Slide 1: Half-Year Results Presentation
19 February 2009 The Manager Company Announcements Office Australian Stock Exchange Limited By Electronic Lodgement Dear Sir Servcorp Limited (SRV) Half-Year Results Presentation Following is a copy of the half-year results presentation given by Servcorp’s Director, Taine Moufarrige, at Servcorp’s h
Slide 2: Analyst Presentation
Servcorp Limited For personal use only Analyst Presentation Thursday 19 February 2009 Six months ended 31 December 2008 Taine Moufarrige, Executive Director Marcus Moufarrige, CIO & CEO - Office² Thomas Wallace, CFO
Slide 3: Background
Servcorp Background For personal use only Ø World’s finest Serviced Offices and Virtual Offices Ø Market leader – Excellence in every aspect of the business Ø No longer a Serviced Office provider – real technology and business solutions that help our clients businesses succeed Ø Number of clients –
Slide 4: Floors Geographic Spread
Servcorp Floors Geographic Spread For personal use only Qatar 2 Bahrain 2 UAE 2 Belgium 2 France 4 Australia 18 NZ 3 Japan 18 Singapore 5 China 6 Thailand 4 Malaysia 2 Hong Kong 3 Australia NZ Singapore China Hong Kong Malaysia Thailand Japan France Belgium UAE Qatar Bahrain 3
Slide 5: Financial Highlights
Six months ended 31 Dec 08 Financial Highlights For personal use only % 000’s Revenue Up 28% to $118,298 Mature floor profit Up 16% to $31,666 Net profit Before Tax Up 19% to $28,093 Net profit After Tax Up 16% to $20,328 Earnings per Share Up 16% to $0.253 Negligible Debt to ($2,449) Net Assets Up
Slide 6: H1 2009 Operational Highlights
H1 2009 Operational Highlights For personal use only Ø Great first quarter Ø Tough trading environment in Q2 2009 FY • Increased competition • Margins dropping • Increasing vacancy in capital cities Ø 2 new floors opened in Australia Ø Cost cutting initiatives implemented in July 2008 Ø Closure of 2
Slide 7: H1 2009 Operational Highlights: New Floors
H1 2009 Operational Highlights For personal use only 2 New Floors § Level 32, 101 Miller St § Level 30, Westpac Tower North Sydney Adelaide (December 2008) (October 2008) 6
Slide 8: H1 2009 Operational Highlights
H1 2009 Operational Highlights For personal use only Ø Consolidation – slowed expansion Ø Looking at opportunities Ø Middle East success Ø India Franchise breaking even – wait and see approach Ø Focusing on the resilience of our business model 7
Slide 9: H1 2009 Operational Highlights: New Virtual Website
H1 2009 Operational Highlights For personal use only § New Virtual website available worldwide Ø Sign up on-line Ø Automatic set up Ø Access to Hottdesk = access to Servcorp Ø New Servcorp website and Hottdesk 8
Slide 10: H1 2009 Operational Highlights: Office²
H1 2009 Operational Highlights For personal use only § OFFICE ² – Marcus Moufarrige Ø Tough conditions for relative “start-up” Ø Longer time to breakeven with slower take up Ø Slower sales plans…get the three exciting projects we have right Ø Supported by Servcorp Board Ø Ascendas is an exciting opp
Slide 11: Financial Results
For personal use only Six Months Ended 31 December 2008 Financial Results Thomas Wallace, CFO
Slide 12: Consolidated Profit and Loss Highlights
Servcorp Consolidated Profit and Loss Highlights six months ended 31 December 2008 For personal use only Six months Six months Growth ended ended 31 Dec 08 31 Dec 07 $ 000’s $ 000’s Revenue 118,298 92,702 28% Mature Floor NPBT 31,666 27,327 16% Immature Floor NPBT (1,515) (2,447) Office Squared NPBT
Slide 13: Consolidated Total Revenue
Servcorp Consolidated Total Revenue For personal use only 5 years H1 2005 – H1 2009 118.3 § Record Revenue in 120.0 H1 2009 92.7 100.0 79.5 § Revenue up 28% 68.6 on PCP AUD (Millions) 80.0 60.0 60.0 § Revenue up 97% in last 5 years 40.0 § Strong operational 20.0 growth over the last 5 years 0.0 2005
Slide 14: Mature / Immature Floors & Office² NPBT
Servcorp Mature / Immature Floors & Office² NPBT – 5 years H1 2005 – H1 2009 For personal use only 35.0 31.7 § Record Mature floor 27.3 result in H1 2009 30.0 25.0 19.3 § Mature floor profit 18.4 up 16% compared 20.0 to H1 2008 12.8 AUD(Millions) 15.0 § Strong organic 10.0 growth for the last 5 year
Slide 15: Consolidated Net Profit Before Tax
Servcorp Consolidated Net Profit Before Tax 5 years H1 2005 – H1 2009 For personal use only 30.0 28.1 25.0 23.6 § Strong H1 2009 growth of 19% on PCP 20.0 § Closure provision of 16.3 AUD (Millions) 14.2 $2,898,000 included 15.0 in H1 2009 11.5 10.0 5.0 0.0 2005 H1 2006 H1 2007 H1 2008 H1 2009 H1 Ye
Slide 16: Consolidated Net Profit After Tax
