Earnings Release • Feb 12, 2020
Earnings Release
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Self Storage Group ASA
| Highlights | 2 |
|---|---|
| Key Figures |
2 |
| Financial development |
3 |
| Strategy | 9 |
| Corporate developments |
11 |
| Risks and uncertainty factors |
11 |
| Outlook | 12 |
| Financials | 13 |
| Alternative performance measures (APMs) |
29 |
The fourth quarter ended a positive and busy year with solid revenue and EBITDA growth, development of new facilities, accretive M&A activities and total value of freehold investment property exceeding beyond NOK one billion.
| Q4 | Q4 | Full year | Full year | |
|---|---|---|---|---|
| (Amounts in NOK million) | 2019 | 2018 | 2019 | 2018 |
| Revenue | 71.9 | 60.8 | 266.5 | 238.4 |
| Lease expenses | 1.5 | 17.7 | 11.8 | 71.5 |
| Total other operating expenses | 29.1 | 23.4 | 103.3 | 93.1 |
| Total adjustments | 0.7 | - | 4.7 | 1.9 |
| Adjusted EBITDA | 41.9 | 19.7 | 156.0 | 75.7 |
| Adjusted EBITDA ex IFRS 16 | 24.6 | 19.7 | 93.1 | 75.7 |
| Adjusted EBIT | 38.1 | 17.2 | 143.9 | 65.2 |
| Change in fair value of investment properties | 12.5 | 35.7 | 17.5 | 38.2 |
| Change in fair value of leasehold properties | - 14.7 | - | - 55.2 | - |
| Adjusted Profit before tax | 28.1 | 52.7 | 80.3 | 100.3 |
| Adjusted Profit before tax ex IFRS 16 | 30.7 | 52.7 | 91.4 | 100.3 |
| Adjusted Net Profit | 24.1 | 43.3 | 65.5 | 81.1 |
| Current lettable area (in thousands m2) | 137.5 | 117.0 | 137.5 | 117.0 |
| Lettable area under development (in thousands m2) |
21.3 | 13.4 | 21.3 | 13.4 |
1Non-GAAP measures are defined on page 29
The underlying financial development in Q4 2019 was solid with an adjusted EBITDA-growth of 25%, excluding impacts of IFRS 16. SSG has a significant number of long-term leasehold agreements, that according to IFRS 16 are treated as financial leases. The new accounting standard was implemented with effect from 1 January 2019 using the modified retrospective approach. See note 2 for description.
Adjusted EBITDA for Q4 2018 vs Q4 2019, including impact of IFRS 16, is visualised below.
Revenue for Q4 2019 was NOK 71.9 million, an increase of NOK 11.1 million from Q4 2018. The increase in revenue is related to the acquisition of Eurobox, which is consolidated from 1 July 2019, growth in lettable area through opening of new facilities and expansions, growth in occupancy for facilities opened the last years, and increased revenue from mature sites with higher average rent per m2 . Increased revenue from the CSS-segment amounts to NOK 8.2 million, of which NOK 5.5 million is related to self-storage revenue from Eurobox. Increased revenue from the OKM-segment amounted to NOK 1.7 million. In addition SSG had NOK 1.3 million in increased revenue in income from segments other than self-storage.
NOK 6.0 million of the revenue in Q4 2019 is attributable to distribution of insurance, ancillary services and rent income from segments other than self-storage, an increase from NOK 1.3 million in Q4 2018. The increase is mainly related to income from office-tenants following the acquisition of properties in 2019. The income from office tenants fluctuates due to contracts expire and office-space converted to self-storage.
Revenue for full year 2019 increased by NOK 28.1 million to NOK 266.5 million compared with full year 2018. NOK 244.6 million is income from the rental of self-storage. Income from self-storage increased by NOK 26.4 million compared with full year 2018. NOK 12.0 million of the increase is revenue from Eurobox, which was acquired in July 2019. The remaining part of the increase is related to organic growth due to opening of new facilities and expansions, increased occupancy and prices for facilities opened the last years, and increased revenue from mature sites with higher average rent per m2 than a year earlier.
Income from segments other than self-storage amounts to NOK 21.8 million for full year 2019. Income from insurance contributed with NOK 13.6 million, rent income from office-tenants contributed with NOK 5.4
million, and income from ancillary service contributed with NOK 2.8 million. NOK 1.4 million of the income from office -tenants are from Eurobox.
Lease expenses were NOK 1.5 million for Q4 2019, down from NOK 17.7 million in Q4 2018 due to IFRS 16 implementation, where long-term leasehold agreements are treated as financial leases. The remaining part of lease expenses are related to leasehold contracts classified as short-term. In Q4 2018 NOK 0.5 million related to property tax in Sweden was recognised as lease expenses, but is recognised as property-related expenses as for the rest of the Group in Q4 2019.
For full year 2019 lease expenses were NOK 11.8 million, down from NOK 71.5 million in 2018 due to IFRS 16 implementation.
At the end of December 2019, 36% of the current lettable area in SSG is freehold, compared to 30% at the end of December 2018. The City Self-Storage segment has mainly leasehold properties (19% of current lettable area is freehold), while 59% of current lettable area in OK Minilager is freehold. The share of freehold property is increasing in both segments.
Property-related expenses consist of maintenance, electricity, cleaning, security, insurance, property tax and other operating costs related to the facilities.
Property-related expenses in Q4 2019 were NOK 8.7 million, an increase of NOK 2.1 million compared to Q4 2018. NOK 0.5 million of the increase is related to property tax in Sweden which in Q4 2018 was recognised as lease expense, but is recognised as property-related expenses in Q4 2019.
Property-related expenses for full year 2019 were NOK 29.0 million, an increase of NOK 3.6 million compared to 2018. NOK 1.5 million of the increase is related to Eurobox.
There are increased costs related to growth in number of facilities and growth in lettable area. Lettable area in SSG has increased with 20 500 m2 (18%) since December 2018, and the number of facilities has increased by ten to 111 facilities as of end December 2019. There are also property-related expenses incurred by the new large properties that are converted to self-storage, but do not generate income yet.
Salary and other employee benefits in Q4 2019 were NOK 11.2 million, an increase of NOK 1.5 million from Q4 2018. NOK 0.7 million of the increase is related to costs from Eurobox. The remaining of the increase is related to annual wage increase and some new roles at the HQ given the growth of the Group.
Salary and other employee benefits for full year 2019 were NOK 39.6 million, an increase of NOK 2.2 million from 2018. NOK 1.3 million of the increase is related to personnel costs from Eurobox.
Salary and other employee benefits for full year 2019 in the CSS-segment excluded impact of personnel costs from Eurobox, have decreased compared with one year earlier, as staff has been reduced and synergies after the acquisitions of Minilageret and Minilager Norge have been utilised. The decrease in costs is offset by increased costs in OK Minilager and HQ related to the growth of the Group in addition to costs related to employees following the Eurobox-acquisition.
The number of full time equivalents (FTE) has increased from 64 FTE in December 2018 to 69 FTE in December 2019, including 5 FTE following the Eurobox acquisition.
Depreciation in Q4 2019 was NOK 3.8 million, an increase of NOK 1.3 million from Q4 2018. The depreciation is mainly related to fitout and other equipment for new facilities and expansions. Maintenance is posted as property-related expenses.
Depreciation for full year 2019 was NOK 12.1 million, an increase of NOK 1.6 million from 2018.
