REG - Intnl Workplace Grp Regus PLC - IWG FY 2024 Preliminary Results
04/03/2025 07:15
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RNS Number : 2335Z International Workplace Group PLC 04 March 2025
4 March 2025
PRELIMINARY RESULTS ANNOUNCEMENT
International Workplace Group plc, the world's largest hybrid workspace
platform with a network in over 120 countries through flexible workspace
brands such as Regus, Spaces, HQ and Signature issues its preliminary results
for the twelve months ended 31 December 2024.
RECORD SYSTEM-WIDE REVENUE, RECORD EBITDA, RECORD CENTRE OPENINGS:
DELIVERY DRIVING $50M SHARE BUYBACK PROGRAMME
Group performance: record revenue, record EBITDA, cash generation
• Highest-ever system-wide revenue of $4.2bn (6% growth in open
centres, 2% growth in all centres)
• Highest-ever pre-IFRS 16 EBITDA with growth of 11% to $557m (2023:
$503m)
• Highest-ever network growth with 899 new centre signings and 624
openings
• Net financial debt continuing to fall to $712m (2023: $775m)
• Return to profitability with earnings per share of 2.0¢ (2023:
(26.7)¢)
Managed & Franchised: fee growth, openings accelerating, RevPAR evolving as expected
• Growth in new centres driving fee income growth of 30% to $79m
(2023: $61m)
• Record openings in 2024 with 73k rooms added to the network - almost
2x higher than in 2023 (37k)
• Signings continued to increase in 2024, with 725 new locations
signed (2023: 678), expecting higher signings in 2025
• At the end of 2024, this segment had 185k rooms open and 182k rooms
that were signed but not yet open. Once these rooms are all open and
mature, they are expected to produce system-wide revenues of $1.4bn per year
Company-owned: further margin improvement
• Profitability continuing to improve with margin increase from 22% in
2023 to 25% to $790m (2023: $711m)
• Revenue growth in open centres of 5%
• Further reduction in centre-related net growth capex to $51m (2023:
$70m) and maintenance capex continued to be controlled despite the
inflationary backdrop
Digital & Professional Services: good underlying performance
• Underlying revenue excluding the impact of the previously announced
loss of a legacy contract increased by 8% and underlying EBITDA growth was 18%
Overhead: continued disciplined control of overhead costs
• Underlying core overheads fell by 1% from maintaining cost control
• Discretionary overheads increased by $36m to $59m. Discretionary
investment overheads is expenditure which are incurred on a discretionary
basis, but not capitalised, to fuel growth. In 2024, these included:
◦ $25m headcount investment in the Partnership Sales team to drive
managed partnership location signings
◦ $13m in increased marketing investment
◦ $4m in finance projects
• This resulted in total overheads increasing by 6% to $502m (2023:
$473m)
• Discretionary overhead spend will result in enhanced scalability to
support future growth
Segmental summary
Capital expenditure
$m System Revenue Contribution Pre-IFRS 16 Centre Maintenance New Centre Other
Revenue
Adjusted
Capex (net)
Capex
Investments
EBITDA
(net)
(incl. M&A)
Managed & Franchised 620 79 79 414 n/a n/a 0
Company-owned 3,222 3,222 790 45 51 55
Digital & Professional Services 389 389 188 143 - - 31
Total in 2024 4,231 3,690 1,057 557 45 51 86
Total in 2023 4,157 3,689 977 503 49 70 89
% change 2% 0% 8% 11% (8)% (27)% (3)%
Capital structure and allocation: Delivering the foundations to support investor returns
Capital structure
• Milestone $1.4bn debt refinancing, extending maturities to 2029/2030
with new revolving credit facility, inaugural bond issued backed by a debut
investment-grade credit rating
Capital allocation
• $50m share buyback and increase in dividend
• On the prior trajectory, we expect to reach the 1.0x Net Debt/EBITDA
target announced in December 2023 at the end of 2025
• The capital allocation policy of leverage reduction and a
progressive dividend remain, but we are adding a $50m share buyback programme
• The Board has recommended a final dividend for 2024 of 0.90c. This
results in an increase in the total dividend for 2024 compared to that in 2023
in-line with our progressive dividend policy.
• We maintain our commitment to a BBB credit rating and continued
de-levering
Changes to presentation of financials
This is the first full year reporting in US dollars resulting in a reduction
in the differential between actual and constant currency. As previously
announced, the Group is adopting US GAAP accounting standards for the year
ended December 31, 2025. Historic financials will be released prior to the H1
2025 results; following this we will be carrying out investor workshops,
details of which will be announced soon.
Summary Group financials
The Group reports results in accordance with IFRS. Some results are
additionally presented before the application of IFRS 16 (in accordance with
IAS 17 accounting standards) as it provides useful information to stakeholders
on how the Group is managed and reporting for debt covenants and certain lease
agreements. The primary difference between the two standards is the treatment
of operating lease liabilities. There is no difference between underlying cash
flow. A reconciliation between EBITDA before the application of IFRS 16 and
the IFRS 16 EBITDA is provided in the CFO review.
($m) FY 2024 FY 2023 Change
System revenue 4,231 4,157 2%
Managed & Franchised 620 529 17%
Company-owned 3,222 3,230 0%
Company-owned (Open Centres) 3,178 3,031 5%
Digital & Professional Services 389 398 (2)%
Group revenue 3,690 3,689 0%
Pre-IFRS 16 Group EBITDA 557 503 11%
Pre-IFRS 16 operating profit 114 35 226%
Earnings per share (¢) 2.0 (26.7) n.m
Cashflow from business activities 298 375 (21)%
Net financial debt 712 775 (8)%
Managed & Franchised
FY 2024 FY 2023 Change
System revenue ($m) 620 529 17%
RevPAR ($) 408 485 (16)%
RevPAR - Managed 256 372 (31)%
RevPAR - Franchised & JVs 487 511 (5)%
Fee revenue ($m) 79 61 30%
Contribution ($m) (1) 79 61 30%
Rooms open 185k 123k 51%
Centres open 1,116 682 64%
Rooms opened in the period 73k 37k 97%
Centres opened in the period 483 232 108%
Rooms in pipeline 182k 121k 50%
New centre deals signed 725 678 7%
1. Gross Profit excluding depreciation before the application
of IFRS 16 defined in the alternative performance measures section
Company-owned
FY 2024 FY 2023 Change
Revenue ($m) 3,222 3,230 0%
Open centre revenue 3,178 3,031 5%
RevPAR ($) 356 352 1%
Contribution (1) ($m) 790 711 11%
Contribution margin (%) 25% 22% +251bps
Rooms open 775k 772k 0%
Centres open 2,873 2,832 1%
Centres opened in the period 141 96 47%
1. Gross Profit excluding depreciation before the application
of IFRS 16 defined in the alternative performance measures section
Digital & Professional Services
($m) FY 2024 FY 2023 Change
Revenue 389 398 (2)%
Underlying revenue 335 363 9%
Contribution (1) 188 205 (8)%
Overhead (2) (45) (47) (4)%
Adjusted EBITDA 163 160 2%
EBITDA margin (%) 37% 39% (269)bps
1. Gross Profit excluding depreciation before the application
of IFRS 16 defined in the alternative performance measures section
2. Pre-rationalisation costs, SG&A excluding depreciation
before the application of IFRS 16 defined in the alternative performance
measures section
Mark Dixon, Chief Executive of International Workplace Group plc, said:
"We are reaching an inflection point where the hard work from the last few
years is coming to fruition. We have a supportive operating environment,
structural industry tailwinds and a business which is both prepared for, and
delivering, centre growth. We are by far the largest player in this industry
and getting ahead of the competition even further as we deliver value to
landlords and clients. I am confident that following last year's delivery of
record revenue, record EBITDA and record centre growth, our share buyback
programme announced today further underpins the position that IWG has as a
global category leader whose offices you can find in almost every major city
on the planet."
Outlook and guidance
We remain cautious given continued global macroeconomic uncertainty and
volatility. In the short term we expect continued growth in pre-IFRS 16 EBITDA
with FY 2025 expectation of $580m to $620m, net debt/EBITDA continuing to fall
and centre growth and signings above FY 2024 levels. In the medium term we
continue to target $1bn pre-IFRS 16 EBITDA. We also reiterate our commitment
to maintaining a BBB credit rating.
Financial calendar
18 March 2025 Publication of 2024 Annual Report & Accounts
2 May 2025 Final 2024 dividend record date
6 May 2025 Q1 2025 trading update
20 May 2025 Annual General Meeting
30 May 2025 Final 2025 dividend payment date
5 August 2025 H1 2025 results
4 November 2025 Q3 2025 trading update
4 December 2025 Investor Day in New York City
Results presentation
Mark Dixon, Chief Executive Officer, and Charlie Steel, Chief Financial
Officer, will be hosting a presentation of the results today for analysts and
investors at 9.00am UK time (SPACES, New Broad Street House, 35 New Broad St,
London, EC2M 1NH).
The presentation will be available via live webcast and will be available to
view at the following link:
https://broadcaster-audience.mediaplatform.com/event/67b23bdb9d04665f3ecd8834
This announcement contains information that qualifies or may qualify as inside
information. The person responsible for arranging the release of this
announcement on behalf of International Workplace Group plc is Tim Regan,
Company Secretary
Further information
International Workplace Group plc Brunswick Tel: + 44 (0) 20 7404 5959
Mark Dixon, Chief Executive Officer Nick Cosgrove
Charlie Steel, Chief Financial Officer Greg Dawson
Richard Manning, Head of Investor Relations
Chairman's Statement
Providing flexibility for a changing world
IWG has been providing flexible workspace since opening its first centre over
35 years ago. That flexibility has come to mean so much more in recent years
as technology has significantly impacted how and where people work. In
addition, the speed and magnitude of unprecedented social, economic and
technological change continue to accelerate which all contribute to the
escalating need for flexibility in the design, quantity, location and term of
workspace.
With nearly 4,000 centres across 120 countries, flexibility is what IWG
continued to provide in abundance during 2024, with the network and
scalability businesses everywhere need to respond quickly, cost-efficiently
and effectively to their space requirements so their people can work
productively.
Executing our strategy
We are focused on executing our strategy which delivered record revenues,
pre-IFRS 16 EBITDA and centre openings for 2024 and is creating value for all
our stakeholders.
For workers we provide modern, flexible workspace conveniently located where
people want to work, whether as their daily office, part of hybrid working
arrangements, or a drop-in meeting location.
We help businesses improve productivity, reduce their environmental impact and
increase employee loyalty by adding flexibility to where, when and how their
people work. We take the complexity and costs out of providing effective
working space for everything from entire workspace needs to providing for the
special needs of mobile and hybrid workers, supporting special project teams,
to entering new market locations.
For our building owner partners we provide strong returns from flexible
workspace, simplifying the process by providing everything required to operate
the business successfully. From the initial design through to ongoing daily
operations, whether to improve returns on an entire building or to provide a
profitable sought-after feature in larger buildings and developments.
For shareholders the execution of our strategy will deliver healthy returns
from serving the rapidly growing need for flexible workspace.
Continuing our sustainability journey
IWG continues to advance towards our sustainability targets with reducing our
carbon footprint through the conversion of our centres to green certified
electricity remaining a key near-term priority. During 2024 we made
significant progress in this area through focusing on the conversion of
additional centres to certified green electricity aligned with RE100
guidelines.
We are also improving the performance of centre buildings using new
technologies while further consolidating our supply chain and reducing waste
across our extended organisation.
In addition, the positive effect of reduced commuting on carbon emissions by
enabling more people to work closer to home continues to grow at pace through
our rapidly expanding network. These ongoing achievements reflect the
commitment to sustainability that is exhibited throughout our corporate
culture.
Acknowledging our exceptional people
The Group's success during such a complex and fast-moving market environment
is a testament to the professional approach and total commitment of our
exceptional people at IWG. They are the key to executing our strategy, from
the unprecedented speed of network expansion to providing outstanding customer
experiences every day. As ever, it is a pleasure to acknowledge their amazing
contribution to our success as we strive to provide a stimulating and
inclusive working environment where they can leverage our robust development
support to build satisfying and rewarding long-term careers with IWG.
Focusing on board succession
I am indebted to my Board colleagues for the high quality of their input and
advice as they continue to contribute to the ongoing success of IWG. After
over nine years on the Board, François Pauly has stepped down as the IWG
Senior Independent Director and Chair of our Nominations Committee. I would
like to thank François for his many contributions during a time of
significant growth for IWG, and I particularly benefitted on a personal level
from his wisdom and insights. I am grateful to Tarun Lal who is serving
effectively as our Senior Independent Director and Chair of the Nominations
Committee as we complete the process of identifying a permanent successor for
these roles and preparing the board for the future.
Looking ahead
I am confident that in 2025 and beyond IWG will continue to build on the
strengths developed over the last 35 years. We will do this by focusing on the
execution of the essentials, including rapid capital-light network development
supported by a growing customer base, increased efficiencies through adoption
of new technologies, building strong partnerships and brands, and creating
opportunities for our people and rewarding returns for shareholders. Our
success will be realised through delivering tangible value for all
stakeholders while enabling millions worldwide to have a great day at work.
Douglas Sutherland
Chairman
4 March 2025
Chief Executive Officer's Review
In 2024, we celebrated a very special milestone. 35 years ago, we opened our
very first Regus location on the superbly located, Avenue Louise in Brussels,
Belgium in September 1989. Over the course of three and a half decades, so
many important and unrivalled milestones have been accomplished from serving 8
million customers in more than 120 countries worldwide to working with 83% of
Fortune 500 companies.
Our defining mission today, as it was 35 years ago, is to revolutionise how
and where people work, bringing significant productivity benefits and lower
costs to companies while transforming the working lives of their teams. Over
the past few years, we have seen hybrid and more flexible ways of working
become the default model for a significant proportion of white-collar workers;
with companies empowering their employees to work across multiple locations,
splitting their time between local workspaces, a central office and home.
It is particularly rewarding to see over the past few years how academics,
leading industry commentators and business leaders are now recognising the
incredible benefits of this way of working for both companies and their
people.
The research of Professor Nicholas Bloom - a senior fellow at the Stanford
Institute for Economic Policy Research and acknowledged as the world's leading
authority on the hybrid model - has shown that about 40% of white-collar
employees now work in this model and will continue to do so in the future.
This long-term shift towards the hybrid model is one of the mega-trends of our
time and represents a substantial financial opportunity for IWG. With 1.2
billion white-collar workers globally, our industry has a total addressable
audience valued at more than $2 trillion and platform working is set to become
the norm for many of these employees.
The reasoning for the transition towards hybrid working is clear and
compelling for companies of all sizes and their employees with positive
impacts on, productivity, lower costs, increased flexibility and above all
significantly enhanced worker happiness, while investors, landlords and
building owners are increasingly seeing IWG as the ideal partner to capitalise
on the long-term shift towards the model.
The Office isn't dead - It's just moved
In recent months, headlines have been dominated by discussion around Return to
Office (RTO) mandates and how these have been gaining significant momentum
amongst companies of all sizes.
While media headlines miss some of the nuances of the shift towards RTO, the
trend is unmistakenly taking place, driving our business forward in a very
meaningful way. Where and how people work is far more nuanced than much of the
current conversation implies. It's not just a binary choice between working
from a traditional city centre office and from home.
There's a third option: working out of a local co-working space or office,
near to home, with other like-minded people. In fact, most white-collar
employees are working from a combination of all three of these locations and
this is driving excellent growth for our business, with our centres in the
heart of the suburbs and local communities showing the strongest increase in
demand from across the network. The reality is the office isn't dead, it's
just moved to a much more convenient place, close to where many people
actually live.
The financial benefits of hybrid
Hybrid working is unlocking considerable benefits for businesses and amongst
the most significant is the substantial cost savings. Research undertaken by
Global Analytics has shown that companies operating in the hybrid model can
save around $11,000 per employee, on a yearly basis. Not only is it a cheaper
way for companies to run, but it enables businesses to operate in a capital
light model moving capex costs into opex.
The groundbreaking research of Professor Bloom further highlights the
financial benefits that are helping multiple thousands of companies across the
world to reduce their operating costs.
As Professor Bloom puts it, "Firms don't do things that lose them money. They
do things that make them money. That's why every firm just about out there is
doing hybrid, because it's such a no-brainer to increase profit…". Small
wonder that he recently put it on record that he expects hybrid uptake to
increase in the years ahead, due to ongoing demand and projected improvements
in technology.
IWG's CEO study which polled more than 500 business leaders found that CEOs
are unified in their support for the hybrid model. 9 in 10 CEOs that have
adopted hybrid have seen significant cost savings, while more than 7 in 10 say
employee happiness has increased.
Beyond financial savings hybrid gives business leaders greater flexibility
with the ability to scale up or down quickly without being locked into lengthy
and costly contracts, while also enabling them to attract and recruit from a
talent pool in diverse locations. Undoubtedly, hybrid working is incredibly
popular with employees providing them with a better work/life balance and by
adopting it companies are supporting their people, their most important asset.
Supporting the productivity of workers
The recent shift to more flexible ways of working has resulted in some
instances to what academics describe as "Proximity bias". This is where
business leaders and senior managers tend to treat workers who are physically
closer to them more favourably, stemming in some instances from an outdated
assumption that those who work remotely are less productive than those who
work from a company's headquarters. All business leaders should remember that
what your people are doing and how you're managing them are by far the most
important factors in performance and productivity.
If work isn't being carried out effectively, it's not the fault of the
location. It's generally the fault of management not making the job clear or
setting good KPIs. Those problems will be the same whether your teams are
sitting 10 metres away from you, or a local office or 1,000 kilometres away.
Dr Gleb Tsipursky in the Harvard Business Review articulately spoke of the
need of Instilling an "excellence from anywhere" culture and warning that if
businesses do not tackle any overt or covert proximity bias, they will be
hurting employee morale, retention, productivity, and ultimately company
bottom lines.
A number of convincing studies - including by Professor Bloom - have shown
productivity increases (3-4%) and reduced quit rates (35%) as a hallmark of
hybrid working. International Workplace Group's own research with business
leaders backs up these findings, and more. More than 6 in 10 cite improved
productivity as one of the key business benefits, while 7 in 10 CEOs highlight
that employee happiness has increased through the adoption of hybrid working.
The rise of local working
Today, the remarkable advances in cloud technology and video conferencing
software - both vital to enabling effective hybrid working - mean workers no
longer need to travel long distances on a daily basis. As a result, we are
seeing a fundamental shift in the geography of work with the centre of gravity
moving towards local communities. Tech changes will continue to advance in
years to come and will radically underline and advance the flexibility of
location.
The rising demand for more localised working has led to the majority of our
new International Workplace Group centres opening in the heart of local
communities, suburbs and rural areas, making 15-minute cities a reality to the
many people around the world who are ditching the commute and saying clearly
that hybrid working is essential, not optional.
During the course of 2024, around 80% of the new locations we signed were in
the suburbs and smaller towns where many people actually live. Places like
Cheadle, a small Staffordshire village in the UK with a population of 12,000,
or Destin in Florida which has only 14,000 residents.
That is not to say that businesses are abandoning city centres: far from it.
Increasingly, we are helping companies shake off the expense of the long-term
city-centre lease and replace it with a flexible, cost-effective agreement on
a smaller space in one of our city-based centres.
Strategy
Our strategic focus is as clear as ever and there is an unrelenting focus on
growing our margin, driven by strong performance on new and embedded price,
service revenue growth and an ongoing strict control of costs.
We will continue to make ongoing investments into our world class platform as
well as focusing on the rapid growth of network coverage in partnership with
the property industry and investors using capital-light expansion methods such
as management agreements, partnering deals and franchising.
Capital-light growth
The shift towards hybrid and more localised working is propelling our business
forward with the fastest growth that we have ever seen in our more than
35-year history. In 2024, we added a record number of locations globally,
signing 899 centres - the vast majority under the partnership model - and
achieved our highest ever revenues at an improved margin.
During the year, we accelerated our capital-light growth strategy allowing us
to capitalise on the growing pipeline of property investors seeking to
maximise their returns by partnering with IWG.
Focusing on growth through the capital-light business means that growth capex
requirements will be dramatically lower in the future, generating more free
cash flow for shareholders.
We are increasingly seeing partners sign multiple locations with IWG as they
grasp the scale of the opportunity in front of them. My greatest thanks go to
all our valued property owners and investors who have chosen to partner with
us and as a business we are resolutely committed to the long-term success of
these partnerships.
Market leader in innovation
As the market-leader in the structurally growing hybrid working industry, we
are exceptionally well positioned for the long term. Not only do we lead the
market on global reach, but also in a number of crucially important areas for
future growth.
IWG has created an outstanding Research and Development team to ensure we are
at the forefront of innovation. We are very pleased to have already added
medical centres and labs to our existing line-up and throughout the course of
2025, we will add new concepts and platforms to further widen our offer to our
expanding customer base.
Sustainable growth
I am very pleased to say that the Group continues to operate in an
environmentally responsible manner and we take our collective role and
responsibility in tackling the climate crisis incredibly seriously. As part of
our climate action plan, we have reduced and are reducing further the carbon
emissions from our buildings and supply chain and our ultimate goal is to
achieve Net Zero carbon emissions by 2040.
Our purpose of helping everyone have a great day at work, whilst protecting
people and planet is at the heart of what we do and as a global employer, our
purpose and values have never been more important. We are in receipt of a
strong AA rating by the MSCI and have been accredited by the RE100 for our
commitment to only source 100% renewable electricity by 2030.
Not only are we doing our part to tackle global warming, but our services have
an extraordinary opportunity to radically reduce humanity's negative
environmental impact by encouraging the adoption of hybrid working in the more
than 120 countries in which we operate.
IWG's landmark study with Arup, a global leader in sustainable development,
shows that hybrid working can facilitate major carbon savings and has the
potential for significant impact on the climate crisis. The study measured the
environmental impact of hybrid working on six cities across the US and UK: LA,
New York City, Atlanta, London, Manchester and Glasgow.
The study's key finding is simply allowing people to work close to home,
enabling them to split their time between a local workplace and home, has the
potential to reduce an employee's work-related carbon emissions by between 49%
and 90%. The report highlights what a genuine and tangible difference reduced
commuting can make in tackling the climate crisis.
The transformative impact of technology
Hybrid working and digital technology have always had a symbiotic
relationship. Each wave of technological innovation enables more fluid
collaboration across geographies and across teams, as well as between
businesses, fuelling the growth of hybrid. As a company, we are using AI more
and more across our business and it is improving our operations and making us
more efficient.
The ongoing rise and adoption of AI will be beneficial for the IWG business
and we will continue to be agile, adapting to new ways of working.
Our financial performance in 2024
With such strong momentum globally behind the shift to hybrid working,
confirmed by our financial results for 2024, record system-wide revenue,
EBITDA, and network growth leading to dividend growth, and a new buyback,
announced today.
I would like to take this opportunity to thank all of our incredible team
members that were the driving force behind the rapid growth of our global
network and an excellent set of financial results.
Looking ahead
The future for IWG and all our stakeholders remains bright as we enter the new
year with good momentum. We continue to grow our customer base, our global
network and our best-in-class portfolio of locations and brands, while
delivering on our capital light expansion strategy.
2024 was a record year for both revenue and network expansion and provides the
foundations for continued growth in the year ahead. With the aforementioned
1.2 billion white-collar workers globally and a potential audience valued at
more than $2 trillion, there is substantial room for growth and as a company,
we are absolutely committed to capturing more of this market over the coming
months and years ahead.
Mark Dixon
Chief Executive Officer
4 March 2025
Chief Financial Officer's Review
2024 has been another record year for the Group, delivering both its
highest-ever system-wide revenue of $4.2bn and highest ever EBITDA of $557m
whilst simultaneously reducing capex spend and delivering the foundations to
support capital returns to investors. We have continued to deliver growth,
cashflow, lower capex and reduce debt.
2024 has also been a busy year for the Finance department
• Invested over $10m in new core systems
• Converted our functional currency to USD
• Refinanced $1.4bn of debt with a new $720m revolving credit facility
and €625m Euro bond with an inaugural investment grade (BBB) credit rating.
The result of this is we have a solid foundation from which we can deliver
further on our existing capital allocation policy with the dividend and new
share buyback programme.
Financial performance
The Group reports results in accordance with IFRS. Under IFRS 16, while total
lease-related expenses over the life of a lease remain unchanged, the lease
expenses are presented as depreciation and finance expenses with higher total
expense in the early periods of a lease and lower total expense in the later
periods of a lease.
Group income statement
$m - IFRS 2024 Adjusting 2024 2023 Adjusting 2023
IFRS -
items(1)
IFRS -
IFRS -
items(1)
IFRS -
As reported
Adjusted
As reported
Adjusted
System-wide revenue 4,231 4,231 4,157 4,157
Group revenue 3,690 3,690 3,689 3,689
Cost of Sales, incl. lease depreciation (2,586) (92) (2,678) (2,957) 101 (2,856)
Gross profit 1,104 (92) 1,012 732 101 833
Gross Margin 30% 27% 20% 23%
Overheads & Other (594) 6 (588) (553) (6) (559)
Operating profit/(loss) 510 (86) 424 179 95 274
Net finance expense, incl. lease interest (457) (457) (416) (416)
Profit/(loss) before tax 53 (86) (33) (237) 95 (142)
Taxation (34) (34) (34) (34)
Profit/(loss) for the period 19 (86) (67) (271) 95 (176)
Basic and Diluted EPS (¢)
From continuing operations 2.0 (6.5) (26.7) (17.3)
Attributable to shareholders 2.0 (6.5) (26.7) (17.3)
1 Adjusting items refer to: Closures costs, Net
impairment/(reversal) of PPE (including ROU assets), Other
(impairments)/reversals and One-off items
Segmental reporting
The IWG Network, comprising of the Group excluding Digital & Professional
Services, is managed through a matrix organisation, i.e. by geographical
regions and by ownership structure. In addition to the three geographical
regions (Americas, Asia, and EMEA) we are reporting results of IWG Network by
ownership structure (Company-owned and Managed & Franchised) and Digital
& Professional Services. This matrix reporting reflects how we practically
manage the IWG Network on a day-to-day basis.
Revenue
System-wide revenue increased by 2% to $4,231m and Group revenue increased to
$3,690m. Our Managed & Franchised business saw fee revenue increase by 30%
to $79m mainly driven by 483 centre openings with signings continuing to
convert into openings at pace. Company-owned remained relatively stable,
delivering revenue of $3,222m with open centres contributing growth of c.5%.
Digital & Professional Services reported a slight revenue regression of 2%
to $389m.
System Revenue Group Revenue
($m) 2024 2023 % change 2024 2023 % change
Managed & Franchised 620 529 17% 79 61 29%
Company-owned 3,222 3,230 0% 3,222 3,230 0%
Digital & Professional Services 389 398 (2)% 389 398 (2)%
Group 4,231 4,157 2% 3,690 3,689 0%
Revenue per Available Room (RevPAR)
RevPAR is a monthly average KPI, defined as the system-wide revenue of the IWG
Network (excluding Digital & Professional Services and excluding centres
opened and closed during the year), divided by the number of available rooms,
which is defined as 7 square metres across all usable space. RevPAR is a well
understood measure used across many industries and is particularly relevant to
IWG as it incorporates all revenue received across IWG's expansive product
portfolio.
