Slide 1: 2016 Full Year Results Presentation
2016 FULL YEAR R E S U LT S P R E S E N TAT I O N
Slide 2: Caution statement
IWG PLC / 2016 FULL YEAR RESULTS PRESENTATION 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 res
Slide 3: IWG – Strong market position
IWG PLC / 2016 FULL YEAR RESULTS PRESENTATION IWG – Strong market position • Global market leader in the fast growing Workspace as a Service (WaaS) sector with a highly diversified business • Unrivalled global and national networks • Operating 2,926 centres • Across over 1,000 towns and cities • In
Slide 4: Full year highlights
IWG PLC / 2016 FULL YEAR RESULTS PRESENTATION Full year highlights Transformational year • Improved returns on investment • Post-tax ROI on pre-12 net investment of 25.1% (up 200bp) • Strong growth in profitability and cash generation • Underlying operating profit up 14%* to £186.2m • Underlying cas
Slide 5: Generating attractive returns
IWG PLC / 2016 FULL YEAR RESULTS PRESENTATION Generating attractive returns • 25.1% post-tax cash return on all Post-tax cash returns based on 2015 results Post-tax cash returns based on 2016 results locations opened on or before 31 December 2011, up 200bp 31.1% • 23.6% post-tax cash return on all 2
Slide 6: World of work is changing
IWG PLC / 2016 FULL YEAR RESULTS PRESENTATION World of work is changing Growth in demand for flexible working 1 Structural changes are driving our 15,000 Number of co-working spaces globally industry globally. Businesses and individuals have 10,000 XXX changed the way they work and use office space.
Slide 7: IWG's growth strategy
IWG PLC / 2016 FULL YEAR RESULTS PRESENTATION IWG’s growth strategy • Driving a higher return, through less capital intensive expansion • Our focus remains on developing national networks offering a range of brands, products and price points • Streamlined and more efficient business model to effecti
Slide 8: Meeting the needs of a changing world
IWG PLC / 2016 FULL YEAR RESULTS PRESENTATION Meeting the needs of a changing world Cloud Based Workspace where, when and however you need it Co-work and Branch Project Community Offices Space Outsourced 100% managed and maintained On demand Instant access to workspace by the hour, day, month or yea
Slide 9: Developing national networks and formats globally
IWG PLC / 2016 FULL YEAR RESULTS PRESENTATION Developing national networks and formats globally Regus Express, Prague Airport Spaces Otemachi, Tokyo Open Office, Kyoto Spaces Denver Regus London Bridge Regus La Grande Arche, Paris 9
Slide 10: Financial Review
IWG PLC / 2016 FULL YEAR RESULTS PRESENTATION FINANCIAL REVIEW 10
Slide 11: Returns developing as expected
IWG PLC / 2016 FULL YEAR RESULTS PRESENTATION Returns developing as expected NCO year group 40 Gross profit margin* 33.8% 32.5% 28.5% 29.2% 26.8% • 2013, 2014 and 2015 additions 20 14.6% 15.1% showing continued improvement % 0 (3.0)% • 2016 locations predominately -20 organic additions (36.3%) -40 2
Slide 12: A strong performance
IWG PLC / 2016 FULL YEAR RESULTS PRESENTATION A strong performance Group income statement (excluding non-recurring items*) • Revenue up 5.5% with % change % change growth in all regions at constant £ million 2016 2015 actual constant currency driven by new locations currency currency Revenue 2,233.4
Slide 13: Mature centre performance: by geography
IWG PLC / 2016 FULL YEAR RESULTS PRESENTATION Mature centre* performance: by geography • Select markets have experienced challenges (e.g. Latam, Russia, China) • Impact from field structure change • Improving sales momentum • Robust mature gross margin of 24.1% Revenue Growth at Revenue Growth at Ma
Slide 14: Group revenue development
IWG PLC / 2016 FULL YEAR RESULTS PRESENTATION Group revenue development Full year 2016 year-on-year revenue development 10.4% 15.9% 2,500 7.6% 1.6% (2.0%) 2,233.4 (1.7%) 2,000 1,927.0 £m 1,500 0 2015 Revenue Mature New '15 New '16 Closures Foreign Exchange 2016 Revenue Q4 2016 year-on-year revenue d
Slide 15: Further overhead efficiency
IWG PLC / 2016 FULL YEAR RESULTS PRESENTATION Further overhead efficiency Total overheads as a % of revenue What happened 25 18.5% 18.5% • Overall overheads declined 13% at constant 20 16.7% currency, compared to a 6% increase in the 14.7% 15 number of locations over the last 12 months % 11.7% 10 •
Slide 16: Strong cash flow
IWG PLC / 2016 FULL YEAR RESULTS PRESENTATION Strong cash flow • Very strong cash performance • Group EBITDA increased by 18% at constant £ million 2016 2015 currency to £380.7m Group EBITDA 380.7 290.0 • Major focus on working capital management Working capital 104.2 103.5 • Underlying cash flow be
Slide 17: A healthy balance sheet
IWG PLC / 2016 FULL YEAR RESULTS PRESENTATION A healthy balance sheet Balance Sheet • Maintained prudent approach to balance sheet management £ million 2016 2015 • Net debt to EBITDA ratio lower at 0.4x Cash flow before net growth 286.1 295.7 expenditure Net growth capital expenditure (162.3) (284.9
Slide 18: Financial summary
IWG PLC / 2016 FULL YEAR RESULTS PRESENTATION Financial summary • Good profit growth and cash generation • Improved overhead and operational efficiency • Strong post-tax cash return on net investment • Disciplined approach to growth with more partnership deals • Current pipeline visibility of c.£120
Slide 19: Outlook and summary
IWG PLC / 2016 FULL YEAR RESULTS PRESENTATION Outlook and summary Transformational year • Proactive actions delivering a more streamlined and scalable business model • Improved returns on investment • Strong growth in profitability and cash generation • Selective growth with increased traction on pa
Slide 20: Questions
IWG PLC / 2016 FULL YEAR RESULTS PRESENTATION QUESTIONS 20
Slide 21: Contact details
IWG PLC / 2016 FULL YEAR RESULTS PRESENTATION Contact details Wayne Gerry Group Investor Relations Director +44 (0) 7584 376533 wayne.gerry@iwgplc.com 21