Good day, and thank you for standing by. Welcome to IWG plc third quarter update conference call. At this time, all participants are in listen only mode. After the speaker's presentation, there will be the question and answer session. To ask a question during the session, you will need to press star and one on your telephone keypad. Please be advised that today's conference is being recorded. If you require any further assistance, please press star zero. I would now like to hand the conference over to your speaker today, Mark Dixon, CEO of IWG. Thank you. Thank you, operator. Thank you, Nadia. Good morning, everyone, and thank you for joining this morning's call to discuss our Q3 trading update. I'm joined on the call today by Glyn Hughes, Group CFO, and we'll take questions after these brief introductory comments. Although we remain in a period of heightened macroeconomic uncertainty, and therefore it's right to remain suitably cautious, I'm pleased to report that our trading performance continued to strengthen during Q3 in all our major markets. September was an outstanding month on all counts. Hybrid working is becoming increasingly relevant, and more and more companies of all sizes, and many of you have probably experienced this within your own organizations, are adopting hybrid working as a way to support their workforce in the digital world that we live in today. Our company is the leading global provider of workspace brands. Remember, we've got a network that's unrivaled in its coverage. We're more than four times larger than the largest competitor. We're perfectly positioned to support companies as they make this change. Demand for our services continue to accelerate, and we've seen unprecedented growth with new enterprise clients. We gained, as we mentioned on the half year, 900 clients in the H1. In the third quarter alone, we've added a further 1,100 customers. As we see many companies turn towards hybrid working, we're also seeing many of our existing clients expanding their operations with us. This is what's underpinning the growth as more and more companies moving towards the platform. Today, just to where are we in terms of our relationships with the Fortune 500 as a measure. Today, we've got a business relationship with 83% of the Fortune 500 and of course with many other companies as well. We've had an acceleration in our improvements in occupancy. The sequential month to month improvement we've seen since March got stronger in Q3. The pre-2020 average occupancy for the quarter was 71.2%. That's the average. But the exit rate in September was 72.5%. That for the pre-2020s, which is a sort of good marker of performance. It's a stable group, no new centers added. These positive trends in occupancy are also being accompanied by strong pickup in the consumption of ancillary services. We announced already in Q2 an increase in meeting room day office. We've seen similarly strong increase, in fact an improving increase in Q3, over Q2 with a 30.5% rise. Basically, we've got all three key indicators moving forward. With occupancy improving with an accelerated pace, the reduction in discounts, therefore price improving, and then services revenues starting to build back, as more and more people come back to the centers. Together, this has delivered a 5.2% quarter on quarter increase in revenue from all of our open centers. You'll see today in today's announcement, we've provided a system-wide revenue indicator, and that's across the whole estate for the first time. This is showing all the revenue that's going across the platform. This is going to be particularly important to give a scale of the business activity as we reduce our own centers by franchising and partnerships become a much larger part of how we operate the business as we pivot towards more and more capital-light growth. We'll update on that regularly going forward. As you'll see in today's announcement, a lot more franchising partner agreements being signed. All of these with either no or much lower capital investment being required, so capital-light programs working well. You know, looking forward and we're already into the fourth quarter, obviously, and looking forward to 2022, we've got a really excellent pipeline for further growth in the same manner. We're starting to pick up more and more momentum on the growth side. Turning to cost, as we've mentioned many times over the past 15 months, we've really focused on the cost efficiency of our business, and we remain on track to achieve the targeted annualized run rate cost savings of about GBP 320 million by the end of the year. With the acceleration in revenue accumulating in September being really an outstanding month on all counts and having good progress on cost savings, we're really starting to see strong and improving cash flow from operations each month, this before investment in growth. You know, this is, you know, giving us real confidence as we move into 2022. Just moving to that investment in growth, and remember, this year's seen more investment in sort of more capital heavy growth as we finished off the program that we'd signed up to in previous years. These are the centers we decided were worth keeping, great sites, good markets, that we continue to invest in. 2021 is a changeover year where you still have the old type of growth, but you've got a lot of the new type of growth, i.e., capital light growth. The investment this year is a little higher for the same amount of growth. This year's net cash investment in growth, GBP 141.5 million for the nine months ending September. This includes a net investment in construction of about GBP 79 million and the rest being the associated investment in operating costs, et cetera, for those centers during the period. We would have been, had we not done