Yr 2 Yr 3 Yr 4 Yr 5 Yr 6 Yr 7 Year of Store Opening 2016 2017 2018 2019 2020 2021 Chart includes new store developments from 2016, excluding acquisitions 20
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, 16.0 London Slough and Burnley • c. 84% of UK leases regeared since 2012 14.0 • All leases in England within renewal protection
Slide 22: Operational and Investment Strategies Deliver Industry-Leading EPS Growth
Operational and Investment Strategies Deliver Industry-Leading EPS Growth Indexed EPS Performance 450 400 350 300 250 200 150 100 FY2013 FY2014 FY2015 FY2016 FY2017 FY2018 FY2019 FY2020 FY2021 FY2022 FY2023 SAFE BYG SHU SAFE: Adjusted Diluted EPRA Earnings per Share BYG: Adjusted Diluted EPRA Earnin
Slide 23: Europe Development Opportunity
Europe Development Opportunity Self Storage Supply (Sq Ft per head) 9.39 Self Storage Supply 2.11 0.82 0.62 0.55 0.50 0.47 0.46 0.34 0.32 0.32 0.35 0.22 0.20 0.21 0.14 0.10 0.10 0.07 0.05 0.04 0.03 0.03 0.02 0.02 Lithuania Czechia Australia Norway Spain Netherlands Ireland US Estonia Latvia Hungary
Slide 24: ESG Progress
03 ESG Progress
Slide 25: Safe, Sustainable Storage
Safe, Sustainable Storage ESG • Continued progress on track toward net zero operational commitment − Absolute-market emissions reduced by 17% vs FY2022 despite growth significant growth in floor space − Market-based emissions intensity reduced by 19% to below 1.0 Kg CO2e/ sq. m − Location-based emis
Slide 26: 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 27: Progress Towards Operational Net Zero
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 lighti
Slide 28: Total Operational CO2e (Tonnes)
Emissions reductions on track 17% reduction in absolute market-based emissions despite growth in portfolio; 19% reduction in emissions intensity Location-Based Market-Based Group Floor Area (Sq M million) 9,000 1.20 8,000 Group Total Floor Area (Sq M million) 7,911 7,864 1.00 Total Operational CO2e
Slide 29: Strong and Flexible Balance Sheet
04 Strong and Flexible Balance Sheet
Slide 30: Strong and Flexible Balance Sheet
Strong and Flexible Balance Sheet Strong and Flexible Balance Sheet − Group loan-to-value ratio (“LTV”) at 25.4% and interest cover ratio (“ICR”) at 6.7x − Financing in place to fund pipeline – Unused debt facility of £197.0 million not including £100.0 million, accordion facility − Typical Free cas
Slide 31: Sector Leading Total Shareholder Return
Sector Leading Total Shareholder Return Since Oct 13, Safestore has provided the highest returns of all stocks in the FTSE350 Real Estate Super Sector index 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
Slide 32: Financials
05 Financials
Slide 33: Financial Highlights
Financial Highlights Income Statement and Cash Flow Change FY 2022 FY 2023 Absolute CER 2 1 Revenue (£’m) like-for-like 209.9 2.2% 1.7% Underlying EBITDA (£’m) like-for-like1 136.1 3.3% 2.8% Revenue (£’m) 224.2 5.5% 4.8% Underlying EBITDA (£’m) 142.2 5.3% 4.5% Underlying EBITDA (post leasehold costs
Slide 34: 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 2.260 2.136 4.396 1.103 0.087 5.586 Average Occupancy LFL1 (sq ft 'm) YOY -4.6% -3.5% -4.1% - -7.4% -3.3% Act 79.9% 78.4% 79.2% 81.3% 77.9% 79.6% 1 Closing Occupancy LFL % YOY -4.0 ppt -3.6 ppt -3
Slide 35: Group Income Statement
Group Income Statement FY 2023 FY 2022 UK Paris Spain Benelux Total (CER) UK Paris Spain Benelux Total (CER) (£’m) (€’m) (€’m) (€’m) (£’m) (£’m) (€’m) (€’m) (€’m) (£’m) Revenue 166.5 50.5 4.3 11.3 222.7 163.0 48.8 3.6 5.9 212.5 Cost of sales** (51.1) (12.1) (1.9) (5.0) (67.3) (48.2) (12.2) (1.2) (2.
