Shurgard Self Storage Ltd

Ladies and gentlemen, welcome to the SureGuard H1 2026 results earning call. For the first part of the conference call, participants will be in listen-only mode. During the questions and answering session, participants will be able to ask questions by dialing the pound key 5 on the telephone keypad, by clicking the raise your hand button on the player, or by writing their questions in the chat box. I'll now hand over the conference to Caroline Thierry-Ferry at SureGuard.

Please go ahead. Good morning, everyone. Thank you for joining us for the Chagat H1-2026 results. I'm here with Marc Orsan and Thomas Oversberg. Before we begin, we want to remind you that all statements other than statements of historical fact included in this code are forward-looking statements. Forward-looking statements are subject to risk and uncertainties that could cause actual results to differ materially from those projected by the statements. This risk and other factors could adversely affect our business and future results that are described in our earnings reviews and in our publicly reported information. You can find our press release as well as a replay of this webcast on our website at sherriab.eu. With that, I will now turn the call over to Mark.

Thank you, Caroline, and good morning all. Thomas and I will present you the different sections of the deck, and I propose to go to page 4. to start with the key highlights of the first semester 26. So, first on the revenue side, we have seen an acceleration in Q2 with 3.6% versus last year, additional, while Q1 delivered plus 3.1% versus last year, supported by stronger momentum in key markets as the UK and Germany. In addition, our like-for-like in Q2 grew by plus 2.5%, while Q1 was 2.2, so a slight improvement. However, this acceleration has been slower than anticipated. Second, regarding the income from properties or NOI, we continue to focus on cost management and Q2 26 achieved a growth of 1.6% versus last year, while Q1 was negative versus last year. Thirdly, our balance sheet is strong with a low average of 6.5 times the debt over underlying EBITDA an LTV below 24%, and €70 million cash plus our on-ground RCF of €570 million. Fourth, our secure pipeline is a real growth engine for the future. We have 170,000 square meters that will be delivered by 2028, and these new properties will fuel our NOI growth with an additional €35 million at maturity. And fifth, regarding the Outlook 26, The slower than anticipated revenue growth led us to revise downward our targets for the year. But, looking ahead, we are focusing on filling up our new properties and leveraging our pricing power and customer retention for ourselves to drive the revenues up during H226 and strengthening our position for 2027. So on that, let's go to page 7 with our business update section. Talking about growth acceleration, Q2 has seen a good momentum for the UK and Germany, while the Nordics and the Netherlands continue to deliver very solid performances. France and Belgium are flat for different reasons. France is impacted by our more aggressive pricing, but occupancy starts to increase, while for Belgium, a couple of stores are defending their market share, which is a competitor in a ramp-up phase. Interestingly, The UK is combining two positive levers, one related to the accelerated ramp up of our long-term stores, in particular the former local store, and the revenue growth in June and July and also early August for our central. And I propose we go to the next page dedicated to an overview of our portfolio and importance of growth. As a reminder, so we are on page eight. Thank you. So, as a reminder, you will find on the right side of the page how our portfolio is well spread across Europe with prime cities. This is what you see on the map. In addition to this strong foundation, the left side of the page shows how the growth of our platform footprint has driven rented square meters over the years and in turn, revenue. Meaning, SureGuard has a significant embedded growth potential based on our recent openings and current secured pipeline. I will not go to the details of page nine, but what you need to understand and remember is the importance of the share of properties in ramp up in our portfolio that will contribute to our future earnings growth. With 29 additional morsels just for the year 26. Let's go to page 10. So page 10, is showing some pictures of the new properties that we opened in H1 and two major redevelopments we did. Those are again demonstrating the benefit of being the owners of our buildings and creating density of properties in prime areas. H1-26 has seen the delivery of 28,000 square liters representing €55 million of investment and H2 will be very busy and will deliver another 75,000 square meter or close to 75% of the whole year 26 commitment. Let's go to page 11 to have an overview on our portfolio expansion. So we have secured today another 95,000 square meter or 240 million euros of project costs to be delivered in 27 and 28. Mainly three countries will benefit from this footprint growth, Germany, the UK and Netherlands. Globally, our current pipeline for the years 26, 27 and 28 will generate 35 million euros of additional NOI at maturity. And I would say that in addition, I would like to mention that all projects approved since February 26 will deliver a return at maturity of 9 to 10% NOI yield, increased by 100 basis points versus previous regular rate, and we see the NOI growth even further. So let's get to page 12. We have a couple of good news regarding the former Lok & So portfolio performance in Q2 and early Q3 26. We have reached 110,000 square meters rented early August, which is our guided target. Meanwhile, the moving rate continues to grow. And on this, I turn to Thomas.

