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.

• Management franchise system revenue grew 19% year-over-year in Q3, with fee income up 46%.

• Opened a net 100 management franchise locations in Q3, surpassing 1,000 open and trading locations, with 234 new signings in Q3 and 568 year-to-date, up 10% from 2023.

• Company-owned and leased segment saw margin expansion to over 25%, with open center revenue up 4% and contribution margin growth of 13% year-over-year.

• Worka platform rollout delayed to year-end, impacting growth, but expected to recover in 2025; Worka revenue remained flat due to digital product delays.

Strategic initiatives and outlook

• Focused on capital-light growth, signing new locations with minimal CapEx and lease liabilities.

• Over 173,000 rooms signed but not yet open, supporting future growth.

• Confident in achieving the medium-term $1 billion EBITDA target, with strong progress in two of three key objectives.

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

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

Franchise and regional dynamics

• Franchise agreements have evolved, with increased investment in salesforce and offerings to lower opening costs.

• Both institutional and entrepreneurial property owners are increasingly adopting the model, with repeat business growing.

• U.S. and rest of world each represent about half of the pipeline, though U.S. faces higher financing obstacles.

• Japan (with Mitsubishi) and Latin America highlighted as strong growth regions; Germany noted as underperforming due to institutional barriers.

• Owners globally are shifting to more active, operational real estate management, with demand for asset-light, flexible solutions rising.