Other operating expenses consist of IT and related costs, sales and advertising, and other administrative expenses. In Q4 2019 other operating expenses were NOK 9.2 million, an increase of NOK 2.1 million from Q4 2018. There were NOK 0.7 million classified as non-recurring costs in Q4 2019. The non-recurring costs were related to acquisition of investment properties. In Q4 2018 there were no adjustments. Adjusted for non-recurring costs of NOK 0.7 million recognised in Q4 2019, other operating expenses have increased by NOK 1.4 million compared with Q4 2018. NOK 1.2 million of the increase is related to costs from Eurobox. The remainder of the increase amounts to NOK 0.2 million, and is attributable to the growth of the company.
| (NOK 1 000) | Q4 | Q4 | Full year | Full year |
|---|---|---|---|---|
| Adjustments | 2019 | 2018 | 2019 | 2018 |
| Acquisition costs | 667 | - | 4 653 | 640 |
| Restructuring | - | - | - | 390 |
| First time value-assessment of freehold portfolio | - | - | - | 199 |
| Severance packages | - | - | - | 713 |
| Total adjustments | 667 | - | 4 653 | 1 942 |
The fair value of freehold investment property is based on independent valuations, with internal lease contracts between the 100% owned company OK Property and the operating companies at market terms as basic principle. Annual CPI-adjustment of the leases and changes in area with lease-agreements will impact the fair value.
In Q4 2019 the change in fair value of freehold investment property recognised in P&L was NOK 12.5 million. This is a reduction of NOK 23.2 million compared to Q4 2018, where the change in fair value of freehold investment property recognised in P&L was NOK 35.7 million. In 2018 several properties were acquired or
expanded and developed into self-storage, and thus the change in fair value of freehold investment property increased extraordinary compared with other quarters. The diagram below shows the change in fair value recognised in P&L from Q1 2017 to Q4 2019.
Change in fair value of right-of-use-assets of leasehold property recognised in P&L in Q4 2019 was NOK -14.7 million, compared to NOK 0 million recognised in P&L in Q4 2018. Change in fair value of right-of-use-assets of leasehold property is related to IFRS 16 and value adjustment due to passage of time of recognised leases. See note 2 for description of IFRS 16 impact.
Fair value of freehold investment property was NOK 1 074 million and fair value of right-of-use-assets leasehold property was NOK 489.1 million at 31 December 2019. Fair value of investment property at 31 December 2018 was NOK 524.5 million, while there was none recognised right-of-use-assets of leasehold property.
EBITDA in Q4 2019 was NOK 41.2 million, an increase of NOK 21.5 million since Q4 2018. EBITDA adjusted for non-recurring costs and effects of implementation of IFRS 16 was NOK 24.6 million, which is an increase of NOK 4.8 million from Q4 2018.
Profit before tax in Q4 2019 was NOK 27.4 million, a decrease of NOK 25.2 million from Q4 2018. Adjusted profit before tax in Q4 2019 was NOK 28.1 million. The decrease is related to change in fair value of investment property of NOK -23.3 million, impact of IFRS 16 of NOK -2.6 million and increased net finance of NOK -2.5 million. The underlying operation adjusted for non-recurring costs has a positive development since a year earlier of NOK 3.9 million.
Profit before tax for Q4 2018 vs Q4 2019, including impact of IFRS 16, is visualised below.
Total assets were NOK 2 005 million at 31 December 2019, compared to NOK 850.4 million at 31 December 2018, an increase of NOK 1 154 million. NOK 491.6 million is related to the impact of IFRS 16, whereof NOK 489.1 million is recognition of right-of-use assets of leasehold property. Freehold investment property has increased with NOK 550.0 million from 31 December 2018 to NOK 1 074 million as of 31 December 2019, mainly due to the acquisition of Eurobox and several properties in Oslo during the year. Goodwill has increased with NOK 90.2 million related to the acquisition of Eurobox and amounts to NOK 184.8 million at the end of December 2019.
Cash and bank deposits have decreased with NOK 34.1 million to NOK 88.1 million at the end of December 2019 from December 2018. The decrease is mainly attributable to higher net outflow on acquisition of subsidiaries and investment property than net proceeds from the private placement and new borrowings drawn up under the existing loan facility.
SSG has a loan facility for purchase of investment property with Handelsbanken up to 60% of the freehold investment property value. Interest-bearing debt 1 amounts to NOK 342.3 million at the end of December 2019, an increase of NOK 212.5 million from December 2018. Loan to value of freehold investment property is 32% as of end December 2019, compared to 25% at the end of December 2018. The loan facility has several covenants. As of 31 December 2019, the Group is not in breach of any of the covenants.
At the end of December 2019 cash minus interest-bearing debt was negative with NOK 254.2 million.
SSG invoices the customers in advance, which reduces credit risks and provides stable working capital. Current liabilities consist mainly of prepaid income.
1Non-GAAP measures are defined on page 29
Total equity at the end of December 2019 was NOK 1 005 million, an increase of NOK 380.0 million from December 2018. The increase is mainly attributable to the issuance of new shares in connection with the private placement of gross NOK 250 million in June 2019 and issuance of consideration shares of gross NOK 75 million to the selling shareholder of Eurobox in July 2019. Obligations under financial lease at the end of December 2019 was NOK 502.8 million, compared to NOK 0.2 million end of December 2018. The increase is related to the implementation of IFRS 16. The equity ratio decreased to 50% at the end of December 2019 from 73% at the end of December 2018, as a consequence of the implementation of IFRS 16. The equity ratio excluding IFRS 16 impact is 67%.
SSG has a strong cash flow with invoicing of customers in advance and predictable and stable costs. Net cash flow from operating activities during Q4 2019 was NOK 35.9 million, compared to NOK 20.4 million during Q4 2018. Income tax paid was NOK 9.3 million in Q4 2019, an increase of NOK 8.7 million from Q4 2018 where taxable losses were utilised. Interest expenses are reclassified from cash flow from operating activities to financing activities. NOK 17.6 million of the increase in net cash flow from operating activities is related to IFRS 16. Net cash flow from operating activities for the full year of 2019 was NOK 145.5 million, compared to NOK 66.0 million for the full year 2018. NOK 65.9 million of the increase in net cash flow from operating activities is related to IFRS 16. The remaining increase in net cash flow from operating activities for the full year 2019 is mainly related to decrease in prepaid expenses and timing differences for payments.
Net cash flow from investing activities during Q4 2019 was NOK -23.9 million compared to NOK -45.2 million at the end of Q4 2018. Net cash flow from investing activities for the full year of 2019 was NOK -561.2 million compared to NOK -157.5 million for the full year 2018. Payments for investment property includes additions to existing properties and acquisition of new properties. Payments for property, plant and equipment consists mainly of new fit-out. Net cash outflow for acquisition of subsidiaries includes business acquisition and acquisition accounted for as asset acquisition, and consists of Eurobox and several properties in Oslo acquired during 2019. These investing activities are in line with the Group's strategy.
Net cash flow from financing activities was NOK -26.9 million at the end of Q4 2019, compared to NOK 38.3 million at the end of Q4 2018. The impact of IFRS 16 for Q4 2019 for net cash flow from financing activities was NOK -17.6 million. Net cash flow from financial activities was affected by payment loan of NOK 5.8 million in Q4 2019. Net cash flow from financing activities for the full year of 2019 was NOK 381.9 million, compared to NOK 18.6 million for the full year 2018. The impact of IFRS 16 for the full year of 2019 for net cash flow from financing activities was NOK -65.9 million. Net cash flow from financial activities for full year 2019 was in addition affected by net proceeds from the private placement of NOK 241.9 million in June, proceeds from borrowing of NOK 228.0 million and repayment of borrowing of NOK 16.0 million in 2019.
The implementation of IFRS 16 gives no net impact of change in cash and cash equivalents.
SSG's cash balance at the end of December 2019 was NOK 88.1 million.
8
SSG engages in the business of renting out self-storage units to both private individuals and businesses. The Group is a leading provider of self-storage services with facilities in Norway, Sweden and Denmark. The business model of the Group is to operate self-storage facilities in Scandinavia with a strong focus on cost effective operations, competitive rent levels and industry leading customer service. In order to achieve this, the Group is constantly working hard in order to increase the level of automation in all parts of the value chain. The Group's vision is to be a leading and preferred self-storage provider to individuals and businesses.
