Self Storage Group

Earnings Release • Aug 15, 2018

Self Storage Group ASA Second quarter 2018

15 August 2018

GROUP HIGHLIGHTS – SECOND QUARTER 2018

• Revenues in Q2 2018 NOK 58.7 million, up from NOK 51.4 million in Q2 2017
• Adjusted EBITDA in Q2 2018 of 17.9 million1) , up from NOK 11.8 million in Q2 2017
• Fair value of investment property increased by NOK 113.1 million from Q4 2017 to a total of NOK 451.7 million in Q2 2018
• Acqusition of 2 properties completed in the quarter
• Cash position 108 million at the end of Q2 2018
• New loan facility with Handelsbanken signed in July with 60% loan to value for purchase of investment properties
• The Group's current loan to value on investment property is 21%

KEY FIGURES – SECOND QUARTER 2018

• Current lettable area (CLA) 112 900 m² , up from 100 200 m²in Q2 2017
• Expansions and opening of 3 new facilities adding a total of 2 800 m²CLA since Q1 2018
• Acqusition of 2 properties with a potential lettable area2) of 4 600 m²
• Total number of operating facilities at the end of Q2 2018 was 95, an increase of 23 facilities since Q2 2017
• Average rent1) 2 281 NOK pr m²
• Occupancy1) 85,7% (target 90%)

KEY FIGURES – SECOND QUARTER 2018

(NOK million)

KEY FIGURES DEVELOPMENT Q2 2017-Q2 2018

	2018	2017	2017
	Q2	Q2	FY
Revenue	58.7	51.4	212.1
Total operating costs1)	40.8	39.6	158.0
Adjusted EBITDA	17.9	11.8	54.2
Non-recurring items	1.0	0.9	11.3
Reported EBITDA	16.9	10.9	42.9

KEY FIGURES1) – SECOND QUARTER 2018 (NOK million)

Q2 18 Q2 17 FY 17 Revenue 58.7 51.4 212.1 Total operating costs2) 40.8 39.6 158.0 Adjusted EBITDA 17.9 11.8 54.2 Adjusted EBIT 15.6 9.6 46.9 Change in fair value of investment properties 2.0 1.3 29.8 Adjusted Pre-tax profit 16.4 10.3 73.5 Adjusted Net profit 12.6 7.6 59.7 Current lettable area (thousands m2) 112.9 100.2 103.7 Lettable area under development (thousands m2) 13.5 9.3 12.3 P&L

Cash flows	Q2 18	Q2 17	31.12.17
Net cash flows from operating activities	18.7	6.1	42.3
Net cash flows from investing activities	-25.5	-58.2	-123.4
Net cash flows from financing activities	-15.0	0.5	241.6
Cash and cash equivalents at beginning of the period	130.4	52.4	34.1
Cash and cash equivalents at end of the period	108.3	26.5	195.2

Balance sheet	30.6.18	31.12.17
ASSETS
Investment property	451.7	338.6
Property, plant and equipment	64.9	52.6
Goodwill	95.0	72.3
Total non-current assets	611.6	463.5
Other current assets	27.4	26.3
Cash and bank deposits	108.3	195.2
Total current assets	135.7	221.5
TOTAL ASSETS	747.3	685.0
EQUITY AND LIABILITIES

Total equity	566.1	514.0
Long-term interest-bearing debt	87.2	89.7
Deferred tax liabilities	34.1	22.3
Total non-current liabilities	122.5	112.2
Total current liabilities	58.7	58.9
Total liabilities	181.2	171.0
TOTAL EQUITY AND LIABILITIES	747.3	685.0

1) Unaudited figures for 2018

2) Adjusted for non-recurring items of NOK 1.0 million in Q2 2018, NOK 0.9 million in Q2 2017 and NOK 11.3 million in FY 2017

PROPERTY VALUE INCREASED BY 33% IN FIRST HALF OF 2018

• SSG owns 43 properties as of June 2018

• The properties have a potential lettable area of 46 300 m²
• 29 400 m² in operation
• 13 300 m²under development
• 3 600 m²new property in Trondheim1)
• Internal lease agreements at commercial terms are signed between OK Property and the operating companies in the Group
• External valuations performed by Newsec conservative yields

