Safestore Holdings Plc · LSE:SAFE
Safestore — H1 2011 Earnings Presentation
45 slides from Safestore's earnings presentation, Jun 23, 2011
Slide 1: 2011 Interim Results
2011 Interim Results 23 June 2011
Slide 2: Introduction
Peter Gowers, Chief Executive Officer Introduction
Slide 3: Good performance demonstrating our resilience
Good performance demonstrating our resilience Highlights Revenues up 7.3% to £45.5m Underlying EBITDA up 5.9% to £24.3m EPRA adjusted earnings per share up 7.6% to 3.96p Interim dividend increased to 1.75p per share Operational highlights Robust trading, particularly in London, the South-East and Pa
Slide 4: Financial Review
Richard Hodsden, Chief Financial Officer Financial Review
Slide 5: Improved EBITDA performance
Improved EBITDA performance Summary IFRS income statement Six Months ended Six Months ended 30 April 2011 30 April 2010 Movement Cost increases driven by (£m) (£m) new stores and Revenue 45.5 42.4 7.3% inflation, especially utilities & rates Operating expenses (excluding exceptionals) (21.2) (19.5)
Slide 6: Cash flow reconciliation
Cash flow reconciliation Six Months ended Six Months ended 30 April 2011 (£m) 30 April 2010 (£m) Operating profit (before investment gain/(loss)) 22.5 22.5 Working capital, non-cash movements and exchange gains (0.4) (1.1) Operating cash flow 22.1 21.4 Non-discretionary cash flow Higher interest Mai
Slide 7: Pleasing performance across all geographical regions
Pleasing performance across all geographical regions Occupancy, rate, revenue performance change in constant currency % Change 10% 9% All regions contributing to revenue growth 8% 7% 6% London and Paris delivered strongest occupancy growth 5% 4% Rate growth in all regions but Rest of 3% UK strongest
Slide 8: Continued key KPI growth
Continued key KPI growth Group total occupancy, average rate and revenue growth Average rental rate Closing Occupancy per sq ft Revenue 2.95 27.00 50.00 2.90 26.00 45.00 2.85 25.00 2.80 24.00 40.00 Million sq ft £ million 2.75 23.00 £ 2.70 22.00 35.00 2.65 21.00 30.00 2.60 20.00 2.55 19.00 25.00 HY
Slide 9: Safestore recovering steadily
Safestore recovering steadily UK total occupancy, average rate and revenue growth Average rental rate Closing Occupancy per sq ft Revenue 2.30 25.00 35.00 2.25 34.00 24.00 33.00 2.20 23.00 Million sq ft 32.00 £ million 2.15 22.00 31.00 £ 2.10 30.00 21.00 29.00 2.05 20.00 28.00 2.00 19.00 27.00 HY HY
Slide 10: UPP continues to extend its reach
UPP continues to extend its reach Paris total occupancy, average rate and revenue growth Average rental rate Closing Occupancy per sq ft Revenue 0.70 33.00 14.00 0.65 31.00 12.00 29.00 0.60 10.00 Million sq ft 27.00 £ million 0.55 8.00 £ 25.00 0.50 6.00 23.00 0.45 4.00 21.00 0.40 19.00 2.00 HY HY HY
Slide 11: The impact of the slowing economy on new lets
The impact of the slowing economy on new lets Q1 2011 Q2 2011 Total H1 2011 Vs Q1 2010 Vs Q2 2010 Vs H1 2010 Personal (including students) +7% +3% +5% Business +14% -1% +6% Total +9% +3% +5% Personal customer new lets slowed in Q2 but were still up year on year Business customer new lets slowed sign
Slide 12: Mature store performance remains key
Mature store performance remains key Portfolio Snapshot - April 2011 Portfolio Snapshot - April 2010 100% 100% 90% 90% 80% 80% 70% 70% 60% 60% Established Established 50% Developing 50% Developing 40% Large 40% Large Mature Mature 30% 30% 20% 20% 10% 10% 0% 0% No of Stores MLA IFRS EBITDA No of Stor
Slide 13: Mature stores recovering well
Mature stores recovering well Mature store occupancy is at 65% at 30 April 2011, consistent with the occupancy at 30 April 2010 Actual occupancy has increased by 52,000 sq ft year on year to 1.92m sq ft We have closed three mature stores in the period, one due to fire and two as relocations to new s
Slide 14: Property portfolio valuations – Cushman & Wakefield
