Big Yellow Group PLC · LSE:BYG
Big Yellow — FY2021 Earnings Presentation
58 slides from Big Yellow's earnings presentation, March 2021
Slide 1: Big Yellow Group PLC Results for the Year ended 31 March 2021
Big Yellow Group PLC Results for the Year ended 31 March 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 in the current crisis • Self storage is more part of the ecos
Slide 3: Key Metrics
Key Metrics 2021 2020 Closing Like-for-Like Occupancy 87.4% 80.7% 6.7 ppts Occupancy Change In Year 420,000 sq ft (29,000 sq ft) 449,000 sq ft Average Achieved Net Rent Per Sq Ft £28.16 £27.86 1.1% Revenue £135.2 million £129.3 million 4.6% Like-For-Like Store Revenue £131.2 million £125.1 million 4
Slide 4: Highlights
Highlights • 4.6% revenue increase largely driven by increase in average occupancy • Store revenue for the fourth quarter was £33.8 million, an increase of 9.7% from £30.8 million for the same quarter last year • Average rate up 1.1% year-on-year. Like-for-like closing store occupancy 87.4% (2020: 8
Slide 5: Monthly Activity
Monthly Activity Monthly move-ins Monthly move-outs 9,000 12,000 8,000 10,000 7,000 6,000 8,000 5,000 6,000 4,000 3,000 4,000 2,000 2,000 1,000 0 0 Move-ins 2019 Move-ins 2020 Move-ins 2021 Move-outs 2019 Move-outs 2020 Move-outs 2021 • Activity levels significantly impacted by lockdown in April to
Slide 6: Operations Update
Operations Update • Significant investment to keep customers and employees safe, fully compliant with Covid protocols. • Investment in automated access and contactless check-in was of significant benefit during lockdowns • Increased investment and focus on Wellbeing, Inclusivity and Diversity • Stor
Slide 7: 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, 62% of visits from mobile devices • Reducing cost of acquis
Slide 8: Financial Review
wen FINANCIAL REVIEW
Slide 9: Portfolio Summary
Portfolio Summary • Like-for-Like closing occupancy 87.4%, an increase of 6.7 ppts • Closing net rent up 2.0% from 31 March 2020, average rate up 1.1% • Like-for-like store revenue up 4.9% • Fourth quarter store revenue up 9.7% • Store operating expenses up £2.5 million (see slide 14) • Store EBITDA
Slide 10: Portfolio Summary – Big Yellow Stores
Portfolio Summary – Big Yellow Stores March 2021 March 2020 Mature Established Developing Total Mature Established Developing Total >6 years 3-6 years <3 years >6 years 3-6 years <3 years Number Of Stores 70 2 6 78 70 2 3 75 At 31 March: Total Capacity (Sq Ft) 4,457,000 124,000 349,000 4,930,000 4,4
Slide 11: Monthly Storage Revenue Growth
Monthly Storage Revenue Growth • Occupancy the main driver of revenue growth this year, after a Brexit impacted 2019 • Rate was impacted by suspension of existing customer price increases and higher promotions during the first lockdown • We expect rate to make more of a contribution to revenue growt
Slide 12: Rental Growth Analysis
Rental Growth Analysis Average occupancy Number of Net rent per sq ft growth from in the year stores April 2020 to March 2021 0 to 75% 3 2.0% 75 to 80% 8 0.2% 80 to 85% 33 1.6% Above 85% 31 3.1% • The above analysis is a straight average rather than a weighted average, and excludes newly opened Camb
Slide 13: Billed Rent Per Sq Ft – New Customer Move-Ins
Billed Rent Per Sq Ft – New Customer Move-Ins £35.00 • Billed rent represents the price £34.00 paid per sq ft by customers before any opening offer promotions, £33.00 which roll off after 8 weeks £32.00 • The fall from March to April 2020 was due to a rush of student move- £31.00 ins in March, takin
Slide 14: Store Operating Expenses
Store Operating Expenses • One-off items in prior year were a Category Year Ended Year Ended % % of store rates rebate on a store, and a 31.03.21 31.03.20 change operating significant backdated utilities recharge to our telecom mast £000 £000 costs in provider 2021 Cost of Sales 3,096 2,791 11% 8% •
Slide 15: Consolidated Income Statement
Consolidated Income Statement Year Ended 31.03.21 31.03.20 £m £m Revenue 135.2 129.3 • Revenue up 4.6%, like-for-like store revenue up 4.9% Cost Of Sales (41.6) (38.9) • Revaluation gain driven by operating performance Admin Expenses (12.1) (10.4) (55% of gain) and cap rate compression (45% of gain)
Slide 16: Adjusted PBT Bridge