Slide 36: Revenue Growth Drives Improved EBITDA
Revenue Growth Drives Improved EBITDA (after leasehold costs) FY 2022 to FY 2023 EBITDA (CER) 134 Utilities, facilities and rates: (1.4) Volume related/remuneration: (0.2) 132 Enquiry generation: (0.5) UK: 1.6 New stores: (3.5) 130 Spain: 0.5 Benelux: 4.6 5.6 128 6.7 1.6 1.1 126 124 0.8% LFL CER cos
Slide 37: Working Capital Movement Impacts Cash flow
Working Capital Movement Impacts Cash flow FY 2023 FY 2022 (£’m) (£’m) Underlying EBITDA 142.2 135.1 Working Capital/ Exceptionals/ Other (13.0)2 (2.7) Adjusted operating cash inflow 129.2 132.4 Interest payments (19.6) (11.8) Leasehold cost payments (14.9) (13.6) Tax payments (5.5) (5.6) Free cash
Slide 38: Balance Sheet Highlights
Balance Sheet Highlights Capital Structure Oct 23 Oct 22 Variance Property valuation (£’m) 1 2,789.7 2,552.3 9.3% UK (£’m) 1 1,934.0 1,815.5 6.5% 1 FR (€’m) 676.7 625.9 8.1% ES (€’m) 1 95.7 67.1 42.6% 1 NL/BE (€’m) 208.7 164.2 27.1% Property valuation like-for-like (£’m) 7 2,416.8 2,292.8 5.4% Gross
Slide 39: Consistent Store Margin Progression over 10 years
Consistent Store Margin Progression over 10 years Group Store EBITDA Margin % in CER – Same 112 stores open at October 2013 (%) 76.0% 74.4% 180 74.0% 160 72.0% 140 120 70.0% 100 68.0% 80 66.0% 64.3% 60 64.0% 40 62.0% 20 60.0% 0 FY2013 FY2014 FY2015 FY2016 FY2017 FY2018 FY2019 FY2020 FY2021 FY2022 FY
Slide 40: Group Like-for-Like EPS Growth
Group Like-for-Like EPS Growth Income Statement Group Total Group LFL 1 Group Non-LFL 1 FY 2023 FY 2022 Change FY 2023 FY 2022 Change FY 2023 FY 2022 Revenue (£’m) 224.2 212.5 5.5% 209.9 205.3 2.2% 14.3 7.2 Underlying Costs (£’m) (82.0) (77.5) 5.8% (73.8) (73.7) 0.1% (8.2) (3.8) Share of Associates
Slide 41: Indicative non-LFL and current pipeline impact
Indicative non-LFL and current pipeline impact Non-LFL & Pipeline Outlook 60.0 20.0 15.0p EPS (+32% v 50.0 FY2022) 15.0 40.0 30.0 7.2p EPS (+15% v 10.0 FY2022) 15.0 15.9 EPS (p) 20.0 11.8 13.0 14.1 £’m 9.9 5.0 10.0 7.2 0.6 3.9 0.0 0.0 -0.9 -3.8 -3.0 -10.0 -5.0 -20.0 -30.0 -10.0 FY23 FY24 FY25 FY26 F
Slide 42: Guidance – Non-Trading and One-Off Items
Guidance – Non-Trading and One-Off Items Item Guidance Foreign exchange Strengthening of the Euro (1.149 in FY2023, 1.178 in FY2022) contributed a £0.8m gain of EBITDA after leasehold impact costs In the year, each 10c fluctuation from the FY2023 FX rate of 1.149 would equate to c. £2.9m of Group EB
Slide 43: 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 • 95% of the portfolio (including pipeline) in capital and major cities • Unlet space equivalent to around c. 90
Slide 44: Appendices
Appendices
Slide 45: Appendices
Appendices CSR − 45 CSR Update Portfolio − 54 Property Valuation Movement Management Financial − 46 Detailed Income Statement Portfolio − 55 Geographic − 46 Non-underlying items Summary − 56 Freehold / Leasehold − 48 Detailed Balance Sheet − 57 Freehold / Leasehold (LFL CER) − 49 Underlying to Statu
Slide 46: Safestore ESG Commitments
Safestore ESG Commitments Sustainability targets and KPIs This table outlines the latest targets we set ourselves in each of the four ‘pillar’ areas of our Sustainability strategy. We are pleased to have met the majority of the FY2022 targets set in 2019 including absolute emissions reductions and o
Slide 47: Detailed Income Statement
Detailed Income Statement FY 2023 FY 2022 (£’m) (£’m) Revenue 224.2 212.5 Cost of sales (69.9) (63.0) Gross profit 154.3 149.5 Administrative expenses (17.7) (27.1) Underlying EBITDA * 142.2 135.1 Exceptional Items - (0.1) Depreciation and variable lease payments (2.1) (1.3) Share based payments (3.