that growth, GBP 141 million-GBP 142 million better off in cash. These were all investments that we felt were the right things to do, even in the difficult circumstances we've seen over the past year, 15 months. The good news is, as we move forward, there's less and less of these sort of more capital heavy investments, and we're much more onto the capital light model, and that will become the norm as we move through 2022. Overall, we've maintained our strong financial position, net debt remaining broadly the same since June, and that's after that investment in new centers. Just to conclude, moving away from the Q3 trading results, we have announced in today's update that we're undertaking a preliminary review to assess the strategic and commercial rationale for separating the digital and technology assets into a separately identified and independent business. We're also looking at the potential to leverage the intellectual property of the group along with the ownership structure of the property portfolio. Over the past 30 odd years in business, we've built quite valuable underlying assets in the business that we feel could be obscured by the existing group structure. Detailed work is being undertaken at the moment to assess the feasibility of this separation, and we expect to be able to update on the progress in the H1 of next year. Although there's still macro uncertainty, we're very pleased in the way our trading performance has strengthened throughout the third quarter, with all three indicators, occupancy, pricing, and services, all coming back strongly month on month with a very good September, and that's followed through into what we can see in the fourth quarter. You know, to note, whilst we're doing well on all these indicators, we still haven't reached the pre-pandemic levels. These positive trends are closing the gap quickly, and we expect to make further progress as we go through the remaining part of this year and into 2022. The strength of these trends gives us confidence in delivering the results for 2021 in line with our expectations, and the momentum will set very strong foundations for a continued recovery in 2022. With that, I thank you all, and we'll hand back to the operator and open the call for questions for Glyn and myself. Thank you. Operator. Thank you. Dear participants, we will now begin the question and answer session. As a reminder, if you wish to ask a question, please press star and one on your telephone keypad and wait for your name to be announced. The first question comes from a line of Andrew Shepherd-Barron from Credit Suisse. Please ask your question. Hi, good morning. Just three from me if I may. The first one just predictably, I guess, on the separation announcement. Could you give us a bit more detail about the scale or the potential scale of that separation and also the motivation for doing it? Secondly, the wins for enterprise clients very strong during the quarter. Could you just again give us a bit more detail about what those enterprise clients want? Is it just access or potential access to the network, or are they specifically taking space? Lastly, you reported the system-wide revenues. There's about just under GBP 70 million difference between that system-wide revenue number and the group revenues. Can you just break that down between franchise and JVs or any other metrics? Will you be able to give us that data going back historically? Thank you very much. Thanks, Andy. Let's just deal with the enterprise customers first of all. What are they buying? They are buying access. We've got more customers just buying access across the network. A lot of wins in that area. They're also buying hub and spoke, where they are adopting a much more distributed work setup, with more people working from much more local offices. You know, behind this strong demand from workers who are resisting in many countries, it's not all countries, but many countries. They're resisting companies asking them to sort of commute back to offices. Really, the enemy underlying all of these moves is commuting. Long commutes will be dramatically reduced in years to come. In order to do that, companies are supplying hub and spoke offices where people, rather than commute long distances, will go into a local office, and we're seeing a lot of that. We're also seeing companies downsizing where they just basically used to have everyone in one office, maybe in a city center or in a number of city center offices that want to then downsize and get flexible, and sort of give up long-term leases, fixed leases, and move to a much, much more flexible and serviced type platform. We're seeing all three of those from enterprise customers. Then, you know, just all standard use, disaster recovery, all the basic products that we do, you know, enterprises are buying all of those in addition. In terms of the separation, while, you know, we can't go into the detail because we're, you know, in the process of doing the strategic review at the moment. You know, we believe that there's value in underlying a lot of the technology. If you imagine, we've been investing about GBP 50 million a year for many years in our technology platform, and that has, we believe, more value than is being seen by the market. It's very hard to see it because we're not separating it. You know, one of the key things is the technology on the one side, and then, of course, we have both our property investments and our property commitments on the other side, which can obscure the underlying results. You know, when we grow the business, that creates an instability in the numbers that we're looking at ways to reduce that in this review. We're working through it. You know, we believe that there's definitely something there to go for. As we've said, we'll update in the