Big Yellow Group PLC · LSE:BYG
Big Yellow — H1 2022 Earnings Presentation
55 slides from Big Yellow's earnings presentation, November 2021
Slide 1: Big Yellow Group PLC Results for the Six Months ended 30 September 2021
Big Yellow Group PLC Results for the Six Months ended 30 September 2021
Slide 2: Our Investment Case
Our Investment Case • UK self storage penetration in key urban conurbations remains relatively low Attractive Market • Limited new supply coming onto the market Dynamics • Resilient through the last economic downturn and resilient to date during the pandemic • Self storage is more part of the ecosys
Slide 3: Key Metrics
Key Metrics Six Months Six Months Ended Ended 30.09.21 30.09.20 Revenue £81.8 million £65.8 million 24% Like-For-Like Store Revenue £73.7 million £64.3 million 15% Cash Flow From Operating Activities (After Net Finance Costs) £51.8 million £42.3 million 22% Adjusted Profit before Tax £46.9 million £
Slide 4: Key Operational Metrics
Key Operational Metrics Six Months Six Months Ended Ended 30.09.21 30.09.20 Store Metrics – Big Yellow Stores Occupancy Growth in the Period (Sq Ft) 271,000 325,000 (54,000) Closing Occupancy 89.7% 85.2% 4.5 ppts Occupancy Like-For-Like Stores 91.3% 87.3% 4.0 ppts Average Achieved Net Rent Per Sq Ft
Slide 5: First Half Highlights
First Half Highlights • Like-for-like occupancy increase of 3.9 ppts from 1 April 2021 and up 4.0 ppts from same time last year to 91.3% • Big Yellow stores average achieved net rent per sq ft increased by 5.4% period on period, closing net rent up by 9.7% from September 2020 • Revenue growth for th
Slide 6: Armadillo Self Storage
Armadillo Self Storage • Acquired remaining 80% interest in 25 stores totalling 1.1m sq ft on 1 July 2021 • Armadillo to be retained as a regional brand within the business • Acquired based on year one net operating income (post central overhead charge) yield of 7.7% • Located regionally with averag
Slide 7: Operations Update
Operations Update • Following reopening of economy have retained the COVID protocols around physical barriers, sanitiser use and cleaning • Encouraged our staff to get vaccinated – we believe a significant proportion are double vaccinated • Maintained our focus on Wellbeing, Inclusivity and Diversit
Slide 8: Monthly Activity
Monthly Activity • Graphs showing Big Yellow stores only • Activity levels significantly impacted by lockdown in April to June 2020 • Strong demand from domestic customers in first quarter in part due to stamp duty holiday • More normalised year on year move-in activity levels in second quarter • Sp
Slide 9: Daily Storage Revenue Growth
Daily Storage Revenue Growth 25% • Graph shows Big Yellow stores only • Occupancy the main driver of revenue 20% growth last year, rate impacted in 2020 by suspension of price increases during Spring lockdown 15% • Pricing model driven by scarcity, increases in asking prices to new 10% customers and
Slide 10: Financial Review
wen FINANCIAL REVIEW
Slide 11: Portfolio Summary
Portfolio Summary • Portfolio summary showing Big Yellow and Armadillo stores in both periods • Big Yellow like-for-like occupancy up 3.9 ppts from 1 April 2021 and up 4.0 ppts from same time last year to 91.3% • Big Yellow closing net rent up 9.7% to £30.43, average rate up 5.4% • Big Yellow like-f
Slide 12: Portfolio Summary – Big Yellow Stores
Portfolio Summary – Big Yellow Stores September 2021 September 2020 Big Yellow Big Yellow Total Big Armadillo Total Big Yellow Big Yellow Total Big Armadillo Total Established Developing Yellow Established Developing Yellow >3 years <3 years >3 years <3 years Number Of Stores 73 6 79 25 104 73 4 77
Slide 13: Rental Growth Analysis
Rental Growth Analysis Average occupancy Number of Net rent per sq ft change from Net rent per sq ft change from in the six months stores 1 April to 30 September 2021 1 April to 30 September 2020 75 to 85% 19 6.3% (3.3%) 85 to 90% 37 6.9% (1.1%) Above 90% 44 8.4% 0.2% • Table shows the change in net
Slide 14: Store Operating Expenses
Store Operating Expenses • Restated for Big Yellow and Armadillo combined Category Period Ended Period Ended % % of store • Operating costs have increased by 30.09.21 30.09.20 change operating £1.6 million (7%) £000 £000 costs in • One-off items in the period are period rates rebates where we have C
