Regus Plc Consolidated Report and Accounts 2013

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Regus Plc Consolidated Report and Accounts 2013 TM THE WORLD IN ONE WORKPLACE REGUS PLC ANNUAL REPORT AND ACCOUNTS 2013 THE GLOBAL WORKPLACE PROVIDER Our purpose is to provide businesses with a network of high quality workplaces that help them be more effective and successful More information is available online at www.regus.co.uk Strategic report Governance Financial statements In this report Strategic report Governance Financial statements 02 Business overview 32 Board of Directors 58 Consolidated income statement 03 Performance highlights 33 Corporate governance 59 Consolidated statement of comprehensive income 04 Market and key growth drivers 38 Audit Committee report 60 Consolidated statement of 06 Our business model 41 Remuneration report changes in equity 08 A unique network 54 Directors’ report 61 Consolidated balance sheet 10 Developing new products 56 Directors’ statements 62 Consolidated statement of and services 57 Auditors’ report cash fl ows 12 Strategy and KPIs 63 Notes to the accounts 14 Chairman’s statement 104 Parent company accounts 15 Chief Executive Offi cer’s review 106 Segmental analysis 19 Chief Financial Offi cer’s review 108 Five year summary 24 Principal risks 109 Shareholder information 28 Corporate responsibility Meeting demand with growth Creating sustainable value Continuing to innovate We continue to grow in response to the Our purpose is to provide businesses Today Regus is focused on providing fundamental changes affecting how people with a network of high quality workplaces an ever expanding range of high quality and organisations work, namely the shift that help them be more effective and products, services and locations from towards a more fl exible mode of working, successful. To achieve this we have which businesses can work, to help especially among corporations. developed a proven, robust and high our customers improve their productivity performing business model. and effi ciency. See p04 for more detail > See p06 for more detail > See p10 for more detail > www.regus.com/investors 1 Business overview A HIGH-PERFORMANCE GROWTH BUSINESS Regus is a long established, high- performing business operating in the growing market of fl exible workplace outsourcing. Our national workplace networks provide our customers with the best quality locations they need to do business. Organisations outsource their workplace needs to Regus so they can better focus on their core business activities. We put our customers in control of how and where they work, allowing them to be more productive and effi cient whilst only paying for what they need. In achieving this we have built a well-respected, high-growth and profi table business. 1,929 684 100 1.58m locations including Cities Countries Customers 1,831 business centres and 98 third place locations 2 Regus plc Annual Report and Accounts 2013 Strategic report Governance Financial statements OUR PERFORMANCE AT A GLANCE Key highlights • Group revenue increased 23.3% to • Firm control over costs – total overheads • Mature free cash fl ow per share £1,533.5m (excluding Research & Development) of 16.6p down 3.8% per available workstation • Record network growth of 30% to 1,831 • 13% increase in full year dividend business centre locations, in addition to • Mature operating profi ts up 33% to 3.6p 98 third place locations to £205.3m and mature EPS up 34% to 17.0p Number of centres split Mature operating profit Mature operating margin mature and new 1,831 £205.3m 16.7% 2,000 250 25 687 1,600 200 20 205.3 382 1,200 150 170.5 15 16.7 255 15.2 164 1,144 1,029 128 948 800 855 920 100 106.8 10 96.6 10.2 10.3 400 50 63.7 5 6.5 0 0 0 09 10 11 12 13 09 10 11 12* 13 09 10 11 12* 13 Mature New Mature free cash flow Mature earnings per share Investment in growth £156.5m 17.0p £301.1m 160 18 350 156.5 17.0 144.3 15 280 301.1 120 14.0 117.1 12 210 80 9 8.6 175.3 70.3 8.1 140 6 55.1 40 5.4 70 86.4 3 71.4 18.2 0 0 0 09 10 11 12* 13 09 10 11 12* 13 09 10 11 12* 13 * These fi gures are prepared on a consistent basis, i.e. the Mature Centre business results for 2013 refl ect only the performance of centres that were open on or before 31 December 2011. 