Managing rapid growth has its rewards and its challenges. Regus has grown significantly in the last few years, growing from 918 locations in 2007 to more than 2,000 locations today in 100 countries. Additionally, in recent years, Regus has taken steps to improve efficiencies in its business, to better serve its customers while at the same time allowing its business to scale more profitability. Mike Osburn, CFO of Regus North America, will share lessons learned from this aggressive growth period for Regus. •Organizational & Planning Observations o Gaining conviction on your growth plan and following it o Aligning your incentive structures appropriately o Being smart and flexible when you need to be oMonitoring performance of your leadership team as growth increases •Market and Deal Observations o Translating historical assumptions to higher-growth environments o Dealing with risk of self-cannibalization o Tailoring your deal structure according to your target market •Performance Observations o Focusing on leading indicators that maximize chances for success o Managing the whole business •Cost Management Observations o (Yes, even in rapid-growth mode) o Offshoring Finance / Accounting functions o Managing overheads

1. MANAGE RAPID GROWTH FROM TOP TO BOTTOM

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World’s largest provider of flexible workplaces
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More than 1.5m customers benefit from broad global footprint
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2,000 locations, 750 cities, 100 countries
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Top quality workspaces wherever you need to be
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Globally consistent quality and standards
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Used by nearly 60% of Fortune 500
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Value propositions:
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Reduce under-utilized office space
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Increase employee productivity
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Increase flexibility & speed to market
INTRO
Who is Regus?

3. What Regus provides
INTRO
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Offices
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Business Lounges
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Video Conferencing
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Meeting and Training Rooms
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Board Rooms
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Virtual Offices
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IT and Full Infrastructure
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On Demand Services/Support
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Professional Reception

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INTRO
Center Growth and Overhead Cost Management
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North America center growth similar shape as global
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North America has managed overhead aggressively during this same period
To Discuss Today:
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Our experiences
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Lessons learned 3 Topic Areas:
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Organizational / Planning
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Market / Deal
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Cost Management
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500

5. ORGANIZATIONAL / PLANNING OBSERVATIONS

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Very simply, be clear on your growth goals
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Put pressure early on what you want, on the right people, insist and measure
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Location mix (new vs. existing market)
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Deal type mix
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Building quality / price points
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Mindset: Growth is good
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Don’t let “growth mantra” overwhelm
ORGANIZATIONAL / PLANNING OBSERVATIONS
Gain Conviction on Your Growth Plan and Follow It

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Primary efforts to speed growth can be thwarted by secondary activities
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Construction / vendor processes
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Deal modeling (standard, simple)
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Legal / deal negotiation handoffs
ORGANIZATIONAL / PLANNING OBSERVATIONS
Address Squeaky Wheels

8. Align Your Incentive Structures Appropriately
ORGANIZATIONAL / PLANNING OBSERVATIONS
Center Growth
Center Performance
Development Team
Field / Ops Team
Center Growth
Center Performance
Primary Purposes
Bonus Element
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Development Team vs. Field Ops Team
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Then vs. Now

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ORGANIZATIONAL / PLANNING OBSERVATIONS
Watch Your Leaders, at All Levels
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Watch your field leaders as growth comes
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Pressure of growth can reveal both strengths and weaknesses
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Stars of the past may not shine so brightly in the new environment, but others may surprise you

10. MARKET AND DEAL OBSERVATIONS

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ORGANIZATIONAL / PLANNING OBSERVATIONS
Investment Cases: A Means to an End
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It’s tempting as Finance people to try and manage to line item goals
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Growth is not a perfect science, we have to deal with realities
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Get the big things right, absorb the smaller pluses and minuses
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Example, staffing a new center:
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2 months early is better than one month late
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Don’t be penny wise / pound foolish

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Slower ramp-up time in new markets vs. existing ones
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Product mix usage often not consistent with mature sites
MARKET AND DEAL OBSERVATIONS
Understand Translation of Historical Assumptions into Higher-Growth Environments

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Bottom line question: In hi-growth mode, self-cannibalization may occur short term, but avoid it long term
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Unhealthy: Saturate too quickly or imbalanced locations
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Healthy: When you lock down a great venue even if “nearby”
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Judgment calls: exceptional exceptions
MARKET AND DEAL OBSERVATIONS
Deal With Risk of Self-Cannibalization

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MARKET AND DEAL OBSERVATIONS
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33 locations
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Heavy in Addison, North Dallas, Las Colinas
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Optimal?
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Cumulative effect of acquisitions
DFW Market: Dec 2012

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MARKET AND DEAL OBSERVATIONS
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43 locations
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Expanded outward
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More balance
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Able to better serve more clients’ needs Blue: 2012 existing Green: 2013 adds
DFW Market: Dec 2013

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MARKET AND DEAL OBSERVATIONS
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Some natural “settling”
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But current clients happier and reaching new ones Blue: Las Colinas Green: Grapevine and Southlake adds
Example: Las Colinas vs. Grapevine / Southlake

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Small / medium university towns: variable or low-investment deal vs. conventional
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Entering “micro markets” - population 50,000 or less
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Aggressively seek out re-use space
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Variable rent structure
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Bottom line, tailor deals based on your market knowledge your risk profile for that market
MARKET AND DEAL OBSERVATIONS
Tailor Deal Structure According to Your Target Market

18. COST MANAGEMENT OBSERVATIONS

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Yes, even in high growth periods
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Fund operating losses of start-up sites
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Fund some additional overheads to support growth
COST MANAGEMENT OBSERVATIONS
Cost Management Focus

20. Shared office space in Yaletown, Vancouver, British Columbia

21. Business Lounge at 747 3rd Avenue in New York City

22. Gamer’s Testing Lounge at Playa Jefferson in Los Angeles, CA

23. Meeting Room at Republic Center in downtown Dallas

24. Business Lounge at Cedar Ridge in Southlake, TX

25. Coworking at Penn Plaza in New York City

26. Shared office space at the Norton Building in Seattle, WA

27. Video Conferencing at Arroyo Crossing in Las Vegas, NV

28. Business Lounge at 555 Madison Ave in New York City

29. Meeting Room at 111 W. Jackson St in Chicago, IL

30. Office space at Diamond View in San Diego, CA