Thank you all for standing by. Welcome to the IWG Full Year Results, 2022. Our presentation for today will be followed by a question- and- answer session. For those who log in on Webex that wishes to ask a question, please dial on the audio platform and press star one to ask a question. If you wish to cancel your request, you may press star two. Please be advised, the call is being recorded. I would now like to hand the call over to our Chief Executive Officer, Mr. Mark Dixon. Thank you. Hello. Good morning, everyone. Thank you for joining this morning. Hybrid is here. What do we mean by that? It's a move to a new way of working, that's been accelerated by the pandemic and has led to increasing demand for companies such as ours, who provide all the tools that companies need to move towards this new way of working. That's translated into increasing demand for our services during 2021. It's also led to an increase in demand from the supply side, from the property industry, and from franchise partners to work with us to convert their buildings into this new service platform, which is flexible working and hybrid working. We're benefiting now and we believe we'll benefit into the future as the market leader in the provision and support of these types of services. It's important to note that our company is four times the size of our nearest competitor. We're gonna talk to you today about accelerated growth that will further improve this position. A key note as we move more to hybrid working to capital-light growth, will be that the portfolio by the end of this year will be close to 50% partnered and franchised, and we think this is a very important milestone. As part of the capital-light strategy, we continue to complete small unit sales and small MFAs. We've done that throughout 2021, and we've done some more at the beginning of 2022. As the company-owned units improve their performance, we would expect more of these to happen. It's a small pipeline. It's not gonna be transformational, but it is starting to grow again. Turning to performance. A strong end to the year from the nadir that was March 2021. March, if you remember, was at the height of government-mandated bans on offices. Since March, from April onwards, we've seen steady month-on-month improvements, really throughout the year. We've continued to trim the real overhead, not the percentage, by improving and streamlining the model, and we've taken out about GBP 52 million over the course of the year. The performance trends that we saw in the second half of 2021 have continued into 2022. We've had a great start to 2022 with the benefit of beginning the year with a strong forward order book, both for the first quarter and also for the year. This is, we're starting to see the effects of a move in the mix with more of the customer base being made up of corporates and multi-site users. These for us are very sticky users. They churn less, and they give us a much more solid forward order book. Our strategic review has been largely completed along with our ESG strategy, and we're gonna talk more to this later. Overall, a very busy and productive year with a business that's in great shape for 2022 and beyond. Let's turn to the financial highlights. Look, clearly a very difficult year in terms of profits, but the key thing to note here and to focus on, and we've set these in the boxes to the right, is the performance in the second half. Here you can see quite a dramatic improvement in revenues and most of the EBITDA for 2021 being produced in the second half of the year. Again, if you look at the shape of the recovery, which I'll talk to in a moment, you can see that we improve and have a good end to the year, which gives us a great starting point for 2022. If we look in a bit more detail and put a little more color around the recovery, you can see here again on the left of the graph, you can see Q1 of 2020, and you can see the drop into the first quarter of 2021. Strong improvement consistently through 2021, and that's continued into this year in occupancy. In new sales price, you can see again steady improvement. The translation of the new sales price, the higher sales price into the order book takes longer. We've only seen the benefits to improved book price coming through in January and March of this year. We've seen and we see going forward in the book, a steady improvement in the achieved price in the book. The trends were there last year, the translation occurs later. Finally, services. This is the most liquid part of our business. You can see service revenues, these are the most affected by the pandemic. These are coming back strongly in Q4 and into Q1 of this year. You can see on all three of these, the objective is to... We'll get back to what we were achieving pre-pandemic on the left-hand bar on each of these. Translating that into cash contribution at center level, as you would expect, you can see again a steady conversion. I think what's important is that at the same time, we've been lowering our underlying overhead, so you know, the contribution conversion into EBITDA is becoming stronger. This is very much what we talked about during 2020 and 2021. This is what we set out to do. I believe the numbers now. I'll turn now to the growth in the network, and this is critical to our plan today and our plan going forward. You know, we believe again and our customers are asking for ubiquitous coverage. They want us to be everywhere where their people are. A lot of focus has been put