The Group is operating under two separate brands: OK Minilager and City Self-Storage. These two brands focus on different market segments and provide a strong platform serving customers with different preferences and needs.
The Group offers self-storage solutions in all Scandinavian countries, with a primary focus on the major cities through City Self-Storage, and a nationwide presence in Norway through OK Minilager. All City Self-Storage facilities are climate controlled, while OK Minilager offers both climate controlled and container based storage facilities.
The strategy is to develop the Group further and to expand the total lettable area by investing in new and preferably freehold facilities. The Group seeks to strengthen its nationwide presence in Norway while at the same time optimising current facilities in Denmark and Sweden and search for profitable expansion opportunities. Going forward, new facilities will primarily be established as freehold properties to ensure long-term access to attractive locations at a lower running cost. In identifying such properties the Group will focus on factors such as location, capex and conversion time. Freehold investment properties are gathered in the 100% owned company OK Property AS, and leased to the operating companies in the Group.
The Group is operating under both the OK Minilager and City Self-Storage brand and will continue to do so as the two concepts target different market segments.
is a nationwide self-storage concept offered in the Norwegian market and the strategy is to continue to increase its presence in all major regions and communities in Norway. The planned expansion will mainly be composed of freehold properties, including a combination of purpose-built facilities and conversion of existing buildings. At the same time OK Minilager will have a strong focus on retaining its position as the most cost-effective player in the Norwegian market by continuously looking for innovative solutions to increase the customer experience and to increase operating efficiency.
is SSG's "urban concept", targeting the population in the major cities, currently serving Oslo, Stavanger, Stockholm and Copenhagen. The strategy is to strengthen the market position in the major cities in Norway by establishing more facilities at attractive locations, while at the same time continuing the ongoing cost reduction initiatives and optimising the organisation. City Self-Storage opened its first facility in Stavanger in Q2 2019, and is planning to open two facilities in Trondheim in 2020. Eurobox, which was acquired in July, will be rebranded to CSS during 2020.
In the other Scandinavian countries, the goal is to improve operating efficiency at existing facilities through cost reductions, upgrades and increased visibility and market awareness. City Self-Storage will however act opportunistically about potential mergers and acquisitions, both with regards to single facilities and other self-storage providers with a complementary portfolio of facilities. As with OK Minilager, the goal for City Self-Storage going forward is to increase the share of freehold facilities.
The Group is confident that it has multiple competitive strengths that separates SSG from other self-storage providers. These strengths have enabled the Group to achieve high historical growth and to establish a strong market position in all markets in which it operates. Through leveraging on these competitive strengths, SSG expects to continue to grow and to confirm its position as one of Scandinavia's leading self-storage providers.
The Group is one of the leading self-storage providers in Scandinavia with a particularly strong position in the Norwegian market. SSG has a high market share, both in the Greater Oslo area and on a country wide basis. City Self-Storage and OK Minilager are on a stand-alone basis the two largest self-storage providers in the Norwegian market. This position has been built through careful planning and a dedicated focus on selecting the right type of facilities. With the acquisition of Eurobox the leading position in the Norwegian market was solidified. SSG entered the Swedish and the Danish market through the acquisition of City Self-Storage. Self Storage Group is the largest self-storage provider in Scandinavia and one of the largest operators in Europe measured by the total number of facilities. The group has a particularly strong position in Norway as the largest provider of self-storage and holds a solid platform for growth as the fourth largest provider in Stockholm and Copenhagen.
The combination of a countrywide presence in the "early stage" Norwegian market and a strong position in the more developed markets in Stockholm and Copenhagen provides a strong foundation for future expansion and growth. The Group can act opportunistically with regards to setting up new facilities while leveraging its strong brand recognition, customer base and knowledge in the respective markets.
Both OK Minilager and City Self-Storage have displayed solid financial track records with increasing revenues and continuously improving EBITDA margins. The Group has an ambitious growth plan and the management team has demonstrated the ability to handle rapid growth without jeopardising profitability. SSG has succeeded in attracting investors and raising capital, and is in a good position for executing the strategy.
On 31 January 2019 the operating company in the Minilager Norge group was merged with City Self-Storage Norge AS, as the last step in the integration of the companies. The real-estate companies of the Minilager Norge group were merged with OK Property in 2018.
On 23 May 2019 the annual general meeting of Self Storage Group ASA was held. All proposals set out in the notice to the general meeting were approved. Martin Nes (chairman), Runar Vatne, Gustav Søbak, Yvonne Litsheim Sandvold and Ingrid Elvira Leisner were elected to the Board of Directors.
On 25 June 2019 the company entered into an agreement to acquire 100% of the shares in Eurobox Minilager AS and the associated property companies to an enterprise value of NOK 320 million. A private placement raising NOK 250 million in gross proceeds was launched after closing of trade at Oslo Børs and successfully completed the same evening.
On 28 June 2019 the company issued 12 987 012 new shares at a price per share of NOK 19.25.
On 1 July 2019 the company issued 3 896 103 consideration shares at a price per share of NOK 19.25 to the seller of Eurobox as part settlement of the acquisition.
SSG is exposed to risk and uncertainty factors, which may affect some or all of the company's activities. SSG has financial risk, market risk as well as operational risk and risk related to the current and future products. There are no significant changes in the risks and uncertainty factors compared to the descriptions in the Annual Report for 2018.
11
There is a large untapped potential for self-storage in Scandinavia as urbanisation and smaller living spaces causes increasing need for external storage solutions. To enhance these opportunities, SSG has established a solid platform for future growth with prime locations in all Scandinavian capitals as well as cities across Norway. The platform for future growth is further strengthened through the acquisition of Eurobox.
SSG has a proven track-record to develop and operate this attractive portfolio of self-storage facilities, leveraging on a lean and operationally focused organisation to increase margins and targeting additional growth, mainly through freehold properties. The Group has built up and acquired new storage capacity and is continuously phasing the new capacity into the market. SSG is experiencing a satisfactory demand for its solutions, and is filling up new storage facilities while at the same time achieving attractive rent levels. SSG has also identified additional opportunities through already acquired development projects and low-cost expansion within existing facilities.
This foundation, a strong macro picture in all Scandinavian countries, combined with a strategy to grow the freehold portfolio in selected markets, gives SSG a solid platform for future growth and value creation.
