Big Yellow Group PLC · LSE:BYG
Big Yellow — FY2022 Earnings Presentation
58 slides from Big Yellow's earnings presentation, May 2022
Slide 1: Results for the Year ended 31 March 2022
Big Yellow Group PLC Results for the Year ended 31 March 2022
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 performed well during the pandemic • Self storage is more part of the ecosystem
Slide 3: Key Metrics
Key Metrics 2022 2021 Revenue £171.3 million £135.2 million 27% Like-For-Like Store Revenue £148.1 million £131.1 million 13% Cash Flow From Operating Activities (After Net Finance Costs) £107.1 million £76.7 million 40% Adjusted Profit before Tax £96.8 million £74.6 million 30% EPRA Earnings Per Sh
Slide 4: Key Operational Metrics
Key Operational Metrics 2022 2021 Occupancy Growth in the Year (Sq Ft) 906,000 sq ft 420,000 sq ft 116% Closing Occupancy 83.7% 85.2% (1.5 ppts) Occupancy Like-For-Like Stores 86.7% 87.4% (0.7 ppts) Average Occupancy 86.7% 83.2% 3.5 ppts Closing Net Rent Per Sq Ft £29.92 £28.71 4% Like-for-Like Aver
Slide 5: Highlights
Highlights • Revenue growth for the year was 27%, which includes nine months of revenue from the acquired Armadillo stores. Like-for-like store revenue is up 13%, driven by gains in average occupancy and the improvement in average net rent • Average occupancy increase of 3.5 ppts, with like-for-like
Slide 6: Armadillo update
Armadillo update • Purchased remaining 80% interest on 1 July 2021, 25 stores and 1.1 million sq ft of MLA • The Cheadle store (104,000 sq ft MLA) destroyed by arson in February, five years remaining on lease, fully insured with four years loss of income. Negotiations with the landlord ongoing for r
Slide 7: Operations Update
Operations Update • Maintained our focus on Wellbeing, Inclusivity and Diversity, employee survey in the year delivered a strong eNPS and engagement score • Responded to engagement survey with changes such as flexible working at our head office, reduced store reception opening hours, and lone tradin
Slide 8: 2022 Self Storage Association Survey
2022 Self Storage Association Survey • Only 2.3% of those surveyed were currently using self storage and 6.2% were thinking of using self storage in the next year (source: SSA YouGov Survey January 2022) • Increasing customer repeat use and referrals with 41% of customers having used self storage be
Slide 9: Monthly Activity
Monthly Activity • Activity levels in prior year significantly impacted by lockdown in April to June 2020 • Strong demand from domestic customers in first quarter this year in part due to stamp duty holiday • Spike in move-outs in July and October 2021 – short term domestic users around stamp duty h
Slide 10: Daily Storage Revenue Growth
Daily Storage Revenue Growth • Graph shows Big Yellow stores only • Occupancy the main driver of revenue growth last year, rate impacted in 2020 by suspension of price increases during Spring lockdown • Significant rate growth this year, with pricing model driven by scarcity, increases in asking pri
Slide 11: Financial Review
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Slide 12: Portfolio Summary
Portfolio Summary • Portfolio summary showing Big Yellow and Armadillo stores • Big Yellow average occupancy increased from 83.2% in 2021 to 86.9% in 2022. Like-for-like closing occupancy down 0.7 ppts to 86.7% • Big Yellow closing net rent up 10% to £31.71, average rate up 8% • Big Yellow like-for-
Slide 13: Portfolio Summary
Portfolio Summary March 2022 March 2021 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 8 81 24 105 73 5 78 25 103 At 31 March: Total Ca
Slide 14: Rental Growth Analysis
Rental Growth Analysis Average occupancy Number of Net rent per sq ft growth from Net rent per sq ft growth from in the year stores April 2021 to March 2022 April 2020 to March 2021 75% to 85% 24 10.8% 1.3% 85% to 90% 49 11.7% 2.5% Above 90% 24 13.0% 4.4% • Table shows the change in net rent per sq
Slide 15: Store Operating Expenses
Store Operating Expenses • Restated for Big Yellow and Armadillo combined Category Year Ended Year Ended % % of store • Operating costs up by £3.1 million (7%) 31.03.22 31.03.21 change operating • New store openings account for nearly £000 £000 costs in half the increase – £1.4 million 2022 • Cost o
Slide 16: Consolidated Income Statement
Consolidated Income Statement Year Ended 31.03.22 31.03.21 £m £m Revenue 171.3 135.2 • Revenue up 27%, like-for-like store revenue up 13% Cost Of Sales (50.4) (41.6) • Admin expenses increase includes £0.4 million of non- recurring acquisition costs written off (on Armadillo) Admin Expenses (14.3) (
