Big Yellow Group Plc · LSE:BYG
Big Yellow — H1 2024 Earnings Presentation
52 slides from Big Yellow's earnings presentation, November 2023
Slide 1: Results for the Six Months ended 30 September 2023
Big Yellow Group PLC Results for the Six Months ended 30 September 2023
Slide 2: Our Investment Case
Our Investment Case BIG YELLOW GROUP HALF YEAR RESULTS • UK self storage penetration in key urban conurbations remains relatively low • Limited new supply coming onto the market ATTRACTIVE MARKET DYNAMICS • Resilient through the global financial crisis and performed well during the pandemic • Self s
Slide 3: Key Financial Metrics
Key Financial Metrics BIG YELLOW GROUP HALF YEAR RESULTS Six Months Six Months CATEGORY Ended Ended CHANGE 30.09.23 30.09.22 Revenue £99.6 million £93.8 million 6% Like-For-Like Store Revenue £96.8 million £92.5 million 5% OVERVIEW Store EBITDA £71.5 million £66.8 million 7% Cash Flow From Operating
Slide 4: Key Operational Metrics
Key Operational Metrics BIG YELLOW GROUP HALF YEAR RESULTS Six Months Six Months CATEGORY Ended Ended CHANGE 30.09.23 30.09.22 Number of Stores 109 108 1% Store Maximum Lettable Area 6,419,000 6,295,000 2% OVERVIEW Closing occupancy (Sq Ft) 5,228,000 5,300,000 (1%) Occupancy Growth In The Period (Sq
Slide 5: First Half Highlights
First Half Highlights BIG YELLOW GROUP HALF YEAR RESULTS • Revenue growth for the period was 6%, like-for-like store revenue up by 5%, driven by increases in average achieved rents • Like-for-like occupancy increase of 1.5 ppts from 1 April 2023, down 2.2 ppts from same time last year to 84.6% (Sept
Slide 6: Highlights - Investment In New Capacity
BIG YELLOW GROUP Highlights - Investment In New Capacity HALF YEAR RESULTS • £107 million (net of expenses) raised by way of a placing of 6.3% of the Company’s issued share capital to fund the build out of the development pipeline • 121,000 sq ft of capacity added in the period with one new store op
Slide 7: Operations Update
Operations Update BIG YELLOW GROUP HALF YEAR RESULTS • Nine new stores opened (627,000 sq ft) since 2020, all cash flow positive – expected to deliver a proforma 8% - 9% year three NOI yield • Continued investment in automation across the business, leading to improved efficiencies and productivity –
Slide 8: Monthly Activity
Monthly Activity BIG YELLOW GROUP HALF YEAR RESULTS Monthly Move-ins Monthly Move-outs 14,000 14,000 12,000 12,000 10,000 10,000 8,000 2022 8,000 2022 6,000 2023 6,000 2023 4,000 2024 4,000 2024 2,000 2,000 OVERVIEW • Prospect numbers more in-line with pre-Covid period on a like-for-like basis Month
Slide 9: Financial Review
FINANCIAL REVIEW Harrow, London, September 2022
Slide 10: Portfolio Summary
Portfolio Summary BIG YELLOW GROUP HALF YEAR RESULTS • Like-for-like closing occupancy down 2.2 ppts to 84.6% FINANCIAL REVIEW • Closing net rent up 6.5% to £33.47, average rate up 8% • Like-for-like store revenue up 5% • Store EBITDA margin up to 72.7% (2022: 72.0%) • Absorption of step up in opera
Slide 11: Portfolio Summary
Portfolio Summary BIG YELLOW GROUP HALF YEAR RESULTS SEPTEMBER 2023 SEPTEMBER 2022 BIG YELLOW BIG YELLOW BIG YELLOW BIG YELLOW TOTAL TOTAL ESTABLISHED DEVELOPING ARMADILLO TOTAL ESTABLISHED DEVELOPING ARMADILLO TOTAL BIG YELLOW BIG YELLOW > 3 YEARS < 3 YEARS > 3 YEARS < 3 YEARS Number of stores 76 9
Slide 12: Rental Growth Analysis
Rental Growth Analysis BIG YELLOW GROUP HALF YEAR RESULTS NET RENT PER SQ FT GROWTH NET RENT PER SQ FT GROWTH AVERAGE OCCUPANCY FROM FROM IN THE SIX MONTHS 1 APRIL TO 30 SEPTEMBER 2023 1 APRIL TO 30 SEPTEMBER 2022 70% to 85% 2.6% 4.9% FINANCIAL REVIEW 85% to 90% 3.5% 5.0% Above 90% 4.7% 5.9% • Table
Slide 13: Store Operating Expenses
Store Operating Expenses BIG YELLOW GROUP HALF YEAR RESULTS PERIOD PERIOD % OF STORE • New stores account for an extra £0.8 million of operating expense ENDED ENDED OPERATING CATEGORY CHANGE 30.09.23 30.09.22 COSTS IN • Cost of sales down £0.6 million, switch in June 2022 to selling Enhanced £000 £0