H1 of next year. In the meantime, we focus fully on performance, cash flow, and that's the sort of main day job every day, and that's coming back strongly. Third question, Andy, I wrote it here. What was it? Just the difference between the system-wide revenues as reported. I don't think we'll break it out because it's just too much detail. If it's meaningful, we'll take a look at that. As we look at it today, if we look at the pipeline going forward, I would say that very few JVs, mostly these are management agreements and franchising. Those are you know, a large part of the sort of work we're looking at now is that. I would say that it's about 50/50 between the two. Many of the franchises, just to be very clear, are people that own buildings. You know, they're sort of you know. I signed off on two this morning through the investment committee, and these are two people, two separate people actually, owning buildings in the U.S., which is starting to gain traction now, which is pleasing. Just on that franchise, those franchise revenues, just given how much focus there is on that shift towards asset light and franchising in general, I mean, will you split it out a bit more clearly and potentially give us some historical data around that? Because it's really interesting as that changes and evolves. Well, that sort of, that brings us back to the strategic review. That allows us to separate these revenues, Andy, so we can be much clearer and we can go back on it. Okay. We've actually got some exciting sort of once you clear away IFRS 16 and all this noise around leases, you've got some very exciting growth businesses sitting right underneath, but you can't see them today. That is part of the review. It's sort of clearing away so that you can see this very exciting franchise management business we have and you can see our digital platform and its income possibilities. Okay, great. Thank you very much. Thanks, Andy. Thank you. The next question comes from the line of Steve Wolf from Numis Securities. Please ask your question. Morning, all. Thanks for the color on the, you know, strategic review. If I could sort of just push you a little further in terms of what's the sort of scale of the assets we're talking about. We can see the, you know, the gross and net book value of the property, obviously on the balance sheet. Are the options here to sale and leaseback to put them in separate JVs? How to extract the value of the investment that you've already put into some of those entities. Just on the technology piece, just, you know, thoughts on how you would actually go about extracting some of the value. Are we thinking about sort of separating out the value of some of the platforms themselves that you're using, whether it's on a, you know, a booking screen or something like that? Just what sort of technology assets are you referring to? Just two very simple follow-ups. Just a percentage of revenue generated by enterprise customers now, and then as ancillary revenues pick up, what proportion of either ancillary or group revenues comes from ancillary revenues as well? Thanks. Okay. Can you push me further on the separation? Look, the property side is, you know, that's very clear to us, that there's, you know, it sort of uncomplicates and there's definite value which is sort of hidden today, that we, you know, we think will help if it's made clearer. The tech is, I mean, this is, you know, we've got the best tech in the industry by a long way. It's, you know, this continuing investment over many years has created the, you know, the best platform with all, you know, many applications and lots of very high value-added features that have uses that are beyond what we're doing. You know, we believe that there is potentially value there, and that's what we're working on at the moment. There's lots of comparative valuations out there, Steve. You know, there's people that are, you know, sort of getting into this sort of area, lots of startups and, you know, they're raising money in the hundreds of millions, for, you know, money and investments. But they have no scale, and they have no they have a fraction of what we have. And it's that sort of, we're, you know, we're working on as we do our strategic review to ensure that we have something here that it is separable, it is a business that can stand on its own right, and it has its own future and it's got its own future growth. What's clear and what underpins the whole thing is that there's a global move amongst the workforce, and driven by companies, driven by people, and driven by the environment to move towards a different way of working. That trend, that move will not stop. There's lots of opportunities to participate in that sort of very exciting, you know, change in this sort of macro change, which will have, you know, huge ramifications for, real estate in particular, and for companies. This gives us more than one bite of the cherry. We've got a very, you know, attractive and growing, franchise business and management business. There's opportunities to participate beyond that. That's what we're looking at as we do the tech review. Enterprise, I don't know the accurate number, but it's, you know, it's gonna be about it was 50 before, it's more than 50 now. 50% of overall- Yeah. group revenues. Yeah. Does that include their total enterprise customers or just the enterprise activity like the access cards and things like that? It's all of their revenues. It's about 50% of revenues it was, but it's been increasing. There's a move towards, let's say, larger companies. When we're talking about an enterprise, we're talking about larger companies using us in more places. You know, an enterprise customer is using us across the network. We've you know, there's you know, that is growing month on month. You