Slide 17: Adjusted PBT Bridge
Adjusted PBT Bridge Increase in Reduction in Reduction in Increase Increase in net share of capitalised in gross administrative profit \ expenses \ interest adjusted interest profit of payable associates £27.3m £1.8m £2.6m £0.6m £0.1m £96.8m Adjusted PBT £74.6m 31 March Adjusted 2022 PBT 31 March 20
Slide 18: Cash Flow and Net Debt Movement
Cash Flow and Net Debt Movement Year Ended 31.03.22 31.03.21 £m £m Opening Net Debt (325.0) (350.6) Operating Cash Flow 120.4 87.1 Interest (Net) (10.8) (8.8) • Operating cash flow after net finance costs increased by Obligations under lease liabilities (0.9) (0.8) 40%, reflecting increase in profit
Slide 19: Capital Structure
Capital Structure 31.03.22 31.03.21 Net Debt / Gross Property Assets 16% 18% Net Debt / Adjusted Net Assets 18% 21% Net Debt / Market Capitalisation 15% 17% Pre-Interest Operating Cash Flow Cover 10.5x 9.9x • Balance sheet gearing ratios lower than prior year, albeit with higher absolute levels of d
Slide 20: Debt Facilities
Debt Facilities 31 March 2022 Debt Expiry Facility Drawn Average Interest Cost Aviva Loan September 2028 £161.9 million £161.9 million 3.5% M&G Loan June 2023 £120 million £120 million 2.9% Revolving Bank Facility (Lloyds, HSBC and B of I) October 2024 £240 million £99 million 2.7% Armadillo Bank Lo
Slide 21: Property Review
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Slide 22: New Site Development
New Site Development New Store Openings Store MLA Opening date Occupancy at 23 May 2022 Uxbridge 54,000 sq ft June 2021 75% Hayes 73,000 sq ft January 2022 21% Hove 58,000 sq ft March 2022 22% • Planning consent received since April 2021 on Slough and Newcastle. Seven of the twelve development sites
Slide 23: Development Pipeline – With Planning
Development Pipeline – With Planning Site Location Status Anticipated Capacity Sq Ft Harrow, Prominent location on Harrow View Planning consent granted in November 2020. Construction commenced in 82,000 London May 2021 with a view to opening in Summer 2022. North Kingston, Prominent location on Rich
Slide 24: Development Pipeline – Without Planning
Development Pipeline – Without Planning Site Location Status Anticipated Capacity Sq Ft Wapping, Prominent location on the Site acquired in July 2020. Planning application submitted in November Additional 95,000 London Highway, adjacent to existing 2021. Big Yellow store Staines, Prominent location
Slide 25: Stores Under Development
Kings Cross, under construction Newcastle, planning granted Stores Under Development Harrow, under construction Wembley, planning granted Wapping, proposed North Kingston, under construction Queensbury, planning granted Staines, proposed Slough, planning granted Kentish Town, proposed 25
Slide 26: Our Portfolio March 2022
Our Portfolio 31 March 2022 26
Slide 27: Strategic Summary
Strategic Summary • Strong results driven by a combination of average occupancy and rate growth • Significantly increased macro-uncertainty since our half year results • We are confident in our business model, having successfully navigated two crises since the GFC ‒ Our stores are at high levels of
Slide 28: Appendix
APPENDIX Sustainability Marketing Review Additional Operational and Financial Information Store Portfolio 28
Slide 29: 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 30: 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 31: Armadillo Programme Of Works
Armadillo Programme Of Works Immediately • Upgrade energy metering infrastructure and integrate with current Big Yellow platform by summer 2022 • Review EPC performance and refresh certificates where necessary – 10 EPCs commissioned for year ending 31 March 2023 • Four gas boilers removed, five remo
Slide 32: Decarbonising Our Business to March 2022
Decarbonising Our Business to March 2022 Scope 1 & Scope 2 carbon dioxide emissions (tCO2e) • All electricity, gas and solar data now includes Armadillo – we have restated to include Armadillo (where possible) from the year ended 3,200 3,100 3,159 31 March 2020 3,000 2,900 2,800 2,805 • Due to the m
Slide 33: Social
Social • Three successful work placements, two of which have been extended by a further 3 months • Maidenhead: one individual placed by the Down’s Syndrome Association. Extended • Swindon: one individual placed by the Down’s Syndrome Association • Battersea: one individual placed by Breaking Barrier
Slide 34: 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 B in 2021 Campaigns Big Yellow recognised as a Supplier Engagement Leader for the second year Official supporter of the TCFD (Task F