Managed & Franchised RevPAR is $408 (2023: $485), being driven by new
centre revenue performing in line with our plans. RevPAR in our franchised
locations was $487 (2023: $511) which is higher than in our Managed
Partnerships locations due to: (a) franchise locations being predominantly in
high RevPAR countries in particular Japan and Switzerland; (b) the higher
maturity of franchise locations which have been operating for many years.
Franchise RevPAR has fallen slightly in 2024 as there have been new openings
in franchised locations and RevPAR has yet to reach maturity. Company-owned
RevPAR grew by 1% to $356 year-over-year, or 3% if looking at the mature
network only, driven primarily by higher pricing and ancillary revenue, with
broad based regional growth. As we have previously disclosed, RevPAR on these
additional Managed Partnerships rooms is targeted to be $250 at maturity.
Given the scale of growth and room additions that the Company is adding to the
Network, RevPAR excluding centres opened in 2023 is presented below to show
RevPAR progression excluding the impact of centres not yet mature.
It is expected that the higher-growth segments will show a falling
year-over-year RevPAR because new locations that have opened but are not yet
mature are contained within the calculation.
System RevPAR ($, monthly average) 2024 2024 ex 2023 2023 % change
Openings
Managed & Franchised 408 489 485 (16)%
Managed 256 391 372 (31)%
Franchised and JVs 487 512 511 (5)%
Company-owned 356 362 352 1%
IWG Network 363 375 365 (1)%
Adjusting Items
The Group identified net adjusting items on operating profit of $(86)m, of
which $(113)m are non-cash items (2023: $42m). These Adjusting items refer to
closure costs (the actual costs of closing centres, including non-cash
write-downs) of $(2)m (2023: $(15)m), the net (impairment)/reversal of PPE
(including Right of Use assets) of $(93)m (2023: $73m) relating to the net
reversal of impairment of $24m (2023: net impairment of $99m), depreciation of
$63m (2023: $21m) and disposals of $6m (2023: $5m) in respect of adjusting
items previously provided for, other impairments/(reversals) of $3 m (2023:
$4m) and no other one-off items for 2024 (2023: $39m), comprising
predominantly legal, acquisition and transaction costs as well as obsolete
desktop phone write-offs.
Adjusting items impact ($m) 2024 2023
Closure Costs (2) (15)
Net (reversal)/impairment of PPE (including ROU assets) (93) 73
Other impairments 3 4
One-off items - 39
Adjusting items impact on Gross Profit (92) 101
Adjusting items impact on SG&A 6 (6)
Adjusting items impact on Operating Profit (86) 95
Depreciation 56 22
Adjusting items impact on EBITDA (30) 117
Gross Profit
Gross Profit, including adjusting items, increased from $732m in 2023 to
$1,104m in 2024. Adjusted Gross Profit increased from $833m in 2023 to $1,012m
in 2024.
Given the operating model, 100% of Managed & Franchised revenue drops
through to Gross Profit. Adjusted Gross Profit in Company-owned increased by
$163m mainly due to strategic cost control. The impact of adjusting items
detailed above of $(92)m are all allocated to Company-owned.
Digital & Professional Services Gross Profit reduced commensurate with the
change in revenue.
Gross Profit ($m) 2024 Adjusting 2024 2023 Adjusting 2023
IFRS -
items
IFRS -
IFRS -
items
IFRS -
As reported
Adjusted
As reported
Adjusted
Managed & Franchised 79 79 61 61
Company-owned 827 (92) 735 471 101 572
Digital & Professional Services 198 198 200 200
Gross profit 1,104 (92) 1,012 732 101 833
The Group focuses on Contribution margin as a financial KPI in its
Company-owned segment rather than Gross Profit due to Gross Profit including
depreciation and amortisation. A bridge from gross profit to Contribution
margin is provided later in this section.
Overheads and other
Group overheads, excluding adjusting items increased to $558m in 2023 to $587m
in 2024. The increase is due to investment in overheads that cannot be
capitalised, including:
• The continued investment for the future, particularly due to the
project costs recognised on one-off investments into the scalability of our
sales and operating platform as we continue to optimise and automate
processes.
• Investment in the Partnership sales team to ensure we maintain our
market leading position. We signed 899 new deals in 2024 vs 867 in 2023, and
whilst our partnership sales team is an ongoing cost, we are not expecting it
to increase linearly with signings, therefore margins should continue to grow.
Operating Profit
Operating Profit after adjusting items increased from $274m in 2023 to $424m
in 2024, reflecting higher Group revenue and cost control. As previously
mentioned, adjusting items had a $(86)m impact in 2024 (2023: $95m)
predominantly due to the non-cash impact of a reversal of impairments.
Reported Operating Profit was at $510m (2023: $179m).
Net finance expense
The Group reported a net finance expense for the year of $457m (2023: $416m).
The net finance expense in 2024 mainly includes:
• Cash interest of $76m related to borrowing facilities (2023: $68m)
The increase in the finance expense is due to the refinancing transactions
completed during the year. Of the €625m Euro bond, €525m has been hedged
into USD using a cross-currency interest rate swap. Under the swap agreement,
interest is paid semi-annually, in June and December of each year. Interest is
paid annually on the unhedged portion of the Euro bond.
• Interest on the Group's lease liabilities of $363m (2023: $349m).
Finance expense $m 2024 2023
Interest payable on lease liabilities (363) (349)
Interest expense on financial debt and other borrowings (76) (68)
(Loss)/gain on foreign exchange (17) 7
Other finance costs(1) (18) (15)
Gain on early settlement of the Convertible bonds 7 -
Interest and finance income 10 9
Net finance expense (457) (416)
1. Excluding financing fees on the issuance of the Euro bond which are
capitalised
Taxation
The effective tax rate in 2024 is 64% (2023: (14)%). The Group has performed
an assessment of its potential exposure to Pillar Two global minimum income
taxes and does not expect any material top-up taxes to arise in any
jurisdiction in which it operates. Whilst the majority of the Group's entities
benefit from transitional safe harbour rules which take them out of scope of
the full rules, for the remaining entities, proxy Pillar Two calculations have
been performed which confirm that no material top-up tax is expected to arise
in any jurisdiction.
Earnings per share
Earnings per share attributable to ordinary shareholders in 2024 was a profit
of 2.0c (2023: loss of 26.7c) reflecting a return to profitability in 2024.
The weighted average number of shares in issue during the year was
1,009,815,126 (2023: 1,006,685,491). At 31 December 2024 the Group held
45,241,020 treasury shares (31 December 2023: 50,558,201). In 2024, 5,283,597
treasury shares were utilised to increase the Group's equity voting rights in
non-controlling interests. For share awards exercised by employees, the value
of the share award in excess of the exercise price was settled through the
utilisation of 33,584 treasury shares and 118,054 were settled using shares
purchased in the open market.
Adjusted EBITDA
The Group's Adjusted EBITDA increased to $1,824m (2023: $1,768m) and Pre-IFRS
16 Adjusted EBITDA increased 11% to $557m (2023: $503m). Adjusted EBITDA
excludes the Group's largest cost - rent - and therefore management does not
believe this is a useful financial metric. It is for this reason that
management focuses on EBITDA before the application of IFRS 16 (Pre-IFRS 16
EBITDA) as the key alternative performance measure for EBITDA, as discussed
below.
Adjusted EBITDA by segment
Results are additionally presented before the application of IFRS 16 (in
accordance with IAS 17 accounting standards) as it provides useful information
to stakeholders on how the Group is managed, as well as reporting for bank
covenants and certain lease agreements. The primary difference between the two
standards is the treatment of operating lease liabilities. There is no
difference between underlying cash flow. To bridge the Group's Adjusted EBITDA
of $1,824m under the IFRS 16 standard to $557m Adjusted Pre-IFRS 16 EBITDA
under IAS 17, we need to recognise rental income in subleases which are
recognised as lease receivables under IFRS 16, rental costs on our lease
portfolio reflected as lease liabilities under IFRS 16 and centre closure and
other costs which are reflected as impairments under IFRS 16.
EBITDA Bridge 2024 IFRS - Adjusted Lease accounting adjustments 2024 Pre-IFRS 16- Adjusted 2023 IFRS - Adjusted Lease accounting adjustments 2023 Pre-IFRS 16- Adjusted
($m)
Managed & Franchised 79 - 79 61 - 61
Company-owned 735 (293) 442 572 (236) 336
Digital & Professional Services 198 (19) 179 200 (1) 199
Gross profit 1,012 (312) 700 833 (237) 596
Depreciation & Amortisation: Managed & Franchised - - - - - -
Depreciation & Amortisation: Company-owned 1,302 (954) 348 1,399 (1,024) 375
Depreciation & Amortisation: Digital & Professional Services 11 (2) 9 7 (1) 6
Depreciation & Amortisation in COS 1,313 (956) 357 1,406 (1,025) 381
Contribution 2,325 (1,268) 1,057 2,239 (1,262) 977
Managed & Franchised 79 - 79 61 - 61
Company-owned 2,037 (1,2471) 790 1,971 (1,260) 711
Digital & Professional Services 209 (21) 188 207 (2) 205
Overheads (500) (2) (502) (470) (3) (473)
Depreciation & Amortisation in overheads (87) 1 (86) (88) 1 (87)
Total overheads (587) (1) (588) (558) (2) (560)
Joint Ventures (1) 3 2 (1) - (1)
Operating profit/(loss) 424 (310) 114 274 (239) 35
Depreciation on property plant and equipment 1,322 (957) 365 1,414 (1,026) 388
Amortisation of intangible assets 78 - 78 80 - 80
Adjusted EBITDA 1,824 (1,267) 557 1,768 (1,265) 503
IWG Network 1,660 (1,246) 414 1,609 (1,263) 346
Digital & Professional Services 163 (20) 143 160 (3) 157
Pre-IFRS 16 Adjusted Contribution margin by segment
Contribution Margin Managed & Franchised Company-owned Digital & Professional Services 2024 Managed & Franchised Company-owned Digital & Professional Services 2023
$m
Contribution 79 790 188 1,057 61 711 205 977
Contribution Margin (%) 100% 24.6% 48.3% 28.7% 100% 22.0% 51.5% 26.5%
The Group's Adjusted Contribution margin increased to $1,057m (2023: $977m).
• Company-owned increased strongly to $790m, reflecting a c.25%
contribution margin, expanding the margin by c.3% from $711m, reflecting a 22%
margin in 2023. This is due to the continued focus on cost control and
operational efficiencies.
• Managed & Franchised increase from $61m to $79m is reflective of
the growth in revenue.
• Digital & Professional Services delivered $188m (2023: $205m),
the reduction in margin from c.52% to 48% due to loss of the profitable legacy
contract.
Network growth
We had a record year for network expansion. Our network increased by 14% to
3,989 centres (2023: 3,514). We opened 624 new centres (2023: 328 centres) and
rationalised (149) centres (2023: (159) centres). Furthermore, 899 new centre
deals were signed in 2024. Out of the 899 new deals signed 95% or 852 deals
are capital-light which underpins our success of growing the network through
capital-light partnerships.
Of the 624 centres opened in 2024, 601 centres were capital-light openings
which comprised of managed partnership centres, variable rent centres,
franchised centres and joint-venture centres. Only 23 centre openings were on
a fully conventional basis.
Our estate of 3,989 centres as per the end of December 2024 is split into 28%
or 1,116 centres in Managed & Franchised, which increased by 64%
year-on-year, and 2,873 centres in Company-owned (of which 869 are based on
variable rents). Based on the strong growth of opening new managed partnership
centres (all leases other than conventional lease agreements) and successful
renegotiations of existing centres we increased our estate in Managed
partnerships by 523 centres or 36% to 1,985 centres. Strong growth in Managed
partnership openings is expected to continue in 2025.
Key KPIs 2024 2023 YoY change YoY
change %
Centres open 3,989 3,514 475 14%
Centre Openings 624 328 296 90%
Of which capital-light(1) 601 301 300 100%
In % 96% 92%
Total new centre deals signed 899 867 32 4%
Of which capital-light(1) 852 839 13 2%
In % 95% 97%
1. Includes locations signed/opened in Managed & Franchised and
Variable rent areas.
Location movement by type 2023 Centre Centre Changed 2024
openings
rationalisations
Conventional 2,052 23 (72) 1 2,004
Variable rent (capital light) 780 118 (53) 24 869
Company-owned 2,832 141 (125) 25 2,873
Managed & Franchised (capital light) 682 483 (24) (25) 1,116
Total 3,514 624 (149) - 3,989
Room movement by type ('000) 2023 Centre Centre Changed 2024
openings
rationalisations
Conventional 558 9 (20) (4) 543
Variable rent (capital light) 214 29 (14) 4 233
Company-owned 772 38 (34) - 776
Managed & Franchised (capital light) 123 73 (6) (5) 185
Total 895 111 (40) (5) 961
Cashflow
$m 2024 2023
Operating profit 510 179
Depreciation & amortisation 1,344 1,472
Adjusting items (30) 117
Adjusted EBITDA - IFRS 16 1,824 1,768
Rent income 67 76
Rent expense (1,343) (1,381)
Other costs (4) (10)
Adjusting items 13 50
Adjusted EBITDA - pre-IFRS 16 557 503
Working capital (excl. amortisation of landlord contributions on leased (51) 118
property)
Working capital related to the amortisation of landlord contributions on (110) (118)
leased property
Maintenance capital expenditure (net) (93) (113)
Other items(1) (5) (15)
Cashflow from business activities(2) 298 375
Tax paid (36) (43)
Net finance costs on bank & other facilities (72) (69)
Cashflow before growth capex, financing activities and dividends 190 263
Gross growth capital expenditure (132) (143)
Growth-related landlord contributions 44 48
Net growth capital expenditure (88) (95)
Purchase of subsidiary undertakings (net of cash) (5) (13)
Cashflow before financing activities and dividends 97 155
Proceeds from issue of loans 808 1,237
Proceeds from issue of Euro bond, net of related transaction costs 650 -
Other finance transaction costs (11) -
Repayment of loans (1,278) (1,443)
Repayment of Convertible bonds (228) -
Purchase of treasury shares - (1)
Dividends paid (17) -
Net cash inflow/(outflow) for the year 21 (52)
Opening net cash 141 194
FX movements (14) (1)
Closing cash 148 141
1. Includes capitalised rent related to centre openings (gross growth
capital expenditure) of $(2)m (2023: $(3)m)
2. Cash flow before growth capex, tax, finance cost on bank &
other facilities, financing activities and dividends
We continued to grow our business and revenues whilst managing our cost base.
This resulted in a cash inflow from business activities in 2024 of $298m
($375m in 2023). Working capital, excluding the amortisation of partner
contributions, saw an outflow during the year of $51m of which $47m related to
movements in the first half of 2024 predominantly arising from carrying over
some payments on facilities and other property costs from 2023 and property
taxes for amounts less than accrued on 31 December 2023. These movements are
summarised in the table below:
Working capital movements ($m) FY 2024 H1 2024 H2 2024
Trade receivables and deferred revenue (21) (16) (5)
Customer deposit movements (excluding non-cash FX movements) 21 13 8
Trade payables and net amounts due from franchise, managed centre and (3) (1) (2)
joint-venture partners
Prepayments and accruals (predominantly relating to rent and other property (39) (32) (7)
costs) and taxes
Landlord contributions (9) (11) 2
Total (51) (47) (4)
Working capital relating the amortisation of partner contributions refers to
historic cash contributions made by landlords for growth capex in the
Company-owned segment (shown as growth-related partner contributions further
down the cash flow statement) and is amortised over the lifetime of the
corresponding lease.
Cash tax paid was $(36)m in 2024 (2023: $(43)m) and primarily relates to
corporate income tax paid in various countries. Finance costs paid on bank
& other facilities was $(72)m in 2024 vs. $(69)m in 2023.
Cash inflow before growth capex, financing and dividends was $190m (2023:
$263m).
Total net investment, including acquisitions and all capex, was $(186)m (2023:
$(221)m). Group capex declined in 2024 and is expected to continue that
trajectory. Maintenance capex has reduced to $93m (FY23: $113m) and is
expected to stay broadly at that level. Growth capex declined from $95m to
$88m. We are confident that overall capex will remain at this level due to new
locations in our Company-owned business increasingly being signed up without
capex needs for the Group; Managed & Franchised faces zero capex, and the
majority of platform investment for Digital & Professional Services $21m
is complete.
2024 saw growth in intangible capex investments of $27m including accounting
projects to improve efficiencies. Whilst we will continue to invest in the
platform and systems, the project spend of $6m in Company-owned is one-off in
nature.
Capital expenditure $m Managed & Franchised Company-owned Digital & Professional Services 2024 Managed & Franchised Company-owned Digital & Professional Services 2023
Growth capital expenditure n/a 95 10 105 n/a 118 15 133
Landlord contributions to Growth capital expenditure n/a (44) - (44) n/a (48) - (48)
Growth capital expenditure on Intangible Assets n/a 6 21 27 n/a 8 2 10
Net Growth capital expenditure n/a 57 31 88 n/a 78 17 95
Centre maintenance capital expenditure n/a 57 - 57 n/a 58 - 58
Landlord contributions to Maintenance capital expenditure n/a (12) - (12) n/a (9) - (9)
Other maintenance capital expenditure n/a 48 - 48 n/a 54 10 64
Net Maintenance capital expenditure n/a 93 - 93 n/a 103 10 113
In 2025, we expect to acquire the remaining 10.7% minority shares outstanding
in The Instant Group at the original purchase price per share, (£41.7m)
predominantly using already-issued Treasury shares.
Financing
During 2024 the Group successfully completed a series of debt transactions and
extended the Group's debt maturity:
• Issued €625m Euro bond (investment grade rating from Fitch of BBB,
Stable) due in June 2030 of which;
◦ €525m has been swapped to $564m with a coupon of 8.137%, and
◦ €100m remains in euro with a coupon of 6.5%
• Signed a new $720m revolving credit facility due in June 2029 (which
was reduced in size from $1.1bn)
• Reduced the face value of the £350m Convertible bonds (hedged at
$445m) outstanding to £158m (hedged at $201m), valued at $193m as at 31
December 2024. The Convertible bonds are due for repayment or conversion at
£4.5807 per share in December 2027 with an option for the bondholders to cash
settle in December 2025 at par.
• Financing fees of $29m are in included as part of the issuance
proceeds in the cashflow statement
Overall, net financial debt was $(712)m at 31 December 2024 (31 December 2023:
$(775)m). The Group's total debt facilities, including details of drawings, is
summarised below:
Net debt
Net Financial Debt $m 2024 2023
Convertible bonds (193) (419)
Euro bond (648) -
RCF Drawn - (467)
Revolving Credit Facility (RCF) (720) (1,116)
RCF available 436 279
RCF guarantee utilisation 284 370
Other debt (18) (30)
Closing cash 148 141
Net financial debt - pre-IFRS 16 (712) (775)
Net investment in finance leases 116 124
Lease liabilities (6,162) (6,856)
Net debt - IFRS 16 (6,758) (7,507)
At 31 December 2024 the Group complied with all facility covenants.
Dividends
In line with the Group's dividend policy, the Board has proposed to
shareholders a final dividend of 0.90¢ per share for a total 2024 dividend of
$1.33¢ per share. Subject to shareholder approval, it is expected that the
final dividend will be paid on 30 May 2025 to shareholders on the register at
the close of business on 2 May 2025. Dividends are declared in US dollars and
paid in pounds sterling with an option for shareholders to elect to receive
payment in US dollars. The foreign exchange rate at which the final dividend
will be converted into pounds sterling will be the New York closing rate on 2
May 2025.
Share buyback
International Workplace Group plc (the "Company") announces that it has
entered into an arrangement with Barclays Bank PLC ("the Broker"). The
arrangement allows the Broker to purchase (a) prior to the expiration of the
Company's current buyback authority granted by shareholder resolution dated 21
May 2024, 105,724,865 ordinary shares in the Company ("Shares"); and (b)
following such expiration, the aggregate number of Shares authorised to be
purchased by the Company under any subsequent buyback authority granted during
the arrangement. The Shares will be purchased pursuant to this arrangement
during open periods arising during the period from the date of this
announcement to 4 March 2026. These share purchases will be made by the Broker
acting as riskless principal.
Any share purchases effected pursuant to the arrangement will be subject to
the terms of the arrangement with the Broker and in any case will be effected
in a manner consistent with the general authority vested in the Company to
repurchase shares, the Market Abuse Regulation 596/2014, the Commission
Delegated Regulation (EU) 2016/1052 (both as incorporated into UK domestic
law) and the UK Listing Rules. The aggregate purchase price under this
arrangement will not exceed US$50,000,000.
All Shares purchased through this arrangement will be cancelled. The sole
purpose of these share purchases is to reduce the Company's share capital.
Foreign Exchange
At 31 December Annual average
Per USD$ 2024 2023 % 2024 2023 %
Pounds sterling 0.80 0.78 2% 0.78 0.80 (2)%
Euro 0.96 0.90 7% 0.93 0.92 0%
Risk management
Effective management of risk is an everyday activity for the Group, and
crucially, integral to our growth planning. A detailed assessment of the
principal risks and uncertainties which could impact the Group's long-term
performance and the risk management structure in place to identify, manage and
mitigate such risk will be in the 2024 Annual Report and Accounts.
Related parties
There have been no changes to the type of related party transactions entered
into by the Group that had a material effect on the financial statements for
the year 2024. Details of related party transactions that have taken place in
the period can be found in note 29.
Going concern
The Group reported a profit after tax of $19m in 2024 (2023: loss of $271m).
Cashflow before growth capex and corporate activities but after interest and
tax was $190m (2023: $263). Furthermore, net cash of $21m (2023: $(52)m) was
generated from operations during the same period. Although the Group's balance
sheet at 31 December 2024 reports a net current liability position of $2,224m
(31 December 2023: $2,145m), the Directors concluded after a comprehensive
review that no liquidity risk exists as:
1. The Group had funding available under the Group's $720m revolving credit
facility of $436m (31 December 2023: $279m) which was available and undrawn at
31 December 2024. The facility's current maturity date is June 2029;
2. A significant proportion of the net current liability position is due to
lease liabilities which are held in non-recourse special purpose vehicles but
also with a corresponding right-of-use asset. A large proportion of the net
current liabilities comprise non-cash liabilities such as deferred revenue of
$525m (2023: $552m) which will be recognised in future periods through the
income statement. The Group holds customer deposits of $584m (2023: $585m)
which are spread across a large number of customers and no deposit held for an
individual customer is material; and
3. The Group maintains a 12-month rolling forecast and a three-year
strategic outlook. It also monitors the covenants in its debt facilities to
manage the risk of potential breach. The Group expects to be able to refinance
external debt and/or renew committed facilities as they become due, which is
the assumption made in the viability scenario modelling, and to remain within
covenants throughout the forecast period. In reaching this conclusion, the
Directors have assessed:
• the potential cash generation of the Group against a range of
illustrative scenarios (including a severe but plausible outcome); and
• mitigating actions to reduce operating costs and optimise cash flows
during any ongoing global uncertainty.
4. An external assessment from Fitch, a leading global credit rating agency,
which has rated the Group and its listed bonds as investment grade with a BBB
(Stable) rating and has continued to monitor the Group's financial performance
since the initial rating assessment.
Due to the above, the Group does not believe the net current liabilities
represents a liquidity risk. The Directors consider that the Group is well
placed to successfully manage the actual and potential risks faced by the
organisation including risks related to inflationary pressures and
geopolitical tensions.
On the basis of their assessment, the Directors have a reasonable expectation
that the Group has adequate resources to continue in operational existence for
a period of at least 12 months from the date of approval of these Group
consolidated financial statements and consider it appropriate to continue to
adopt the going concern basis in preparing the financial statements of the
Group.
Charlie Steel
Chief Financial Officer
4 March 2025
Consolidated income statement
$m Notes Year ended Year ended
31 December 2024
31 December 2023
Unaudited
Restated ((1)(2))
Revenue 3 3,690 3,689
Total cost of sales (2,573) (2,938)
Cost of sales (2,665) (2,837)
Adjusting items to cost of sales((3)) 8 61 (2)
Net reversal/(impairment) of property, plant, equipment and right-of-use 3, 4 31 (99)
assets((3))
Expected credit losses on trade receivables 4 (13) (19)
Gross profit 3 1,104 732
Total selling, general and administration expenses (593) (552)
Selling, general and administration expenses (587) (558)
Adjusting items to selling, general and administration expenses((3)) 8 (6) 6
Share of loss of equity-accounted investees, net of tax 19 (1) (1)
Operating profit 4 510 179
Finance expense 6 (474) (425)
Finance income 6 17 9
Net finance expense (457) (416)
Profit/(loss) before tax for the year 53 (237)
Income tax expense 7 (34) (34)
Profit/(loss) for the year 19 (271)
Attributable to equity shareholders of the Group 20 (269)
Attributable to non-controlling interests 21 (1) (2)
Earnings/(Loss) per ordinary share (EPS):
Attributable to ordinary shareholders
Basic (¢) 9 2.0 (26.7)
Diluted (¢) 9 2.0 (26.7)
1. The comparative information has been restated in USD (note 2).
2. Includes a net settlement fee of $2m recognised in 2023 (comprising
the settlement fee of $22m, offset by a release of related accrued income of
$20m), for TKP Corporation's sale of the Japanese master franchise agreement
to Mitsubishi Estate Co.
3. The net adjusting items credit on operating profit relating to
rationalisations in the network of $86m (2023: charge of $95m) comprises the
following items included in the balances referenced (note 8): The net reversal
of impairment of property, plant and equipment and right-of-use assets of $93m
(2023: net impairment of $73m), closure related credit of $2m (2023: $15m),
other impairment of $3m (2023: $4m) and other one-off items including legal,
acquisition and transaction cost as well as obsolete desktop phone write-offs
of $6m (2023: $33m).
The above consolidated income statement should be read in conjunction with the
accompanying notes.
Consolidated statement of comprehensive income/(loss)
$m Notes Year ended Year ended
31 December 2024
31 December 2023
Unaudited
Restated ((1))
Profit/(Loss) for the year 19 (271)
Other comprehensive income/(loss) that is or may be reclassified to profit or
loss in subsequent periods:
Net investment hedge - net profit 3 -
Cash flow hedges - effective portion of changes in fair value 24 -
Foreign currency translation gain/(loss) for foreign operations 5 (3)
Items that are or may be reclassified to profit or loss in subsequent periods 32 (3)
Other comprehensive income that will never be reclassified to profit or loss
in subsequent periods:
Items that will never be reclassified to profit or loss in subsequent periods - -
Other comprehensive profit/(loss) for the year, net of tax 32 (3)
Total comprehensive profit/(loss) for the year, net of tax 51 (274)
Attributable to shareholders of the Group 52 (276)
Attributable to non-controlling interests 21 (1) 2
1. The comparative information has been restated in USD (note 2).
The above consolidated statement of comprehensive income should be read in
conjunction with the accompanying notes.