in, a lot of investment has been made into reshaping the growth platform over the last 18 months. The result of that is a much more rapid rate of growth. The key is that growth is capital-light. You can see just in 2021, we had a 25% increase in the number of deals that were partnered and franchised that make up the overall book. We expect to get close to 50%, so about half and half by the end of this year, and that trend will continue. Overall, long- term, we expect the company-owned would make up no more than 10% or 15% of the overall. This significantly de-risks the network. Clearly, if we're partnering, we make lower returns, but we're not investing. Those returns remain with our partners and other investors. Looking forward, the mix is about 85% partnered and franchised if we look at the growth into 2021. We're very pleased with this. It's taken a lot of. It's taken time to establish the methods. We've got a lot of men and women on the ground now that are building this network, and we're confident that the growth rate will significantly change going forward. We're also opening company-owned centers, but even the company-owned centers have become much more capital-light. You can see here the amount of investment per sq ft dramatically changed, a little in 2020, but a lot in 2021. You know, we're very pleased with this. We will still continue to invest in company-owned centers, but the terms are different and the returns aren't, the capital invested are completely different as well. We're performing better on these cohorts, so they are better investments that cost less. We are continuing to do them. They are a small percentage of the overall growth. Glyn, with that, I'll hand over to you. Thank you, Mark. As Mark has indicated, the business has made good progress and we continue to see an uplift in financial metrics since the end of the first quarter last year. We've delivered nine months of consecutive revenue and profit growth. The business has delivered in excess of GBP 300 million of annualized cost savings that we outlined last year, and we've seen a very strong performance from investments in new centers, particularly those centers that opened in 2020 and 2021. As Mark outlined, we've seen a dramatic upturn in profit conversion in the second half of the year, and we've delivered a strong second half EBITDA performance. As we enter 2022, we have good momentum and a strong order book behind us. Looking at the bridge for revenue performance in 2021, excluding the impact of FX, the revenue fall for the full year was only GBP 113 million or 5% on the prior year. As we outlined last year, during the first half, we obviously saw occupancy levels below where they had been prior to COVID, and this led to a full-year revenue drop in excess of GBP 200 million. However, since the end of the first quarter, we've seen a steady month-on-month pickup in occupancy. Pricing throughout the year has also steadily increased, driving GBP 100 million revenue benefit on the previous year. We've delivered additional sales of GBP 112 million from new centers, and in line with previous communication, you'll note that we've closed centers primarily as a result of COVID, which combined with the impact of new openings, has led to a GBP 14 million reduction through portfolio enhancements. As we have referenced, the business has delivered over GBP 300 million worth of annualized cost savings. The majority of these were attributable to the significant success we had in renegotiating rents together with center closures. In total, GBP 240 million of savings were property-related. We've also made good progress in improving internal efficiencies within the business, reducing overheads, and delivering other cost-saving opportunities. GBP 40 million of savings have resulted from these areas. These cost savings have been partly offset by the investment in new centers of circa GBP 130 million. The net impact of these initiatives is GBP 150 million reduction in costs on the prior year. Looking at the cash flow in terms of cash generation and our net debt position, the business has made significant progress in generating cash flow from centers during the year, amounting to GBP 118 million. This has been partly offset by investment in growth of slightly in excess of GBP 110 million. In the second half of the year, we've continued to reduce net debt, so we're closing the year slightly below the GBP 400 million of net debt that we guided the market to last year. We've recently refinanced our group facilities, providing us with the appropriate flexibility and lower cost base to execute our strategy going forward. We've a strong balance sheet and liquidity to support this. In terms of the net debt bridge, the business has delivered a mature EBITDA of close to GBP 150 million in the year. We've also had some proceeds from transactions and the sale of franchise businesses. We've spent under GBP 100 million on maintenance CapEx and as previously guided, net investment growth of GBP 110 million. On the right-hand side of this table, you'll note some non-recurring one-offs, primarily in relation to working capital and the receipt of an investment loan. These partly offset each other. All in all, we exit 2021 with just under GBP 400 million of net debt, of which over GBP 300 million relates to the convertible bond issued in 2020. The net debt under the RCF is GBP 90 million. With that, I'll hand the call back to Mark Dixon. Thank you, Glyn. Look, I'd just like to pause on this