Adjusted PBT Bridge Reduction Increase in Increase Increase in Increase in share of in gross in net administrative capitalised profit interest \ expenses adjusted profit of interest payable associates £3.2m £1.2m £1.7m £0.3m £0.6m £74.6m £71.0m Adjusted Adjusted PBT PBT 31 March 31 March 2021 2020 •
Slide 17: Cash Flow and Net Debt Movement
Cash Flow and Net Debt Movement Year Ended 31.03.21 31.03.20 £m £m Opening Net Debt (350.6) (319.7) Operating Cash Flow 87.1 85.1 • Free cash flow increased by 4.2% Interest (Net) (8.8) (10.2) Obligations under lease liabilities (0.8) (0.8) • Capex − Purchase of land at Wapping, Staines Tax (0.8) (0
Slide 18: Capital Structure
Capital Structure 31.03.21 31.03.20 Net Debt / Gross Property Assets 18% 23% Net Debt / Adjusted Net Assets 21% 28% Net Debt / Market Capitalisation 17% 21% Pre-Interest Operating Cash Flow Cover 9.9x 8.3x 31 March 2021 Debt Expiry Facility Drawn Average Interest Cost Aviva Loan April 2027 £114.8 mi
Slide 19: Armadillo Portfolio Performance
Armadillo Portfolio Performance 2021 2020 Number Of Stores 25 25 At 31 March: Total Capacity (Sq Ft) 1,083,000 1,063,000 Occupied Space (Sq Ft) 908,000 799,000 Percentage Occupied 83.8% 75.2% • Occupancy increase of 8.6 ppts, closing occupancy 83.8% Net Rent Per Sq Ft £18.38 £17.84 • Growth in closi
Slide 20: Sustainability
SUSTAINABILITY 20
Slide 21: 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 to be published with our Annual Report in June 2021 • Total medium term investmen
Slide 22: 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 as w
Slide 23: Timeline to 2030
Timeline to 2030 To date 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 Continue to deliver energy efficiency and reduction activities Energy efficiency initiative Decommission gas boilers in stores and head office implemented: LED Lighting Motion sensors Battery and buying Roll out of battery; o
Slide 24: Decarbonising Our Business to March 2021
Decarbonising Our Business to March 2021 CARBON INTENSITY (PER CLA SQ M) 14 12.7 12 9.7 • Carbon Emission intensity – a reduction from the prior year of 10 8 6.1 12.7% at 4.8 per m² CLA (top graph) 6 5.5 4.8 4 2 • 15% increase in renewable energy generated from Solar PVs 0 (bottom graph) 2017 2018 2
Slide 25: Social
Social • London Children’s Ballet has occupied the studio space at our new Battersea store, under our Section 106 Social Agreement with Wandsworth Borough Council • Big Yellow matched donations – and Director cash gifts of £61k has mitigated any loss of Foundation income due to the Pandemic • Founda
Slide 26: ESG Investor Benchmarks & ESG Standards
ESG Investor Benchmarks & ESG Standards CDP (Carbon Disclosure Project) Big Yellow participated since 2012; achieved our first A- in 2020 Big Yellow recognised as a Supplier Engagement Leader GRESB (Global Real Estate Sustainability Benchmark) Big Yellow participated since 2014 Big Yellow shows reco
Slide 27: Property Review
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Slide 28: New Site Development
New Site Development New Store Openings Store MLA Opening Date Occupancy at 31 March 2021 EBITDA Break Even Date Camberwell 75,000 sq ft July 2020 38% March 2021 Bracknell 59,000 sq ft September 2020 40% March 2021 Battersea 70,000 sq ft November 2020 26% April 2021 • Planning consent received since
Slide 29: Development Pipeline – With Planning
Development Pipeline – With Planning Site Location Status Anticipated Capacity Sq Ft Uxbridge, Prominent location on Oxford Road Planning consent granted in July 2019. Construction started in June 2020 with 54,000 London a view to opening in June 2021. Hayes, London Prominent location on Hayes Road
Slide 30: Development Pipeline – Without Planning
Development Pipeline – Without Planning Site Location Status Anticipated Capacity Sq Ft Slough Prominent location on Bath Site acquired in April 2019. Planning application submitted in March 90,000 Road 2021. Staines, London Prominent location on the Site acquired in December 2020. Planning applicat
Slide 31: Development sites with planning status
Uxbridge, planning granted North Kingston, planning granted Slough, proposed Hayes, planning granted Kings Cross, planning granted Newcastle, proposed Harrow, planning granted Wembley, planning granted Wapping, proposed Hove, planning granted Queensbury, planning granted Staines, proposed 31
Slide 32: Our Portfolio May 2021
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Slide 33: Strategic Summary