Slide 14: Consolidated Income Statement
Consolidated Income Statement BIG YELLOW GROUP HALF YEAR RESULTS SIX MONTHS SIX MONTHS ENDED ENDED 30.09.23 30.09.22 £000 £000 Revenue 99.6 93.8 • Revenue up 6%, with storage income up 7% offset by lower growth Cost of Sales (27.8) (26.4) in non-storage income FINANCIAL Admin Expenses (6.9) (7.1) •
Slide 15: Adjusted PBT Bridge
Adjusted PBT Bridge BIG YELLOW GROUP HALF YEAR RESULTS Increase in Decrease in Decrease in Increase in Increase in gross other admin net capitalised profit operating expenses interest interest income payable FINANCIAL £4.4m (£0.1m) £0.2m (£5.7m) £ 0.1m APPENDIX REVIEW £54.6m £53.5m Adjusted Adjusted
Slide 16: Cash Flow And Net Debt Movement
Cash Flow And Net Debt Movement BIG YELLOW GROUP HALF YEAR RESULTS 30.09.23 30.09.22 £m £m Opening Net Debt (486.6) (411.8) Cash Generated from Operations 68.3 63.3 Net Finance Costs (12.8) (6.9) • Operating cash flow after net finance costs and pre-working FINANCIAL Interest on Obligations under Le
Slide 17: Capital Structure
Capital Structure BIG YELLOW GROUP HALF YEAR RESULTS 30.09.23 30.09.22 (PROFOMA) FINANCIAL Net Debt / Gross Property Assets 14% 18% • Proforma capital ratios shown following repayment of debt from the placing proceeds in October 2023 APPENDIX Net Debt / Adjusted Net Assets 16% 21% • Pre-interest ope
Slide 18: Debt Facilities
Debt Facilities BIG YELLOW GROUP HALF YEAR RESULTS AVERAGE 30.09.23 DEBT EXPIRY FACILITY INTEREST DRAWN COST Aviva Loan (fixed rate loan) September 2028 £157.4m £157.4m 3.4% FINANCIAL M&G Loan (£35 million fixed at 4.5%, balance September 2029 £120m £120m 6.9% floating) APPENDIX Revolving Bank Facil
Slide 19: Property Review
PROPERTY REVIEW Manchester, May 2019 19
Slide 20: New Site Development
New Site Development BIG YELLOW GROUP HALF YEAR RESULTS • Our landmark 103,000 sq ft Kings Cross store opened in June 2023. Early trading from the store has been very encouraging, with the store adding 24,000 sq ft of occupancy by 30 September 2023, and has now reached breakeven at the EBITDA level
Slide 21: Kings Cross
Kings Cross BIG YELLOW GROUP HALF YEAR RESULTS PROPERTY REVIEW 21 21
Slide 22: Development Pipeline With Planning
Development Pipeline With Planning BIG YELLOW GROUP HALF YEAR RESULTS ANTICIPATED CAPACITY SITE PROMINENT LOCATION STATUS SQ FT On the Highway, adjacent Planning consent granted, demolition of existing Wapping, London Additional 95,000 PROPERTY REVIEW to existing Big Yellow store building to commenc
Slide 23: Development Pipeline Without Planning
BIG YELLOW GROUP Development Pipeline Without Planning HALF YEAR RESULTS ANTICIPATED CAPACITY SITE PROMINENT LOCATION STATUS SQ FT Site acquired in March 2021. Planning application Epsom, London East Street refused by Epsom and Ewell Council and an appeal 58,000 PROPERTY REVIEW has been submitted Si
Slide 24: Our Portfolio
Our Portfolio BIG YELLOW GROUP HALF YEAR RESULTS KEY 85 Big Yellow stores (47 in London) 13 Big Yellow stores under development (9 in London) 24 Armadillo stores (1 in London) Outside London 65 stores and sites London 57 stores and sites PROPERTY REVIEW 24 24
Slide 25: Summary
Summary BIG YELLOW GROUP HALF YEAR RESULTS • A resilient performance with growth in revenue, net achieved rents and operating margin in a challenging macroeconomic, political and geo-political environment • Earnings impacted by one-off absorption of increase in operating and borrowing costs • We wil
Slide 26: Appendix
APPENDIX Hove, September 2022
Slide 27: Sustainability Update
Sustainability Update BIG YELLOW GROUP HALF YEAR RESULTS • We now have our Science-Based Targets fully verified to reinforce our pathways to 100% renewable energy and net zero carbon emission plan by 2032 • The solar retro-fit programme is projected to cost £20 to £25 million of which £10.4 million