Oslo, 11 February 2020 Board of Directors, Self Storage Group ASA
| (Amounts in NOK 1 000) | Unaudited | Unaudited | Unaudited | Audited | |
|---|---|---|---|---|---|
| For the three months ended 31 December |
For the three months ended 31 December |
For the twelve months ended 31 December |
For the twelve months ended 31 December |
||
| Note | 2019 | 2018 | 2019 | 2018 | |
| Revenue | 3 | 71 884 | 60 751 | 266 453 | 238 361 |
| Lease expenses | 2,3 | 1 538 | 17 657 | 11 813 | 71 451 |
| Property-related expenses Salary and other employee benefits |
3 3 |
8 696 11 169 |
6 559 9 710 |
28 975 39 566 |
25 425 37 403 |
| Depreciation | 3 849 | 2 573 | 12 108 | 10 527 | |
| Other operating expenses | 3 | 9 239 | 7 095 | 34 730 | 30 311 |
| Operating profit before fair value adjustments | 37 393 | 17 157 | 139 261 | 63 244 | |
| Change in fair value of investment properties | 6 | 12 451 | 35 723 | 17 523 | 38 223 |
| Change in fair value of leasehold properties | 2,6 | -14 726 | - | -55 204 | - |
| Operating profit after fair value adjustments | 35 118 | 52 880 | 101 580 | 101 467 | |
| Finance income | 626 | 725 | 1 283 | 1 511 | |
| Finance expense | 2 | 8 313 | 952 | 27 260 | 4 632 |
| Profit before tax | 27 431 | 52 653 | 75 603 | 98 346 | |
| Income tax expense | 3 949 | 9 319 | 13 870 | 18 856 | |
| Profit for the period | 23 482 | 43 334 | 61 733 | 79 490 | |
| Total comprehensive income for the year attributable to parent company shareholders |
23 482 | 43 334 | 61 733 | 79 490 | |
| Total comprehensive income for the year attributable to non-controlling interests |
- | - | - | - | |
| Earnings per share | |||||
| Basic (NOK) | 4 | 0.28 | 0.66 | 0.83 | 1.22 |
| Diluted (NOK) | 4 | 0.28 | 0.66 | 0.83 | 1.22 |
| Other comprehensive income, net of income tax |
|||||
| Items that may be reclassified subsequently to profit or loss |
|||||
| - currency translation difference | 129 | 553 | - 383 | - 73 | |
| Other comprehensive income for the period, net of income tax |
129 | 553 | - 383 | - 73 | |
| Total comprehensive income for the period |
23 611 | 43 887 | 61 350 | 79 417 | |
| Total comprehensive income for the year attributable to parent company shareholders |
23 611 | 43 887 | 61 350 | 79 417 | |
| Total comprehensive income for the year attributable to non-controlling interests |
- | - | - | - |
13
| (Amounts in NOK 1 000) | Unaudited | Audited | |
|---|---|---|---|
| ASSETS | 31 December 2019 |
31 December 2018 |
|
| Non-current assets | Note | ||
| Investment property | 6 | 1 074 457 | 524 505 |
| Right-of-use assets - leasehold property | 2,6 | 489 062 | - |
| Property, plant and equipment | 112 595 | 70 405 | |
| Goodwill | 184 828 | 94 639 | |
| Financial instruments | 24 750 | - | |
| Other intangible assets | 1 839 | 1 376 | |
| Total non-current assets | 1 887 531 | 690 925 | |
| Current assets | |||
| Inventories | 1 617 | 1 270 | |
| Trade and other receivables | 15 928 | 13 421 | |
| Other current assets | 11 410 | 22 598 | |
| Cash and bank deposits | 88 117 | 122 228 | |
| Total current assets | 117 072 | 159 517 | |
| TOTAL ASSETS | 2 004 603 | 850 442 | |
| EQUITY AND LIABILITIES | |||
| Equity | |||
| Issued share capital | 7 | 8 261 | 6 573 |
| Share premium | 744 853 | 427 889 | |
| Other reserves | - 93 | 290 | |
| Retained earnings | 252 032 | 190 299 | |
| Total equity | 1 005 053 | 625 051 | |
| LIABILITIES | |||
| Non-current liabilities | |||
| Long-term interest-bearing debt | 8 | 239 057 | 118 023 |
| Long-term obligations under finance leases | 2,8 | 450 642 | 143 |
| Other financial liabilities | 454 | 873 | |
| Deferred tax liabilities | 91 053 | 34 911 | |
| Total non-current liabilities | 781 206 | 153 950 | |
| Current liabilities | |||
| Short-term interest-bearing debt | 8 | 103 223 | 11 750 |
| Short-term obligations under finance leases | 2,8 | 52 190 | 74 |
| Trade and other payables | 7 115 | 11 404 | |
| Income tax payable | 9 309 | 11 647 | |
| Other taxes and withholdings | 5 276 | 5 291 | |
| Other current liabilities | 41 231 | 31 275 | |
| Total current liabilities | 218 344 | 71 441 | |
| Total liabilities | 999 550 | 225 391 | |
| TOTAL EQUITY AND LIABILITIES | 2 004 603 | 850 442 |
| (Amounts in NOK 1 000) | Issued Share capital |
Share premium |
Currency translation reserve |
Retained earnings |
Total equity |
|---|---|---|---|---|---|
| Balance at 1 January 2018 | 6 369 | 396 416 | 363 | 110 809 | 513 957 |
| Profit (loss) for the period | - | - | - | 79 490 | 79 490 |
| Other comprehensive income (loss) for the period net of income tax |
- | - | - 73 | - | - 73 |
| Total comprehensive income for the period | - | - | - 73 | 79 490 | 79 417 |
| Issue of ordinary shares, net of transaction costs | 204 | 31 473 | - | - | 31 677 |
| Balance at 31 December 2018 | 6 573 | 427 889 | 290 | 190 299 | 625 051 |
| Balance at 1 January 2019 | 6 573 | 427 889 | 290 | 190 299 | 625 051 |
|---|---|---|---|---|---|
| Profit (loss) for the period | - | - | - | 61 733 | 61 733 |
| Other comprehensive income (loss) for the period | |||||
| net of income tax | - | - | - 383 | - | - 383 |
| Total comprehensive income for the period | - | - | - 383 | 61 733 | 61 350 |
| Issue of ordinary shares, net of transaction costs | 1 688 | 316 964 | - | - | 318 652 |
| Balance at 31 December 2019 (Unaudited) | 8 261 | 744 853 | - 93 | 252 032 | 1 005 053 |
| Unaudited | Unaudited | Unaudited | Audited | ||
|---|---|---|---|---|---|
| (Amounts in NOK 1 000) | Note | For the three months ended 31 |
For the three months ended 31 |
For the year ended 31 |
For the year ended 31 |
| December 2019 |
December 2018 |
December 2019 |
December 2018 |
||
| Cash flow from operating activities | |||||
| Profit before tax | 27 431 | 52 653 | 75 603 | 98 346 | |
| Income tax paid | - 9 274 | - 544 | - 10 720 | - 2 244 | |
| Interest expense | 2 | 7 903 | 771 | 24 602 | 1 819 |
| Depreciation | 3 849 | 2 573 | 12 108 | 10 527 | |
| Gain/loss on disposal of property, plant and equipment |
- | - 47 | - | - 47 | |
| Change in fair value of investment property | 6 | - 12 451 | - 35 723 | - 17 523 | - 38 223 |
| Change in fair value of leasehold property | 2,6 | 14 726 | - | 55 204 | - |
| Change in trade and other receivables | 428 | - 398 | - 703 | - 1 946 | |
| Change in trade and other payables | 1 664 | 131 | - 5 497 | 791 | |
| Change in other current assets | 5 567 | 930 | 6 332 | - 2 414 | |
| Change in other current liabilities | - 3 952 | 80 | 6 107 | - 582 | |
| Net cash flow from operating activities | 35 891 | 20 426 | 145 513 | 66 027 | |
| Cash flow from investing activities | |||||
| Payments for investment property | - 15 731 | - 11 460 | - 42 753 | - 62 902 | |
| Payments for property, plant and equipment | - 8 348 | - 6 280 | - 28 497 | - 21 648 | |
| Net cash outflow on acquisition of subsidiaries | 168 | - 27 503 | - 489 962 | - 72 957 | |
| Net cash flow from investing activities | - 23 911 | - 45 243 | - 561 212 | - 157 507 | |
| Cash flow from financing activities | |||||
| Net proceeds from issue of equity instruments of the | |||||
| Company | 7 | - 806 | - | 241 862 | - |
| Proceeds from borrowing | 8 | - | 40 000 | 228 000 | 40 000 |
| Repayment of borrowings | 8 | - 5 787 | - 1 188 | - 15 950 | - 19 066 |
| Payments of lease liabilities | 2,8 | - 12 670 | - | - 47 442 | - |
| Payments of leases classified as interest | 2,8 | - 4 919 | - | - 18 417 | - |
| Interest paid | 8 | - 2 745 | - 528 | - 6 148 | - 2 312 |
| Net cash flow from financing activities | - 26 927 | 38 284 | 381 905 | 18 622 | |
| Net change in cash and cash equivalents | - 14 947 | 13 467 | - 33 794 | - 72 858 | |
| Cash and cash equivalents at beginning of the period | 102 885 | 108 141 | 122 228 | 195 224 | |
| Effect of foreign currency rate changes on cash and cash equivalents |
179 | 620 | - 317 | - 138 | |
| Cash and equivalents at end of the period | 88 117 | 122 228 | 88 117 | 122 228 |
16
These condensed consolidated financial statements have been prepared in accordance with International Accounting Standard 34 Interim Financial Reporting. The condensed consolidated financial statements have been prepared on the historical cost basis except for investment property, which is measured at fair value with gains and losses recognised in profit or loss. The interim financial statements were approved by the Board of Directors on 11 February 2020.
