Slide 1: Full Year Results Presentation cover letter
24 August 2011 The Manager Company Announcements Office Australian Securities Exchange By electronic lodgement Dear Sir Servcorp Limited (SRV) Full Year Results Presentation Servcorp Limited ABN 97 089 222 506 Level 12 MLC Centre 19-29 Martin Place Sydney NSW 2000 Australia T | +61 29231 7616 F [| +
Slide 2: Analyst Presentation Twelve Months ended 30 June 2011
For personal use only Servcorp Limited Analyst Presentation Twelve Months ended 30 June 2011 Presented by Alf Moufarrige, CEO Wednesday 24 August 2011 1
Slide 3: Operational Highlights - FY 2011
Operational Highlights - FY 2011 Revenue up 8% to $182.06M For personal use only Mature floor NPBT up 24% to $31.19M Immature floor loss of $27.98M NPBT of $3.04M up 6% on FY 2010 Strong (unencumbered) cash balances of $91.27M at 30 June 2011 Solid net operating cash flow of $18.79M NT
Slide 4: Operational Highlights - Total Floors by Region
Operational Highlights - FY 2011 Total Floors by Region 30 June 2011 For personal use only 30 25 25 22 21 20 Number of Floors 16 15 11 10 9 9 5 3 0 Australia & Japan South East Middle East India Greater China Europe USA New Zealand Asia (Franchise) Total Floors = 116 1 2
Slide 5: Financial Results – FY 2011
Financial Results – FY 2011 Constant FY 2011 FY 2010 % Currency % For personal use only $AUD $AUD 000’s 000’s 175,900 162,231 8% Operating Revenue 6,156 6,606 (7%) Other Revenue 182,056 168,837 8% 13% Total Revenue 31,191 25,126 24% Mature Floor Net Profit Before Tax (27,983) (20,102) 39% Total Imma
Slide 6: Financial Results – FY 2011
Financial Results – FY 2011 For personal use only As at As at % 30 June 2011 30 June 2010 $AUD $AUD 000’s 000’s Cash Balance 99,993 131,948 (24%) Cash Balance (unencumbered) 91,269 121,030 (25%) Net Assets 192,612 212,610 (9%) Net Tangible Assets (per share) $1.81 $2.01 (10%) FY 2011 FY 2010 % Earni
Slide 7: Mature Business – FY 2011
Mature Business – FY 2011 Mature floor NPBT increased by 24% to $31.19M For personal use only Mature result is better than guidance of $30.00M Challenging trading conditions in FY 2011 Management is satisfied with the result Revenue and margins in H2 FY 2011 improved in several regions E
Slide 8: Mature Business – FY 2011
Mature Business – FY 2011 During H1 FY 2011, 2 large floors reached maturity For personal use only Both floors became mature ahead of expectations During H2 FY 2011, 4 floors became mature Australia & Southeast Asia continue to perform strongly Average mature floor occupancy increased to 7
Slide 9: Immature Business – Immature Floors by Region
Immature Business – FY 2011 Immature Floors by Region For personal use only 30 June 2011 25 21 20 Number of Floors 15 10 8 6 5 4 3 3 1 0 Australia & Japan South East Middle East Greater China Europe USA New Zealand Asia Total Immature Floors = 46 3 7
Slide 10: Immature Business – FY 2011
Immature Business – FY 2011 Immature floor losses were $27.98M for FY 2011 For personal use only Offsetting immature floor losses were cash incentives received of $5.64M New floor Capex and Opex costs in line budget expectations Executed majority of leases hopefully near the bottom of the ma
Slide 11: Immature Business – FY 2011
Immature Business – FY 2011 Management continues to have confidence in the Servcorp business For personal use only model Satisfied with overall progress of new floor rollouts Focus on growing immature revenue 46 floors were immature at 30 June 2011 3 9
Slide 12: Global Expansion – Update
Global Expansion – Update Total Floors Opened by Region 24 months ended 30 June 2011 For personal use only 25 20 Number of Floors 15 19 10 7 5 3 7 3 3 4 2 2 1 2 0 Australia & Japan South East Middle East Greater China Europe USA New Zealand Asia Total Floors Opened FY 2010 = 13 Total Floors Opened F
Slide 13: Global Expansion – Update