Strategic Summary • A challenging year in which we have delivered a strong occupancy performance with like-for-like growth of 6.7 ppts, and 87.4% occupancy • We expect to see more rate growth in 2021/22 as a contributor to revenue growth given the starting occupancy level • The reopening of the econ
Slide 34: Appendix
APPENDIX Operations Additional Financial Information Marketing Review Operations Store Portfolio 34
Slide 35: Covid-19 Operational Response
Covid-19 Operational Response • Self storage forms an important part of the storage and distribution network and has remained open throughout the pandemic • Stores provide automated access for existing customers and our digital platform allows remote check-in, minimising time in stores • Invested in
Slide 36: Per Store Analysis
Per Store Analysis Year Ended 31 March 2021 70 Mature 2 Established 6 Developing All 78 Stores Stores Stores Stores Average Store Capacity 63,650 62,000 58,200 63,200 Average Sq Ft Occupied Per Store at 31 March 2021 56,000 54,000 28,500 53,850 Average % Occupancy 88.0% 87.1% 49.0% 85.2% Average Rev
Slide 37: Track Record Since 2007
Track Record Since 2007 • 2.4 million sq ft increase in MLA capacity and 2.4 million sq ft increase in occupied space from 1 April 2007 to 31 March 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 more
Slide 38: Big Yellow Relative TSR Performance
Big Yellow Relative TSR Performance Big Yellow FTSE All Share FTSE 350 Real Estate 2,500 2,000 1,670.9% (14.7% p.a.) 1,500 1,000 500 211.9% (5.6% p.a.) 163.3% (4.7% p.a.) 0 2000 2002 2004 2006 2008 2010 2012 2014 2017 2019 2021 Source: Datastream as at 31 March 2021 38
Slide 39: Armadillo Self Storage
Armadillo Self Storage • A lower frills brand in smaller towns and cities – Big Yellow own 20% • 10 store Armadillo platform acquired in April 2014, an additional 4 stores acquired in January 2015, a further 2 stores acquired in April 2016, a further 3 stores acquired in April 2017, 1 store in Decem
Slide 40: 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 75% first time users– the interaction at the prospect stage t
Slide 41: 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 42: High Brand Awareness = High Online Market Share
High Brand Awareness = High Online Market Share • Over 90% of our prospects came from our digital platforms. 62% of web visits are from smartphones, with an increase in desktop use to 33%, driven by working from home • A significant proportion of these web visits come from people searching for our b
Slide 43: 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 44: 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 45: 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 46: 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 47: 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 48: Reasons for Using Self Storage
Reasons for Using Self Storage Overall Occupied Space 31 March 2021 Demand Profile of Move-ins only April 2020 to March 2021 April 2019 to March 2020 Moving Owner Occupied 20% Moving Rental Sector 19% Other 13% Business storage 12% Student storage 12% Decluttering 12% Home improvements 6% 48 Travell
Slide 49: Length of Stay of Customers Vacating in Financial Year
Length of Stay of Customers Vacating in Financial Year 49
Slide 50: Customer Average Length of Stay
Customer Average Length of Stay As at Stores (No of Months) 31/03/2021 0-3 Years 3-6 Years >6 Years Portfolio 31/03/2020 No of Stores 6 2 70 78 75 Business Existing 7.7 19.3 32.6 31.3 33.2 Vacated 4.6 6.6 11.8 11.8 11.6 Total 6.2 9.4 13.8 13.7 13.7 Domestic Existing 6.2 15.7 27.2 26.1 26.3 Vacated 3
Slide 51: 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 52: 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 53: Recent store openings
Battersea, November 2020 Bracknell, September 2020 ‘Camberwell, July 2020 MLA -70000sq ft MLA - 59000 sqft MLA -75000sqit Manchester, May 2019 ~ Wapping, July 2018 - Guildford Central, March 2018 MLA - 60,000 sq ft MLA - 26,000 sqft MLA - 55000 sat
Slide 54: Store portfolio by opening date
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 55: Store portfolio by opening date
‘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 56: Store portfolio by opening date
= 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 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