International Workplace Group Plc · LSE:IWG
International Workplace — H1 2024 Earnings Presentation
22 slides from International Workplace's earnings presentation, Aug 6, 2024
Slide 1: Financial results for the six months ending 30.06.2024
International Workplace Group plc Financial results for the six months ending 30.06.2024 6 August 2024
Slide 2: Caution statement
2 Caution statement No representations or warranties, express or This presentation may contain forward- The Company undertakes no obligation to implied are given in, or in respect of, this looking statements that are based on current revise or update any forward-looking presentation or any further i
Slide 3: Mark Dixon, Founder, Chief Executive Officer
3 Mark Dixon Founder Chief Executive Officer
Slide 4: Investment Case
4 Investment Case 1 Market leader in a future 2 Fast capital light 3 Significant cash 4 Global network and mega industry – Hybrid growth generation whilst coverage advantage work / Platform work growing 5 50% US 6 Structural cost 7 Deeply experienced advantage management team
Slide 5: IWG – Global market leader in the Hybrid work market
5 IWG – Global market leader in the Hybrid work market 3,751 465 >120 / 44 locations 1 pipeline deals signed 2 countries / languages 926,000 306 8m rooms 1 Locations opened 2 users 1. As of June 30th 2024 2. In H1 2024
Slide 6: Market leader, only global platform
6 Market leader, only global platform Hugely fragmented market 3,751 582 • Lead the market 160 on innovation 150 • Multiple products # of locations developed • Well established R&D team • Extensive access to decades of data • Exciting growth plans 0 1’000 2’000 3’000 4’000 5’000 Source: WeWork estim
Slide 7: The growth opportunity
7 The growth opportunity $3.4trn $2trn $5.7trn c. $90bn c.$2bn c. $130bn Sources: Bloomberg, airbnb S-1 Filing, Uber S-1 Filing Total addressable market Market Cap.
Slide 8: IWG delivering the strategy
1. Constant currency 2. Adjusted EBITDA pre IFRS 8 IWG delivering the strategy • Network expansion: 465 locations signed in H1 2024 (H1 2023: 400) and 306 opened in H1 2024 (H1 2023: 133) • RevPAR – lfl RevPAR growth • Managed & Franchised: o Fee income growth of 23% in H1 2024 to $35m (H1 2023: $28
Slide 9: On track to $1bn EBITDA target
9 On track to $1bn EBITDA target Medium term 2022 2023 2024 target $1’200m $1’000m $800m $600m $400m $200m H1: H1: H1: $274m $245m $198m $0m Sources: Based on pre-IFRS EBITDA; GBP to USD FX: 1.25
Slide 10: Financial performance
10 Charlie Steel Chief Financial Officer Financial performance
Slide 11: H1 2024 highlights
11 H1 2024 highlights Delivering the plan • Cashflow generation of $118m before growth capex. All three businesses will grow cashflow • Total net capex reduced to $79m driven by a reduction in growth capex, maintenance capex remaining broadly stable • Net debt reduced by $67m to $768m (H1 2023: $835
Slide 12: Group Overview
12 Group Overview Healthy growth • Company Owned & Leased revenue remaining System $m Revenue Contribution 1 Overhead 2 EBITDA 3 stable, delivering increased EBITDA through Revenue focus on margin expansion underpinned by Managed & efficiency gains 287 35 35 Franchised 211 204 Company Owned • Manage
Slide 13: Managed & Franchised
13 Managed & Franchised Gaining momentum H1 2024 ($m) Year-on-Year (“YoY”) Growth • Fee income grew 23% YoY to $35m ($287m of System revenue) System (Partner) revenue 287 15% Contribution1 35 23% • Signings are evolving into openings at pace growing by 19% YoY (room openings grew by 173% YoY) 154’00
Slide 14: Managed Partnerships – RevPAR evolution
14 Managed Partnerships – RevPAR evolution $350 $300 $250 $200 $150 $100 1 Average $50 Targeted Targeted RevPar RevPar at at 18 18 Months Months old 2 $- 1m old 2m old 3m old 4m old 5m old 6m old 7m old 8m old 9m old 10m old 11m old 12m old 1. Includes all Managed Partnerships opened since January 2
Slide 15: Company-Owned & Leased
15 Company-Owned & Leased Continued margin expansion H1 2024 ($m) Year-on-Year (“YoY”) Growth • Contribution margin increased by 260bps to approx. 24% Revenue 1,613 0% Contribution1 380 13% • RevPAR remained stable with a slight increase of 1% 771 • Costs, including centre net maintenance capex, wer
Slide 16: Margin stability through the cycle
16 Margin stability through the cycle CBITDA2 27.6% 26.6% 25.5% 27.1% 30.0% 23.6% 19.1% 23.0% 26.0% 26.1% 700 611 600 523 519 500 421 439 426 431 396 400 321 300 261 $m1 200 100 0 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23 H1 24 Note: Represents the Pre-2018 cohorts (open centres only) on a Pre-IF
Slide 17: Worka
17 Worka Market-leading hybrid work platform H1 2024 ($m) Year-on-Year Growth • We continue to invest in Worka as it captures the full value chain of the Revenue 188 -1% structural growth in the market driven by Gross profit 102 9% the expansion of hybrid working • Flat revenue growth as previously
Slide 18: Investments
18 Investments Lower capex…but pivot toward platform Centre Centre Other Capex • Total capex has fallen to $79m in H1 2024 $m Maintenance Capex (net) Fitout Capex (net) (incl. M&A) (H1 2023: $102m) Managed & Franchised - - - Company Owned & Leased (26) (23) (16) • Controlling centre maintenance cape
Slide 19: Summary P&L
19 Summary P&L Margin delivery Preliminary results - $m H1 2024 H1 2023 Constant Actual • EBITDA2 of $274m (+13% year-on-year) currency Currency System-wide revenue 2,088 2,060 2% 1% Group revenue 1,836 1,836 • Positive earnings for the first time since the pandemic as strengths of the Gross profit
Slide 20: Focus on cash
20 Focus on cash Cash delivery Preliminary results - $m H1 2024 H1 2023 Operating profit 269 116 Depreciation & amortisation 665 735 Rationalisation impact (17) 19 • Cashflow generation of $118m from 35 37 Rent income business activities leading to a net debt Rent expense (680) (674) Other costs (16
Slide 21: Sustainability is important to our customers and ourselves
21 Sustainability is important to our customers and ourselves • IWG empowers businesses and people everywhere to work more sustainably • As a solution to global workforces, and as a business, we are committed to ensuring our business activities achieve the highest level of environmental sustainabili
Slide 22: H2 2024 and beyond
22 H2 2024 and beyond No change to expectations • Continued growth and net debt reduction throughout 2024 • Medium term EBITDA run rate target of $1bn, including strong cashflow production • Successful transition to US$ as functional currency • Interim dividend of 0.43¢ per share
International Workplace Group — H1 2024 Earnings Presentation on 6ix