Slide 1: Interim Results 2011 Presentation
Interim Results 2011 Presentation 30 August 2011 Mark Dixon, Chief Executive Officer Stephen Gleadle, Chief Financial Officer
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 1
Slide 3: I. Welcome and introduction
I. Welcome and introduction Mark Dixon Chief Executive Officer
Slide 4: Continued financial and strategic delivery
Continued financial and strategic delivery Financial highlights • Revenues of £565.6m: +9.7% • EBITDA of £50.1m: +8.4% • EBIT of £13.8m: +35.3% • Cash from operations of £70.2m: +49% • Net Cash of £197.8m (+3.3% from 31/12/2010) • Earnings per share of 2.5p (up 3.3p) • Dividend per share of 0.9p: +6
Slide 5: Strong mature performance
Strong mature performance Number of mature centres Mature financial highlights 1,000 • Revenues of £514.1m: +1.9% 800 • EBITDA of £69.0m: +12.6% 600 • EBIT of £37.7m: +46.1% • Mature cash flow of £54.7m: +5.0% 400 • Earnings per share of 3.1p: +47.6% 200 0 2007 2008 2009 2010 2011 Strategic highligh
Slide 6: New centres - 2010 and 2011
New centres - 2010 and 2011 Financial highlights • Revenues of £50.3m • EBITDA of £(18.2m) • EBIT of £(23.2m) • Investment in Growth of £45.6m Strategic highlights • 48 centres added in the first half of 2011 • 5,674 additional workstations • Three new countries: Uganda, Serbia, Latvia • 11 new citi
Slide 7: II. Financial review
II. Financial review Stephen Gleadle Chief Financial Officer
Slide 8: Summary income statement - Consolidated
Summary income statement - Consolidated Actual exchange rates £ million H1 2011 H1 2010 Change Revenue 565.6 515.5 50.1 Centre contribution 129.4 105.5 23.9 Overheads (115.7) (96.2) (19.5) Joint ventures 0.1 0.9 (0.8) EBIT pre-exceptional 13.8 10.2 3.6 Restructuring & reorganisation - (15.8) 15.8 Ne
Slide 9: Regional analysis
Regional analysis Actual exchange rates Revenue Contribution Mature margin (%) £ million H1 2011 H1 2010 H1 2011 H1 2010 H1 2011 H1 2010 Americas 230.8 215.7 60.9 47.4 28% 23% EMEA 149.9 142.4 33.9 35.6 25% 26% Asia Pacific 79.8 68.4 20.1 19.5 30% 32% UK 105.1 89.0 14.5 3.0 15% 4% Total 565.6 515.5
Slide 10: Summary income statement – Mature centres
Summary income statement – Mature centres Actual exchange rates £ million H1 2011 H1 2010 Change Revenue 514.1 504.5 9.6 Centre contribution 129.0 109.4 19.6 Overheads (91.3) (83.6) (7.7) add back Depreciation 31.3 35.5 (4.2) EBITDA 69.0 61.3 7.7 EBITDA Margin % 13% 12% 1% Maintenance Capex (14.3) (
Slide 11: Summary income statement – new 2010 and 2011 centres
Summary income statement – new 2010 and 2011 centres Actual exchange rates £ million H1 2011 H1 2010 Revenue 50.3 4.1 Centre contribution 1.0 (2.3) Overheads (24.2) (11.6) Add back depreciation 5.0 0.5 EBITDA (18.2) (13.4) Growth capex (27.4) (14.0) Investment in growth (45.6) (27.4) Number of centr
Slide 12: Cash flow
Cash flow Actual exchange rates £ million H1 2011 H1 2010 Change Mature cash flow 54.7 52.1 2.6 Investment in growth (45.6) (27.4) (18.2) Working capital movement 19.5 2.9 16.6 Interest and tax (3.1) (8.6) 5.5 Dividends and share buybacks (17.4) (19.2) 1.8 Other cash movements 6.2 13.3 (7.1) Change
Slide 13: Summary balance sheet
Summary balance sheet Actual exchange rates £ million H1 2011 H1 2010 Change Non-current assets 673.0 656.2 16.8 Working capital (279.4) (280.9) 1.5 Net cash 197.8 224.2 (26.4) Other non-current liabilities (110.3) (102.6) (7.7) Net assets 481.1 496.9 (15.8) 12
Slide 14: Building revenue while managing rent
Building revenue while managing rent • Contracted income > 18 months’ Rent liability – statutory case rent 400 Total rent liability £1.6bn 350 • Managed case limits rent liability 300 250 • >900k customers £m 200 • Customers sector diversity 150 100 • Geographical diversity 50 0 1 2 3 4 5 6 7 Years
