National Storage Reit · ASX:NSR
National Storage Reit — FY2020 Earnings Presentation
33 slides from National Storage Reit's earnings presentation, Aug 26, 2020
Slide 1: FY20 Results
FY20 NATIONAL R ES U LTS
Slide 2: Disclaimer
DISCLAIMER This presentation has been prepared by National Storage REIT (“NSR”) comprising National Storage Holdings Forward-looking statements Limited (ACN 166 572 845) and National Storage Financial Services Limited (ACN 600 787 246 and AFSL 475 This presentation may contain certain "forward-looki
Slide 3: Australasia's largest self-storage owner-operator
As Australasia’s largest self-storage owner-operator, NSR is focused on driving organic growth across its 194 storage centres, and executing a strong pipeline of acquisition and development opportunities.
Slide 4: Agenda
AGENDA • FY20 RESULTS SUMMARY • FINANCIAL RESULTS • OPERATIONAL UPDATE AND COVID-19 • KEY OPERATING METRICS • STRATEGY - FOUR PILLARS OF GROWTH • ORGANIC GROWTH • ACQUISITIONS • DEVELOPMENT & EXPANSION UPDATE • TECHNOLOGY AND INNOVATION • GUIDANCE FY21 National Storage Robina
Slide 5: FY20 Highlights
FY20 HIGHLIGHTS A-IFRS PROFIT $121.8 MILLION (EPS 14.67 CENTS) | UNDERLYING EPS 8.3 CENTS UNDERLYING TOTAL PORTFOLIO WEIGHTED AUSTRALIAN PORTFOLIO AVERAGE PRIMARY ASSETS UNDER EARNINGS1 OCCUPANCY2 OCCUPANCY2 CAP RATE MANAGEMENT 78.9% 77.8% $67.7m (down 3.0%) (Down 3.4%) 6.56% $2.28b (Up 9%) (down 29
Slide 6: Profit and Loss
PROFIT AND LOSS FOR THE YEAR ENDED 30 JUNE 2020 STRATEGY CONTINUES TO DELIVER SOLID GROWTH $ Million FY20 FY19 % Change Storage revenue 159.5 139.4 14% • FY20 performance Sales of goods and services 7.6 6.7 13% Other revenue 7.5 6.1 23% • Storage revenue up 14% Total Revenue 174.6 152.2 15% Operatin
Slide 7: Summary Balance Sheet
SUMMARY BALANCE SHEET AS AT 30 JUNE 2020 NTA GROWTH AND GEARING RESET $ Million Jun 20 Jun 19 Movement • NTA increased to $1.65 per stapled security Cash 90.4 178.8 (88.4) Investment Properties (June 2019: $1.63) 2,281.5 1,949.1 332.4 (net of Lease Liability) • Investment properties1 held increased
Slide 8: Capital Management
CAPITAL MANAGEMENT FOR THE YEAR ENDED 30 JUNE 2020 $348 MILLION EQUITY RAISED TO STRENGTHEN BALANCE SHEET AND FUND CONTINUED ACQUISITION GROWTH • Gearing 25% (Covenant 55%) - Target range 25% - 40% Capital Management Jun-20 Jun-19 • ICR 3.1x (Covenant 2.0x) Cash Balance $90.4m $178.8m Total debt fac
Slide 9: Operational Update and COVID-19
OPERATIONAL UPDATE AND COVID-19 99.1% OF SELF-STORAGE REVENUE COLLECTED * |STRONG RECOVERY FROM INITIAL IMPACTS OF COVID-19 Spike in move-outs Drop in enquiries at NLA - Index to July 2019 Enquiries - Index to Week 1 at start of COVID-19 start of COVID-19 1.30 1.20 1.20 Strong recovery in 1.00 1.10
Slide 10: Operational Update and COVID-19 (cont.)
OPERATIONAL UPDATE AND COVID-19 (cont.) FOCUS ON OPERATIONAL EFFICIENCY FOR BEST PRACTICE OUTCOMES ACROSS NSR Merchandise Revenue • Significant uplift in the overall performance and engagement $340,000 of our centre staff across all regions as a result of improved $300,000 state leadership structure
Slide 11: Operational Update and COVID-19 (cont.)