Thank you, Marc. And good morning, everyone. Let me start with our all-store performance for the first half of 2026 on page 14. At constant exchange rate, property operating revenue increased by 3.3% to $229.6 million. This was supported by a 3.4% increase in average rented square meters, while average in-place rent was stable. The impact of our larger rent-out portfolio meant that average occupancy was 83.6% or 1.9 percentage points below the prior year. Net operating income increased by 0.5% to 140.2 million with operating margin declining by 1.7 percentage points. This reflects the impact of operating a portfolio that is 6.1% larger in rentable square meters. together with inflationary pressure and deliberate investments to support revenue growth, which we will talk about on slide 16. Underlying EBITDA was 124 million, down 0.6% at constant exchange rate. Adjusted upper earnings were 0.77 Euro, down 5.7%. I will come back to the per share bridge on slide 18. Let us now look at the sources of the revenue growth. As noted, Revenue at constant exchange rate increased from 222.2 million in the first half of 2025 to 229.6 million in the first half of 2026, an increase of 7.4 million or 3.3%. The 251 stores already in the 2025 same-store pool contributed an additional revenue of 1.9 million. The 24 stores entering the 2026 same-store pool added a further 0.8 million. Taken together, same-store segment contributed 2.7 million of incremental revenue growth. The 2026 non-same-store pool contributed 4.7 million, demonstrating the significant earning contributions from properties that we have recently been developing or acquired and are now renting out. The key point is, therefore, that growth is broad-based across the portfolio. Let us now break down the NOI development on slide 16. At constant exchange rate, NOI increased from 139.5 million to 140.2 million, or 0.5%. The bridge shows two dynamics. Within the same store properties already included in the 2025 same store pool reduced NOI by 0.6 million, while stores entering the 2026 same store pool added 0.5. The combined impact of the 275 same stores was therefore broadly stable with a modest decline of €100,000. The ramping up non-same store portfolio contributed an additional 0.8 million of net operating income and offset the same store movement. This confirms that this part of the portfolio is already contributing to profitability, even though these stores are still below mature occupancy and margin level. Let's zoom in on various cost drivers compared to the same period of clear year. Payroll expenses increased by 2.1 million as a result of both addition in properties as well as the reinforcement of our support center. Real estate and other taxes increased by 1.7 million, mainly driven by the anticipated increase in UK business rate, combined with the additional stores across the network. Marketing expenses increased by 1.1 million, reflecting the generally higher cost of online advertising, as well as our larger portfolio. In addition, it reflects the deliberate decision to increase our spending to support revenue growth And finally, other operating expenses have increased by 2.1 million, mainly due to two drivers. First, higher licensing and maintenance costs for our SaaS ARP tool, which we placed in H2 2025, our all-on-premise solution, combined with the addition of the stores to the portfolio and the rollout of our European call center. The noted same-store margin pressure reflects the timing of these commercial and operating model-driven investments. as they were incurred against lower than expected modest same-store revenue growth. While the Q2 direction was better, the improvement in revenue was not yet sufficient. Our focus on occupancy and rental rate growth should allow us to show a better sales leverage effect going forward. Slide 17 puts this split into a larger perspective and shows why the ramp-up portfolio matters so much to Q2 earnings. As the chart shows, the non-same-store segment offset the negative contribution from the same store that has the highest contribution to NOI growth since 2021. This is our strategy at play. It shows the important growth the portfolio expansion delivered during the recent years. Looking at the H1 2026 performance, our immediate priority is twofold. Continue maturing these new stores by reinforcing growth and operating leverage in the same stock portfolio through occupancy, pricing, customer retention, and cost discipline. Let me now bridge this operating performance to adjusted APRA earnings per share on slide 18. Adjusted April earnings per share decreased from 0.82 in the first half of 2025 to 0.77 in the first half of 2026, a decline of 5.7% at constant exchange rates. NOI positively contributed approximately 0.01 per share, which was offset by approximately 0.01 from general administrative costs and here in particular higher share-based compensation expenses. and 0.03 from the anticipated higher net interest. The tax movement contributed approximately 0.01, while the other items were brought in neutral. The remaining approximately 0.02 per share dilution came from the higher weighted average share count following the 2025 script dividend. The script option has now been discontinued. This residual comparison effect is a residual comparison effect, apologies, and not an ongoing source of delusion, which is important when assessing the underlying earnings trajectory. Let me now turn to the balance sheet and final conclusion, turning to slide 20. At June 30th, the investment property, including properties under construction, was valued at $7.27 billion, compared with $7.12 billion at the end of 2025. The increase reflects continued investment in the portfolio, while the overall valuation environment remains broadly stable, as exit cap rates expanded modestly from 5.1% to 5.2%. APRA NTA per share increased by 0.7% to 53.64%. Net debt was 1.73 billion compared to 1.66 billion at year end, reflecting the continued investment in the portfolio and the move to a full cash dividend. Loan-to-value was 23.7% compared to 23.2% at year-end, and net debt to underlying EBITDA was 6.5 times compared to 6.2 times. The increase is measured and remains fully within our rating framework. It also needs to be viewed against the substantial embedded earnings contributions from stores that are still ramping up. The financial structure behind this balance sheet remains strong, gives us significant flexibility, which is further detailed on slide 21. We retain our strong 2 rupee plus rating from S&P with a stable outlook and 100% of our assets remain unencumbered. On average, fixed cost debt is 3.3% with a weighted average maturity of 6.9 years. We currently have 795 million committed liquidity sources consisting of our undrawn remaining term loan and the revolving credit facility. In addition, we have 70 million of cash at hand. This liquidity, combined with a strong loan-to-value ratio, provides the flexibility to execute our committed development program while maintaining capital discipline. Our financing position, therefore, does not change the priority. funds a secure pipeline, protect the rating, and allocate capital only where returns meet our more demanding criteria. With that, I hand back to Marc to take us through the outlook and our execution priorities.