slide. Hybrid working, and it has become an integral part of how companies are thinking about how they support their workers, and their teams, how they attract the best talent. It really is an important moment of change in the way people are working. So much so that this year, hybrid working was listed for the first time in the Oxford English Dictionary. You know, people are talking about it. It really has become mainstream, and it really does support work in a new and practical way. We think it's a huge opportunity, and we're very pleased that we completed our strategic review to look at how we best grow into this clear opportunity and navigate this fast-growing new market. The strategic review was a chance to stand back, to really take some time, consult, and decide how to move forward much more decisively into the opportunity. We really feel that this opportunity is a once in a lifetime one. It's such an important change to the way companies and people work, and we're really at the center of this change, being the market leader in this provision of new platform workplaces. We came out of this with a set of very clear objectives, accelerated growth, capital-light, a new digital strategy, which also includes the spin-off of some of our digital assets, a continued investment in our own digital at the same time, maximizing our company own performance, and all of this translating into free cash flow as we monetize the our investments and our platform. Just to stand back for a second and look at the market itself and the dynamics of the market, lots of pieces of research out there, from all sources showing that, the expectation is that flexible space, which is what we do, will become 30% of the market within a decade. That's going from 2% today to 30%. This is very, very rapid growth, 15 times growth rate over 10 years. It's being driven by what companies and people want and facilitated by technology. The technology advances that made all of this possible, think Zoom, Teams, and Slack and others, that's what we have today. There's gonna be major additional breakthrough technologies that come in and make the whole of flexible working, hybrid working, even easier and much more effective tomorrow. You know, we think this market is growing today, but we think the growth will only accelerate from here on. The drivers, we talked about these during the last year, are there. It's what people want. If you wanna hire the best people, 80% of them are asking, "Do you have flexible working?" You know, the idea of people being asked to commute on a daily basis really is something that will not get you the best people, and your teams very often won't be satisfied. The second driver, planet. There's a whole range of sustainability benefits to moving towards hybrid working. It will reduce footprint by up to 70%, and it improves community. Very important, high on the list for many companies today. Finally, profit. It's cheaper. You know, hybrid working, every worker moved to hybrid working, the saving on average is $11,000 a year. It's really too good to miss, and most companies are not missing it. They are reviewing it. That's translated for us into an increase in demand. You know, we reached over one million new requests and inquiries last year. You know, this is very significant, and it's what's driving our revenue improvements as we go through 2021 and into 2022. Overall, our objective is to grow to 30,000 locations. We set this out many years ago as what we thought the platform should look like. The demand is what will make it happen. The demand's coming from large companies across the board, and we talked during 2021 of the many customer wins that we had, customers using us in a very significant way. The As I mentioned earlier, this has helped the order book as we've come into 2022 as more of these sticky companies that were using us on a network basis become a bigger part of the book. It's not just large companies, just to be clear. It's SMEs and growing companies from every sector that are making this change. It's a very, very broad-based change that's occurring. You know, we're very excited about the future as more companies talk to us. A minute to look at our brands. This was an important part of our strategic review. We felt that our brands were an undervalued asset, that we had accumulated over the last 30 years and that we needed to bring them out more into the forefront. They're a valuable asset because it allows us to hit more price points and more work styles. These are established brands that are known in the market for their niches and they are helping us both convert the demand into revenue, and they are also helping us to grow the network. These brands can be used to cover all price points in all types of geographic location. As we grow into different types of location, whether those locations are rural, business parks, towns, cities and so on, the brands are an important part of the mix and have a value in their own right that we felt was necessary to both start talking about but also to continue to develop. ESG was integral, an integral part of our strategic review. It became at the heart of the strategy for two reasons. One, we felt it the right thing to do to be focused on reducing our own environmental and carbon footprint and improving our social parts of our ESG strategy. We've been doing it for quite a while. This is not new. We've got a renewed focus on it. We've brought back our carbon neutral target from 2025 to it should be achieved