The same accounting policies, presentation and methods of computation have been followed in these condensed financial statements as were applied in the preparation of the Group's financial statements for the year ended 31 December 2018, except for the adoption of new standards effective as of 1 January 2019. The Group has not early adopted any standard, interpretation or amendment with effective date after 1 January 2019. With the exception of IFRS 16, no new standards or amendments impact the Group. The interim financial statements are unaudited.
The Group adopted IFRS 16 with effect from 1 January 2019. The new standard was applied using the modified retrospective approach, and therefore comparatives for the year ended 31 December 2018 have not been restated and the reclassifications and adjustments on implementation are recognised in the opening balance sheet at 1 January 2019.
IFRS 16 establishes significant new accounting policies for lessees. IFRS 16 eliminates the current distinction between operating and finance leases as is required by IAS 17 Leases and, instead, introduces a single lessee accounting model.
When applying the new model, the Group has recognised a liability to make lease payments (i.e., the lease liability) and an asset representing the right to use the underlying asset during the lease term for all leases with a lease term of more than 12 months, unless the underlying asset is of low value, and recognise fair value adjustments and depreciation of the right-of-use assets separately from interest on lease liabilities in the income statement.
The Group made the following accounting policy choices and elected the following practical expedients on initial implementation of IFRS 16:
The Group leases properties, containers and trailers. Lease terms correspond to the term of the lease contract, unless the Group is reasonably certain that it will exercise contractual extensions or termination options. From 1 January 2019 leases are recognised as a right-of-use asset and corresponding lease liability at the date at which the leased asset is available for use. Lease payments are apportioned between finance expenses and reduction of the lease obligation so as to achieve a constant rate of interest on the remaining balance of the liability. The right-of-use assets of investment property is measured at fair value, and all other right-of-use assets are depreciated over the shorter of the lease term and their useful lives.
Lease liabilities are measured at the net present value of lease payments due under the contract, less any lease incentives receivable, plus the costs of purchase or termination options if reasonably certain to be exercised. Lease payments are discounted using the interest rate implicit in the lease. If that rate cannot be determined, the Group's incremental borrowing rate is used, being the rate that the lessee would have to pay to borrow the funds necessary to obtain an asset of similar value in a similar economic environment with similar terms and conditions. All lease liabilities were measured at the present value of remaining lease payments, discounted using the incremental borrowing rate at 1 January 2019. The Group has defined all leasehold property as a similar economic environment with similar terms and conditions, the same for containers and trailers. The weighted average incremental borrowing rate applied to all lease liabilities at 1 January 2019 was 4.2%.
Right-of-use assets of leasehold property are measured at fair value. Gains and losses arising from changes in the fair value of leasehold property are included in profit or loss in the period in which they arise. Change in value is outlined by the value adjustment due to passage of time, and no terminal value exists. Other right-of-use assets are containers and trailers and are measured at cost, comprising the initial measurement of lease liability, lease payments made at the commencement date, initial direct costs and estimated restoration costs, less any lease incentives received. In measuring of right-of-use assets non-lease components are not included. All options starting within the next seven years and reasonably certain to exercise are included.
Lease payments associated with short-term leases and leases of low-value assets are recognised on a straight-line basis as an expense in profit or loss.
Transition impact of adopting the new standard and impacts on the income statement for the fourth quarter of 2019 and the full year of 2019 are shown in the tables below.
Reconciliation of total operating lease commitments at 31 December 2018 to lease liabilities recognised at 1 January 2019
| (Amounts in NOK 1 000) | Total | Non-current | Current |
|---|---|---|---|
| Operating lease obligations at 31 December 2018 | 364 340 | ||
| Financial lease liabilities at 31 December 2018 | 217 | ||
| Commitments exempt due to rolling lease less than 12 months, expiry within 12 months or low value |
-6 743 | ||
| Effect of changes to lease payments | -3 931 | ||
| Effect of increase in lease term due to extension options | 196 623 | ||
| Effect of discounting | -112 887 | ||
| Lease liability at 1 January 2019 | 437 619 | 395 405 | 42 214 |
| Present value of financial lease liability as at 31 December 2018 |
- 217 | - 143 | - 74 |
| Additional lease liability as a result of implementation of IFRS 16 as at 1 January 2019 |
437 402 | 395 262 | 42 140 |
| (Amounts in NOK 1 000) | Opening balance | 31 December 2019 | ||||
|---|---|---|---|---|---|---|
| Audited | Unaudited | Unaudited | Unaudited | Unaudited | Unaudited | |
| 31 December | Impact | 1 January | 31 December | Impact | 31 | |
| 2018 | 2019 | 2019 | December 2019 |
|||
| IAS 17 | IFRS 16 | IFRS 16 | IAS 17* | IFRS 16 | IFRS 16 | |
| Total non-current assets | 690 925 | 437 402 | 1 128 327 | 1 393 222 | 494 309 | 1 887 531 |
| Total current assets | 159 517 | - | 159 517 | 119 742 | - 2 670 | 117 072 |
| TOTAL ASSETS | 850 442 | 437 402 | 1 287 844 | 1 512 964 | 491 639 | 2 004 603 |
| Total equity | 625 051 | - | 625 051 | 1 011 881 | - 6 828 | 1 005 053 |
| Total non-current liabilities | 153 950 | 395 262 | 549 212 | 334 875 | 446 331 | 781 206 |
| Total current liabilities | 71 441 | 42 140 | 113 581 | 166 208 | 52 136 | 218 344 |
| Total liabilities | 225 391 | 437 402 | 662 793 | 501 083 | 498 467 | 999 550 |
| TOTAL EQUITY AND LIABILITIES | 850 442 | 437 402 | 1 287 844 | 1 512 964 | 491 639 | 2 004 603 |
* Financial position impacts are shown as if IAS 17 still applied, without the adoption of the new standard IFRS 16
At 1 January 2019 the Group recognised lease liabilities of NOK 437.4 million and right-of-use assets of NOK 437.4 million. The remaining implementation impact of NOK -2.6 million is reversal of trade payables and other current assets now included in IFRS 16 implementation.
The Group recognised lease liabilities for leased properties, containers and trailers that were previously classified as operating leases. These liabilities were measured at the present value of remaining lease payments, discounted using the incremental borrowing rate at 1 January 2019.
A corresponding right-of-use asset was recognised, measured at the amount equal to the lease liability and adjusted by the amount of lease incentives embedded in the value of the asset, asset impairment, accrued costs of restoration and any liabilities relating to onerous leases.