Consolidated statement of changes in equity
$m Notes Issued share capital Share premium Treasury shares Foreign currency translation Hedging reserve Other Retained Total equity attributable to equity shareholders Non-controlling interests Total equity
reserve
Reserves ((2))
earnings
Balance at 1 January 2023, Restated ((1)) 13 399 (194) (331) - 41 385 313 63 376
Total comprehensive income/(loss) for the year:
Loss for the year - - - - - - (269) (269) (2) (271)
Other comprehensive income/(loss):
Foreign currency translation gain/(loss) for foreign operations - - - (7) - - - (7) 4 (3)
Other comprehensive income/(loss), net of tax - - - (7) - - - (7) 4 (3)
Total comprehensive income/(loss) for the year - - - (7) - - (269) (276) 2 (274)
Transactions with owners of the Company
Ordinary dividend paid 10 - - - - - - - - - -
Share-based payments 5 - - - - - - 8 8 - 8
Purchase of shares 20 - - (1) - - - - (1) - (1)
Settlement from exercise of share awards 20 - - 1 - - - (1) - - -
Total transactions with owners of the Company - - - - - - 7 7 - 7
Balance at 31 December 2023, Restated ((1)) 13 399 (194) (338) - 41 123 44 65 109
Total comprehensive income/(loss) for the year:
Income/(loss) for the year - - - - - - 20 20 (1) 19
Other comprehensive income:
Net investment hedge - net profit 23 - - - - 3 - - 3 - 3
Cash flow hedges - effective portion of changes in fair value 23 - - - - 24 - - 24 - 24
Cash flow hedges - reclassified to profit 23 - - - - - - - - - -
Foreign currency translation gain for foreign operations - - - 5 - - - 5 - 5
Other comprehensive income, net of tax - - - 5 27 - - 32 - 32
Total comprehensive income/(loss) for the year - - - 5 27 - 20 52 (1) 51
Transactions with owners of the Company
Ordinary dividend paid 10 - - - - - - (17) (17) - (17)
Share-based payments 5 - - - - - - 2 2 - 2
Reissuance of shares 20 - - - - - - - - - -
Settlement from exercise of share awards 20 - - - - - - - - - -
Total transactions with owners of the Company - - - - - - (15) (15) - (15)
Purchase of non-controlling interest ((3)) - - 12 - - - - 12 (14) (2)
Balance at 31 December 2024 (unaudited) 13 399 (182) (333) 27 41 128 93 50 143
1. The comparative information has been restated in USD (note 2).
2. Other reserves include $14m for the restatement of the assets and
liabilities of the UK associate, from historic to fair value at the time of
the acquisition of the outstanding 58% interest on 19 April 2006, $66m arising
from the Scheme of Arrangement undertaken on 14 October 2008, $10m relating to
merger reserves and $nil to the redemption of preference shares, partly offset
by $49m arising from the Scheme of Arrangement undertaken in 2003.
3. During the year, the Group increased its equity voting rights to
89.3% (2023: 86.6%) in the non-controlling interest for a consideration of
$14m net of utilisation of $12m treasury shares.
The above consolidated statement of changes in equity should be read in
conjunction with the accompanying notes.
Consolidated balance sheet
$m Notes As at As at As at
31 December
31 December
1 January
2024
2023
2023
Unaudited
Restated ((1))
Restated ((1))
Non-current assets
Goodwill 11 1,148 1,172 1,128
Other intangible assets 12 227 266 259
Property, plant and equipment 13 6,116 6,883 7,526
Right-of-use assets 13 4,940 5,574 6,047
Other property, plant and equipment 13 1,176 1,309 1,479
Non-current net investment in finance leases 22 88 81 115
Deferred tax assets 7 586 576 558
Non-current derivative financial asset 23 6 - -
Other long-term receivables 14 67 67 69
Investments in joint ventures 19 56 56 54
Total non-current assets 8,294 9,101 9,709
Current assets
Inventory 1 1 1
Trade and other receivables 15 1,128 1,136 1,109
Current net investment in finance leases 22 28 43 63
Corporation tax receivable 7 34 34 22
Cash and cash equivalents 22 148 141 194
Total current assets 1,339 1,355 1,389
Total assets 9,633 10,456 11,098
Current liabilities
Trade and other payables (incl. customer deposits) 16 1,599 1,667 1,452
Deferred revenue 525 552 550
Corporation tax payable 7 65 55 55
Current derivatives liabilities 23 3 - -
Bank and other loans 17, 22 206 17 344
Lease liabilities 22 1,131 1,178 1,210
Provisions 18 34 31 37
Total current liabilities 3,563 3,500 3,648
Non-current liabilities
Other long-term payables 11 16 14
Deferred tax liability 7 220 220 213
Bank and other loans 17, 22 633 899 710
Lease liabilities 22 5,031 5,678 6,082
Provisions 18 22 23 45
Provision for deficit on joint ventures 19 6 8 8
Retirement benefit obligations 25 4 3 2
Total non-current liabilities 5,927 6,847 7,074
Total liabilities 9,490 10,347 10,722
Total equity
Issued share capital 20 13 13 13
Issued share premium 399 399 399
Treasury shares 20 (182) (194) (194)
Foreign currency translation reserve (333) (338) (331)
Hedging reserves 23 27 - -
Other reserves 41 41 41
Retained earnings 128 123 385
Total shareholders' equity 93 44 313
Non-controlling interests 21 50 65 63
Total equity 143 109 376
Total equity and liabilities 9,633 10,456 11,098
1. In accordance with IAS 1 Presentation of Financial Statements, the
Group has presented a third balance sheet as at 1 January 2023 due to the
retrospective restatement of the Group's financial statements in USD for the
year ended 31 December 2023. Comparative information has been restated in USD
(note 2).
The above consolidated statement of cash flows should be read in conjunction
with the accompanying notes.
Consolidated statement of cash flows
$m Notes Year ended Year ended
31 December 2024
31 December 2023
Unaudited
Restated ((1))
Operating activities
Profit/(loss) for the year 19 (271)
Adjustments for:
Profit on disposal of subsidiary (2) -
Net finance expense 6 457 416
Share of loss on equity-accounted investees, net of tax 19 1 1
Depreciation charge 13 1,266 1,392
Right-of-use assets 13 1,049 1,146
Other property, plant and equipment 13 217 246
Impairment of other intangible assets 4, 12 - 2
Loss on disposal of property, plant and equipment 4 37 77
Profit on disposal of right-of-use assets and related lease liabilities 4, 13, 22 (42) (46)
Loss on disposal of intangible assets 6 1
Net of (reversal)/impairment of property, plant and equipment 4, 13 (12) 46
Net of (reversal)/impairment of right-of-use assets 4, 13 (19) 53
Amortisation of intangible assets 4, 12 78 80
Loss on other investments 2 -
Tax expense 7 34 34
Expected credit losses on trade receivables 4 13 19
Increase/(decrease) in provisions 18 2 (28)
Share-based payments 5 2 8
Other non-cash movements (24) (9)
Operating cash flows before movements in working capital 1,818 1,775
Proceeds from landlord contributions (reimbursement of costs)((2)) 13 8 27
(Increase)/decrease in trade and other receivables (22) (10)
(Decrease)/increase in trade and other payables (2) 165
Cash generated from operations 1,802 1,957
Interest paid and similar charges on bank loans and corporate borrowings (74) (70)
Interest paid on lease liabilities 22 (363) (349)
Tax paid (36) (43)
Net cash inflows from operating activities 1,329 1,495
Investing activities
Purchase of property, plant and equipment 13 (192) (191)
Payment of initial direct costs related to right-of-use assets - (2)
Interest received on net lease investment 6 8 8
Principal payments received from net lease investment 22 49 67
Purchase of subsidiary undertakings, net of cash acquired 26 (5) (13)
Purchase of intangible assets 12 (45) (74)
Proceeds on sale of property, plant and equipment - -
Interest received 6 2 1
Net cash outflows from investing activities (183) (204)
Financing activities
Proceeds from issue of loans 22 808 1,237
Proceeds from issue of Euro bond, net of related transaction costs 22 650 -
Repayment of loans 22 (1,278) (1,443)
Repayment of Convertible bonds 22 (228) -
Other financing transaction fees (11) -
Principal portion of lease liabilities 22 (1,097) (1,166)
Proceeds from landlord contributions (lease incentives)((2)) 13 48 30
Purchase of treasury shares 20 - (1)
Dividends paid 10 (17) -
Net cash outflows from financing activities (1,125) (1,343)
Net increase / (decrease) in cash and cash equivalents 21 (52)
Cash and cash equivalents at beginning of the year 141 194
Effect of exchange rate fluctuations on cash held (14) (1)
Cash and cash equivalents at end of the year 22 148 141
1. The comparative information has been restated in USD (note 2).
2. The total proceeds from landlord contributions relating to the
reimbursement of costs and lease incentives of $56m (2023: $57m) are allocated
between maintenance capital expenditure landlord contributions of $12m (2023:
$9m) and growth capital expenditure landlord contributions of $44m (2023:
$48m).
The above consolidated statement of cash flows should be read in conjunction
with the accompanying notes.
Notes to the accounts
1. Authorisation of financial statements
The financial information presented in this preliminary release does not
constitute full statutory financial statements. The Annual Report and
Financial Statements will be approved by the Board of Directors and reported
on by the Auditor in due course. Accordingly, the financial information is
unaudited. The Group financial statements for the year ended 31 December 2023
have been published. The audit report on those financial statements was
unqualified.
International Workplace Group plc ("IWG") is a public limited company
incorporated in Jersey and registered and domiciled in Switzerland. The
Company's ordinary shares are traded on the London Stock Exchange.
International Workplace Group plc owns, leases, manages and is a franchise
operator of a network of business centres which are utilised by a variety of
business customers. Information on the Group's structure is provided in note
30, and information on other related party relationships of the Group is
provided in note 29.
The Group financial statements have been prepared and approved by the
Directors in accordance with Companies (Jersey) Law 1991 and International
Financial Reporting Standards as adopted by the European Union
('Adopted IFRSs').
2. Material Accounting policies
Basis of preparation
The Group financial statements consolidate those of the parent company and its
subsidiaries (together referred to as the 'Group') and equity account for the
Group's interest in joint ventures. The extract from the parent company annual
accounts presents information about the Company as a separate entity and not
about its Group.
Effective 1 January 2024 and 1 July 2024, certain strategic and financing
companies within the Group adopted the US dollar as their functional currency.
Prior to 1 January 2024, the functional currency of these companies was pounds
sterling. The change in the functional currency of these entities is due to
the increased exposure to the US dollar as a result of the growth in
international operations, redenomination of its Revolving Credit Facility to
US dollars, the issuance of a Euro bond, the majority of the proceeds of which
were swapped into US dollars, and the conversion of other arrangements to US
dollars. In line with our decision to report our financial results in US
dollars from 1 January 2024, our dividends will be declared in US dollars and
paid in pounds sterling with an option to elect for US dollars.
In addition, International Workplace Group plc changed the presentation
currency of its consolidated financial statements to US dollars from pounds
sterling. All values are in million US dollars, except where indicated
otherwise. Prior period comparatives were translated from sterling and
presented in US dollars as follows: assets and liabilities at the rate of
exchange in effect at the applicable balance sheet date and revenues and
expenses at the average monthly rates applicable for the period.
Unrealised gains and losses resulting from the translation to US dollars are
accumulated in a separate component of shareholders' equity in a cumulative
foreign currency translation reserve.
Other than the change in presentation currency, the basis of preparation and
accounting policies set out below have been applied consistently to all
periods presented in these Group financial statements. Amendments to adopted
IFRSs issued by the International Accounting Standards Board (IASB) and the
International Financial Reporting Interpretations Committee (IFRIC) with an
effective date from 1 January 2024 did not have a material effect on the Group
financial statements, unless otherwise indicated.
The following standards, interpretations and amendments to standards were
adopted by the Group for periods commencing on or after 1 January 2024, with
no material impact on the Group:
Non-current Liabilities with Covenants - Amendments to IAS 1
Classification of Liabilities as Current or Non-Current - Amendments to IAS 1
Lease Liability in a Sale and Leaseback - Amendments to IFRS 16
Supplier Finance Arrangements - Amendments to IAS 7 and IFRS 7
The consolidated financial statements are prepared on a historical cost basis,
with the exception of certain financial assets and liabilities that are
measured at fair value.
The attributable results of those companies acquired or disposed of during the
year are included for the periods of ownership.
Judgements made by the Directors in the application of these accounting
policies that have significant effect on the consolidated financial statements
and estimates with a significant risk of material adjustment in the next year
are discussed in note 31.
IFRS not yet effective
The following new or amended standards and interpretations that are mandatory
for 2025 annual periods (and future years) are not expected to have a material
impact on the Company:
The Effects of Changes in Foreign Exchange Rates: Lack of Exchangeability - 1 January 2025
Amendments to IAS 21
1 January 2026
The Classification and Measurement of Financial Instruments - Amendments to
IFRS 9 and IFRS 7 1 January 2026
Annual Improvements to IFRS Accounting Standards - Amendments to IFRS 1, IFRS 1 January 2026
7, IFRS 9, IFRS 10 and IAS 7
1 January 2027
Contracts Referencing Nature-dependent Electricity - Amendments to IFRS 9 and
IFRS 7
IFRS 19 Subsidiaries without Public Accountability: Disclosures
The Group is in the process of assessing the impact of IFRS 18 - Presentation
and Disclosure in Financial Statements, effective 1 January 2027, particularly
with respect to the structure of the Group's statement of profit or loss, the
statement of cash flows, and the additional disclosures required for
management-defined performance measures (MPM's). The Group is also assessing
the impact of how information is grouped in the financial statements.
There are no other IFRS standards or interpretations that are not yet
effective that are expected to have a material impact on the Group. The Group
has not early adopted any standard, interpretation or amendment that has been
issued but is not yet effective.
Climate
The potential climate-related risks and opportunities to which the Group is
exposed, have been assessed by management, who assessed the potential
financial impacts relating to the identified risks, primarily considering the
useful lives of, and retirement obligations for, property, plant and
equipment, the possibility of impairment of goodwill and other long-lived
assets and the recoverability of the Group's deferred tax assets. Management
has exercised judgement in concluding that there are no further material
financial impacts of the Group's climate-related risks and opportunities on
the consolidated financial statements. These judgements will be kept under
review by management as the future climate-related impacts will depend on
environmental, regulatory and other factors outside of the Group's control
which are not all currently known.
Going concern
The Group reported a profit after tax of $19m in 2024 (2023: loss of $271m).
Cashflow before growth capex and corporate activities but after interest and
tax was $190m (2023: $263). Furthermore, net cash of $21m (2023: $(52)m) was
generated from operations during the same period. Although the Group's balance
sheet at 31 December 2024 reports a net current liability position of $2,224m
(31 December 2023: $2,145m), the Directors concluded after a comprehensive
review that no liquidity risk exists as:
1. The Group had funding available under the Group's $720m revolving
credit facility of $436m (31 December 2023: $279m) which was available and
undrawn at 31 December 2024. The facility's current maturity date is June
2029;
2. A significant proportion of the net current liability position is due
to lease liabilities which are held in non-recourse special purpose vehicles
but also with a corresponding right-of-use asset. A large proportion of the
net current liabilities comprise non-cash liabilities such as deferred revenue
of $525m (2023: $552m) which will be recognised in future periods through the
income statement. The Group holds customer deposits of $584m (2023: $585m)
which are spread across a large number of customers and no deposit held for an
individual customer is material; and
3. The Group maintains a 12-month rolling forecast and a three-year
strategic outlook. It also monitors the covenants in its debt facilities to
manage the risk of potential breach. The Group expects to be able to refinance
external debt and/or renew committed facilities as they become due, which is
the assumption made in the viability scenario modelling, and to remain within
covenants throughout the forecast period. In reaching this conclusion, the
Directors have assessed:
· the potential cash generation of the Group against a range of
illustrative scenarios (including a severe but plausible outcome); and
· mitigating actions to reduce operating costs and optimise cash
flows during any ongoing global uncertainty.
4. An external assessment from Fitch, a leading global credit rating
agency, which has rated the Group and its listed bonds as investment grade
with a BBB (Stable) rating and has continued to monitor the Group's financial
performance since the initial rating assessment.
Due to the above, the Group does not believe the net current liabilities
represents a liquidity risk. The Directors consider that the Group is well
placed to successfully manage the actual and potential risks faced by the
organisation including risks related to inflationary pressures and
geopolitical tensions.
On the basis of their assessment, the Directors have a reasonable expectation
that the Group has adequate resources to continue in operational existence for
a period of at least 12 months from the date of approval of these Group
consolidated financial statements and consider it appropriate to continue to
adopt the going concern basis in preparing the financial statements of the
Group.
Basis of consolidation
Subsidiaries are entities controlled by the Group. Control exists when the
Group controls an entity, when it is exposed to, or has the rights to,
variable returns from its involvement with the entity and has the ability to
affect those returns through its power over the entity. The financial
statements of subsidiaries are included in the consolidated financial
statements from the date that control commences. The results are consolidated
until the date control ceases or the subsidiary qualifies as a disposal group,
at which point the assets and liabilities are carried at the lower of fair
value less costs to sell and carrying value.
Joint ventures are those entities over whose activities the Group has joint
control, whereby the Group has rights to the net assets of the arrangement,
rather than rights to its assets and obligations for its liabilities. The
consolidated financial statements include the Group's share of the total
recognised gains and losses of joint ventures on an equity-accounted basis,
from the date that joint control commences until the date that joint control
ceases or the joint venture qualifies as a disposal group, at which point the
investment is carried at the lower of fair value less costs to sell and
carrying value. When the Group's share of losses exceeds its interest in a
joint venture, the Group's carrying amount is reduced to nil and recognition
of further losses is discontinued except to the extent that the Group has
incurred legal or constructive obligations or made payments on behalf of a
joint venture.
Acquisitions of non-controlling interests
Acquisitions of non-controlling interests are accounted for as transactions
with owners in their capacity as owners and therefore no goodwill is
recognised as a result. Adjustments to non-controlling interests arising from
transactions that do not involve the loss of control are based on a
proportionate amount of the net assets of the subsidiary.
Goodwill
All business combinations are accounted for using the purchase method.
Goodwill is initially measured at fair value, being the excess of the
aggregate of the fair value of the consideration transferred and the amount
recognised for non-controlling interests, and any previous interest held, over
the net identifiable assets acquired and liabilities assumed. If the fair
value of the net assets acquired is in excess of the aggregate consideration
transferred, the Group reassesses whether it has correctly identified all of
the assets acquired and all of the liabilities assumed and reviews the
procedures used to measure the amounts to be recognised at the acquisition
date. If the reassessment still results in an excess of the fair value of net
assets acquired over the aggregate consideration transferred (negative
goodwill), then the gain is recognised in profit or loss.
Positive goodwill is stated at cost less any provision for impairment in
value. An impairment test is carried out annually and, in addition, whenever
indicators exist that the carrying amount may not be recoverable. Negative
goodwill is recognised directly in profit or loss.
Intangible assets
Intangible assets acquired separately from the business are capitalised at
cost. Intangible assets acquired as part of an acquisition of a business are
capitalised separately from goodwill if their fair value can be identified and
measured reliably on initial recognition.
Intangible assets are amortised on a straight-line basis over the estimated
useful life of the assets as follows:
Brand - Regus brand Indefinite life
Brand - Other acquired brands 20 years
Computer software Up to 5 years
Customer lists - service agreements 2 years
Customer lists - sublease agreements Up to 5 years
All amortisation of intangible assets is expensed through Selling, general and
administration expenses in the consolidated income statement.
Property, plant and equipment
Property, plant and equipment is stated at cost less accumulated depreciation
and any impairment in value. Asset lives and recoverable amounts are reviewed
on an annual basis. Depreciation is calculated on a straight-line basis over
the estimated useful life of the assets as follows:
Right-of-use assets((1)) Over the lease term
Buildings 50 years
Leasehold improvements((1)) 10 years
Furniture and equipment 5-10 years
Computer hardware 3-5 years
1. 10 years represents the average useful economic life.
All depreciation relating to Property, plant and equipment (including
Right-of-use assets) is expensed through Cost of sales in the consolidated
income statement apart from depreciation relating to property, plant and
equipment used for corporate purposes.
Leases
The nature of the Group's leases relates primarily to the rental of commercial
office real estate premises globally.
1. Right-of-use assets
The Group recognises right-of-use assets at the commencement date of the
lease. Right-of-use assets are measured at cost less lease incentives, less
any accumulated depreciation and impairment losses, and adjusted for any
re-measurement of lease liabilities. The initial cost of right-of-use assets
includes the amount of lease liabilities recognised and initial direct costs
incurred. The recognised right-of-use assets are depreciated on a
straight-line basis over the shorter of its estimated useful life and the
lease term.
Right-of-use assets are assessed for indicators of impairment at the end of
each reporting period and on an annual basis.
2. Lease liabilities
At the commencement date of the lease, the Group recognises lease liabilities
measured at the present value of lease payments to be made over the lease
term. The lease payments include fixed payments and variable lease payments
that depend on an index or a rate. The variable lease payments that do not
depend on an index or a rate are recognised as a lease expense in the period
in which they are incurred.
In calculating the present value of lease payments, the Group uses the
incremental borrowing rate at the lease commencement date as the interest rate
implicit in the lease is not readily determinable. After the commencement
date, the amount of lease liabilities is increased to reflect the accretion of
interest and reduced for the lease payments made. In addition, the carrying
amount of lease liabilities is re-measured if there is a modification, a
change in the lease term or a change in the fixed lease payments.
3. Lease modifications
The carrying amount of lease liabilities is re-measured where there is a
modification, a change in the lease term, a change in the lease payments (e.g.
changes to future payments resulting from a change in an index or rate used to
determine such lease payments) or a change in the assessment of an option to
purchase the underlying asset. The impact of the modification is recognised
against the carrying amount of the right-of-use assets or is recorded in
profit or loss if the carrying amount of the right-of-use assets has been
reduced to zero.
4. Short-term leases and leases of low-value assets
The Group applies the short-term lease recognition exemption to short-term
leases (i.e. those leases that have a lease term of 12 months or less from
commencement). It also applies the lease of low-value assets recognition
exemption under IFRS 16 to leases that are considered of low value. Lease
payments on short-term leases and leases of low-value assets are recognised as
a lease expense on a straight-line basis over the lease term.
5. Landlord contributions including lease incentives
Landlord contributions are contributions from our business landlords (property
owners and landlords) towards the initial costs of opening a business centre,
including the fit-out of the property. Landlord contributions representing a
reimbursement of costs to the lessee (IWG) are accounted for as agency
arrangements, and form part of the lessor's (landlord's) assets.
Landlord contributions for lease incentives are received at or before the
lease commencement date for commercial reasons and, where the Group retains
ownership of the fit-out assets, are accounted for as a lease incentive and
recognised by reducing the right-of-use asset. Any other landlord
contributions for lease incentives received subsequent to the commencement of
the lease are accounted for as part of the associated lease modification.
6. Lease term
The lease term is the non-cancellable period of the lease adjusted for any
renewal or termination options which are reasonably certain to be exercised.
Management applies judgement in determining whether it is reasonably certain
that a renewal or termination option will be exercised.
7. Lease break penalties
Lease break penalties, where the lease term has been determined as the period
from inception up to a break clause and when there are break payments or
penalties, have been appropriately included in the measurement of the
lease liability.
8. Net investment in finance leases
The Group acts as an intermediate lessor where certain commercial office real
estate properties, leased under separate 'head' lease agreements, are sublet
as part of a separate sublease agreements. Interest in the 'head' lease and
sublease are accounted for separately, with the classification of the sublease
assessed with reference to the right-of-use assets arising from the head lease
(not with reference to the underlying asset) resulting in some sub-leases
being accounted for as finance leases.
The initial net investment in finance leases is equal to the present value of
the lease receipts during the lease term that have not yet been paid. The
right-of-use asset arising from the head lease is offset by the initial
measurement of the net investment in the finance lease, plus any additional
direct costs associated with setting up the lease.
If the sublease agreement contains lease and non-lease components, the Group
applies IFRS 15 in determining the allocation of the agreement consideration.
Impairment of non-financial assets
For goodwill, assets that have an indefinite useful life and intangible assets
that are not yet available for use, the recoverable amount was estimated at 30
September 2024. At each reporting date, the Group reviews the carrying amount
of these assets to determine whether there is an indicator of impairment. If
any indicator is identified, then the assets' recoverable amount is
re-evaluated.
The carrying amount of the Group's other non-financial assets (other than
deferred tax assets and inventory), including right-of-use assets, is reviewed
at the reporting date to determine whether there is an indicator of
impairment. If any such indication exists, the assets' recoverable amount is
estimated.
An impairment loss is recognised whenever the carrying amount of an asset or
its cash-generating unit (CGU) exceeds its recoverable amount. Impairment
losses are recognised in the income statement.
At each reporting date, the Group assesses whether there is an indication that
a previously recognised impairment loss has reversed because of a change in
the estimates used to determine the impairment loss. If there is such an
indication, and the recoverable amount of the impaired asset or CGU
subsequently increases, then the impairment loss is generally reversed, with
the exception of goodwill.
A CGU is the smallest identifiable group of assets that generates cash inflows
that are largely independent of the cash inflows from other assets or groups
of assets. The Group has identified individual business centres as the CGU.
The potential impairment of immovable property, plant and equipment and
right-of-use assets at the centre (CGU) level are evaluated where there are
indicators of impairment.
Centres (CGUs) are grouped by country of operation for the purposes of
carrying out impairment reviews of goodwill as this is the lowest level at
which it can be assessed.
Individual fittings and equipment in centres or elsewhere in the business that
become obsolete or are damaged are assessed and impaired where appropriate.
The recoverable amount of relevant assets is the greater of their fair value
less costs to sell and value-in-use. In assessing value-in-use, the estimated
future cash flows are discounted to their present value using a pre-tax
discount rate that reflects current market assessments of the time value of
money and the risks specific to the asset. For an asset that does not generate
largely independent cash inflows, the recoverable amount is determined for the
cash-generating unit to which the asset belongs.
Financial assets
Financial assets are classified and subsequently measured at amortised cost,
fair value through the profit or loss, or fair value through other
comprehensive income (OCI). The classification depends on the nature and
purpose of the financial assets and is determined on initial recognition.
Financial assets (including trade and other receivables) are measured at
amortised cost if both of the following conditions are met:
• The financial asset is held within a business model whose objective
is to hold assets to collect contractual cash flows; and
• Its contractual terms give rise on specified dates to cash flows
that are solely payments of principal and interest on the principal
amount outstanding.
The effective interest rate is the rate that exactly discounts estimated
future cash payments or receipts through the expected life of the financial
instruments to the gross carrying amount of the financial assets.
Financial assets at fair value through profit or loss are measured at fair
value and changes therein, including any interest or dividend income, are
recognised in profit or loss.
IFRS 9 requires the Group to record expected credit losses on all of its
financial assets held at amortised cost, on either a 12-month or a lifetime
basis. The Group applies the simplified approach to trade receivables and
recognises expected credit losses based on the lifetime expected losses.
Provisions for receivables are established based on both expected credit
losses and information available that the Group will not be able to collect
all amounts due according to the original terms of the receivables.
Inventory
Inventories relate to consumable items which are measured at the lower of cost
or net realisable value. The cost of inventories is based on the first-in,
first-out principle.
Cash and cash equivalents
Cash and cash equivalents comprise cash at bank and in hand and are subject to
an insignificant risk of change in value.
Interest-bearing borrowings and other financial liabilities
Financial liabilities, including interest-bearing borrowings, are recognised
initially at fair value less attributable transaction costs. Subsequent to
initial recognition, financial liabilities are stated at amortised cost with
any difference between cost and redemption value being recognised in the
income statement over the period of the borrowings on an effective interest
rate method.
The Group derecognises financial liabilities when the Group's obligations are
discharged, cancelled or expired.