in 2023 as an example of this. Right at the heart, ESG. It's important for our business, but it's also important for our customers' businesses. As we improve our ESG outcome, we bring in new demand. It's very high on the list for, in particular, large companies, very high on the list is ESG. The more we deliver on ESG, the more demand we create from our customers who are focused on this as well. That's the background, if you like. Now the objective. It is all about growth going forward. Lots of investment, lots of work to improve the method of how we do this. We're now delivering on this. We expect in 2022 to achieve a 15% growth rate. Our target in 2023 is a 30% growth rate. At these sort of growth rates, you would achieve your 30,000 network in about nine years, mathematically. You know, we believe that strategically, network is the heart of customer service. The ability to serve our customers wherever they want to be is key to our attractiveness and their success in moving to hybrid. Most of this growth will occur through capital-light, and, you know, we think that this scale of growth that we will produce from the capital-light part of the delivery, around GBP 200 million of contribution by 2024. Remember, that's coming through partnering, so our investment is only in overhead to achieve this. There, there's a good drop through. Clearly it's not the same margin as we make in our company-owned units, simply because that margin is being made by our partners, and it's that, the attractiveness of the investment proposition that's making them come into it with us. We're seeing good success on here, in this whole area, and that with a gradual restart of MFA and unit sales, you know, we will move the entire portfolio into a new place, maximizing company-owned performance. It's an obvious thing, and that is to bring the centers that we have back to their previous performance. You saw the performance charts that I showed earlier in the presentation. Here you can see the historic performance of today's open group of centers over many years. This performance goes back more years than this. You can see that in normal circumstances centers produce about a 30% contribution margin. A key strategic objective is to build back up to that 30%. At 30%, when that's achieved, the approximate revenue from this group would be around GBP 3 billion in revenues, and, you know, clearly you can calculate the drop-through from that in contribution terms. The third area is leveraging our intellectual and digital assets, importantly our digital assets here. We have continued to invest each year GBP 50 million into the core technology platform. It's a key investment, and it supports the growth in the number of users, which today is eight million. As we move towards 30,000 centers, you know, that number will increase to 100 million plus. You know, it is impossible to deal with that number of people without a fantastic, fully functioning digital platform. These investments are critical. We also continue to invest in R&D and product development. These are an integral part of facilitating the move to hybrid working and other ways of working, and they require constant investment, so we can keep ahead of the game. These investments also produce a like for like reduction in overhead. We are improving efficiency in all areas of the business, mainly through digital technologies in the supply chain, in the innovation of the interaction between customers and ourselves and so on. You can see that coming through in the overhead, and we will continue to do so. We believe it's critical to the strategic mid and long-term success of the business. This is for our business, but we're also preparing to spin off our digital assets. Some of the assets we've invested in that we use only for ourselves today, we will spin off into the new company that we've invested in, The Instant Group, which we're very pleased to announce today, our investment here. Now, in short, the Instant Group is a company that's the market leader in servicing the rest of the industry, the non-IWG world. That world is a world of 30,000 buildings in 175 countries, and, you know, it's a huge and it's a growing market. We are growing into Hybrid, but so are many others. Instant, we expect, will grow. Our digital assets become theirs. We merge them in, and they will grow the number of services that they provide to that growing group on the other side. It's an investment of GBP 270 million. The management team are also investing GBP 50 million, and that provides money to both invest in growth, but also to buy out some existing shareholders. The objective of this business is to continue to rapidly grow it already is growing rapidly, and to list the merged business on the U.S. or U.K. markets within two years. That's the broad target here. This gives us, you know, a very interesting outlook. It allows us to monetize some of the work we've already done and our investment into Instant, a great management team. They will focus on serving the rest of the industry. It's an independent business, and will, as I say, list within two years. Bringing it all together, you know, the key objective here for our shareholders is to pivot to a much more free cash flow generation. And it's quite a simple pivot really. Historically, for the last 25 years or so, we have been investing all the cash flow we produce from our operations into growth. We've paid some dividends and so on, but the majority of the money created was reinvested into