IWG Reports Record System-wide Revenue and EBITDA in 2024 Results
Why we think this is good
IWG has demonstrated strong performance in 2024, with record system-wide revenue of $4.2bn and highest-ever pre-IFRS 16 EBITDA of $557m. The company's profitability has significantly improved, with operating profit increasing from $179m to $510m and a return to positive EPS. Network growth remains robust with 899 new centre signings and 624 openings. While there's a slight decrease in cash flow from business activities, the overall financial position has strengthened with reduced net financial debt and improved liquidity through new financing arrangements. The outlook remains positive, with expectations of continued EBITDA growth and a medium-term target of $1bn pre-IFRS 16 EBITDA. However, investors should be mindful of execution risks associated with rapid expansion and potential market risks from global economic uncertainties.
Key Points
- Record system-wide revenue of $4.2bn, up 2% year-on-year
- Highest-ever pre-IFRS 16 EBITDA of $557m, an 11% increase
- Operating profit increased to $510m from $179m in 2023
- Return to profitability with EPS of 2.0¢ (2023: -26.7¢)
- 899 new centre signings and 624 openings in 2024
- Net financial debt reduced to $712m from $775m
- €625m Euro bond issued and new $720m revolving credit facility secured
- 95% of new deals signed are capital-light
- Company-owned contribution margin improved from 22% to 25%
- Expecting continued growth in pre-IFRS 16 EBITDA for FY 2025
- Medium-term target of $1bn pre-IFRS 16 EBITDA
Summary
IWG plc has delivered a strong performance in 2024, marking several milestones:
- Record system-wide revenue of $4.2bn, up 2% year-on-year
- Highest-ever pre-IFRS 16 EBITDA of $557m, an 11% increase
- Operating profit surged to $510m from $179m in 2023
- Return to profitability with earnings per share of 2.0¢ (2023: -26.7¢)
- Network growth accelerated with 899 new centre signings and 624 openings
- Net financial debt reduced to $712m from $775m
The company's capital-light growth strategy is gaining traction, with 95% of new deals signed being capital-light. IWG has also strengthened its financial position through a €625m Euro bond issuance and a new $720m revolving credit facility. Looking ahead, IWG expects continued growth in pre-IFRS 16 EBITDA for FY 2025 and is targeting $1bn pre-IFRS 16 EBITDA in the medium term. However, investors should note the slight decrease in cash flow from business activities and be aware of potential risks associated with rapid expansion and global economic uncertainties.