Thank you, Thomas, for these explanations. So, regarding Amontage 23, regarding the Outlook 26, we have decided to revise the operational part downward due to the revenue trajectory we have at the end of H126 versus the anticipated The impact is leading to a revised also revenue growth of three and a half to four and a half versus full year 25 at consumption rate. And despite our cost management, less interest expenses and lower corporate income tax than anticipated, the negative difference of revenue growth is impacting the underlying EDTA and our adhesive earnings versus previous guidance. On the square meter portfolio expansion side, we will deliver within the initial guidance, leverage and dividend stay as initially guided as well. For the medium-term guidance, considering the current approaching environment, we are not reaffirming our targets and will revisit when market conditions allow for a more meaningful assessment. However, we maintain our leveraged targets with an LTV below 25%, a net debt over VBA of 5 to 6 times, and our commitment to our triple D plus S&P rating. We will continue to pay a cash dividend of 1.17 euros per share per year. So let's go to page 24 to discover the key actions in motion to support our EPS role. I think it is important to share with you and understand the actions that the management supported by our board of directors have already decided to put into motion. There are four folds. The first one is the capital discipline. We stopped the optionality of the script dividend in January 26th. and all dividends since then are 100% cash payments to avoid additional dilution and impacts on the EPS. The second decision has been to increase the hurdle rate by 100 basis points to 9-10% NOI yield for all organic projects as of February 26 with a positive medium-term impact on the EPS. The third decision has been to require an EPS accretion as of the first full year of operations for M&A Deals. The second lever that is relating to financing of the company. Here we have refinance, former debts and additional needs in March 26 with a term loan facility of 570 million euros at a cost of 80 basis points above EUR which brings flexibility and avoids upfront loading interest costs. Our third lever is a revenue acceleration. We have applied a more aggressive pricing to accelerate the ramp-up of our known sensors, which are a significant source of potential additional revenue and NOI since Q1 26. At the same time, we pushed the occupancy of our sensors with additional advertising and continue to do so in Q3 26. Last but not least, We have rolled out a European call center for sales calls in and outbound calls to catch more leads and convert more. The complete rollout will end by October 26. And our fourth lever is the operating efficiency that you are familiar with. The clusterization of our store network has been completed with the UK in early Q3 26 and France will be completed by Q4 26. It will deliver labor cost savings for the full year 27 and partially in 26. In the end, these eight Q actions have and will support EPS growth for our company. So therefore, time to conclude now and let's look at the final page, page 26. Thank you. So, the first half of the year has ended better than it started with the acceleration of the revenue growth and the significant contribution coming from our non-sense tools. but not enough versus our anticipation, and therefore, we revised our operational outlook for 2026. However, we have strong levers and strengths to play with. One, our focus on revenue growth through the ramp up of our non-SAMS tools, plus customers retention and pricing dynamics for our SAMS tools. Second, our cost optimization plans. Thirdly, our solid secured pipeline that will deliver significant additional NOI growth in the coming years. And fourth, a very strong balance sheet with a low leverage and an article because rating from S&P. All in all, 26 will be a transition year, positioning the company well for the future. And on this, I turn to Caroline to open the Q&A session.

Thank you, Marc and Thomas. We are now pleased to open the line for your questions.

Ladies and gentlemen, if you wish to ask a question, please dial pound key 5 on your telephone keypad to enter the queue. If you wish to withdraw your question, please dial pound key 6. You can also ask a question by clicking the raise your hand button on the player and by writing questions in the chat box under the player. Our first question is from Marius Pasu from Bernstein. Please go ahead. The next question comes from Marius Pasu from Bernstein. Please go ahead.

Thank you very much and good morning and thank you for taking my questions. Two from my side, I lost them one by one. So I think firstly, really into your guidance, of course with the first quarter results, I think you'd expect us to remain within that outlook range provided. What really has been the shift since then? I mean, the metrics at the time were also broadly unsupportive. So I suppose, can you walk us through what you'd anticipated would drive a recovery back then towards those targeted levels?

So, thank you for the question, Marius. So, the situation when we looked at the results, if you want, was that we saw the accelerating taking part. And we were looking at where occupancy pricing and the whole market were moving. And we therefore, at that point in time, considered that the acceleration would still be sufficient to close the gap. So when we recently then looked at the past performance and plugged that into our latest forecast, while we saw this good Q2 momentum, we eventually had to conclude that it was not sufficient, the acceleration, to close the gap until year-end.

And I suppose a bit of a follow-up to that one is that what is driving then your view that this momentum you're seeing now will be supported through the second half?

So the momentum which we're currently seeing is continuing. That's, I think, the very, very supportive message. In all of our key markets, and particularly in the UK, we see that what we observed in the last month is continuing at the moment. Absolutely.

for our all-stores and also the semi-stores. Okay.