| (Amounts in NOK 1 000) | Unaudited Q4 2019 |
Unaudited Impact |
Unaudited Q4 2019 |
|---|---|---|---|
| IAS 17* | IFRS 16 | IFRS 16 | |
| Revenue | 71 884 | - | 71 884 |
| Lease expenses | 18 879 | -17 341 | 1 538 |
| Property-related expenses | 8 696 | - | 8 696 |
| Salary and other employee benefits | 11 169 | - | 11 169 |
| Depreciation | 3 552 | 297 | 3 849 |
| Other operating expenses | 9 239 | - | 9 239 |
| Operating profit before fair value adjustments | 20 349 | 17 044 | 37 393 |
| Change in fair value of investment properties | 12 451 | - | 12 451 |
| Change in fair value of leasehold properties | - | -14 726 | -14 726 |
| Operating profit after fair value adjustments | 32 800 | 2 318 | 35 118 |
| Net finance | -2 768 | -4 919 | -7 687 |
| Profit before tax | 30 032 | -2 601 | 27 431 |
| Income tax expense | 7 015 | -3 066 | 3 949 |
| Profit for the period | 23 017 | 465 | 23 482 |
* Income statement impacts are shown as if IAS 17 still applied, without the adoption of the new standard IFRS 16
| (Amounts in NOK 1 000) | Unaudited | Unaudited | Unaudited |
|---|---|---|---|
| Full year 2019 | Impact | Full year 2019 | |
| IAS 17* | IFRS 16 | IFRS 16 | |
| Revenue | 266 453 | - | 266 453 |
| Lease expenses | 74 699 | -62 886 | 11 813 |
| Property-related expenses | 28 975 | - | 28 975 |
| Salary and other employee benefits | 39 566 | - | 39 566 |
| Depreciation | 11 710 | 398 | 12 108 |
| Other operating expenses | 34 730 | - | 34 730 |
| Operating profit before fair value adjustments | 76 773 | 62 488 | 139 261 |
| Change in fair value of investment properties | 17 523 | - | 17 523 |
| Change in fair value of leasehold properties | - | -55 204 | -55 204 |
| Operating profit after fair value adjustments | 94 296 | 7 284 | 101 580 |
| Net finance | -7 560 | -18 417 | -25 977 |
| Profit before tax | 86 736 | -11 133 | 75 603 |
| Income tax expense | 18 181 | -4 311 | 13 870 |
| Profit for the period | 68 555 | -6 822 | 61 733 |
* Income statement impacts are shown as if IAS 17 still applied, without the adoption of the new standard IFRS 16
According to IFRS 16 the timing of expenses change over the lease term. Due to the interest element more expenses are recognised early in the lease term and less expenses are recognised later in the lease term, compared to IAS 17. During the first years of application of IFRS 16 under the modified retrospective transition approach, a net negative effect on profit or loss compared to the effects under IAS 17 will occur. Later in the lease terms there will be a corresponding positive impact of applying IFRS 16. Over the lease term the total expenses under IFRS 16 are equal to those of IAS 17.
The net impact on profit for the period for the Group was NOK 0.5 million in the fourth quarter of 2019 and NOK -6.8 million for the full year of 2019.
| (Amounts in NOK 1 000) | Unaudited | Unaudited | Unaudited |
|---|---|---|---|
| Q4 2019 | Impact | Q4 2019 | |
| IAS 17* | IFRS 16 | IFRS 16 | |
| Net cash flows from operating activities | 18 302 | 17 589 | 35 891 |
| Net cash flows from investing activities | -23 911 | - | -23 911 |
| Net cash flows from financing activities | -9 338 | -17 589 | -26 927 |
| Net change in cash and cash equivalents | -14 947 | - | -14 947 |
* Effect on cash flow statements impacts are shown as if IAS 17 still applied, without the adoption of the new standard IFRS 16
| (Amounts in NOK 1 000) | Unaudited | Unaudited | Unaudited |
|---|---|---|---|
| Full year 2019 | Impact | Full year 2019 | |
| IAS 17* | IFRS 16 | IFRS 16 | |
| Net cash flows from operating activities | 79 654 | 65 859 | 145 513 |
| Net cash flows from investing activities | -561 212 | 0 | -561 212 |
| Net cash flows from financing activities | 447 764 | -65 859 | 381 905 |
| Net change in cash and cash equivalents | -33 794 | - | -33 794 |
* Effect on cash flow statements impacts are shown as if IAS 17 still applied, without the adoption of the new standard IFRS 16
Under IFRS 16, operational lease payments within the scope of IFRS 16 are reclassified from operating activities to principal repayments of borrowings and payment of interest included as financing costs paid, both included in cash flows from financing activities.
There are no net impact on change in cash and cash equivalents.
Management has determined the operating segments based on reports reviewed by the CEO and management team and Board of Directors, which are used to make strategic and resource allocation decisions. The Group reports management information based on the two concepts offered by the Group, City Self-Storage (CSS) and OK Minilager (OKM), in addition to the Group's property business in the Property segment and Self Storage Group ASA (SSG ASA) in separate segments. Other/elimination includes eliminations of intercompany transactions and the remainder of the Group's activities not attributable to the other operating segments. In the tables below, reconciliation from EBITDA to Profit before tax is presented on an aggregated level. The Group reports management information except IFRS 16 impacts.
The operating entity from the Eurobox acquisition is reported as part of the CSS segment and the three property entities are reported as part of the Property segment.
The total of Sales income and Other income in the segment reporting corresponds with the line item Revenue as recognised under IFRS.
| OK Minilager (OKM) | Nationwide presence in Norway offering climate controlled storage units and container based storage. |
|---|---|
| City Self-Storage (CSS) | Climate controlled facilities in all Scandinavian countries, with a primary focus on the capital cities of Oslo, Stockholm and Copenhagen. |
| Property | The ownership and development of property. Internal lease agreements with the operating companies in the group, in addition to external lease agreements. The internal income and expenses are eliminated on Group level. |
| SSG ASA | SSG ASA includes administration and management activities. |
| Other/eliminations | Elimination and the remainder of the Group's activities not attributable to the operating segments described above. |
| For the three months ended 31 December 2019 |
CSS | OKM | Property | SSG ASA |
Other/ eliminations |
IFRS 16 | Total |
|---|---|---|---|---|---|---|---|
| Rental income from self-storage services | 47 152 | 18 721 | - | - | - | - | 65 873 |
| Other income | 3 732 | 1 163 | 12 839 | - | - 11 723 | - | 6 011 |
| Lease expenses | - 22 006 | - 7 720 | - | 10 | 10 706 | 17 472 | - 1 538 |
| Other operating costs | - 18 776 | - 7 263 | - 2 311 | - 1 771 | 1 017 | - | - 29 104 |
| EBITDA | 10 102 | 4 901 | 10 528 | - 1 761 | - | 17 472 | 41 242 |
| Reconciliation to profit before tax as reported under IFRS |
|||||||
| Depreciation | - 3 849 | ||||||
| Change in fair value of investment property | 12 451 | ||||||
| Change in fair value of leasehold property | - 14 726 | ||||||
| Finance income | 626 | ||||||
| Finance expense | - 8 313 | ||||||
| Profit before tax | 27 431 |
| For the three months ended 31 December 2018 |
CSS | OKM | Property | SSG ASA |
Other/ eliminations |
IFRS 16 | Total |
|---|---|---|---|---|---|---|---|
| Rental income from self-storage services | 39 044 | 16 972 | - | - | - | - | 56 016 |
| Other income | 3 617 | 984 | 7 867 | - | - 7 733 | - | 4 735 |
| Lease expenses | - 16 144 | - 7 929 | - 47 | - 167 | 6 630 | - | - 17 657 |
| Other operating costs | - 15 578 | - 6 525 | - 1 043 | - 1 258 | 1 040 | - | - 23 364 |
| EBITDA | 10 939 | 3 502 | 6 777 | - 1 425 | - 63 | - | 19 730 |
| Reconciliation to profit before tax as reported under IFRS |
|||||||
| Depreciation | - 2 573 | ||||||
| Change in fair value of investment property | 35 723 | ||||||
| Change in fair value of leasehold property | - | ||||||
| Finance income | 725 | ||||||
| Finance expense | - 952 | ||||||
| Profit before tax | 52 653 |
| SSG | Other/ | ||||||
|---|---|---|---|---|---|---|---|
| For the year ended 31 December 2019 | CSS | OKM | Property | ASA | eliminations | IFRS 16 | Total |
| Rental income from self-storage services | 172 676 | 71 957 | - | - | - | - | 244 633 |
| Other income | 15 864 | 4 079 | 43 796 | - | - 41 919 | - | 21 820 |