Slide 15: Consolidated Income Statement
Consolidated Income Statement Six Months Ended 30.09.21 30.09.20 £m £m Revenue 81.8 65.8 • Revenue up 24%, like-for-like store revenue up 15% Cost Of Sales (23.8) (20.0) • Admin expenses increase includes £0.4 million of non- Admin Expenses (7.3) (5.7) recurring acquisition costs written off (on Arm
Slide 16: Adjusted PBT Bridge
Adjusted PBT Bridge Increase Increase in Increase in Reduction in share of in gross administrative net profit \ expenses \ interest adjusted profit of payable associates £12.3m £1.3m £0.5m £0.1m £46.9m Adjusted PBT £36.5m 30 September Adjusted 2021 PBT 30 September 2020 • Non recurring items and rev
Slide 17: Cash Flow and Net Debt Movement
Cash Flow and Net Debt Movement Six Months Ended 30.09.21 30.09.20 £m £m Opening Net Debt (325.0) (350.6) Cash Generated from Operations 57.9 47.6 • Free cash flow increased by 22% Net Finance Costs (5.0) (4.4) Interest on Obligations under Lease Liabilities (0.4) (0.4) • Capex − Purchase of land at
Slide 18: Capital Structure
Capital Structure 30.09.21 30.09.20 Net Debt / Gross Property Assets 18% 18% Net Debt / Adjusted Net Assets 21% 21% Net Debt / Market Capitalisation 15% 16% Pre-Interest Operating Cash Flow Cover 10.6x 9.7x 30 September 2021 Debt Expiry Facility Drawn Average Interest Cost Aviva Loan September 2028
Slide 19: Property Review
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Slide 20: New Site Development
New Site Development • 54,000 sq ft store in Uxbridge opened at the end of June 2021, and is currently 52% occupied. Store broke even at the EBITDA level in three months • Planning consent received since April 2021 on Slough and Newcastle. Nine of the fourteen development sites now have planning • A
Slide 21: Development Pipeline – With Planning
Development Pipeline – With Planning Site Location Status Anticipated Capacity Sq Ft Hayes, London Prominent location on Hayes Road Planning consent granted in July 2020. Construction commenced in January 73,000 2021 with a view to opening in January 2022. Hove Prominent location on Old Shoreham Pla
Slide 22: Development Pipeline – Without Planning
Development Pipeline – Without Planning Site Location Status Anticipated Capacity Sq Ft Wapping, London Prominent location on the Site acquired in July 2020. Planning application submitted in November Additional 95,000 Highway, adjacent to existing 2021. Big Yellow store Staines, London Prominent lo
Slide 23: Development sites under construction and planning granted
Hayes, under construction Kings Cross, under construction Newcastle, planning granted Harrow, under construction Wembley, planning granted Wapping, proposed Hove, under construction Queensbury, planning granted Staines, proposed North Kingston, under construction Slough, planning granted 23
Slide 24: Our Portfolio November 2021
Our Portfolio November 2021 24
Slide 25: Strategic Summary
Strategic Summary • Strong first half results driven by a combination of occupancy and rate growth • The structural need for self storage is now firmly embedded; step-up in awareness since the onset of the pandemic • Armadillo acquisition earnings enhancing • Big Yellow is well placed: ‒ Our stores
Slide 26: Appendix
APPENDIX Sustainability Marketing Review Additional Operational and Financial Information Store Portfolio 26
Slide 27: Sustainability Update
Sustainability Update • We have set 3 new long-term, ambitious environmental goals: 1. Net Renewable Energy Positive by 2030 2. Net Zero Scope 1 & 2 Emissions by 2030 3. Net Zero Scope 3 by 2040 • The detailed strategy was published with our full CSR Report in summer 2021 • Total five year horizon i
Slide 28: Big Yellow's Pathway To 100% Renewable Energy And Zero Carbon Emission Plan
Big Yellow’s Pathway To 100% Renewable Energy And Zero Carbon Emission Plan To 2030 & 2040 • Our ambition is for Big Yellow to be fully aligned to the UK Government’s commitments to sustainability by addressing our Emissions by 2050, at the latest • Our two 2030 targets are interconnected, insofar a
Slide 29: Armadillo Programme Of Works