And then just secondly, of course, you've mentioned that you've stepped away from your prior medium-term guidance. So should we think about 26 as being a bit of a reset year before returning to growth? And whether that revised all-store revenue growth guidance for this year is a more realistic run rate going forward versus the prior 6% to 8% you had?

Well, I think that the new outlook of the revisorhood that we have given obviously is corresponding to what we think we will do in 26. And in 27, we have our disclosure for the full year 26 in early March. And there will be also an outlook given for the year 27 at that moment.

Okay so no pointing towards I mean because obviously it's clear that you obviously aren't reaffirming that guidance but I think the expectation for that six to eight percent top line I'm assuming people are going to be looking to see if that's still achievable is there like is that set down we're seeing this year is that basically a function of what we're now going to be seeing in future years in light of what you're seeing in terms of the market progression?

I think, Marios, that to be completely transparent and clear, we need to wait for the end of the year to see where we are exactly, and also the start of 27 to be able to come back with a realistic, let's say, numbers and outlook. Okay, I can take that.

The next question is from Anna Escanante from Morgan Stanley. Please go ahead.

Good morning. My first question is on guidance for 2026. So I think we all appreciate that it might be challenging forecasting revenues, even, you know, it's difficult to predict consumer behavior accurately. However, when I look at the implied operating expenses, I draw a bit of margin. based on your revised revenue and EBITDA guidance, it looks like now you're guiding to operating expenses including FDNA around 2-3% higher than the previous guidance. So what has changed versus May? What has happened since May that you were not anticipating back then in terms of the expenses?

From the operating expenses perspective, we are not expecting that the costs are going higher than what we were guiding for before. So I think it's important to know that the expenses really developed in line with what we were expecting when it comes from an operating perspective. The only exception is when we decided to invest more in our marketing to drive conversion and get the revenue in. That will likely continue for the rest of the year, and therefore that is the only probably exception to what we were thinking before. But that's fully in line with our aim to get the revenue and the occupancy where it's supposed to be. All the other costs were behaving exactly in the way we were expecting them, and we expect them to end in line with our estimates before.

Thank you. That was very clear. And then my second question is on capital allocation. You've mentioned in the release that there is a challenging macro environment, but you also quoted the challenging competitive environment. So why keep building new stores then, particularly in markets where are performing a bit weaker? Why do you think that's the best capital allocation?

Well, obviously when the pipeline is secured, the pipeline has to be delivered and that's why we are already in 26, 27 and 28 with projects where we have the building permits and therefore those ones will be delivered. Secondly, medium-term, we believe that and we had that demonstration for example in Sweden when we faced a couple of years ago, if you remember, a very tough situation in terms of competition, so one competitor was aggressively developing and ramping up the properties. And in the end, today, when you look at the results of Sweden, we are very happy to be in Sweden and to do what we are doing there. No more than plus 5% revenue for year-to-date, I think. So for us, medium term, we don't fear competition and we still think that growing the platform where it makes sense, meaning the capital cities where we are with redevelopment and organic or even M&A is a good way to do. After that, monitoring the volume of investment year on year for pipeline, you have a lead time that you need to respect. So that's where we are.

Okay, thank you.

You're welcome.

Our next question is from Frederic Renard from SureGuard.

Please go ahead.

Welcome Frederic.

Hi guys, good morning. Just a few follow-up. So you draw the mid-term guidance. I understand that you probably have lower confidence in the mid-term outlook. But then the question would be, how do you expect the consensus to modelize SureGard on a two, three-year basis while it's difficult for you to give a proper guidance for the next year? What do you think about that?

Well, we think that analysts have talents, first. Secondly, we are a public company for now more than eight years. We are in Europe the one disclosing quarterly detailed numbers per market, which is very different than what our players are doing. And I think you have plenty of information to be able to modelize the company for the future. And that's our belief.

But versus what you just said to the question of Mario, in the sense that for me, my conclusion was to say, okay, maybe you don't have a visibility on your future revenue. Would that be correct to interpret?

No, I said that the visibility will be obviously, because we have given a revised guidance, and if we have given this revised guidance, obviously, we're going to make it. And by the end of 2026, and especially early 27 when we have in March to give an outlook for the year we have already two months more or less of trading for the year 27 so it will give us I suppose more comfort to give an outlook 27 than obviously now. That's the point I'd like to make.

Because, for instance, if I look at the Q1, you publish in mid-May, so basically you had already six weeks in the Q2. So I'm just struggling to understand what happens over the last or the remaining six weeks that force you to revise. I clearly don't know all that guidance. I mean, was there really...

Sorry to interrupt, but I think it's what Thomas explained previously in the answer to, I think, to Mario's. We saw a pick up of the revenue in late Q1 and in Q2 it started too, but in the end what we're expecting to see in May-June, even if there is an acceleration, the acceleration was not at the level that we're anticipating. That's simply what happened.