growth. As we move to capital-light, the requirement for company-owned investment reduces significantly. If you look on the other side, it's clear that we have a huge upside to come as we move our company-owned centers back to a 30% margin. At the same time, a continual flow of unit sales and small MFAs, maybe larger ones over time, well, that just simply accelerates the company-owned cash flow as we sell it. Management income will grow significantly. With that level of growth, and I gave an indication of what that could look like earlier, that will become a bigger and bigger part of our earnings. We continue to focus on scale and cost efficiency, and that also will help underpin anything we can do on the revenue line. Then finally, you know, we believe well executed by the Instant team, there could be an exciting outcome with the separation of our digital assets and the eventual IPO of those assets. We think that the, you know, the balance has firmly swung onto cash flow generation coming from a very, very difficult period in 2020 and 2021 for obvious reasons, to a very exciting period today, and we're extremely positive looking forward from here. In conclusion, we're very clear about what we're doing. You know, we've got the resources in place to deliver on it. Tailwinds are behind us, very much so. This was already happening pre the pandemic as more companies move to hybrid working. That small move is now really mainstream and will continue to help us deliver into the future. We're very well established in a leadership position, and we're very conscious of having respect for that, continuing to develop our business into the future. Great start to the year, both in terms of our revenues and also capital-light growth, which we believe is very important to be doing those two in tandem. Look, we're ready for this revolution that's taking place. I don't think we've ever been readier. I'm very pleased that we've taken the time to review the business in a strategic way and be clear about the way forward. With that, we'll move to questions. Thank you. Thank you. For the participants over the audio, please press star one on your telephone keypad and wait for your name. And if you wish to ask a question, please press star two. Once again, star one if you wish to ask a question. Can you ask again? Once again, star one if you wish to ask a question. Tech's not working, is it? Can everyone hear us? Our first question. We'll take our first question now. Please go ahead. Your line is now open. Hi, guys. Can you hear me? Yes. Sorry, that was a bit confusing there. Yeah, it's Sam Dindol from Stifel. Thanks for the presentation. I think I've got three questions. Firstly, on the core business, I think you spoke before about it being back to full power by mid 2022. Is that still what we're thinking? Should we think about that in terms of price and occupancy getting back to maybe towards the Q1 2020 levels? Secondly, on The Instant Group, can you give a bit of clarity on ownership of that business? I think given management are investing GBP 50 million, they still own a certain percentage of that business. We'll clearly say pre-listing. On The Instant Group, can you give an idea of the revenue and EBITDA that IWG is transferring to that entity and any sort of names of the digital assets, if it's Worka or anything like that? Thank you. Okay. Thank you for the questions. Back to full power by mid-2022. I think good power by mid-2022, not quite full power. I think when we were saying full power mid-2022, that was, you know, the effects of the pandemic went on little longer. It's largely there, it's just not fully there. You're not gonna be back to a 30% margin. You know, that if that sort of will occur like more likely at the beginning of 2023. You know, margins will be significantly up by the midyear. There's just a bit more to come after. Would you agree, Glyn, on that? Yeah. Correct. Pricing will lag occupancy. It's pricing, yeah. Yeah. It just takes about a year to get it all through the book. Okay, that's the first one. In terms of the Instant investment, look, this is an independent business, independent management team. They've got a significant investment. They will have about 15% of the equity. The brands that we're putting in are Worka, Rovva, Meetingo, the coworking, it's Coworker, Easy Offices. There's a whole range of brands and technologies that go in either right now or during the course of the year. Some of them take a little longer to put in, some of the technology ones. You know, what do we expect, and final part of your question, what do we expect for, in terms of the return on this investment? We would expect that overall this business would produce somewhere around GBP 50 million in its first year of operation. That's about GBP 30 million from the current business, Instant business. It's about GBP 10 million from businesses we transfer in and about GBP 10 million-GBP 20 million in synergies. You know, somewhere between GBP 50 million and GBP 60 million. GBP 50 million net, if you like, of what we're putting into it of synergy plus EBITDA. It will do about GBP 60 million on a sort of pro forma standalone basis. Thank you. One quick follow-up. Of the GBP 270 you're putting into that, how much from selling shareholders and how much is for ongoing investment? It's mostly for outgoing shareholders, in short. Thank you very much. Thank you. Next question. We will take our next question. Please go ahead. Hi, good morning. It's Andy from Credit Suisse. Just one, Mark, if I may, but a slightly longer one. You talked about the 30% growth and then 15% growth. Can you just talk about the split of that growth in terms of owned versus franchise versus managed, and also where you are now? 