Slide 1: 2015 Interim Results Presentation
2015 Interim Results Presentation . 25th August 2015 © Regus Group Services 2015
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: First Half Financial Highlights
First Half Financial Highlights . • Improved returns on investment to 23.1%1 • Revenues increased 16.4%2 to £937.0m • Underlying operating profit up 62%2 to £65.0m • Operating margin3 increased from 5.0% to 6.9% • EPS3 increased 81%2 from 2.6p to 4.9p • Underlying cash generated before net growth in
Slide 4: Growth company in a growing industry
Growth company in a growing industry . • Doubled revenue over the last 5 Revenue 2000 years +16.4%* 1800 • Invested £120m, adding 231 new 1600 +15.8%* locations in H1- visibility for full year +23.2%* 1400 2015 of c£230m net investment and +9.2%* c600 locations added 1200 +12.6%* £m 1000 • 24% growt
Slide 5: Fast developing market demand
Fast developing market demand . Factors enabling change Smartphones Broadband Work Work Network at home anywhere convenience Business forces driving demand Company Employee Marketing Environment adoption popularity visibility 5
Slide 6: Generating attractive returns
Generating attractive returns . 30 • 23.1% post-tax cash returns on all locations opened on or 25 Post-tax Cash Returns based before 31 December 2011 on LTM 2015 result (%) 24.1% 24.8% 20 21.9% (2015 LTM basis) 19.7% Unusual mix 15 of locations • Recent year group 10 investments are progressing 10.4
Slide 7: Key to delivering the growth opportunity
Key to delivering the growth opportunity . 1. Detailed country planning 2. Investment in formats and innovation 3. Rigorous management of the business 7
Slide 8: 1. Detailed country plans
1. Detailed country plans . A clear strategy to deliver profitable growth • Detailed and comprehensive country plans • Investment in strong local management to deliver these plans 8
Slide 9: Significant runway for growth
Significant runway for growth . • Exciting growth market, with significant customer demand • Potential for 20,000+ Regus locations • Pace of investment will be driven by ability to generate strong returns Benchmarks Growth potential 20,000 15,000 10,000 5,000 • >36,000 restaurants • >21,000 location
Slide 10: Diversity of partnering methods
Diversity of partnering methods. • Dependent on geographic demographics and inherent risks, we will employ different partnering methods as we develop our national networks • Franchising / Licensing • Joint Ventures • Management contracts • Variable rent deals • Conventional lease deals • Occasionall
Slide 11: 2. Formats & innovation
. 2. Formats & innovation 11
Slide 12: Spaces
Spaces . • Established business with significant potential • Creative working environments with a unique entrepreneurial spirit • Inspirational space with community events to help people think, create and collaborate 12
Slide 13: Kora
Kora . • A network of entrepreneurial workspaces connecting the worlds of education and enterprise • Unique environments that provide the space, inspiration, knowledge and contacts needed to bring ideas to life • On-site team offering mentoring, support and regular networking events 13
Slide 14: Regus Express
Regus Express . • Drop-in workspace in the most convenient and accessible locations • Helps workers stay connected when on the move • Airports, railway stations, service stations, shopping malls and hotels • Flexible terms to suit all businesses 14
Slide 15: Other innovations
Other innovations . Regus app • The world of flexible working in the palm of your hand • Search for locations, check availability and make bookings on the move Global WiFi access • 18 million WiFi hotspots in hotels, restaurants and airports around the world Airport lounge access • Preferential rate
Slide 16: 3. Rigorous management of the business
3. Rigorous management of the business . • Continued drive to improve overall rigour and efficiency in the business • Investing in key management • Improving software & systems • Further improvement in operating model • Expect further reduction of overheads as a % of revenues in second half 16
Slide 17: Financial Review
. Financial Review 17
Slide 18: Recent year groups maturing as expected
Recent year groups maturing as expected . Post-tax return on net investment Post-tax cash return on net investment 2011 • We continue to make attractive NCO year group 2015 2014 2013 2012 and before returns 20 23.1% 20.9% • Benefiting from operational 10 8.7% leverage and capital efficiency 0 0.0% 6
Slide 19: A strong performance
A strong performance . Group income statement (excluding exceptional profit) % change % change • Revenue up 16.4% with £ million H1 2015 H1 2014 (actual (constant currency) currency) growth in all regions Revenue 937.0 804.7 16.4% 16.4% • Overall, limited impact from Gross profit 209.0 178.8 17% 16%
Slide 20: Improved overhead efficiency
Improved overhead efficiency . • Continued focus on overhead Total overheads as a % of revenues 20 efficiency • Overall up only 3% at constant 19.3% currency compared to 24% increase 19 in network in the 12 months to June 19.0% 2015 18.5% 18.5% 18 • Benefit from historic investment in % systems, pro
Slide 21: Strong cash flow
Strong cash flow . • Group EBITDA increased by 40% £ million H1 2015 H1 2014 at constant currency Group EBITDA 136.3 96.4 • Cash generated before net growth Working capital 16.7 6.2 investment and disposal proceeds increased Less growth related partner contributions (24.5) (15.2) to £79.9m, or 8.5p
Slide 22: A healthy balance sheet
A healthy balance sheet . £ million H1 2015 H1 2014 Balance Sheet Cash flow before growth expenditure 159.9 45.6 • Maintained prudent approach to balance sheet management Net growth capital expenditure (120.0) (121.1) Total net cash flow from operations 39.9 (75.5) • Net debt to Group LTM EBITDA lev
Slide 23: Financial summary
Financial summary . • A strong set of financial results • Continued to deliver attractive returns • Significant growth in profitability reflecting underlying progress in the business and economies of scale • Neutral FX impact in H1 2015. Recent moves in key currencies will provide a slight headwind
Slide 24: Outlook & summary
Outlook & summary . • Excellent first half: • Improved returns on investment • Significant operating leverage • Strong cash flow • Disciplined focus on country plans • Growing the range of formats • Continuing to carefully manage the business • Current trading in line with our expectations 24
Slide 25: Questions
Questions. Regus 25
Slide 26: Contact details
Contact details . Wayne Gerry Group Investor Relations Director +44 (0) 7584 376533 wayne.gerry@regus.com Emma Gilpin-Jacobs Group Corporate Affairs Director +44 (0) 7802 955243 emma.gilpinjacobs@regus.com 26