But maybe on another topic, and that would be the last question. So you mentioned that the pipeline is actually the growth engine for the future growth. But actually, if you look back for the last three, four years, the more you have been adding property, the lower you have been able to grow on an EPS basis. and I appreciate you gave some elements to boost the EPAs on page 24 of the presentation for instance and among other you mentioned that you were targeting a pricing which was relatively or you quoted a more aggressive pricing across non-safe stores but how can you increase pricing with limited occupancies at the moment?

Let's be clear, so if you take the The two elements of this portfolio, so the segmentation with on one side the same store and the other side the non-same stores, so the ones that are in a ramp-up position, and we'll start with this one, which is, I think, quite obvious, is what we decided to do is simply to be more aggressive on pricing. When I mean more aggressive, I mean to discount more. That's what I meant when we say aggressive. It's not that we're going to increase to customers.

Ah, okay, okay, okay.

Sorry, so maybe that's a misunderstanding. So when we say more aggressive pricing, meaning that the public prices to new customers are lower than what initially we were planning to do. That's what I meant.

And that's very important to keep that in mind. Indeed, we are fighting for the opportunity. You know that is our strategy. We are very happy to get the customers in at the right price and we are very aggressive on that front. but we are not doing that in isolation to just earn money because what we also know is that we have an industry leading churn and we have the probably most sophisticated PCRI tool so we can actually then once the customers are with us we are able to retain them longer and increase them significantly and that's why we are very happy to make those investments now and to make it even clearer I would say that

For the non-same store, the new stores, when you start, the occupancy is very low, so let's say 5%, 10%. So the question is not at the price you make them in, it's simply get them in, fill out the property, and at the same time, as said Thomas, increase these customers when they are in. So it's more than zero when it's empty. So that's the basic principle, I would say, of what we are doing on the non-same stores. And we saw also a good pick up in different markets in the UK, in Germany, where we have a lot of non-same stores. And that's why, for example, for all your . So that's the way we do for the same stores. Back to your question. Here, it's a little bit different. The way we do it is two things. First, yes, we are also giving potentially more discounts to new customers in order to be attractive with the pricing that they see publicly on our website. And secondly, we make, I would say, more noise. So we dig the drum by simply spending more money on Google, meaning advertising. And that's back to the question of Anna regarding the cost. and the OPEX for the second half, we have factored in, in our guidance revised for 2026, the fact that we will spend more advertising during the second half.

Okay, and then if I just made to rebound on what you just said, so you mentioned more aggressive pricing, more aggressive also expenses on marketing, so you also announced that you are going to revise upwards or a few quarters back the NOI yield target on new developments, so can we conclude that this NOI yield target that you gave to the market is actually a function of time, so maybe before you were expecting to reach it at four or five years, now maybe at seven, eight years?

No, I don't think so, because it's simply that the shape of the curve will be different, but the ending point and the time to get to that ending point doesn't change. If you think IR wise, we are still absolutely on this, because the IR over 10 years will be probably 100 at this point even above, 9 to 10, so it will be probably 10 to 11. So it doesn't change. Okay, thank you. You're welcome.

Our next question is from Ashna Vyas from Deutsche Bank. Please go ahead.

Hi, morning. Thanks for the question. Two questions for me. Your first one on your CapEx numbers of 2026, you've revised that down. Is that primarily just timing related or is that just you've sort of taking a more selective approach to development and can you talk a bit more about the future pipeline and the capex related to that and the second one is just on the cost management that you've got undergoing you're doing some you talked about clusterization is there more meaningful opportunities to take costs out of the business from here and maybe you can help quantify that if possible or even when the timings of the benefits come in okay sure sure I shall so I shall sorry so

So let's start with the first part of your question, so the one related to the pipeline. Yeah, we have been, exactly as you said, it's a more phasing approach, that's it. And some of the projects have been moved to 27. But, you know, 75%, as I said, of the 26 pipeline will be delivered in the second half. And if you look at what we have disclosed, and I think we have disclosed with the different quarters for the year 2026, you see that there are a lot in the Q4 26, and some also in 27. So we might have good surprises, some stores that were initially planned for any 27 that would jump in the end and being opened in 26. and others that in 26 maybe would be postponed by a couple of weeks to 27. But to me, it's purely phasing stuff. It's nothing more than that. And the second question was related to the clusterization. Yeah, what we call clusterization. Yeah, so I would say that we have done a lot the past few years. To give you an idea, four years ago, on average, we had two and a half people per property. and we didn't have any clusters, didn't exist. Now, at the end of this year, so when France will be completed, you will have 80% of all the properties of SureGuard in what we call clusters, meaning you have two properties and one managing the other one. And instead of having two and a half times two, there's two stores, so five people, you have three people, which is two people left, sorry, and two people out of five, it means 40%. And it's what happened. So meaning that what we have done the past three years has fed the NOI growth by having reduced labor costs, despite, by the way, increases related to the different spikes of inflation in the years 23 and also to 24. For the future, you can do always more. Today, I don't want to commit to any numbers on that, but there is still some stuff to do. Then the magnitude of it, we will come back to you in early 27 with that.

Okay, thank you.

You're welcome.

The next question is from Akansha Anand from Citigroup. Please go ahead.