STEADY GROWTH IN SHARE OF OWNED PORTFOLIO

• SSG's strategy is to expand within owned facilities
• 26% of current lettable area in operation at the end of June 2018 was freehold
• 83 481 m²leased
• 29 390 m²owned
• Freehold m² increased with 110% during 2017 and additional 36% in the first half year of 2018

• 38 of a total of 95 facilities in operation (40%) were freehold as of June 2018

CLA INCREASED BY 9 200 M² DURING 1H 2018 – 13 300 M² IN PIPELINE

AVERAGE OCCUPANCY AND RENT1) IN Q2 2018 PER CONCEPT AND GEOGRAFICAL AREA

REVENUE DYNAMICS Q2 2018

STRONG LINK BETWEEN REVENUE GROWTH AND ABSOLUTE GROWTH IN PRE TAX FREE CASH FLOW

Strong link between further growth in revenue and EBITDA

THE COMPANY

OUR HISTORY

HIGH ACTIVITY IN 2017 – CONTINUING THE GROWTH IN 2018

SELF STORAGE GROUP AT A GLANCE

Provider of self storage solutions to both individuals and businesses through (i) OK Minilager and (ii) City Self Storage

Operations in Norway, Sweden and Denmark

Focus on cost effective operations through self service/ automated storage facilities

As of 15 August 2018 SSG has 113 200 m² CLA and 13 300 m² lettable area under development – in total 126 500 m²

As of 15 August 2018 SSG has 19 000 storage rooms in 39 cities and towns – 96 facilities

SSG CONSISTS OF TWO DISTINCT BUSINESS CONCEPTS

City Self-Storage OK Minilager

High-end brand providing self-storage rental and ancillary products and services in Scandinavia's capital cities

• 311) temperate storage facilities across Scandinavia
• One of the leading self-storage providers in the Scandinavian market
• Located in Oslo, Stockholm and Copenhagen

• 63 765 m² CLA (4 454 m² freehold)

• Countrywide, discount-priced offering of self-serviced storage facilities in Norway

• 652) facilities located across Norway
• 30 drive-in storage facilities and 35 temperate storage facilities
• 2 nd largest player in Norway, behind CSS
• Self service, open 24 hr/day and 7 days a week
• 49 449 m² CLA (25 250 m² freehold)

1) As of 15 August 2018 2) As of 15 August 2018

ACQUISITIONS IN THE QUARTER

Acquisition of 2 new properties in the quarter

2) The potential lettable area is subject to building permits and is not included in the KPI's as of 15 August

DEVELOPMENT IN MOSS

New purpose-built Expansion

Highlights

• The purchase agreement of Minilager Norge group included a contingent liability related to the terms of a building permit for the construction of a new storage building
• The existing facility in Moss has 755 m² CLA and occupancy above 90%
• Building permit for the new purpose built building on the existing property was received in July 2018
• Potential lettable area of 1 200 m2 1)
• Great visibility and easy access
• Moss is expected to grow with 17% by 20402)
• Several new housing developments in the city
• With this expansion we strengthen our position in the Østfold region

Map Source: Google Maps

1) Potential lettable area is not included in KPI's as of 15 August

13 300 M² IN POTENTIAL LETTABLE AREA1)

• The potential m²is in freehold facilities
• Rent income from expiring lease contracts from 5 100 m²of the 13 300 m²not yet built into self-storage units
• 10 000+ m² are planned to open during 2018
• 4 900 m² are opened as of June 2018 in addition to 4 300 m2 from the acquisition of Minilager Norge group

Illustration of a greenfield project developed under the CSS brand

GROWTH POTENTIAL IN NORWAY

Focus on organic growth in Greater Oslo. Strengthening the position of both the CSS and OK Minilager brands in the region

Focus on the larger urban areas in Norway, with automated sites operated under the OK Minilager brand

Potential to enter 30+ smaller markets with population of 10.000<

Growth potential within existing smaller markets

Opportunity for M&A in selected markets

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Illustration showing markets with immediate growth potential

SSG HAS A STRONG PLATFORM FOR FUTURE GROWTH

THE MARKET

UNTAPPED POTENTIAL FOR SELF STORAGE IN THE NORDICS

Historic development in UK1) shows growth in CLA per capita and growth in occupancy

Scandinavia is lagging in terms of self storage space per capita (m² )

• The European market is growing; total number of facilities and lettable area have experienced CAGRs of 6.4 % and 4.5 % since 2014, respectively
• Experience from more mature markets highlight a significant untapped potential in the Scandinavian countries

