Slide 1: 2015 Full Year Results Presentation
2015 Full Year Results Presentation 1st March 2016 . © Regus Group Services 2016
Slide 2: Caution statement
Caution statement . No representations or warranties, express or implied are given in, or in respect of, this presentation or any further information supplied. In no circumstances, to the fullest extent permitted by law, will the Company, or any of its respective subsidiaries, shareholders, affiliat
Slide 3: Full Year Financial Highlights
Full Year Financial Highlights . • Group revenues increased 15.9% to £1,927.0m • Underlying operating profit up 37% to £144.8m • Underlying cash generated before net growth investment increased to £215.7m from £175.6m • Improved post-tax ROI on pre-12 net investment to 23.1% • Operating margin incre
Slide 4: Generating attractive returns
Generating attractive returns . Post-tax cash return on net investment NCO year group 2011 • 23.1% post-tax cash returns 2015 2014 2013 2012 and before on all locations opened on or 25 23.0% 23.1% before 31 December 2011 20 20.9% • 15 Recent year group 11.2% 13.3% 13.3% investments are progressing 1
Slide 5: Fast growth trajectory
Fast growth trajectory . Group revenue 2015 • Another year of strong revenue growth 2500 • Invested £285m, adding 554 new locations +15.9%* • 22% growth in locations to 2,768 2000 • Further overhead leverage +15.8%* +23.2%* • Strong and improving returns 1500 +9.2%* +12.6%* 2016 £m • Current pipelin
Slide 6: Exciting opportunities
Exciting opportunities . Structural change helping drive our industry across the globe: • The rise of the sharing economy, facilitated by technology and changing work practises • Companies actively seeking flexibility and alternative ways to support their workplace • Greater awareness of what the ma
Slide 7: Verizon win
Verizon win . Verizon to transform its real estate portfolio, with staff moving into multiple Regus locations across the USA Deal will: • Help Verizon to halve operating costs over the next five years • Enable Verizon & its staff to work more flexibly and cost effectively • Boost employee productivi
Slide 8: Financial Review
Financial Review . 8
Slide 9: Returns developing as expected
Returns developing as expected . 40 Gross profit margin* 33.9% 34.1% • 2012, 2013 and 2014 additions 30 29.6% 31.0% 26.5% showing continued improvement 20 % 19.6% • 2015 locations progressing as 10 15.2% planned (1.4%) 1.2% 0 2015 2014 2013 2012 2011 and before *before interest, tax, depreciation an
Slide 10: A strong performance
A strong performance . Group income statement (excluding non-recurring profit*) £ million 2015 2014 % change % change • Revenue up 15.9% with growth (actual (constant currency) currency) in all regions at constant currency Revenue 1,927.0 1,676.1 15.0% 15.9% Gross profit • Further overhead efficienc
Slide 11: Mature centre performance: by geography
Mature centre* performance: by geography . Revenue Growth at Revenue Growth at Mature Gross Revenue Contribution Actual Currency Constant Currency Margin (%) £m 2015 2014 2015 2014 2015 2014 Americas 712.1 660.1 7.9% 3.9% 189.0 157.3 26.5% 23.8% EMEA 321.2 341.0 (5.8)% 5.5% 89.6 83.2 27.9% 24.4% Asi
Slide 12: Further overhead efficiency
Further overhead efficiency . Total overheads as a % of revenues 20 • Continued focus on overhead 19 19.3% efficiency 19.0% 18.5% 18.5% 18 • Overall up only 2% compared to % 22% increase in network 17 16.7% • Benefit from prior investment in 16 systems, processes and 15 management to support growth
Slide 13: Improved field structure
Improved field structure . Two important changes to local sales structure: • New ‘cluster’ location management: • higher productivity • cost efficiencies • sharper focus on broader offering • Revised compensation basis: • move away from sales commissions • quarterly profit share bonus scheme 13
Slide 14: Strong cash flow
Strong cash flow . £ million 2015 2014 • Group EBITDA increased by 28% at constant currency Group EBITDA 290.0 224.8 • Cash generated before net growth Working capital 103.5 80.3 investment and disposal proceeds increased Less growth related partner contributions (59.8) (47.0) to £215.7m, or 23.1p p
Slide 15: A healthy balance sheet
A healthy balance sheet . £ million 2015 2014 Balance Sheet Cash flow before growth expenditure 295.7 175.6 • Maintained prudent approach to balance sheet management Net growth capital expenditure (284.9) (206.6) • Net debt to Group EBITDA ratio broadly Total net cash flow from operations 10.8 (31.0
Slide 16: Financial summary
Financial summary . • A strong set of financial results • Continued to deliver attractive post-tax cash returns • Significant growth in profitability reflecting underlying progress in the business and economies of scale • Maintained a prudent balance sheet with improved maturity profile of funding a
Slide 17: Strategic update and outlook
. Strategic update and outlook 17
Slide 18: The market opportunity
The market opportunity . Key drivers of the industry External factors enabling change Forces driving demand 2,768 locations 106 countries 977 cities 9,290 colleagues 18
Slide 19: Regus - Partner of choice
Regus - Partner of choice . Sole Trader Global Corporate SME The principles that Real Estate drive our business Owners Infrastructure Owners Office 1. Investment in products Retail and innovation 2. Detailed planning to deliver growth Global integrator. 3. Range of partnering Making work options mor
Slide 20: 1. Investment in products and innovation: formats
1. Investment in products and innovation: formats . Meeting demand: Delivering growth • Flexibility • Support • Flexibility • Community • Business support • Connections • Consistency • Professionalism • Inspiration • Creative workstyle • Inspiration • Funding • Exclusivity • Luxury • Value • Functio
Slide 21: 1. Investment in products and innovation: innovation
1. Investment in products and innovation: innovation . Regus app • The world of flexible working in the palm of your hand • Search for locations, check availability and make bookings on the move Marketplace • An online trading platform that allows customers to promote services to each other, as well
Slide 22: 2. Detailed planning to deliver growth
2. Detailed planning to deliver growth . A clear strategy to deliver profitable growth Growth potential • Detailed and comprehensive country plans 20,000 • Investment in strong local management to deliver these plans 15,000 • Exciting growth market, with 10,000 significant customer demand • Potentia
Slide 23: 3. Range of partnering options
3. Range of partnering options. Intelligent use of different partnering methods dependent on geographic demographics and inherent risks to develop our national networks Occasionally and tactically, property purchases will also make sense 23
Slide 24: 4. Rigorous management of the business
4. Rigorous management of the business . • Continued drive to improve overall rigour and efficiency in the business • Strong risk management • Investing in key management • Improving software & systems • Further improvement in operating model e.g. clustering • Improving customer service 24
Slide 25: Outlook & summary
Outlook & summary . • Successful 2015: • Improved returns on investment • Significant operating leverage • Strong cash flow • Outlook for 2016 • Healthy growth • Well placed to take advantage of structural changes in the world of work • Mindful of global economic uncertainty • Current trading in lin
Slide 26: Questions
Questions = Regus 26
Slide 27: Contact details
Contact details . Wayne Gerry Group Investor Relations Director +44 (0) 7584 376533 wayne.gerry@regus.com 27