Slide 1: 2008 Year End Results
2008 Year End Results March 20, 2009
Slide 2: Caution statement
Caution statement This presentation may contain forward looking statements, which are subject to risk and uncertainty. A variety of factors could cause our actual results to differ materially from the anticipated results expressed in such forward looking statements. 2
Slide 3: Agenda
Agenda Introduction Mark Dixon Financials Stephen Gleadle Strategy and Outlook Mark Dixon 3
Slide 4: Introduction
Introduction Mark Dixon Chief Executive Officer 4
Slide 5: Business performing strongly
Business performing strongly Revenues up 25% to £1,077.2m Operating profit up 20% to £147.4m Cash from operations up 18% to £249.6m Earnings Per Share up 14% to 12p (10.5p) Dividend per share up 80% to 1.8p 5
Slide 6: Regus delivering the promise
Regus delivering the promise Actual exchange rates Revenue growth, £m Operating profit, £m Cash from operations, £m Annualised EPS, pence 6
Slide 7: Regus delivering the promise
Regus delivering the promise Actual exchange rates Weighted av. Available workstations Annualised REVPAW Average occupancy Annualised REVPOW 7
Slide 8: Financials
FINANCIALS Stephen Gleadle Finance Director 8
Slide 9: Summary income statement
Summary income Actual exchange rates statement £ million 2008 2007 Change Revenue 1,077.2 862.4 214.8 Centre contribution 305.7 251.9 53.8 Overheads (158.3) (129.3) (29.0) Operating profit 147.4 122.6 24.8 JV / Associate 2.3 0.8 1.5 Net interest (0.5) (4.0) 3.5 Tax (34.3) (15.8) (18.5) Earnings 114.
Slide 10: Revenue & centre contribution
Revenue & centre contribution Workstations Revenue Contribution Margin (%) Weighted av. £ million £ million 132,938 2007 862.4 251.9 29% Impact of exchange rate - 86.3 26.9 movement 132,938 2007 at 2008 exchange rates 948.7 278.8 29% 1,526 Mature business 33.2 9.9 10,849 Added 2007 75.9 31.1 9,764 A
Slide 11: Regional analysis
Regional analysis Actual exchange rates Revenue Contribution Mature margin (%) £ million 2008 2007 2008 2007 2008 2007 Americas 414.9 336.3 117.0 102.7 32% 32% EMEA 319.2 240.3 111.2 80.3 37% 36% Asia Pacific 121.0 77.7 37.5 27.5 38% 38% UK 222.1 208.1 40.0 41.4 20% 22% 1,077.2 862.4 305.7 251.9 31%
Slide 12: Overheads
Overheads Overheads as % of revenue 12 month rolling trend 12
Slide 13: Interest and Tax
Interest and Tax Interest 2008 2007 Change Interest payable on bank loans and overdrafts (3.5) (4.4) 0.9 Interest receivable 5.3 3.4 1.9 Finance lease (0.2) (0.2) -- Non cash - Deferred finance costs (0.6) (0.5) (0.1) Non cash - UK acquisition related (1.5) (2.3) 0.8 Net Interest (0.5) (4.0) 3.5 Tax
Slide 14: Cash flow
Cash flow £ million 2008 2007 Change Cash from operations 249.6 211.1 38.5 Exercise of share options & other 1.9 0.5 1.4 Cash in 251.5 211.6 39.9 Maintenance capex (32.9) (29.8) (3.1) Interest and tax (30.2) (16.9) (13.3) Free cash flow 188.4 164.9 23.5 Acquisitions (inc fees) (12.1) (17.8) 5.7 New
Slide 15: Free Cashflow per Share
Free Cashflow per Share 10.5 06 ‘08 15 workwithoutboundaries
Slide 16: Summary balance sheet
Summary balance sheet £ million 2008 2007 Change Non-current assets 729.6 527.1 202.5 Working capital (346.0) (240.4) (105.6) Net cash 211.2 101.4 109.8 Other non-current (114.5) (78.3) (36.2) liabilities Net assets 480.3 309.8 170.5 16 16
Slide 17: Summary
Summary Operating profit up 20% Cash from operations up 18% Average workstations up 15% Dividend per share up 80% Net Cash to £211.2m 17
Slide 18: Strategy and Outlook
STRATEGY AND OUTLOOK Mark Dixon Chief Executive Officer 18
Slide 19: Americas
Americas America in recession for 18 months Mature occupancy increased from 85.8% to 86.2% Inventory growing Marketing wins in partnerships - American Express, Clear Significant Corporate downsizing wins New Latin countries due – Honduras and Paraguay opening in early H109. 19
Slide 20: EMEA