Hi, good morning. This is Aakansha Anand from Citigroup. Two questions from my side. I'll take them one by one. The first one is just on the drivers. So what are the main drivers that you attribute the lower than anticipated acceleration to? And maybe split them out by geography if there are specific dynamics in each one of them. And with that backdrop, Do you expect the second half same store performance to broadly be in line with H1? That's the first one.

Okay. So, I can start with that. So, I can start. So, regarding the drivers, I would say that it's mainly due to more competition if you take the UK. So, when I mean more competition, probably combined maybe with the sentiment due to the macros. But if you specifically look at the UK, especially in the M25, some competitors have changed their pricing policies. Some of them have opened properties and they have to ramp them up. And therefore, we had to simply react to this because as Thomas has explained, the model we have is, we believe, creating more lifetime value for us, meaning that as soon as we have a customer in, we're able to apply increases of prices to the customer and adding a lifetime value to the trend we have, which is quite low, to be able to, let's say, to increase the lifetime value of that customer. So what we experience in the UK, which is an acceleration, but not at the level of what we're expecting, and I would say the same potentially for Germany. It's related to this, to the fact that competition has been more fierce and we had to react to that. But the good point, at least, is that we are increasing and we see an acceleration Q2 versus Q1 in these two key markets. I mean, Germany and the UK. And even in Q3, as we mentioned, quarter to date, we see another level of acceleration for these two countries.

You might remember that what we said last time is that what we saw from a move-in perspective is we saw that the move-ins were comparable to the year before, but what we were not seeing is that we were able to close the gap. That's why we have taken now the additional actions, and that's why you now see that we actually start to get this additional kick in there, and that brings us now to this new guidance.

And therefore, we think that H2, back to the second part of your first question, H2 in terms of revenue growth, total company will be higher than H1. And same thing for the same stores.

Okay, and could you just put some more color around what's happening in France and then what are the main drivers for the growth in Sweden and Denmark?

Okay, so for France, here we... I would say there are maybe two different situations. Paris region and outside Paris. You know that out of the portfolio we have in France, I would say that 70% almost is in Paris region and the remaining 30% are outside Paris region. So if you take Paris, clearly here in Paris region, there are some competitors also more aggressive and we have decided to grow and bring occupancy to 90%. Back to the model that we have and we continue to invest into public prices to customers and we start to see an increase of occupancy. So slower than what we're thinking of, but it's starting to take place. So that's why the revenue all in all between the gain of square meters and the investment within the prices are more or less flat. But the positive thing is that occupancy starts to grow there, and we'll get the benefit of that in the coming quarters. Outside Paris, I would say it's a bit different. Things are doing, I would say, better in a way. We don't have to invest more than what we do in the Paris region, and the results are actually quite positive there.

And for Sweden,

Well, I think that Sweden is facing two things. The macros are much better than what they were, if you remember, three years ago. And at the same time, three years ago, we had, as I mentioned, the second major effect that was the competition. So the development of our competitor, Green, that was opening properties and had a lot of properties in ramp up. And we are defending our market share by lowering our public prices. in order to keep the occupancy. And now we have the benefit, I think, of both, meaning that green, they are private, I don't have their numbers, but we think that the occupancy has reached more or less where they want to be. So they have a more stabilized portfolio than three years ago. So mechanically, they are less aggressive. And secondly, the macros have turned to be much more positive than it was three years ago. So I think the two engines that we have in Sweden are those two ones.

Thank you. That's very clear. And the second question is just from the NOI margin. So when can we expect the platform gains to start to deliver? So basically reflect and contribute to an increase in NOI margin.

You mean as a percentage of margin or the value of margin?

Just the overall percentage of margin because I see that NOI margin was down over the H1 in 2026. Is that a trend you expect continues over second half and next two to three years or do you think there might be some scope for improvement on that front?

So don't forget that H1 is impacted that we are having the full real estate cost in our NOI in the first half of the year and that's obviously a very significant driver both on the absolute value but also on the increase which we saw this year. So on the second half you should see on that front obviously the significant improvement and that might explain why we're guiding in the way we're guiding on the NOI. The other important part is in that I probably need to be clear on that. We mentioned that in H2 2025, we changed our ERP system to the SAS solution, which meant that as of July 2025, we have this in our NOI, but not in the first half of the year. So for the second half of the year, when it comes to that, we are fully comparable, but in the first year, we didn't have those costs in the comparable period. So overall, that's what is driving NOI. Combined with what Mark was saying, that we are expecting to continue higher investments in marketing, obviously only as long as it makes sense. We are watching very carefully with the teams, how are the returns on the investments, how is the conversion. As long as we see that it makes sense, we are making those investments.

Okay, great. That's all my questions. Thank you.

Thank you.

Our next question is from Stefan Alfonso from Jefferies. Please go ahead.

Hi, everyone. Thanks for the presentation and for taking my question. Just on the medium-term EPS guidance, so until last May, you were still very confident in your targets. Just what has changed since then, because there is no change in demand, the yield on cost of 90% is unchanged, pipeline is secured, and I recall that no strike overhead is required for the 2026-2035 pipeline. And on top of that, it appears that refinancing conditions are not deteriorating. Could you just please explain what I'm missing about the business that could explain this change in confidence?

