Hybrid

works.

Annual Report and Accounts 2022

CONTENTS Strategic report
Hybrid Works.
Our purpose
Chairman’s statement
01
08
10
Revenue from continuing operations (£m)
£2,751m
‘22 2,751

Chief Executive Officer’s review 14 ‘21 2,227

Market review 18 ‘20 2,432

Business Model 20 ‘19 2,593
22
Our strategy ‘18 2,355
Key performance indicators 26
28
Our brands Overheads as percentage of revenue (%)
Stakeholder engagement 34 15.5%
Chief Financial Officer’s review 36
‘22 15.5
Risk 44
‘21 14.7
Introduction to ESG 54
‘20 15.1
Environment 56
‘19 10.8
Social 60
‘18 10.5
Governance and task force on climate-related 66
16
financial disclosures
Adjusted EBITDA (before application of IFRS 16)

Governance £308m
‘22 308
Board of Directors 72
‘21 80
Corporate governance 74
‘20 134
Nomination Committee report 84
‘19 428
Audit Committee report 90
‘18 390
Directors’ Remuneration report 96 0 450

Directors’ report 118

Network (locations)
121
Directors’ statement
3,345
‘22 3,345
Financial statements
‘21 3,314

Independent auditor’s report 122 ‘20 3,313

Consolidated income statement 129 ‘19 3,388

Consolidated statement of comprehensive 130 ‘18 3,306

income 0 3450

Consolidated statement of changes in equity 131

Net growth capital investment
132
Consolidated balance sheet £141m
Consolidated statement of cash flows 133
‘22 141
Notes to the accounts 134
‘21 104
Parent company accounts 183
‘20 177
Reconciliation for alternative performance 184
‘19 260
Five-year summary 187
188 ‘18 330
Glossary 0 450

Shareholder information 190

* A glossary is included on page 188 which defines
various alternative measures used to provide useful
and relevant information.
 Strategic report
Hybrid
works.
Hybrid’s the Q Is hybrid working
and the use of
accelerant that’s flexspace here to
stay?
empowering IWG’s
rapid growth, right A Definitely. We’re witnessing a
major cultural shift – and you
only have to look at the data
across the world. to see some of the reasons
why. Quit rates are down 35%,
And its multiple and 77% of workers are saying
an office close to home is a
benefits mean it’s must have for their next job.
According to Global Workplace
here to stay.” Analytics companies are saving
$11,000 per employee. And 87%
of CFOs see hybrid as a more
Mark Dixon, Founder and CEO, IWG plc affordable business model.
In short, hybrid works.

Q With the uptake of Q How important is

hybrid in achieving
hybrid working sky
rocketing over the sustainability goals?
last two years, can
we say it truly A Massively important, our latest
research, in partnership with
ARUP, is telling us that carbon
works? emissions are lower by up to
A Yes, and the reason is simple: it
works. Being able to work close
70% in the hybrid model,
demonstrating how its continued
to home is giving people a uptake has the power to make
better work/life balance – these reductions part of the new
seeing more of friends and normal. Helping customers solve
family, cutting out the daily some of their sustainability
commute, saving on travel challenges is at the core of our
costs, supporting their local business, and this report covers
economies. It’s massively several of the ways in which
cutting the real-estate costs of we’re making this happen.
employers too, while reducing
employee churn and providing
access to a global talent pool.
More than 50% of professional
employees will work in the
hybrid model over the next five
years, outnumbering those who
don’t.
IWG plc Annual Report and Accounts 2022 1
Hybrid works.
For business
Freedom to grow Millions of businesses are already gaining from better
With thousands of locations agility, reduced costs, heightened productivity and the
globally, we give businesses ability to attract the best talent the planet has to offer.
everywhere the freedom to
grasp opportunities wherever
and whenever they occur.

+80%
The ability to flex their footprint
rapidly and easily is empowering
them to implement growth-
orientated real-estate strategies
and ways of working that are
truly fit for purpose.

Lower costs of CFOs see

Less fixed space means less
hybrid as a
cost. That’s why over 80% of money saver1
CFOs see hybrid as a money
saver, and why 72% of
companies are planning to
reduce their traditional
property spend. And it’s why
freedom from the constraints
of the long-term lease is
enabling our customers to
focus their resources
on growth.

More productive
Having access to a professional
environment that’s convenient
and close to home is enabling
people everywhere to work
and be creative together.
Right across our global network,
businesses are reporting
productivity boosts powered
by engaged employees whose
workstyle suits their lifestyle.

Attracting talent
Hybrid is changing the
geography of work forever.
Now, with no need for
employees to be close to
headquarters, businesses can
hire talent from across the
planet. And with 77% of
employees saying a flexible
workspace close to home is
amust-have for their next job,
hybrid’s the magnet companies
1. IWG CFO Study, Conducted by Mortar (2022)
need to attract the best.

2 IWG plc Annual Report and Accounts 2022

 Q Do you expect your

Strategic report
people in the office
fulltime?
A “There’s no doubt in my mind
that we’re never going back to
full occupancy five days a week
in an office.

We need to get past the historic

view that attendance is somehow
a proxy for productivity. To get
the best people, we don’t have to
force anybody to relocate from
the south of Spain or to London. ”
For a long time, Christian Bigsby
companies have VP of Workspace Solutions,
expected people Cisco

to come to the Q How are you

approaching the
mountain. Now the shift to hybrid
mountain is going working?

to have to come A “It requires close collaboration

between our IT, HR, Facilities and

to the people…”
Security teams, to build a holistic
strategy, approach and success
measures. Our business results
show it’s working for us, and I
Christian Bigsby believe this model will be
embraced as the future of work.”
VP of Workspace Solutions, Cisco
Michael Dell
Q What’s your
experience to date
CEO and Chairman, Dell
Technologies
of working with IWG?
A “We love the fact that IWG has

72%
multiple brands, a global
presence and spaces we can
configure to our exact needs.
Today, we have a partner with
the right culture, values and
global scale that’s helping us
provide the right flexible,
coworking global real-estate of companies
strategy to manage the new are planning to
way of working in the future.”
reduce their
Arvind Kumar property spend
Global Vice President of
Indirects, NTT Global Sourcing

Q Are you now fully

committed to the
hybrid model?
A “If your employees can do their
jobs remotely and they have all
the digital tools they need, if
productivity is up and your
clients are happy, why would
you force them into the office
five days a week?”

Luigi Sciabarrasi
Corporate SVP, Global Real
Estate, AECOM

IWG plc Annual Report and Accounts 2022 3

Hybrid works.
For our “Hybrid gives people so
much of what they want

customers
most from life: the freedom
to choose how they work;
more time for the things
that matter; less stress and
expense – and the ability
to reduce their
environmental impact.”
Mark Dixon, Founder and CEO, IWG plc

76%
Happiness and
wellbeing
Happy employees are
productive. They’re happiest
when they have the freedom to
choose where and when they say commuting
can work at their best, with the less is

78%
right support, tools and
Community spirit technology. And this is exactly important
what millions of people get to fight the
The death of the daily commute
is breathing new life into
from IWG every day. climate crisis1
communities everywhere. Reduced commuting,
Working where is most
say their convenient means more time
lower carbon
wellbeing with family and friends, more
money spent with local
Enabling people to work close
to home achieves far more than
has improved businesses, less stress and just diminishing the misery of
thanks improved wellbeing. So our the daily commute. Replacing
focus is on the places where cars, buses, trains and planes
to Hybrid1 people want to be. with feet and bicycles also
greatly reduces the impact
The future of work of the single biggest cause
of carbon emissions – a factor
At IWG, we empower
that’s of growing importance
companies to create the
to workers of all ages.
working infrastructure where
their people can be at their
best and happiest. With our
multiple brands and workplace
solutions, we are shaping the
future of work: where tech-
empowered workers and
businesses collaborate and
learn together, driving growth
and enabling companies to put
their employees first.

1. IWG Research, conducted by Mortar (2022)

4 IWG plc Annual Report and Accounts 2022

 Strategic report
Q How are you
ensuring that people
end up working in
the way that best
suits them?
A “We have committed to allowing
team members around the globe
We’re having to choose the work pattern that
best fits their lifestyle, whether
extremely positive that’s remote, in an office or
a blend of the two. And we’re
employee feedback redesigning offices to enhance
the hybrid experience by bringing
on improved work/ teams together for social
connection and collaboration.”
life balance, reduced Michael Dell
commuting and CEO and Chairman, Dell

lower costs…” Technologies

Q Why is ‘happiness’
a key objective
Luigi Sciabarrasi
for Avaya?
Corporate SVP,
Global Real Estate, AECOM A “At Avaya, we talk about ‘hybrid
happiness’. Employees are happy
when they can choose where to
work – and their happiness leads
Q What is the greatest
benefit of hybrid
to productivity, which is
beneficial for the company.
working that you’ve Young professionals increasingly
seen so far? embrace the freedom to choose
where they can work best: for
A “The benefits of flexibility are
clear to see, especially when
team collaboration or client
meetings this might be at
you think about the time people a nearby IWG workspace, while
would otherwise spend for processing an offer or a
commuting, freeing up time to tender it might be from home…”
spend with families. Flexibility
drives so many other things, Ourania Odermatt
such as productivity, happiness,
engagement and retention.” Managing Director, Avaya
Switzerland and Austria
Kim Colucci
People Director, Mixbook Q How do you plan to
get the right balance
between what’s best
Q Do you have
ambitions to change for your people and
your employee what’s best for the
relationships under business?
the hybrid model? A “In the world of tomorrow, we’ll
never have one offer that fits
A “We really want people to take
that time to go to their child’s
all. We’re going to have a hybrid
environment that works for
game or take care of their a host of different people and
parents. It’s about being a purposes. What’s exciting is that
company that cares for their we’ve found the right partner.”
employees – and providing that
flexibility is invaluable.”
Arvind Kumar
Luigi Sciabarrasi Global Vice President of
Indirects, NTT Global Sourcing
Corporate SVP, Global Real
Estate, AECOM

IWG plc Annual Report and Accounts 2022 5

Hybrid works.
For our planet
The hybrid model is ushering in a new way of working that’s fast reducing
the negative impact of economic activity on society and the environment.

Better lives on
a cleaner planet
The IWG approach to hybrid
working has a direct positive
impact on six of the United
Nations’ Sustainable
Development Goals. Of these,
four relate to important social
issues: SDG#3 (Good Health
and Wellbeing); #5 (Gender
Equality); #8 (Economic
Growth); and #11 (Sustainable
Cities and Communities).

But the approach is particularly

powerful when it comes to
supporting SDG #7 (Clean
Energy) and #13 (Climate
Action). Our work is not only
helping businesses downsize
their office property into
advanced, environmentally
efficient shared workspaces;
it’s also getting people out of
their cars and onto their Advances reducing
bicycles and their feet to end the impact of work
the intensely destructive
long-distance daily commute. Digitalisation and other
technological, scientific and
engineering advances are
freeing people everywhere to
work as they wish.

And this is empowering IWG to

help cut the impact of work on
the planet in several ways:
through the increasing use
of advanced, LEED-certified
Class A office space that helps
businesses slash workplace
power usage and emissions;
through enabling the re-use
of resources and office-based
recycling schemes; and above
all, by making obsolete much
of the work-related travel
that is the single largest
source of atmospheric fossil
CO2 emissions.

6 IWG plc Annual Report and Accounts 2022

 Strategic report
Reducing carbon organisation and we believe
that transparency is a key part
emissions and to achieving this goal.
energy usage
In line with our Net Zero As a global employer, our
commitment, we are purpose and values have never
accelerating our efforts to been more important, and we
achieve 100% green electricity. want to play a leading role in
We have also aligned our promoting environmental best
We are increasingly investment decisions to
sustainable building standards,
practice. This progress has
been recognised through
reducing carbon ensuring that our building
selection process aligns to our
our strong AA rating by MSCI
and B score for our CDP
emissions and energy Net Zero trajectory and existing
buildings are continuously
submissions. We also continue
to take necessary steps to work
usage across our improving our sustainability
performance.
collaboratively with our
customers, partners suppliers
estate and paying Our focus on reducing our
and other stakeholders to drive
the change that’s needed.
close attention to the footprint extends beyond

70%
building operations, we are also
recycling and the re- working to optimise our supply
chains and operations to
use of materials” encourage eco-friendly
practices.
Douglas Sutherland, Chairman Environmental best potential
practice reduction in net
Our purpose of helping emissions with
Our carbon everyone have a great day at
home or local
initiatives work, whilst protecting people
and planet is at the heart of our working1
While we work towards our
objective to achieve Net Zero
carbon emissions by 2040, to
eliminate the remaining net
effect of our operating
activities in the interim we are
investing in a range of carbon
removal projects which will
result in achieving carbon
neutrality during the course
of 2023. As part of our climate
action plan, we have set targets
to reduce carbon emissions
from our building and supply
chain whilst establishing
sustainable business
operations, encouraging our
people to take action.

Recycling and the

re-use of materials
We are refreshing our
processes to ensure that we
encourage the use of materials
with low carbon intensity
including locally sourced
materials, high recycled
content and innovative
products that reduce waste
of natural resources such
as water.

1. Arup and IWG Hybrid Working: Carbon

Reduction Study (2023)

IWG plc Annual Report and Accounts 2022 7

Our purpose

Our
purpose
culture and
values Our purpose

We all deserve a great As we understand and harness

day at work. For us, this the major forces bringing about
radical change in how people
means not just working want to shape their working lives,
productively, but also these values are central to our
role at the forefront of the
Our business
leading better balanced
lives: greener, with more
hybrid-working revolution.
Already driven by powerful
model
time for friends, family megatrends such as growing
and community. environmental awareness,
societal pressures and
technological advancement,
Hybrid works change to the way we work has
Our ability to deliver against this
purpose is empowered by our
been radically accelerated by
the COVID-19 pandemic over Our strategy
uniquely diverse, truly global the last three years.
culture, which is the result of
operating in more than 120 As a result, the shift towards
countries across the world. We hybrid working fast gained
recognise the critical importance traction among greatly increased
of the value that this diverse and numbers of businesses across
passionate global workforce the planet. Only we have the
brings to our business. global coverage and service
portfolio to respond to this level
Our people are therefore at the of demand. And, with our unique
heart of our culture, which is capital-light expansion model,
we alone have the capability to
Our people and
based on our pioneering spirit,
mutual empowerment, shared grow our offering in the suburbs,
towns and even rural
culture
leadership, unified global
network and commitment to communities where people wish
placing the customer at the to live and work.
heart of our thinking.

At IWG, these essential

properties are united by our
trust in one another and driven
by the shared values of diversity, Governance and
flexibility and balance.
risk management

8 IWG plc Annual Report and Accounts 2022

 Strategic report
OUR VALUE CREATION
FRAMEWORK
The unique way in which we are structured, our highly efficient platform, our
global reach, brands, service portfolio, technologies and outstanding people
enable us to meet the needs of all stakeholders: customers, partners, employees,
communities and shareholders.

We help millions of people to be more productive every

day, supporting them to lead more balanced and
rewarding lives.

For more than three decades, we have successfully developed and refined our business model to deliver excellent
customer value and strong financial returns. Today, with our unmatched scale, multi-brand approach and highly efficient
platform that delivers everything our partners and customers need, we are uniquely placed to meet the accelerating
global demand for hybrid-working solutions.

See pages 20 to 21

1 2 3 Our three strategic priorities enable

sustainable growth to achieve our
purpose.

See pages 22 to 25
Network Partnerships Platform
(technology)

We recognise the critical importance of the value our diverse and passionate
global workforce brings to our business. Our people are at the heart of our
culture, which is based on our pioneering spirit, mutual empowerment, shared
leadership and unified global network and is united by trust in one another.

See pages 60 to 65

Our operating model is underpinned and supported by strong and

robust governance and a rigorous risk management model that ensures
our business is always managed prudently, with all risks understood
and appropriately assessed.

See pages 44 to 53

IWG plc Annual Report and Accounts 2022 9

Chairman’s statement

Hybrid
working
is driving The hybrid model is
becoming the preferred

flexible
way of working for
millions of people across
the planet. This reflects
major societal and

workspace
behavioural change, as
technological advances
empower people to work
wherever they are most

mainstream.
productive. IWG is
uniquely positioned
to benefit from these
fundamental changes to
how work is conducted.