know, startups, smaller companies have always used us. The changes that enterprise customers, that is the you know, larger companies are now using us increasingly for the first time and then increasing their scale with us. That is changing. That's making the revenues sort of move to, you know, sort of companies you'd know as opposed to companies you wouldn't. Ancillary revenues, you know, were, I think, pre-crisis were about... Wayne, Glyn, I think about 26%. They were 28%, Mark. 28% revenue. Pre-COVID, yeah. I would say that, you know, that they will definitely come back to 28%, and they would be more, as because they're being supplemented by a lot more drop-in revenue. People that have become office-less, so they don't have a fixed office anymore, they drop in and use offices. That part of the business will continue to grow. We're optimistic that, you know, as we go into 2022, we will have, you know, continue to build. Remember, we forecast sort of mid-2022 for a sort of back on to full power performance and, you know, but it should be enhanced, as we get beyond that by two things, basically better ancillary revenue. Remember our drop-in revenue, so all of our membership drop-in and sort of all access just. That all comes into ancillary, so that's not counted in office revenue, even though people are using offices some of the time. Because it's shorter-term revenue. When we give you occupancy, that is long-term occupancy. It's not the short-term stuff. We expect that will come back, so we expect to get better revenues and sort of more richer revenue as we go through 2022 with lower costs, that we've talked about many times. With you know, we've closed many of the underperforming centers and improved them. You know, the estate's about the same as it was when we started the crisis, but we've added a lot more great centers. We've improved the stock and so we have better stock, and you've lost a lot of the marginals. You know, on a multi-site business like ours, that gives us a greater propensity for margin as we go through 2022. That plus inflation, which, you know, we've got some of the world where we have inflation-linked rents and some of the world that we don't. In a world of inflation, there's you know that's that we expect, and we're already anticipating that. You know, there's more potential upside from that. We're quite optimistic. You know, you know, we caveat that by saying, you know, of course, we could face more headwinds through more potential lockdowns from COVID-19, but you know, that seems to have reduced quite a lot into November, December. We're seeing much less than we did. You know, we're sort of set in a quite good position as we report this quarter. Thanks, Mark. One final follow-up. You mentioned the investment of GBP 145 million year to date was the total number of sort of CapEx, OpEx investment. Where do you see that full year? And then you mentioned it moving more capital light and the heavy spend is done. Where would that number be as a comparison for full year 2022 at this stage, in your mind? For the remaining quarter, Glyn, you got a number on that? Broadly, we're assuming a similar run rate to what we've seen in the first three. The 141 equivalent will be circa GBP 170-GBP 175 for the full year. Yeah. A lot less. It'll be less. Look, it'll either be the same amount, but you get three times more growth for it. We're still doing some, you know, we're doing some leases, not very many. In, you know, where we get, you know, fantastic terms, you know, we've got to sort of brave the effects of GAAP and IFRS 16 and sort of do them because they are compelling in terms of what our criteria are all about return on capital. You know, this is essentially as we enter 2022, you know, people will tell you know, commentators talk about the real estate market being robust. It is not. It is. It's people talking it up. It's very weak. Many owners are now looking at the possibilities of, you know, finding another way to create cash flow on buildings, which is, these are attractive circumstances for us. Some of them actually need a lease. They need the lease. Even though they might want to do a management deal, they, their funding doesn't allow it, et cetera. But, you know, it will be, we get a lot more growth for a lot less money. Hard for us to predict. You know, all I can tell you today is that we have a big pipeline of really attractive franchise deals, management deals, and less of leases, but a few leases. That's great, Mark. Thank you very much all of you for your time on that. Thank you. The next question comes from the line of Sam Sindel from Stifel. Please ask the question. Morning, guys. Three questions from me. Firstly, on the master franchise agreements, would you be able to give any color on any ongoing discussions, there and potential timelines? Secondly, you mentioned access passes in your previous answer, and that's not included in the occupancy. Would you have any sense of what potentially that would add sort of day to day currently for occupancy? I think that'd be quite interesting. Then finally, I think 70% of centers in Q3 were from partnerships and franchising. Should we expect that to go to sort of 90% plus in the coming years with a bit of leasing or- Sorry, what was that? 70% you said? 70% in Q3 of the newly added centers were partners or franchisees. I just wondered, does that get to sort of 90% in the next couple of years with some leasing? Yeah you know, a great effect on that? Any color, that'd be great. Thanks. Okay. Thanks, yeah. Thanks. MFAs, there's, you know, a couple of discussions ongoing, small ones, but, you know, nothing to. In fact, there's, you know, probably four that are underway at the moment, but not sort of major countries. These are couple of mediums, two smalls. In