In This Article:
Release Date: February 28, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
-
Shurgard Self Storage Ltd (SSSAF) achieved a significant total revenue growth of 13% for the full year 2024, surpassing guidance.
-
The company maintained high occupancy levels, reaching almost 90% over the year, with a consistent positive growth of around 5% for six consecutive quarters.
-
Net operating income (NOI) grew by 12.2% year-over-year, reflecting the scalability of Shurgard's platform and the impact of digitalization.
-
Shurgard's acquisition of Lok'nStore in the UK and other portfolios in Germany contributed to strong revenue growth, with UK and Germany revenues increasing by 47.3% and 43.7%, respectively.
-
The company successfully issued its first bond of EUR500 million with a fixed coupon of 3.625% for 10 years, securing long-term financing and maintaining a strong balance sheet with an investment-grade BBB+ rating from S&P.
Negative Points
-
Interest expenses increased significantly to EUR30 million due to additional debt for major acquisitions, impacting financial costs.
-
Adjusted EPRA earnings per share decreased by 3% compared to 2023, partly due to the dilution impact from equity raises and scrip dividends.
-
The effective tax rate is expected to increase to approximately 18.5% in 2025, up from the 2024 rate of circa 17%.
-
Despite strong revenue growth, the net debt to EBITDA ratio remains relatively high at 6.2 times, indicating a need for continued financial discipline.
-
Interest expenses are projected to rise further to around EUR50 million in 2025, reflecting the long-term financing of investments, which could pressure profitability.
Q & A Highlights
Q: Can you elaborate on the revenue growth drivers for 2024? A: Marc Oursin, CEO, explained that the revenue growth of 13% for 2024 was driven by high performance from same stores across all markets and strategic acquisitions in the UK and Germany. The same store revenue growth of 4.8% was primarily due to a 5.2% increase in in-place rent and maintaining high occupancy levels at nearly 90%.
Q: How did the recent acquisitions impact financial performance? A: Thomas Oversberg, CFO, noted that the acquisitions, particularly Lok'nStore in the UK, significantly contributed to revenue growth, with the UK and Germany seeing revenue increases of 47.3% and 43.7%, respectively. The integration of Lok'nStore was smooth, with occupancy increasing from 67% to 72% by December 2024, and the acquisition is expected to be earnings accretive from 2025.