OPERATIONAL UPDATE AND COVID-19 (cont.) FOCUS ON OPERATIONAL EFFICIENCY FOR BEST PRACTICE OUTCOMES ACROSS NSR Human Resources • Full COVID-19 safe compliance plans implemented across all centres and Head Office • Zero staff infections to date • Head Office led the approach towards work flexibility,
Slide 12: Key Operational Metrics
KEY OPERATIONAL METRICS ACTIVE MANAGEMENT OF RATE AND OCCUPANCY TO MAINTAIN MOMENTUM Average H2 REVPAM REVPAM stabilised higher than comparable in July period last year REVPAM REVPAM June 2018 Centres June 2016 Centres $210 $220 $215 $205 $210 $200 $205 $200 $195 $195 $190 $190 $185 $185 Aug-18 Feb-
Slide 13: Key Operational Metrics
KEY OPERATIONAL METRICS OCCUPANCY AFFECTED BY COVID-19|STRONG RECOVERY YTD FY21 • Combined June 2020 Aust and NZ Occupancy 78.9% (-3.0%) Australia • Australian Portfolio 77.8% (-3.4%) 85.0% 80.0% Jun-14 • New Zealand Portfolio 84.7% (-1.0%) Jun-15 75.0% Jun-16 • Affected by COVID-19 lockdowns 70.0%
Slide 14: New Zealand
NEW ZEALAND COVID-19 IMPACT MINIMISED New Zealand • Performance during COVID-19 demonstrated resilience of NSR’s New 90.0% Zealand storage portfolio and quality of local management team 85.0% • Portfolio now consists of 23 storage centres, plus three development 80.0% Jun-16 sites across New Zealand
Slide 15: NSR Strategy: Four Pillars of Growth
NSR STRATEGY FOUR PILLARS OF GROWTH DEVELOPMENT AND TECHNOLOGY AND ORGANIC GROWTH ACQUISITIONS EXPANSION INNOVATION NSR achieves organic NSR has executed over NSR has highly developed NSR leads the Australasian growth through a 130 high-quality and proven in-house storage industry with new combinati
Slide 16: Organic Growth
ORGANIC GROWTH PORTFOLIO OPTIMISATION THROUGH A BALANCED APPROACH TO RATE AND OCCUPANCY GROWTH • Occupancy growth is managed by a combination of NSR’s own data analytics and the use of Prorize – industry leading revenue management software • High conversion rates in the call centre due to improved:
Slide 17: Organic Growth (cont.)
ORGANIC GROWTH (cont.) PORTFOLIO OPTIMISATION THROUGH A BALANCED APPROACH TO RATE AND OCCUPANCY GROWTH • Continued focus on digital marketing • Fully internalised in-house digital marketing team proving to be highly effective • Improved data analytics • Strong focus on Search Engine Optimisation (SE
Slide 18: Built Capacity
BUILT CAPACITY OPPORTUNITY FOR CONTINUED OPERATIONAL IMPROVEMENT • Significant growth in NLA through acquisition and development activity • Australian Portfolio 30 June 2020 NLA – 800,000sqm Total Australia NLA • Target occupancy 85% - 90% 900,000 • Opportunity “runway” Additional revenue at $250/sq
Slide 19: Acquisitions
ACQUISITIONS AUSTRALASIA’S NO. 1 ACQUIRER OF HIGH-QUALITY, INDEPENDENTLY OWNED STORAGE CENTRES • NSR remains acquirer of choice • No FIRB approval required Total Assets Under Management (AUM) 2,500 • Typical settlement time six weeks from acceptance of offer • NSR is the leading consolidator in Aust
Slide 20: Acquisitions (cont.)