Hybrid working is leading

companies to replace their
expensive conventional HQs
in city centres with smaller,
more flexible workspaces,
while simultaneously taking
on advanced workspaces in
the suburbs and smaller
communities close to where
their employees live to benefit
When viewed in the context of from the fundamental changes
to how work is conducted.
the challenges over the last three As a result, our rapidly growing
network is bringing new
years, these results are a opportunities into the heart
of local communities, and
significant accomplishment companies of all sizes are using
IWG across multiple locations
that reflects the dedication and as they continue to shift their
real estate strategies to focus
continued hard work of our on flexibility.

people.” This shift delivers benefits to

multiple groups. To businesses,
helping them reduce costs, meet
their ESG priorities and win the
Douglas Sutherland
war for talent. To their people,
Chairman enabling them to lead happier,
healthier, less costly and less
environmentally damaging lives
closer to where they live. To
communities, through increased
local business opportunities.
To our shareholders, from

10 IWG plc Annual Report and Accounts 2022

 “We therefore

Strategic report
look forward
to a future
of profitable
growth
providing
opportunities
and rewards
for our people,
customers,
partners and
investors in 2023
and beyond”
I remain immensely proud and
grateful to them for maintaining
the IWG difference and our
position at the forefront of one
of the world’s most exciting and
important business sectors.

Our strategy
As true pioneers of flexible
workspace, we have the
coverage, the offer, the
approach, the technology, and
the people to place us front of
mind for any business wishing
to explore the advantages
of hybrid. As previously
announced, to capture the
opportunities created by the
rapid shift to hybrid working,
we have organised to improve
improved financial returns Our people focus on three important areas.
as we implement our strategy
to capture the opportunities We continually aim to bring our
from hybrid working. people every opportunity to First, we continue to develop our
build a great career with us. We platform benefitting from years
While addressing the changes provide the means for them to of investment and experience in
being brought by hybrid working, develop their talent and effectively operating the largest
IWG remained concentrated on capabilities in a diverse, inclusive global workspace physical
the fundamentals to deliver a and often challenging network. This includes industry
strong finish to a year impacted environment that enables them leading systems and processes
by unforeseen geopolitical and to stretch themselves and to manage all aspects of flexible
economic developments. This represent IWG as a truly workspace and deliver services
resulted in IWG reporting record progressive force. in an efficient and cost-effective
revenues, a record network manner. Our on-going
footprint, steady increases I would like to extend my management platform
to occupancy and pricing, and personal thanks to everybody developments will further
limited impacts from inflation who has been responsible for improve efficiencies and service
due to strict cost discipline. IWG’s outstanding achievements levels while addressing new
When viewed in the context during the year, especially those opportunities from hybrid
of the challenges over the last team members who have working.
three years, these results are continued to represent the
a significant accomplishment Company so brilliantly in all Second, our network
that reflects the dedication our markets across the world. development organisation is
and continued hard work Our people provide great service accelerating the capital-light
of our people. to our millions of customers, expansion of our physical
delivering to each and every one network through management
of them a great day at work. agreements, partnering and

IWG plc Annual Report and Accounts 2022 11

Chairman’s statement continued

franchising as building owners sustainability in governance,

adapt to providing flexible leadership and investment
workspace. Having the largest through solutions for companies
and fastest growing flexible and investors seeking impact.
workspace network in She has public board experience
convenient locations will be in the US and Europe and was a
key to meeting the needs of co-founder of the International
hybrid workers. Corporate Governance Network.

Finally, during 2022 we We continue to implement the

completed the merger of certain results of our internal board
digital assets with the Instant review process in our plans and
Group to create Worka, the have full confidence in the Board
world’s leading integrated members and processes. We will
independent workspace digital maintain our focus on strategic
platform for serving the needs objectives and succession
of the broader flexible planning at the Board
workspace market. level in 2023.

Our Board Our environmental

I remain indebted to my Board journey
colleagues for their continued We are committed to advancing
dedication to fulfilling the IWG on our environmental journey
vision and the outstanding and delivering against the
quality of advice that they have objectives we have set. We are
brought to the business during proud to be doing so much to
yet another very active year. I promote and lead the global
would like to take this uptake of the hybrid-working
opportunity to thank Florence model. This is at the forefront
Pierre, who left the Board in of efforts to reduce the negative
November after nine years as an effects of the daily commute,
active Board member, as well as reducing both the environmental
Glyn Hughes, who stepped down impact and personal time
as Chief Financial Officer in associated with travel. Recent As part of our journey, we are
October. We also welcomed research we have conducted working to convert to certified
three new Directors during the with Arup highlights the green electricity with the goal
year, who bring a wealth of importance of this shift, to achieve this by 2030. We are
experience and important new identifying the commute as a improving the efficiency of our
perspectives on our business. major contributor. By moving global supply chain by
away from long daily commutes consolidating it into regional
Tarun Lal joined us in May, and working locally some of the hubs that reduce the overall
bringing extensive international time an average worker’s carbon impact of our logistics
franchising expertise. Tarun has footprint can be reduced by operations. In addition, our
over 20 years of experience up to 70%, making it a colleagues from across the world
gained with Yum! Restaurants, fundamentally important issue are leading numerous initiatives
where his executive roles have for all of us. to reduce waste and promote
included Global Chief Operating recycling in our centres.
Officer KFC and Managing We are also actively reducing
Director – KFC Middle East, our own carbon footprint as part
Pakistan, Turkey, Africa, and of the implementation of our
India. Currently he is President robust ESG strategy. The actions
of KFC U.S. we have already taken resulted
in our AA ESG rating by MSCI.
Charlie Steel joined us in And, while we work towards our
November as CFO. Previously, objective to achieve net zero
Charlie was CFO of Babylon carbon emissions by 2040, to
Holdings, a New York Stock eliminate the remaining net
Exchange listed digital health effect of our operating activities
delivery and AI diagnosis business. in the interim we are investing in
a range of carbon removal
Sophie L’Hélias joined us in projects to achieve carbon
December. A trained lawyer, neutrality during 2023.
Sophie is currently the President
of LeaderXXchange™, which
promotes diversity and

12 IWG plc Annual Report and Accounts 2022

 Strategic report
Looking ahead IWG is a clear leader in enabling
the changes from hybrid working
While we enter 2023 with great and has everything in place to
confidence in the future, we are build on that lead: a rapidly
fully cognizant of the challenging growing global network, an
economic and geopolitical efficient management platform,
environment in which we and industry leading technology, an
our customers will be operating expanding customer base,
throughout the coming year. a broad brand and service
We will remain focused on our portfolio to meet the needs
purpose at IWG, to help people of our customers and property
have a great day at work. By owners, our people experienced
enabling them to increasingly in all aspects of delivering
work in the ways they want and flexible workspace, and the
closer to home, we are actively vision and drive necessary
improving the way people live – to ultimately benefit from these
not just at work but in many changes. We therefore look
other aspects of their forward to a future of profitable
lives as well. growth providing opportunities
and rewards for our people,
customers, partners and
investors in 2023 and beyond.

Douglas Sutherland
Chairman

20 March 2023

IWG plc Annual Report and Accounts 2022 13

Chief Executive Officer’s review

Leading the
global shift
to hybrid. For many years, I have
been saying that
I believed companies
and their employees
would eventually move
to a hybrid working
model, with people being
given the flexibility to get
their work done when and
where they’re most
We mustn’t underestimate productive. This shift was
taking place pre-Covid at
the significance of what we a gradual pace, but now
it’s happening at break-
are witnessing. In years to come, neck speed, and there
the ‘hybrid revolution’ will there’s no turning back.
Hybrid working is here
be recognised as every bit as to stay.
important as all of the biggest Hybrid working is better for
previous innovations that have people, cheaper and far more
flexible for companies. The
shaped the world of work.” advent of hybrid has made it
redundant for companies to tie
themselves into inflexible and
expensive long-term contracts
Mark Dixon on city-centre properties, while
Chief Executive Officer also having a hugely positive
impact on the environment.

This type of working is being

rapidly adopted by companies
worldwide. It’s no longer just
about plans or intentions, as we
can see in our record numbers
for 2022, it’s already changed
the actions business leaders
are taking when it comes
to managing their property
footprint. In IWG’s recent
CFO study, half of the financial
leaders surveyed have already
opted for some form of hybrid
working solutions1.

The reasoning for this shift to

hybrid is simple: the approach
gives them the flexibility to scale
up or down quickly without

14 IWG plc Annual Report and Accounts 2022

 Strategic report
82%
of CEOs globally
are concerned about
uncertain economic
growth

This future world of work is one

in which we thrive, as the global
market leader of hybrid working
products supplied from our
platform. A new real estate
frontier, where buildings are
‘linked together’ to form a single
work platform that can be
accessed by millions in a
convenient, productive and
efficient way. Most importantly,
work becomes more local for
many, with growing indications
being locked into lengthy that the fast-changing working
contracts. It’s also ‘a no brainer’ habits of millions of people
when it comes to profit, with across the world mean the days
an independent Global Analytics could be numbered for one of
survey recently showing that the greatest drivers of global
hybrid working can save warming: the daily commute.
organisations an average of
more than $11,000 per employee Little has done more over the
per year2. years to depress, stress and
irritate workers than the daily
Savings of that scale ramp up commute, affecting people in
dramatically. It’s estimated that otherwise fantastic careers, in
since Cisco went hybrid five exceptional cities and with great
years ago it has saved around employers. It separates families,
$500 million by cutting around According to Stanford fractures communities, pollutes
half of its real-estate footprint3. University’s Professor Nicholas the environment and wastes
Bloom, acknowledged as the vast amounts of time
We see a future where between leading academic expert on and money.
30% and 50% of white-collar hybrid: “Firms don’t do things
workers (well over a billion people) that lose them money. They Today the daily commute is
will work in the hybrid style. do things that make them entirely unnecessary, because
Significant academic research and money. That’s why every firm the office is no longer a physical
opinion reinforces this prediction just about out there is doing place that people have to go to.
and highlights why companies are hybrid, because it’s such Rather, it is a digital space, where
embracing the model. a no-brainer to increase profit”4. data saved in the cloud is
accessible at any time,
1. IWG Research, 2022 from anywhere.
2. Global Workplace Analytics: Latest Work-at-Home/Telecommuting/Remote Work Statistics –
Global Workplace Analytics
3. BBC STORYWORKS
4. What we now know about hybrid work (charterworks.com)

IWG plc Annual Report and Accounts 2022 15

Chief Executive Officer’s review continued

While sophisticated web-based The second is our parallel focus These drivers are empowering
technology has been around for on the rapid growth of our us to grow faster than ever
a few years, it is only since the network coverage in partnership before, supporting our plans to
pandemic that companies have with the property industry and add new signed locations during
seen first-hand not only that investors using capital-light 2023 and bring the benefits of
hybrid works, but that they are expansion methods such as hybrid to many more people.
able to thrive under the model. management agreements,
Firms are able to operate more partnering deals and franchising. Growth is clearly a priority for
efficiently with a more IWG, but we are determined only
productive workforce, while Finally, we are committed to to expand as a carbon-neutral
employees are happier as accelerating the growth of our organisation. The action we have
they see hybrid working as Worka business following our taken to restrict and offset IWG
the equivalent of a 7% to 8% investment in the Instant Group plc’s environmental impact is
pay rise1. at the beginning of Q1 in 2022. having the desired effect; our
strong rating by MSCI was
A Bright future Expanding as a upgraded to AA and I am
As we enter 2023, our focus is carbon neutral pleased to say that we are
sharper than ever and we have business on track to achieve carbon
neutrality during 2023.
completely repositioned the There are two distinct yet
Company and its strategy in complementary trends that Driving growth at IWG
three key areas to enable us to companies are embracing
deliver against our full potential. that are driving the demand Hybrid working is sometimes
for hybrid working solutions. presented as a binary choice,
The first of these is an First, companies are downsizing between people working
unrelenting focus on growing in city centres, replacing long, from home and a central
our margin, driven by strong restrictive, and expensive headquarters, but this
performance on new and leases with flexible space with misses the point entirely.
embedded price, sequential operators like IWG. Second, they
improvements in occupancy, are taking on flexible workspace All studies show employees
service revenue growth and in local neighbourhoods, closer don’t want to spend hours
strict control of costs. to where their people live and commuting each day to work in
want to be. an inconveniently located office.

1. What we now know about hybrid work (charterworks.com)

16 IWG plc Annual Report and Accounts 2022

 Strategic report
“Make no mistake the office
is most definitely not dead;
it has just changed location”
Just look at the sites of some My greatest thanks go to all our
of our most recent openings. team members, who were the
In the UK: Gerrards Cross, driving force behind our success
Buckinghamshire (population in achieving excellent results in
8,000); Marlow, also in an extraordinary year for our
Buckinghamshire (14,000); global market and our business.
and Chippenham in Wiltshire
(relatively large at 45,000). In Looking to the
the USA: Kodak, Tennessee year ahead
(10,500); Destin, Florida (14,000);
Blufton, South Carolina (27,700); We enter 2023 with strong
Middleton, Wisconsin (20,000); momentum behind us.
Ridgeland, Mississippi (24,000); The future is extremely bright
and Stafford, Virginia (5,500). for IWG and all our stakeholders
as we continue to grow our
That is not to say that customer base, our global
businesses are abandoning city network and our matchless
centres: far from it. Increasingly, portfolio of brands and
we are helping companies shake other solutions.
off the expense of the long-term,
city-centre lease and replace We remain ambitious and
it with a flexible, cost-effective hungry for yet greater success.
Now, the remarkable advances Our ultimate goal is to grow
in cloud technology and video agreement on a smaller space
in one of our city-based centres. by thousands of centres over
conferencing software – both the coming years, further
vital to enabling effective hybrid This, too, is a trend that is
proving highly beneficial for IWG consolidating our position at the
working – mean they don’t need forefront of the most important
to. That is why we are seeing and as a result we will continue
to expand across metropolitan, and positive revolution in the
a fundamental shift in the world of work.
geography of work with the suburban and rural locations.
centre of gravity moving towards Make no mistake the office is
most definitely not dead; it has With the market trends on our
the local communities where side, the right strategy, the right
people actually live. just changed location.
people and the right impetus,
This rapidly growing demand Our financial we are superbly placed to
performance in 2022 deliver against all our ongoing
for hybrid working is propelling growth ambitions.
the IWG business forward. With all the trends on our side it
The demand to work locally is no surprise that our financial
is particularly strong in the Mark Dixon
results for 2022 were very
suburbs, former dormitory strong with the highest-ever Founder and CEO, IWG plc
towns, satellite villages and revenue in IWG’s 34-year history
countryside communities that with 24% growth in system-wide
used to be denuded of their 20 March 2023
revenue to £3.1bn.
people in the working week by
the irresistible draw of the big The strong financial results
city. In parallel, businesses we generated, with growth in
everywhere are now typically revenue and operating profit,
opting for a fraction of their are providing outstanding
former conventional city-centre momentum for the business.
space in favour of sites closer We also started to grow our
to where their employees live network strongly by signing
and actually want to be. 462 new centres in 2022,
and we are planning for even
stronger network growth
in the year ahead.

IWG plc Annual Report and Accounts 2022 17

Market review

The growing Concern about the

flexible environment
Continuing to support people working
at or near home following the pandemic

workspace
is the single biggest contribution
organisations can make to reduce their
carbon footprint. Taking positive action
attracts talent who share an increasing
sense of shared responsibility and

market
global citizenship.

Societal change
The global COVID-19 pandemic
has significantly accelerated the uptake
of hybrid working patterns. Research shows
that half of all workers would seek another
job if asked to make a full time return to
Right across the world, significant forces are influencing the office1. SME demand for high-quality
the future development of the flexible workspace market. accommodation and services in local
In 2020, the COVID-19 pandemic made these all the markets continues to accelerate.

stronger. Here we reflect on how the ways we react

to change are enabling us to strengthen our position Evolving global
as a global market leader.
economy
Companies across the world are aiming
to reflect their business priorities in their
real estate strategies. For many, this
includes increasing operational flexibility
while driving down overall costs, and
seeking new ways of maintaining
closer relationships with customers
and suppliers alike.

Advancing
technology
Smart technology and universal
connectivity are enabling people
to choose how, when and where they work.
With the pandemic having made remote
communications the norm, billions are
now connecting globally via the latest
in video communications and virtual
reality platforms – a shift that’s being
100% enabled by major improvements
in technology.

Agile property
models
Companies increasingly need to be poised
for rapid reinvention in an ever-more
complex and competitive environment.
To support rapid shifts in strategy, scale
and location, businesses are increasingly
demanding highly efficient, intelligent
buildings, high‑quality services and
portfolio solutions that extend far beyond
single offices.