Slide 28: Pathway To 100% Renewable Energy And Zero Carbon Emission Plan
BIG YELLOW GROUP Pathway To 100% Renewable Energy And Zero Carbon Emission Plan To 2030 & 2032 HALF YEAR RESULTS • 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 int
Slide 29: Solar Generation
Solar Generation BIG YELLOW GROUP HALF YEAR RESULTS Solar Retrofit Programme • 15 stores retrofitted with solar panels in 22/23 • Phase 2 of our retrofit programme was completed in the first half of this year with 8 stores retrofitted with solar • Phase 3 has commenced in this second half of the yea
Slide 30: Science-Based Targets
Science-Based Targets BIG YELLOW GROUP HALF YEAR RESULTS • Our Science-Based Targets are fully verified. These are as follows: − Big Yellow commits to reduce absolute Scope 1 and 2 GHG emissions 70% by FYE2032 from a FY2019-20 base year − Big Yellow also commits to reduce Scope 3 GHG emissions from
Slide 31: SBT Trajectories And Actions
SBT Trajectories And Actions BIG YELLOW GROUP HALF YEAR RESULTS SBT Scope 1&2 Emissions Trajectory 3500 3000 • Scope 1&2 are ahead of tracking for our 2032 mid-term target. 2500 We will continue to remove gas from the estate and install solar to reduce our reliance on grid bought power 2000 • Zero m
Slide 32: Social
Social BIG YELLOW GROUP HALF YEAR RESULTS • Several successful work placements through our charity partners and local colleges: • A young man with Down’s syndrome has been working at our Cardiff store since July 2022 • A female refugee working at our Tolworth store extended her placement to work in
Slide 33: Governance, ESG Investor Benchmarks, Standards and Campaigns
BIG YELLOW GROUP Governance, ESG Investor Benchmarks, Standards and Campaigns HALF YEAR RESULTS BENCHMARKS AND STANDARDS CAMPAIGNS CDP (Carbon Disclosure Project) • Official supporter of the TCFD (Task Force on Climate-related Financial Disclosures) since September 2021 • Big Yellow participated sin
Slide 34: Marketing And Sales Update
Marketing And Sales Update BIG YELLOW GROUP HALF YEAR RESULTS • Big Yellow has market-leading brand awareness – five times higher than the next nearest competitor • Continued investment in digital to drive prospect growth – key to our success with over 90% of prospects online, 66% of visits from mob
Slide 35: The Importance Of The Brand
The Importance Of The Brand BIG YELLOW GROUP HALF YEAR RESULTS • 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
Slide 36: Research Of Brand And Market Awareness
Research Of Brand And Market Awareness BIG YELLOW GROUP HALF YEAR RESULTS UNPROMPTED BRAND AWARENESS • YouGov commissioned survey by the UK Self Storage Association in January 2023 • Measures unprompted brand awareness • 2,102 adults sample APPENDIX • Statistically selected and weighted sample that
Slide 37: High Brand Awareness = High Online Market Share
High Brand Awareness = High Online Market Share BIG YELLOW GROUP HALF YEAR RESULTS • Over 90% of our prospects come from our digital platforms. 66% of web visits are from smartphones, 32% from desktop and laptop use with the remaining 2% of web visits from tablets (April 2023 to September 2023) APPE
Slide 38: Customer Insights
Customer Insights BIG YELLOW GROUP HALF YEAR RESULTS • 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 Pr
Slide 39: Social Media, PR And Display
Social Media, PR And Display BIG YELLOW GROUP HALF YEAR RESULTS • Targeted YouTube advertising to domestic and business audiences in need of APPENDIX self storage • ESG focussed social media content on Twitter, Instagram and Facebook • LinkedIn spotlights our company culture, employee development, r
Slide 40: Reasons For Using Self Storage
