Slide 1: 2016 Interim Results Presentation
2016 Interim Results Presentation 9 August 2016 © Regus Group Services 2016
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, affiliates
Slide 3: First Half Financial Highlights
First Half Financial Highlights • Group revenues increased 10.3%* to £1,077.6m • Underlying operating profit up 30%* to £90.0m • Operating margin increased from 6.9% to 8.4% • Overheads reduced 9%* in absolute terms – 12.6% as a percentage of revenues • Underlying cash generated before net growth in
Slide 4: Generating attractive returns
Generating attractive returns Post-tax cash return on net investment Post-tax cash returns based on 2015 results Post-tax cash returns based on LTM 2016 results • 23.3% post-tax cash returns on all locations opened on or 25.7% before 31 December 2012 25.9% 23.3% 24.1% 21.6% 21.4% • Recent year group
Slide 5: Structural growth market
Structural growth market Structural changes are driving our industry globally The way people use office space is changing: • 53% of professionals globally now work remotely for at least half their working week1 • 67% of businesses globally say they are now choosing forms of flexible workspace as a l
Slide 6: Strong market position
Strong market position • Global market leader with a highly diversified business • Unrivalled global and national networks • operating 2,845 centres • across 1,008 towns and cities • in 107 countries • Diverse range of office formats • Wide range of service offerings • Mobile • Virtual office • Work
Slide 7: Regus’ growth strategy
Regus’ growth strategy • Confidence in long-term growth opportunity • Our focus remains on developing national networks offering a range of products and price points • Streamlined and more efficient business model • Detailed planning is key to successful delivery • Net growth investment of £83.1m –
Slide 8: Our national network in the UK
Our national network in the UK • The UK network • City centre locations • Business parks • Road locations • Rail locations • Airport locations • Educational & community locations • Retail locations • Hotels 8
Slide 9: Developing national networks globally
Developing national networks globally Regus Express, Mumbai airport Spaces, Menlo Park, Silicon Valley Regus, Toa Payoh Library, Singapore Regus, Geneva City Centre Spaces, Melbourne Regus, St. Thomas, Barbados 9
Slide 10: SPACES development
SPACES development • Strong roll out programme of our Spaces co-working format in 2016 • Amsterdam • Long Island City • Rotterdam • Silicon Valley • The Hague • Los Angeles • London • Santa Monica • Glasgow • San Francisco • Melbourne • San Jose • Sydney • Denver • Nagoya • Boston • Singapore • Dall
Slide 11: Financial review
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Slide 12: Returns developing as expected
Returns developing as expected NCO year group 40 Gross profit margin* 33.5% 33.0% 20 25.5% 28.3% 30.6% • 2013, 2014 and 2015 additions 9.8% 10.3% showing continued improvement 0 % (3.7)% • 2016 locations predominately -20 organic additions -40 (49.4%) -60 2016 2015 2014 2013 2012 and before *before
Slide 13: A strong performance
A strong performance Group income statement (excluding non-recurring items*) £ million H1 2016 H1 2015 % change % change • Revenue up 10.3% with (actual (constant currency) currency) growth in all regions at constant currency Revenue 1,077.6 937.0 15.0% 10.3% Gross profit • Strong overhead performan
Slide 14: Mature centre performance: by geography
Mature centre* performance: by geography Revenue Growth at Revenue Growth at Mature Gross Revenue Contribution Actual Currency Constant Currency Margin (%) £m H1 2016 H1 2015 H1 2016 H1 2015 H1 2016 H1 2015 Americas 398.4 373.8 6.6% 0.8% 93.7 89.0 23.5% 23.8% EMEA 198.7 187.7 5.9% 0.8% 52.1 42.9 26.
Slide 15: Further overhead efficiency
Further overhead efficiency Total overheads as a % of revenues 25 What happened 20 • Overall overheads declined 9% at 19.3% 18.5% 18.5% 16.7% constant currency, compared to a 15 14.7% 15.4% % 15% increase in the number of 10 12.6% locations over the last 12 months 5 • New cluster based field structu
Slide 16: Strong cash flow
Strong cash flow £ million H1 2016 H1 2015 • Very strong cash performance Group EBITDA 178.6 136.3 • Group EBITDA increased by 24% at constant currency Working capital 48.8 17.5 • Strong working capital management Less growth related partner contributions (23.7) (24.5) • Modest exchange rate benefit
Slide 17: A healthy balance sheet
A healthy balance sheet £ million H1 2016 H1 2015 Balance Sheet Cash flow before growth expenditure 142.6 159.9 • Maintained prudent approach to balance sheet management Net growth capital expenditure (83.1) (120.0) • Net debt to Group LTM EBITDA ratio Total net cash flow from operations 59.5 39.9 m
Slide 18: Financial summary
Financial summary • Strong profit growth and cash generation • Increased overhead and operational efficiency • Good post-tax cash return on investment • Disciplined approach to growth with more partnership deals • Pipeline visibility maintained at c.£120m of net capex • Prudent balance sheet managem
Slide 19: Outlook & summary
Outlook & summary Successful First half • Improved returns on investment • Proactive actions delivering significant operating leverage • Strong cash flow Outlook for 2016 • More uncertainty in the world • Maintain disciplined approach to growth • Well placed to take advantage of structural changes i
Slide 20: Questions
Questions 20
Slide 21: Contact details
Contact details Wayne Gerry Group Investor Relations Director +44 (0) 7584 376533 wayne.gerry@regus.com 21