18 IWG plc Annual Report and Accounts 2022 1. IWG Research conducted by Mortar (2021)
 Strategic report
Impact on our industry How we are responding
• Need to satisfy growing consumer, shareholder, • Investing in highly efficient, intelligent buildings,
employee, legislative and societal demand for continuously upgrading our estate and enabling
reduced environmental impact. reduced commuting by opening more locations
• Increased demand for flexible workspace solutions, outside city centres.
close to and in the communities where people • Upgrading or closing inefficient centres to improve
want and can afford to live. environmental performance across our portfolio.
• Growing requirement for advanced tech solutions • Supporting new ways of working that allow people
to support home working as individuals seek everywhere to contribute to the carbon-
to enhance their lifestyles and reduce their reduction agenda.
carbon footprints.

• To attract and retain the best talent, employers • Our network expansion is focused on local markets,
are seeking partners who can provide flexible space enabled and accelerated by our capital light growth
and services. strategy that is driving our global presence towards
• Workspace providers without diverse portfolios are our goal of reaching 30,000 centres.
struggling to meet emerging customer needs and • We ensure our customers gain from our scale,
remain competitive. brand portfolio and service levels at every stage
• Communities that cannot provide high-quality of their development.
workspace are finding it hard to meet the evolving • We enable our customers to participate in our local
needs of local employers. social investment programmes across the world.

• Companies are increasingly taking a portfolio • We provide ‘hub-and-spoke’ infrastructure to meet

approach to real estate, taking on a hierarchy national and regional development plans.
of sites from headquarters to local offices. • Our sophisticated global platform allows
• They are seeking new ways of building immediate personalised support to meet
dispersed customer relationships while emerging customer needs.
delivering a personalised service. • Our global network supports a worldwide,
• The need is growing for customers to understand regional and local presence wherever required,
and influence supplier behaviour in local markets. allowing customers to make rapid shifts in location,
scale, strategy and customer focus.

• The ability to offer, refresh, expand and manage • We leverage our unmatched insight into the tech
an appropriate range of digital offerings is a key needs and expectations of businesses, delivered
differentiator. by millions of individuals who use our services
• Companies are focusing their attention on identifying every day.
the right tech investments to make the moment • We continually invest in world-class, resilient
they are required. IT infrastructure, innovative digital offerings and
• The need to maintain service provision is mission- services at all our centres.
critical, driving the often expensive requirement • With thousands of centres worldwide, we provide
to keep pace with advances. the resilience and global infrastructure to meet
every flexible-working need.

• Fast-changing business needs mean that customer • We can respond fast and fluidly to rapidly changing
requirements are continuously evolving. needs and demands by developing bespoke solutions
• Companies are seeking partners that can be rapidly engineered for global uptake.
who can meet increasingly rigorous and • We have the experience, scale and investment power
mission-critical demands, fast and efficiently. to deliver and continuously upgrade in line with
• Growing complexity is increasing the need for individual expectations.
enterprise companies to have a single point • Our network comprises a wide variety of building
of contact for their property requirements. types able to serve even complex business needs.

IWG plc Annual Report and Accounts 2022 19

Business model

Creating value
For over three decades, we have successfully developed our business model to deliver
strong returns. Today, with our unmatched scale, unique multi-brand approach and highly
efficient platform, IWG is poised for unprecedented growth.

What we do How we do it
We partner with property owners Creating Property owners
and investors across the world to
provide the largest network of access to Our unique portfolio of brands and formats lets building

the flexible
flexible workspace for businesses owners select the flexible workspace solution that will
of every type and size. Through add the most value by meeting the needs of the local
our unique global infrastructure, workspace business community. Our platform and associated
centralised support functions make implementation
we deliver a comprehensive
service that ensures our partners market straightforward.
and end customers have a great
day at work.

Key inputs Our Operational Centralised

Our partner relationships
competitive efficiency support
Our success depends on the success of operating We continuously
optimise the
functions
our partners, so we use all our experience
and expertise to deliver the service and model performance and
Centralised support
functions maximise
support they need. effectiveness of our value for our partners,
locations. Combined with customers and
Our people a disciplined approach to shareholders. From
We employ great people and help them costs, this enables us to procurement to
to achieve their full potential, so they deliver long-term value. marketing, we benefit
can drive our and our partners’ success. Our scaled platform and from economies of scale
centralised support and global reach to
Our networks functions underpin IWG’s provide consistent
It is our vision to have a centre serving operational efficiency support and service
every community, so we and our partners across the world. to the business.
can empower businesses and individuals
to work flexibly and productively
anywhere in the world.

Our brands Our strategic Our three strategic priorities enable sustainable
growth to achieve our purpose.
With a growing stable of global and local pillars
brands, we can segment the markets
where we operate to maximise uptake
and create a unique growth opportunity.

Our formats See pages 22-25 to read more

Versatile, inspiring and practical, our about our strategic priorities
formats drive worker satisfaction and
productivity.

Our platform
Our flexible platform features world-class,
easy-to-use infrastructure that delivers Strong Robust governance and a rigorous risk-
management model underpin our operating
simple points of access and a great
user experience.
governance and model to ensure the business is managed
risk management prudently and risks are assessed
appropriately.
system

20 IWG plc Annual Report and Accounts 2022

 Strategic report
Value created

Franchise partners
Our franchise partners find it easy to activate our
business model, brands and access the group’s
marketing support. Customers
We help businesses perform
better, with more flexibility and
agility, staffed by more fulfilled,
effective and loyal people.

Scaled Multi-
platform branded
Partners
IWG’s different brands We recognise there
We offer an exciting, sustainable
operate from a single, is no ‘one size fits all’
scaled and highly solution, so we provide
business opportunity powered by
efficient global platform, a choice of workspace our global leadership, unique
enabling us to provide formats through our experience and unrivalled
workplace solutions different brands, formats operating platform.
across the world that and workspaces to
meet every customer’s accommodate our
requirements. customers’ varied
needs and enable them
to have a great day Employees
at work.
We recognise the talents of our
diverse and passionate workforce
across the world, enabling our
people to contribute to society
while driving successful careers.

1 2 3

Communities
We bring employment
opportunities to the heart of
Network Franchise Platform communities, attracting jobs,
partnerships (technology) reducing unnecessary travel and
encouraging social connection.

Importantly, our operating model ensures that we benefit from an

entrepreneurial spirit and can strive for our ambitions for future growth.
Shareholders
See pages 44-53 for more on our
We deliver sustainable returns via
approach to risk and governance a progressive dividend policy
that’s enabled by our prudent
approach to investment.

IWG plc Annual Report and Accounts 2022 21

Our strategy

A strategy to
extend our global
market lead
Our unique, capital-light and highly cash-generative strategy for growth is based on three
essential pillars that are enabling us to simultaneously expand our market-leading global
presence, drive significant month-on-month increases in fee income, and create ever-closer
customer relationships.

DELIVERING GROWTH THROUGH OUR THREE

STRATEGIC PILLARS
1 2 3

Network Franchise and Platform (technology)

Partnerships

Our fast-growing global network, Our unique approach to Our continuous-improvement

providing high quality workspace franchising and partnering with approach to technological
wherever it is required, under a building owners, creating close, development, bringing our
multiplicity of leading brands mutually beneficial relationships customers ever-better solutions
and in increasingly advanced and driving significant month- that maximise workforce
buildings in cities, towns, on-month revenue increases, efficiency, flexibility and loyalty,
suburbs and rural locations now and into the future. no matter where their
across the world. employees actually work.

See page 23 for more on See pages 24 for more on See pages 25 for more on
our locations partners and franchising our technology

Market opportunity

22 IWG plc Annual Report and Accounts 2022

Strategy: Network

Strategic report
Our global network: Global operations

world-leading,
fast-growing
and worker-
focused
19
The worldwide hybrid advanced hybrid working
working market is technologies, increasingly
want to work
growing fast. We are
seeking to grow our Quite simply, it’s a strategy

BRANDS
global network ahead of enabling employers and
employees to work in the way
of the curve to attract an they want by providing the
ever-increasing share solutions they want, wherever
of the world’s employers and however they want them..
and their employees.

8M
With close to 3,400 high-quality
centres serving more than
8 million customers via
19 brands in over 120 countries
worldwide, IWG is already the

CUSTOMERS
dominant force in the flexible
workspace market globally.

And, by accelerating our

expansion programme, we
are continuously extending
our lead, particularly in those
local suburban and rural
environments where people,
freed and empowered by

IWG plc Annual Report and Accounts 2022 23

Strategy: Partnerships

Empowering our partners:

partnerships
for shared success
Working with property Demand for our solutions is • Institutional developers
owners, investors and growing fast, supporting the and investors: with 88% of
acceleration of our network organisations adopting
franchisees across the expansion over the next year. hybrid-working solutions for
world is central to IWG’s As a result, we can deliver their people, business leaders
capital-light growth sustainable demand and are reducing their traditional
income for our partners: office speed at an accelerating
strategy. It’s an approach pace. This is offering
that benefits all parties, • Building owners: traditional developers and investors with
empowering our partners building owners are taking a hit interests in commercial real
as companies cut back on estate a powerful opportunity
to turn today’s surge in conventional office space. As to future-proof their
demand for hybrid demand for hybrid grows, IWG investments. By removing
working into valuable, can provide them with a route dependence on a few large
to higher income – leases, the shift to hybrid
cash-generating and immediately. With our turnkey enables diversification,
profitable businesses. services, including dedicated mitigating risk and providing a
sales and marketing, design route to long-term growth and
We are the leading global and fit-out support, we can stability. However, without the
provider of hybrid working radically accelerate and right partner providing the
solutions, the area of the global sustain their return to essential platform, network,
workspace market that’s in most profitable occupancy. scale and experience, making
vibrant growth today – and • Franchise investors: we that shift will present significant
predicted to grow by 600% already work with many challenges. As market leader,
before 2030. As such, we are individual, multi-unit and only IWG provides a roadmap
uniquely well-positioned to help regional franchise investors to success, helping to create
ambitious businesses diversify across the world to develop amenities that benefit tenants
into this fast-growing sector, highly successful flexible- while delivering a premium
leveraging more than three workspace locations. With the income in perpetuity.
decades of experience and right vision for growth and the
our deep understanding of over desire to seize the commercial
120 national markets. opportunities facing them,
they recognise IWG as the only
true partner of choice. And

600%
growing numbers are joining
them every day.

35%

amount the flexible

workspace market
will grow by 2030

24 IWG plc Annual Report and Accounts 2022

Strategy: Technology

Strategic report
The technology gain:
seamless end-to-
end customer Optimising office
locations

journeys
Our many decades of experience
have given us a wealth of data on
the key factors that underpin the
successful location and design
of our centres, including detailed
information on sales, operating
costs and space utilisation.
Combined with an active feedback
The way we develop and localise effectively is a key source loop, this enormously powerful
implement our technology of competitive advantage for us. resource for training machine-
We therefore integrate our detailed learning algorithms will give us
offer is an essential knowledge of the local requirements accurate projections of demand
component of our strategy in all our markets into our digital and profitability for optimised
to outperform our market. operating platform, helping location selection as we extend our
businesses operate safely and global network.
By ascertaining that seamlessly, no matter where they are.
customers get the tools Blending the customer
they need from us to fulfil We have also continued to develop
our solutions supporting hybrid
experience
their business goals, we working as it continues to become We are bringing our customers’
ensure their growth and the normal way of working for millions. physical and digital worlds together
ours are seamlessly From cloud telephony and cloud to deliver a holistic working
printing to zero-touch internet experience, whether in the office
interconnected, maximising around the world, we have continued or online. By merging their physical
loyalty for long-term to broaden and extend the services and digital profiles, we can ensure
relationships. people need to work without barriers all users’ experience in both worlds
to productivity, wherever they are. precisely meets their needs thanks
With our global footprint across to the frictionless delivery of the right
As part of this programme, we service, delivered in the right way
124 countries, the demands placed
recently introduced enterprise and at the right moment.
on the technology we use to
employee solutions, which help
support our customers are virtually
unique. It has to meet needs at
large companies support their Commercialising our
every touchpoint, for 8 million
employees in every aspect of hybrid technology platform
and flexible working.
people working in multiple We have developed and refined
languages and in multiple Maximising space our comprehensive ‘Everyware’
places – in the office, technology platform over many
at home and on the move. utilisation
years and for tens of thousands
Our customers often need to of customers. And now we are
As a result, we invest more than respond quickly to fast-changing commercialising it, making its
£50m annually in developing space requirements, especially at benefits available to any company,
systems, automation and apps atime of global uncertainty. IWG workspace operator or property
across many areas. These ranged therefore started to build a full digital owner that wishes to use a true
from solutions supporting very large representation of its global estate best-of-breed solution to
enterprise customers with tens of last year, to help businesses adopt streamline their own locations.
thousands of employees in multiple flexible planning strategies for the We are confident there is a
locations in many countries, to apps future. This will enable real-time receptive market. Our ability to
that help the smallest SMEs comply metrics from our existing IoT blend people, workspace and
with local legislation. platform to be blended with AI- technology with local knowledge,
driven planning tools and demand enterprise experience and global
Every country where we operate has forecasts, enabling us and our scale presents a value proposition
a unique cultural and operating customers to plan the most efficient that we believe will persuade many
environment, and our ability to use of space at any point in time. companies to outsource to us.

IWG plc Annual Report and Accounts 2022 25

Key performance indicators

Sustainable growth
We aim to deliver sustainable profitable growth for our investors through providing
customers globally with an unrivalled choice of convenient work environments that
suit the full range of workspace and service needs.

1 Industry-leading Adjusted EBITDA (£m)

£308m
profitable growth ‘22 308
‘21 80
‘20 134
‘19 428

2 Best-in-class cost Overhead as percentage of revenue (%)

15.5%
leadership ‘22 15.5
‘21 14.7
‘20 15.1
‘19 10.8

3 Global multi-brand Network (locations)

3,345
network ‘22 3,345
‘21 3,314
‘20 3,313
‘19 3,388

4 Capital-light
Net growth capital investment (£m)
£141m
growth ‘22 141
‘21 104
‘20 177
‘19 260

5 Shareholder returns Total shareholder returns (£m)

£5m
‘22 5
‘21 nil
‘20 44
‘19 108

26 IWG plc Annual Report and Accounts 2022

 Strategic report
Overview Future ambitions and risk

Adjusted EBITDA (before application of IFRS 16) up £228m, from £80m More companies are permanently embracing hybrid working and IWG,
in 2021 to £308m in 2022, reflecting the great progress we made in as the global industry leader, is set to benefit most from these
restructuring our centre costs, mitigating the inflationary impacts fundamental changes to how work is conducted. We believe that
and benefiting from increasing revenue. maintaining our strong focus on capital-light growth, creating the
world’s largest digital workspace platform and continued cost
discipline, together with increasing revenue, will drive
improving profitability.

Overheads as a % of revenue before adjusting items were well We will continue to focus on controlling overhead cost to deliver
controlled at 15.5%. operational efficiency. This will be balanced with investments in
overhead cost, where necessary, to improve the performance of
Group overheads for 2022, increased 27% at constant currency
our well invested operating platform, processes and people and
to £427m (2021: £328m). This increase reflects the successful
delivery of the Group’s capital-light strategy.
investment in our in-country sales teams and our marketing
to support our pivot to capital-light growth, yielding strong results
with 462 new deals signed in 2022.

We continue to add quality, convenience and choice to our network in Macroeconomic and geopolitical uncertainties are likely to persist in
a carefully controlled and risk-managed way. Overall, we rationalised many regions in 2023, which may lead to further rationalisation of the
121 locations during 2022, with 152 new high-quality locations added network. However, we remain clearly focused on accelerating growth
to maintain the largest global and most widely distributed network. through our capital-light and partnering strategy. Simultaneously we
will continue to develop our brands to enhance the choice available to
more customers.

During 2022 net growth capital expenditure was £141m, reflecting In 2022 we signed a total of 462 new centre deals (2021: 193 deals
centres we signed in prior years. This investment resulted in our signed) which will be added to our global and widely distributed
highest-ever network footprint of more than 65 million sq. ft. network in the future. 91% or 421 deals out of these 462 deals in total
were capital-light which will result in significantly reduced net growth
capital expenditure investments in future years.

Given the continuing macroeconomic and geopolitical tensions, we Our capital allocation policy remains in place, prioritising investment
believe it was prudent to protect our liquidity and as a result there in the long-term development of our business and distributions to
was no cash distribution to shareholders in 2022. We did however shareholders. We intend to return, at the earliest possible date, to
make a number of small-scale share repurchases, in total acquiring providing attractive returns to shareholders through dividend
2.1m shares to be held in treasury at a cost of £5m. distributions and share repurchase programmes.