Slide 15: Financial summary
Financial summary • Strong mature performance through the cycle • Continued cash generation • Ongoing investment in infrastructure • Significantly increasing investment in growth • Strong balance sheet • Proactive management of lease liabilities 14
Slide 16: III. Business review
III. Business review Mark Dixon Chief Executive Officer
Slide 17: Regus at a glance
Regus at a glance The world’s largest provider of flexible workplaces Key statistics Revenue mix by geography No. of countries 88 MEA E Europe 3% 6% No. of cities 519 Americas USA 9% 30% No. of centres 1,119 No. of colleagues (FTE) 6,500 Asia 13% No. of workstations 193,000 No. of customers 900,000
Slide 18: The network continues to expand
The network continues to expand Europe & UK BRIC Nations 396 +50% 85 +158% USA N-11 Nations 416 +21% 44 +76% Americas Asia Pacific 106 +121% 142 +115% Middle East & Africa 47 +104% Number of centres at end H1 2011 and percentage increase since 2006 Excluding franchises 17
Slide 19: A growing opportunity
A growing opportunity 1 Lower cost 2 Technology Five key 3 Company adoption drivers 4 Employee demand 5 Ongoing globalisation 18
Slide 20: Lower cost
1 Lower cost • Ongoing economic • Supporting 900+ workers across 32 uncertainty maintains cost- markets cutting pressure • Mix of office, Virtual Office and Businessworld • Saving over three • We can provide small branch years vs traditional = US$24million offices at 50% or less of in- sourced alter
Slide 21: Technology
2 Technology • Key enabler and catalyst for change • Totally transformed the “work” landscape • Continued technology advances will further enhance flexible work growth 1990 1995 2001 2003 2010 Launch of 2G First true Launch of Smartphone iPad and adoption of laptops begin 3G Blackberry released mobi
Slide 22: Company adoption
3 Company adoption • Outsourcing in growth mode • Regus simplifies the complex and inflexible process of real estate procurement / management • Regus products and services are being adopted as recognised and accepted business tools • New product enhancements and launches bringing in new customer/cor
Slide 23: Employee demand
4 Employee demand • Employee support a priority when More than a billion mobile workers fixed offices reduced 1200 • Home work programmes increasing dramatically 1000 • Commuting time and cost 800 significant 600 • Convenience of location and ease of access a priority to flexible 400 workers 200 • N
Slide 24: Ongoing globalisation
5 Ongoing globalisation • The internet continues to dissolve borders and expand markets • Global connectivity continues to grow, led by the emerging markets • Companies need physical locations to trade • Capital is more scarce and companies are looking at cost- effective expansion 23
Slide 25: Satisfying demand
Satisfying demand Centre growth – 2005-2014 • Reach 2000 centres 2000 1500 • Extend footprint to 120 countries 1000 • Major focus on national networks 500 0 • Increase targeting of infrastructure 2005 2007 2009 2011 2013 points Customer numbers 1000 • Leverage multi-brand offering 800 ‘000s 600 • Co
Slide 26: IV. Current trading and outlook
IV.Current trading and outlook Mark Dixon Chief Executive Officer
Slide 27: Current trading
Current trading • Benefits from strategic investment continued into H1 2011 • Mature occupancy at record levels • Price gradually improving • Steady margin progression expected • Increased investment in growth and group infrastructure 26
Slide 28: 2011 outlook
2011 outlook • Network growth acceleration in H2 • Reducing overhead per available workstation (OPWS) • UK returning towards normalised margins • Further margin and cashflow improvement • Further strengthening of global management team 27
Slide 29: V. Q&A
V. Q&A