Financial liabilities are classified as financial liabilities at fair value
through profit or loss where the liability is either held for trading or is
designated as held at fair value through profit or loss on initial
recognition. Financial liabilities at fair value through profit or loss are
stated at fair value with any resultant gain or loss recognised in the
income statement.
Compound financial instruments issued by the Group comprise Convertible bonds
denominated in pounds sterling that can be converted to ordinary shares at the
option of the holder.
The debt component of compound financial instruments is initially recognised
at the fair value of a similar liability that does not have an equity
conversion option. The conversion option represents a derivative financial
liability and is initially recognised as the difference between the fair value
of the compound financial instrument as a whole and the fair value of the
liability component. Any directly attributable transaction costs are allocated
to the debt host.
Subsequent to initial recognition, the debt component of a compound financial
instrument is measured at amortised cost using the effective interest rate
method. The derivative component of a compound financial instrument is
re-measured at fair value through profit or loss. Interest related to the debt
is recognised as a finance expense in profit or loss.
Derivative financial instruments
The Group's policy on the use of derivative financial instruments can be found
in note 23. Derivative financial instruments are measured initially at fair
value and changes in the fair value are recognised through profit or loss
unless the derivative financial instrument has been designated as a cash flow
hedge whereby the effective portion of changes in the fair value are deferred
in equity.
In 2024, the Group began to use derivative financial assets/liabilities as
hedging instruments to manage exposure to variability in cash flows arising
from changes in foreign currency exchange rates in relation to the Group's
debt liabilities. These derivatives are designated as cash flow hedging
instruments. The effective portion of changes in fair value of the derivative
is recognised in OCI and accumulated in the hedging reserve. The effective
portion of changes in the fair value of the derivative that is recognised in
OCI is limited to the cumulative change in fair value of the hedged item,
determined on a present value basis, from inception of the hedge. Any
ineffective portion of changes in the fair value of the derivative is
recognised immediately in profit or loss within Net finance expense.
If the hedge no longer meets the criteria for hedge accounting or the hedging
instrument is sold, expires, is terminated or is exercised, then hedge
accounting is discontinued prospectively. When hedge accounting for cash flow
hedges is discontinued, the amount that has been accumulated in the hedging
reserve remains in equity until it is reclassified to profit or loss in the
same period or periods as the hedged expected future cash flows affect profit
or loss.
If the hedged future cash flows are no longer expected to occur, then the
amounts that have been accumulated in the hedging reserve and the cost of
hedging reserve are immediately reclassified to profit or loss.
The Group has designated a portion of its Bank and other loans as the hedging
instrument in a hedge of a net investment in foreign operations. The effective
portion of foreign exchange gains and losses on the Bank and other loans are
recognised in OCI and presented in the translation reserve within equity. Any
ineffective portion of the gains and losses on the Bank and other loans are
recognised immediately in profit or loss. The amount recognised in OCI is
fully or partially reclassified to profit or loss as a reclassification
adjustment on disposal or partial disposal of the foreign operation,
respectively.
The effective portion of the cumulative net change in the fair value of
hedging instruments used in the cash flow hedges pending subsequent
recognition in profit or loss or directly included in the initial cost or
other carrying amount of a non-financial asset or non-financial liability are
including in the hedging reserve.
Provisions
A provision is recognised in the balance sheet when the Group has a present
legal or constructive obligation as a result of a past event that can be
estimated reliably, and it is probable that an outflow of economic benefits
will be required to settle the obligation.
Restructuring provisions are made for direct expenditures of a business
reorganisation where the plans are sufficiently detailed and well-advanced and
where the appropriate communication to those affected has been undertaken at
the reporting date.
Provision is made for closure costs to the extent that the unavoidable costs
of meeting the obligations exceed the economic benefits expected to
be delivered. This includes potential dilapidation payments when it is
probable that an outflow will occur and can be reliably estimated.
Deferred revenue
Invoices issued in advance of services provided, in accordance with
contractual arrangements with customers, are held on the balance sheet as a
current liability until the services have been rendered.
Equity
Equity instruments issued by the Group are recorded at the fair value of
proceeds received, net of direct issue costs.
When shares recognised as equity are repurchased, the amount of the
consideration paid, which includes directly attributable costs, net of any tax
effects, is recognised as a deduction from equity. Repurchased shares are
classified as treasury shares and are presented in the treasury share reserve.
When treasury shares are sold or re‑issued subsequently, the amount received
is recognised as an increase in equity and the resulting surplus or deficit on
the transaction is presented within retained earnings.
Non-controlling interests
Non-controlling interests are measured initially at their proportionate share
of the acquiree's identifiable net assets at the date of acquisitions.
Share-based payments
The share awards programme entitles certain directors and employees to acquire
shares of the ultimate parent company (International Workplace Group plc);
these awards are granted by the ultimate parent company (International
Workplace Group plc) and are equity-settled. The fair value of options and
awards granted under the Group's share-based payment plans outlined in note 24
is recognised as an employee expense with a corresponding increase in equity.
The fair value is measured at grant date and spread over the period during
which the employees become unconditionally entitled to the options. The fair
value of the options granted is measured using the Black-Scholes valuation
model or the Monte Carlo method, taking into account the terms and conditions
upon which the options were granted. The amount recognised as an expense is
adjusted to reflect the actual number of share options that vest in respect of
non-market conditions except where forfeiture is due to the expiry of the
option.
Revenue
The Group's primary activity is the provision of fully integrated, end-to-end
global workspace solutions.
1. Office revenues
The Group recognises workstation revenue when it transfers services to a
customer. It is measured based on the consideration specified in a contract
with a customer. Services transfer to the customer equally over the contract
period based on the time elapsed. Where discounted periods are granted to
customers, service income is spread on a straight-line basis over the duration
of the customer contract. Invoices are generally issued in advance, on a
monthly basis with normal credit terms of 15 days and initially recognised as
deferred revenue.
Workstation revenue is recognised over time as the services are provided.
Amounts invoiced in advance are accounted for as deferred revenue (contract
liability) and recognised as revenue upon provision of the service.
2. Management and franchise fees
Fees received for the provision of initial and subsequent services are
recognised over time as the services are rendered. Fees charged for the use of
continuing rights granted by the agreement are measured based on the
contractually agreed percentage of revenue, generated by the operation, except
where a different basis is determined in the contractual arrangements. Fees
charged for other services provided, during the period of the agreement, are
recognised as revenue as the services provided or the rights used. Invoices
are generally issued on a monthly basis and settled immediately with invoiced
amounts deducted from the amounts due to partners.
3. Service income
Service income (including the provision of workspace bookings, meeting rooms
and inventory management) is recognised over time as the services are
delivered or at a point in time depending on contractual obligations. Invoices
are generally issued when the service is provided and subject to immediate
settlement. In circumstances where the Group acts as an agent for the sale and
purchase of goods to customers, only the commission fee earned is recognised
as revenue.
4. Membership income
Revenue from the sale of memberships is deferred and recognised over time
within the period that the benefits of the membership card are expected to be
provided.
5. Customer deposits
Deposits received from customers against non-performance of the contract are
held on the balance sheet as a current liability until they are either
returned to the customer at the end of their relationship with the Group, or
released to the income statement.
The Group has concluded that it is the principal in its revenue arrangements,
except where noted above.
Adjusting items
Significant transactions, not indicative of the underlying performance of the
consolidated Group are reported separately as adjusting items. The profit
before tax and adjusting items measure is not a recognised profit measure
under IFRS and may not be directly comparable with adjusted profit measures
used by other companies.
Adjusting items are separately disclosed by the Group to provide readers with
helpful, additional information on the performance of the business across
periods. Each of these items is considered to be significant in nature and/or
size. The exclusion of these items is consistent with how the business
performance is planned by, and reported to, the Board.
The classification of adjusting items requires management judgement after
considering the nature and intentions of a transaction. Adjusting items
recognised are based on the actual costs incurred and/or calculated on a basis
consistent with the key judgements and estimates. The classification of
adjusting items requires management judgement after considering the nature and
intentions of a transaction. Where necessary, this judgement applied is based
on a formal methodology, to determine whether or not some, or all, of the
associated costs are arising in the ordinary course of business.
Management classifies the following as adjusting items:
1. Network rationalisation charges, representing direct closure costs and
the write-off of the book values of assets pertaining to centres closed during
the year;
2. Impairment charges and reversals, representing the impairment of
property, plant and equipment, right-of-use assets, goodwill and other assets,
and the reversals of prior impairments recorded;
3. Costs associated with acquisitions and restructurings during the year;
4. Other significant and non-recurring items, including write-off of fixed
assets due to obsolescence.
Where estimated amounts provide to be in excess of the amounts required, the
release of any amounts provided for at year-end are treated as adjusting
items.
Employee benefits
The majority of the Group's pension plans are of the defined contribution
type. For these plans the Group's contribution and other paid and unpaid
benefits earned by the employees are charged to the income statement
as incurred.
The cost of providing benefits under the defined benefit plans is determined
using the projected unit credit method.
Re-measurements, comprising actuarial gains and losses, the effect of the
asset ceiling and the return on plan assets, excluding net interest, are
recognised immediately in the balance sheet with a corresponding debit or
credit to retained earnings through other comprehensive income in the period
in which they occur. Re-measurements are not reclassified to profit or loss in
subsequent periods.
Service costs are recognised in profit or loss and include current and past
service costs as well as gains and losses on curtailments.
Net interest is calculated by applying the discount rate to the net defined
benefit liability or asset. The Group recognises the following changes in the
net defined benefit obligation under 'cost of sales' and 'selling, general
and administration expenses' in the consolidated income statement depending
on the employee cost centre: service costs comprising current service costs;
past service costs; and gains and losses on curtailments and non‑routine
settlements.
Settlements of defined benefit schemes are recognised in the period in which
the settlement occurs.
Grants that compensate the Group for expenses incurred are recognised in
profit or loss on a systematic basis in the periods in which the expenses are
recognised.
Net finance expense
Interest charges and income are accounted for in the income statement on an
accrual basis. Financing transaction costs that relate to financial
liabilities are charged to interest expense using the effective interest rate
method and are recognised within the carrying value of the related financial
liability on the balance sheet. Fees paid for the arrangement of credit
facilities are recognised as a prepayment asset and recognised through the
finance expense over the term of the facility.
Where assets or liabilities on the Group balance sheet are carried at net
present value, the increase in the amount due to unwinding the discount is
recognised as a finance expense or finance income as appropriate.
Costs arising from bank guarantees and letters of credit and foreign exchange
gains or losses are included in other finance costs (note 6).
Taxation
Tax on the profit for the year comprises current and deferred tax. Tax is
recognised in the income statement except to the extent that it relates to
items recognised directly in equity, in which case it is recognised in equity.
Current tax is the expected tax payable on the taxable income for the year,
using tax rates enacted or substantively enacted at the balance sheet date,
and any adjustment to tax payable in respect of previous years.
Deferred tax is provided on temporary differences between the carrying amounts
of assets and liabilities for financial reporting purposes and the amounts
used for taxation purposes. Deferred tax assets and liabilities are not
subject to discounting. The following temporary differences are not provided
for: the initial recognition of goodwill; the initial recognition of assets
and liabilities that affect neither accounting nor taxable profit other than
in a business combination; and differences relating to investments in
subsidiaries to the extent that they will probably not reverse in the
foreseeable future. The amount of deferred tax provided is based on the
expected manner of realisation or settlement of the carrying amount of assets
and liabilities, using tax rates enacted or substantively enacted at the
reporting date.
A deferred tax asset is recognised for unused tax losses only to the extent
that it is probable that future taxable profits will be available against
which the asset can be utilised.
The carrying amount of a deferred tax asset or liability may change for
reasons other than a change in the temporary difference itself. Such changes
might arise as a result of a change in tax rates or laws, a reassessment of
the recoverability of a deferred tax asset or a change in the expected manner
of recovery of an asset or the expected manner of a settlement of a liability.
The impact of these changes is recognised in the income statement or in other
comprehensive income depending on where the original deferred tax balance was
recognised.
Deferred tax assets and liabilities are offset when there is a legally
enforceable right to set off current tax assets against current tax
liabilities and when they relate to income taxes levied by the same taxation
authority and the Group intends to settle its current tax assets and
liabilities on a net basis.
In accordance with IFRIC Interpretation 23, the Group considers whether it has
any uncertain tax positions, particularly those relating to transfer pricing.
The Company's and the subsidiaries' tax filings in different jurisdictions
include deductions related to transfer pricing and the taxation authorities
may challenge those tax treatments. The Group determined, based on its tax
compliance and transfer pricing studies, that in most jurisdictions it is
probable that its tax treatments (including those for the subsidiaries) will
be accepted by the taxation authorities. The Group has, where considered
appropriate, provided for the potential impact of uncertain tax positions
where the likelihood of tax authority adjustment is considered to be more
likely than not. The adoption of the interpretation did not have an impact on
the consolidated financial statements of the Group.
Discontinued operations
A discontinued operation is a component of the Group's business, the
operations and cash flows of which can be clearly distinguished from the rest
of the Group and which:
• represents a separate major line of business or geographic area of
operations; or
• is part of a single coordinated plan to dispose of a separate major
line of business or geographic area of operations; or
• is a subsidiary acquired exclusively with a view to resale.
Classification as a discontinued operation occurs at the earlier of disposal
or when the operation meets the criteria to be classified as held-for-sale.
When an operation is classified as a discontinued operation, the comparative
statement of profit or loss and OCI is re-presented as if the operation had
been discontinued from the start of the comparative year.
Foreign currency transactions and foreign operations
Transactions in foreign currencies are recorded using the rate of exchange
ruling at the date of the transaction. Monetary assets and liabilities
denominated in foreign currencies are translated using the closing rate of
exchange at the balance sheet date and the gains or losses on translation are
taken to the income statement. Non-monetary assets and liabilities that are
measured in terms of historical cost in a foreign currency are translated
using the exchange rate at the date of the transaction. The results and cash
flows of foreign operations are translated using the average rate for the
period. Assets and liabilities, including goodwill and fair value adjustments,
of foreign operations are translated using the closing rate, with all exchange
differences arising on consolidation being recognised in other comprehensive
income, and presented in the foreign currency translation reserve in equity.
Exchange differences are reclassified to the income statement on disposal.
Foreign currency translation rates
At 31 December Annual average
2024 2023 2024 2023
Pounds sterling 0.80 0.78 0.78 0.80
Euro 0.96 0.90 0.93 0.92
3. Segmental analysis
An operating segment is a component of the Group that engages in business
activities from which it may earn revenue and incur expenses. An operating
segment's results are reviewed regularly by the chief operating
decision‑maker (the Board of Directors of the Group) on a pre-IFRS 16 basis
to make decisions about resources to be allocated to the segment and assess
its performance, and for which distinct financial information is available.
The segmental information is presented on the same basis on which the chief
operating decision-maker received reporting during the year. Segmental assets
and liabilities continue to be presented in accordance with IFRS.
The business is run on a worldwide basis but managed through two reportable
segments, IWG Network and Digital and Professional Services.
IWG Network represents the Group's reportable segmental results excluding
Digital and Professional Services. IWG Network is managed through both
geographical regions and ownership structure splits. The three principle
geographical regions are: the Americas, EMEA and Asia Pacific. The results of
business centres in each of these regions, based on time zones, economic
relationships, market characteristics, cultural similarities and language
clusters, form the basis for reporting geographical results to the chief
operating decision-maker. These geographical regions exclude the Group's
non-trading, holding and corporate management companies, which are included in
Other.
The Group's IWG Network results are also managed by ownership structure and
are an additional basis for reporting results to the chief operating
decision-maker. Company-owned comprises results from business centres owned,
leased and operated by the Group. Managed & Franchised comprises results
relating to services provided to business centres owned by third parties.
The Digital and Professional Services comprises the results relating to The
Instant Group investment and includes the Group's services provided outside of
IWG network centres. All reportable segments are involved in the provision of
global workplace solutions. The Group's reportable segments operate in
different markets and are managed separately because of the different economic
characteristics that exist in each of those markets. Each reportable segment
has its own distinct senior management team responsible for the performance of
the segment.
The Group's primary activity is the provision of global workplace solutions;
therefore all revenue is attributed to a single group of similar products and
services. Relevant product categories have; however, been included in the
segmental analysis below. Revenue is recognised where the service is provided.
The Group has a diversified customer base and no single customer contributes a
material percentage of the Group's revenue.
On pre-IFRS 16 basis IWG Network Operating Segment
By geography By ownership
$m Americas EMEA Asia Other Company- Managed & Franchised IWG Network Digital and Professional Services 2024
Pacific
owned
Revenue 1,289 1,669 334 9 3,222 79 3,301 456 3,757
Workstation revenue((1)) 899 1,251 248 - 2,398 - 2,398 - 2,398
Fee income 19 36 24 - - 79 79 - 79
Customer Service income((2)) 371 382 62 9 824 - 824 456 1,280
Cost of Sales (1,120) (1,371) (255) (11) (2,757) - (2,757) (277) (3,034)
Other Cost of Sales (including depreciation) (1,189) (1,403) (264) (11) (2,867) - (2,867) (277) (3,144)
Amortisation of Landlord contributions in Cost of Sales 69 32 9 - 110 - 110 - 110
Gross profit 169 298 79 (2) 465 79 544 179 723
Depreciation in Cost of Sales 170 149 28 - 347 - 347 9 356
Contribution 339 447 107 (2) 812 79 891 188 1,079
SG&A and other (501) (90) (591)
Operating profit 43 89 132
Depreciation and amortisation 388 - 388 55 443
Impairment of assets - - - - -
Loss on disposal of assets 64 - 64 - 64
Assets((3)) 3,772 4,015 535 604 8,926 - 8,926 707 9,633
Liabilities((3)) (3,788) (3,877) (547) (1,014) (9,226) - (9,226) (264) (9,490)
Net (liabilities)/assets((3)) (16) 138 (12) (410) (300) - (300) 443 143
Non-current asset additions((3)(4)) 359 - 359 24 383
Non-current asset acquisitions((3)(4)) 3 - 3 2 5
1. Includes customer deposits.
2. Includes membership card income.
3. Presented on a basis consistent with IFRS 16.
4. Excluding deferred taxation.
On pre-IFRS 16 basis IWG Network Operating Segment
By geography By ownership
$m Americas EMEA Asia Other Company- Managed & Franchised IWG Network Digital and Professional Services 2023
Pacific
owned
Revenue 1,304 1,640 341 6 3,230 61 3,291 473 3,764
Workstation revenue((1)) 880 1,231 253 - 2,364 - 2,364 - 2,364
Fee income 11 30 20 - - 61 61 - 61
Customer Service income((2)) 413 379 68 6 866 - 866 473 1,339
Cost of Sales (1,245) (1,511) (317) 7 (3,066) - (3,066) (274) (3,340)
Other Cost of Sales (including depreciation) (1,322) (1,542) (327) 7 (3,184) - (3,184) (274) (3,458)
Amortisation of Landlord contributions in Cost of Sales 77 31 10 - 118 - 118 - 118
Gross profit 59 129 24 13 164 61 225 199 424
Depreciation in Cost of Sales 192 152 31 - 375 - 375 6 381
Contribution 251 281 55 13 539 61 600 205 805
SG&A (467) (89) (556)
Operating (loss)/profit (242) 110 (132)
Depreciation and amortisation 420 - 420 48 468
Impairment of assets 2 - 2 - 2
Loss on disposal of assets 97 - 97 - 97
Assets((3)) 3,954 4,433 598 704 9,689 - 9,689 767 10,456
Liabilities((3)) (3,914) (4,346) (631) (1,122) (10,013) - (10,013) (334) (10,347)
Net (liabilities)/assets((3)) 40 87 (33) (418) (324) - (324) 433 109
Non-current asset additions((3)(4)) 571 - 571 36 607
Non-current asset acquisitions((3)(4)) 19 - 19 8 27
1. Includes customer deposits.
2. Includes membership card income.
3. Presented on a basis consistent with IFRS 16.
4. Excluding deferred taxation.
Operating profit in the 'Other' category is generated from services related to
the provision of workspace solutions, offset by corporate overheads.
The operating segment's results presented on a pre-IFRS 16 basis reconcile to
the financial statements as follows:
IWG Network Operating Segment
By geography By ownership
$m Americas EMEA Asia Other Company- Managed & Franchised IWG Network Digital and Professional Services 2024
Pacific
owned
Revenue - pre-IFRS 16 basis 1,289 1,669 334 9 3,222 79 3,301 456 3,757
Sublease income - - - - - - - (67) (67)
Revenue - post IFRS 16 basis 1,289 1,669 334 9 3,222 79 3,301 389 3,690
Gross profit - pre-IFRS 16 basis 169 298 79 (2) 465 79 544 179 723
Total Adjustments impacting Gross Profit 156 182 24 - 362 - 362 19 381
Sublease income - - - - - - - (67) (67)
Rent expense 550 578 126 2 1,256 - 1,256 86 1,342
Depreciation of property, plant and equipment including right-of-use (398) (414) (85) (3) (900) - (900) (1) (901)
assets((1))
Other((2)) 4 18 (17) 1 6 - 6 1 7
Gross profit - post IFRS 16 basis 325 480 103 (2) 827 79 906 198 1,104
Operating profit - pre-IFRS 16 basis 43 89 132
Total Adjustments impacting Operating Profit 360 18 378
Operating profit - post IFRS 16 basis 403 107 510
Depreciation and amortisation - pre-IFRS 16 basis 388 - 388 55 443
Depreciation of property, plant and equipment including right-of-use assets 900 - 900 1 901
Depreciation and amortisation 1,288 - 1,288 56 1,344
Impairment of assets - pre-IFRS 16 - - - - -
Net reversal of impairment of property, plant and equipment including (31) - (31) - (31)
right-of-use assets
Net reversal of impairment of assets (31) - (31) - (31)
Loss on disposal of assets - pre-IFRS 16 basis 64 - 64 - 64
Loss on disposal of property, plant and equipment including right-of-use (46) - (46) (17) (63)
assets((3))
Loss/(gain) on disposal of assets 18 - 18 (17) 1
1. Includes depreciation on right of use assets of $1,049m offset by
reduced depreciation on leasehold improvements under IFRS 16 due to the
classification of certain landlord contributions as a reduction to property,
plant and equipment.
2. Includes $31m of net reversal of impairment of property, plant and
equipment including right-of-use assets, as well as reversal of losses on
disposal of property, plant and equipment including right-of-use assets of
$6m.
3. Loss on disposal under IFRS 16 is lower due to the classification
of certain landlord contributions as a reduction to property, plant and
equipment under IFRS 16.
IWG Network Operating Segment
By geography By ownership
$m Americas EMEA Asia Pacific Other Company- Managed & Franchised IWG Network Digital and Professional Services 2023
owned
Revenue - pre-IFRS 16 basis 1,304 1,640 341 6 3,230 61 3,291 473 3,764
Sublease income - - - - - - - (75) (75)
Revenue 1,304 1,640 341 6 3,230 61 3,291 398 3,689
Gross profit - pre-IFRS 16 basis 59 129 24 13 164 61 225 199 424
Total Adjustments impacting Gross Profit 100 164 39 4 307 - 307 1 308
Sublease income - - - - - - - (75) (75)
Rent expense 555 606 141 - 1,302 - 1,302 78 1,380
Depreciation of property, plant and equipment including right-of-use (435) (457) (108) (3) (1,003) - (1,003) (1) (1,004)
assets((1))
Other((2)) (20) 15 6 7 8 - 8 (1) 7
Gross profit 159 293 63 17 471 61 532 200 732
Operating (loss)/profit - pre-IFRS 16 basis (242) 110 (132)
Total Adjustments impacting Operating Profit 310 1 311
Operating profit 68 111 179
Depreciation and amortisation - pre-IFRS 16 basis 420 - 420 48 468
Depreciation of property, plant and equipment including right-of-use assets 1,003 - 1,003 1 1,004
Depreciation and amortisation 1,423 - 1,423 49 1,472
Impairment of assets - pre-IFRS 16 basis 2 - 2 - 2
Net impairment of property, plant and equipment including right-of-use assets 99 - 99 - 99
Net impairment of assets 101 - 101 - 101
Loss on disposal of assets - pre-IFRS 16 basis 97 - 97 - 97
Gain on disposal of property, plant and equipment including right-of-use (64) - (64) (1) (65)
assets((3))
Loss/(gain) on disposal of assets 33 - 33 (1) 32
1. Includes depreciation on right of use assets of $1,146m offset by
reduced depreciation on leasehold improvements under IFRS 16 due to the
classification of certain landlord contributions as a reduction to property,
plant and equipment.
2. Includes $99m of net reversals of impairment of property, plant and
equipment including right-of-use assets, offset by losses on disposal of
property, plant and equipment including right-of-use assets of $5m.
3. Loss on disposal under IFRS 16 is lower due to the classification
of certain landlord contributions as a reduction to property, plant and
equipment under IFRS 16.
4. Operating profit
Operating profit has been arrived at after crediting/(charging):
$m Notes 2024 2023
Revenue 3,690 3,689
Depreciation on property, plant and equipment 13 (1,266) (1,392)
Right-of-use assets 13 (1,049) (1,146)
Other property, plant and equipment 13 (217) (246)
Amortisation of intangible assets 12 (78) (80)
Variable property rents payable in respect of leases 22 (116) (65)
Lease expense on short-term leases - (1)
Staff costs 5 (543) (544)
Facility and other property costs (631) (653)
Expected credit losses on trade receivables 23 (13) (19)
Loss on disposal of property, plant and equipment (37) (77)
Profit on disposal of right-of-use assets and related lease liabilities 42 46
Loss on disposal of intangible assets 12 (6) (1)
Impairment of other intangible assets 12 - (2)
Net reversal/(impairment) of property, plant and equipment((1)) 13 31 (99)
Net reversal/(impairment) of right-of-use assets 13 19 (53)
Net reversal/(impairment) of other property, plant and equipment 13 12 (46)
Other costs (562) (622)
Operating profit before equity-accounted investees 511 180
Share of loss of equity-accounted investees, net of tax 19 (1) (1)
Operating profit 510 179
1. The net reversal of impairment of $31m (2023: net impairment of
$99m) includes an additional impairment of $48m (2023: $143m), offset by the
reversal of $79m (2023: $44m) previously provided for (note 13).
2. Includes product and centre related costs of $148m (2023: $165m),
marketing costs of $130m (2023: $117m), maintenance costs of $94m (2023:
$109m), professional fees of $79m
(2023: $93m) and other overhead costs of $111m (2023: $138m).
$m 2024 2023
Fees payable to the Group's auditor and its associates for the audit of the (2) (2)
Group accounts
Fees payable to the Group's auditor and its associates for other services:
The audit of the Company's subsidiaries pursuant to legislation (5) (5)
Other services pursuant to legislation - -
Other non-audit services (1) (1)
5. Staff costs
$m 2024 2023
The aggregate payroll costs were as follows:
Wages and salaries 464 456
Social security 68 72
Pension costs 9 8
Share-based payments 2 8
543 544
Average full-time Equivalents 2024 2023
The average number of persons employed by the Group (including Executive
Directors), analysed by category and geography, was as follows:
Centre staff 6,329 6,536
Sales and marketing staff 615 572
Finance and shared service centre staff 750 709
Other staff 1,313 1,238
9,007 9,055
Americas 2,787 2.837
EMEA 3,449 3,366
Asia Pacific 1,069 1,001
Corporate functions 1,702 1,851
9,007 9,055
Details of the Directors' emoluments and interests are given in the Directors'
Remuneration report.