IWG plc Annual Report and Accounts 2022 27

Our brands

Creating
value
through our
brands
THE OFFICE OPERATORS

At IWG, we believe that Signature. Our diverse

business success is operational portfolio provides
businesses with a variation of
underpinned by the design, fit-out, location, building
effectiveness and and customer base, enabling
happiness of people. them to choose a style which
meets their unique needs. For
So, we’ve made it our individuals, IWG offers the ability
mission to help millions to work in practically every
of people have a great country, town, city and transport
hub in the world. Enterprise
day at work. Here, we clients can opt for a presence
describe the brands wherever they need to be,
that help to make choosing an operating brand
this possible. that closely matches the needs
of their organisation and the
people working within it.
IWG provides a world-leading
hybrid working platform, drawing

19
on our 33 year track record
of delivering the best flexible
real-estate solutions for
businesses worldwide. IWG’s
hybrid workspace options
reduce the risk for our
customers, with zero balance- brands

3,314
sheet impact and solutions
designed with people’s
productivity in mind.

Our products are simple to use,

with a full suite of business
support services that enable locations

8m+
people to focus on their core
business and enjoy a great day
at work.

IWG covers a wider breadth of

sectors and locations than any
competitor, offering unparalleled users
choice to customers through our
unique portfolio of global
operating brands, including
Regus, Spaces, HQ and

28 IWG plc Annual Report and Accounts 2022

 Strategic report
Work your way
Regus was founded in 1989
and is the world’s largest
provider of flexible workspace
solutions. Regus helps
businesses find and create the
right workplace for their people,
offering choice, flexibility,
community, custom workspaces
and consistently professional
locations all over the world.

A unique
entrepreneurial
spirit
Spaces was founded in 2006
in Amsterdam. It creates an
environment where people have
freedom to do their jobs
however they want to do them.
Each Spaces is designed to offer
a professional and inspirational
working environment full of
timeless design classics,
inspiring art and accessories
combined with a strong
community programme of
partnerships, professional
events and hospitality services.

IWG plc Annual Report and Accounts 2022 29

Our brands continued

Where real
work gets done
HQ provides efficient, functional
space, offering practical places
with all the essentials businesses
need, set up and ready-to-go.
HQ appeals to businesses of
all shapes and sizes, from large
corporates to individual
freelancers – everyone
is welcome.

Your key to
the world’s
ultimate
business
locations
Signature represents an
exclusive selection of landmark
buildings in the most sought-
after locations in the world.
Signature provides a premium
working environment, with
custom designs reflecting the
quality and nature of the
building. It provides businesses
with ultimate prestige, offering
an exclusive address and place
to work that truly enhances their
reputation, community
programme of partnerships,
professional events and
hospitality services.

30 IWG plc Annual Report and Accounts 2022

 Strategic report
Our domestic Basepoint Business Centres
comprises a network of locations
office and across England and Wales, providing
multifunctional workspace to start-ups

coworking
and SMEs. In addition to office space,
virtual offices and meeting rooms,
Basepoint offers practical business
brands units which are ideally suited as
studio or workshop space.

In addition to our global brands,

we also operate domestic office
and coworking brands, providing
a unique service in key markets
around the world.
THE OFFICE OPERATORS

Stop & Work is a flexible working The Office Operators is based in

brand operating in France. the Netherlands and Belgium,
Throughout its locations, it provides a specialising in flexible office space,
drop-in service and professional reception services and conference
environment for telecommuters to use products. As an organisation, it aims to
open-plan or private workspaces and unburden its customers as much as
meeting rooms. Customers can possible in all facility and
access the locations by the hour, operational matters.
day or longer as required.

The Clubhouse is a leading More than just a desk, BizDojo is a This flexible workspace brand
business club in London, providing coworking and collaboration network has locations exclusively in Japan.
offices, lounge and meeting space. operating in New Zealand. It is OpenOffice provides office space,
Designed to meet the requirements of passionate about supporting its diverse virtual offices and meeting rooms
growing businesses, The Clubhouse community with an active and in a productive, self-service
provides a luxurious, professional collaborative culture of events, office environment.
space where customers can meet projects, programmes and
and work in an inspiring and networking.
productive environment.

No18 is a blend of curated business Central Working provides flexible

club environments in the best and scalable spaces, fully tailored to
locations, with first-class service and match customer needs. More than just
expansive member benefits. It’s a an office space, it helps advance
workplace where people do business business by providing access to
and socialise, moving from premium training, networking events and a
offices to restaurants and supportive community.
collaborative workspaces.

Copernico provides smart working

environments across Italy. Set out to
change the way work is done, it has
created an ecosystem that
accommodates businesses of any size
with solutions ranging from coworking
to office lounges. It also provides
users with events, workshops and
informal meetings, fostering
new knowledge and local
excellence.

IWG plc Annual Report and Accounts 2022 31

Our brands continued

Our digital
businesses
During 2022, IWG’s digital brands
were combined with The Instant
Group to create Worka, the
world’s leading integrated
independent workspace digital
platform for serving the needs
of the broader flexible
workspace market.

The app
containing
every hybrid
work solution
Worka will bring together every
type of flexible workspace in one
easy-to-use app.

Users will be able to search and

compare over 30,000 global
locations and instantly book a
range of hybrid working solutions
including office space, coworking
and meeting rooms.

With the largest offering of

flexible workspace and real-time
availability, Worka meets
the needs of all hybrid
workers globally.

32 IWG plc Annual Report and Accounts 2022

 Strategic report
EasyOffices is an online broker that HomeToWork improves the
makes it easier for people to find great homeworking experience by providing
places to work. It provides a powerful online everything needed to stay connected and
search and comparison tool to help people productive and enjoy working from home. Our
find their perfect workspace. Customers can leading homeworker platform provides access
also contact the team directly for impartial to useful daily content, a carefully curated
advice and support. programme of events and resources, and
valuable benefits from industry-leading
companies. HomeToWork provides an
immersive experience which enables
members to make home a great
place to work.

Rovva is an online toolkit which Meetingo is a digital platform that

provides a range of products and services offers everything customers need for a
to help people take their businesses further successful meeting, all in one place. With
– whether they’re just getting started, trying thousands of meeting rooms to choose from,
to improve efficiency or exploring new Meetingo provides the right space, in the right
markets. From virtual offices to telephone place and at the right price. There’s a location
answering, Rovva makes it easy for people to for every need, from team trainings to
do better business. five-star board meetings, from city centres
to business parks. Customers can
compare features, locations, pricing
and style of meeting rooms, and
can book and pay in moments.

Our managed conventional office space

Whether it’s a new workspace brief or an

adaptation to an existing office, IWG’s
Managed Office Solutions (MOS) can provide
customised workspaces designed to match
any client’s unique requirements. MOS can
provide additional revenue opportunities
for businesses’ surplus space with the
flexibility to re-occupy that space
in the future.

IWG plc Annual Report and Accounts 2022 33

Stakeholder engagement

Adding value for

our stakeholders
At IWG, we have a strong record of delivering value to our key
stakeholders, comprising the five groups that mean most to us:
customers, partners, employees, communities and shareholders.

Partners Customers

Franchisees seeking opportunities to Businesses of all sizes across the

diversify into an exciting and world are seeking flexibility, quality
fast-growing market, and building and value from their workspace to
owners and developers wishing boost their agility, competitiveness
to drive the best possible return and the commitment of their people
on investment

Why are they important to us? Why are they important to us?
They not only own or manage IWG exists to serve its customers.
the buildings where our customers By paying for our services, they enable
work, they also bring us the benefits us to consistently improve our global
of their experience across a range offering with ever-better property
of niche and local markets models, working environments, value,
to deepen our understanding service and business solutions that
of specific customer needs. collectively add up to a great day at work.

What do they want from us? What do they want from us?
Our partners need flexible, bespoke Our customers need us to understand
relationships based on shared trust, their changing needs, responding fast
enabling them to maximise the and with precision. This means giving
benefits of our proven business them the flexibility to achieve rapid shifts
model, our experience, the power on cost, location and scale, while
of our brands and our global providing the great working environments,
leadership position. world-class IT and admin support they
need to achieve their business goals.
How do we engage with them?
We provide established international How do we engage with them?
sales and marketing channels and We empower our customers to choose
comprehensive training from the from a wide range of leading brands, so
outset, as well as ongoing support they can find the precise solution that
and training from an experienced works best for their business. We also
global team. give them and their people all the support
they need, wherever they are: in the
office, at home and on the move.
34 IWG plc Annual Report and Accounts 2022
 Strategic report
Employees Communities Shareholders

The heart of our business: the The places where our centres are The individuals and institutions who
people who – in growing numbers of based, increasingly home to where own our shares and provide the
neighbourhoods across the world – our own people and customers’ support we need to deliver
do most to ensure our customers employees live and wish to work sustainable stakeholder value
have a great day at work

Why are they important to us? Why are they important to us? Why are they important to us?
They are the public face of IWG. They are increasingly the source They give us the financial support
They ensure we deliver customer not only of our employees but our and authorisation we need
value and drive our growth, attract customers too, enabling us to grow to continue our unique strategy
new business and deliver the at scale in multiple local markets for growth and strengthen our
returns our shareholders want. across the world. leadership position in the global
flexible-workspace sector.
What do they want from us? What do they want from us?
Like everybody else, they want They want us to help them thrive, What do they want from us?
a great day at work, based on mutual attracting new employment and Our investors want us to continue
loyalty, exciting rewards, effective enabling local people to work articulating and following our
development opportunities and the closer to home. successful strategy, communicating
benefits associated with working with them clearly and regularly,
for a global leader. How do we engage with them? and giving them the opportunity
We are a part of the community, to comment on our progress.
How do we engage with them? and are heavily involved Above all, they want us to grow
Our People Promise commits in community projects from the value of our shares and operate
us to delivering interesting education to health-related a progressive dividend policy.
and achievable work, together and other initiatives.
with sensitive management, How do we engage with them?
a company that cares, and the In 2022, our Investor Relations
opportunity to advance and function held more than
develop their careers with us. 500 meetings with investors
and analysts. These meetings were
held both virtually and in person.

IWG plc Annual Report and Accounts 2022 35

Chief Financial Officer’s review

Growing rapidly
and profitably
2022 has been an extraordinary year for the Group, demonstrating the ability to deliver its
highest-ever system-wide revenue of £3.1bn in IWG’s 34-year history whilst simultaneously
increasing operating profit and cash generation. Combining the Group’s unique brand strategy
and unrivalled global network with historic investment in new centre capacity positions the
business well for 2023.

Financial performance
The Group reports results in accordance with IFRS. Under IFRS 16, while total lease-related charges over the life of a lease
remain unchanged, the lease charges are characterised as depreciation and financing expenses with higher total expense
in the early periods of a lease and lower total expense in the later periods of the lease.

Constant Actual
Group income statement (£m) 2022 2021 currency currency

System-wide revenue 3,086 2,498 +18% +24%

Group revenue 2,751 2,227 +17% +24%
Gross profit 575 243 +124% +137%
Overheads (427) (328) +27% +30%
Joint ventures (1) (2)
Operating profit/(loss) 147 (87) n.m. n.m.
Net finance cost (252) (172) +47%
Loss before tax from continuing operations (105) (259) -59%
Taxation (16) (10)
Effective tax rate -15% -4%
Loss after tax from continuing operations (121) (269)
Profit after tax from discontinued operations 1 59
Loss for the period (120) (210)
Basic EPS (p)
From continuing operations, adjusted (10.1) (23.4)
Attributable to shareholders (11.2) (20.4)
Depreciation & amortisation 1,189 1,110 +2% +7%
Profit on discontinued operations - 3
EBITDA 1,336 1,026 +22% +30%
Network rationalisation charge 58 71
Reversal of impairment of PP&E (73) (125)
Provision for expected credit losses - 53
Asset impairment of Russia & Ukraine 9 -
Other one-off items incl. restructuring 19 32
Total adjusting items 13 31
EBITDA adjusted 1,349 1,057 +20% +28%

36 IWG plc Annual Report and Accounts 2022

 Strategic report
Revenue
System-wide revenue increased by 24%, or 18% at
constant currency, to £3,086m. Group revenue also
increased by 24%, or 17% at constant FX, to £2,751m.
All three geographic regions reported good year-on-
year revenue growth. In particular, our largest region
of EMEA had strong revenue growth to £1,199m
(17% at constant FX) and Americas to £1,024m
(8% at constant FX). Asia still had significant COVID-19
restrictions throughout much of 2022, in particular
in China, and therefore revenue growth was weaker
to £248m (2% at constant FX). Worka grew to £271m
(103% at constant FX) impacted in particular by
investment in The Instant Group in March 2022.
On a pro-forma basis, had we consolidated
The Instant Group for the full year in 2022,
Worka had revenue of approximately £304m.

Constant
Revenue (£m) 2022 2021 currency

EMEA 1,199 1,027 +17%

Changes to segmental reporting Americas 1,024 836 +8%

Asia 248 231 +2%
In March 2022 we invested in The Instant Group,
which is the world’s largest independent marketplace Other 9 1 n.m.
for flexible working solutions for a smarter working Group pre-Worka 2,480 2,095 +12%
world, with an innovative technology platform and
award-winning digital marketing capabilities (refer Worka 271 132 +103%
to note 28 for financial details). As stated at the time Group 2,751 2,227 +17%
of the investment in The Instant Group, the intention Worka pro-forma1 304 132 +128%
was to combine this business with some of IWG’s
other assets, including digital assets, to form Worka. 1. Pro-forma for Instant Group investment for the full year
During the year this integration progressed as planned
and as a result we have made changes to our
segmental reporting. Worka is operated by
an independent management team.

We have also split the Group pre-Worka into three

principal geographical segments: the Americas, Asia
and EMEA (Continental Europe including UK, Middle
East and Africa). As part of our focus on operational
efficiency we have organised our main management
functions and processes on a global basis. These
geographical segments reflect how we practically
exercise our global management through groupings
based on time zones, economic relationships, market
characteristics, cultural similarities, and language
clusters. As a result, the UK is now included in the
EMEA segment reporting.