Well, Stéphane, it's pretty clear. I think we mentioned that already before, I mean, at the start of the call. So, we first want to deliver our revised outlook 2026. We will be early 27 able to give an outlook for 27, which is more reliable, and therefore taking into account how we ended exactly in 26, and secondly, how the start of the quarter will be. So that's why we've come back to the market early March with an outlook 27.

Okay, and when you're saying that you are becoming more aggressive, can you just please quantify it?

Well, it's difficult to quantify this, to be very frank. I mean, we have some numbers, but we don't disclose them, one. And secondly, it's really store per store. And I would say that it's not even store per store. It's per category of size of units in a given location for a certain period of time. So, and then it makes the thing very different so we don't want to give these numbers because most of them actually are in a way important for us and regarding the competition we do not want to share this kind of information with them.

And more generally should investors consider the possibility that some of the original medium term targets were simply too ambitious given the market environment that we are seeing today?

Well, obviously, if we have decided to put them on hold, it's yes, you're right, but maybe not. We need, as I said, let's wait for the end of Q2 of 26. Let's see how the start of 27 will be. And then at that moment, you will be able to say exactly what you are saying now, actually.

Okay, thank you.

You're welcome. Thank you, Stefan.

My next question is from Sultan Awan from Landshut Gempen. Please go ahead.

Hey, good morning, everyone. Thank you for the questions. Just two for me. One on the EBITDA margin. Can you talk a bit more about the moving parts on OPEX? I mean, we've, you know, payroll expenses have increased. Marketing is increased. How should we think about this moving forward? I mean,

are these more structurally increases that's you know more a reality now of all the competitive pressures or are they really temporary moving forward should we see these flush through yeah so so first of all i i think i mentioned that we for the rest of the year we we feel that the costs are developing in line with what we expected at the beginning of the year so this is this is not something which is um which is where there are any surprises. The main gap comes from the revenue miss, which we were not able to close fast enough. The only exceptional cost, and again, I just want to repeat that, is we have the higher marketing costs, which are part of the NOI, and we have higher share-based payments costs, which is part of G&A. And those two together really result a little bit in the situation If you then go further down the P&L and go to EPS growth, it is about interest expenses. I mean, the interest expenses are not higher than they expected. They are actually lower than expected because we were able to get with our financing more flexible solution on that. But this is the consequence of the additional debt which we raised in the past there. So those are the main drivers in there. In Texas, just to round that up, we expect to be rather stable. So on the cost front, there's nothing which we were not really anticipating except a few items which I just mentioned. And especially on the marketing front, I would like to repeat that We are making those investments as long as we think it makes sense. So if we are seeing that this becomes too expensive or we don't see the return on that, we are going to drive that number down again.

got it thank you and then just one on the UK so say so revenues is still negative but seems to stabilize a bit with I think you mentioned the last month starting a bit more positive how confident are you on this trend are you kind of expecting similar rates moving forward do you expect the UK to remain a bit challenging

Well, thank you for the point. I would say that even if we're anticipating more, it's still good in the sense that if you look at the same score performance in the UK, Q1-26 was at minus 1.3 versus Q1-25. And Q2 was minus 0.5, but this minus 0.5 was actually embedding still a negative growth for April, but positive already in June. And July is positive. August up to now is positive. So we have three months in a row in the UK for our self stores that are positive and more positive month on month. So there's a certain level of confidence, clearly, but reasonably confident. need to be cautiously careful. But we have not seen this trend, I would say, since a couple of months in the UK at all. So it's pretty, we are pretty happy with the performance of, I would say, all our sensors in the UK. And I think that this is back to what the first question you had, Thomas, answered. related to how we are pricing our products to customers and how we show that, meaning how the noise we make through the level of advertising, generally, it does pay off. Got it. Thank you. You're welcome.

Our next question is from Kanan Mitra, Basit. Please go ahead. Can I? You're still on mute, so maybe you need to unmute yourself.

Yes. Hi. Hi. Thanks for taking my question. At this point, I just have one. So can you just shed some color on your clusterization model and how you aim to achieve it and the second part of that question is while it probably reduces your labor costs but it's also possible that you kind of compete with your own existing stores because it's in the same locality we have heard similar things from peers and also probably mentioned something similar in Belgium

Okay, so thank you for the question, Kevin. So back to the test organizations. As I initially said, this is a process that we started three years ago, more or less, testing it, and it has been pretty successful, to be very frank. But why it is successful? Because two things. First, we have never given up on how customers actually assert how we are securing the properties and the purpose is not to do simply labor cost and cost saving. We don't want to do cost killing versus customer killing. So we have been very careful with that and we have monitored all of this country by country because you could have different behavior for certain citizenship. And in the end, this was the case. It has been the same kind of reactions and customers have been very positive about actually the fact that there is still people taking care of them, but the people are not in this location. They are, let's say, 10, 15, 20 minutes away. So that's one. Secondly, we have been able to make it happen because our eRental, so the contract that we are doing through the website, so simply between customers, well, prospects and our website, have reached more than 50% of the iteration of all our contracts in all the countries where we are operating. And by having this situation, it's helping us, obviously, to reorganize the work of the people and the magnitude, meaning the number of people working simply in the properties. So that's what we did, and that's why it took three years. Now we are at the end, I would say, of that process. As I said, the UK is done. It was in July this year. a month ago, less than a month ago actually. In France, it was a bit longer because you have to go through in France the legal process with the unions and work also and this has taken place and we got it here and then it will be executed before the end of this year. So, there was a question I think one of your colleagues How we can envisage more from this characterization, and clearly we can always do more, but I think we have done, I would say, the major part of the job, and it will be more marginal in the coming years.