| Lease expenses | - 78 608 | - 33 650 | - | - 854 | 38 413 | 62 886 | - 11 813 |
| Other operating costs* | - 67 280 | - 25 295 | - 6 518 | - 7 684 | 3 506 | - | - 103 271 |
| EBITDA | 42 652 | 17 091 | 37 278 | - 8 538 | - | 62 886 | 151 369 |
| Reconciliation to profit before tax as reported under IFRS |
|||||||
| Depreciation | - 12 108 | ||||||
| Change in fair value of investment property | 17 523 | ||||||
| Change in fair value of leasehold property | - 55 204 | ||||||
| Finance income | 1 283 | ||||||
| Finance expense | - 27 260 | ||||||
| Profit before tax | 75 603 | ||||||
| SSG | Other/ | ||||||
|---|---|---|---|---|---|---|---|
| For the year ended 31 December 2018 | CSS | OKM | Property | ASA | eliminations | IFRS 16 | Total |
| Rental income from self-storage services | 154 180 | 64 073 | - | - | - | - | 218 253 |
| Other income | 14 249 | 3 424 | 29 903 | - | - 27 468 | - | 20 108 |
| Lease expenses | - 65 542 | - 29 117 | - 71 | - 668 | 23 947 | - | - 71 451 |
| Other operating costs | - 65 163 | - 22 085 | - 4 089 | - 5 258 | 3 456 | - | - 93 139 |
| EBITDA | 37 724 | 16 295 | 25 743 | - 5 926 | - 65 | 73 771 | |
| Reconciliation to profit before tax as reported under IFRS |
|||||||
| Depreciation | - 10 527 | ||||||
| Change in fair value of investment property | 38 223 | ||||||
| Finance lease expense | - | ||||||
| Finance income | 1 511 | ||||||
| Finance expense | - 4 632 | ||||||
| Profit before tax | 98 346 |
| (Amounts in NOK) | For the three months ended 31 December 2019 |
For the three months ended 31 December 2018 |
For the full year 2019 |
For the full year 2018 |
|---|---|---|---|---|
| Profit (loss) for the period | 23 482 000 | 43 334 000 | 61 733 000 | 79 490 000 |
| Weighted average number of outstanding shares during the period (basic) |
82 617 226 | 65 734 111 | 74 436 122 | 65 203 305 |
| Weighted average number of outstanding shares during the period (diluted) |
82 617 226 | 65 734 111 | 74 500 344 | 65 203 305 |
| Earnings (loss) per share - basic in NOK | 0.28 | 0.66 | 0.83 | 1.22 |
| Earnings (loss) per share - diluted in NOK See also note 7 |
0.28 | 0.66 | 0.83 | 1.22 |
Self Storage Group has acquired Eurobox, consisting of four legal entities. Eurobox operates four high quality climate controlled sites in the greater Oslo region, ideally located close to the main roads in the urban areas of Oslo, Asker and Drammen. Three of the facilities are freehold, and one facility has a long-term leasehold contract.
| 2019 | Main business activity |
Date of business combination |
Proportion of voting equity acquired |
|---|---|---|---|
| Eurobox Minilager AS - operating company | Self-storage solutions | 1 July 2019 | 100% |
| Cron Gruppen AS | Self-storage solutions | 1 July 2019 | 100% |
| Cron Invest AS | Self-storage solutions | 1 July 2019 | 100% |
| Eurobox Billingstad AS | Self-storage solutions | 1 July 2019 | 100% |
The above companies have been acquired with the purpose of continuing expansion of the group's activities, which focus on the self-storage market in Norway. Eurobox was acquired on 1 July 2019, with except for Eurobox Billingstad acquired 10 September 2019. The operating entity from the Eurobox acquisition is reported as part of the CSS segment and the three property entities are reported as part of the Property segment.
| Consideration | |
|---|---|
| (Amounts in NOK 1 000) | Eurobox |
| Cash | 234 294 |
| Shares in Self Storage Group ASA | 75 000 |
| Total consideration | 309 294 |
The purchase agreement included an option to acquire a neighbouring building at Billingstad. The excess value of the option is calculated based on market value for the neighbouring property, acquired in the transaction. The cash consideration is adjusted for changes in work in capital.
Assets and liabilities assumed in connection with the business combination of Eurobox group have been recognised at their estimated fair value on the date of the business combination. Investment property is recorded to fair value based on valuation from external real estate appraiser have been made to the freehold investment properties. Surplus value is identified related to fit-out, and the fair value adjustments is based on management's best estimate. No other adjustments to the carrying values of assets and liabilities have been identified. No not previously recognised intangible assets were identified. The purchase price allocation is preliminary and may be subject to change during the measurement period, which is one year from the date of the acquisition.
| (Amounts in NOK 1 000) | Carrying amount 1 July 2019 | Fair value adjustments | Fair value 1 July 2019 |
|---|---|---|---|
| Investment property | 235 479 | - | 235 479 |
| Fit-out and property, plant and equipment |
4 641 | 15 380 | 20 021 |
| Trade receivables | 1 706 | - | 1 706 |
| Option to buy additional freehold property |
- | 24 750 | 24 750 |
| Other current assets | 1 521 | - | 1 521 |
| Cash and cash equivalents | 1 978 | - | 1 978 |
| Deferred tax liability | - 41 828 | - 8 829 | - 50 657 |
| Trade payables | - 914 | - | - 914 |
| Tax payable | - 1 281 | - | - 1 281 |
| Other current liabilities | - 13 470 | - | - 13 470 |
| Net assets | 187 832 | 31 301 | 219 133 |
| Goodwill | |
|---|---|
| (Amounts in NOK 1000) | Eurobox |
| Consideration | 309 294 |
| Fair value of identifiable net assets acquired | - 219 133 |
| Goodwill | 90 161 |
Goodwill originating from the business combination is related to the fair value of the four properties in operation, and the value stems from the synergies of the net assets of the business, as well as from other benefits, such as the ability to earn monopoly profits and barriers to market entry. No impairment has been recognised subsequent to the business combination.
Goodwill that has arisen as part of the business acquisition is not tax deductible.
The acquired companies do not affect revenue and profit before they are consolidated from 1 July 2019.
The revenue and net profit for the full year 2019 are NOK 28.5 million and NOK 9.1 million respectively, if the Company had acquired Eurobox with effect from 1 January 2019. EBITDA for the full year 2019 is NOK 13.9 million.
Estimated transaction costs related to the acquisition amounted to NOK 2.8 million are recorded in 2019.
During the full year 2019, the following changes have occurred in the Group's portfolio of investment properties:
| Freehold investment | ||||
|---|---|---|---|---|
| Leasehold property | property | Total | ||
| Balance as at 31 December 2018 | - | 524 505 | 524 505 | |
| Implementation impact of leasehold property earlier classified | ||||
| as operating lease commitments | 437 402 | - | 437 402 | |
| Value adjustment due to passage of time | - 55 204 | - | -55 204 | |
| Additions and disposals leasehold property in the year | 109 010 | - | 109 010 | |
| Asset acquisition in OK Property AS | - | 11 257 | 11 257 | |
| Business combinations (see note 5) | - | 234 523 | 234 523 | |
| Company acquired as asset acquisition | - | 255 153 | 255 153 | |
| Additions to existing properties | - | 31 496 | 31 496 | |
| Fair value adjustments recognised in profit or loss | - | 17 523 | 17 523 | |
| Other/translation differences | - 2 146 | - | -2 146 | |
| Balance as at 31 December 2019 | 489 062 | 1 074 457 | 1 563 519 |
| Date | Number of shares issued |
Total number of shares |
Total share capital |
Value per share |
|
|---|---|---|---|---|---|
| Ordinary shares at 31 December 2018 | 65 734 111 | 6 573 411 | 0.10 | ||
| Issue of ordinary shares from Private Placement |
25 June 2019 | 12 987 012 | 78 721 123 | 7 872 112 | 0.10 |
| Issue of ordinary shares as part settlement to the selling shareholder of Eurobox |
1 July 2019 | 3 896 103 | 82 617 226 | 8 261 723 | 0.10 |
| Ordinary shares at 31 December 2019 | 82 617 226 | 8 261 723 | 0.10 |
At the General Meeting in 2019 the Board of Directors was authorised to increase the share capital with up to NOK 3 286 705.50 through one or several share capital increases. The authorisation may be used to provide the Company with financial flexibility, including in connection with investments, merger and acquisitions. The Board's authorisation is valid until the annual General Meeting in 2020.
