International Workplace Group Plc · LSE:IWG
International Workplace — FY2022 Earnings Presentation
25 slides from International Workplace's earnings presentation, Mar 7, 2023
Slide 1: Financial results for the full year ending 31.12.22
Financial results for the full year ending 31.12.22 7 March 2023
Slide 2: Caution statement
2022 Full Year Results Caution statement No representations or warranties, This presentation may contain forward- The Company undertakes no obligation express or implied are given in, or in looking statements that are based on to revise or update any forward-looking respect of, this presentation or
Slide 3: Mark Dixon, Founder & Chief Executive Officer
2022 Full Year Results Mark Dixon Founder & Chief Executive Officer 7 March 2023 3
Slide 4: New world. New IWG.
2022 Full Year Results New world. New IWG. We have an exciting opportunity to change the world for the better for people and for companies. Hybrid working makes workers happier and more productive, companies more efficient and profitable, and the planet significantly greener by reducing the need to
Slide 5: Hybrid working is supported by leading CEOs globally
2022 Full Year Results Hybrid working is supported by leading CEOs globally… “Hybrid work is now just work. Every organization is looking to reconnect and Firms don’t do things that lose them money. reengage the workforce at home, in the They do things that make them money. That’s office, and everyw
Slide 6: Hybrid working is often misunderstood
2022 Full Year Results Hybrid working is often misunderstood It’s not about simply working from Companies are moving from a The model completely eliminates home. Hybrid working is about single or small number of fixed office the need for long daily commutes and supporting companies and their teams l
Slide 7: IWG: the global leader in hybrid working
2022 Full Year Results IWG: the global leader in hybrid working Physical Platform: Empowering people to work Digital Platform World's Largest Network where is most convenient Delivering lower costs and happier teams 7 March 2023 7
Slide 8: 2022: IWG delivers highest ever revenue in its 34 year history
2022 Full Year Results 2022: IWG delivers highest ever revenue in its 34 year history Highest-ever revenue in IWG’s 34-year history with 24% growth1 in system-wide revenue to £3.1bn Highest-ever network footprint of more than 65 million sq.ft. - market leader worldwide by far Momentum continues in 2
Slide 9: Delivery against strategic objectives/opportunity
2022 Full Year Results Delivery against strategic objectives/opportunity Margin opportunity in core business Margin improvement driven by strong performance on price, new and embedded, sequential improvements in occupancy and service revenue growth Complete coverage through capital light growth Acce
Slide 10: Charlie Steel, Chief Financial Officer
2022 Full Year Results Charlie Steel Chief Financial Officer 7 March 2023 10
Slide 11: 2022 Revenue Growth
2022 Full Year Results 2022 Revenue Growth 103% • System-wide revenue of +£3.1bn, up 18% at constant FX – a record high for IWG • Creation of Worka, combining The Instant Group investment with IWG’s digital assets • All segments performing strongly, with increasing diversification • Signing of 421 c
Slide 12: Group returns to operating profitability
2022 Full Year Results Group returns to Preliminary results (£m) Constant Actual 2022 2021 currency currency operating profitability System-wide revenue 3,086 2,498 +18% +24% Group revenue 2,751 2,227 +17% +24% Gross profit 575 243 +124% +137% Overheads (426) (328) +27% +30% • Record revenue combine
Slide 13: Growth driven by revenue recovery and investment
2022 Full Year Results Growth driven by revenue recovery and investment £3,086m New investment yield +£133m £2,751m Revenue recovery +£139m £2,618m +£41m +£88m +£11m +£87m +£106m (£81m) £2,227m FY 2021 Pre-21 Pre-21 price Pre-21 services Centre New 21 and Fees Worka FY 2022 pre- FX impact FY 2022 FY
Slide 14: 3.5x increase in EBITDA, continuing margin focus
2022 Full Year Results 3.5x increase in EBITDA, continuing margin focus Revenues increasing faster than costs Profitable investments +£41m +£25m +£308m +£43m £1m +£87m +£31m +£11m +£8m (£71m) +£106m (£54m) £80m FY 2021 Pre-21 occupancy Pre-21 price Pre-21 services Pre-21 centre Centre Regional New c
Slide 15: Higher margins driving profitability
2022 Full Year Results Preliminary results (£m) Cash flow Higher margins driving 2022 2021 Operating profit/(loss) 147 (87) Depreciation & amortisation 1,189 1,110 profitability Profit on discontinued operations EBITDA Rent income - 1,336 50 3 1,026 - Rent expense (1,059) (997) Cash flow from busine
Slide 16: Net debt falls before impact of growth
2022 Full Year Results Net debt falls before impact of growth Discretionary items (£253m) (£712m) Pre-growth net financial debt £89m underlying cash flow (£141m) (£5m) (£6m) (£397m) (£61m) (£307m) (£90m) +£241m Net financial debt Cashflow before Maintenance Tax & Finance Net financial debt Net growt
Slide 17: Strengthening balance sheet
2022 Full Year Results Strengthening Preliminary results (£m) Balance Sheet 2022 2021 balance sheet Cash and cash equivalents 161 78 Trade & other receivables (incl. inventory) 991 754 Total current assets 1,152 832 Property, plant and equipment 6,234 6,376 Other intangible assets 214 78 Goodwill 93
Slide 18: Unrivalled network globally
2022 Full Year Results Unrivalled network globally Spaces 13% • Unrivalled global network of 3,345 buildings across 120 Signature 2% countries HQ 5% • Additional 462 new centre deals signed during 2022 Other 4% • 421 under capital light model • Unique brand diversity strategy allows for expansive cu
Slide 19: Geographic diversity combined with flat corporate overheads
2022 Full Year Results Geographic diversity combined with flat Preliminary results Adjusted EBITDA corporate overheads £m / % change FY 2022 FY 2021 Constant ccy EMEA 597 474 +26% Americas 588 451 +15% • Global diversity from profitability perspective Asia 144 115 +19% • Asia, particularly China, su
Slide 20: IWG committed to ESG
2022 Full Year Results IWG committed to ESG Carbon neutral journey ESG programmes Recognition Carbon neutrality expected Launched framework to baseline Rated by MSCI index (top to be achieved during green buildings in today’s estate AA score AAA) 2023 Established ESG supplier Progress own forestry a
Slide 21: Financial outlook
2022 Full Year Results Financial outlook • Cautiously optimistic for 2023 • Revenue and underlying EBITDA (pre application of IFRS) expected to be in-line with management expectations • Management expects net debt to fall during the year • Underlying EBITDA, pre application of IFRS, at c.£30m for th
Slide 22: Conclusion
2022 Full Year Results Conclusion 7 March 2023 22
Slide 23: Conclusion
2022 Full Year Results Conclusion • 2022 has been a record year for IWG with our highest-ever revenue produced in our 34-year history • More companies permanently embracing hybrid and IWG set to benefit most as by far the leading global player • Unrelenting focus on delivering our strategy: • Growin
Slide 24: Appendices
2022 Full Year Results Appendices 7 March 2023 24
Slide 25: EBITDA reconciliation from IFRS to pre-application of IFRS standards
2022 Full Year Results EBITDA reconciliation Preliminary results from IFRS to £m / % change FY 2022 FY 2021 pre-application EBITDA IFRS 16 1,337 1,026 of IFRS standards Rent income 50 - Rent expense (1,060) (997) Centre closure & other cost (10) 30 EBITDA before application of IFRS 16 317 59 Network
International Workplace Group — FY2022 Earnings Presentation on 6ix