Armadillo Programme Of Works Immediately • Upgrade energy metering infrastructure and integrate with current Big Yellow platform by 31 March 2022 • Review EPC performance and refresh certificates where necessary • Remove gas boilers in selected stores • Include Armadillo in 3rd party assurance and e
Slide 30: Decarbonising Our Business to March 2021
Decarbonising Our Business to March 2021 CARBON INTENSITY (PER CLA SQ M) 14 12.7 12 • Big Yellow stores only – to be updated with the full year results 10 9.7 to include Armadillo 8 6.1 5.5 6 4.8 • Carbon Emission intensity – a reduction from the prior year of 4 12.7% at 4.8 per m² CLA (top graph) 2
Slide 31: Social
Social • London Children’s Ballet has occupied the studio space at our Battersea store, under our Section 106 Social Agreement with Wandsworth Borough Council • Big Yellow volunteer programme has commenced with Street League – very positive employee feedback • Strong employee engagement approval rat
Slide 32: ESG Investor Benchmarks, ESG Standards & Campaigns
ESG Investor Benchmarks, ESG Standards & Campaigns Benchmarks CDP (Carbon Disclosure Project) MSCI Rating of AA (May 2021) Big Yellow participated since 2012; achieved our first A- in 2020 Big Yellow recognised as a Supplier Engagement Leader Campaigns GRESB (Global Real Estate Sustainability Benchm
Slide 33: Marketing and Sales Update
Marketing and Sales Update • Big Yellow has market-leading brand awareness – over 5 times higher than next nearest competitor • Continued investment in digital to drive prospect growth – key to our success with over 90% of prospects online, 63% of visits from mobile devices • Reducing cost of acquis
Slide 34: The Importance of the Brand
The Importance of the Brand • Self storage is a consumer facing business for both domestic and small business markets • Done right, brand sits at the heart of a business and drives its performance • Self storage is an immature market with 70 % first time users – the interaction at the prospect stage
Slide 35: Research of Brand and Market Awareness
Research of Brand and Market Awareness • YouGov commissioned survey by the UK Self Storage Association in January 2021 • Measures unprompted brand awareness • 2,092 adults sample size • Statistically selected and weighted sample that represents a sample of the demographics of the adult UK population
Slide 36: High Brand Awareness = High Online Market Share
High Brand Awareness = High Online Market Share • Over 90% of our prospects come from our digital platforms. 63% of web visits are from smartphones, with an increase in desktop use to 34%, driven by working from home (April to September 2021) • A significant proportion of these web visits come from
Slide 37: The Growth Opportunity
The Growth Opportunity • Only 2% of those surveyed were currently using self storage and 6% were thinking of using self storage in the next year (source: SSA YouGov Survey January 2021) • Increasing customer repeat use and referrals with 43% of customers having used self storage before (source: SSA
Slide 38: Customer Insights
Customer Insights • Wide-ranging demographic and domestic customer base; extended families, couples, singles, renters, students, downsizers, space constrained home dwellers • Over 70% of our customers are in the top 3 ACORN categories; Affluent Achievers, Rising Prosperity and Comfortable Communitie
Slide 39: Social Media & PR
Social Media & PR • Targeted YouTube advertising to domestic and business audiences in need of self storage • CSR focussed social media content on Twitter, Instagram and Facebook • LinkedIn spotlights our company culture, employee development, recruitment, CSR initiatives and the Big Yellow Foundati
Slide 40: Local Economy Value of Business Customers
Local Economy Value of Business Customers • External business survey commissioned a couple of years ago to assess impact of average Big Yellow store on the local economy • 36% of the Group’s space is occupied by business customers • The average store has over 100 different businesses who between the
Slide 41: National Customers
National Customers • Businesses can store at multiple locations nationwide through one dedicated point of contact • Our extended network of third party providers enables customers to have a single self storage supplier relationship • We provide a range of business services. These include accepting d