THE NORWEGAIN MARKET IS UNDERDEVELOPED -AN INCREASING NEED FOR STORAGE GOING FORWARD

Growth in population

% of population living in cities

Growth in population in 5 largest cities1)

Growth in types of households 2013-2017

BNP-level in Norway is 50% higher than European average

URBANISATION AND RISING HOUSING PRICES HAVE LEAD TO NEW BUILDING STANDARDS WITH LESS STORAGE SPACE

• Approx. 50 m²
• 3 rooms
• Closed kitchen

More functional layout with focus on practical solutions and storage space

• «Closed kitchen» with necessary storage space
• Larger bedrooms and bathrooms
• Common areas in basements were previously reserved for storage space

Old building standards New building standards

• Approx. 40 m²
• 2 rooms

• Open kitchen

• Smaller apartments on the back of rapidly rising housing prices, especially in the larger cities

• «Open kitchen» solution with less storage space
• No link between size of apartment and storage space
• The required 3 m² storage space has become a «walk-in closet» and may even be eliminated following TEK17

THE SCANDINAVIAN SELF STORAGE MARKET AT A GLANCE

Source:Company information, proff.no, proff.se

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Appendix

SECOND QUARTER AND YTD 2018 COMPREHENSIVE INCOME

Profit and loss statement Comments

(Amounts in NOK 1 000)		Unaudited	Unaudited	Unaudited	Unaudited	Audited
		For the three	For the three	For the six	For the six	For the twelve
		months ended	months ended months ended months ended			months ended
	Note	30 June 2018	30 June 2017	30 June 2018		30 June 2017 31 December 2017
Revenue	3	58 695	51 378	116 981	101 187	212 143
Property-related expenses	3	23 810	23 241	49 1 54	48 083	94 994
Salary and other employee
benefits	3	9 9 4 2	8 3 3 6	19 309	17013	36 747
Depreciation		2 3 7 2	2 2 2 3	4758	2 5 6 2	7 2 6 1
Other operating expenses	3	8036	8927	16893	15 3 76	37 464
Operating profit before fair value
adjustments		14 5 35	8651	26 867	18 15 3	35 677
Change in fair value of investment
properties	6	2 0 1 1	1 2 7 5	2 500	13 1 7 3	29 831
Operating profit after fair value
adjustments		16 545	9926	29 366	31326	65 508
Finance income		60	374	612	487	1 3 3 3
Finance expense		1 2 1 4	879	2 5 8 7	2 0 4 5	4626
Profit before tax		15 391	9421	27 391	29768	62 215
Income tax expense		3 5 4 0	2516	6 3 5 0	7473	11 996
Profit for the period		11851	6905	21040	22 295	50 219

• Financial development affected by the acquisition of Minilageret AS 30 June 2017 and the consolidation of Minilager Norge group from 1 January 2018
• Revenue for Q2 2018 was NOK 58.7 million, up NOK 7.3 million from Q2 2017. The increase is due to income from Minilageret and Minilager Norge group, in addition to growth in rentals
• Operating profit in Q2 2018 was impacted by transaction costs related to the acquisition of Minilageret group and other non-recurring items. In total non-recurring items amounted to NOK 1.0 million in Q2 2018, NOK 0.9 in Q2 2017 and NOK 11.3 million in 2017
• The fair value of investment property is based on external valuations in combination with management estimates and judgments

YTD 2018– FINANCIAL POSITION

Financial position Comments

(Amounts in NOK 1 000)	Unaudited	Audited
	30 June	31 December
ASSETS	2018	2017
Non-current assets
Investment property	451 737	338 631
Property, plant and equipment	64 047	52 618
Goodwill	94 950	72 272
Other intangible assets	901	493
Total non-current assets	611 635	463 521
Current assets
Inventories	1 493	1 434
Trade and other receivables	11 985	11 455
Other current assets	13 900	13 397
Cash and bank deposits	108 324	195 224
Total current assets	135 702	221 510
TOTAL ASSETS	747 337	685 031