IWG plc Annual Report and Accounts 2022 37

Chief Financial Officer’s review continued

Gross Profit Before the application of IFRS 16 the Group’s EBITDA

increased by 389% at constant currency to £317m
Revenue improvement coupled with cost control from £59m in 2021.
resulted in a 124% improvement of gross profit
to £575m (2021: £243m). To bridge the Group’s EBITDA of £1,336m under
the IFRS 16 standard to £317m under IAS 17, we need
Constant
Gross Profit (£m) 2022 2021 currency
to recognise rental income on subleases which are
recognise as lease receivables under IFRS 16, rental
EMEA 191 78 +141% costs on our lease portfolio reflected as lease liabilities
Americas 184 73 +123% under IFRS 16 and centre closure and other costs
which are reflected as impairments under IFRS 16.
Asia 51 20 +153%
Other 11 (6) n.m. EBITDA bridge (£m) 2022 2021
Group pre-Worka 437 165 +148% EBITDA 1,336 1,026
Worka 138 78 +76% Rent income 50 -
Group 575 243 +124% Rent expense (1,059) (997)
Centre closure & other cost (10) 30
Overheads
EBITDA before application
We are pleased that investment in our in-country of IFRS 16 317 59
sales teams and our marketing to support our pivot
to capital-light growth is yielding results with 462 Network rationalisation charge 25 60
new deals signed in 2022. This investment to grow Closure cost provision release (71) (125)
our network, coupled with the investment to fill Provision for expected credit
our centres and the impact of The Instant Group losses - 53
investment, resulted in Group increased overheads
of £(427)m (2021: £(328)m). Asset impairment of Russia &
Ukraine 19 -
Operating Profit/(Loss) adjusted – Other one-off items incl.
continuing operations restructuring 18 33
Total adjusting items (9) 21
In 2022 our results recovered strongly and we are
pleased to report an operating profit for year Adjusted EBITDA before
of £147m compared to a loss of £(87)m in 2021. application of IFRS 16 308 80

EBITDA All our segments reported strong results, led by EMEA

with EBITDA up 26% at constant FX from £474m
The Group’s EBITDA increased by 22% at constant to £597m, Asia up 19% at constant FX from £115m
currency to £1,336m from £1,026m in 2021. to £144m and Americas up 15% at constant FX from
This EBITDA improvement demonstrates the great £451m to £588m. Worka EBITDA was at £112m
progress we made in restructuring our centre costs, (2021: £75m) positively impacted by The Instant
mitigating the inflationary impacts and benefiting Group investment in March 2022. On a pro-forma
from increasing revenue. basis, i.e. including The Instant Group for full 12 months,
Worka EBITDA was at £117m.
The Group reports results in accordance with IFRS.
Under IFRS 16, while total lease-related charges over
the life of a lease remain unchanged, the lease charges EBITDA by segment FY FY Constant
(£m) 2022 2021 currency
are characterised as depreciation and financing
expenses with higher total expense in the early EMEA 597 474 +26%
periods of a lease and lower total expense in the Americas 588 451 +15%
later periods of the lease. Results are additionally
presented before the application of IFRS 16 Asia 144 115 +19%
(in accordance with IAS 17 accounting standards) Other (105) (108) -2%
as it provides useful information to stakeholders Group pre-Worka 1,224 932 +23%
on how the Group is managed, and reporting for
bank covenants and certain lease agreements Worka 112 75 +48%
The primary difference between the two standards Continuing operations 1,336 1,007 +25%
is the treatment of operating lease liabilities. Discontinuing
There is no difference between underlying cash flow. operations - 19
Group 1,336 1,026 +22%
Worka (pro-forma)1 117 75
1. Pro-forma for Instant Group investment for the full year

38 IWG plc Annual Report and Accounts 2022

 Strategic report
Adjusting items We continue to manage prices appropriately and
continue to mitigate ongoing inflationary pressures
As in prior years, in order to improve the transparency through our strong focus on supplier consolidation
and usefulness of the financial information presented and renegotiation, further strengthening our industry
and to improve year-on-year comparability the Group cost leadership. Cost efficiency and focus on
identified net adjusting items on operating profit profitable growth is our key focus area together
of £13m compared to £31m in 2021, of which all £13m with our focus on capital-light growth.
are non-cash items (2021: £8m).
Constant
These adjusting items in 2022 primarily reflect Revenue (£m) 2022 2021 currency
COVID-19 related network rationalisation charges of Number of centres 3,345 3,314 +31
£58m vs. £71m in 2021, a reversal of impairment of
Centre openings 152 146
property, plant and equipment of £(73)m vs. £(125)m
in 2021 and other one-off items including restructuring Centre
costs of £19m vs. £32m in 2021. Additionally, a charge rationalisations (121) (145)
related to the asset impairment of Russia and the Number of SQFT 65.1m 64.1m +2%
Ukraine of £9m as a result of the ongoing geopolitical
tensions was also recognised. Total new centre
deals signed 462 193 +139%
Foreign exchange Of which capital light 421 182
The overall impact of exchange rate movements over Average total
the course of the year increased revenue by £133m occupancy 73.5% 68.2% +530 bps
and EBITDA by £79m. The Group’s results are exposed Embedded price,
to translation risk from the movement in currencies. indexed* 95 89 +7%
During 2022 key exchange rates moved, as shown
in the table below. * Price per square foot, Q1 2020 = 100

At 31 Dec Average Finance costs and taxation

£ sterling 2022 2021 % 2022 2021 %
The Group reported a net finance expense for the year
US dollar 1.21 1.35 -10% 1.23 1.38 -11% of £(252)m (2021: £(172)m). The net finance expense
Euro 1.13 1.19 -5% 1.17 1.16 1% includes interest on the Group’s lease liabilities
of £(230)m (2021: £(166)m) and borrowing facilities
of £(22)m (2021: £(6)m). The increase in the finance
Network growth expense related to the borrowing facilities is driven
Our focus has been and will continue by increased interest rates globally and increased
to be on the expansion through partnerships. debt related to the investment in The Instant
91% (or 421 deals out of 462) of deals we signed Group in March 2022 mitigated by a £27m gain
in 2022 in total were capital-light. As a result, on the mark-to-market of the option element
we are continuing to improve the quality of our of the convertible bond (gain of £23m). Excluding
portfolio as we grow our global network. the mark-to-market of the convertible bond
the financial expense related to the borrowing
Total occupancy of the Group’s continued operations facilities was £(49)m (2021: £(29)m).
improved strongly by 530 bps in 2022 to 73.5%
(2021: 68.2%). This is a great achievement. It also The effective tax rate is -15% (2021: -4%). Despite
means that we still have 26.5% of centre capacity reporting a loss for the year, the Group incurred
to grow revenues at low marginal cost and with a tax charge due to the continuing profitability
minimal further investment. of certain countries and entities within the overall
Group. Looking forward, factors that may potentially
The Group’s overall pricing continued to improve influence the effective tax rate include the shape of
throughout the year and importantly ahead of cost the recovery in the Group’s trading performance, the
inflation, with year-on-year pricing increasing availability of tax losses and the continuing ownership
by 7%, albeit down from the all-time high of Q1 2020. of specific countries or regions which may change
Our ability to increase prices is tied closely to due to future potential franchise agreements.
macroeconomic inflation rates, and therefore
we expect that our ability to pass on inflationary
increases to customers will slow as inflation
reduces globally.

IWG plc Annual Report and Accounts 2022 39

Chief Financial Officer’s review continued

Earnings per share Cash flow – continuing operations

Earnings per share improved in the year from a loss In 2022 we demonstrated that actions taken to
of (26.2)p to a loss of (11.3)p. Earnings per share from manage cost tightly, restructure centres where
continuing operations on an adjusted basis was a loss necessary and improve revenue resulted in £151m
of (10.1)p compared to a loss of (23.4)p in 2021. of cash inflow from business activities compared
to an outflow of £(219)m in 2021. Net maintenance
Diluted earnings per share for the year was a loss capital expenditure was £5m lower in 2022 at £(90)m
of (11.3)p (2021: loss of (26.2)p). Diluted earnings per (2021: £(95)m).
share on a continuing basis on an adjusted basis for
the year was a loss of (10.1)p (2021: loss of (24.2)p). Cash inflow before growth capex and corporate
activities was £90m (2021: outflow of £(240)m).
The weighted average number of shares in issue
during the year was 1,006,884,755 (2021: 1,007,214,854). Net growth capital expenditure was at £(141)m
The weighted average number of shares for (2021: £(104)m) mainly due to centres we signed
diluted earnings per share was 1,090,855,142 in prior years. It is important to note that in 2022
(2021: 1,102,444,936). 2,174,738 shares were acquired we signed a total of 462 new centre deals (2021: 193
in the period to be held in treasury to satisfy future deals signed) which will be added to our global and
exercises under various Group long-term incentive widely distributed network in the future. 91% or 421
schemes. The Group reissued 1,442,606 shares from deals out of these 462 deals in total were capital-light
treasury to satisfy such exercises during the year. which will result in significantly reduced net growth
At 31 December 2022 the Group held 50,564,853 capital expenditure investments in future years.
treasury shares (2021: 49,832,721).
Net cash for the year increased by £77m as cash
outflow before investments, share repurchase and
dividends of £(359)m (2021: £(334)m) was financed
through net proceeds on transactions of £54m and
net proceeds from loans of £386m.

40 IWG plc Annual Report and Accounts 2022

 Strategic report
Cashflow (£m) 2022 2021

Operating profit/(loss) 147 (87)

Depreciation & amortisation 1,189 1,110
Profit on discontinued operations - 3
EBITDA 1,336 1,026
Rent income 50 -
Rent expense (1,059) (997)
Centre closure & other costs (10) 30
EBITDA before application of IFRS 16 317 59
Working capital (excl. amortisation of partner contributions) 22 (129)
Working capital related to the amortisation of partner contributions (104) (95)
Maintenance capital expenditure (net) (90) (95)
Other items1 6 41
Cash inflow/(outflow) from business activities2 151 (219)
Tax paid (24) (5)
Finance costs on bank & other facilities (37) (16)
Cash inflow/(outflow) before growth capex and corporate activities 90 (240)
Gross growth capital expenditure (180) (154)
Growth-related partner contributions 39 50
Net growth capital expenditure (141) (104)
Purchase of subsidiary undertakings (net of cash) (307) 11
Cash outflow before corporate activities (358) (333)
Purchase of shares (5) -
Investment-related loan receivable - 283
Net proceeds on transactions 54 19
Net proceeds from loans 386 36
Net cash inflow for the year 77 5
Opening net cash 78 71
FX movements 6 2
Closing cash 161 78
1. Includes capitalised rent related to centre openings (gross growth capital expenditure) of £(12)m (2021: £(20)m)
2. Cash flow before growth capex, corporate activities, tax and finance cost on bank & other facilities

IWG plc Annual Report and Accounts 2022 41

Chief Financial Officer’s review continued

Cash at year-end 2022 was £161m (2021: £78m). Risk management

Mainly due to the investment in The Instant Group
we increased our loan balance by £(386)m to £(861)m Effective management of risk is an everyday activity
and non-cash movements, which was further for the Group and, crucially, integral to our growth
impacted by foreign exchange losses of £(12)m. planning. A detailed assessment of the principal risks
This resulted in net debt before application and uncertainties which could impact the Group’s
of IFRS 16 of £(712)m (2021: £(397)m). long-term performance and the risk management
structure in place to identify, manage and mitigate
Under IFRS, we are obliged to report net debt including such risks can be found on pages 44 to 53 of this
operating leases which comprise c.90% of our net report. The principal risks and uncertainties are
debt balance. During 2022 we paid principal and unchanged, other than climate change risk, where
interest on finance leases of £1,227m and recognised an inadequate ESG strategy would mean that IWG
new principal and interest on net lease investments is unable to manage climate related exposures.
of £(48)m. Non-cash movements and currency impact IWG manages this risk in the following ways:
on lease liabilities and investments increased the
liability by £(950)m. Hence, total IFRS 16 related • ESG is firmly on the agenda for the Board;
lease liabilities at the end of 2022 were £(5,892)m • IWG is exposed to physical and transitional climate
(2021: £(6,121)m). related risks and are exposed to assessment
throughout the year; and
As a result, net debt at the end of 2022 was at • ESG considerations are an integral part of our
£(6,604)m compared with £(6,518)m at the end of businesses, and our strategy will continue to evolve
2021. Again, the increase in net debt was primarily to address climate related risks and opportunities.
driven by £(307)m of acquisitions (predominantly The Group continually reviews its product offering
The Instant Group in March 2022), growth capex to provide low carbon services; and In changing
related to centre openings which we signed in prior asset allocations towards decarbonising operations
years and the impact of currency changes. and value chains.

Net debt (£m) 2022 2021 Related parties

Closing cash 161 78 There have been no changes to the type of related
Opening loans (475) (422) party transactions entered into by the Group that
had a material effect on the financial statements
Net proceeds from issue & for the twelve months ended 31 December 2022.
repayment of loans (386) (36) Details of related party transactions that have taken
Non-cash movements & FX impact place in the period can be found in note 31.
on loans (12) (17)
Net financial debt (712) (397)
Dividends and share repurchase
Opening lease liabilities (6,121) (6,559) Given continuing macroeconomic uncertainties and
geopolitical tensions the Group continued to focus
Principal & interest payments on maintaining sufficient funding. As a result, dividend
on finance leases 1,227 1,032 payments currently remain on hold with a clear
Non-cash movements (net) (524) (712) intention to return to our progressive dividend policy
Principal & interest received
at the earliest possible opportunity. During the year
on net lease investment (48) -
the Group made a number of small-scale share
repurchases, in total acquiring 2.1m shares to be held
FX impact on lease liabilities in treasury at a cost of £5m.
& investments (net) (426) 118
Net debt (6,604) (6,518) Financing
The Group has a combination of debt financing
instruments, including:

• Convertible bond of £318m (face value £350m,

2021: £308m) with an interest rate of 0.5%,
due for repayment in 2027 with an option for
the bondholders to put the instrument back
to the Group in 2025 at par; and
• Net financial debt (excluding the convertible bond)
at 31 December 2022 of £394m. This includes
a non-recourse bridge facility against the Worka
group, the gross balance of which was £270m at
31 December 2022

As at year-end 2022 the Group complied with

all facility covenants. The financial instruments
are discussed in relation to the going concern
assessment below.

42 IWG plc Annual Report and Accounts 2022

 Strategic report
Going Concern 3. The Group maintains a 12-month rolling forecast
and a three-year strategic outlook. It also monitors
The Group reported a loss after tax of £(121)m the covenants in its facilities to manage the risk
(2021: £(269)m) from continuing operations for the of potential breach. The Group expects to remain
year, while net cash of £1,147m (2021: £735m) was within covenants throughout the forecast period.
generated from operations during the year. Although In reaching this conclusion, the Directors have
the Group’s balance sheet at 31 December 2022 assessed:
reports a net current liability position of £1,868m
(2021: £1,435m) which could give rise to a potential i. the potential cash generation of the Group
liquidity risk, the Directors concluded and are satisfied against a range of illustrative scenarios
after a comprehensive review that no liquidity risk (including a severe but plausible outcome); and
exists after taking into account the following ii. mitigating actions to reduce operating costs
considerations: and optimise cash flows during any ongoing
global restrictions.
1. The Group has funding available under the Group’s
£750m revolving credit facility. £173m Details of the principal risks, outcomes of modelled
(2021: £530m) was available and undrawn at and stress tested scenarios are set out in the Viability
31 December 2022. This facility is committed until statement review on page 53.
March 2025 with an option to extend until 2026
(note 25); Based on the above, the Directors consider that
2. The Group’s initial £330m non-recourse bridge the Group is well placed to successfully manage
facility, to fund the investment in The Instant Group, the actual and potential liquidity risks faced
matures in September 2023. The Instant Group, by the organisation subject to successful resolution
combined with the IWG digital assets in Worka, of the uncertainty with regard to the bridge facility
has been highly cash generative and reduced referred to in section 2 above.
its net debt to £176m, excluding £4m of lease
liabilities, at 31 December 2022. Based on the On the basis of their assessment, the Directors
modelled scenarios the Directors expect that have a reasonable expectation that the Group
Worka will continue to reduce its net debt position has adequate resources to continue in operational
by September 2023, and has already been doing existence for a period of at least 12 months from the
so at the start of 2023. The Group is pursuing date of approval of these Group consolidated financial
various options available to address the bridge statements and consider it appropriate to continue
facility refinancing, including but not limited to: to adopt the going concern basis in preparing the
repaying the bridge facility through asset sales, financial statements of the Group.
cash generated from operations, and/or the
extension or replacement of this facility to ensure
Charlie Steel
continued funding of this highly successful and cash
generative business; and Chief Financial Officer

20 March 2023

IWG plc Annual Report and Accounts 2022 43

Risk management and principal risks

Managing
IWG is on track to achieve carbon
neutrality during 2023. We
participate annually in the Carbon
Disclosure Programme and

risk in an
maintained a stronger rating than
the global and industry averages
for our carbon and water
submissions. At its core, IWG
embraces the 15-minute commute

uncertain
and advocates a hybrid working
environment.

Principal risks to the

achievement of our

world
strategy in 2022
Our principal risks are linked to
our key business objectives and
overall strategy and in 2022 were
considered in the context of the
ongoing pandemic, economic
downturn and climate change.