Slide 42: Reasons for Using Self Storage
Reasons for Using Self Storage Overall Occupied Space Demand Profile of Move-ins only 30 September 2021 April to September 2021 April to September 2020 Moving Owner Occupied 20% Moving Rental Sector 16% Other 14% Business storage 14% Student storage 14% Decluttering 12% Home improvements 5% 42 Trave
Slide 43: Length of Stay of Customers Vacating in the Six Months to 30 September
Length of Stay of Customers Vacating in the Six Months to 30 September 43
Slide 44: Customer Average Length of Stay
Customer Average Length of Stay As at Stores (No of Months) 30/09/2021 0-3 Years >3 Years All Big Armadillo All All Stores Yellow Stores 30/09/2020 No of Stores 6 73 79 25 104 102 Business Existing 34.8 32.2 31.4 8.4 33.0 31.7 Vacated 4.3 11.8 11.8 14.4 12.1 11.7 Total 6.5 13.9 13.8 17.0 14.2 13.7 D
Slide 45: Self Storage Market
Self Storage Market Key Influencers – Growing public awareness – Change in economic activity and GDP growth – Population mobility and investment in existing homes – Physical planning and constraints, smaller homes – Focus on high density development on brownfield sites – Housing demand, divorce, sin
Slide 46: Self Storage Market
Self Storage Market – US Market (2020 SSA/Cushman & Wakefield Report) – Population 328.2 million – 55,000 self storage centres – 3.1 billion sq ft – 9.4 sq ft per person – Australian Market (2020 SSA/Cushman & Wakefield Report) – Population 25.0 million – 1,450 self storage centres – 48.5 million sq
Slide 47: Per Store Analysis
Per Store Analysis Six Months Ended 30 September 2021 73 Established 6 Developing 25 Armadillo All 104 Stores Stores Stores Stores Average Store Capacity 63,500 58,000 43,100 58,300 Average Sq Ft Occupied Per Store 58,100 38,333 38,200 52,200 Average % Occupancy 91.5% 66.1% 88.6% 89.5% Average Reven
Slide 48: Track Record Since 2007
Track Record Since 2007 • 3.5 million sq ft increase in MLA capacity and 3.6 million sq ft increase in occupied space from 1 April 2007 to 30 September 2021 • Revenue for March 2021 more than doubled since 2008 to £135.2 million • More than threefold increase in adjusted EPS since 2008 to 42.4p and
Slide 49: Big Yellow Relative TSR Performance
Big Yellow Relative TSR Performance Big Yellow FTSE All Share FTSE 350 Real Estate 3,000 2,500 2,143.3% 2,000 (15.6% p.a.) 1,500 1,000 500 254.8% (6.1% p.a.) 184.3% (5.0% p.a.) 0 2000 2002 2004 2006 2008 2011 2013 2015 2017 2019 2021 Source: Datastream as at 30 September 2021 49
Slide 50: Store Portfolio
Uxbridge, June 2021 MLA - 54,000sqft Camberwell, July 2020 MLA - 75,000 sq ft Battersea, November 2020 MLA -70000sq ft Manchester, May 2019 MLA - 60000sqit Wapping, July 2018 MLA - 26000 sqft Bracknell, September 2020 MLA - 59,000 sq ft rot Pe Guildford Central, March 2018 MLA - 55,000 sq tt
Slide 51: Store Portfolio
6 f= (I Twickenham 2, April 2016 Nine Elms, April 2016 Cambridge, January 2016 Enfield, April 2015 Chester, February 2015 Oxford 2, July 2014 MLA - 22000 sqft MLA - 65,000sq ft MLA - 60000sq ft MLA - 60000 sqft MLA - 69000sq ft MLA - 35000sqt Gypsy Comer, April 2014 Chiswick, April 2012 New Cross, F
Slide 52: Store Portfolio
‘ee ae Kennington, May 2008 Merton, March 2008 Fulham, March 2008 Balham, March 2008 Barking, November 2007 Ealing Southall, November 2007 MLA - 66,000 sq ft MLA - 70000 sqft MLA - 138000 sqft MLA - 61,000 sq ft MLA - 64,000 sq ft MLA 57000 sa ft Sutton, July 2007 Gloucester, December 2006 Edmonton,
Slide 53: Store Portfolio
= 3 2 = y West Norwood, January 2003 Colchester, December 2002 Bow, November 2002 Brighton, October Guildford Slytield, June 2002 New Malden, May 2002 MLA - 57000 sq ft MLA - 54000 sqft MLA - 132000 sqft MLA - 59000 sqft MLA - 55000 sft MLA -81000sq ft Portsmouth, October 2001 Norwich, September 200
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Slide 55: Disclaimer
Disclaimer This presentation contains certain statements that are neither reported financial results nor other historical information. These statements are forward-looking in nature and are subject to risks and uncertainties. Actual future results may differ materially from those expressed in or imp