2012 Mature Centres are those that were open on or before 31 December 2010. www.regus.com/investors 3 MARKET AND KEY GROWTH DRIVERS We continue to grow When a business looks to outsource its workplace requirements, location is in response to the typically the primary consideration. It is fundamental changes for this reason that we continue to invest heavily in expanding and strengthening affecting how people national networks across all the markets and organisations work, in which we operate, taking the products and services we provide to where our namely the shift towards customers need us to be. Expansion, in a more fl exible mode of our core business centre network and into third place locations such as airports, retail working, especially among outlets and community centres, is a key large businesses. objective for the Group. Financial growth also allows us to realise signifi cant scale benefi ts through cost reductions and The principle drivers of this growth in gains in effi ciency. fl exible workplace outsourcing, and fl exible working in general, are technology, Our aim is to provide our customers which enabbles us to work anywhere, and with the best possible help and support the signifi cant cost savings associated in deciding how and where they structure with contraca ting to a specialist suppport themselves to work. Expanding and service provider like Regus. As outlined strengthening our national networks allows in more detail opposite, other drivers us to better serve ouru custot mers and include demographics, sustainability attract new customers, andn in so doing and the growing societal importance to create a strong and vibrant business of woro k-life balance. whw icch geneerates long-term value foor ala l our stakkehe olded rsr . As a result, flexible working has coomem to be viewedd as a core element of the way organisations operate and coonduuct busineess. Our buusis neness model has evolo ved to refl ect thee changing wow rk needds of businesses annd individuals alike. We expx ect ene d user demand for our serviccese to grrow as teechnoloogy continues too impror ve andd busu inessees look for further efffi cic encic es in thheir coosts base.e We are iddeally placedd to help them achieve this. 4 Regus plc Annual Report and Accounts 2013 Strategic report Governance Financial statements Growth drivers Cost: Technology: Demographics: Sustainability: Work-life balance: Using traditional fi xed Technological advances, There are now four Sustainability is a core A harmonious work-life property can be expensive from new devices to generations in the strategic priority for balance often tops – all the more so since technologies and services, workforce from the over businesses, governments professionals’ defi nition of more fl exible working allow us to work and 65’s and Baby Boomers to and individuals, and career success, ahead of leaves desks empty for connect to colleagues, Gen-X and lastly Net-Gens includes concerns around both money and much of the week. Flexible customers and suppliers born into an always-on, environmental impact, for recognition. Flexible workplace outsourcing can from anywhere. always-connected world. example through carbon working is a major be more cost effective than Technological change will Each has very different emissions. Flexible working contributor to a better fi xed alternatives. only continue to make us work styles and helps address this is an work-life balance, and is more mobile, connected expectations which fl exible effi cient and simply way increasingly used by and accessible. working helps them meet. by allowing our customers employers to attract and to cut the carbon retain staff. emissions associated with commuting. Number of flexible workers (m) 1,334 1,250 1,186 1,121 1,059 1,001 919 946 801 2007 2008 2009 2010 2011 2012 2013 2014 2015 Source: IDC worldwide mobile worker population forecasts – 2009-2013 & 2011-2015 (June 2010 and Jan 2012) Growth in size of Regus network 918 978 983 1,084 1,203 1,411 1,831 2007 2008 2009 2010 2011 2012 2013 www.regus.com/investors 5 Our business model HELPING OUR CUSTOMERS WORK Our purpose is to provide Network strength Cash generative Regus invests in strengthening and An attractive feature of our business model businesses with a network expanding its national networks so as to is the strong conversion of profi t into cash. of high quality workplaces best serve the needs and demands of This supports continued investment in its customers, both current and new. expanding our core expertise delivered that help them be more Expanding in this way enables Regus to through multiple national business centre effective and successful. interact with an increasing number and networks whilst delivering tangible cash variety of customers across all industry returns to our shareholders through the To achieve this we have segments and geographical locations. Group’s progressive dividend policy. developed a proven, Regus is in a fi nancially strong position – in Constantly innovating particular, the strong cash fl ow generation robust and high performing To better serve our customers we invest from our mature centres allows us to signifi cantly in developing our products business model. continue to invest in the business, growing and services. We also champion a better the network and investing in Research & understanding of the benefi ts of workplace Development.
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