Property portfolio valuations – Cushman & Wakefield Movement Valuation as Maximum since 31 at 30 April New stores have contributed £17.0m of Location Tenure Stores Lettable Area October 2011 (‘000 sq ft) 2010 valuation uplift (£) (£) UK Freehold 55 2,132 415.8m 6.2m La Défense store – valuation decr
Slide 15: Property valuation metrics reflect economic conditions
Property valuation metrics reflect economic conditions Key variables April 2011 October 2010 April 2010 Average Self Storage Rate per Sq Ft £26.33 £25.55 £25.51 Exit Cap Rate 7.88% 7.87% 7.90% Weighted average stabilised occupancy 78.80% 79.46% 77.40% Stabilised Occupancy in Sq Ft 3.89m 3.97m 3.92m
Slide 16: 3 new stores opened in period delivering over 100,000 sq ft of MLA
3 new stores opened in period delivering over 100,000 sq ft of MLA Pipeline MLA Opened / estimated Pipeline of 9 expansion stores totalling 340,000 sq Pipeline store / site Full planning sq. Ft opening ft of MLA. Of these: Stores opened in H1 FY2011 All nine are freehold Bolton * 19,700 Nov-10 Two s
Slide 17: Initial Impressions
Peter Gowers, Chief Executive Officer Initial Impressions
Slide 18: Safestore is well positioned for growth
Safestore is well positioned for growth Premium storage market has considerable growth potential Safestore is in a strong competitive position Opportunities to use our scale to add further value 18
Slide 19: Premium storage market has considerable growth potential
Premium storage market has considerable growth potential Main drivers of premium storage: Events Solutions Medium term macro trends are favourable Industry still in its infancy Further opportunities to grow 19
Slide 20: Safestore is in a strong competitive position in the UK and France
Safestore is in a strong competitive position in the UK and France 20
Slide 21: Safestore has a comprehensive offer for personal and business customers
Safestore has a comprehensive offer for personal and business customers Well located stores Wide unit range Packing materials Specialist advice Nationwide footprint Wide unit range Centralised billing Support services 21
Slide 22: Safestore has scale in the UK and Paris
Safestore has scale in the UK and Paris As at 30th April 2011: Enfield Chingford Borehamwood Stanmore Friern Barnet 118 Current stores Wood Green Romford Edgware Staples Corner Alexandra Palace Stoke Newington 9 Expansion stores Pentonville Road Ruislip Holloway Ilford Camden Notting Hill Paddington
Slide 23: Safestore has the ability to grow with different business models
Safestore has the ability to grow with different business models Stores 12 9% 71 55% 47 36% Freehold / Long Leasehold Short Leasehold Management Contract 23
Slide 24: Safestore has geographic earnings diversity
Safestore has geographic earnings diversity 100% 90% 80% 70% 60% 50% 80% of EBITDA in 40% London, South-East 30% and Paris 20% 10% 0% Store No MLA EBITDA London & South East Paris Rest of UK 24
Slide 25: RevPAF will be a key focus to deliver on operational gearing effects
RevPAF will be a key focus to deliver on operational gearing effects Free Cash Flow Operational Gearing RevPAF Operating Costs Capex Returns Occupancy Rate Ancillaries Enquiries Conversion Customer Mix Price 25
Slide 26: REVPAF recovering for both total store portfolio and mature stores
REVPAF recovering for both total store portfolio and mature stores Total Store Portfolio Mature Stores 19.00 23.50 23.00 18.61 18.50 22.50 21.61 18.00 21.50 21.23 21.26 £ £ 17.50 20.50 17.31 17.30 17.04 17.00 16.90 19.50 18.78 16.50 18.50 16.00 17.50 H1 2007 H1 2008 H1 2009 H1 2010 H1 2011 H1 2007 H
Slide 27: Scale can help us drive further RevPAF and value
Scale can help us drive further RevPAF and value • Execution Focus • Colleague Strong Brand • Differentiation Engagement Team Power • Enquiry Growth • Propco Mentality Asset Operational • Yield Management • Asset Returns Management Excellence • Sales and Productivity 27
Slide 28: Safestore has opportunities to strengthen brand power