Probably to add, as you have heard, we have rolled out now a European call center, a sales call, And that obviously will help us also to optimize, again, what we are using our staff and the resource for, because we can free up time. That means we can have more efficient processes in there, which we will have to monitor what is possible on that front. So at the same time, it's not only helping us with reaching customers where they are, having more efficient conversion, but also getting the actual cost of the conversion better off.

Our last question is from Vincent Cognier from the Grof Petercamp. Please go ahead.

Good morning. Thank you for taking my question. I had one question maybe mainly on capital allocation point and on your pipeline. So in the beginning of this year you highlighted that you increased the hurdle rate of new topics to now 9 and 10%. However since the beginning or since the announcement at least you haven't added anything to the pipeline. Is it fair to say that maybe the hurdle rate was too aggressive or could we expect some announcements in H2?

Thank you Vincent for the question. So if you look at organic and M&A, which is very different, and also the redevelopment actually, no, there's no, let's say, slowdown regarding the organic, neither the redevelopment. It's simply, it takes regular time and we have always the same, you know, the time to be able to get a deal with an owner of a land, to from that deal to get actually the building permit and all of that. So here, from that front, to make a long story short, we don't see a slowdown related to that due to this increase of the hurdle rate. In M&A, there is two things in M&A. Clearly, the market is still showing signs of activity. So there are still activities, clearly. So there are potential deals on the market. But the expectation of the sellers knowing that the vast majority of them, I would say almost all of them, are private companies, are still with a disconnect between what they think they can sell and the price that, let's say, private equities or even ourselves or other operators that are public are willing to pay. And we have said we want to be accretive in terms of EPS for the first full year of operations for M&A. Obviously, this condition is, I would say, Limiting our capacity to say yes to prices that do not take into account the fact that there's a complete disconnect between private valuation and public valuation.

All right, clear. Just following up on the organic side specifically. On the 9%, of course, you highlight, okay, maybe you have something, of course, you're working on, good, and I'm hoping for that. But just when you reconcile this hurdle rate with what appears to be now a more maybe generalized environment of competition or heightened competition across most or all markets, Do you not see maybe also the hurdle rate, so there's more issues potentially on price and occupancy going forward, where this hurdle rate could be too high?

Well, up to now, I would say no. I think one of your colleagues mentioned that or raised a point that was close to this question. And no, no, I really believe that We are able to have some savings, and I think the clusterization is really helping on the NOI, and this NOI yield is fed for sure by the occupancy slash the prices slash for the revenues, but in the end also how you are managing your costs, and clearly the larger the platform is, the more fixed costs are absorbed per store, and secondly, the clusterization is helping, and what Thomas added regarding also the call center has to be factored in. For the time, no, we are not at all, I would say, anxious about this 9 to 10. I think it's, we will make it, you know, when we did, I remember post IPO, we were having a hurdle rate of 7 to 8. And then two years ago, we brought this, we raised actually this hurdle of 7.8 to 8.9 due to the cost of capital. 9 to 10 should follow and secondly it's an NOI yield meaning that the team is also working on the total cost of let's say development meaning the price of the land, broker's fee, the way we build the building and there are some savings that the team is working on so we believe that the 9 to 10 for organic and redevelopment will be there.

And Vincent, just as a reminder, again, this is what we believe is the required return on our capital from the market. It's not that we are choosing this number. We are looking at what is our cost of equity, what is our cost of debt, and that drives our return requirements because we want to be sure that we make the required returns. But as Mark was mentioning, this is not done in isolation. because if we indeed just would increase, that would be difficult to achieve. But we also see that while it is at the moment a little bit slower, that the same store, and that means our actual performance and the cash flow continue to improve, we see that we are able to reduce construction costs by being more efficient in the overall process. And those two things together will help us to hopefully get to that level. But again, this is not us wishing. This is what the market demands.

And to add on what Thomas said, yeah, I mean, it's not a slam dunk, it's not easy for sure, but we think that we can make it.

All right. Thank you very much. I'm looking forward to that announcement. My last question is... Again, not wanting to accentuate that again, but on the midterm guidance, you've highlighted that you want to come back on it once you have more visibility, but let's say now after three quarters of somewhat subdued performance, what do you actually fundamentally need in terms of visibility in an environment where we fully agree that volatility is now the new normal? What is your requirement to be able to give them midterm guidance? Thank you.

Again, more time simply. Thank you very much. Thank you all for joining us today. We appreciate your continued interest in Chargarde and look forward to speaking with you soon again.

Thank you.

Goodbye. Thank you.