International Workplace Group (IWG) Trading Update summary

Trading performance and growth

• Achieved 2% system revenue growth to $1.1 billion in Q3 and $3.2 billion year-to-date, driven by structural growth in hybrid and flexible working.

• Managed and franchised system revenue grew 19% year-over-year in Q3, with fee income up 46% and 169,000 rooms open, plus a pipeline of 173,000 signed rooms.

• Net centre openings increased by 52% compared to Q3 2023, surpassing 1,000 open and trading locations, with 100 net new management franchise locations opened in Q3.

• Company-owned and leased segment saw margin expansion to 25.2%, with open centers delivering 4% revenue growth and 13% contribution growth year-over-year.

• Worka platform rollout delayed, impacting growth, but new digital platform expected to launch by year-end, supporting 2025 growth.

Strategic initiatives and outlook

• Continued focus on capital-light growth, signing new locations with minimal CapEx or lease liabilities, and full-year signings of capital-light centres on track to exceed 2023.

• Pipeline remains strong, with 568 locations signed in the first nine months, about 10% higher than the same period last year, and expansion balanced geographically.

• Adding new brands in 2025, some commanding higher management fees and margins, to further diversify and strengthen the offering.

• Confident in achieving the medium-term $1 billion EBITDA target, with current performance compensating for slower Worka growth; outlook for 2024 EBITDA and net financial debt remains unchanged.

• Capital allocation remains focused on reducing net debt toward a short-term target of 1x Net Debt/EBITDA.

Financial position and guidance

• Net debt reduced by $34 million in Q3, reaching $734 million from $768 million in H1 2024, supported by improved cash flows, cost control, and bond repurchases, partially offset by FX impacts.

• 2024 EBITDA and net financial debt expected to be in line with management and market expectations.

• Contribution margin in company-owned and leased expected to progress by one percentage point annually, targeting 30% over the medium term.

• Interim dividend of $4 million (0.43c/share) paid in October 2024.

• Transition to US GAAP reporting in 2025, with historic numbers and data book provided for modeling and investor workshops scheduled.