Half Year 2026 Shurgard Self Storage Ltd Earnings Call Transcript
Key Points
- Revenue growth accelerated in Q2 2026 to 3.6% year-over-year, up from 3.1% in Q1, driven by strong momentum in the U.K. and Germany.
- The non-same-store portfolio contributed EUR4.7 million in incremental revenue and EUR0.8 million in NOI, demonstrating the earnings potential of recent developments and acquisitions.
- The secured pipeline of 170,000 square meters is expected to deliver EUR35 million in additional NOI at maturity, with new projects approved since February 2026 targeting a 9-10% NOI yield.
- The former Lok'nStore portfolio reached its guided target of 110,000 square meters rented by early August 2026, with move-in rates continuing to grow.
- The balance sheet remains strong with low leverage (6.5x net debt/EBITDA), LTV below 24%, and EUR795 million in committed liquidity, supporting the development program.
- Management has implemented several EPS-accretive measures, including discontinuing the scrip dividend, increasing hurdle rates, and requiring EPS accretion for M&A deals.
- The clusterization of stores is nearly complete, with the U.K. finished and France expected by Q4 2026, leading to labor cost savings.
- Same-store revenue in the U.K. turned positive in June, July, and early August, indicating a recovery trend.
- The company maintains a strong BBB+ rating from S&P with a stable outlook and 100% unencumbered assets.
- The European call center rollout is expected to improve sales conversion and operational efficiency by October 2026.
- Revenue growth was slower than anticipated, leading to a downward revision of the 2026 all-store revenue growth guidance to 3.5-4.5%.
- NOI margin declined by 1.7 percentage points in H1 2026 due to higher payroll, real estate taxes, marketing, and other operating expenses.
- Adjusted EPRA earnings per share decreased by 5.7% to EUR0.77, impacted by higher interest expenses and share dilution from the 2025 scrip dividend.
- The company has not reaffirmed its medium-term guidance, citing the current operating environment and a need for more visibility.
- Same-store revenue growth remains modest, with the 2025 same-store pool contributing only EUR1.9 million in incremental revenue.
- France and Belgium are experiencing flat performance due to aggressive pricing and competitive pressures, respectively.
- Increased competition in the U.K. and Germany has forced more aggressive pricing and higher marketing spend, pressuring margins.
- The company expects higher marketing costs to continue in H2 2026, which could further impact profitability.
- The pipeline delivery is subject to phasing risks, with some projects potentially slipping into 2027.
- M&A activity is limited by a disconnect between seller expectations and the company's requirement for EPS accretion in the first full year.
Ladies and gentlemen, welcome to Shurgard H1 2026 results earnings call. (Operator Instructions)
I will now hand over the conference to Caroline Thirifay at Shurgard. Please go ahead.
Good morning, everyone. Thank you for joining us for the Shurgard H1 2026 results. I'm here with Marc Oursin and Thomas Oversberg.
Before we begin, we want to remind you that all statements other than statements of historical fact included in this call are forward-looking statements. Forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those projected by the statements. These risks and other factors could adversely affect our business and future results that are described in our earnings release and in our publicly reported information. You can find our press release as well as a replay of this webcast on our website at shurgard.eu.
With that, I will now turn the call over to Marc.
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