International Workplace Group Plc · LSE:IWG
International Workplace — IWG — H1 2020 Earnings Presentation
21 slides from International Workplace's earnings presentation, Aug 4, 2020
Slide 1: 2020 Interim Results
2020 INTERIM RESULTS 4 August 2020 2020 Interim Results – 4 August 2020 1
Slide 2: Caution statement
Caution statement No representations or warranties, express or implied are given in, or in respect nature, they are subject to known and unknown risks and uncertainties and can of, this presentation or any further information supplied. In no circumstances, to be affected by other factors that could
Slide 3: Key interim financial highlights
Key interim financial highlights ▪ H1 total revenue up 3.5% to £1,322.7m despite COVID-19 ▪ Open centre revenue up 10.2% to £1,298.2m, all regions contributing ▪ Pre-2019 revenue up 0.2% to £1,164.4m ▪ Pre-2019 EBITDA up 17.1% to £212.6m ▪ Cash generation before growth capital expenditure, share rep
Slide 4: Interim highlights
Interim highlights ▪ Great start to year, best ever Q1, followed by a challenging Q2 ▪ Comprehensive actions taken to reduce costs, improve cash flow and liquidity - £180m cash savings from operations so far - One-off charge of £155.8m resulting from COVID-19 • £29.1m relating to H1 • £126.7m provis
Slide 5: Actions taken to mitigate impact of COVID-19
Actions taken to mitigate impact of COVID-19 ▪ Further cost savings: £180m cash savings so far and looking for more ▪ Increased focus on costs across all areas ▪ 50% reduction in Board remuneration ▪ Reduced growth and maintenance capital expenditures ▪ Network rationalisation – always a last resort
Slide 6: Enhanced demand for flexibility
Enhanced demand for flexibility Structural growth drivers Incremental tailwinds ▪ Increased focus on cost saving initiatives ▪ Cheaper – potential c.50% saving 1 Cost efficiency ▪ Space required to comply with social distancing at a ▪ Higher productivity reasonable cost ▪ Environmental advantage 2 E
Slide 7: New world of working
New world of working ▪ Clear view of dramatically transitioning market place ▪ World beyond COVID-19 will still need offices ▪ Greater requirement for more flexible space ▪ More distributed workforces ▪ More working near home ▪ Significant opportunities for IWG - Business scale - Coverage - Home wor
Slide 8: Importance of scale and coverage
Importance of scale and coverage IWG’s business model provides a level of resilience relative to the wider industry Resilient revenue Truly global presence Unrivalled coverage 3,392 centres 1,131 towns & cities - urban and suburban C.10% 9% 11% 12% 20% 38% 48% C.90% 29% 33% Contracted Spot Americas
Slide 9: Supporting dispersed workforces
Supporting dispersed workforces Network coverage provides alternatives to commuting within a 5, 10 and 20 km radius of High Wycombe 2020 Interim Results – 4 August 2020 9
Slide 10: Unique capability to do this globally
Unique capability to do this globally Paris, France Dallas, Texas, US Sydney, Australia Kuala Lumpur, Malaysia 2020 Interim Results – 4 August 2020 10
Slide 11: New Enterprise wins
New Enterprise wins Preparing for the new world of working SANOFI: multinational pharmaceutical company. Transitioned from existing long-term LOOv traditional lease for small teams (10 to 150 people) to maximize agility and reduce real estate costs . Already installed in Hungary, Ecuador, Chile, Hon
Slide 12: Four methods to accelerate growth
Four methods to accelerate growth Franchising M&A ▪ Continue to make progress with MFAs and sub- ▪ Compelling opportunities franchising Rescue situations ▪ Keep active dialogue with ▪ Operators unable to meet interested parties across our ▪ Ability for IWG platform to absorb growth funding requireme
Slide 13: Group results
Group results H1 revenues up, profits impacted by COVID-19 ▪ Revenue up 3.5% to £1,322.7m £m H1 2020 H1 2019 ▪ Open centre revenue up 10.2% to £1,298.2m Revenue 1,322.7 1,276.3 ▪ Pre-2019 EBITDA up 17.1% to £212.6m Open centre revenue 1,298.2 1,176.7 ▪ Adjusted operating loss of £13.4m, in line with
Slide 14: Group cash flow
Group cash flow Strengthened balance sheet, monthly cash generation ▪ Cash flow before net growth capital expenditure of £125.4m £m H1 2020 H1 2019 - Positively impacted by: Adjusted EBITDA 137.4 189.8 • Increase in working capital inflow Working capital 177.3 80.2 • Decrease in taxation & finance c
Slide 15: Outlook
Outlook ▪ Impact of COVID-19 more prolonged than anticipated ▪ Expect challenging Q3, see improvements coming through into Q4 ▪ Very focused on costs and maximising savings in the coming months ▪ Long term structural drivers strengthening ▪ Many customers increasingly looking at more dispersed worki
Slide 16: Q&A?
Q&A? 2020 Interim Results – 4 August 2020 16
Slide 17: Appendix
Appendix 2020 Interim Results – 4 August 2020 17
Slide 18: Adjusting items
Adjusting items Total Adjusting items (£m) Accelerated network rationalisation 134.5* Transaction costs in respect of Master Franchise Agreements not yet completed 5.8 Expected credit losses 9.4 Impairment of goodwill 4.9 Other one-off items 1.2 Total adjusting items 155.8 * £7.8m charge related to
Slide 19: Proven financial track record
Proven financial track record Revenue (£m) EBITDA (£m) 2019 2,653.0 2019 428.3 2018 2,402.1 2018 389.9 2017 2,240.0 2017 376.2 2016 2,129.6 2016 379.7 * Including discontinued operations Net growth capital investment (£m) Cash to shareholders(£m) 2019 389.0 2019 58.2 49.5 2018 332.0 2018 53.7 40.2 2
Slide 20: Thank you
Thank you iwgplc.com 2020 Interim Results – 4 August 2020 20
Slide 21: Contact details
Contact details Wayne Gerry ▪ Group Investor Relations Director ▪ wayne.gerry@iwgplc.com 2020 Interim Results – 4 August 2020 21