Global Expansion – Update FY 2011 was Servcorp’s biggest expansion year ever For personal use only In FY 2012 we will slow the pace of expansion and consolidate Limiting openings to new floors in established & profitable locations Cashflow in USA assisted by $5.64M in landlord cash incentive
Slide 14: Operating Summary by Region – Australia & New Zealand
Operating Summary by Region 2010 - 2011 AUSTRALIA & NEW ZEALAND For personal use only Mature floors Australia and New Zealand performed strongly Revenue and margins increased in most capital cities 3 floors closed in this region at a cost of $0.53M Immature floors 7 new floors opened in Aust
Slide 15: Operating Summary by Region – Japan
Operating Summary by Region 2010 - 2011 JAPAN For personal use only Mature floors Fukushima earthquake impacted business confidence Impact most notable on our business in Tokyo Margins continue to be depressed in this city Margins improved in southern Japanese cities Management satisfied w
Slide 16: Operating Summary by Region – Greater China
Operating Summary by Region 2010 - 2011 GREATER CHINA For personal use only Mature floors Servcorp’s business in China saw a significant turnaround This translated directly into improved margins in the region Immature floors No new floors opened in Greater China during FY 2011 FY 2012 Outlook
Slide 17: Operating Summary by Region – Southeast Asia
Operating Summary by Region 2010 - 2011 SOUTHEAST ASIA For personal use only Mature floors Southeast Asian Serviced Office market was mixed Singapore saw an increase in revenue and margins 1 large floor in Singapore mature after 6 months The Malaysian market continues to be soft Performanc
Slide 18: Operating Summary by Region – Middle East
Operating Summary by Region 2010 - 2011 MIDDLE EAST For personal use only Mature floors Servcorp largely unaffected by civil unrest in the Middle East Business continues to improve in Saudi Arabia and Turkey Margins in UAE remain strong New location in Abu Dhabi became mature in H1 FY 2011
Slide 19: Operating Summary by Region – Europe
Operating Summary by Region 2010 - 2011 EUROPE For personal use only Mature floors European business sentiment continues to be depressed The Serviced Office market continues to be difficult Revenue increased in Paris despite aggressive competition Brussels has improved and we are now profita
Slide 20: Operating Summary by Region – USA
Operating Summary by Region 2010 - 2011 USA For personal use only Immature floors USA is a critical addition to the Servcorp global footprint Construction delays affected floor opening times This adversely impacted operating running costs Initial revenue generation is below budget expectatio
Slide 21: Operating Summary by Region – Office Squared
Operating Summary by Region 2010 - 2011 Office Squared For personal use only The Office Squared business has been scaled back Operations in both Malaysia and China have been closed Loss for Office Squared for FY 2011 was $0.17M 19
Slide 22: Outlook for Servcorp
FY 2012 Outlook Management is cautiously optimistic about the outlook for Servcorp For personal use only Global financial markets continue to be highly volatile This has a direct impact on business consumer confidence Revenue and margins across the mature business improved in H2 FY 2011 An
Slide 23: FY 2012 consolidation and guidance
FY 2012 Outlook FY 2011 always intended to be a major expansion period for Servcorp For personal use only In FY 2012 we will consolidate operations Expect to open no more than 15 floors in FY 2012 in established markets Immature floor loss guidance of approximately $20.00M for FY 2012 [This
Slide 24: Dividend FY 2012
Dividend FY 2012 For personal use only Final Dividend (declared) of 5.0 cents per share – fully franked Total FY 2011 dividends of 10.0 cents per share - fully franked Dividend Outlook Dividends of 15.0 cents per share, partially franked expected to be paid for FY 2012 [This payment is subject