terms of the and just looking at that, again, we've got a fast improving business, and we're quite, you know, sort of optimistic as we look forward to 2022. You know, our position improves. We will get more value as we get into next year anyway. You know, deals can always be done, but it's just a question of getting the right terms. If we look at all access, this is membership drop-in, so on, this is around 1%, just over 1%, 1.5%. We expect this could go to, you know, 4% of available workstations. We think there's a lot more that can come through here. Looking forward to next year, I would say that, you know, it would be more likely to be in the 80%-90% range. Look, it just depends. It's very hard to tell, and it depends how good the terms can be on leases. The problems with leases are also, even if we're totally risk managed on them, as we are always, and as you've seen us, you know, manage leases over the past 15 months because of the structure, the problem is that, you know, they carry a heavy weight in non-cash losses and IFRS 16 and the distortion of capping and so on rather than cash. They are, you know, the terms are the best I've seen in 30 years, there's no question. It's a question of picking them out and taking a few of them. You know, we wanna keep to our capital light strategy. It's working and, you know, the more effort, the more resource we put into it, the more, you know, openings we're finding. You know, I would expect that, you know, that would be 80%-90% next year, that type of growth at 10-15% of leases. Thank you. Thank you. The next question comes from the line of Calum Battersby from Berenberg. Please ask your question. Morning, guys. Just two questions from me, please. Firstly, just wondering if you'd give any more detail on the business model for the work app that's been mentioned in the press. Wondering if the ambition is that this will largely be made up of third-party operators. Kind of, could we confirm if you have any third-party operators on the app at the moment? Then secondly, kind of just to follow up on one of the earlier questions. From what you're seeing in terms of service or ancillary revenues as occupancy comes back, I was wondering how that relates to, let's say, physical in-office occupancy. If the average tenant is only actually in the office, let's say three times a week in 2022, does that mean that the ancillary revenues don't recover to pre-crisis levels, or are you seeing that tenants are actually spending relatively more in the times that they go into the offices? Thanks. Okay, just dealing with the second question. The majority of everything we do are subscription revenues. It's not relevant whether someone's in one day, five days, doesn't really matter. Almost everything. I mean, there are a few things that are associated with actual physical occupancy, but those are few. They tend to be very low margin services if they are. That point one. Point two, you know, people, we've been actually surprised by this sort of the level of physical occupancy and the days. It's sort of different trends in different places. You know, people are tending to do more on the days they're in, so there's more people in. It's quite different country by country and even regions of country. We are adapting our products to meet these requirements. We have launched, and we've got more product adaptations and launches to, you know, provide customers what they need and allow us to yield more from the network. That this is our sort of day on day focus. We've got quite a bit of upside that we expect to get in 2022 just through further digitalization of everything that we do, in terms of reducing leakage. You know, we think that's got a good upside for us in 2022. These are minor leakages, but across millions of people, that makes quite a big difference. Yeah, I mean, look, the marketplace has changed, but we're changing with it. We're adapting and, you know, we're confident that those revenues will come back. For example, just, you know, we're adding more meeting rooms, so we're converting more of the inventory into meeting rooms and collaboration rooms because, you know, those people that do come in, you know, we don't have enough meeting rooms. You know, we are adding more meeting rooms and charging more for the meeting rooms that people want. Because we've seen pinch points already in the past months with having not enough rooms. It's a great problem to have, but, you know, we need to adapt inventory to meet that, which is quite straightforward for us to do. With regard to the worker app, any comments on it are way too premature. You know, what was released or what was picked up, it wasn't released, but you know, to Sky News, which you know, is totally premature, and these were just you know, we're taking soundings in the market to you know, establish what things could be worth and you know, how to go about you know, bringing potentially parts of the business to market that have a different value to the value that we have today. Can't really comment on anything in detail there. Apologies. We will update as soon as we possibly can. Got it. Understood. Thanks, Mark. Thank you. The next question comes from the line of Michael Donnelly from Investec. Please ask your question. Good morning. Two quick ones from me. First of all, Mark, you said that you had some inflation linkage in your revenues the other day. Can you just give us a rough idea of what proportion of total revenues are inflation-linked? The second question is, you've spoken in the past about 28% of revenues roughly being ancillary, and of the 28%, I think 20 were subscription-based revenues. Is there any linkage or is that synonymous in any way with what you refer in the statement today as digital and technology assets? Is there any sort of