Slide 48: Non-Underlying Items
Non-Underlying Items FY 2023 FY 2022 (£’m) (£’m) Underlying EBITDA* 142.2 135.1 Gain on investment properties and investment properties under construction 93.8 381.6 Depreciation (1.3) (1.0) Variable lease payments (0.8) (0.3) Share-based payments (3.5) (11.2) Exceptional items - 10.7 Share of assoc
Slide 49: Balance Sheet
Balance Sheet FY 2023 FY 2022 (£’m) (£’m) Assets Non-current assets Investment properties 2,681.1 2,457.8 Investment properties under construction 108.6 94.5 Other non-current assets 117.1 101.1 Non-current assets 2,906.8 2,653.4 Current assets 50.1 54.1 Liabilities Non-current liabilities Bank borr
Slide 50: FY 2023 Underlying to Statutory Adjustments
FY 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 51: FY 2022 Underlying to Statutory Adjustments
FY 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 52: Movement in Cost Base
Movement in Cost Base Cost of Sales Administrative Expenses FY 2023 FY 2022 FY 2023 FY 2022 (£’m) (£’m) (£’m) (£’m) Reported cost of sales (69.9) (63.0) Reported administrative expenses (17.7) (27.1) Adjusted for: Adjusted for: Depreciation 1.3 1.0 Share based payments 3.5 11.2 Variable lease paymen
Slide 53: Group Debt Position at 31 October 2023
Group Debt Position at 31 October 2023 Term Facility Drawn Hedged Hedged Bank Hedged Floating Total Margin £/€'m £'m £'m % % Rate Rate Rate UK Revolver (GBP) Nov-27 £400.0 £162.0 - - 1.25% - 5.19% 6.44% UK Revolver (EUR) Nov-27 - £41.0 - - 1.25% - 3.88% 5.13% UK Revolver- non-utilisation - £197.0 -
Slide 54: 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 2023 Personal Customers Numbers (% of total) 75% 75% 76% 77% 78% 78% 79% 79% Square feet occupied (% of total) 54% 55% 56% 58% 59% 59% 61% 61% Square feet occupied (‘m) 2.05 2.25 2.59
Slide 55: Property Valuation Movement
Property Valuation Movement (excluding investment properties under construction) Property Valuation (£m) 2,700.0 2,650.0 103.5 2,600.0 2,550.0 42.0 2,500.0 67.6 2,681.1 10.2 2,450.0 2,400.0 2,457.8 2,350.0 2,300.0 Value at 31 Currency Additions Disposals Reclassifications Revaluation Value at 31 Oct
Slide 56: Portfolio Summary: Geographically Split
Portfolio Summary: Geographically Split UK Paris Spain Netherlands Belgium Group Number of stores 133 29 11 11 6 190 Let Square Feet (m sq ft) 4.472 1.107 0.135 0.352 0.164 6.230 Maximum Lettable Area (m sq ft) 5.730 1.360 0.340 0.440 0.220 8.090 Let Square Feet per store (k sq ft) 34 38 12 32 27 33
Slide 57: Portfolio Summary: Freehold and Leasehold
Portfolio Summary: Freehold and Leasehold FY 2023 FY 2022 Freehold Leasehold Total Freehold Leasehold Total Number of stores 139 51 190 127 52 179 MLA self storage only (m) 6.148 1.945 8.093 5.702 1.997 7.698 Closing occupancy (m) 4.673 1.558 6.231 4.661 1.657 6.318 Occupancy (%) 76.0% 80.1% 77.0% 8
Slide 58: Portfolio Summary: Freehold and Leasehold (LFL CER)
Portfolio Summary: Freehold and Leasehold (LFL CER) FY 2023 FY 2022 Freehold Leasehold Total Freehold Leasehold Total Number of stores 112 49 161 112 49 161 MLA self storage only (m) 5.102 1.916 7.018 5.092 1.906 6.998 Closing occupancy (m) 4.040 1.543 5.583 4.213 1.580 5.793 Occupancy (%) 79.2% 80.
Slide 59: Portfolio Summary: Store Maturity
Portfolio Summary: Store Maturity FY 2023 FY 2022 Developing Established Mature Total Developing Established Mature Total Number of stores 17 13 160 190 6 13 160 179 MLA self storage only (m) 0.623 0.617 6.820 8.093 0.248 0.616 6.834 7.698 Closing occupancy (m) 0.269 0.499 5.463 6.231 0.133 0.483 5.
Slide 60: Portfolio Summary: Store Maturity (LFL CER)
Portfolio Summary: Store Maturity (LFL CER) FY 2023 FY 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 6.369 7.018 0.109 0.540 6.350 6.998 Closing occupancy (m) 0.073 0.435 5.075 5.583 0.068
Slide 61: Average Customer Contract Length
Average Customer Contract Length UK Paris Spain Benelux Group FY 2023 FY 2022 FY 2023 FY 2022 FY 2023 FY 2022 FY 2023 FY 2022 FY 2023 FY 2022 (mths) (mths) (mths) (mths) (mths) (mths) (mths) (mths) (mths) (mths) Business Existing 25.7 26.4 28.2 32.0 27.0 31.2 31.5 30.2 26.7 28.0 Vacated 12.6 12.8 14