6. Net finance expense
$m 2024 2023
Interest payable and similar charges on bank loans and corporate borrowings (34) (51)
Interest expense and accretion on Convertible bond((1)) (16) (17)
Interest expense and accretion on Euro bond((1)) (22) -
Interest expense on cross currency interest rate swap (4) -
Interest expense on financial debt (76) (68)
Interest payable on lease liabilities (363) (349)
Total interest expense (439) (417)
(Loss)/gain on foreign exchange (17) 7
Other finance costs (18) (15)
Total finance expense (474) (425)
Interest income 2 1
Interest received on net lease investment 8 8
Gain on early settlement of Convertible bonds 7
-
Total interest and finance income 17 9
Net finance expense (457) (416)
1. Interest expense and accretion includes accretion of $14m (2023:
$15m) in respect of the Convertible bonds, and $1m (2023: $nil) in respect of
the Euro bond.
7. Taxation
(a) Analysis of charge in the year
$m 2024 2023
Current taxation
Corporate income tax (47) (96)
Previously unrecognised tax losses and temporary differences 5 55
(Under)/over provision in respect of prior years (4) 10
Total current taxation (46) (31)
Deferred taxation
Origin and reversal of temporary differences (25) (24)
Previously unrecognised tax losses and other differences 37 21
Total deferred taxation 12 (3)
Tax charge (34) (34)
(b) Reconciliation of taxation charge
2024 2023
$m % $m %
Profit/(loss) before tax 53 (237)
Tax on profit at 11.9% (2023: 11.9%) (6) (12) 29 (12)
Tax effects of:
Expenses not deductible for tax purposes (76) (143) (102) 43
Items not chargeable for tax purposes 14 26 17 (7)
Previously unrecognised temporary differences expected 42 79 77 (33)
to be used in the future
Current year temporary differences not currently expected (35) (66) (99) 42
to be used
Adjustment to tax charge in respect of previous years (4) (8) 10 (4)
Differences in tax rates on overseas earnings 31 60 34 (15)
Total tax charge for the year (34) (64) (34) 14
The applicable tax rate is determined based on the tax rate in the canton of
Zug in Switzerland, which was the statutory tax rate applicable in the country
of domicile of the parent company of the Group at the end of the financial
year.
(c) Factors that may affect the future tax charge
Unrecognised tax losses to carry forward against certain future overseas
corporation tax liabilities have the following expiration dates
dates: $m 2024 2023
2024 - 38
2025 35 45
2026 36 46
2027 32 40
2028 71 82
2029 90 88
2030 57 105
2031 61 12
2032 and later 9,505 1,733
9,887 2,189
Available indefinitely 1,685 1,807
Unrecognised tax losses available to carry forward 11,572 3,996
Amount of losses recognised in deferred tax assets 319 275
Total tax losses available to carry forward 11,891 4,271
Additional tax losses have been generated since 31 December 2023, primarily
resulting from the impairment of investments held by Head Office entities in
Luxembourg. These losses are subject to recapture under certain conditions and
are included in the table below as part of the unrecognised deferred tax
assets figures of $2,783m. The above loss expiry table excludes $130m (2023:
$157m) US state tax losses.
The following deferred tax assets have not been recognised due to
uncertainties over recoverability:
$m 2024 2023
Intangibles 447 456
Accelerated capital allowances 98 68
Tax losses 2,783 992
Rent 161 136
Leases 78 80
Short-term timing differences 36 20
3,603 1,752
(d) Corporation tax
$m 2024 2023
Corporation tax payable (65) (55)
Corporation tax receivable 34 34
(e) Deferred taxation
The movement in deferred tax is analysed below:
$m Intangibles Property, Tax losses Rent Leases Short-term temporary differences Total
plant and equipment
Deferred tax assets
At 31 December 2022 98 - 19 88 1,341 88 1,634
Current year movement (3) (4) 50 (74) (172) 38 (165)
Prior year movement - (1) - 8 - (8) (1)
Exchange rate movements 3 5 (1) (4) - (3)
At 31 December 2023 98 - 68 18 1,169 115 1,468
Offset against deferred tax liabilities - - - - (892) - (892)
Net deferred tax assets at 31 December 2023 98 - 68 18 277 115 576
Gross deferred tax assets at 31 December 2023 98 - 68 18 1,169 115 1,468
Current year movement (15) 13 9 15 (126) (10) 114
Exchange rate movements 1 - (2) - - - (1)
At 31 December 2024 84 13 75 33 1,043 105 1,353
Offset against deferred tax liabilities - - - - (767) - (767)
At 31 December 2024 84 13 75 33 276 105 586
$m Intangibles Property, Tax losses Rent Leases Short term temporary differences Total
plant and equipment
Deferred tax liabilities
At 1 January 2023 (73) (103) - (1) (1,095) (3) (1,275)
Current year movement 1 13 - 1 150 (2) 163
Exchange rate movements - - - - - 2 2
At 31 December 2023 (72) (90) - - (945) (5) (1,112)
Offset against deferred tax assets - - - - 892 - 892
Net deferred tax liabilities at 31 December 2023 (72) (90) - - (53) (5) (220)
Gross deferred tax liabilities at 31 December 2023 (72) (90) - - (945) (5) (1,112)
Current year movement (1) 15 - (1) 119 (6) 126
Exchange rate movements - - - - - (1) (1)
At 31 December 2024 (73) (75) - (1) (826) (11) (987)
Offset against deferred tax assets - - - - 767 - 767
At 31 December 2024 (73) (75) - (1) (59) (11) (220)
The movements in deferred taxes included above are after the offset of
deferred tax assets and deferred tax liabilities where there is a legally
enforceable right to set off and they relate to income taxes levied by the
same taxation authority. The closing deferred tax position above represents
the aggregated deferred tax asset or liability position within individual
legal entities, with some companies recognising deferred tax assets and others
recognising deferred tax liabilities. The closing position is a net deferred
tax asset of $586m and a deferred tax liability of $220m.
In evaluating whether it is probable that taxable profits will be earned in
future accounting periods for the purposes of deferred tax asset recognition,
management based their analysis on the Board approved forecasts prepared for
the purposes of reviewing goodwill for impairment.
At the balance sheet date, the temporary difference arising from unremitted
earnings of overseas subsidiaries was $15m (2023: $15m). The only tax that
would arise on these reserves if they were remitted would be non-creditable
withholding tax.
In 2024 the deferred tax asset recognised in respect of the fair market value
of IP resulting from a group restructure in 2019, in relation to which the
amortisation is deductible for Swiss corporate income tax purposes, was
reduced from $100m to $84m and is included as Intangibles in the deferred tax
table above. Recognition of this deferred tax asset is based on the approved
three-year forecast.
(f) Global minimum top-up tax
The Group is within the scope of the OECD Pillar Two model rules. Pillar Two
legislation has been enacted or substantively enacted in many of the
jurisdictions where IWG operates, including in Switzerland where it has come
into effect from January 1, 2024, with the introduction of a domestic minimum
tax rule. The Group has performed an assessment of its potential exposure to
Pillar Two global minimum income taxes and does not expect any material top-up
taxes to arise in any jurisdiction in which it operates. Whilst the majority
of the Group's entities benefit from transitional safe harbour rules which
take them out of scope of the full rules, for the remaining entities, proxy
Pillar Two calculations have been performed which confirm that no material
top-up tax is expected to arise in any jurisdiction.
The Group has applied a temporary mandatory relief from deferred tax
accounting for the impacts of the top-up tax and accounts for it as a current
tax when it is incurred.
8. Adjusting items
The Group has recognised the following adjusting items:
$m Notes 2024 2023
Cost of sales Selling, general and administration costs Cost of sales Selling, general and
administration costs
Closure credit (2) - (15) -
Net (reversal)/impairment of property, plant and equipment (including 13 (93) - 73 -
right-of-use assets)((1))
Other impairments 3 - 4 -
One-off items - 6 39 (6)
Total adjusting items((2)) (92) 6 101 (6)
1. Net reversal of impairment of $31m (2023: net impairment of $99m)
excludes depreciation of $56m (2023: $21m) and disposals of $6m (2023: $5m) in
respect of adjusting items previously provided for (note 13).
2. Includes $(113)m of non-cash items (2023: $42m).
Closure related credit
A closure related credit of $2m (2023: $15m) was recognised during the year,
which includes the direct closure costs of $nil (2023: credit of $1m) related
to these centres, $16m (2023: $14m) write-off of the book value of assets,
$48m (2023: $61m) against the right-of-use assets and $66m (2023: $89m)
credits for the related lease liabilities.
Net reversal of impairment of property, plant and equipment (including right-of-use assets)
Management carried out a comprehensive review exercise for potential
impairments across the whole portfolio at a cash-generating units (CGUs)
level. This review compared the value-in-use of CGUs, based on management's
assumptions regarding likely future trading performance, to the carrying
values at 31 December 2024. Following this review, a net reversal of
impairment of $31m (2023: net impairment of $99m) was recognised within cost
of sales. Of this net reversal of impairment, $12m (2023: net impairment of
$46m) and $19m (2023: net impairment of $53m) were recognised against
property, plant and equipment and right-of-use assets respectively.
Other impairments
Impairment of Ukraine and Russia
As a result of geopolitical circumstances in the Ukraine and related sanctions
against Russia, the Board has taken the decision to recognise a provision
against the gross assets of both its Russian and Ukrainian operations.
Following a review of the carrying value of the CGU, an additional $3m (2023:
$4m) impairment charge was recognised against assets of $22m (2023: $19m).
These operations are not material to the Group, representing less than 1% of
both total revenue and net assets of the Group. Accordingly, the Group's
significant accounting judgements, estimates and assumptions have not changed.
One-off items
During the year, the Group incurred $3m (2023: $2m) of restructuring and
transaction costs.
Should the estimated charges be in excess of the amounts required, the release
of any amounts provided for at 31 December 2024 would be treated as adjusting
items.
Following a review of revenues derived from desktop telephones in 2023, the
Group wrote-off $nil (2023: $39m) of telephone assets. The Group also
wrote-off $6m (2023: $1m) of obsolete software during the year.
During the year, the Group utilised closure related legal provisions of $3m
(2023: $9m).
9. Earnings/(loss) per ordinary share (basic and diluted)
2024 2023
Basic and diluted profit/(loss) for the year attributable to shareholders ($m) 20 (269)
Basic earnings/(loss) per share (¢) 2.0 (26.7)
Diluted earnings/(loss) per share (¢) 2.0 (26.7)
Weighted average number of shares for basic and diluted EPS 1,009,815,216 1,006,685,491
Weighted average number of shares under option 32,708,366 17,380,163
Weighted average number of shares that would have been issued at average (26,212,684) (13,303,122)
market price
Weighted average number of share awards under the CIP, PSP, DBSP and 2,824,696 2,210,401
One-off Award
Weighted average number of shares for diluted EPS when profitable 1,019,135,504 1,012,972,933
Potentially issuable shares on Convertible bonds (anti-dilutive) 76,408,203 76,408,203
Options are considered dilutive when they would result in the issue of
ordinary shares for less than the market price of ordinary shares in the
period. The amount of the dilution is taken to be the average market price of
shares during the period minus the exercise price. In 2024, 9,320,378 share
awards had a dilutive effect with a negligible impact on the basic earnings
per share (2023: all awards were considered anti-dilutive).
The Group issued £350m of Convertible bonds in December 2020. As of 1 January
2024, the Convertible bonds created 76,408,203 of potentially issuable shares.
During 2024, the Group repurchased £192m face value of the Convertible bonds,
reducing the potentially issuable number of shares to 34,786,815 at 31
December 2024. The Convertible bonds had no dilutive effect in 2024 or 2023.
The average market price of one share during the year was 177.99p (2023:
159.96p), with a high of 207.00p on 28 May 2024 (197.70p on 2 February 2023)
and a low of 151.60p on 19 December 2024 (127.40p on 25 October 2023).
10. Dividends
$m 2024 2023
Final dividend for the year ended 31 December 2023: 1.00 pence per share 13 -
proposed on 5 March 2024 and paid on 31 May 2024 (for the year ended 31
December 2022: nil pence per share)
Interim dividends for the year ended 31 December 2024: 0.43¢ per share; 4 -
proposed on 4 August 2024 and paid on 4 October 2024
In line with the Group's dividend policy, the Board has proposed to
shareholders a final dividend of 0.90¢ per share for a total 2024 dividend of
1.33¢ per share (2023: 1.00p per share). Subject to shareholder approval, it
is expected that the dividend will be paid on 30 May 2025 to shareholders on
the register at the close of business on 2 May 2025.
11. Goodwill
$m Total
Cost
At 31 December 2022 1,128
Recognised on acquisition of subsidiaries 10
Exchange rate movements 34
At 31 December 2023 1,172
Recognised on acquisition of subsidiaries 2
Exchange rate movements (26)
At 31 December 2024 1,148
Net book value
At 31 December 2023 1,172
At 31 December 2024 1,148
Cash-generating units (CGUs), defined as individual business centres, are
grouped by country of operation and Digital & Professional Services for
the purposes of carrying out impairment reviews of goodwill as this is the
lowest level at which it can be assessed. Goodwill acquired through business
combinations is held at a country and Digital & Professional Services
level and is subject to impairment reviews based on the cash flows of the CGUs
within that country and the Digital & Professional Services segment.
The carrying amount of goodwill attributable to the reportable business
segments is as follows:
$m 2024 2023
Americas 379 381
EMEA 456 471
Asia Pacific 31 33
Digital & Professional Services 282 287
1,148 1,172
The carrying value of goodwill and indefinite life intangibles allocated to
the USA, UK and Digital & Professional Services is material relative to
the total carrying value, comprising 81% of the total. The remaining 19% of
the carrying value is allocated to a further 38 countries. The goodwill and
indefinite life intangibles allocated to the USA, UK and Digital &
Professional Services are set out below:
$m Goodwill Intangible assets((1)) 2024 2023
USA 355 - 355 355
United Kingdom 276 14 290 293
Digital & Professional Services 282 - 282 287
Other countries 235 - 235 251
1,148 14 1,162 1,186
1. The indefinite life intangible asset relates to the Regus brand.
The value-in-use for each country and Digital & Professional Services has
been determined using a model which derives the present value of the expected
future cash flows for each individual country and Digital & Professional
Services. Although the model includes budgets and forecasts prepared by
management, it also reflects external factors, such as capital market risk
pricing as reflected in the market capitalisation of the Group and prevailing
tax rates, which have been used to determine the risk-adjusted discount rate
for the Group. Management believes that the projected cash flows are a
reasonable reflection of the likely outcomes over the medium to long-term. In
the event that trading conditions deteriorate beyond the assumptions used in
the projected cash flows, it is also possible that impairment charges could
arise in future periods.
The following key assumptions have been used in calculating the value-in-use
for each country and Digital & Professional Services:
• Future cash flows are based on forecasts prepared by management. The
model excludes cost savings and restructurings that are anticipated but had
not been committed to at the date of the determination of the value‑in-use
and capital expenditures and the related benefits arising from technology
development projects that have not substantively commenced;
• Thereafter, forecasts have been prepared by management for 2025, and
for a further four years, that follow a budgeting process approved by the
Board;
• These forecasts exclude the impact of acquisitive growth expected to
take place in future periods;
• Management considers these projections to be a reasonable projection
of margins expected at the mid‑cycle position;
• Harnessing synergies across the Group relating to digital sales
conversion rates, Digital & Professional Services platform engagement and
lead generation;
• Frequency, duration and amount of commissions earned on the Digital
& Professional Services platform
• A terminal value is included in the assessment, reflecting the
Group's expectation that it will continue to operate in these markets and the
long-term nature of the business; and
• The Group applies a country-specific, pre-tax discount rate to the
pre-tax cash flows for each country. The country-specific discount rate is
based on the underlying weighted average cost of capital (WACC) for the Group.
The Group WACC is then adjusted for each country to reflect the assessed
market risk specific to that country. The Group pre-tax WACC decreased from
12.4% in 2024 to 10.9% in 2025 (post-tax WACC: 8.2%). The country-specific
pre-tax WACC reflecting the respective market risk adjustment has been set
between 9.6% and 13.1% (2023: 11.0% to 13.6%).
The amounts by which the values-in-use exceed the carrying amounts of goodwill
are sufficiently large to enable the Directors to conclude that a reasonably
possible change in the key assumptions would result in a recognised impairment
of $nil (2023: $nil), in respect of all countries. Foreseeable events are
unlikely to result in a change in the projections of such a significant nature
as to result in the goodwill carrying amount exceeding their recoverable
amount. The forecast models used in assessing the impairment of goodwill are
based on the related business centre structure at the end of the year.
The US model assumes an average centre contribution of 25% (2023: 22%) over
the next five years. A terminal value centre gross margin of 28% is adopted
from 2029, with a nil long-term growth rate assumed on revenue and costs into
perpetuity. The cash flows have been discounted using a pre-tax discount rate
of 11.4% (2023: 11.1%).
The UK model assumes an average centre contribution of 20% (2023: 16%) over
the next five years. A terminal value centre gross margin of 25% is adopted
from 2029, with a 2.4% long-term growth rate assumed on revenue and costs into
perpetuity. The cash flows have been discounted using a pre-tax discount rate
of 12.4% (2023: 12.4%).
The Digital & Professional Services model assumes an average contribution
of 38% (2023: 34%) over the next five years. A terminal value centre gross
margin of 42% is adopted from 2029, with a 2.4% long-term growth rate assumed
on revenue and costs into perpetuity. The cash flows have been discounted
using a pre-tax discount rate of 12.4% (2023: 12.4%).
Management has considered the following sensitivities:
• Market growth and RevPAR - Management has considered the impact of a
variance in market growth and RevPAR. The value-in-use calculation shows that
if the long-term growth rate is nil, the recoverable amount of the US, UK and
Digital & Professional Services would still be greater than their carrying
value.
• Discount rate - Management has considered the impact of an increase
in the discount rate applied to the calculation. The value-in-use calculation
shows that for the recoverable amount to be less than its carrying value, the
pre-tax discount rate would have to be increased by over 1,000% (2023: 435.9%)
for the US, 9.3% (2023: 24.2%) for the UK and 5.1% for Digital &
Professional Services (2023: 3.9%).
• Occupancy - Management has considered the impact of a variance in
occupancy. The value-in-use calculation shows that for the recoverable amount
to be less than its carrying value, occupancy in all future years would have
to decrease by 18.4% (2023: 13.4%) for the US and 3.3% (2023: 5.3%) for the
UK.
• Pricing - Management has considered the impact of a variance in
price. The value-in-use calculation shows that for the recoverable amount to
be less than its carrying value, price per occupied workspace in all future
years would have to decrease by 33.7% (2023: 28.8%) for the US and 5.8% (2023:
8.2%) for the UK.
12. Other intangible assets
$m Brand Customer lists Software Total
Cost
At 31 December 2022 110 134 240 484
Additions at cost - - 74 74
Acquisition of subsidiaries - - - -
Disposals - - (7) (7)
Exchange rate movements 6 7 11 24
At 31 December 2023 116 141 318 575
Additions at cost - - 45 45
Acquisition of subsidiaries 1 - 1 2
Disposals - - (8) (8)
Exchange rate movements (1) (3) (2) (6)
At 31 December 2024 116 138 354 608
Amortisation
At 31 December 2022 54 61 110 225
Charge for year 4 30 46 80
Disposals - - (6) (6)
Impairment - - 2 2
Exchange rate movements 3 2 3 8
At 31 December 2023 61 93 155 309
Charge for year 1 28 49 78
Disposals - - (2) (2)
Impairment - - - -
Exchange rate movements - (3) (1) (4)
At 31 December 2024 62 118 201 381
Net book value
At 31 December 2022 56 73 130 259
At 31 December 2023 55 48 163 266
At 31 December 2024 54 20 153 227
Included within the brand value is $14m relating to the acquisition of the
remaining 58% of the UK business in the year ended 31 December 2006. The Regus
brand acquired in this transaction is assumed to have an indefinite useful
life due to the fact that the value of the brand is intrinsically linked to
the continuing operation of the Group.
As a result of the Regus brand acquired with the UK business having an
indefinite useful life no amortisation is charged but the carrying value is
assessed for impairment on an annual basis. The brand was tested at the
balance sheet date against the recoverable amount of the UK business segment
at the same time as the goodwill arising on the acquisition of the UK business
(see note 11).
13. Property, plant and equipment
$m Right-of-use assets((1)) Land and buildings Leasehold improvements Furniture and equipment Computer hardware Total
Cost
At 31 December 2022 11,655 193 2,059 1,115 166 15,188
Additions 372 - 110 51 3 536
Modifications((2)) 420 - - - - 420
Acquisition of subsidiaries 12 - 6 - - 18
Disposals (893) - (62) (181) (8) (1,144)
Exchange rate movements 207 11 21 15 4 258
At 31 December 2023 11,773 204 2,134 1,000 165 15,276
Additions 195 - 157 25 2 379
Modifications((2)) 607 - - - - 607
Acquisition of subsidiaries - - 1 2 - 3
Disposals (932) - (113) (20) (6) (1,071)
Exchange rate movements (341) (2) (106) (34) (6) (489)
At 31 December 2024 11,302 202 2,073 973 155 14,705
Accumulated depreciation
At 31 December 2022 5,608 17 1,257 644 136 7,662
Charge for the year 1,146 3 152 84 7 1,392
Disposals((4)) (695) - (30) (137) (7) (869)
Net impairment((5)) 53 - 46 - - 99
Exchange rate movements 87 1 9 9 3 109
At 31 December 2023 6,199 21 1,434 600 139 8,393
Charge for the year((3)) 1,049 3 137 70 7 1,266
Disposals((4)) (693) - (83) (14) (5) (795)
Net reversal of impairment((5)) (19) - (12) - - (31)
Exchange rate movements (174) - (42) (22) (6) (244)
At 31 December 2024 6,362 24 1,434 634 135 8,589
Net book value
At 31 December 2022 6,047 176 802 471 30 7,526
At 31 December 2023 5,574 183 700 400 26 6,883
At 31 December 2024 4,940 178 639 339 20 6,116
1. Right-of-use assets consist of property-related leases.
2. Modifications includes lease modifications and extensions.
3. Depreciation is net of $56m (2023: $21m) in respect of adjusting
items previously provided for (note 8).
4. Disposals are net of $6m (2023: $5m) in respect of adjusting items
previously provided for (note 8).
5. The net reversal of impairment of $31m (2023: net impairment of
$99m) includes an additional impairment of $48m (2023: $143m), offset by the
reversal of $79m (2023: $43m) previously provided for (note 8).
The key assumptions and methodology in calculating right-of-use assets and the
corresponding lease liability remain consistent with those noted in notes 2
and 31.
Impairment tests for property, plant and equipment (including right-of-use
assets) are performed on a cash‑generating unit basis when impairment
triggers arise. Cash-generating units (CGUs) are defined as individual
business centres, being the smallest identifiable group of assets that
generate cash flows that are largely independent of other groups of assets.
The Group assesses whether there is an indication that a CGU may be impaired,
including persistent operating losses, net cash outflows and poor performance
against forecasts.
The recoverable amounts of property, plant and equipment are based on the
higher of fair value less costs to sell and value-in-use. The Group considered
both fair value less costs to dispose and value-in-use in the impairment
testing on a centre-by-centre level, on a basis consistent with the impairment
testing described in note 11. Impairment charges are recognised within cost of
sales in the consolidated income statement. In 2024, the Group recorded a net
reversal of impairment charges of $19m (2023: net impairment of $53m) in
respect of right-of-use assets and $12m (2023: net impairment of $46m) in
respect of leasehold improvements.
14. Other long-term receivables
$m 2024 2023
Deposits held by landlords against lease obligations 67 67
15. Trade and other receivables
$m 2024 2023
Trade receivables, net 456 469
Prepayments and accrued income 143 185
Other receivables 283 230
Landlord contributions receivables 35 32
VAT recoverable 206 214
Deposits held by landlords against lease obligations 5 6
1,128 1,136
16. Trade and other payables (including customer deposits)
$m 2024 2023
Customer deposits((1)) 584 585
Other accruals 380 415
Trade payables 232 310
VAT payable 146 133
Other payables 227 186
Other tax and social security 30 38
1,599 1,667
1. Includes an unrealised foreign exchange loss of $21m (2023: gain of
$9m).
17. Borrowings
Bank and other loans
The Group's total loan and borrowing position at 31 December 2024 and at 31
December 2023 had the following maturity profiles:
$m 2024 2023
Repayments falling due as follows:
In more than one year but not more than two years((1)) 2 896
In more than two years but not more than five years - 1
In more than five years((2)) 650 2
Total non-current 652 899
Total current((3)) 208 17
Total bank and other loans 860 916
1. Includes $nil (2023: $419m) Convertible bonds liability, disclosed
net of derivative foreign exchange cashflow hedges of $nil (2023: $nil).
2. Includes $629m (2023: $nil) Euro bond liability, disclosed net of
derivative foreign exchange cashflow hedge liability of $19m (2023: $nil).
3. Includes $191m (2023: $nil) Convertible bonds liability, disclosed
net of derivative foreign exchange cashflow hedge liability of $2m (2023:
$nil).
The Group issued £350m Convertible bonds in December 2020, raising £343m,
net of transaction fees. At the date of issue, the Convertible bonds were
bifurcated between
• A financial liability recognised at amortised cost of £298m, by
using the discounted cash flow of interest payments and the bonds' nominal
value; and subsequently remeasured at amortised cost.
• A derivative financial liability of £52m, not being closely related
to the host financial liability, was recognised separately and measured at
fair value through profit or loss (note 23).
During 2024, the Group repurchased £192m face value of the Convertible bonds,
valued at its amortised cost of $235m, at a weighted average price of £0.923,
including accrued interest, representing a consideration of £178m, or $228m,
resulting in a gain on settlement of $7m.
As at 31 December 2024, the debt was valued at its amortised cost of $191m (31
December 2023: $419m) and the derivative liability at its fair value is $2m
(2023: $nil). In December 2024, the Convertible bonds were reclassified from
non-current liabilities to current liabilities, due to the fact that
bondholders have the option to cash settle in December 2025 at par which the
Group expects to settle in cash.
The Group issued a €575m Euro bond on 28 June 2024 at a fixed coupon rate of
6.5% and a bullet maturity of June 2030. An additional €50m was issued on 10
September 2024. The bonds are traded on the London Stock Exchange's
International Securities Market. Both IWG as a Group and the Euro bond itself
have an investment-grade rating of BBB (Stable) assigned by Fitch Ratings. As
at 31 December 2024, the debt was valued at its amortised cost of $648m,
comprising a $629m bond liability and its related $19m derivative foreign
exchange cash flow hedge liability.
The Group's $720m revolving credit facility (2023: $1,116m) is subject to
financial covenants which include interest cover and net debt to EBITDA ratio.
The Group continued to operate in compliance with the covenants agreed with
the lenders.
Further information regarding the Group's bond liabilities can be found in
note 23.
18. Provisions
$m 2024 2023
Closures Other Total Closures Other Total
At 1 January 54 - 54 72 10 82
Acquired in the period - - - - - -
Provided in the period 5 1 6 10 - 10
Utilised in the period (6) - (6) (31) (9) (40)
Exchange rate movements 2 - 2 3 (1) 2
At 31 December 55 1 56 54 - 54
Analysed between:
Current 33 1 34 31 - 31
Non-current 22 - 22 23 - 23
At 31 December 55 1 56 54 - 54
Closures
Provisions for closures relate to the expected costs of centre closures,
including restructuring costs. Impairments of right-of-use assets and
property, plant and equipment (note 13) are not included above.
