Slide 1: 2009 Half Year Results
2009 Half Year Results August 25, 2009 1
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 solidly in downturn
Business performing solidly in downturn Revenues to £557.4m Operating profit to £68.4m Net Cash to £229.5m Earnings Per Share maintained at 5.7p Interim Dividend increased by a third to 0.8p Note: Results include exceptional net income from settlement of a legal dispute of £18.3 million 5
Slide 6: Robust performance
Robust performance Actual exchange rates Revenue growth, £m Operating profit*, £m Annualised EPS, pence Net cash*, £m *Results include exceptional net income from settlement of a legal dispute of £18.3 million 6
Slide 7: Robust performance
Robust performance Actual exchange rates Weighted av. Available workstations Annualised REVPAW Average occupancy Annualised REVPOW 7
Slide 8: Financials
Financials Stephen Gleadle Chief Financial Officer 8
Slide 9: Summary income statement
Summary Actual exchange rates income statement £ million 2009 2008 Change Revenue 557.4 507.5 49.9 Centre contribution 134.0 150.2 (16.2) Overheads (83.9) (75.8) (8.1) Operating profit 50.1 74.4 (24.3) Exceptional receipt 18.3 -- 18.3 Joint ventures 1.3 1.2 0.1 Net interest (0.7) (1.1) 0.4 Tax (14.3
Slide 10: Revenue & centre contribution
Revenue & centre contribution Workstations Revenue Contribution Margin (%) Weighted av. £ million £ million 149,087 2008 507.5 150.2 30% - Impact of exchange rate movement 90.6 28.4 149,087 2008 at 2009 exchange rates 598.1 178.6 30% (32) Mature business (66.9) (48.0) 11,227 Added 2008 28.1 6.2 949
Slide 11: Regional analysis
Regional analysis Actual exchange rates Revenue Contribution Mature margin (%) £ million 2009 2008 2009 2008 2009 2008 Americas 227.0 190.5 51.4 55.7 24% 30% EMEA 162.5 150.6 49.1 51.6 32% 35% Asia Pacific 68.6 55.0 20.9 17.6 35% 36% UK 98.5 110.5 11.1 23.6 13% 22% Other 0.8 0.9 1.5 1.7 - - 557.4 50
Slide 12: Overheads
Overheads Overheads as % of revenue 12 month rolling trend 13.9% Represents costs associated with “Smartworking” initiatives 12
Slide 13: Interest and Tax
Interest and Tax Interest 2009 2008 Change Interest payable on bank loans and overdrafts (0.9) (1.9) 1.0 Interest receivable 1.3 2.2 (0.9) Finance lease (0.1) (0.1) - Non cash - Deferred finance costs (0.5) (0.2) (0.3) Non cash - UK acquisition related (0.5) (1.1) 0.6 Net Interest (0.7) (1.1) 0.4 Ta
Slide 14: Cash flow
Cash flow £ million 2009 2008 Change Cash from operations 62.2 123.4 (61.2) Dividends from joint ventures 0.2 0.6 (0.4) Exceptional receipt 18.5 -- 18.5 Cash in 80.9 124.0 (43.1) Maintenance capex (6.8) (13.8) 7.0 Interest and tax (15.2) (12.9) (2.3) Free cash flow 58.9 97.3 (38.4) Acquisitions (inc
Slide 15: Summary balance sheet
Summary balance sheet @ Actual exchange rates £ million 2009 2008 Change Non-current assets 639.7 542.9 96.8 Working capital (285.9) (253.6) 32.3 Net cash 229.5 140.2 89.3 Other non-current (98.6) (89.5) 9.1 liabilities Net assets 484.7 340.0 144.7 15
Slide 16: Summary
Summary In an uncertain trading environment, we have remained strongly cash generative increased our net cash balance executed our cost savings plans maintained our EPS and increased our interim dividend by one third We remain well placed for the long term a wide, well diversified geographic presenc
Slide 17: Strategy and Outlook
STRATEGY AND OUTLOOK Mark Dixon Chief Executive Officer 17
Slide 18: Overview
Overview Historically tough market Global Market leader – in a growing market 981 centres, 500,000 customers 2/3rds of customers outside of a physical Regus office New products performing well Back office consolidation producing savings Ready to exploit growth opportunities 18
Slide 19: ASIA
ASIA Continued increase in mature occupancy and holding mature margin steady at 35% New centres opened in Macau, Hangzhou and Pune, India Significant development of regional shared service centre in Manila – all billing and > 50% of finance now handled; expected 100% by end Oct 09 Continued cost bas
Slide 20: EMEA
EMEA Continued strengthening of country networks New countries added in 09 – Senegal, Estonia and Mauritius Regional shared service centre now operationally implemented: centralised billing, collections, etc New partnerships with SIXT; renewed partnership Air France/KLM 20
Slide 21: Americas
Americas Enquiry levels holding firm Cost reduction schemes going to plan Taking advantage of rent renegotiation opportunities – locking in savings early Opened in Paraguay – expanding our network Capitalising on strategic growth opportunities 21
Slide 22: UK: Very challenging market – as expected
UK Very challenging market – as expected Market leader in a highly competitive market Continuing competitive consolidation Focus on efficiency and productivity gains Significant new partnerships - large potential target group 22
Slide 23: Businessworld
Businessworld Multiple offerings to suit all Continued global growth Major partnership opportunities expected Membership numbers Revenues up ten-fold over comparative half 23
Slide 24: Berkeley Square Lounge
Berkeley Square Lounge 24
Slide 25: Enterprise solutions – a clear cost benefit
Enterprise solutions – a clear cost benefit Spend visibility Utilisation reporting Improve employee satisfaction Green credentials Simplicity, Flexibility One monthly invoice 25
Slide 26: Retail
Retail My Office Anywhere Business Traveller - Full Day - Worldwide Access Regus to Go – full suite 26
Slide 27: Cost Initiatives
Cost Initiatives Progressing as expected in establishing financial shared service centres Cost reductions in line with expectations Continued implementation of global “smartworking” programmes Focus on every cost line Rent renegotiation opportunities 27
Slide 28: Shared service centres
Shared service centres….. Regus shared services centres 28
Slide 29: Continued growth
Continued growth Property portfolio @ H1,09 Kick starting growth Low capex/low risk preferred Variable terms Potential selective property acquisitions 29
Slide 30: Summary
Summary £237m total cash in bank Earnings maintained Interim dividend increased one third Continued investment in new product offerings Additional sales channels open Delivering expected cost savings Global economic conditions continue to be very challenging Ready to kick-start growth 30
Slide 31: Appendix
Appendix 31 workwithoutboundaries
Slide 32: Stability in our business model
Stability in our business model Workstation segmentation Customer sectors 32
Slide 33: 76 countries
76 countries Algeria Egypt Kenya Philippines Argentina El Salvador Lebanon Poland Australia England Luxembourg Portugal Austria Finland Macau Qatar Bahrain France Malaysia Romania Belgium Germany Malta Russian Federation Brazil Greece Mexico Saudi Arabia Bulgaria Guatemala Monaco Scotland Canada Hon
Slide 34: 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 34
Slide 35: Regional diversity
Regional diversity H1 2009 Revenues by region 35