Risk management is an IWG’s risk management framework A critical component of the risk
integral part of IWG's is designed to improve the prospect management process is assessing
of meeting our strategic intentions the impact and likelihood of risks,
strategic planning through disciplined and practical risk allowing determination to be made
process. The importance identification, assessment and over the current level of controls in
of having robust and mitigation. Through this process, we place versus future controls and risk
effective enterprise risk are able to fully understand the risks status. All our principal risks are
management is vital to and opportunities present in our managed in accordance with our
day-to-day operations and in our Group risk appetite and mitigated
the achievement of our business objectives. Our enterprise- as far as reasonably practical.
goals, especially in an wide risk management process We have zero tolerance of financial
ever changing allows us to understand the nature, and ethical non-compliance, and
environment. As such we scope and potential impact of our aim to have our health, safety,
conduct regular key business and strategic risks, environmental and security risks
enabling us to manage them managed to levels that are as low
enterprise-wide risk effectively. IWG therefore has a as reasonably practicable.
reviews to identify and comprehensive approach to risk
consider potential risks management, as set out in more Effective risk management requires
to the Group and its detail in the Corporate Governance awareness and engagement
strategy. We calculate report on pages 74 to 83. throughout IWG to provide
their possible impact a top-down and bottom-up view
In 2022, our risk work incorporated of risk. At IWG risk management
and create strategies to ongoing pandemic impacts, is embedded into operational
protect the interests of including economic disruption as decision-making and reflected
IWG and all its well as considering climate change in the Group’s key processes
stakeholders. impact on our principal risks. and controls.
The Board has overall responsibility In particular, external risk and those Risk management takes place
for ensuring that IWG has an outside the Group’s control were at various levels across the
appropriate risk management considered in 2022 and included business, including;
framework in place. This includes as part of scenario testing.
approving the risk appetite for the • monthly performance reviews for
Group. Our risk appetite outlines Climate change risks all countries and Group functions;
the extent to which we are willing and opportunities • individual reviews of every new
to take measured risks in pursuit location investment and all
of our strategic objectives. Climate change risk has become
a standalone principal risk to the acquisitions;
Risk Management business in 2022. It also presents • an annual budgeting and planning
a unique opportunity for the process for all markets and Group
Approach Group in providing sustainable functions;
IWG operates the three lines office solutions for clients who • a review in each Audit Committee
of defence to manage risk, may not be able to meet climate meeting of the status of our
endorsed by the Board. change targets alone. principal risks; and
• annual review of all risks in our risk
See diagram on page 45
register, updated currently for
significant changes between
annual reviews.
44 IWG plc Annual Report and Accounts 2022
 Strategic report
THREE LINES OF DEFENCE
Board
Approves the strategy

Defines IWG’s risk appetite

Monitors risk management process

Assesses overall effectiveness of risk management

Audit Committee
Reviews effectiveness of internal controls

Monitors progress against internal and external audit recommendations

Approves the annual internal audit plan

Assurance, risk and internal control reports

1st Line 2nd Line 3rd Line

• Front line business • Corporate functions • Independent assurance

operations • Sets policies and • Tests the design and
• Strategies, policies, procedures operation of controls in
procedures and controls • Monitors risks and internal place including policies, and
in day-to-day activities controls procedures implemented
• Daily management of risk • Accountable for the design by the 1st and 2nd lines
in line with functional and implementation of risk • Assists management and
objectives management processes the Board in conducting risk
• Responsible for compliance and controls studies
with Group policies, • Accountable for the regular • Advises and guides on
procedures and internal review and appraisal of key policies and internal controls
controls risks framework
• Contributes to the • Drives implementation of
identification and recommendations in the
assessment of key risks business
• Tests compliance with
internal controls

IWG plc Annual Report and Accounts 2022 45

Risk management and principal risks continued

Strategic risks
Risk description Mitigation Change / improvement since 2021

Growth risk
IWG continues to undertake IWG mitigates this risk as follows: Throughout 2022 additional resource
significant Global growth. investment took place for network
1. A strong capital-light growth structure is
development teams to focus on capital-light
Mismatches between network implemented, enabling low-cost investment.
growth.
growth and demand growth 2. All investments or acquisitions are subject to
could lead to under or over review and approval by the Investment Strong growth plans were implemented and
supply which could impact Committee. monitored.
competitive position, 3. New leases are principally required to be
New centre opening strength that occurred
profitability and cash variable in nature.
in 2021, continued throughout 2022.
generation. 4. A robust business planning and forecasting
process is in place to provide timely and
reliable information to address short- and
mid-term opportunities and risks to
performance.
5. Monthly Business Reviews take place to
monitor spend and profitability. A quarterly
review process is in place to monitor new
centre performance profitability. As part of the
annual planning process, a growth plan is
agreed for each country which clearly sets out
the annual growth objectives and means to
achieve those goals.
Transformation risk
Execution and delivery of This risk is mitigated as follows: We have recruited a number of senior roles
programmes are not achieved to provide additional expertise.
1. Governance Committee in place for all
within desired timelines or do
transformation programmes. Clear timelines We have a coordinated transformation
not meet the desired
and expected outcomes are monitored and programme in place to align multiple
outcomes.
managed. transformational activities.
2. Programme management team is in place to
External expertise is called on as and when
ensure programmes are monitored and
required to assist in the delivery of our
properly managed.
transformation.
3. Dedicated resources are recruited to ensure
programme requirements are met. External
expertise utilised where required. A Resource
Committee is established to manage resource
requirements needed for the execution of this.
Lease obligations
The Group’s portfolio of leases This risk is mitigated in a number of ways: Approximately 96% of our leases are flexible
gives rise to an inherent risk in giving the Group the agility to change to
Almost all of our leases are ‘flexible’, meaning that
relation to lease obligations economic conditions.
they are either terminable at our option within six
and associated financial
months and/or located in or assignable to a At the end of 2022, we were operating
commitment. The lives of the
standalone legal entity, which is not fully cross- 3,345 locations of which approximately
Group’s leases are, on average,
guaranteed. In this way, individual centres are 40% are variable deals.
significantly longer than the
sustained by their own profitability and cash flow.
average terms of customer Further, more than 90% of new deals signed
This flexibility has no impact on our accounting
contracts which creates a in 2022 were variable in nature.
for leases in the scope of IFRS 16.
potential for mismatch if
revenues fall significantly, Additionally, close to 40% of all our open centres
which can impact profitability as at December 2022 are variable in nature, which
and cash flows. means that payments to landlords vary with the
performance of the relevant centre. In this way
the ‘risk’ to profitability and cash flow of that
centre from fluctuations in market rates is
softened by the consequent adjustment to rental
costs. The sheer number of leases and geographic
diversity of our business reduce the overall risk to
our business. Additionally, our capital-light growth
model together with Increased partner
agreements reduces the overall risk to the Group.
Each year a significant number of leases in our
portfolio reach a natural break point further
reducing the risk.

46 IWG plc Annual Report and Accounts 2022

 Strategic report
Risk description Mitigation Change / improvement since 2021

Prolonged economic downturn

A prolonged economic The Group has taken a number of actions The number of ‘flexible’ leases as a
downturn in key and emerging to mitigate this risk: percentage of the total remained at 96%.
markets, or changes in market
1. The Group has a strategy in place, which Our monthly business performance reviews
conditions, could adversely
is reviewed and approved by the Board. provide early warning of any impact
impact our global market
2. Approximately 40% of all our leases are variable on our business performance and allow
share, operating revenue and
in nature and our rental payments, if any, vary management to react with speed.
profit performance.
with the performance of the centre.
The Board reviewed the potential impact
The Group is operationally 3. Lease contracts include break clauses when
of an economic downturn and addressed
leveraged, resulting in leases can be terminated at our behest.
a range of potential impacts when making
profitability moving up and 4. We review our customer base to assess exposure
its annual Viability statement.
down with relatively small to a particular customer or industry group and
changes in revenue. take action where necessary to manage any risk.
5. The geographic spread of the Group’s network
increases the depth and breadth of our business
and provides better protection from an economic
downturn in any single market or region.
Innovation and competitive advantage
Failure to innovate and IWG's strategy includes investment in innovation 2022 saw continued modernisation of the
respond to market demand to develop new products and services to further technology used by IWG. The adoption of the
could result In IWG’s leading Increase its competitive advantage, protect Microsoft suite of ERP products underpins
market share being current revenue and unlock potential new sources a digital operating platform which supports
compromised. of revenue. business agility and flexibility. The Company
remains focused on using emerging
technology to improve the customer
experience and achieve operational
efficiency. We are continuously looking
at every aspect of our business for
opportunities to leverage technology to
automate, simplify and future-proof our
platform. As technology evolves and matures,
even more opportunities arise.
Partner portfolio
The continued expansion of This risk is mitigated as follows: In 2022, more countries and partners were
our franchising and managed added in our partner portfolio.
1. A Partner Committee oversees key
partnerships is key to the
programmes connected with the franchising Partner development and support teams
Group's capital-light growth
model and the managed partnership model and were further strengthened in 2022 with the
strategy. Achieving our partner
ensures that significant risks are identified and recruitment of dedicated sales and
model objectives will require
mitigated. development and support personnel in key
the continued development of
2. We have regular communications with franchise markets. We have implemented hands-on
our skills, services and
partners including sharing best practices to targeted support for our partners with
resources.
drive performance and deliver consistent monthly reviews to drive performance and
service to our customers. review of processes to identify improvement
opportunities.
Increased competition
The residual impact from While physical barriers to entry into the flexible The competitive landscape has continued
the pandemic and the 'great workspace market at a local level are low, the to shift in 2022. We continue our efforts to
resignation' has solidified barriers to establishing a national or international offer an unrivalled global network and varied
hybrid working as the ‘new network are much higher. As market leaders, IWG product range to suit the different
normal’. As such, more service also responded quickly to the pandemic and requirements of our customers. In 2022,
office offerings are likely offered clients its unique "hub and spoke" model. we added 20 new towns and cities.
to emerge. An inability to
IWG also offers a diverse product range under its In addition to our global network and product
maintain sustainable global
different brands to cater to multiple customer range we maintained cost leadership which
competitive advantage could
segments. This allows us to capture and maintain is pivotal for a sustainable business.
result in a loss of market share
market share across the flexible workspace
and impact on profitability for
market. We explore new and emerging markets to
the Group.
ensure our supply of products meets demand. We
continuous review our portfolio to provide
products and services that are aligned to
customer expectations and requirements and
there are currently active investment programmes
being implemented across our estate.

IWG plc Annual Report and Accounts 2022 47

Risk management and principal risks continued

Strategic risks continued

Risk description Mitigation Change / improvement since 2021

Geopolitical instability
Increasing geopolitical The geographies most directly impacted to date The risk of broader economic impacts from
instability and conflicts are will not have a material effect on our global geopolitical instability, conflict and sanctions
directly impacting some of our operations or results and we have exited some is increasing. IWG has taken concerted action
markets. Continued escalation markets impacted. Our broader economic during 2022 to reduce risk relating
and sanctions could lead to downturn scenario planning considers a range to geopolitical conflict and to ensure
broader economic impacts. of economic downturns, irrespective of the cause. there is a robust KYC process in place.
(NEW) Climate change risk
Inadequate ESG Strategy IWG manages this risk In the following ways: The Group adopted greenhouse gas
would mean that IWG is unable emission reduction goals and a commitment
1. ESG is firmly on the agenda for the Board.
to manage climate-related to achieve carbon neutrality during 2023.
2. IWG is exposed to physical and transitional
exposures. This was communicated in our 2021
climate-related risks and are exposed
annual report.
to assessment throughout the year.
3. ESG considerations are an integral part
of our businesses, and our strategy will continue
to evolve to address climate-related risks and
opportunities. The Group continually reviews its
product offering to provide low carbon services;
and in changing asset allocations towards
decarbonising operations and value chains.

Financial risks
Risk description Mitigation Change / improvement since 2021

Business planning and forecasting

The Group is exposed to IWG maintains a three-year business plan which is The existing forecasting process was
constantly changing external updated and reviewed on an annual basis. We also enhanced by creating different scenarios
environment (e.g.: geopolitical use a 12-month rolling forecast which is reviewed to reflect various economic environments
risks and global Inflation rises) every month based on actual performance. and financial outcomes. The focus has
which can impact business been on cash generation by reducing cost,
Business plans, forecasts and review processes
planning and forecasting. renegotiating rents and rationalising
are embedded into the Group to provide timely
the network.
and reliable information for short-, mid- and
long-term opportunities. Any risks to performance
will be identified by early warning indicators so
that they can be addressed on a proactive basis.
Funding
The Group relies on external This risk is mitigated in a number of ways: The Group’s funding comprises of a GBP
funding to support a net 350m convertible bond with a fixed 0.5%
1. The Group continually monitors its cash flow
financial debt position of interest rate, a GBP 750m Revolving Credit
and financial headroom development and
£712m at the end of 2022. Facility (RCF) and a GBP 270m non-recourse
maintains a 12-month rolling forecast and
Any change to this support Bridge Facility as at December 2022.
a three-year strategic outlook. The Group also
would result in liquidity risk
monitors the relevant financial ratios against The convertible bond matures in 2027 with
for the Group.
the covenants in its facilities to manage the risk an option for the bondholders to put the
of breach. The measurement of these covenant instrument back to the Group in 2025.
ratios is unaffected by the recognition of lease
The RCF is committed until March 2025
liabilities under IFRS 16.
with an option to extend until 2026.
2. The Group also stress tests these forecasts
with downside scenario planning to assess The non-recourse Bridge Facility, to fund the
risk and determine potential action plans investment in The Instant Group in March
(Refer to the Viability statement on Page 53). 2022, matures in September 2023. The Group
3. The Board intends to maintain a prudent is pursuing various options available to
approach to the Group’s capital structure address the bridge facility refinancing,
and constant review of the maturity profile including but not limited to: repaying the
of external funding is in place. bridge facility through asset sales, cash
4. Part of the annual planning process is a debt generated from operations, and/or the
strategy and action plan to ensure that the extension or replacement of this facility to
Group will have sufficient funding in place ensure continued funding of this highly
to achieve its strategic objectives. successful and cash generative business.

48 IWG plc Annual Report and Accounts 2022

 Strategic report
Risk description Mitigation Change / improvement since 2021

Inflation risk
Increasing global inflationary Mitigating actions include: Inflationary pressures are expected
pressures may impact the to increase.
1. The short-term nature of most customer
Group’s costs, including
contracts allows the possibility for prices Continued pricing management and focus
financing charges, impacting
to be adjusted in consideration of the on cost and efficiencies are largely mitigating
profitability and cash flows.
evolution of costs. inflationary pressure.
2. The Group’s capital-light strategy includes
a focus on flexible leases and management
contracts which reduce the negative
impacts of inflation.
3. The Group constantly monitors interest rates
exposure and has a fixed rate coupon on its
£350m convertible bond up to 2027.
Exchange rates
The Group's global operations Given that transactions generally take place In 2022, exchange rates had a positive
expose it to a variety of in the functional currency of Group companies, impact on results.
financial risks, including the the Group’s exposure to transactional foreign
Revenue increased during the year
effects of changes in foreign exchange risk is limited.
by £133m and EBITDA by £79m.
currency exchange rates.
Where possible, the Group attempts to create
In particular, the Group’s
natural hedges against currency exposures
substantial US operations
through matching income and expenses, and
generate revenue in USD
assets and liabilities, in the same currency.
and therefore currency
volatility can impact revenue.
The Group does not undertake
any speculative transactions
to manage risk.

Operational risks
Risk description Mitigation Change / Improvement since 2021

High level recruiting and succession planning

To achieve its strategic Mitigating actions include: Recruitment channels are constantly under
objectives, the Group needs review to continue offering opportunities
1. Resource Committee in place for key
to increase its management to as wide a population as possible
resource positions.
capabilities through the in each market.
2. Succession planning discussions are an integral
continued development
part of our business planning and review The Group has implemented
of existing talent
process. a comprehensive strategy to address
supplemented by the hiring
3. Part of the annual planning process is the talent resource requirements.
of experienced professionals.
Human Resources Plan, and performance
This will support our strategic Key hires in 2022 met demand and we
against this Plan is reviewed through the year.
execution and enhance expect more of the same in 2023 to meet
4. Regular external and internal evaluation
succession planning the growing needs of the business.
of the performance of the Board, including
throughout the Group. The Board of Directors was increased
succession planning.
by an additional Non-Executive Director
with three of the Board members being
newly appointed during 2022.

IWG plc Annual Report and Accounts 2022 49

Risk management and principal risks continued

Operational risks continued

Risk description Mitigation Change / improvement since 2021

Employee engagement and retention

As a serviced-based business, One of the key items in the Human Resources The Group has in place a comprehensive
the strength and capabilities Plan is the Global Induction & Training Plan, which training programme for all levels and
of our geographically diverse sets out the key objectives for the forthcoming functions. The significant investment
team are critical to achieving year. Performance against these objectives is in our Group’s Learning and Development
our strategic objectives, reviewed through the year. programme continues to provide a means
including delivering to engage with our colleagues through
Strong ESG and a remote working Human
outstanding customer service. e-learning, videos, webinars, case studies
Resources strategy on recruiting and salary
The increased competition for and coaching.
banding, including benchmarking, are in place
talent impacts retention at all
across the globe to ensure that salaries and Our Management Skills Training Programme
levels, from executives to
benefits are competitive. and Sales and Customer Service Training
centre staff.
Academy are carried out virtually throughout
All new employees are surveyed in the first
the world to support continuously giving
three months to ensure they have been trained
customers a great day at work.
and are receiving effective support.
In 2022, the Group issued a number
of employee engagement surveys across
specific functions and to the Group
as a whole, with positive results.
Ethics and compliance
Ethical misconduct by our IWG manages this risk through: We continue to actively monitor and respond
employees or non-compliance to reports via our ethics hotline.
1. Visible ethical leadership.
with regulation, whether
2. A robust governance framework including A robust supplier selection and evaluation
inadvertently, knowingly or
a detailed Code of Conduct and other process continues to be in place with a view
negligently, could lead to
mandatory training for all employees to enhance controls to address the risk
financial loss/penalties,
(e.g.: gifts and hospitality, anti-bribery of fraud.
reputational damage, loss of
and corruption).
business and impact on staff All projects are monitored and evaluated
3. Centralised procurement contracts with
morale. by a centralised capex finance team and
suppliers for key services and products.
the Investment Committee presides over
4. Standardised processes to manage and
key decisions.
monitor spend including controls over
supplier on-boarding and payments approval. A dedicated cost function to review spend
5. Regular reviews to monitor effectiveness across all categories and detect anomalies
of controls. or exceptions is in place.
6. Independent and confidential ethics
hotline available to employees, contractors
and third parties.
7. Independent investigation of fraud
incidents and allegations of misconduct
with Board-level oversight.

