International Workplace Group Plc · LSE:IWG
International Workplace — H1 2021 Earnings Presentation
28 slides from International Workplace's earnings presentation, Aug 10, 2021
Slide 1: Interim results
2021 Interim results 10 August 2021
Slide 2: Caution statement
2021 INTERIM RESULTS Caution statement No representations or warranties, express or implied are given in, or in respect of, be affected by other factors that could cause actual results, and our plans and this presentation or any further information supplied. In no circumstances, to the objectives, t
Slide 3: Financial summary
2021 INTERIM RESULTS Financial summary • Positive pre-2020 adjusted EBITDA of £63.8m - Positive adjusted EBITDA of £5.4m • Open centre revenue £1,055.2m -10.4% - Q2 revenue 3.4% higher than Q1 • Pre-2020 revenue £992.0m -15.0% - Q2 revenue 1.5% higher than Q1 - Q2 occupancy 120 bps higher than Q1 •
Slide 4: Two very different quarters
2021 INTERIM RESULTS Two very different quarters … • Q1 was the trough of COVID-19 impacted performance • A clear inflection point… • … although recovery trend impacted by COVID variants • Improvement in operational metrics in Q2 has translated into month-on-month revenue and EBITDA recovery • Cost
Slide 5: Structural tailwinds strengthening
2021 INTERIM RESULTS Structural tailwinds strengthening • Unprecedented interest in our sector • Permanent shift in our direction • Most employers reassessing fixed space and moving to hybrid working • Enquiries and sales conversions back at 2019 levels • Weakness of competition creates potential ac
Slide 6: Operational metrics drive revenue inflection
2021 INTERIM RESULTS Operational metrics drive revenue inflection … • Network growth has continued, and unprofitable centres closed • Improved occupancy drives billings and services utilisation • Price now stabilised and recovery in sight • Inflection into second half clearly visible Pre-2020 occupa
Slide 7: Progress against strategic objectives
2021 INTERIM RESULTS Progress against strategic objectives • Enterprise customer development • Network growth • Reduced capital intensity • Cost optimisation 2021 Interim Results – 10 August 2021 7
Slide 8: Enterprise customer development
2021 INTERIM RESULTS Enterprise customer development Why & how enterprises use IWG Hubs Drop in / Flex Managed Enterprise Space solutions Projects Local HQs 2021 Interim Results – 10 August 2021 8
Slide 9: Winning new accounts …
2021 INTERIM RESULTS Winning new accounts … 2021 Interim Results – 10 August 2021 9
Slide 10: … and expanding existing relationships
2021 INTERIM RESULTS … and expanding existing relationships 2021 Interim Results – 10 August 2021 10
Slide 11: Customer examples
2021 INTERIM RESULTS Customer examples Global pharmaceutical company required a new workplace solution for a International services provider started working with IWG in March 2021 to spin-off to boost its focus on high-growth areas. IWG successfully designed explore opportunities to migrate its staf
Slide 12: Customer examples
2021 INTERIM RESULTS Customer examples Multinational technology company required a solution for regional HQs This global aerospace, defence, and transportation technology business while increasing flexible solutions to support employees globally. Company was seeking new office space in an iconic loc
Slide 13: Area under management growing strongly
2021 INTERIM RESULTS Area under management growing strongly • Network coverage drives success • Record levels of franchise and management deals - 50:50 JV with Hysan to significantly develop the network in the GBA • 84 new centre additions in H1 2021 • Multiple centre acquisitions completed, includi
Slide 14: Attractive new openings and competitor locations taken over
2021 INTERIM RESULTS Attractive new openings and competitor locations taken over New centre openings Competitor locations taken over San Diego, USA Toronto, Canada Shanghai, China London, UK Hong Kong Hamburg, Germany Jakarta, Indonesia Calgary, Canada 2021 Interim Results – 10 August 2021 14