EMEA Held Mature Occupancy at an average of 88.7% throughout the year Opened 35 new centres Increased presence to 240 centres in 43 countries - added Malta & Monaco Centralised Financial Service Centre (FSC) in Prague opened - collections, reporting and compliance Restructured Operational teams to b
Slide 21: Asia Pacific
Asia Pacific Mature occupancy increased from 80.1% to 82.1% Remained a high growth market in 2008 Size > twice our nearest competitor National networks well established – India, China, Japan, Australia Partnerships – Cathy Pacific, Thai Airways and Malaysian Airways, Amex and Diners Card 112 centres
Slide 22: United Kingdom
United Kingdom Mature occupancy increased from 83.5% to 84.4% Added c.4,000 workstations in 2008 – 15% extra capacity (low risk, low cost focus) Introduced new premium brand to portfolio - Stonemartin Continued early adopter of new concepts in sales and products Heightened focus on efficiency/cost M
Slide 23: 2009 – Rising to the challenge
2009 – Rising to the challenge Macro Picture Revenue Initiatives Cost initiatives Translation to cash 23 23
Slide 24: Macro Picture
Macro Picture Enquiry levels Sales Price Churn Corporate downsizing and restructuring Small company & “individuals” start up 24 24
Slide 25: Revenue Initiatives
Revenue Initiatives “Reboot” sales platform - “Recession ready” Strong marketing message - cost savings and flexibility “Recession Busting” products - low cost, flexible Capture all existing revenue potential - “no loss” Increase Membership base and spend 25 25
Slide 26: Product variety
Product variety PLATINUM PLATINUM CAMPUS PRIVATE OFFICE OFFICE GOLD 5 days 10 days 5 days 10 days businessworld BLUE FREE £17 per month per month per month Unlimited per month per month Unlimited City based access (Manchester) 3 3 £69 £99 £149 £99 £129 £199 National access (UK) 3 3 £149 £199 £299 £1
Slide 27: Businessworld
Businessworld Transformational product Gaining momentum Corporate take up Membership numbers Extensive/rapid business development Reached £1m sales in Jan 09 27 27
Slide 28: Corporate Opportunities
Corporate Opportunities Unique, Simple and Easy to Implement 28
Slide 29: Cost Initiatives
Cost Initiatives Anticipated cost reductions - c.£75m in 2009 Acceleration of global “smartworking” program Renegotiation with suppliers Rent savings 29 29
Slide 30: Growth with flexibility
Growth with flexibility New centres opened in 2008 Still growing Focus on low capex Focus on variable terms Focus on management contracts Property portfolio Consolidation expected Well balanced portfolio 30
Slide 31: Translation to Cash
Translation to Cash £211 million net cash start point Maintain focus on working capital Reduce maintenance capex Reduce growth capex Operating cash flow key 2009 – continued strong cash generation 31 31
Slide 32: Summary
Summary £220m cash in bank Cash and cashflow continues to be king Strong operating performance in 2008 Dividend increased 80% year-on-year Global economic conditions very challenging Product innovation creating new revenue streams Growth opportunities remain Aggressive cost control continues a prior
Slide 33: Appendix
® Resus IX Append \\ boundaries
Slide 34: Stability in our business model
Stability in our business model Workstation segmentation Customer sectors 34
Slide 35: 74 countries
74 countries Algeria Egypt Kenya Portugal Argentina El Salvador Lebanon Puerto Rico Australia England Luxembourg Qatar Austria Finland Malaysia Romania Bahrain France Malta Russian Federation Belgium Germany Mexico Saudi Arabia Brazil Greece Monaco Scotland Bulgaria Guatemala Morocco Singapore Canad
Slide 36: Emerging Markets – continued contributors
Emerging Markets – continued contributors B.R.I.C. NATIONS N-11 NATIONS EASTERN EUROPE AFRICA EXCL EGY/MOR Revenues, £M Revenues, £M Revenues, £M Revenues, £M LATIN AMERICA MIDDLE EAST ASIA EXCL INDIA/CHINA Revenues, £M Revenues, £M Revenues, £M 36
Slide 37: Regional diversity
Regional diversity 2008 Revenues by region Note: UK regional review has resulted in change in regional segments; London no longer separate, now in SE; some SE centres now in SW. 37