ACQUISITIONS (cont.) 22 ACQUISITIONS TOTALING $218M TRANSACTED IN FY20 • National Storage has successfully transacted 20 storage centres and two FY20 ACQUISITIONS development sites in FY20 for $218 million NUMBER OF NLA REGION • Continue to pursue high-quality acquisitions across Australia and New Z
Slide 21: Acquisition Pipeline
ACQUISITION PIPELINE ACQUISITION PIPELINE REMAINS STRONG • Strong start to FY21 having successfully completed the acquisition of seven centres in FY21 YTD totalling $134 million and adding 50,400 sqm NLA National Storage Yandina • Forward looking acquisition pipeline remains strong FY21 ACQUISITIONS
Slide 22: Development & Expansion
DEVELOPMENT & EXPANSION TARGETED DEVELOPMENT AND EXPANSION PROJECTS PROVIDING ADDITIONAL UNIT PIPELINE IN KEY AREAS Overview • Two completed projects • 15 active projects • Five under construction • Five projects shovel-ready • Aggregate NLA pipeline circa 106,000m² • Combination of greenfield, turn
Slide 23: Development & Expansion (cont.)
DEVELOPMENT & EXPANSION (cont.) EXECUTING A STRONG PIPELINE OF DEVELOPMENT AND EXPANSION OPPORTUNITIES Spend to Project Location Structure Phase DD Settlement Concept DA Tender BA Construction PC Date ($'m) Canterbury VIC JV (NSR 25%) Complete 5,600 ● ● ● ● ● ● ● ● Robina QLD NSR Complete 7,500 ● ●
Slide 24: Development & Expansion (cont.)
DEVELOPMENT & EXPANSION (cont.) TARGETED DEVELOPMENT AND EXPANSION PROJECTS PROVIDING ADDITIONAL PIPELINE IN KEY AREAS Expansions – Existing centres • Strategic expansion of existing centres where occupancy levels remain consistently high and demand for unit sizes exceeds supply • Optimisation of ad
Slide 25: Technology
TECHNOLOGY HARNESSING NEW TECHNOLOGY AND INNOVATION FOR ENHANCED BUSINESS OUTCOMES • Roll out of Contact-Free Move-In process Bluetooth Smart Access • Completion of the first fully automated self-storage centre in Australia • Development of an NSR Application Programming Interface (API) that will al
Slide 26: Technology (cont.)
TECHNOLOGY (cont.) A NEW DIGITAL PRESENCE A new digital look for the National Storage and Wine Ark brands • Mobile-focused • Streamlined sales journeys • Increased upsell opportunities • Built with full automation in mind • Rich data capture of the whole customer journey 26
Slide 27: Technology (cont.)
TECHNOLOGY (cont.) INSIGHT DRIVEN DECISION MAKING LOOKING AT OUR BUSINESS IN A DIFFERENT WAY • Operations, marketing and technology teams working together to develop customised insights using our new analytics platform • Aggregating customer interactions into marketing insights to enhance customer e
Slide 28: FY21 Guidance & Outlook
FY21 GUIDANCE & OUTLOOK DISTRIBUTION GUIDANCE 90% - 100% OF UNDERLYING EARNINGS UNDERLYING EPS 1 PER STAPLED SECURITY UNDERLYING EARNINGS 7.7 – 8.3 CENTS $78 - $84 MILLION 1 – NSR provides this guidance assuming there are no material changes in market conditions or operating environments, including
Slide 29: Appendices
APPENDICES 29
Slide 30: NSR Footprint
NSR FOOTPRINT *includes all centres managed, operated and licensed as National Storage as at 24 August 2020. 30
Slide 31: Portfolio Metrics
PORTFOLIO METRICS 30 June 2019 30 June 2020 AUST NZ MGT TOTAL AUST NZ MGT TOTAL Freehold centres 126 22 4 152 147 23 2 172 Leasehold centres 15 - - 15 14 - - 14 Total centres 1 141 22 4 167 161 23 2 186 Freehold NLA (sqm) 670,000 120,000 21,000 811,000 745,100 123,500 4,100 872,700 Leasehold NLA (sq
Slide 32: Thank You
193 194 195 THANK YOU www.nationalstorage.com.au invest@nationalstorage.com.au 32
Slide 33: Notes
NOTES 33