Safestore has opportunities to strengthen brand power Integrated approach Customer focus Great name – strengthen brand relevance Brand Strong Power Team Asset Operational Update web and leverage scale in distribution Management Excellence 28
Slide 29: First steps – initial changes to web presence
First steps – initial changes to web presence Simplified layout Cross-promotion of call centre number Dedicated personal and business sections 29
Slide 30: Operational excellence is a Safestore strength
Operational excellence is a Safestore strength Managing RevPAF Yield management Strong Brand Team Power Flexible strategies by location Asset Management Operational Excellence 30
Slide 31: Ongoing progress – Space Specialist
Ongoing progress – Space Specialist More than 300 UK team-members trained to advise customers 31
Slide 32: Asset management focus will help create value
Asset management focus will help create value Manage for yield Internal property focus Strong Brand Team Power Appropriate business models Operational Asset Excellence Management 32
Slide 33: Progress update – acquisition of London Pentonville Road freehold
Progress update – acquisition of London Pentonville Road freehold
Slide 34: Aligning the team behind strategy drives productivity
Aligning the team behind strategy drives productivity Maintain operational focus Alignment on drivers of RevPAF Strong Team Brand Power Efficiency and productivity Asset Operational Management Excellence 34
Slide 35: Outlook
Outlook Good results, demonstrating resilience Challenging comparables for second half of the year Economic visibility is limited Cautious short-term outlook Confidence in position, operating model and opportunities for value 35
Slide 36: Slide 36
Slide 37: Appendices
Appendices
Slide 38: Portfolio summary under IFRS
Portfolio summary under IFRS April2011 April 2010 Developing Established Mature Large Total Developing Established Mature Large Total (Sq ft ‘000) (Sq ft ‘000) (Sq ft ‘000) (Sq ft ‘000) (Sq ft ‘000) (Sq ft ‘000) (Sq ft ‘000) (Sq ft ‘000) (Sq ft ‘000) (Sq ft ‘000) Number of Stores 11 18 81 8 118 14 1
Slide 39: EPRA Adjusted Income Statement
EPRA Adjusted Income Statement Six Months ended Six Months ended Movement 30 April 2011 (£m) 30 April 2010 (£m) Revenue 45.5 42.4 7.3% Operating expenses (excluding exceptionals) (21.3) (19.5) EBITDA before exceptional items and investment gain 24.3 22.9 6.0% Depreciation (0.1) (0.1) Exceptional ite
Slide 40: Summary IFRS balance sheet
Summary IFRS balance sheet Six Months ended Six Months ended 30 April 2011 (£m) 30 April 2010 (£m) Assets Non-current assets Investment properties 692 654 Development properties 15 18 Other non-current assets 75 77 Non-current assets 782 749 Current assets 37 38 Liabilities Current liabilities (53)
Slide 41: Net debt and facilities
Net debt and facilities Half Year Year ended Net Debt Position 30 April 2011 31 October 2010 (£m) (£m) Available facilities at the year end* 385.6 385.6 Total bank borrowings (gross of FRS 4 Adjustment) 324.7 316.0 Cash (15.7) (15.5) Net debt 309.0 300.5 * €40m facility translated at €1.1230:£1 (rat
Slide 42: 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 Apr 2011 Oct 2010 N0 of Stores 4 4 15 71 94 94 (wks) (mths) (wks) (mths) (wks) (mths) (wks) (mths) (wks) (mths) (wks) (mths) Business Existing 18 4.1 37 8.4 66 15.1 134 30.9 119 27.
Slide 43: 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 Apr 2011 Oct 2010 N0 of Stores 2 1 3 16 22 22 (wks) (mths) (wks) (mths) (wks) (mths) (wks) (mths) (wks) (mths) (wks) (mths) Business Existing 13 2.9 39 9.0 65 15.1 132 30.5 120 27.6
Slide 44: 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 44
Slide 45: Disclaimer
Disclaimer This document has been prepared by the Company solely for use at presentations held in connection with the announcement of its Interim Results for the six months ended 30 April 2011. The information in this document has not been independently verified and no representation or warranty, ex