Slide 15: Capital-light is working
2021 INTERIM RESULTS Capital-light is working 9 60 8 50 • Network growth continues despite 7 6 40 external environment 5 30 4 3 20 • Net growth investment of £46.9m / 84 locations 2 10 (H1 2020: £116.2m / 88 locations) 1 0 0 2017 2018 2019 2020 H1 2021 • Portfolio transition accelerates with SQFT ad
Slide 16: Increased franchising momentum
2021 INTERIM RESULTS Increased franchising momentum H1 2021 • Added 17 franchise partners (FY 2020: 15) • Added 64 committed locations (FY 2020: 67) • Across 10 countries • First franchise agreements in USA - Detroit, Michigan - Dayton & Toledo, Ohio - Fort Wayne, Indiana H2 2021 to date • Clear acc
Slide 17: JV with Hysan Development Company Limited
2021 INTERIM RESULTS JV with Hysan Development Company Limited Formation of a 50:50 JV between Hysan Development Company and IWG • Brings together complimentary strengths of Hysan and IWG • Focus on Hong Kong and the Greater Bay Area (GBA) – 86m population* • JV will acquire IWG’s 32 existing locati
Slide 18: Group results
2021 INTERIM RESULTS Group results £m H1 2021* H1 2020* • Open centre revenue £1,055.2m Revenue 1,066.6 1,321.3 - Q2 revenue increased over Q1 by 3.4% Open centre revenue 1,055.2 1,236.2 Adjusted gross (loss)/profit (15.1) 143.9 - Average new sales price exceeds embedded price Adjusted operating (lo
Slide 19: Revenue bridge
2021 INTERIM RESULTS Revenue bridge 1,400 £177.9m market disruption 1,321.3 £18.5m portfolio optimisation 1,300 (80.0) 53.2 1,200 £m (97.9) 1,100 (71.7) 1,066.6 (58.3) 1,000 900 800 H1 - 2020 Pre-20 Occupancy Pre-20 Price New Closures FX H1 - 2021 2021 Interim Results – 10 August 2021 19
Slide 20: Cost optimisation and restructuring
2021 INTERIM RESULTS Cost optimisation and restructuring Costs reducing in line with plan • Underlying, pre-growth*, annualised cost run-rate reduced by c. £320m • Further reductions in affected countries • Supply chain innovation and support • Increased discipline on maintenance capex Portfolio rat
Slide 21: Cost reduction on track
2021 INTERIM RESULTS Cost reduction on track 1,334.2 £143.5m property savings £46.3m other centre costs and SG&A savings 1,212.2 (96.6) (46.9) (14.6) (7.0) £m (13.1) (11.6) 67.8 H1 2020 Closed centre Pre-20 rent Pre-20 product Centre SG&A savings Other savings New centre H1 2021 Total costs costs sa
Slide 22: Cash flow bridge
2021 INTERIM RESULTS Cash flow bridge £m £(237.9)m Working capital 5.4 (351.1) 283.7 (29.8) (49.1) (15.7) (414.6) £(99.0)m Network investment (159.0) (52.1) (46.9) Net debt Adjusted Customer Other working Prior year Maintenance Net growth Cash Tax, Net debt 31 Dec 2021 EBITDA deposits capital net de
Slide 23: Outlook
2021 INTERIM RESULTS Outlook • Unprecedented sales activity • Strengthening structural tailwinds • Trading passes point of inflection • Network growth acceleration • Cost reduction and restructuring delivered • Market-leading platform well set for growth in H2 • Although pace of recovery dependent o
Slide 24: Q&A
2021 INTERIM RESULTS Q&A 2021 Interim Results – 10 August 2021 24
Slide 25: Appendix
2021 INTERIM RESULTS APPENDIX 2021 Interim Results – 10 August 2021 25
Slide 26: Adjusting items H1 2021
2021 INTERIM RESULTS Adjusting items H1 2021 H1 H2 FY H1 Adjusting items 2020 2020 2020 2021 (£m) (£m) (£m) (£m) Accelerated network rationalisation provision 134.5 177.5 312.0 9.4 Expected credit losses 9.4 8.1 17.5 12.6 Restructuring costs 4.9 14.6 19.5 17.4 Transaction costs 5.8 2.4 8.2 0.4 Other
Slide 27: Thank you
Thank you IDG fee" |WGplc.com
Slide 28: Contact details
2021 INTERIM RESULTS Contact details Wayne Gerry Group Investor Relations Director wayne.gerry@iwgplc.com 2021 Interim Results – 10 August 2021 28
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