Interest bearing liabilities are carried at amortised cost. The carrying amounts approximate fair value as at 31 December 2019.
| Amounts due in | ||||||
|---|---|---|---|---|---|---|
| As at 31 December 2019 | less than 1 year* | 1-5 years | Total | |||
| Debt to financial institutions (NOK, Handelsbanken) | 103 223 | 239 057 | 342 280 |
| Changes in liabilities arising from financing activities | Interest bearing borrowings |
Lease liabilities | Total financing activities |
|---|---|---|---|
| Balance as at 31 December 2018 | 129 773 | 217 | 129 990 |
| Implementation impact of lease earlier classified as operating lease commitments |
- | 437 402 | 437 402 |
| Additions and disposals of leasehold property in the year | - | 109 010 | 109 010 |
| Additions and disposals of other leases in the year | - | 5 646 | 5 646 |
| Repayments of borrowings/Payments of lease | -15 950 | -47 442 | -63 392 |
| Proceeds from borrowings | 228 000 | - | 228 000 |
| Interests expenses of borrowings | 6 605 | - | 6 605 |
| Interests paid of borrowings | -6 148 | - | -6 148 |
| Other/translation differences | - | -2 001 | -2 001 |
| Balance as at 31 December 2019 | 342 280 | 502 832 | 845 112 |
* Of the debt to financial institutions due in less than 1 year, NOK 84.8 million is planned refinanced in 2020.
Interim Report Q4 2019
Self Storage Group's financial information is prepared in accordance with international financial reporting standards (IFRS). In addition, management provides alternative performance measures that are regularly reviewed by management to permit for a more complete and comprehensive analysis of the Group's operating performance relative to other companies and across periods in addition to the financial information prepared in accordance with IFRS. Companies comparable to the Group vary with regards to, inter alia, capital structure and mix of leasehold and freehold properties. Non-IFRS financial measures, such as EBITDA, can assist the Company and investors in comparing performance on a more consistent basis without regard to factors such as depreciation and amortisation, which can vary significantly depending upon accounting methods, mix of freehold and leasehold properties or based on non-operating factors. Also, some of the non-IFRS financial measures presented herein adjust for one-time costs or costs that are not considered to be a part of regular operations.
The non-IFRS financial measures presented herein are not measurements of performance under IFRS or other generally accepted accounting principles and investors should not consider any such measures to be an alternative to: (a) operating revenues or operating profit (as determined in accordance with generally accepted accounting principles), as a measure of the Group's operating performance; or (b) any other measures of performance under generally accepted accounting principles. The non-IFRS financial measures presented herein may not be indicative of the Group's historical operating results, nor are such measures meant to be predictive of the Group's future results. The non-IFRS financial measures may be presented on a basis that is different from other companies.
Presenting operating profit before fair value adjustments is useful to Self Storage Group as it provides a measure of profit before taking into account the movement in fair value of investment properties and leasehold properties and is useful to the Group for assessing operating performance.
Identified costs not likely to occur in the normal course of business in Self Storage Group are defined as non-recurring costs. Examples of non-recurring costs are acquisition costs, restructuring and severance packages. The exclusion of non-recurring costs is useful to Self Storage Group as it provides a measure for assessing underlying operating performance.
EBITDA: EBIT + depreciation, amortisation and impairments
Adjusted EBITDA: EBITDA +/- identified items to be excluded from adjusted EBITDA as described below
| (Amounts in NOK 1 000) | 31 December | 31 December |
|---|---|---|
| Interest-bearing debt | 2019 | 2018 |
| Long-term interest-bearing debt | 239 057 | 118 023 |
| Short-term interest-bearing debt | 103 223 | 11 750 |
| Total interest-bearing debt | 342 280 | 129 773 |
| (Amounts in NOK 1 000) | Q4 2019 | Ex IFRS 16 Q4 2019 |
Q4 2018 | Full year 2018 |
|---|---|---|---|---|
| Property-related expenses | 8 696 | 8 696 | 6 559 | 25 425 |
| Salary and other employee benefits | 11 169 | 11 169 | 9 710 | 37 403 |
| Other operating expenses | 9 239 | 9 239 | 7 095 | 30 311 |
| Total other operating expenses | 29 104 | 29 104 | 23 364 | 93 139 |
| Operating profit before fair value adjustments | 37 393 | 20 349 | 17 157 | 63 244 |
| EBIT | 37 393 | 20 349 | 17 157 | 63 244 |
| Total adjustments | 667 | 667 | - | 1 942 |
| Adjusted EBIT | 38 060 | 21 016 | 17 157 | 65 186 |
| Change in fair value of investment properties | 12 451 | 12 451 | 35 723 | 38 223 |
| Change in fair value of leasehold properties | -14 726 | - | - | - |
| Adjusted Profit before tax | 28 098 | 30 699 | 52 653 | 100 288 |
| Tax | 4 045 | 7 111 | 9 319 | 19 228 |
| Adjusted Net profit | 24 053 | 23 588 | 43 334 | 81 060 |
| Operating profit before fair value adjustments | 37 393 | 20 349 | 17 157 | 63 244 |
| Depreciation | 3 849 | 3 552 | 2 573 | 10 527 |
| EBITDA | 41 242 | 23 901 | 19 730 | 73 771 |
| Total adjustments | 667 | 667 | - | 1 942 |
| Adjusted EBITDA | 41 909 | 24 568 | 19 730 | 75 713 |
| Adjustments | ||||
| Acquisition costs | 667 | 667 | - | 640 |
| Restructuring of legal structure | - | - | - | 390 |
| First time value assessment of freehold portfolio | - | - | - | 199 |
| Severance packages | - | - | - | 713 |
| Total adjustments | 667 | 667 | - | 1 942 |
| Ex IFRS 16 full | |||
|---|---|---|---|
| (Amounts in NOK 1 000) | Full year 2019 | year 2019 | Full year 2018 |
| Property-related expenses | 28 975 | 28 975 | 25 425 |
| Salary and other employee benefits | 39 566 | 39 566 | 37 403 |
| Other operating expenses | 34 730 | 34 730 | 30 311 |
| Total other operating expenses | 103 271 | 103 271 | 93 139 |
| Operating profit before fair value adjustments | 139 261 | 76 773 | 63 244 |
| EBIT | 139 261 | 76 773 | 63 244 |
| Total adjustments | 4 653 | 4 653 | 1 942 |
| Adjusted EBIT | 143 914 | 81 426 | 65 186 |
| Change in fair value of investment properties | 17 523 | 17 523 | 38 223 |
| Change in fair value of leasehold properties | -55 204 | - | - |
| Adjusted Profit before tax | 80 256 | 91 389 | 100 288 |
| Tax | 14 724 | 19 035 | 19 228 |
| Adjusted Net profit | 65 532 | 72 354 | 81 060 |
| Operating profit before fair value adjustments | 139 261 | 76 773 | 63 244 |
| Depreciation | 12 108 | 11 710 | 10 527 |
| EBITDA | 151 369 | 88 483 | 73 771 |
| Total adjustments | 4 653 | 4 653 | 1 942 |
| Adjusted EBITDA | 156 022 | 93 136 | 75 713 |
| Adjustments | |||
| Acquisition costs | 4 653 | 4 653 | 640 |
| Restructuring of legal structure | - | - | 390 |
| First time value assessment of freehold portfolio | - | - | 199 |
| Severance packages | - | - | 713 |
| Total adjustments | 4 653 | 4 653 | 1 942 |
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