'Cause it's just trying to get our heads around when you talk about GBP 200 million contribution, where is the starting point? What are your expectations for- Okay. for your current owned business? Just to get a sense of what that's gonna mean for the P&L. Yeah, that's a very good question, Andy. Thank you. You have to break it, I would suggest, into three parts. The part that we've put onto the slide is just the management part. That is management of franchise. It's that delivers the GBP 200 million, okay? Approximately. You can work that out. That's gonna be roughly 2,000 centers at an average of about GBP 1 million revenue per center. The drop through is, you know, net-net, you know, somewhere in the 10% range. That's where you're getting the GBP 200 million from. It's about GBP 2 billion in revenues. But that is only from that group. Sorry, that's perhaps a little bit unclear on the slide. The second group, which is outlined in the slide, is the company-owned existing units. What we're saying there, at that maturity of this open group, you should get about GBP 3 billion in revenues, and they will be at a 30%+ margin, so you can work out the contribution from those. The third group are the company-owned investments. This is a continuation of company-owned with less capital invested but a higher movement to return. Though that group will be about 15% of the growth this year, that is in 2022 as we see it today, and will become a smaller percentage in the 2023 year. That number will probably come down to under 10% in 2023. Because you know, what is growing is franchise and management. These are the high growth areas. You know, the company-owned investments are much more limited as our preference is always to partner. Just to follow up on that, the GBP 200 million of franchise. Is that franchise and managed in that? Yes. Where would that be now or last year? Just to think about the delta. Small-ish. What is it? 50? No, no, it's not that. It's about 50 fees, isn't it? We'll come back to you with that number. It's about 50. If 50 is the right number, so that from here, the expectation is that the contribution from franchise and managed will quadruple over the next three years or so. Absolutely, yes. That your existing business will recover and. Yeah. Mature, and then there will be limited growth, which you haven't quite set out in your, as you invest into your company-owned, but that's going to be probably low- single- digits. Is that the right way to think about it? That's the right way to think about it, yes. Okay. Brilliant. Thank you very much. Thank you. We will take our next question. Please go ahead. Your line is now open. Good morning. It's Dan Cowan here from HSBC. I've just got a follow-up question, please, on Instant. The synergies you're talking about there, Mark, please, how quickly do you think you can realize them and where are you gonna find them? And the second question is about the dreaded I-word inflation. We've all got a lot of knickers in a twist over that. I was just wondering if you could remind us, please, about how we should think about that, how IWG as a business will manage in an inflationary environment, please. Okay, just to deal with the synergies first. These are basically the beginnings of transfers of some of our digital into, you know, into serving the rest of the community, which is the rest of the market. These are efficiencies that we can help with, you know, to a much broader market. They're pretty well laid out. Again, the important thing here is that the Instant management team is, we feel, one of the key assets that we have, that we're investing behind. They already have a successful track record for growth, with us supporting, and that's all we do. You know, we're not involved in the business, but we have synergistic support of some of our technologies that just could be applied to the broader market. There's a big opportunity there for synergies both, you know, in efficiency and also in revenue. Turning to your question on inflation. Look, overall, inflation, if handled properly, can be our friend on average. I mean, we, some of our arrangements are index-linked, but it's a relatively small number. About a third of our group would be sort of index-linked and two-thirds is not. So what is important is our ability to manage price during this time, and clearly to be as efficient as possible. If you look at supply chain, that is the construction of new sites. Here, there's significant inflation, but we've also achieved here significant efficiency. In particular, we're adopting more environmentally sensitive methods of construction, these also can lead and have led to lower costs. We found efficiencies in that supply chain that mean that the you know the cost of adding centers, whether they're partnered, franchised or our own, have not significantly moved. Thank you. Once again, if you have any questions, kindly press star one on your telephone. And there are no further questions at this time, sir. Please continue. Okay. Thank you all very much for joining us this morning. As usual, we'll be available today and the rest of the week if there's any follow-ups. Thank you. Thank you. That concludes our call for today. You may all disconnect. Thank you all for participating.