Other
Other provisions include the estimated costs of claims against the Group
outstanding at 31 December 2024, of which, due to their nature, the maximum
period over which they are expected to be utilised is uncertain.
The Group is involved in various disputes, primarily related to potential
lease obligations, some of which are in the course of litigation. Where there
is a dispute and where, based on legal counsel advice, the Group estimates
that it is probable that the dispute will result in an outflow of economic
resources, provision is made based on the Group's best estimate of the likely
financial outcome. Where a reliable estimate cannot be made, or where the
Group, based on legal counsel advice, considers that it is not probable that
there will be an outflow of economic resources, no provision is recognised.
There are no disputes which are expected to have a material impact on the
Group.
19. Investments in joint ventures
$m Investments Provision for Total
in joint
deficit in
ventures
joint ventures
At 31 December 2022 55 (8) 47
Share of loss (1) - (1)
Exchange rate movements 2 - 2
At 31 December 2023 56 (8) 48
Share of loss (1) - (1)
Disposal of joint ventures - 2 2
Exchange rate movements 1 - 1
At 31 December 2024 56 (6) 50
The Group has 78 centres operating under joint venture agreements (2023: 81)
at the reporting date, all of which are individually immaterial. The Group has
a legal obligation in respect of its share of any deficits recognised by these
operations. No indicators of impairment were identified by management in
relation to these investments.
The results of the joint ventures below are the full-year results of the joint
ventures and do not represent the effective share:
$m 2024 2023
Income statement
Revenue 114 108
Expenses (109) (113)
Profit/(loss) before tax for the year 5 (5)
Income tax expenses (2) -
Profit/(loss) after tax for the year 3 (5)
Balance sheet
Non-current assets 154 180
Current assets 718 715
Current liabilities (712) (713)
Non-current liabilities (135) (165)
Net assets 25 17
20. Share capital
Ordinary equity share capital
2024 2023
Number Nominal value Number Nominal value Nominal value
$m
$m
£m
Authorised
Ordinary 1.24¢ shares in International Workplace Group plc at 1 January 8,000,000,000 99 8,000,000,000 99 80
Ordinary 1.24¢ shares in International Workplace Group plc at 31 December 8,000,000,000 99 8,000,000,000 99 80
Issued and fully paid up
Ordinary 1.24¢ shares in International Workplace Group plc at 1 January 1,057,248,651 13 1,057,248,651 13 10
Ordinary 1.24¢ shares issued for cash in the year - - - - -
Ordinary 1.24¢ shares in International Workplace Group plc at 31 December 1,057,248,651 13 1,057,248,651 13 10
Treasury share transactions involving International Workplace Group plc shares between 1 January 2024 and 31 December 2024
As at 4 March 2025, 45,233,630 treasury shares were held. The holders of
ordinary shares in International Workplace Group plc are entitled to receive
such dividends as are declared by the Company and are entitled to one vote per
share at meetings of the Company. Treasury shares do not carry such rights
until reissued.
2024 2023
Number of shares $m Number of shares $m
1 January 50,558,201 194 50,564,853 194
Net treasury shares utilised((1)) (5,317,181) (12) (6,652) -
31 December 45,241,020 182 50,558,201 194
1. During the year, 5,283,597 treasury shares (2023: nil) were
utilised to increase the Group's equity voting rights in the non-controlling
interest. In addition, out of the 410,169 (2023: 525,674) share awards
exercised by employees, for 292,115 (2023: 126,516) the value of the share
award in excess of the exercise price was settled through the utilisation of
33,584 (2023: 6,652) treasury shares and for 118,054 (2023: 399,158), the
share awards were settled using shares purchased in the open market for $0.2m
(2023: $0.6m).
21. Non-controlling interests
During the year, the Group increased its equity voting rights to 89.3% (2023:
86.6%) in the non-controlling interest for a consideration of $14m net of
utilisation of $12m treasury shares.
In 2025, the Group expects to acquire the remaining 10.7% minority shares
outstanding predominantly using already issued Treasury shares.
The following table summarises the information relating to each of the Group's
subsidiaries that have a material non‑controlling interest.
$m 2024 2023
NCI percentage 10.7% 13.4%
Non-current assets 502 543
Current assets 343 338
Non-current liabilities (157) (146)
Current liabilities (206) (240)
Net assets 482 495
Net assets attributable to NCI 50 65
Revenue 214 220
Loss after tax (5) (13)
Other comprehensive income - 30
Total comprehensive income/(loss) (5) 17
Loss allocated to NCI (1) (2)
Other comprehensive income allocated to NCI - 4
Cash flows from operating activities 13 37
Cash flows from investing activities 29 44
Cash flows from financing activities (36) (123)
Net increase/(decrease) in cash and cash equivalents 6 (42)
22. Net debt analysis
$m 2024 2023
Cash and cash equivalents 148 141
Debt due within one year((1)) (208) (17)
Debt due after one year((2)) (652) (899)
Net financial debt (712) (775)
Current net investment in finance leases 28 43
Non-current net investment in finance leases 88 81
Lease due within one year((3)) (1,131) (1,178)
Lease due after one year((3)) (5,031) (5,678)
Net debt (6,758) (7,507)
1. Includes $191m (2023: $nil) Convertible bonds liability, disclosed
net of the derivative foreign exchange cashflow hedge liability of $2m (2023:
$nil), and $15m (2023: $17m) of other short-term loans.
2. Includes $nil (2023: $419m) Convertible bonds liability and $629m
(2023: $nil) Euro bond liability, disclosed net of derivative foreign exchange
cash flow hedge liabilities of $nil (2023: $nil) and $19m (2023: $nil)
respectively, and $4m (2023: $480m) other long-term loans.
3. There are no significant lease commitments for leases not commenced
at 31 December 2024. Lease contracts are typically held in non-recourse
special purpose entities.
The following table shows a reconciliation of net cash flow to movements in
net debt:
$m Cash and cash equivalents Bank and other loans Convertible bonds((2)) Euro bond((2)) Net financial debt Net investment in finance leases Lease liabilities Net debt
At 1 January 2023 194 (670) (384) - (860) 178 (7,292) (7,974)
Net decrease in cash and cash equivalents (52) - - - (52) - - (52)
Proceeds from issue of loans and net investment in finance leases - (1,237) - - (1,237) (67) - (1,304)
Repayment of loans and principal payment of lease liabilities - 1,441 2 - 1,443 - 1,166 2,609
Interest (received)/paid - - - - - (8) 349 341
Non-cash movements - - (15) - (15) 17 (947) (945)
Interest income/(expense) - - (15) - (15) 8 (349) (356)
Other non-cash movements((1)) - - - - - 9 (598) (589)
Exchange rate movements (1) (31) (22) - (54) 4 (132) (182)
At 31 December 2023 141 (497) (419) - (775) 124 (6,856) (7,507)
Net increase in cash and cash equivalents 21 - - - 21 - - 21
Proceeds from issue of loans and net investment in finance leases - (808) - (650) (1,458) (49) - (1,507)
Repayment of loans and principal payment of lease liabilities - 1,278 228 - 1,506 - 1,097 2,603
Interest (received)/paid - - - - - (8) 363 355
Non-cash movements - - (4) (1) (5) 53 (981) (933)
Interest income/(expense) - - (14) (1) (15) 8 (363) (370)
Other non-cash movements((1)) - - 10 - 10 45 (618) (563)
Exchange rate movements (14) 8 2 3 (1) (4) 215 210
At 31 December 2024 148 (19) (193) (648) (712) 116 (6,162) (6,758)
1. Includes gain on early settlement of the Convertible bonds of $7m
(2023: $nil), movements on leases in relation to new leases, lease
modifications/re-measurements of $770m (2023: $833m). Early termination of
lease liabilities represents $197m (2023: $244m) of the non‑cash movements.
2. Convertible bonds and Euro bond liabilities are presented net of
related derivative foreign exchange cash flow hedge liabilities of $2m
(2023: $nil) and $19m (2023: $nil) respectively.
Cash and cash equivalent balances held by the Group that are not available for
use amounted to $11m at 31 December 2024 (2023: $11m). Of this balance, $5m
(2023: $1m) is pledged as security against outstanding bank guarantees and a
further $6m (2023: $10m) is pledged against various other commitments of the
Group.
Cash flows on bank and other loans relate to movements in the revolving credit
facility and other borrowings.
The following amounts are included in the Group's consolidated financial
statements in respect of its leases:
$m 2024 2023
Depreciation charge for right-of-use assets (1,049) (1,146)
Interest income on net lease investment 8 8
Interest expense on lease liabilities (363) (349)
Expenses relating to leases of low-value assets - (1)
Expenses relating to variable lease payments not included in lease liabilities (116) (65)
Additions to right-of-use assets 195 372
Acquired right-of-use assets - 12
Principal portion of lease liabilities (1,097) (1,166)
Principal payments received from net lease investment 49 67
Total cash outflow for leases comprising interest and capital payments (1,460) (1,515)
Total cash outflows of $1,576m (2023: $1,580m) for leases, including variable
payments of $116m (2023: $65m), were incurred in the year.
23. Financial instruments and financial risk management
The objectives, policies and strategies applied by the Group with respect to
financial instruments and the management of capital are determined at Group
level. The Group's Board maintains responsibility for the risk management
strategy of the Group and the Chief Financial Officer is responsible for
policy on a day-to-day basis. The Chief Financial Officer and Group Treasurer
review the Group's risk management strategy and policies on an ongoing basis.
The Board has delegated to the Group Audit Committee the responsibility for
applying an effective system of internal control and compliance with the
Group's risk management policies.
Going concern
The Strategic Report sets out the Group's strategy and the factors that are
likely to affect the future performance and position of the business. The
financial review within the Strategic Report reviews the trading performance,
financial position and cash flows of the Group. The Group's net debt position
decreased by $749m (2023: $467m) to a net debt position of $6,758m (2023:
$7,507m) as at 31 December 2024. Excluding the IFRS 16 net investment in
finance leases and lease liabilities, the net financial debt position improved
to $712m (2023: $775m). The investment in growth is funded by a combination
of cash flow generated from the Group's mature business centres, cash flow
from franchise and managed partner fees and debt. The Group had a $720m
revolving credit facility (RCF) provided by a group of relationship banks with
a final maturity in 2029. As at 31 December 2024, $436m (2023: $279m) of the
RCF was available and undrawn.
Although the Group has net current liabilities of $2,224m (2023: $2,145m), the
Group does not consider that this gives rise to a liquidity risk. A large
proportion of the net current liabilities comprise non-cash liabilities such
as deferred revenue of $525m (2023: $552m) which will be recognised in future
periods through the income statement. The Group holds customer deposits of
$584m (2023: $585m) which are spread across a large number of customers and no
deposit held for an individual customer is material. Therefore, the Group does
not believe the net current liabilities represents a liquidity risk.
Credit risk
Credit risk could occur where a customer or counterparty defaults under the
contractual terms of a financial instrument and arises principally in relation
to customer contracts and the Group's cash deposits.
A diversified customer base, requirement for customer deposits, and payments
in advance on workstation contracts minimise the Group's exposure to customer
credit risk. No single customer contributes more than 1% of the Group's
revenue. The Group applies the simplified approach to trade receivables and
recognises expected credit losses based on the lifetime expected losses.
Provisions for receivables are established based on both expected credit
losses and information available that the Group will not be able to collect
all amounts due according to the original terms of the receivables. Trade
debtors that are more than four months overdue are considered to be in default
and therefore, under the simplified lifetime approach, are impaired in full.
This reflects the Group's experience of the likelihood of recoverability of
these trade receivables based on both historical and forward-looking
information. These provisions, which take into consideration any customer
deposits held, are reviewed on an ongoing basis to assess changes in the
likelihood of recoverability.
The Group has assessed the other receivable balances for expected credit
losses, with immaterial expected credit losses recognised due to the nature
and default history of these items.
The maximum exposure to credit risk for trade receivables at the reporting
date, not taking into account customer deposits held, analysed by geographic
region, is summarised below:
$m 2024 2023
Americas 163 170
EMEA 227 236
Asia Pacific 33 38
Digital & Professional Services 33 25
456 469
All of the Group's trade receivables relate to customers purchasing workplace
solutions and associated services and no individual customer has a material
balance owing as a trade receivable.
The ageing of trade receivables at 31 December was:
2024 2023
$m Gross Provision Gross Provision
Not overdue 302 - 362 -
Past due 0 - 30 days 37 - 46 -
Past due 31 - 60 days 51 - 24 -
Past due 61 - 90 days 34 - 21 -
Past due more than 90 days 46 (14) 24 (8)
470 (14) 477 (8)
At 31 December 2024, the Group maintained a provision of $14m for expected
credit losses (2023: $8m) arising from trade receivables. The Group had
provided $13m (2023: $19m) in the year, utilised $7m (2023: $25m) and released
$nil (2023: $nil). Customer deposits of $584m (2023: $585m) are held by the
Group, mitigating the risk of default.
IFRS 9 requires the Group to record expected credit losses on all of its
receivables, on either a 12-month or a lifetime basis. The Group has applied
the simplified approach to all trade receivables, which requires the
recognition of the expected credit loss based on the lifetime expected losses.
The expected credit loss is mitigated through the invoicing of contracted
services in advance and customer deposits.
Cash investments and derivative financial instruments are only transacted with
counterparties of sound credit ratings, and management does not expect any of
these counterparties to fail to meet their obligations.
Liquidity risk
Liquidity risk represents the risk that the Group will not be able to meet its
obligations as they fall due. The Group manages liquidity risk by closely
monitoring the global cash position, the available and undrawn credit
facilities, and forecast capital expenditure, and expects to have sufficient
liquidity to meet its financial obligations as they fall due. In response to
ongoing political and economic uncertainty, the Group continues to focus on
cash generation by increasing revenues, reducing costs and reducing capital
expenditure by growing the Managed & Franchised segment of the business,
resulting in short-term or long-term cash benefits. The Group has free cash
and liquid investments (excluding blocked cash) of $137m (2023: $130m). In
addition to cash and liquid investments, the Group had $436m (2023: $279m)
available and undrawn under its committed borrowings. The Directors consider
the Group has adequate liquidity to meet day-to-day requirements.
The Group maintains a revolving credit facility provided by a group of
international banks. In June 2024, the Group fully repaid the previous drawn
RCF and entered into a new RCF. The amount of the facility is $720m (as at 31
December 2023: $1,116m) with a final maturity in June 2029. As at 31 December
2024, $436m was available and undrawn under the RCF facility (2023: $279m).
The Group actively reviews its exposure to interest rate movements. The
issuance of the fixed rate bond in 2024 significantly reduces the Group's
exposure to an increase in interest rates.
Market risk
The Group is exposed to market risk primarily related to foreign currency
exchange rates, interest rates and the market value of our investments in
financial assets. These exposures are actively managed by the Group Treasurer
and Chief Financial Officer in accordance with a written policy approved by
the Board of Directors. The Group does not use financial derivatives for
trading or speculative reasons.
Interest rate risk
The Group manages its exposure to interest rate risk through the relative
proportions of fixed rate debt and floating rate debt. Any surplus cash
balances are invested short-term, and at the end of 2024 no cash was invested
for a period exceeding three months (2023: $nil).
Foreign currency risk
The Group is exposed to foreign currency exchange rate movements. The majority
of day-to-day transactions of overseas subsidiaries are carried out in local
currency and the underlying foreign exchange exposure is small. Transactional
exposures do arise in some countries where it is local market practice for a
proportion of the payables or receivables to be in other than the functional
currency of the affiliate. Intercompany charging, funding and cash management
activity may also lead to foreign exchange exposures. It is the policy of the
Group to seek to minimise such transactional exposures through careful
management of non-local currency assets and liabilities, thereby minimising
the potential volatility in the income statement. Net investments in IWG
affiliates with a functional currency other than US dollars are of a long-term
nature and the Group hedges a portion of such foreign currency translation
exposures.
The principal exposures of the Group are to pounds sterling and the Euro, with
approximately 20% (2023: 20%) of the Group's revenue being directly
attributable to pounds sterling and 24% (2023: 25%) to the Euro.
From time to time the Group uses derivative financial instruments to manage
its transactional foreign exchange exposures where these exposures cannot be
eliminated through balancing the underlying risks.
No transactions of a speculative nature are undertaken.
The foreign currency exposure arising from open third-party transactions held
in a currency other than the functional currency of the related entity is
summarised as follows:
2024
$m GBP EUR USD
Trade and other receivables 5 9 7
Trade and other payables (17) (29) (19)
Net statement of financial position exposure (12) (20) (12)
2023
$m GBP EUR USD
Trade and other receivables - 12 8
Trade and other payables (2) (24) (24)
Net statement of financial position exposure (2) (12) (16)
The Group uses forward foreign exchange contracts to hedge its currency risk
relating to its bond liabilities denominated in euro and pounds sterling.
These contracts have maturities aligning to the repayment dates of the bonds
and are designated as cash flow hedges.
Other market risks
The Group does not hold any equity securities for fair value measurement under
IFRS 9 and is therefore not subject to risks of changes in equity prices in
the income statement.
Cash flow hedges
At year end, the Group held the following instruments to hedge exposures to
changes in foreign currency rates.
2024 2023
1-6 months 6-12 months More than one year 1-6 months 6-12 months More than one year
Net exposure ($m) - 201 564 - - -
Average USD:GBP forward contract rate - 0.79 - - - -
Average USD:EUR forward contract rate - - 0.93 - - -
The amounts at the reporting date relating to items designated as hedged items
were as follows.
2024 2023
$m Change in value used for calculating hedge effectiveness Cash flow hedge reserve Change in value used for calculating hedge effectiveness Cash flow hedge reserve
Convertible bonds £158m 2 (1) - -
Euro bond €525m 19 25 - -
The amounts relating to items designated as hedging instruments and hedge
ineffectiveness were as follows.
$m 2024
Nominal amount Carrying amount Line item in the balance sheet where the hedging instrument is included Changes in the value of the hedging instrument recognised in profit or loss Changes in the value of the hedging instrument recognised in OCI Hedge ineffectiveness recognised in Line item in profit or loss that includes hedge ineffectiveness
profit or loss
Assets Liabilities
Forward exchange contract - Convertible bond £158m 201 - (3) Current Derivative financial liabilities (2) (1) - Finance expense
Cross-currency interest rate swap - Euro bond €525m 564 6 - Non-current Derivative financial assets (19) 25 (1) Finance expense
Net investment hedges
A foreign currency exposure arises from the Group's net investment in its
European subsidiaries that have a euro functional currency. The risk arises
from the fluctuation in spot exchange rates between the euro and the US
dollar, which causes the amount of the net investment to vary.
The hedged risk in the net investment hedge is the risk of a weakening euro
against the US dollar that will result in a reduction in the carrying amount
of the Group's net investment in the European subsidiaries.
Part of the Group's net investment in its European subsidiaries is hedged by
the €100m portion of the Euro bond (carrying amount: $104m (2023: $nil) that
is not subject to the cross-currency interest rate swap, which mitigates the
foreign currency risk arising from the subsidiaries' net assets. The bond is
designated as a hedging instrument for the changes in the value of the net
investment that is attributable to changes in the USD/EUR spot rate.
To assess hedge effectiveness, the Group determines the economic relationship
between the hedging instrument and the hedged item by comparing changes in the
carrying amount of the debt that is attributable to a change in the spot rate
with changes in the investment in the foreign operation due to movements in
the spot rate (the offset method). The Group's policy is to hedge the net
investment only to the extent of the debt principal.
The amounts related to items designated as hedging instruments were as
follows:
$m 2024
Nominal amount Carrying amount Balance Sheet line where the hedging instrument is included Changes in the value of the hedging instrument recognised in profit or loss Changes in hedging instrument recognised in OCI Hedge ineffectiveness recognised in Line item in profit or loss that includes hedge ineffectiveness
profit or loss
Assets Liabilities
Euro bond €100m 104 - 104 Bank and other loans - 3 - Finance expense
The amounts related to items designated as hedged items were as follows:
2024 2023
$m Change in value Hedging reserve Change in value Hedging reserve
used for calculating hedge effectiveness
used for calculating hedge effectiveness
EUR net investment 3 27 - -
Hedging reserve
The following table provides a reconciliation by risk category of components
of equity and analysis of OCI items resulting from cash flow hedge and net
investment hedge accounting.
$m 2024 2023
Balance at 1 January - -
Cash flow hedges:
- Forward exchange contract - Convertible bonds (1) -
- Cross-currency interest rate swap - Euro bond €525m 25 -
Net investment hedge:
- Euro bond €100m 3 -
Balance at 31 December 27 -
Included in the hedging reserve balance at 31 December 2024, is $8m (2023:
$nil) of reserves related to the cost of hedging, to be amortised over the
term of the respective bonds.
Sensitivity analysis
For the year ended 31 December 2024, it is estimated that a general increase
of one percentage point in interest rates would have increased the Group's
loss before tax by approximately $3m (2023: $5m) with a corresponding decrease
in total equity.
It is estimated that a five-percentage point weakening in the value of pounds
sterling against the US dollar would have decreased the Group's profit before
tax by approximately $6m for the year ended 31 December 2024 (2023: increased
loss before tax by $6m). It is estimated that a five-percentage point
weakening in the value of the euro against the US dollar would have decreased
the Group's profit before tax by approximately $5m for the year ended 31
December 2024 (2023: increased loss before tax by $3m).
It is estimated that a five-percentage point weakening in the value of pounds
sterling against the US dollar would have decreased the Group's total equity
by approximately $28m for the year ended 31 December 2024 (2023: decreased by
$28m). It is estimated that a five-percentage point weakening in the value of
the euro against the US dollar would have increased the Group's total equity
by approximately $4m for the year ended 31 December 2024 (2023: increased by
$3m).
Capital management
The Group's parent company is listed on the UK stock exchange and the Board's
policy is to maintain a strong capital base. The Chief Financial Officer
monitors the diversity of the Group's major shareholders and further details
of the Group's communication with key investors can be found in the Corporate
Governance Report. In 2006, the Board approved the commencement of a
progressive dividend policy to enhance the total return to shareholders. The
Company returned to this dividend policy in 2023.
The Group's Chief Executive Officer, Mark Dixon, is a major shareholder of the
Company. Details of the Directors' shareholdings can be found in the
Directors' Remuneration report. In addition, the Group operates various share
option plans for key management and other senior employees.
The Group's objective when managing capital (equity and borrowings) is to
safeguard the Group's ability to continue as a going concern and to maintain
an optimal capital structure to reduce the cost of capital.
Effective interest rates
In respect of financial assets and financial liabilities, the following table
indicates their effective interest rates at the balance sheet date and the
periods in which they mature.
Except for lease liabilities, the Euro bond and the Convertible bonds, the
undiscounted cash flow and fair values of these instruments is not materially
different from the carrying value.
As at 31 December 2024:
$m Effective Carrying value Contractual Less than 1 year 1-2 years 2-5 years More than
interest rate %
cash flow
5 years
Cash and cash equivalents 0.9% 148 148 148 - - -
Trade and other receivables((1)) - 985 985 985 - - -
Net investment in finance leases 5.6% 116 167 41 37 74 15
Other long-term receivables - 67 67 - 34 33 -
Derivative financial assets
Cross-currency interest rate swap used for hedging:
- Outflow - - (817) (46) (46) (138) (587)
- Inflow - 6 757 35 35 106 581
Financial assets - 1,322 1,307 1,163 60 75 9
Bank loans and corporate borrowings 7.8% - - - - - -
Convertible bonds 3.8% (191) (201) (201) - - -
Euro bond 6.6% (629) (901) (42) (42) (126) (691)
Lease liabilities 5.7% (6,162) (9,159) (1,451) (1,366) (3,291) (3,051)
Other loans 0.1% (19) (19) (15) (2) - (2)
Deferred consideration on acquisitions - (5) (5) (2) (3) - -
Contingent consideration on acquisitions - (7) (7) - - (7) -
Trade and other payables - (1,597) (1,597) (1,597) - - -
Other long-term payables - (1) (1) - (1) - -
Derivative financial liabilities
Forward foreign currency exchange contract for hedging:
- Outflow - (3) (201) (201) - - -
- Inflow - - 200 200 - - -
Financial liabilities - (8,614) (11,891) (3,309) (1,414) (3,424) (3,744)
As at 31 December 2023:
$m Effective interest rate % Carrying value Contractual cash flow Less than 1 year 1-2 years 2-5 years More than 5 years
Cash and cash equivalents 0.6% 141 141 141 - - -
Trade and other receivables((1)) - 951 951 951 - - -
Net investment in finance leases 6.3% 124 170 52 32 64 22
Other long-term receivables - 67 67 - 34 33 -
Financial assets 1,283 1,329 1,144 66 97 22
Bank loans and corporate borrowings 8.0% (480) (480) - (480) - -
Convertible bonds 3.8% (419) (451) (3) (448) - -
Euro bond - - - - - - -
Lease liabilities 5.5% (6,856) (9,300) (1,550) (1,409) (3,248) (3,093)
Other loans 0.5% (17) (17) (14) - (1) (2)
Deferred consideration on acquisitions - (5) (5) (2) (3) - -
Contingent consideration on acquisitions - (7) (7) - - (7) -
Trade and other payables - (1,665) (1,665) (1,665) - - -
Other long-term payables - (6) (6) - - (6) -
Financial liabilities (9,455) (11,931) (3,234) (2,340) (3,262) (3,095)
1. Excluding prepayments.
Fair value disclosures
The fair values together with the carrying amounts shown in the balance sheet
are as follows:
31 December 2024:
$m Carrying amount Fair value
Cash, Fair value - hedging instruments Other financial liabilities Total Level 1 Level 2 Level 3 Total
loans and receivables
Cash and cash equivalents 148 - - 148 148 - - 148
Trade and other receivables((1)) 985 - - 985 985 - - 985
Other long-term receivables 67 - - 67 67 - - 67
Derivative financial assets - 6 - 6 - - 6 6
Derivative financial liabilities - (3) - (3) - - (3) (3)
Convertible bond - - (191) (191) - (187) - (187)
Euro bond - - (629) (629) - (694) - (694)
Other loans - - (19) (19) - - - -
Deferred consideration on acquisitions - - (5) (5) - - - -
Contingent consideration on acquisitions - - (7) (7) - - (7) (7)
Trade and other payables - - (1,597) (1,597) - - - -
Other long-term payables - - (1) (1) - - - -
1,200 3 (2,449) (1,246) 1,200 (881) (4) 315
31 December 2023:
$m Carrying amount Fair value
Cash, Fair value - hedging instruments Other Total Level 1 Level 2 Level 3 Total
loans and receivables
financial liabilities
Cash and cash equivalents 141 - - 141 141 - - 141
Trade and other receivables((1)) 951 - - 951 951 - - 951
Other long-term receivables 67 - - 67 67 - - 67
Bank loans and corporate borrowings - - (419) (419) - - - -
Convertible bonds - - (480) (480) - - (383) (383)
Other loans - - (17) (17) - - - -
Deferred consideration on acquisitions - - (5) (5) - - - -
Contingent consideration on acquisitions - - (7) (7) - - (7) (7)
Trade and other payables - - (1,665) (1,665) - - - -
Other long-term payables - - (6) (6) - - - -
1,159 - (2,599) (1,440) 1,159 - (390) 769
1. Excluding prepayments.
At the date of issue, the £350m Convertible bonds were bifurcated at £298m
and £52m between corporate borrowings (debt) and a derivative financial
liability respectively. At 31 December 2024, the debt was valued at its
amortised cost, $191m (2023: $419m) and the derivative liability at its fair
value, $nil (2023: $nil).