linkage between those two areas? It's just a question about language more than anything else, that we can use to infer, perhaps what the quantum, the magnitudes of, the value associated with digital and technology assets might be. Thanks. On that second question, I can't really help you on that. As I said to Colin Battersby, you know, what we wanted to do is just bring the market up to date with the fact that we are doing a very detailed review of the possibilities, but to go into any detail with it, you can't really. It's very hard to disentangle what we're doing from today's numbers, and that's part of the problem. You know, we need a wholesale representation, if you like, of the business. Even if we did nothing and there were no actual splits, presenting the business in a clearer format so investors can see exactly what's going on and where the value is and could be in the future would, at a minimum, be helpful. Understood. Thanks. This is Aaron Deva here. We're taking a view that, I mean, we're already seeing inflation. You know, we expect 2022 will be a year of inflation. What's very important is we anticipate this well in advance. You know, it takes time for us to you know build our order books, and our order books have you know about one year in length. It's important to anticipate, and we're anticipating, we have been already, even though we're sort of coming from a you know the sort of depths of March all the way through to September. You know, from really the summer onwards, we've been working on inflation and how to introduce it into what we're doing. Inflation affects, you know, in terms of that, the way we look at the world, it will affect, I think, almost all our operations in different quantums. We already deal with massive inflation in some of the markets. Remember, we're in 120 countries, so it's something we, you know, very used to dealing with in unstable inflationary countries. That sort of unstable nature of the business in terms of pricing and inflation coming in, you know, we're anticipating that now and building it in. You know, in the beginning, for the first years, it's advantageous. Then as your input price, in particular with rents, adjust, it takes longer, so you get this sort of time lag. It It may help margin in the medium term. You have to anticipate it for the future. Thank you. Thank you. Dear participants, as a reminder, if you wish to ask a question, please press star and one on your telephone keypads. The next question comes from the line of Daniel Cohen from HSBC. Please ask your question. Good morning. I've got two questions. One is on pricing, just, I guess, following up on the discussion about inflation. I think in August you said that your average new sales prices in June had started to exceed the embedded price in the network. I'm just wondering how that's continued in Q3. Kind of where are we in terms of the discounts that you're applying and how close are we to, I guess, seeing quote-unquote, "normal levels of discounting" in the business? The second question is just a simple one on competition and how you're seeing behaviors in your key markets, please. On pricing, we have since August consistently sold at a higher price than the embedded book. We've got rising price. What we said, we said it a long while back actually, that we would expect price to come back to sort of a normal level by mid-point 2022. Now, just to give an indicator, the price improvement in September. Prices sold in September were 30% better than the prices we sold at in March. You've got a huge difference. That is just the reduction in the discount. That's without price rise. That's just reduction in discounting. Since you know, we've further tightened into October, and we're sort of tightening up all the time. You know, some markets we're running out of stock, so again, that becomes even more important. Pricing for us is a you know, that's an everyday adjustment, so this is, you know, it's very liquid. We've got a lot of customers, a lot of transactions, so, you know, the prices are moving daily, and they've continued to, you know, with better momentum in sales, less stock available, that helps. I think with the competition. Which is a very interesting question, Daniel. You know, this falls into two areas. I mean, you've got people that are, unfortunately, in a sort of death spiral, where they need cash. They haven't got any money. They need cash. They sell at any price. That's sporadic now. Some of them have gone by the wayside. We've picked some of them up. You know, it's still out there. It's, you know, parts of London, for example. Bits and pieces around the world. I think, you know, with WeWork, you know, they've certainly got more discipline in what they're doing. Overall, you still see some unsustainable pricing where they are still pricing below cost, but below even rent cost. That's, I think, in markets where they have a particular oversupply. Overall, I think the market as well, you know, apart from people that just need cash at any cost, you know, price is not an issue. It's just they need cash to pay bills. That's sort of slowly going away and you've got more discipline with more people, I think, getting more occupied, so pricing overall becomes easier. Okay. That's very helpful, Mark. Thank you. Thank you. The last question comes through the line of James Zarembka from Barclays. Please ask your question. Hi. Morning. Yes. I've three questions, please. One, just on the franchise business, I was just wondering about how the pipeline converts into openings. I guess my current thinking is you've got a pipeline of around 500 and agreements for, I guess, roughly about five ish years. Does that sort of imply, I guess, 100 openings next year? If that sounds reasonable. The second one, just getting back to