Servcorp Consolidated Net Profit After Tax 5 years H1 2005 – H1 2009 For personal use only 25.0 § Strong NPAT growth 20.3 in H1 2009 of 16% 20.0 17.5 compared to H1 2008 AUD (Millions) 15.0 11.9 10.3 8.4 10.0 5.0 0.0 2005 H 1 2006 H 1 2007 H 1 2008 H 1 2009 H 1 Ye a rs 15
Slide 17: Consolidated Earnings Per Share
Servcorp Consolidated Earnings Per Share 5 years H1 2005 – H1 2009 For personal use only 30.0 25.3 25.0 21.8 20.0 AUD (Cents Per Share) 14.8 15.0 12.7 10.4 10.0 5.0 0.0 2005 H1 2006 H1 2007 H1 2008 H1 2009 H1 Years 16
Slide 18: Consolidated Balance Sheet
Servcorp Consolidated Balance Sheet as at 31 December 2008 For personal use only At 31 Dec 08 At 30 June 08 Growth $ 000’s $ 000’s Cash assets 91,685 73,716 24% Other current assets 35,983 24,087 Total Current Assets 127,668 97,803 Non Current Assets 118,033 92,692 Total Assets 245,701 190,495 29% C
Slide 19: Consolidated Cash Flow from Operations
Servcorp Consolidated Cash Flow from Operations For personal use only six months ended 31 December 2008 $ 000’s Cash Balance at 30 June 2008 73,449 Operating cash flow after tax payments 29,799 Strong conversion of NPAT to cash flow Payments for PPE (5,559) 2 floors constructed in H1 2009 Payments f
Slide 20: Consolidated Cash Flow from Operations, H1 2005 – H1 2009
Servcorp Consolidated Cash Flow from Operations For personal use only 5 years H1 2005 – H1 2009 35.0 29.8 30.0 25.5 § Strong cash flows 25.0 in H1 2009 19.8 AUD ( Millions) 20.0 • Growth of 15% 12.4 12.6 compared to H1 2008 15.0 10.0 § Steady growth for last 5 years 5.0 0.0 2005 H1 2006 H1 2007 H1 2
Slide 21: 2008 – 2009 Focus
2008 – 2009 FOCUS Ø Management focus rather than expansion For personal use only Ø Focus on sales, revenue, margins and controlling costs Ø Focus on customer service and retention Ø Focus on providing our clients with IT and Communications infrastructure that helps their businesses succeed. Ø Focus
Slide 22: Around The World: Europe & Middle East
Around The World 2008 – 2009 For personal use only EUROPE & MIDDLE EAST Ø Dubai– performing strongly (for now) Ø Bahrain – strong performance Ø Qatar – performing ahead of expectation Ø Paris – improved performance but looking tough Ø Brussels – surprised to the upside in H1 2009 21
Slide 23: Around The World: Japan
Around The World 2008 – 2009 For personal use only JAPAN Ø Great locations performing well but …… Ø Extremely competitive markets – particularly in Tokyo Ø Economic slow down – softening results Ø Weak AUD helps 22
Slide 24: Around The World: Asia & China
Around The World 2008 – 2009 For personal use only ASIA & CHINA Ø Rents high, low vacancies – but the market is changing quickly Ø Hong Kong and Singapore particularly tight but adjustment is imminent Ø Shanghai has a massive over supply of space Ø Beijing rents are dropping Ø Strong USD helps 23
Slide 25: Around The World: Australia & New Zealand
Around The World 2008 – 2009 For personal use only AUSTRALIA & NEW ZEALAND Ø Landlords are talking it up but…… Ø Financial centres softening Ø Mining cities – seeing increased vacancy Ø New Zealand in recession Ø Australia will be tough Ø Adelaide and North Sydney – new floors 24
Slide 26: IT Client Services and Solutions
Around The World 2008 – 2009 IT CLIENT SERVICES AND SOLUTIONS For personal use only Ø No longer just a serviced office Ø Real integrated business Ø Complete Hottdesk v3 rollout Ø Delivery of sophisticated client services online to improve return Ø Maximise return from global converged network – real
Slide 27: 2009 Outlook
For personal use only 2009 Outlook Ø Cautious approach in existing markets - Focus on sales / revenues / margins / cost control Ø Only 1 new floor planned to open in H2 FY 2009 Ø Expand operations in Middle East in the medium term 26
Slide 28: 2009 Outlook
2009 Outlook For personal use only Ø Marketing focus on helping businesses through the GEC – “corporate presence and sophisticated IT and communications infrastructure at a fraction of the cost” Ø Complete rollout of Hottdesk and maximize returns from our IT and Communications platforms and infrastr
Slide 29: 2009 Outlook
2009 Outlook For personal use only Ø Confirm our forecast of 5% increase in NPBT in FY 2009 Ø NPBT 2007/2008 - $44.5 million Ø Forecast NPBT 2008/2009 - $46.7 million Ø Margins squeezed, occupancy decrease, profit reduction but… Ø Best product in the market Ø Best business model in the industry Ø Be
Slide 30: 2008/09 Dividend
2008/09 Dividend For personal use only Ø April 2009 10 cents fully franked ordinary dividend Ø October 2009 10 cents fully franked ordinary dividend 29
Slide 31: Questions and Answers
Questions and Answers For personal use only 30