	Unaudited	Audited
	30 June	31 December
EQUITY AND LIABILITIES	2018	2017
Equity
Issued share capital	6 573	6 369
Share premium	427 931	396 416
Other reserves	-263	363
Retained earnings	131 849	110 809
Total equity	566 090	513 957
Liabilities
Non-current liabilities
Long-term interest-bearing debt	87 166	89 690
Other financial liabilities	1 053
Deferred tax liabilities	34 063	22 289
Obligations under finance leases	223	214
Total non-current liabilities	122 505	112 193
Current liabilities
Short-term interest-bearing debt	4 750	4 750
Trade and other payables	12 345	10 282
Income tax payable	519	1 699
Other taxes and withholdings	5 420	4 789
Obligations under finance leases	125	312
Other current liabilities	35 583	37 049
Total current liabilities	58 742	58 881
Total liabilities	181 247	171 074
TOTAL EQUITY AND LIABILITIES	747 337	685 031

• Total assets of NOK 747 million
• Investment property increased by NOK 113 million since 31 December 2017
• Cash and bank deposits reduced due to acquisition of Minilager Norge group, purchase of investment properties (100% cash), and down payment of loan in Minilager Norge to DNB. New loan facility with Handelsbanken is signed in July 2018
• Increased equity through issue of ordinary shares and result for the period
• Positive net interest-bearing debt was NOK 16.4 million
• Equity ratio was 76%
• Negative working capital due to invoicing of customers in advance and stable cost

YTD 2018 – CASH FLOW

Condensed consolidated statement of cash flows Comments

		Unaudited	Unaudited	Unaudited	Unaudited	Audited
(Amounts in NOK 1 000)		Note For the three For the three months ended	months ended	For the six months ended 30 June 2018 30 June 2017 30 June 2018 30 June 2017	months ended	For the six For the year ended 31 December 2017
Cash flow from operating activities
Profit before tax		15 3 9 0	9430	27 391	29 768	62 215
Income tax paid		$-1853$	$-7701$	$-1853$	$-7701$	$-8170$
Adjustment for net interests paid		12		$-582$		242
Depreciation		2 3 7 2	2 2 2 3	4758	2562	7 2 6 1
Gain/loss on disposal of property, plant and equipment			133		133	148
Change in fair value of investment property	6	$-2010$	$-1275$	$-2500$	$-13173$	$-29831$
Change in trade and other receivables		$-655$	587	$-436$	$-477$	$-733$
Change in trade and other payables		1 2 8 8	$-1275$	1731	$-4262$	1466
Change in other current assets		4682	2.642	$-523$	4 0 0 0	5047
Change in other current liabilities		$-528$	1 3 5 2	$-2059$	1828	4623
Net cash flow from operating activities		18698	6 116	25927	12678	42 268
Cash flow from investing activities
Payments for investment property		$-20197$	$-18019$	$-46756$	$-27846$	$-42163$
Payments for property, plant and equipment		$-4468$	$-2499$	$-9323$	$-4021$	$-11471$
Net cash outflow on acquisition of subsidiaries		$-806$	$-37669$	$-39454$	$-46136$	$-69760$
Net cash flow from investing activities		$-25471$	$-58187$	$-95533$	$-78003$	- 123 394
Cash flow from financing activities
Net proceeds from issue of equity instruments of the Company					95 865	287 416
Proceeds from borrowing						95 000
Repayment of borrowings		$-14974$	$-350$	$-16691$	$-38159$	$-140840$
Net cash flow from financing activities		$-14974$	$-350$	$-16691$	57706	241576
Net change in cash and cash equivalents		$-21747$	$-52421$	$-86297$	$-7619$	160 450
Cash and cash equivalents at beginning of the period		130 374	79 0 20	195 224	34 115	34 1 1 5
Effect of foreign currency rate changes on cash and cash equivalents		$-303$	$-126$	$-603-$	$-23$	659
Cash and equivalents at end of the period		108 324	26 473	108 324	26473	195 224

Operating activities

• Strong cash flow
• Invoicing of customers in advance predictable and stable costs

Investing activities

• Acquisition of Minilager Norge group Q1 2018
• Acquisition of 6 investment properties and 1 company assets aqusitions (cash) first half 2018
• Establishment and fit out new facilities and expanisons
• Maintenance is posted as property cost

Financing activities

• Private placements in January and October 2017
• Loan facility with Handelsbanken in July 2017 – repayments to shareholders
• Down payment of loan in Minilager Norge group to DNB in Q2 2018

SSG's cash position at the end of June 2018 was NOK 108 million

EBITDA-DEVELOPMENT

(NOK million)

BRIDGE Q2 2017-Q2 2018

BRIDGE Q1 2018-Q2 2018