Valuation techniques
When measuring the fair value of an asset or a liability, the Group uses
market observable data as far as possible. Fair values are categorised into
different levels in a fair value hierarchy based on the inputs used in the
valuation techniques as follows:
• Level 1: quoted prices in active markets for identical assets or
liabilities;
• Level 2: inputs other than quoted prices included in level 1 that
are observable for the asset or liability, either directly or indirectly; and
• Level 3: inputs for the asset or liability that are not based on
observable market data.
The following tables show the valuation techniques used in measuring level 3
fair values and methods used for financial assets and liabilities not measured
at fair value:
Type Valuation technique
Cash and cash equivalents, trade and other receivables/payables, customer For cash and cash equivalents, receivables/payables with a remaining life of
deposits and investment loan receivables less than one year and customer deposits, the book value approximates the fair
value because of their short-term nature.
Loans and overdrafts The fair value of bank loans, overdrafts and other loans approximates the
carrying value because interest rates are at floating rates where payments are
reset to market rates at intervals of less than one year.
Contingent consideration, foreign exchange contracts and interest rate swaps The fair values are based on a combination of broker quotes, forward pricing,
and swap models.
Transfers between Levels 2 and 3
The Group has a Convertible bonds liability with a fair value of $187m at 31
December 2024 (2023: $383m). The fair value of this liability was categorised
as Level 3 at 31 December 2023. This was due to the fact that the bonds' price
on the open market reflected the combined value of the bonds' debt component
and the derivative financial liability, therefore the debt element's fair
value was calculated separately using non-observable inputs, rather than using
the bonds' market price.
Since 31 December 2022, the Group has measured the derivative component of the
bonds at $nil, and therefore the bonds' price published on the open market is
considered to reflect solely the fair value of the debt component of the
bonds. Because the bonds now have a published price quotation in an active
market, the fair value measurement was transferred from Level 3 to Level 2 of
the fair value hierarchy at 31 December 2024.
Convertible bond
In December 2020 the Group issued £350m Convertible bonds, issued by IWG
Group Holdings S.à.r.l. and transferred in 2021 to IWG International Holdings
S.à.r.l., a subsidiary of the Group and guaranteed by International Workplace
Group plc, which is due for repayment in 2027 if not previously converted into
shares. If the conversion option is exercised by the holder of the option, the
issuer has the choice to settle by cash or equity shares in the Group. The
holders of the bonds have the option to cash settle in December 2025 at par.
The bonds carry a fixed coupon of 0.5% per annum. The bonds' liability is
split between corporate borrowings (debt) and a derivative financial
liability. At the date of issue, the £350m was bifurcated at £298m and £52m
between corporate borrowings (debt) and a derivative financial liability,
respectively.
The derivative liability represents a level 3 instrument, which has been
valued with reference to the total Convertible bonds' price (a level 2
valuation) minus the level 3 valuation of the debt host.
Between June and October 2024, the Group repurchased in instalments a £192m
face value of the Convertible bonds at a weighted average price of 0.926
including accrued interest, representing a consideration of £178m. At 31
December 2024, the debt was valued at its amortised cost, $191m (2023: $419m)
and the derivative liability at its fair value, $nil (2023: $nil). The
outstanding nominal value of the debt at 31 December 2024 was £158m.
The Group entered into a series of forward exchange rate contracts on 16 and
18 January 2024, respectively, to hedge against foreign currency fluctuations
in relation to its £350m Convertible bonds denominated in GBP. These
contracts were designated as cash flow hedges. The Group contracted to
purchase £350m for $445m in 2025. From June to October 2024, due to the
partial repurchase of the Convertible bonds, £192m of the forward exchange
rate contracts entered into, were closed out. As at 31 December 2024, the fair
value of the forward exchange contract was $(3)m, and amounts recognised
through other comprehensive income/(loss) were $(1)m.
Euro bond
The Group issued a €575m Euro bond on 28 June 2024 at a fixed coupon rate of
6.5% and a bullet maturity of June 2030. An additional €50m was issued on 10
September 2024. The Euro bond is traded on the London Stock Exchange's
International Securities Market. Both IWG as a Group and the Euro bond itself
have an investment-grade rating of BBB (Stable) assigned by Fitch Ratings.
Simultaneous to closing of the Euro bond, the Group entered into hedging
arrangements to swap €400m of the issuance and the related interest into
$428m, with a weighted-average fixed coupon of 8.153%. On 12 September 2024,
the Group entered into arrangements to swap an additional €50m and the
related interest into $55m, with a weighted-average fixed coupon of 7.820%. On
29 October 2024, the Group entered into hedging arrangements to swap an
additional €75m of the Euro bond notional plus interest into $81m, with a
weighted-average fixed coupon of 8.216%. At the end of the period, a total of
€525m of the issuance was hedged, with arrangements to swap into $564m with
a weighted-average fixed coupon of 8.137%. The hedge will remain in place for
the life of the bond and has been designated as a cash flow hedge. As at 31
December 2024, the fair value of the swap contract was $6m, and amounts
recognised through other comprehensive income/(loss) were $25m (2023: $nil).
The remaining of the €100m issuance and the related interest at a fixed
coupon of 6.50% will remain in euros as these amounts are anticipated to be
covered by a natural currency hedge due to the anticipated geographic
diversity of operations of the Company and have been designated as net
investment hedges. Accordingly, the weighted average interest cost on the new
debt is 7.875%.
24. Share-based payments
There are three share-based payment plans, details of which are outlined
below:
Plan 1: IWG Group Share Option Plan
During 2004 the Group established the IWG Group Share Option Plan that
entitles eligible employees to purchase shares in International Workplace
Group plc. In accordance with this programme, holders of vested options are
entitled to purchase shares at the mid-market closing price of the shares at
the day before the date of grant.
The IWG Group also operates the IWG Group Share Option Plan (France) which is
included within the numbers for the IWG Share Option Plan disclosed above. The
terms of the IWG Share Option Plan (France) are materially the same as the IWG
Group Share Option Plan with the exception that they are only exercisable from
the fourth anniversary of the date of grant, assuming the performance
conditions have been met.
Reconciliation of outstanding share options
2024 2023
Number of Weighted average Number of Weighted average
share options
exercise price
share options
exercise price
per share (p)
per share (p)
At 1 January 53,482,059 169.60 52,304,124 171.48
Granted during the year 9,341,464 156.63 3,986,347 150.55
Lapsed during the year (8,390,504) 182.63 (2,681,896) 178.41
Exercised during the year (292,115) 170.87 (126,516) 158.42
Outstanding at 31 December 54,140,904 165.34 53,482,059 169.60
Exercisable at 31 December 23,535,725 194.13 21,477,049 198.95
Date of grant Numbers Weighted average exercise price per share (in pence) Lapsed Exercised At 31 Dec Vesting and exercisable from Vesting period Expiry date Performance
granted
2024
conditions
May-14 1,845,500 187.20 (1,658,500) (187,000) - ((1)) May-17 rateably over 5 years May-24 Personal performance targets
Nov-14 12,875,796 186.00 (11,204,511) (1,671,285) - ((1)) Nov-17 rateably over 5 years Nov-24 Personal performance targets
May-15 1,906,565 250.80 (1,862,565) - 44,000 ((1)) May-18 rateably over 5 years May-25 Personal performance targets
Dec-15 1,154,646 322.20 (395,186) (25,000) 734,460 ((1)) Dec-18 rateably over 5 years Dec-25 Personal performance targets
Jun-16 444,196 272.50 (389,150) (11,009) 44,037 ((1)) Jun-19 rateably over 5 years Jun-26 Personal performance targets
Sep-16 249,589 258.00 (214,313) (7,055) 28,221 ((1)) Sep-19 rateably over 5 years Sep-26 Personal performance targets
Mar-17 1,200,000 283.70 - - 1,200,000 ((1)) Mar-20 rateably over 5 years Mar-27 Personal performance targets
Dec-18 300,000 203.10 (75,000) - 225,000 ((1)) Dec-21 rateably over 3 years Dec-28 Personal performance targets
(Grant 1)
Dec-18 20,900,000 199.80 (9,116,664) (166,668) 11,616,668 ((1)) Dec-21 rateably over 3 years Dec-28 Personal performance targets
(Grant 2)
May-19 613,872 341.90 (595,834) - 18,038 ((1)) May-22 rateably over 3 years May-29 Personal performance targets
Dec-19 108,349 408.60 (108,349) - - ((1)) Dec-22 rateably over 3 years Dec-29 Personal performance targets
Apr-20 20,325,000 165.00 (7,139,802) (272,998) 12,912,200 ((2)) Apr-23 rateably over 3 years Apr-30 50% Personal performance targets, 50% TSR
May-20 450,000 202.00 (419,667) (30,333) - ((1)) May-23 rateably over 3 years May-30 50% Personal performance targets, 50% TSR
Sep-20 173,148 291.00 (156,737) - 16,411 ((2)) Sep-23 rateably over 3 years Sep-30 TSR
Mar-21 466,377 342.80 (466,377) - - ((3)) Mar-24 rateably over 3 years Mar-31 TSR
May-21 318,645 376.60 (318,645) - - ((3)) May-24 rateably over 3 years May-31 TSR
Aug-21 580,655 310.00 (580,655) - - ((3)) Aug-24 rateably over 3 years Aug-31 TSR
Mar-22 204,659 255.00 - - 204,659 ((3)) Mar-25 rateably over 3 years Mar-32 TSR
May-22 (Grant 1) 1,042,774 222.10 (42,774) - 1,000,000 ((3)) May-25 rateably over 3 years May-32 TSR
May-22 (Grant 2) 382,791 242.30 (382,791) - - ((3)) May-25 rateably over 3 years May-32 TSR
Oct-22 (Grant 1) 15,087,586 117.95 (1,921,953) - 13,165,633 ((3)) Oct-25 rateably over 3 years Oct-32 TSR
Oct-22 (Grant 2) 600,000 122.25 (600,000) - - ((3)) Oct-25 rateably over 3 years Oct-32 TSR
Dec-22 1,285,306 159.35 (75,306) - 1,210,000 ((3)) Dec-25 rateably over 3 years Dec-32 TSR
Mar-23 (Grant 1) 498,336 192.05 (329,108) - 169,228 ((3)) Mar-26 rateably over 3 years Mar-33 TSR
Mar-23 (Grant 2) 571,333 144.40 (55,402) - 515,931 ((3)) Mar-26 rateably over 3 years Mar-33 TSR
Aug-23 575,000 162.00 (225,000) - 350,000 ((3)) Aug-26 rateably over 3 years Aug-33 TSR
Oct-23 1,520,264 141.00 (741,724) - 778,540 ((3)) Oct-26 rateably over 2-3 years Oct-33 TSR
Nov-23 750,000 137.50 (250,000) - 500,000 ((3)) Nov-26 rateably over 3 years Nov-33 TSR
Dec-23 71,414 158.10 (5,000) - 66,414 ((3)) Dec-26 rateably over 3 years Dec-33 TSR
Jun-24 250,000 174.60 - - 250,000 ((3)) Jun-27 rateably over 3 years Jun-34 TSR
Sep-24 280,734 169.20 - - 280,734 ((3)) Sep-27 rateably over 3 years Sep-34 TSR
Sep-24 716,682 169.20 - - 716,682 ((3)) Sep-27 rateably over 3 years Sep-34 Personal performance targets
Nov-24 519,048 163.70 - - 519,048 ((3)) Nov-27 rateably over 3 years Nov-34 TSR
Dec-24 7,575,000 153.90 - - 7,575,000 ((3)) Dec-27 rateably over 3 years Dec-34 TSR
137,730,789 (63,700,735) (19,889,150) 54,140,904
1. These options have fully vested as of 31 December 2024.
2. The performance targets for these options have been met and they
are subject to vesting schedules as described below.
3. These options are subject to performance targets and vesting
schedules as described below.
Performance conditions for share options
Personal performance targets
The share options subject to personal performance targets are vested based on
the achievement of certain of the Group's strategic goals, as set out at the
date of issue of the share awards. These include franchise targets,
profitability targets and KPI targets specific to the recipient of the award.
Personal performance targets are subject to review, in line with changes to
the Group's strategy, at the discretion of the Remuneration Committee.
Total Shareholder Return (TSR)
The share options subject to TSR targets are vested based on the Group ranking
at or above the median for TSR performance relative to a comparator group over
a period of three years with a minimum performance threshold of achieving a
ranking at the median TSR or above and the maximum award being given for
exceeding the comparator group median TSR performance by 10% or more.
The relative TSR condition is based on the performance of the Group's TSR
growth against the median TSR growth of the comparator group as follows:
% of the award that vests
Exceeds the median by 10% or more 100%
Exceeds the median by less than 10% On a straight-line basis between 25% and 100%
Ranked at median 25%
Ranked below the median 0%
Measurement of fair values
The fair value of the rights granted through the employee share purchase plan
was measured based on the Monte Carlo simulation or the Black-Scholes formula.
The expected volatility is based on the historic volatility adjusted for any
abnormal movement in share prices.
The inputs to the model are as follows:
December 2024 November 2024 September 2024 June 2024
Share price on grant date 153.90p 163.70p 169.20p 174.60p
Exercise price 153.90p 163.70p 169.20p 174.60p
Expected volatility 38.28% - 51.43% 38.78% - 51.43% 39.66% - 51.22% 39.96% - 51.32%
Option life 3-5 years 3-5 years 3-5 years 3-5 years
Expected dividend 0.32% 0.31% 0.30% 0.29%
Fair value of option at time of grant 82.52p - 98.39p 90.14p - 105.92p 88.97p - 104.17p 96.64p - 111.33p
Risk-free interest rate 3.99% - 4.14% 4.34% - 4.47% 3.70% - 3.84% 3.92% - 4.08%
December 2023 November 2023 October 2023 August 2023
Share price on grant date 158.10p 137.50p 141.00p 162.00p
Exercise price 158.10p 137.50p 141.00p 162.00p
Expected volatility 40.64% - 55.49% 42.00% - 55.25% 42.97% - 55.18% 42.96% - 54.98%
Option life 3-5 years 3-5 years 3-5 years 3-5 years
Expected dividend 0.00% 0.00% 0.00% 0.00%
Fair value of option at time of grant 91.30p - 108.55p 82.73p - 95.52p 86.63p - 98.25p 99.53p - 112.66p
Risk-free interest rate 3.66% - 3.83% 4.22% - 4.38% 4.37% - 4.61% 4.37% - 4.61%
March 2023 (Grant 2) March 2023 (Grant 1) December 2022 October 2022 (Grant 2)
Share price on grant date 144.40p 192.05p 159.35p 122.25p
Exercise price 144.40p 192.05p 159.35p 122.25p
Expected volatility 53.62% - 59.37% 52.75% - 60.04% 54.01% - 59.92% 53.34% - 58.16%
Option life 3-5 years 3-5 years 3-5 years 3-5 years
Expected dividend 0.00% 0.00% 0.00% 0.00%
Fair value of option at time of grant 96.70p - 102.37p 126.16p - 136.44p 106.53p - 113.10p 81.12p - 85.29p
Risk-free interest rate 3.35% - 3.46% 3.12% - 3.21% 3.22% - 3.24% 3.22% - 3.24%
October 2022 (Grant 1) May 2022 May 2022 March2022
(Grant 2)
(Grant 1)
Share price on grant date 117.95p 242.30p 222.10p 255.00p
Exercise price 117.95p 242.30p 222.10p 255.00p
Expected volatility 53.30% - 58.05% 53.48% - 56.71% 54.59% - 56.66% 54.33% - 57.32%
Option life 3-5 years 3-5 years 3-5 years 3-5 years
Expected dividend 0.00% 0.00% 0.00% 0.00%
Fair value of option at time of grant 78.24p - 82.21p 153.52p - 158.97p 142.70p - 145.61p 162.79p - 168.44p
Risk-free interest rate 3.22% - 3.24% 1.42% - 1.60% 1.42% - 1.60% 1.41% - 1.49%
August 2021 May 2021 March 2021 September 2020
Share price on grant date 310.00p 376.60p 342.80p 291.00p
Exercise price 310.00p 376.60p 342.80p 291.00p
Expected volatility 53.67% - 57.07% 53.78% - 59.19% 53.64% - 59.13% 51.81% - 62.96%
Option life 3-5 years 3-5 years 3-5 years 3-5 years
Expected dividend 1.12% 0.96% 1.00% 2.39%
Fair value of option at time of grant 163.92p - 171.67p 202.75p - 217.81p 183.02p - 196.95p 122.93p - 146.68p
Risk-free interest rate 0.37% - 0.49% 0.16% - 0.34% 0.15% - 0.33% (0.08%) - (0.04%)
May 2020 April 2020 December 2019 May 2019
Share price on grant date 202.00p 165.00p 408.60p 341.90p
Exercise price 202.00p 165.00p 408.60p 341.90p
Expected volatility 50.15% - 61.06% 49.02% - 59.29% 36.24% - 44.72% 38.84% - 45.75%
Option life 3-5 years 3-5 years 3-7 years 3-5 years
Expected dividend 3.44% 4.21% 1.59% 1.85%
Fair value of option at time of grant 71.39p - 86.80p 50.79p - 62.29p 141.77p - 172.84p 120.77p - 141.08p
Risk-free interest rate 0.00% - 0.06% 0.00% - 0.06% 0.57% - 0.65% 0.52% - 0.60%
December 2018 (Grant 2) December 2018 (Grant 1) March 2017 September 2016
Share price on grant date 199.80p 203.10p 283.70p 258.00p
Exercise price 199.80p 203.10p 283.70p 258.00p
Expected volatility 37.66% - 44.35% 37.63% - 44.25% 27.42% - 29.87% 27.45% - 32.35%
Option life 3-5 years 3-5 years 3-5 years 3-7 years
Expected dividend 2.95% 2.90% 1.80% 1.80%
Fair value of option at time of grant 58.77% - 69.33% 39.36p - 46.42p 44.51p - 76.88p 40.96p - 67.89p
Risk-free interest rate 0.87% - 1.01% 0.73% - 0.88% 0.23% - 0.56% 0.09% - 0.38%
June 2016 December 2015 May 2015
Share price on grant date 272.50p 322.20p 250.80p
Exercise price 272.50p 322.20p 250.80p
Expected volatility 27.71% - 34.81% 24.80% - 37.08% 27.23% - 30.12%
Option life 3-7 years 3-7 years 3-7 years
Expected dividend 1.71% 1.40% 1.59%
Fair value of option at time of grant 44.28p - 78.68p 29.76p - 90.61p 42.35p - 69.12p
Risk-free interest rate 0.14% - 0.39% 0.14% - 0.21% 0.81% - 1.53%
Plan 2: Performance Share Plan (PSP)
The PSP provides for the Remuneration Committee to make standalone awards,
based on normal plan limits, up to a maximum of 250% of base salary.
Reconciliation of outstanding share awards
2024 2023
Number of awards Number of awards
At 1 January 3,417,871 2,542,212
PSP awards granted during the year 1,917,709 1,711,795
Lapsed during the year (638,128) (609,332)
Exercised during the year (118,054) (226,804)
Outstanding at 31 December 4,579,398 3,417,871
Exercisable at 31 December 92,050 -
There were 118,054 shares which were exercised during the year ended 31
December 2024 (2023: 226,804). The weighted average share price at the date of
exercise for share awards exercised during the year ended 31 December 2024 was
184.72p (2023: 150.00p).
Plan Date of grant Numbers Lapsed Exercised At 31 Dec Vesting and released from Holding period Expiry date Performance conditions
granted
2024
PSP 07/03/2019 1,058,578 (848,474) (118,054) 92,050 Mar-24 5 years Mar-29 1/3 EPS, 1/3 ROI, 1/3 TSR
PSP 26/03/2021 959,015 (959,015) - - Mar-26 5 years Mar-31 TSR
PSP 09/03/2022 1,289,217 (431,373) - 857,844 Mar-27 5 years Mar-32 TSR
PSP 08/03/2023 1,711,795 - - 1,711,795 Mar-28 5 years Mar-33 TSR
PSP 06/03/2024 1,826,390 - - 1,826,390 Mar-29 5 years Mar-34 TSR
PSP 19/03/2024 91,319 - - 91,319 Mar-29 5 years Mar-34 TSR
6,936,314 (2,238,862) (118,054) 4,579,398
Performance conditions for shares awarded
Earnings per share (EPS)
The total number of shares awarded subject to earnings per share (EPS)
conditions are vested based on the EPS improvement over a period of three
years. It is recognised by the Remuneration Committee that the EPS targets
represent a highly challenging goal and consequently, in determining whether
they have been met, the Committee will exercise its discretion.
Return on investment (ROI)
The total number of shares awarded subject to return on investment (ROI)
conditions are vested based on the ROI improvement over a period of three
years.
Total Shareholder Return (TSR)
The total number of shares awarded subject to TSR targets are vested based on
the Group ranking at or above the median for TSR performance relative to a
comparator group over a period of three years with a minimum performance
threshold of achieving a ranking at the median TSR or above and the maximum
award being given for exceeding the comparator group median TSR performance by
10% or more.
The relative TSR condition is based on the performance of the Group's TSR
growth against the median TSR growth of the comparator group as follows:
% of the award that vests
Exceeds the median by 10% or more 100%
Exceeds the median by less than 10% On a straight-line basis between 25% and 100%
Ranked at median 25%
Ranked below the median 0%
On 20 February 2025, 857,844 options issued on March 2022 under the PSP were
lapsed on 1st January 2025 following determination by the Remuneration
Committee that the performance conditions had not been achieved.
Measurement of fair values
The fair value of the rights granted through the employee share purchase plan
was measured based on the Monte Carlo simulation.
The inputs to the model are as follows:
March 2024 (Grant 2) March 2024 (Grant 1) March March March March
2023
2022
2021
2019
Share price on grant date 180.70p 180.00p 192.05p 255.00p 346.40p 244.90p
Exercise price nil nil nil nil nil nil
Number of simulations 250,000 250,000 250,000 250,000 250,000 250,000
Number of companies 32 32 32 32 32 32
Award life 5 years 5 years 5 years 5 years 5 years 5 years
Expected dividend 0.00% 0.00% 0.00% 0.00% 1.00% 2.57%
Fair value of award at time of grant 118.83p - 180.03p 118.37p - 179.33p 126.29p - 191.32p 167.75p - 254.14p 206.19p - 312.37p 124.38p - 188.43p
Risk-free interest rate 3.97% 3.97% 3.12% 1.45% 0.33% 0.79%
Plan 3: Deferred Bonus Share Plan and Other Shares Awards
The Deferred Bonus Share Plan, established in 2016, enables the Board to award
options to selected employees on a discretionary basis. The awards are
conditional on the ongoing employment of the related employees for a specified
period of time. Once this condition is satisfied, those awards that are
eligible will vest three years after the date of grant.
On 2 November 2022, the Chief Financial Officer received a conditional award
over 511,571 ordinary shares in the Company. This was granted as a one-off
award arrangement established under Listing Rule 9.4.2(2) in order to
facilitate his recruitment. This award is subject to a TSR performance metric.
Once this condition is satisfied, this award will vest 5 years after the date
of grant.
Reconciliation of outstanding share options
2024 2023
Number of awards Number of
awards
At 1 January 955,841 947,443
DBSP and other awards granted during the year 471,392 180,752
Lapsed during the year - -
Exercised during the year - (172,354)
Outstanding at 31 December 1,427,233 955,841
Exercisable at 31 December 91,923 91,923
The weighted average share price at the date of exercise for share awards
exercised during the year ended 31 December 2024 was 0.00p (2023: 150.00p).
Plan Date of grant Numbers Lapsed Exercised At 31 Dec Release date
granted
2024
DBSP 04/03/2020 264,277 - (172,354) 91,923 Mar-23
DBSP 09/03/2022 171,415 - - 171,415 Mar-25
One-off award 02/11/2022 511,751 - - 511,751 Nov-27
DBSP 08/03/2023 180,752 - - 180,752 Mar-26
DBSP 06/03/2024 471,392 - - 471,392 Mar-27
1,599,587 - (172,354) 1,427,233
Performance conditions related to the one-off award
Total Shareholder Return (TSR)
The total number of shares awarded subject to TSR targets are vested based on
the Group ranking at or above the median for TSR performance relative to a
comparator group over a period of three years with a minimum performance
threshold of achieving a ranking at the median TSR or above and the maximum
award being given for exceeding the comparator group median TSR performance by
10% or more.
The relative TSR condition is based on the performance of the Group's TSR
growth against the median TSR growth of the comparator group as follows:
% of the award that vests
Exceeds the median by 10% or more 100%
Exceeds the median by less than 10% On a straight-line basis between 25% and 100%
Ranked at median 25%
Ranked below the median 0%
Measurement of fair values
The fair value of the rights granted through the employee share purchase plan
was measured based on the Black-Scholes formula. The expected volatility is
based on the historic volatility adjusted for any abnormal movement in share
prices.
The inputs to the model are as follows:
March March November March March
2024 2023 2022 2022 2020
Share price on grant date 180.00p 192.05p 131.90p 255.00p 356.50p
Exercise price nil nil nil nil nil
Number of simulations - - - - -
Number of companies - - - - -
Award life 3 years 3 years 5 years 3 years 3 years
Expected dividend 0.00% 0.00% 0.00% 0.00% 1.95%
Fair value of award at time of grant 179.34p 191.17p - 191.33p 131.18p 254.14p 292.36p
Risk-free interest rate 4.08% 3.21% 3.24% 1.41% 0.00%
25. Retirement benefit obligations
The Group accounts for the Swiss and Philippines pension plans as defined
benefit plans under IAS 19 - Employee Benefits.
The reconciliation of the net defined benefit liability and its components is
as follows:
$m 2024 2023
Switzerland Philippines Total Switzerland Philippines Total
Fair value of plan assets 8 - 8 8 - 8
Present value of obligations (10) (2) (12) (10) (1) (11)
Net funded obligations (2) (2) (4) (2) (1) (3)
26. Acquisitions
Current period acquisitions
During the year ended 31 December 2024 the Group made various individually
immaterial acquisitions for a total consideration of $4m:
• $2m consideration related to two immaterial acquisitions
• $2m increased stake to 89.3% (2023: 86.6%) in a non-controlling
interest for a consideration of $14m net of utilisation of $12m treasury
shares
The provisional goodwill arising on these 2024 acquisitions reflects the
anticipated future benefits IWG can obtain from operating the businesses more
efficiently, primarily through increasing occupancy and the addition of
value-adding products and services.
In the year, the acquisitions contributed revenue of $2m and net retained loss
of $1m. If the above acquisitions had occurred on 1 January 2024, the revenue
and net retained loss arising from these acquisitions would have been $4m and
$1m respectively in the year ended 31 December 2024.
In relation to the acquisitions completed during the year ended 31 December
2024, the fair value of assets acquired has only been provisionally assessed,
pending completion of a fair value assessment. The final assessment of the
fair value of these assets will be made within 12 months of the acquisition
dates and any adjustments reported in future reports.