Slide 35: Marketing and Sales Update
Marketing and Sales Update • Big Yellow has market-leading brand awareness – over five 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 acq
Slide 36: 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 37: Research of Brand and Market Awareness
Research of Brand and Market Awareness • YouGov commissioned survey by the UK Self Storage Association in January 2022 • Measures unprompted brand awareness • 2,057 adults sample size • Statistically selected and weighted sample that represents a sample of the demographics of the adult UK population
Slide 38: 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 2021 to March 2022) • A significant proportion of these web visits come from
Slide 39: 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 40: 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 41: Local Economy Value of Business Customers
Local Economy Value of Business Customers • External business survey previously commissioned to assess impact of average Big Yellow store on the local economy • 37% of the Group’s space is occupied by business customers • The average store has over 100 different businesses who between them employ 30
Slide 42: 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 43: Reasons for Using Self Storage
Reasons for Using Self Storage Overall Occupied Space 31 March 2022 Demand Profile of Move-ins only April 2021 to March 2022 April 2020 to March 2021 Moving Owner Occupied 23% Moving Rental Sector 16% Other 14% Business storage 14% Decluttering 13% Student storage 9% Home improvements 6% 43 Travelli
Slide 44: Length of Stay of Customers Vacating in Financial Year
Length of Stay of Customers Vacating in Financial Year 44
Slide 45: Customer Average Length of Stay
Customer Average Length of Stay As at Stores (No of Months) 31/03/2022 0-3 Years >3 Years Big Armadillo All Big Yellow Yellow Stores Stores 31/03/2021 Business Existing 35.5 33.6 31.3 8.2 34.5 33.1 Vacated 3.7 11.8 11.8 14.4 12.1 11.8 Total 6.0 14.0 13.9 17.0 14.2 13.7 Domestic Existing 22.4 27.4 26
Slide 46: 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 47: 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 48: Per Store Analysis
Per Store Analysis Year Ended 31 March 2022 Established Developing Armadillo All Stores Stores Stores Stores Average Store Capacity 63,550 59,750 40,875 58,075 Average Sq Ft Occupied Per Store 55,165 33,125 33,960 48,640 Average % Occupancy 86.8% 55.4% 83.1% 83.7% Average Revenue Per Store (£000) 2,
Slide 49: Track Record Since 2007
Track Record Since 2007 • 3.6 million sq ft increase in MLA capacity and 3.3 million sq ft increase in occupied space from 1 April 2007 to 31 March 2022 • Revenue for March 2022 more than tripled since 2008 to £171.3 million • More than fourfold increase in adjusted EPS since 2008 to 52.5p and more
Slide 50: Track Record Since 2007
Track Record Since 2007 Revenue Occupancy 180.0 90% 160.0 80% 140.0 70% 120.0 60% 100.0 50% 80.0 40% 60.0 30% 40.0 20% 20.0 10% 0.0 0% 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 Avg annual rent
Slide 51: Big Yellow Relative TSR Performance
Big Yellow Relative TSR Performance Big Yellow FTSE All Share FTSE 350 Real Estate 3,000 2,401.0% 2,500 (15.8% p.a.) 2,000 1,500 1,000 500 276.9% (6.2% p.a.) 197.6% (5.1% p.a.) 0 2000 2002 2004 2006 2009 2011 2013 2015 2017 2020 2022 Source: Datastream as at 31 March 2022 51
Slide 52: Store Portfolio: Hove, Hayes, Uxbridge and earlier stores
Hove, March 2022 Hayes, January 2022 Uxbridge, June 2021 MLA - 58000sqft MLA -73000 sq ft MLA - 54,000 sq ft or A x = nl —=_-—~S Battersea, November 2020 Bracknell, September 2020 Camberwell, July 2020 Manchester, May 2019 Wapping, July 2018 Guildford Central, March 2018 MLA -70000saft MLA - 590005q
Slide 53: Store Portfolio: Twickenham 2, Nine Elms, Cambridge and others
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 54: Store Portfolio: Kennington, Merton, Fulham and others
‘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 55: Store Portfolio: West Norwood, Colchester, Bow and others
= 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
Slide 56: Armadillo Stores: Canterbury, Exeter, Gateshead and others
Canterbury Exeter Gateshead MLA - 35 000sqit MLA - 33000 sq tt MLA - 46000sq tt Tce Mi | Liverpool Aintree Liverpool Bootle Liverpool South Macclesfield MLA - 49,000 sq ft MLA - 35000 sq ft MLA - 50000sqft MLA - 63000 sq ft He GAD, Newcastle Peterborough Plymouth Shettield Parkway Sheffield West Bar
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Slide 58: 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