the growth investments. I just wanted to clarify how much of the GBP 140 million was capitalized versus expensed. In terms of the expense amount, I guess how that compares to pre-COVID levels, in 2019, for example. Then the last question, you know, The Telegraph seems to be writing kind of persistent number of articles about legal proceedings in relation to one of your Jersey-based entities. I'm just wondering if there's been a provision taken there or if it's just a non-material matter. Thank you. The franchise pipeline, openings next year, I think there's about 700 in the pipelines, isn't it, Glyn? I think that's the number. Of which there's 700 committed, ish, and it's on about a five year program. It depends who they are, what they are. That's sort of low hundreds. There's more availability of real estate, so openings are picking up now. There's more openings because people are getting more confident. They may have bought the rights, but they're getting more confident now about opening. Plus we've got new franchises. I would say that hundred would be absolutely the bottom case, more likely to be 2x that, I would say. We're getting a lot more people that actually have buildings and they own buildings. That obviously accelerates the openings. It's when people are going to find buildings that takes longer. But I would say the number's more likely to be. It's gonna be between 100 and 200, but more likely at the upper end of that in franchise terms. You know, could be about the same in management deals, sort of, you know, just double that. We, you know, we've got a great pipeline on that that's strengthening daily, so we're quite confident in our outlook there. In terms of GBP 140 million, Glyn, do you wanna just deal with that one, please? Yeah. Yeah. That's fine. The hundred and forty million, one half of that effectively relates to capital expenditure and hence is capitalized. The rest relates to cash investment in growth centers, including, you know, working capital and the operating cost of running those centers. Circa half of that number is capitalized. It's Capitalized in terms of its hard assets on the balance sheet. And then- Glyn ... in terms of, I guess, as you guys open less of your own or leased centers next year, and certainly a significant step down in previous years, just wondering, you know, how much of a, I guess, cost benefit that is versus, let's say, 2019. Is that sort of within the GBP 320 million savings? Is this sort of a separate fee? It's separate. Nothing to do with the GBP 320 million. Yeah. So- Exactly. It's independent of that. I mean, look, the way you've got to look at it is you've got a business, I mean, you've got a business here. You've got an improving cash flow, EBITDA cash flow coming from you know, much improved estate that's recovering. It's in the right marketplace. You know, there's lots more demand for this. We have the world's best platform. There's a lot of good things here, but it's all about now you know, rebuilding and then going beyond where we had the EBITDA and the cash flow before. You know, that's just get the yield out of what you already have. You know, one of the problems, if you look back on the business, has been in order to grow, we've had to reinvest capital, and when it It's capital that goes out, this brings with it sort of gap losses, opening losses as you add more centers. Now, with capital light, with the management contracts or with franchising, there is no loss. It's actually positive, not from day one, but close to day one. You get a much smaller effect from this capital investment cycle that has obscured value in the past. It's one of the things that's obscured value in the past. We want to avoid that coming back again. You effectively get a franchise, a management business here with a great platform growing at, hopefully we can get it to 20% growth a year, minimum 10%. That's a much easier thing to predict. If you don't have the, you know, the economics, you take the cyclicality and the investment cyclicality out of it's a different business. That's one of the things that we're reviewing and considering. But notwithstanding that next year will be, you know, a very good year if we're able to continue to recover and get beyond in terms of EBITDA production from the existing estate that we have, and we can grow in a much more capital light way even than this year, where you've got very little capital going out and very little sort of losses, operational losses that are sort of detracting from the result. You get a much cleaner number. That's our objective. Third question, I mean, look, The Telegraph keeps, you know, cracking at this one. You know, we, you know, we... All of the things that we've done, you know, if it needs a provision, everything's been provisioned. You know, these are people, overall, you know, we've managed to do what we had to do with everyone moving forward with us. There will always be some people that, you know, want to take a legal route, and we, you know, we have to follow that. There's nothing we can really do about it. You know, we do not think in any way this is a material point. Perfect. Thank you very much. Thank you. There are no further questions from our participants, and I would like to hand over back the call to our speaker for closing remarks. Okay. Well, thank you all very much for your very detailed questions. Thank you, Glyn, for joining me today. Thank you, operator, for adjudicating the call. As usual, both Glyn, Wayne, and myself will be available later on today if you have any follow-up questions that we can help you with. Thanks very much for your time this morning. Bye-bye. Thank you. That does conclude the conference for today. Thank you for participating. You may all disconnect. Have a nice day. Do please stand by.