Deferred consideration of $nil arose on acquisitions completed during the year
ended 31 December 2024. Deferred consideration of $nil was paid and $nil
released, during the current year. $5m deferred consideration is held on the
Group's balance sheet at 31 December 2024.
Contingent consideration of $nil arose on acquisitions completed during the
year ended 31 December 2024. Contingent consideration of $1m was paid and $nil
released, during the current year, with respect to milestones, achieved, on
previous acquisitions. $7m contingent consideration is held on the Group's
balance sheet at 31 December 2024.
Goodwill of $2m arose relating to 2024 acquisitions.
Prior period acquisitions
During the year ended 31 December 2023, the Group made various individually
immaterial acquisitions for a total consideration of $21m.
$m Book value Final fair value adjustments Final fair value
Net assets acquired
Right-of-use assets 12 12
Other property, plant and equipment 5 5
Cash 3 3
Other current and non-current assets 10 (4) 6
Lease liabilities (11) (11)
Current liabilities (8) 4 (4)
11 11
Goodwill arising on acquisition 10
Total consideration 21
Less: deferred consideration (3)
Less: contingent consideration (8)
Cash flow on acquisition 10
Cash paid 10
Less: cash acquired (3)
Net cash outflow 7
Goodwill of $10m arose relating to 2023 acquisitions. The goodwill arising on
the 2023 acquisitions reflects the expected future benefits IWG can obtain
from operating the businesses more efficiently, primarily through increasing
occupancy and the addition of value-adding products and services.
In the year, the acquisitions contributed revenue of $10m and net retained
loss of $1m. If the above acquisitions had occurred on 1 January 2023, the
revenue and net retained loss arising from these acquisitions would have been
$12m and $2m respectively in the year ended 31 December 2023.
Deferred consideration of $3m arose from acquisitions, $1m was released and
$4m were settled during the year. In addition, $2m deferred consideration
relating to prior period acquisitions is held on the Group's balance sheet at
31 December 2023.
Contingent consideration of $8m arose on the 2023 acquisitions. Contingent
consideration of $2m was paid and $nil released, during the prior year, with
respect to milestones, achieved or not achieved, on previous acquisitions. No
additional contingent consideration relating to prior period acquisitions is
held on the Group's balance sheet at 31 December 2023.
Non-controlling interests
During the year, the Group increased its equity voting rights to 89.3% (2023:
86.6%) in the non-controlling interest for a consideration of $14m net of
utilisation of $12m treasury shares.
27. Capital commitments
Capital commitments in respect of centre fit-out obligations that are not
offset by contractually committed landlord contributions are immaterial at
December 31, 2024. There are $1m (2023: $1m) of capital commitments in respect
of joint ventures and no significant lease commitments for leases not
commenced at 31 December 2024.
28. Bank guarantees and contingent liabilities
The Group has bank guarantees and letters of credit held with certain banks,
predominantly in support of leasehold contracts with a variety of landlords,
amounting to $332m (31 December 2023: $389m). Of this $332m, $284m was
utilised under the RCF facility (see Note 23) and the remaining $48m from
separate bilateral guarantee facilities. There are no material lawsuits
pending against the Group.
29. Related parties
Parent and subsidiary entities
The consolidated financial statements include the results of the Group and its
subsidiaries.
Joint ventures
The following table provides the total amount of transactions that have been
entered into with related parties for the relevant financial year.
$m Management fees received Amounts owed by related party Amounts owed to related party
from related parties
2024
Joint ventures 9 42 38
2023
Joint ventures 9 49 46
As at 31 December 2024, none of the amounts due to the Group have been
provided for as the expected credit losses arising on the balances are
considered immaterial (2023: $nil). All outstanding balances with these
related parties are priced on an arm's length basis. None of the balances are
secured.
Key management personnel
No loans or credit transactions were outstanding with Directors or Officers of
the Company at the end of the year or arose during the year that are required
to be disclosed.
Compensation of key management personnel (including Directors)
Key management personnel include those personnel (including Directors) that
have responsibility and authority for planning, directing and controlling the
activities of the Group:
$m 2024 2023
Short-term employee benefits 11 9
Retirement benefit obligations - -
Share-based payments 1 3
12 12
Share-based payments included in the table above reflect the accounting charge
in the year. The full fair value of awards granted in the year was $6m (2023:
$4m). These awards are subject to performance conditions and vest over three,
four and five years from the award date (note 24).
Transactions with related parties
During the year ended 31 December 2024 the Group acquired goods and services
from a company indirectly controlled by a Director of the Company amounting to
$65,754 (2023: $81,252). There was a $411 balance outstanding at the year-end
(2023: $81,510).
All transactions with these related parties are priced on an arm's length
basis and are to be settled in cash. None of the balances are secured.
30. Principal Group companies
The Group's principal subsidiary undertakings at 31 December 2024, their
principal activities and countries of incorporation are set out below:
Name of undertaking Country of incorporation % of ordinary shares
and votes held
Trading companies
Regus Australia Management Pty Ltd Australia 100
Regus Belgium SA Belgium 100
Regus do Brasil Ltda Brazil 100
Regus Business Service (Shenzen) Ltd China 100
Regus Management ApS Denmark 100
Regus Management (Finland) Oy Finland 100
IWG France Management Sarl France 100
Regus CME Ireland Limited Ireland 100
Regus Business Centres Limited Israel 100
Regus Business Centres Italia S.r.l. Italy 100
Regus Management Malaysia Sdn Bhd Malaysia 100
Regus Management de Mexico, SA de CV Mexico 100
Trading companies (continued)
IWG Management Services Morocco Morocco 100
Regus New Zealand Management Ltd New Zealand 100
Regus Business Centre Norge AS Norway 100
IWG Management Sp z.o.o. Poland 100
Regus Business Centre, Lda Portugal 100
Regus Management Singapore Pte Ltd Singapore 100
Regus Management España SL Spain 100
IWG Management (Sweden) AB Sweden 100
Avanta Managed Offices Ltd United Kingdom 100
Basepoint Centres Limited United Kingdom 100
Green (Topco) Limited United Kingdom 89.3
HQ Global Workplaces LLC United States 100
RGN National Business Centre LLC United States 100
RB Centres LLC United States 100
Regus Management Group LLC United States 100
Management companies
RGN Management Limited Partnership Canada 100
Regus Service Centre Philippines B.V. Netherlands 100
Franchise International GmbH Switzerland 100
Pathway IP II GmbH Switzerland 100
Regus Global Management Centre SA Switzerland 100
Regus Group Services Ltd United Kingdom 100
IW Group Services (UK) Ltd United Kingdom 100
Regus Management Group LLC United States 100
Holding and finance companies
IWG Enterprise S.à.r.l. Luxembourg 100
IWG Group Holdings S.à.r.l. Luxembourg 100
IWG International Holdings S.à.r.l. Luxembourg 100
Ibiza Holdings Limited Jersey 89.3
Global Platform Services GmbH Switzerland 100
Regus Group Limited United Kingdom 100
Regus Corporation United States 100
Ibiza Finance Limited Jersey 100
Genesis Finance GmbH Switzerland 100
Pathway Finance GmbH Switzerland 100
Pathway Finance EUR 2 GmbH Switzerland 100
Pathway Finance USD 2 GmbH Switzerland 100
IWG US Finance LLC United States 100
31. Key judgmental and estimates areas adopted in preparing these accounts
The preparation of consolidated financial statements in accordance with IFRS
requires management to make certain judgements and assumptions that affect
reported amounts and related disclosures.
Key judgements
Tax assets and liabilities
The Group is subject to income taxes in numerous jurisdictions. Significant
judgement is required in determining the worldwide provision for income taxes.
Where appropriate, the Group assesses the potential risk of future tax
liabilities arising from the operation of its business in multiple tax
jurisdictions and includes provisions within tax liabilities for those risks
that can be estimated reliably. Changes in existing tax laws can affect large
international groups such as IWG and could result in additional tax
liabilities over and above those already provided for.
Determining the lease term of contracts with renewal and termination options
IFRS 16 defines the lease term as the non-cancellable period of a lease
together with the options to extend or terminate a lease, if the lessee were
reasonably certain to exercise that option. Where a lease includes the option
for the Group to extend the lease term, the Group makes a judgement as to
whether it is reasonably certain that the option will be taken. This will take
into account the length of time remaining before the option is exercisable,
macro-economic environment, socio-political environment and other lease
specific factors.
The lease term is the non-cancellable period of the lease adjusted for any
renewal or termination options which are reasonably certain to be exercised.
Management applies judgement in determining whether it is reasonably certain
that a renewal or termination option will be exercised.
Key estimates
Impairment of intangibles and goodwill
We evaluate the fair value of goodwill and other indefinite life intangible
assets to assess potential impairments on an annual basis, or during the year
if an event or other circumstance indicates that we may not be able to recover
the carrying amount of the asset. We evaluate the carrying value of goodwill
based on our CGUs aggregated at a country level and make that determination
based upon future cash flow projections which assume certain growth
projections which may or may not occur. We record an impairment loss for
goodwill when the carrying value of the asset is less than its estimated
recoverable amount. Further details of the methodology and assumptions applied
to the impairment review in the year ended 31 December 2024, including the
sensitivity to changes in those assumptions, can be found in note 11.
Deferred tax assets
We base our estimate of deferred tax assets and liabilities on current tax
laws and rates and, where relevant, the Group's three-year business plans and
other expectations about future outcomes. Changes in existing laws and rates,
and their related interpretations, and future business results may affect the
amount of deferred tax liabilities or the valuation of deferred tax assets
over time. Our accounting for deferred tax consequences represents
management's best estimate of future events that can be appropriately
reflected in the accounting estimates. It is Group policy to recognise a
deferred tax asset to the extent that it is probable that future taxable
profits will be available against which the assets can be used. Significant
changes to the Group's forecasts and other expectations of future outcomes
could significantly impact the recognition of deferred tax assets.
Given the significant level of corporate developments in the Group and the
number of legal entities and countries in which the Group operates, the
determination of the period of time representing foreseeable future requires
judgement to be exercised. Management has determined the most suitable period
to be the three-year period corresponding to the Group's business forecasting
processes. Any changes in management's approach to this assessment could
significantly impact the recognition of deferred tax assets.
Derivatives
The Group applies hedge accounting to manage the volatility of cash flows
arising from fluctuations in foreign exchange rates.
The assessment of hedge effectiveness and the measurement of ineffectiveness
involve significant judgement, including estimating future cash flows,
selecting appropriate valuation methodologies, and determining the probability
of forecasted transactions. Changes in market conditions or assumptions could
impact hedge effectiveness and result in reclassification of gains or losses
from other comprehensive income to earnings.
Impairment of property, plant and equipment (including right-of-use assets)
We evaluate the potential impairment of property, plant and equipment at a
centre (CGU) level where there are indicators of impairment at the balance
sheet date. In the assessment of value-in-use, key judgemental areas in
determining future cash flow projections include: an assessment of the
location of the centre; the local economic situation; competition; local
environmental factors; the management of the centre; and future changes in
occupancy, revenue and costs of the centre.
While centre costs remain relatively stable, revenue is a function of the
expected levels of occupancy and the corresponding pricing achieved. In
assessing any impairment, the value-in-use calculated is therefore assessed
for sensitivity to changes in both occupancy and pricing, to determine the
extent to which these estimates need to change before an impairment arises. On
a similar basis, overall performance is also a function of the discount rate
applied (which is based on the incremental borrowing rates associated with
centre leases). The value-in-use calculation is therefore also assessed for
sensitivity to changes in this discount rate, to determine the extent to which
this discount rate needs to change before an impairment arises.
We evaluate the potential impairment of property, plant and equipment at a
centre (CGU) level where there are indicators of impairment at the balance
sheet date and for centres which have been identified as part of the Group's
rationalisation programme. The key area of estimation involved is in
determining the recoverable amount of the rationalised centres, determining
whether historical financial performance is reflective of future financial
performance, over what period the rationalisation will take place, and the
level of moveable assets that will be utilised in other centres.
Estimating the incremental borrowing rates on leases
The determination of applicable incremental borrowing rates on leases at the
commencement of lease contracts also requires judgement. The Group determines
its incremental borrowing rates by obtaining interest rates from various
external financing sources and makes certain adjustments to reflect the terms
of the lease. The Group considers the relevant market interest rate, based on
the weighted average of the timing of the lease payments under the lease
obligation. In addition, a spread over the market rate is applied based on the
cost of funds to the Group, plus a spread that represents the risk
differential of the lessee entity compared to the Group funding cost.
Fair value accounting for business combinations
For each business combination, we assess the fair values of assets and
liabilities acquired. Where there is not an active market in the category of
the non-current assets typically acquired with a business centre or where the
books and records of the acquired company do not provide sufficient
information to derive an accurate valuation, management calculates an
estimated fair value based on available information and experience.
The main categories of acquired non-current assets where management's
judgement has an impact on the amounts recorded include tangible fixed assets,
customer list intangibles and the fair market value of leasehold assets and
liabilities. For significant business combinations management also obtains
third-party valuations to provide additional guidance as to the appropriate
valuation to be included in the financial statements.
32. Subsequent events
On 4 March 2025 IWG announced a $50m share buyback programme.
Furthermore, the Board has recommended a final dividend for 2024 of 0.90¢
pertaining to 2024.
There were no other significant events occurring after 31 December 2024
affecting the consolidated financial statements of the Group.
Reconciliation for alternative performance measures
Alternative performance measures
The Group reports certain alternative performance measures (APMs) that are not
required under International Financial Reporting Standards (IFRS) which
represents the generally accepted accounting principles (GAAP) under which the
Group reports. The Group believes that the presentation of these APMs provides
useful supplemental information, when viewed in conjunction with our IFRS
financial information as follows:
• to evaluate the historical and planned underlying results of our
operations;
• to set Director and management remuneration; and
• to discuss and explain the Group's performance with the investment
analyst community.
None of the APMs should be considered as an alternative to financial measures
derived in accordance with GAAP. The APMs can have limitations as analytical
tools and should not be considered in isolation or as a substitute for an
analysis of our results as reported under GAAP. These performance measures may
not be calculated uniformly by all companies and therefore may not be directly
comparable with similarly titled measures and disclosures of other companies.
Additional information has been provided on the following pages to bridge the
statutory information reported with the performance presented as part of the
Chief Executive Officer's and Chief Financial Officer's review.
Reconciliation of alternative performance measurement adjustments recognised
The purpose of these unaudited pages is to provide a reconciliation from the
2024 financial results to the alternative performance measures in accordance
with the previous pre-IFRS 16 policies adopted by the Group, thereby giving
the reader greater insight into the impact of IFRS 16 on the results of the
Group. The recognition of these adjustments will not impact the overall cash
flows of the Group or the cash generation per share.
1. Rent income and finance income
Under IFRS 16, where the sublease is assessed with reference to the
right-of-use assets arising from the head lease, conventional rent income is
not recognised in the profit or loss. The receipts associated with this income
instead are used to determine the net investment in finance leases noted
above. The net investment in finance leases is measured in subsequent periods
using the effective interest rate method, based on the applicable interest
rate. The related finance income arising on subsequent measurement is
recognised directly through profit or loss.
2. Rent expense and finance costs
Under IFRS 16, conventional rent charges are not recognised in the profit or
loss. The payments associated with these charges instead form part of the
lease payments used in calculating the right-of-use assets and related lease
liabilities noted above. The lease liabilities are measured in subsequent
periods using the effective interest rate method, based on the applicable
interest rate. The related finance costs arising on subsequent measurement are
recognised directly through profit or loss.
3. Depreciation, lease payments and lease receipts
Depreciation on the right-of-use assets recognised, is depreciated over the
life of the lease on a straight-line basis, adjusted for any period between
the lease commencement date and the date the related centre opens, reflecting
the lease-related costs directly incurred in preparing the business centre for
trading. Lease payments on head leases reduce the lease liabilities recognised
in the balance sheet. Lease receipts on subleases reduce the net investment in
finance leases recognised in the balance sheet.
4. Other adjustments
These adjustments primarily reflect the impairment of the right-of-use assets
and other property, plant and equipment as well as the reversal of the closure
cost provision on a pre-IFRS 16 basis. Certain parking, storage and brokerage
costs are also reversed, as they form part of the lease payments.
System-wide revenue (unaudited)
in $m Reference Year Ended 31 December 2024 Year Ended 31 December 2023
System-wide revenue CFO review 4,231 4,157
Fee revenue CFO review 79 61
Managed & Franchised system revenue CFO review (620) (529)
Group Revenue Consolidated income statement 3,690 3,689
Consolidated EBITDA (unaudited)
Year ended 31 December 2024:
$m Notes As reported Rent income Rent expense Depreciation Other pre-IFRS 16
Adjustments ((1))
Adjusted EBITDA 1,824 67 (1,342) - 8 557
Adjusting items 30 - (12) 18
Depreciation on property plant and equipment 4 (1,266) - - 901 - (365)
Amortisation of intangible assets 4 (78) - - - - (78)
Operating profit/(loss) 4 510 67 (1,342) 901 (4) 132
1. Includes $31m of net reversal of impairment of property, plant and
equipment including right-of-use assets.
Year ended 31 December 2023:
$m Notes As Rent income Rent expense Depreciation Other pre-IFRS 16
reported
Adjustments ((1))
Adjusted EBITDA 1,768 75 (1,381) - 41 503
Adjusting items (117) - - - (50) (167)
Depreciation on property plant and equipment 4 (1,392) - - 1,004 - (388)
Amortisation of intangible assets 4 (80) - - - - (80)
Operating profit/(loss) 4 179 75 (1,381) 1,004 (9) (132)
1. Includes $99m of net impairment of property, plant and equipment
including right-of-use assets.
Landlord contributions receivables in relation to leased centres (unaudited)
$m Reference 2024 2023
Opening landlord contribution receivables 15 32 28
Net landlord contributions recognised in the period 56 57
• Proceeds from landlord contributions Operating activities, Statement of cashflows 8 27
(reimbursement of costs)
• Proceeds from landlord contributions Investing activities, Statement of cashflows 48 30
(lease incentives)
• Maintenance landlord contributions CFO review 12 9
• Gross growth landlord contributions CFO review 44 48
Contributions owed settled in the period (52) (54)
Exchange differences (1) 1
Closing landlord contribution receivable 15 35 32
Working capital (unaudited)
Year ended 31 December 2024:
$m Reference As reported Rent income & expense and finance income & expense Depreciation and lease payments Other adjustments pre-IFRS 16
Landlord contributions - reimbursement Statement of cash flows 8 - (8) - -
(Increase)/decrease in trade and other receivables Statement of cash flows (22) (35) - - (57)
Increase/(decrease) in trade and other payables Statement of cash flows (2) 957 (992) (23) (60)
Working capital (16) 922 (1,000) (23) (117)
Analysed as:
Working capital (excluding amortisation of landlord contributions) CFO review (51)
Working capital related to CFO review (110)
the amortisation of landlord contributions
Growth-related landlord contributions CFO review 44
Year ended 31 December 2023:
$m Reference As reported Rent income & expense and finance income & expense Depreciation and lease payments Other adjustments pre-IFRS 16
Landlord contributions - reimbursement Statement of cash flows 27 - (22) (5) -
(Increase)/decrease in trade and other receivables Statement of cash flows (10) 32 - 2 24
Increase/(decrease) in trade and other payables Statement of cash flows 165 935 (1,048) (28) 24
Working capital 182 967 (1,070) (31) 48
Analysed as:
Working capital (excluding amortisation of landlord contributions) CFO review 118
Working capital related to the amortisation of landlord contributions CFO review (118)
Growth-related landlord contributions CFO review 48
Capital expenditure (unaudited)
Year ended 31 December 2024:
$m Reference As reported Rent income & expense and finance income & expense pre-IFRS 16
Purchase of property, plant and equipment Statement of cash flows (192) (2) (194)
Purchase of intangible assets Statement of cash flows (45) - (45)
Total capital expenditure (237) (2) (239)
Analysed as: Net capital expenditure Landlord contributions Gross capital expenditure
Maintenance capital expenditure CFO review (93) (12) (105)
Gross growth capital expenditure CFO review (88) (44) (132)
Capitalised rent related to centre openings CFO review - (2) (2)
Total capital expenditure (181) (58) (239)
Year ended 31 December 2023:
$m Reference As reported Rent income & expense pre-IFRS 16
and finance income & expense
Purchase of property, plant and equipment Statement of cash flows (191) (3) (194)
Purchase of intangible assets Statement of cash flows (74) - (74)
Total capital expenditure (265) (3) (268)
Analysed as: Net capital expenditure Landlord contributions Gross capital expenditure
Maintenance capital expenditure CFO review (113) (9) (122)
Gross growth capital expenditure CFO review (95) (48) (143)
Capitalised rent related to centre openings CFO review - (3) (3)
Total capital expenditure (208) (60) (268)
Five-year summary
$m 31 Dec 2024 31 Dec 2023 31 Dec 2022 31 Dec 2021 31 Dec 2020
(Unaudited) Restated (1) Restated (1) Restated (1)
Income statement (full year ended)
Revenue 3,690 3,689 3,385 3,065 3,139
Cost of sales (2,573) (2,938) (2,685) (2,594) (3,068)
Expected credit reversal/(losses) on trade receivables (13) (19) 7 (137) (45)
Gross profit 1,104 732 707 334 26
Selling, general and administration expenses (593) (552) (525) (451) (474)
Share of (loss) of equity-accounted investees, net of tax (1) (1) (1) (3) (4)
Operating profit/(loss) 510 179 181 (120) (452)
Finance expense (474) (425) (353) (272) (343)
Finance income 17 9 43 36 4
Profit/(loss) before tax for the year from continuing operations 53 (237) (129) (356) (791)
Income tax (expense)/credit (34) (34) 39 (14) (39)
Profit/(loss) for the year from continuing operations 19 (271) (90) (370) (830)
Profit/(loss) after tax for the year from discontinued operations - - 1 81 (5)
Profit/(loss) after tax for the year 19 (271) (89) (289) (835)
Earnings/(loss) per ordinary share (EPS):
Attributable to ordinary shareholders
Basic (¢) 2.0 (26.7) (8) (28) (88)
Diluted (¢) 2.0 (26.7) (8) (28) (88)
Weighted average number of shares outstanding ('000s) 1,009,815 1,006,685 1,238,854 1,386,146 1,152,190
From continuing operations
Basic (¢) 2.0 (26.7) (8) (28) (88)
Diluted (¢) 2.0 (26.7) (8) (28) (88)
Weighted average number of shares outstanding ('000s) 1,009,815 1,006,685 1,238,854 1,386,146 1,152,190
Balance sheet data (as at)
Intangible assets 1,375 1,438 1,386 1,057 1,023
Right-of-use assets 4,940 5,574 6,048 7,100 7,712
Property, plant and equipment 1,176 1,309 1,479 1,516 1,651
Net investment in finance leases 116 124 177 - -
Deferred tax assets 586 576 552 522 257
Other assets 1,292 1,294 1,257 1,147 1,502
Cash and cash equivalents 148 141 194 105 97
Total assets 9,633 10,456 11,093 11,447 12,242
Current liabilities 3,563 3,500 3,646 3,064 3,325
Non-current liabilities 5,927 6,847 7,071 7,933 8,215
Equity 143 109 377 451 702
Total equity and liabilities 9,633 10,456 11,094 11,448 12,242
1. The comparative information has been restated as the Group changed
its accounting policy on deferred tax related to assets and liabilities
arising from a single transaction due to amendments to IAS 12 (note 2)
Glossary
Adjusted contribution
Gross Profit excluding depreciation before the application of IFRS 16 and
adjusting items to cost of sales.
Adjusted EBITDA
EBITDA excluding adjusting items.
Adjusting items
Adjusting items reflects the impact of adjustments, both incomes and costs not
indicative of the underlying performance, which are considered to be
significant in nature and/or size.
Capital-light
Business centres operating under a variable lease, joint-venture, managed and
franchised arrangements.
Company-owned
Business centres operated by the Group under a conventional lease or variable
lease arrangements.
Contribution
Gross profit excluding depreciation and amortisation in cost of sales
Digital and Professional Services
Services not related to the IWG network
EBIT
Earnings before interest and tax.
EBITDA
Earnings before interest, tax, depreciation and amortisation.
EPS
Earnings per share.
Expansions
A general term which includes new business centres established by IWG and
acquired centres in the year.
Growth capital expenditure
Capital expenditure in respect of centres which opened during the current or
prior financial period.
Growth-related landlord contributions (leased centres)
Landlord contributions received in respect of centres which opened during the
current or prior financial period.
Maintenance capital expenditure (leased centres)
Capital expenditure in respect of centres owned for a full 12-month period
prior to the start of the financial year and operated throughout the current
financial year, which therefore have a full-year comparative.
Maintenance-related landlord contributions (leased centres)
Landlord contributions received in respect of centres owned for a full
12-month period prior to the start of the financial year and operated
throughout the current financial year, which therefore have a
full‑year comparative.
Managed & Franchised
Business centres operating under a formal joint‑venture, managed or
franchise arrangements.
Net debt
Operations cash and cash equivalents, adjusted for both short and long-term
borrowings, lease liabilities and net investments in finance leases and
derivatives.
Net financial debt
Operations cash and cash equivalents, adjusted for both short and long-term
borrowings and derivatives.
Network rationalisation
Network rationalisation for the current year is defined as a centre that
ceases operation during the period from 1 January to December of the current
year. Network rationalisation for the prior year comparative is defined as a
centre that ceases operation from 1 January of the prior year to December of
the current year.
Occupancy
Occupied square feet divided by total inventory square feet expressed as a
percentage.
Pre-IFRS 16 basis/Before application of IFRS 16
Reporting in accordance with IFRS accounting standards effective as at the
relevant reporting date with the exception of IFRS 16 - Leases.
Rooms
The yearly average total business centre square meters divided by a standard
room of seven square meters.
RevPAR
Monthly average IWG Network revenue, divided by the average available number
of rooms, excluding rooms opened and closed in the period
System-wide revenue
Refers to the total revenue generated across IWG network, including revenue
from franchise, managed centre and joint-venture partners, but excluding
related fee income. System revenue relates to the allocation of System-wide
revenue across our segments.
TSR
Total shareholder return.
Corporate directory
Secretary and Registered Office
Timothy Regan, Company Secretary
International Workplace Group plc
Registered Office: Registered Head Office:
22 Grenville Street Baarerstrasse 52
St Helier CH-6300
Jersey JE4 8PX Zug
Switzerland
Registered number
Jersey
122154
Registrars
MUFG Corporate Markets (Jersey) Limited
IFC 5
St. Helier
JE1 1ST
Jersey
Auditor
KPMG
1 Stokes Place
St. Stephen's Green
Dublin 2
DO2 DE03
Ireland
Legal advisors to the Company as to English law
Slaughter and May
One Bunhill Row
London EC1Y 8YY
Legal advisors to the Company as to Jersey law
Mourant Ozannes
22 Grenville Street
St Helier
Jersey JE4 8PX
Legal advisors to the Company as to Swiss law
Bär & Karrer Ltd
Brandschenkestrasse 90
CH-8027
Zurich
Switzerland
Corporate stockbrokers
Barclays Bank plc Investec Bank plc HSBC Bank plc
2 Churchill Place
2 Gresham Street
8 Canada Square
London EC2V 7QP
London E14 5HQ
Canary Wharf
London E14 5RB
Financial PR advisors
Brunswick Group LLP
16 Lincoln's Inn Fields
London WC2A 3ED
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