50 IWG plc Annual Report and Accounts 2022

 Strategic report
Risk description Mitigation Change / improvement since 2021

Data protection and privacy

IWG is required to comply with IWG mitigates this risk as follows: We continue to remain compliant with data
legislation in the jurisdictions protection and privacy regulations across
1. IWG operates a comprehensive programme
in which it operates including the business, continuously monitoring and
that covers all aspects of data privacy
the new General Data enhancing our privacy and security controls,
and data protection.
Protection Regulation including a project to remove Personal
2. Our strategy is to process minimum amounts
(GDPR) and other local Identifiable Information (PII). We also
of personal data, which are kept only to the
data privacy laws. continue to comply with PCI and Swift
extent necessary to provide a service to our
standards.
Non-compliance and breaches customers.
could result in significant 3. We apply the principle of ‘least access’ In instances where specific countries
financial penalties and privilege and separation of duties to safeguard implement stringent new Cyber Security &
reputational damage our data. Privacy laws which could threaten our
4. All credit card data is stored on PCI-accredited operations if IWG is found to not be
payment service providers and not on IWG compliant, the Information Security team
systems. works with in-country experts to ensure we
remain compliant.
Cyber security
The continued integration of This risk is mitigated as follows: IWG has developed a security roadmap to
the digital economy and use of carry out information security best practices,
1. IWG’s Information Security Steering Committee
external cloud services, strengthen controls and implement security
reports regularly to the Board of Directors
combined with a rise in operations to detect potential incidents.
and has wide representation from business
phishing attempts and
operations, risk assurance, legal, IT and All critical systems have been migrated
malicious attacks, could result
Non-Executive Board members. to the cloud with high availability and
in additional costs and
2. IWG runs a world-class Information Security geo-redundancy for disaster recovery.
damage.
programme with ISO/IEC 27000 adopted as its As part of this cloud migration, IWG has
charter to establish, operate and monitor its implemented best practice cloud security
Information Security Management System. controls. The entire environment is managed
3. The programme is delivered in collaboration by a world-leading security managed
with external specialists across our services provider.
environments.
Information Security gates have been
4. Using a risk-based approach, IWG continuously
established for all new projects which require
identifies, evaluates and applies remediation
conformance to our cloud security blueprint.
controls to threats that could impact
the security, confidentiality and integrity of its In our application development area, we have
assets. implemented a market-leading static code
5. IWG transfers residual risk through its analysis tool which ensures that all code
comprehensive cyber insurance coverage developed follows global secure code
provided by a global leader in cyber insurance. best practices.
6. We have a robust security incident A programme is in place to continually
management process which and coordinates implement new security features to improve
our response in the event of a security incident. our processes and controls in this area,
7. Security awareness training is mandatory for all keeping pace with the ever-changing
employees that covers Information Security, best-practice.
PCI and Privacy.
In our business centre environment,
we have a security blueprint for all centres.
We perform penetration testing in this
environment to ensure that our blueprint
remains up to date as either technology
changes, or new risks emerge. All findings
from these penetration tests are used to
update the blueprint with which all centres
need to comply.

IWG plc Annual Report and Accounts 2022 51

Risk management and principal risks continued

Operational risks continued

Risk description Mitigation Change / improvement since 2021

Business continuity
Business continuity covering IWG manages this risk through: Our cloud migration project has been
systems, regional hubs and completed and all critical systems have
1. The implementation and regular testing of its
operations. Should the data disaster recovery plans in place.
business continuity plans for different parts
centres, sales call centres,
of the organisation, which includes business All new systems development includes
regional hubs and centres be
processes, personnel knowledge of manual high availability & disaster recovery built
impacted as a result of
procedures and disaster recovery procedures into the initial design phase.
circumstances outside the
for our technology systems.
Group’s control there could be For our voice communications platform,
2. All critical applications have been migrated
an adverse impact on the we have built in additional redundancy
to the cloud with high availability and geo-
Group’s operations and in countries where we experience minor
redundancy, allowing availability of critical
therefore its financial results. disruption due to external factors.
systems and providing employees access
to the systems from any location, a critical We have further implemented a daily process
element of our business continuity plans. to ensure critical data is stored securely
3. A robust managed services and managed off-site. This is data that would be needed
security services agreement in place with to run our business for several days should
leading vendor. the worst case scenario occur in both
4. The Group uses a risk-based approach to production and DR sites simultaneously
determine additional redundancy requirements being rendered inaccessible.
across its entire technology platform, including
the global telephony infrastructure critical
for continuity of its sales and call centre
environment.
5. Appropriate business interruption insurance
is in place.
6. Country Business Continuity Plan and Centre
Disaster Recovery Plan are in place and
regularly reviewed.

52 IWG plc Annual Report and Accounts 2022

 Strategic report
Viability statement The impact on performance was 2023. The Instant Group,
assessed over a three-year period combined with the IWG digital
In accordance with the UK (2023-25) and on account assets in Worka, has been
Corporate Governance Code of individual risks as well as highly cash generative and
published by the Financial Reporting a combination of risks materialising. reduced its net debt to £176m,
Council in July 2018, and excluding £4m of lease
considering the Group’s current The modelling for worst case liabilities, at 31 December
position and prospects as outlined revenue shortfall reflects the low 2022. Based on the modelled
in the Strategic Report and its starting point given the recovery scenarios the Directors expect
principal risks for a period longer from COVID-19 and the worst case that Worka will continue to
than 12 months as required by the for cyber/data event reflects the reduce its net debt position
going concern statement, the Board limited private data held and other by September 2023, and
has a reasonable expectation that steps taken to limit the risk/impact has already been doing so
the Group will continue to operate of such events. at the start of 2023. The Group
and meet its liabilities as they fall is pursuing various options
due, for the next three years. In the event of extreme worst-case available to address the bridge
scenarios there are actions that facility refinancing, including
The Board is cognizant could/would be taken including but not limited to: repaying
of the maturing Bridge Facility an accelerated sale of properties, the bridge facility through
in September 2023. The Group cutting growth and related capex asset sales, cash generated
has various options to address and costs, etc. The significant from operations, and/or the
this, including: repaying the bridge potential benefits from such actions extension or replacement
facility via asset sales, cash have not been reflected in the of this facility to ensure
generated from operations, modelling. continued funding of this
or refinancing via extension highly successful and cash
or replacement of the facility. The potential impact of each generative business.
scenario was modelled on the
The Board’s consideration Group’s revenue, gross profit,
of the long-term viability operating profit, net debt and debt
of the Group is an extension covenants over the three-year
of our business planning process forecast period. The Board
which includes financial forecasting, subsequently considered the
a robust enterprise-wide risk viability of the Group both in the
management programme, regular context of the individual risks listed
business performance reviews above and combination of two
and scenario planning. or more risks over a range
of assumptions. The stress testing
For the purposes of assessing showed that the Group would be
the Group’s viability, the Board able to withstand any of the severe
identified that, of the principal risks, but plausible scenarios by taking
the following are the most important management action in the normal
to the assessment of the viability course of business.
of the Group:
In making its assessment, the Board
The following principal risks considered the outcome of each
were modelled to support the modelled scenario against the
Viability statement; Group’s current and projected
future net cash/(debt) and liquidity
• Revenue shortfall; position, specifically:
• £ sterling appreciation; and
• Significant cybersecurity 1. The Group had funding available
or data breach event. under the Group’s £750m
revolving credit facility. As at
Two scenarios (likely-case and 31 December, £173m
worst-case) modelled for revenue (2021: £530.1m) was available and
shortfall, sterling appreciation, and undrawn under this facility.
cybersecurity or data breach event This facility is committed until
using assumptions derived from March 2025 with an option to
historical data or based on case extend until 2026;
studies/available market research 2. The Group’s initial £330m non-
to determine the impact on recourse bridge facility, to fund
revenue, gross profit, operating the investment in The Instant
profit and EBITDA. Group, matures in September

IWG plc Annual Report and Accounts 2022 53

Environment, Social, Governance

IWG puts
people and
planet first Teams across
IWG collaborate to
continuously improve
and innovate ensuring
our business delivers
against our main
ambitions:

Our carbon reduction

Climate change is at a pivotal journey

moment – I believe it is critical

• We are reducing carbon
emissions across all IWG

that IWG plays its part. We have

spaces, investing in buildings
that have recognisable

amplified our efforts in this

sustainable credentials
and reducing waste

space to ensure we deliver an

across operations
• We remain on track to deliver
environmentally friendly and carbon neutrality during 2023
and have set a target to reach
inclusive space for all customers.” Net Zero by 2040

Being a socially
responsible employer
Mark Dixon
• We continue to invest in
Chief Executive Officer recruiting and training the best
talent and are proud to be
recognised as a leading
employer
• Our teams and customers
have made huge contributions
to charitable organisations
in the communities where we
operate in across the world

Providing transparent
and regular information
• We have improved the
transparency of our ESG data
• This year we have disclosed
our carbon footprint for 2021
and 2022

54 IWG plc Annual Report and Accounts 2022

 Strategic report
ESG Highlights
Adopting hybrid working brings considerable sustainability benefits. It can provide a major
pillar in any company’s ESG strategy and the foundation of a new approach that benefits
work and life for both the planet and its people.
At IWG we continue to push our ESG agenda so that we and our customers can make
a difference and contribute to the global climate challenge.
This year, we have delivered our strongest performance to date.

2040
Target to achieve Net Zero

2023
On track to deliver
AA
Rated by MSCI
9.2
Rated by Sustainalytics
carbon neutrality

FORESTS
Large scale investments
100%
Green electricity target
B
CDP score for Climate Change
globally by 2030 & Water Security

SCOPE 3
Reduction through improved
£474k
Provided to charitable organisations
TOP 1%
Won the UK Leading
supply chain Employer Award

IWG plc Annual Report and Accounts 2022 55

Environment

Our carbon reduction As part of this, we’re pleased Our initial transition plan to
to remain on track to deliver support our target to Net Zero
journey carbon neutrality across our emissions by 2040 features
Environmental operations globally (Scope 1 a working group focused on
sustainability remains and 2). Our continued progress converting the energy we use
has made us more determined to green. This will initially prioritise
a global imperative and and we have set out a transition electricity, but will also address all
partnering with IWG for plan to reach Net Zero emissions forms of energy through innovative
flexible workspaces is by 2040. solutions and collaboration with
our partners and suppliers.
a form of climate action. We continue to remain mindful
This year, IWG collaborated of the wider impacts of our As we continue on our journey,
with renowned consultancy, Arup, actions and strive to support we are developing reduction plans
to independently verify the impact the protection of the planet, across the spaces we operate
of hybrid working on carbon including reducing our impact to reduce our energy intensity.
emissions. This analysis on natural resources, These plans focus on optimising
demonstrates that hybrid working biodiversity and pollution. our buildings with energy-efficient
reduces carbon emissions through equipment, evolving our
improved commuting options and Transition plan to reach operational practices to be more
building efficiency – the impact Net Zero emissions by sustainable, and working with our
per person can drive a 70% 2040 customers to reduce the energy
reduction in carbon emissions. they use in their spaces. Where
Since embarking on our we have emissions that we have
environmental journey, we have not yet been able to eliminate,
We place great importance on
continually broadened our we will compensate through
ensuring our business activities
ambitions. Following our progress investments in carbon
achieve the highest level of
last year, we have calculated our removal solutions.
environmental sustainability.
Scope 1 and 2 greenhouse gas
emissions for 2021 and 2022.

HYBRID WORKING AS A FORM OF CLIMATE ACTION

IWG and ARUP partnered to As anticipated, less commuting hybrid scenario consistently
investigate the carbon impact to city centre locations reduces emits 41%+ less emissions that
of new ways of working carbon emissions. the traditional five-day city
centre scenario.
compared with the traditional Surprisingly, however, even
commute into the city centre. where people drive to local The widespread adoption of
Our research was conducted offices the carbon emissions are hybrid working has accelerated
across six cities and uses still lower than the traditional changes in our society, creating
disaggregated calculations for five-day city centre commute. new possibilities for the future.
Hybrid working at a local office Beyond the potential to tackle
transport and building in Los Angeles demonstrated the emission of greenhouse
emissions. The study highlights a 70% reduction in carbon gases, hybrid working supports
that modern hybrid working emissions, despite widespread the United Nations’ 17
reduces employees carbon reliance on cars. Sustainable Development Goals
emissions. including economic growth,
Where employees chose to work sustainable cities and
in an office close to home, their communities, gender equality,
total emissions are lowest - good health and wellbeing and
although commuting emissions clean energy and climate action.
increase, sharing resources
within a building provides the
lowest overall carbon emissions.
In LA the ‘close to home’ or

56 IWG plc Annual Report and Accounts 2022

 Strategic report
NET ZERO BY 2040
OUR TRANSITION PLAN

0
204
by
2040
Target to achieve Net Zero emissions

ero
across global operations.

2030
Commitment to 100% green electricity, in alignment

Net Z
with RE100 guidance.

2025
Scope 3 emissions tracked in accordance with the guidelines provided
by science-based frameworks and reduction plan established.

2023
IWG is set to deliver carbon neutrality ahead
of 2025 commitment.

2020
IWG announced its commitment to
achieving carbon neutrality globally
(Scope 1 and 2) by 2025.

Key actions to deliver

Reduce carbon emissions Continue to transition Monitor and reduce Scope

created in heating and to green energy 3 emissions, prioritising
cooling of buildings centre fit-out
emissions

Identify and invest in low Investment in natural

carbon products and carbon removal solutions
solutions

IWG plc Annual Report and Accounts 2022 57

Environment continued

Making our global office spaces In 2022, we announced the launch To enable this, we are developing
sustainable of our UK electric vehicle scheme, relevant criteria to assess
in partnership with Tusker. This development projects from
To embed sustainability in our is another example of our green the beginning of design to
capital allocation and long term efforts that enable customers and construction and through to the
investment decisions, we have colleagues to reduce their carbon ultimate impact on the in-use
introduced IWG’s Centre emissions from commuting. building. This has highlighted the
Sustainability Assessment To further encourage uptake, importance of product innovation
Framework. This toolkit is we are committed to expanding to support delivery of our circular
designed to identify and acquire electric vehicle (EV) charging design principles that will reduce
less-energy intensive buildings point availability at our centres. the climate impact of our
that align with our Net Zero products and processes.
trajectory. It also helps us monitor Building understanding of our
criteria such as on-site renewable Scope 3 emissions We are also working concurrently
energy or green building with our partners to drive
certification, to ensure our Part of our plan is to ensure we decisions towards low carbon
investments promote have a reliable and responsible products, sustainable raw
sustainable practices. supply chain for customers, materials and low-energy
through working with our suppliers manufacturing processes.
Additionally, we are utilising to embed sustainability into the This includes avoiding the use
the assessment to analyse our value chain. This year, our of materials with high carbon
existing portfolio and help us thorough review of our supply intensity and instead using
identify further opportunities chain including logistics, enabled locally sourced materials with
to reduce the energy intensity us to consolidate our regional high recycled content and
of our buildings. By developing hubs where possible, reducing innovative low-carbon materials.
an internal metric, we can carbon emissions and improving Our long-term partnership with
evaluate carbon risks and logistical efficiency. strategic suppliers enables
opportunities, to feed into our the identification of low-carbon
investment decision-making in Our supply chain transparency products and consolidation
line with our wider climate targets. has increased dramatically of our supply chain to support
through monthly measurement reductions in logistics
Our internal framework is aligned of new suppliers. During 2022, related emissions.
to international sustainable we launched an audit into the
building standards, so that IWG sustainability credentials of our We intend to evolve our
can continue to demonstrate top suppliers globally using our frameworks over time through
leadership in promoting Supply Chain ESG Framework. collaboration with partners
sustainable workspace standards Responses are collated and and suppliers.
in our building selection, internal analysed, including innovations
fit-out and operations. We will and opportunities to improve
continue to seek opportunities the sustainability of the products
to use recognised green and processes bought through
certifications (e.g. LEED or third parties.
BREEAM). Given our global reach,
we will work in close partnership Alongside this, our procurement
with landlords and partners that team regularly communicates
share our ambition. our responsible sourcing
requirements, and ESG ambitions
Reducing our operational to all suppliers.
footprint
Addressing embodied carbon
This year we expanded
sustainable practices at As part of our Net Zero transition
community and operational levels, plan, we have identified fit-out
including establishing an eco- of new centres as a key driver
friendly cleaning programme. of lifecycle emissions. We are
This approach places emphasis therefore setting targets for
on minimising water usage and fit-out projects.
waste generated, allowing us to
reduce our carbon footprint and
contribute to delivering a healthier
environment for our customers
and colleagues.