Reasons For Using Self Storage BIG YELLOW GROUP HALF YEAR RESULTS % of customer numbers by type Reasons people used our storage who moved-in during the six months Domestic 81% Travelling 6% 80% 5% Business 19% Student storage 19% 20% 17% Other 11% % of store space occupied by customer type 12% APPEN
Slide 41: National Customers
National Customers BIG YELLOW GROUP HALF YEAR RESULTS • Businesses can store at multiple locations nationwide through one dedicated point of contact APPENDIX • Our extended network of third party providers enables customers to have a single self storage supplier relationship • We provide a range of
Slide 42: Length Of Stay Of Customers Vacating
BIG YELLOW GROUP Length Of Stay Of Customers Vacating In Rolling 12 Months to 30 September HALF YEAR RESULTS 2023 9.4 2022 8.9 2021 8.0 2020 9.2 2019 8.6 2018 7.9 APPENDIX 2017 7.8 2016 7.3 Months 2015 6.9 2014 6.9 2013 7.3 2012 7.0 2011 7.2 2010 7.4 2009 8.6 2008 7.7 0 1 2 3 4 5 6 7 8 9 10 42 42
Slide 43: Customer Average Length Of Stay
Customer Average Length Of Stay BIG YELLOW GROUP HALF YEAR RESULTS AS AT NUMBER OF MONTHS 30/09/2023 0-3 YEARS >3 YEARS BIG ARMADILLO ALL STORES ALL STORES YELLOW 30/09/2022 No of Stores 10 75 84 24 109 108 Business Existing 10.8 37.8 35.8 39.7 36.1 34.0 APPENDIX Vacated 4.8 12.3 12.2 15.3 12.5 12.2
Slide 44: Self Storage Market
Self Storage Market BIG YELLOW GROUP HALF YEAR RESULTS 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 s
Slide 45: Track Record Since 2007-8
Track Record Since 2007-8 BIG YELLOW GROUP HALF YEAR RESULTS Occupancy(1) and Average Rate Revenue (£m) 90% £32.00 200 80% 180 70% £30.00 160 60% 140 CAGR – 8% £28.00 50% 120 40% 100 £26.00 30% 80 20% £24.00 60 10% 40 0% £22.00 20 APPENDIX 0 Occupancy (%) Average net rent (£ per sq ft) Adjusted EPS
Slide 46: Big Yellow Relative TSR Performance
Big Yellow Relative TSR Performance BIG YELLOW GROUP HALF YEAR RESULTS Big Yellow FTSE All Share FTSE 350 Real Estate 3,000 2,500 2,000 APPENDIX 1,517.3% (12.6% p.a.) 1,500 1,000 210.7% 500 (5.0% p.a.) 151.6% (4.0% p.a.) 0 2000 2002 2004 2006 2007 2009 2011 2013 2015 2017 2019 2021 2023 Source: Data
Slide 47: Big Yellow Portfolio
Kings Cross, June 2023 Harrow, September 2022 MLA - 10% ft MLA - 82000 sq ft MLA - 560 Hove, March 2022 MLA - 58000 sq ft Q (7) < m c ° = v 8 sa nm ° —) ° = 5 Bracknell, September 2020 Camberwell, July 2020 Manchester, May 2019 Wapping, July 2018 Guildford Central, March 2018 MLA ~59000 sq ft MLA -
Slide 48: Big Yellow Portfolio
[i cca i a 2 Twickenham 2, April 2016 Nine Elms, April 2016 Cambildge, January 2016 Enfield, April 2015 ‘Chester, February 2015 Oxtord 2, July 2014 MLA - 22000 sqft MLA -65,000 sqtt MLA ~60000 sqft MLA ~ 60,000 sqtt MLA-€,0005q ft MIA - 35,000sqit Gypsy Corner, April 2014 Chiswick, April 2012 ~~ Now
Slide 49: Big Yellow Portfolio
——— 6) lg cx) (num i Reception id — y i Eas fee | : ki ST i _ L = Kennington, May 2008 Merton, March 2008 Fulham, March 2008 Balham, March 2008 Barking, November 2007 Ealing Southall, November 2007 MLA - 66,000 sqft MILA - 70000 sq ft MLA ~ 138000 sq ft MLA - 61000 sqft MLA - 64000 sq ft MLA - 57000
Slide 50: Big Yellow Portfolio
=: = = 4 «| West Norwood, January 2003 Colchester, December 2002 MLA - 54000sq ft : fo ae Bow, November 2002 Brighton, October 2002 Guildford Stytield, June 2002 New Malden, May 2002 MLA - 132,000 sq ft MLA - 59000 sq ft MLA - 55,000 sq ft MLA - 81000 sq tt MLA - 57,000sq ft Iiford, November 2001 Ca
Slide 51: Armadillo Portfolio
Dundee Gateshead MLA -39000sqtt MLA - 46000sq tt Canterbury Daventry MLA- %,000sqit MLA -26000sq ft Liverpool Aintree Liverpool Bootle Liverpool South Macclesfield MLA - 40000 sq tt MLA - 49,000 sq tt MLA -35000sq tt MLA -50000sq ft MLA - 63000sq tt s- O104LYOd OTIIGVINYY Newcastle Peterborough Plym
Slide 52: Disclaimer
Disclaimer BIG YELLOW GROUP FULL YEAR RESULTS 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 materi