58 IWG plc Annual Report and Accounts 2022

 Strategic report
Achieving carbon
neutrality
To reduce our environmental
impact, we recognise the need
to take action to address the
emissions we can’t yet avoid.

As part of this commitment,

we are dedicated to preserving
the environment and investing
in nature-based solutions that
offer both ecological and social
benefits. By supporting the
restoration and protection of
forests, we can help preserve
biodiversity, enhance
ecosystems, and mitigate
climate change impacts.

We continue to take our

responsibility seriously and
are committed to investing
in projects that align with our
ESG strategy and also generate
additional co-benefits to help
meet some of the the United
Nations’ 17 Sustainable
Development Goals. Our
carefully designed project
selection process is focused on
identifying high quality carbon
investments that contribute
to improved economic growth
and opportunities (Goal #8),
addressing climate change (Goal
#13) and species protection
(Goal #15).

IWG plc Annual Report and Accounts 2022 59

Social

A socially
The development of this
platform is key for franchise and
property partners to manage
their own teams locally with

responsible
efficiency and consistency.
In addition, all our team
members use a unique app that
they can access on any device,
day or night, called TeamHub.

employer for
This app had broad functionality
from resource allocation
to absence management.

Talent acquisition

colleagues
2022 was the most challenging
year in our history. We pride
ourselves on best-in-class
career opportunities combined
with technology and ways of
working that allow IWG and its
partners the capability to recruit
any talent, in any location,
quickly and effectively. The team
that looks after our customers
Advancing our talent is of prime importance.
strategy
The year 2022 turned out to be We added new opportunities
one of the most dynamic job in product development, finance,
markets that the world has seen country management, sales,
for decades. Phenomenal career a new technology hub in Porto,
opportunities combined with franchising, property
increases in inflation and energy partnerships and project
costs gave rise to an exciting management, all focused
race to hire and retain great on delivering and deploying
talent. The IWG recruitment Our People Plan for 2022 innovation, automation
model, our technology and focused on six essential and network growth across
investments in marketing and strategies: the business.
recruitment delivered highly
productive results with over • The development of our Our Apprentice Programme,
4,000 people starting new global HR information and where individuals can attain
careers with IWG around administration platform formal qualifications while
the world. in Manila working proved to be an
• The acquisition of new talent excellent channel for new talent
Our IWG people promises are: and the retention of this cadre
• Training and careers
of our team was very high at
• Diversity, equity and inclusion more than 85%.
• Interesting work
• Communication and
• A manager and company
that cares
recognition Diversity, equity and
• An opportunity to develop
• Reward inclusion
& grow your career HR platform Diversity of talent continues
to be a focus for us, and our
In order to give customers a As our team grows in numbers recruitment channels and
great day at work, we have to across the world, we continue to processes offer opportunity
ensure our team members also build on the global HR platform to everybody. In 2022 IWG
have a great day at work. The that is accessible to all team offered new and existing talent
two are inextricably linked and members 24/7, 365 days a year. a range of opportunities that
we are delighted to say that IWG This is a single ticketed system can be done on a part-time
has again won the UK Leading to get answers on all topics from basis, entirely from home, to suit
Employer Award, in December global policies, processes and individuals that have diverse
2022 for the year 2023, which documents to accessing the personal priorities that makes
is awarded to the top 1% IWG Learning Academy and it difficult for them to commute
of employers. much more in terms of best or be based in an office. This
working practices. new talent pool will continue
to be an important part of
our strategy.

60 IWG plc Annual Report and Accounts 2022

 Strategic report
Our current global gender split We also continued our series Learning, development
is 65% female and 35% male. of ‘Affinity Groups’ in the USA. and careers
At regional leadership level our Made up of team members,
split is 42% female and 58% these work with the Leadership 2022 was another record year
male. At senior leadership level, Team to make and consider for IWG. With much success
which includes our Senior recommendations on how best in our recruitment drive,
Leadership Team of global to ensure we remain fair and onboarding and induction
geographic and functional equitable in our day-to-day was re-designed from scratch
leaders as well as our country business operations. with a huge improvement in
leadership, our gender split the number of those new people
is 25% female and 75% male, In 2021 we started our global successfully completing their
with the gender representation Voice Councils and these induction and within their first
similar in both of these groups. continued into 2022. Hosted 30 days of employment. The
by a senior audience, our team year ended with a 95% success.
Based on the colleagues who drives the agenda with
were happy to disclose their recommendations for We filled 25,000 training slots
data, further information improvement and innovation (webinars) from induction to
regarding our diversity picture documented and actioned skills development in key areas
is as follows: as appropriate. such as customer service, sales
and communication.
White 52% We also continue to operate
our confidential ‘Right to Speak’ We continued our core
Hispanic 19%
reporting helpline for all programmes on important
Black 18.5% members of our extended team topics such as health and
Asian 6.3% across the world. In addition, well-being, technology skills
we have various programmes in and hybrid working.
Mixed 2.5%
place to provide employees with
Pacific Islander 1.5% confidential counselling services, We launched a new compliance
24/7 and 365 days a year. programme which all our team
We have continued our Board members completed. This
diversification with two new extends to all employees including
Non-Executive Directors in 2022. part-time and contractors and
covers topics from anti-money
laundering to cyber-attacks, given
this education becomes ever
more important.

Partnership

OPPORTUNITIES TO City Team

Leader
Community
Operations
Lead –
Stager
Sales
Director

PROGRESS AT IWG Sr.

Partnership
Sales
Manager
Retaining great talent is about leaders focusing
Community Hunter
on talent development and supporting individuals Manager
to progress their careers at IWG.
Account
• Great opportunity to progress vertically Manager
and cross-functionally Community
Closer
• Training programmes focused on career progression Manager
and development of high potentials Team
• 2023 management focus on talent development Leader
Account
and succession planning Manager
Assistant

“A true leader’s legacy

Assistant
Community
Closer
Manager

is the number of people L&D

– Trainer

we have helped grow Trainee Graduate

and progress” Project
Manager

IWG plc Annual Report and Accounts 2022 61

Social continued

Our learning and development their expertise, and reach their Intertwined with this are
curriculum is focused on giving full potential. We also continue initiatives on staying healthy,
our team members the right to deliver Content Club training career opportunities and charity
start at IWG. Then, it is about into our academy forums. events that combine driving
developing the skills and performance with a sense of
knowledge of our team members Communication and pride and return on investment.
to offer them an opportunity to recognition
develop and take the next step We held a full global engagement
on their career ladder. Our Communication and survey in 2022 and are thrilled
customer-facing teams have a connectivity in a globally with the results. By continually
defined career path with dispersed workforce is a critical seeking out and valuing the
multiple opportunities in front of agenda point. Regular calls on opinions of our team members,
them. performance, new partnerships we are able to maintain
and innovation with new ways a workplace that is responsive
We place great importance of working underpin our annual and fosters a culture of open
on continuous learning and have communication calendar. communication and
established partnerships collaboration.
to accelerate growth of our Investment in leadership
employees. Engagement with meetings, monthly performance Over 78% of IWG employees
strategic collaborators and reviews and monthly town halls said they would recommend
industry experts, including create a drum beat for the IWG as an employer to friends
Corndel, allows IWG to deliver organisation that gives absolute and family, as endorsed by our
professional learning and our focus on performance and UK Leading Employer Award.
team members the opportunity objectives.
to develop new skills, enhance

2022 ENGAGEMENT SURVEY FINDINGS

98%
of our
82% 85%
of our
88%
of our
of our
team members team members team members
team members
are clear about confirm they have have regular
think our technology
their role, KPIs the resources and communication
is relevant and
and contribution tools to be with their
effective
to IWG successful manager

78%
would recommend
30%
want
23%
want
25%
want
IWG to family and even more better training more recognition
friends as an improvement and coaching for the job
employer in ways of that they do
working

62 IWG plc Annual Report and Accounts 2022

 Strategic report
There is additional work to do on Reward As we extend our health and
careers, process improvement well-being offerings to
and recognition in 2023 and this IWG reviewed salary bands for customers we will look to extend
will be a continued focus in the customer-facing employees on these to our team members
coming months. a continuous basis throughout at the same time. GP services,
2022, increasing base pay nutrition and gym facilities are
We held four regional leadership and salary bands accordingly. all programmes of work for the
conferences holding two in North In some high-inflation markets forthcoming year.
America and the UK in December this required several reviews
2022 with a further two throughout the year. Balancing progressive,
conferences for Europe, Middle happy and productive work
East and Africa and Asia Pacific Incentives were simplified in the environments with health and
in January. Holding regional second half of the year making it well-being whilst helping the
rather than global conferences easier for team members to earn climate is a foundation for our
requires additional investment performance-related incentives team members and for our
in time, however we deemed as a key part of total customers.
getting closer to our leadership compensation.
teams in country to be critical
given we have not been together The Remuneration Committee
in person since January 2020. also reviewed total leadership
compensation and a new grant
Our ongoing recognition of options was made to critical
programme continues with executives around the world.
recognition pins given out
to colleagues on the spot for New benefits such as the
exceptional behaviours and opportunity to buy an electric
to other team members where vehicle or a bicycle through
people have gone above-and- salary sacrifice programmes
beyond for their customers or are supporting team member
colleagues. requests for different, more
interesting benefit packages.
Every new person in IWG will get
their own tree to plant in IWG
forests. As their career grows, so
their contribution to saving the
planet grows. Team members
receive additional trees for great
work and exceptional
performance, promotions and
milestone events such as long
service. As a united team we
believe we can contribute
significantly to tackling climate
change, being carbon neutral
during 2023 and doing our part
collectively to protect
the planet.

IWG plc Annual Report and Accounts 2022 63

Social continued

Engaging with
the communities
in which we operate
Our business puts people Our office spaces hosted
and planet first, 35 senior managers, clinicians,
and mental health allies and
especially through the welcomed the Mayor of Sutton
collective IWG desire to Councillor, the Mayor’s Consort
make a difference in the and the Vice Chair of
Healthwatch. A display of mental
lives of our customers health recognition resources
and our communities. including poetry books and
artwork were also available
As a global organisation, as supplementary resources.
we continue to invest
in our communities to create
opportunities that promote a “We were at Spaces
fairer and more inclusive society Raising awareness when the idea for the
for all. We achieve this through
a combination of monetary
Our teams across California,
together with our clients,
Bridging the Gap event
donations, strategic partnerships have joined forces to raise was born. We’d met
with customers and charities
that align with our brands, gifts
awareness of Breast Cancer.
Several awareness campaigns
many mental health
in kind, and active engagement were set up throughout Cancer professionals doing
campaigns with local
communities. This year, we are
Awareness Month, including fun
photo booths in the centre,
amazing work but
pleased to have donated a total a designated day of wearing noticed they were
of £474k to charitable and
environmental organisations.
pink and pink potluck events
with clients. Some of our team
working in silos.
members also participated in We wondered if we, as
“Making Strides” – a renowned
charity run – to raise money
a creative partnership,
“Cancer awareness is for the American Cancer Society. could smash the silos as
a cause that is near and well as the stigma. ”
Additionally, IWG colleagues
dear to me, and I was in the UK organised “Bridging
Zoe Hannam
touched by how many the Gap”, a networking event
to connect mental health Carer Peer Support Worker,
of our team members professionals in the community UK NHS
thanked our group for and raise awareness of the
importance of supporting
supporting this, as they mental health.
and their loved ones had
also been impacted.”
Bonnie Fisher
IWG Sales Director

64 IWG plc Annual Report and Accounts 2022

 Strategic report
“It has been wonderful
to see our local Regus
centre taking part in
such well deserving
charity events this year.
Well done KidsOut and
thanks to the staff at
Regus for promoting
awareness.”
Spreading a smile In Mexico, IWG partnered with Steve Taylor
Asilo Primavera, a children’s
For the second successive year, home, to ensure underprivileged IWG customer, IceBlue
the IWG team in the UK took part children were able to celebrate
in the Giving Tree initiative “El dia de Reyes” or Three Kings “Thanks Regus team
to buy gifts and raise money Day. Our team members
for the KidsOut Foundation. organised toy collections and to put this together,
This non-profit organisation were excited to deliver gifts we’re all going to make
makes Christmas wishes for and spread kindness throughout
underprivileged children come the festive season. happy children on
true – many of whom have Christmas Day!”
escaped domestic violence,
being forced to flee their homes Toni Lleo
quickly and leave all possessions
behind. During the life of this IWG customer, Laminam UK
outstanding partnership, our
people raised an amazing
£55k and donated over 4k
physical toys.

Supporting
humanitarian war relief
This year, IWG has set up a
fundraising appeal in partnership
with the Ukraine Humanitarian
Fund established by UNICEF
– a global charity that has
committed to providing vital
support to millions of children
and families impacted by the
war in Ukraine.

In total, IWG colleagues globally

have raised £23k and continued
“We stand united to support our teams and
Movement to work
in support of our customers in Ukraine throughout Continuing efforts from last year,
a difficult year. Several centres our colleagues in Denmark once
colleagues, customers, across Poland, France and again partnered with a non-
and everyone impacted Romania have arranged profit bottle collection service
collections of essential supplies that provides socially
at this unimaginably – including food, clothing, disadvantaged people
difficult time.” medication, and tents for with concrete work.
refugees fleeing the war –
Mark Dixon playing a key role in relief efforts. By donating empty bottles, our
teams helped vulnerable citizens
Founder & CEO, IWG seize opportunities to put
homelessness behind them.

IWG plc Annual Report and Accounts 2022 65

Governance and task force on climate-related financial disclosures

Transparent
information
for investors
IWG supports the Transparent Governance
recommendations of the and regular The Chairman of the Board has
Task Force on Climate- ESG information overall responsibility for
related Financial We have a long-standing sustainability supported by the
Board with clear roles and
Disclosures (TCFD). These commitment to the environment
responsibility assigned. Successful
are designed to encourage and believe that transparency is
a key part to achieving our goals. implementation of our approved
consistent and effective sustainability and climate change
reporting of climate- In order to drive progress, we strategies is a critical element of
have prioritised data visibility, IWG’s purpose and drives our
related risks and culture and values.
leveraging our carbon footprint
opportunities. IWG has analysis, and engaging our
adopted the following key partners to determine the Our ability to deliver on our
sustainability performance of sustainability and climate change
themes: (i) Governance; objectives underpins our overall
our existing portfolio.
(ii) Strategy; (iii) Risk Additionally, we have initiated strategy. These are key
Management; and (iv) the tracking of our Scope 3 considerations in Board and
Committee decision making,
Metrics & Targets. emissions through the use of
including major actions and
our Supply Chain ESG Framework.
project decisions, risk
This year, we have evolved management policies, annual
Our progress has not gone
our climate strategy and taken budgets and in setting our
unnoticed, as demonstrated by
necessary steps to further performance objectives. For
our strong AA rating from MSCI
integrate climate change further information see pages 70
and negligible risk score of 9.2
within our governance and risk and 74 to 121.
from Sustainalytics. Additionally,
management frameworks.
our efforts to address climate
The findings of our first
change and water security were
scenario-based climate risk
recognised with a B score in our
assessment have further
submissions to the Carbon
strengthened our understanding
Disclosure Project, surpassing
of the potential impacts of
both global and industry averages.
climate change on our business.
In our continued efforts to provide
transparency, we have completed
a comprehensive Climate-related
Financial Disclosure in accordance
with TCFD recommendations, and
include a summary of our first
Climate Scenario Analysis in this
report.

66 IWG plc Annual Report and Accounts 2022

 Strategic report
Risks & opportunities
A summary of six most material risks and opportunities.

Risks Category Impact Impact Rating*

Physical • Extreme weather impacting IWG centres, resulting Acute/Chronic Revenue L M H

in loss of customers and certain markets
• Operating costs (including insurance costs) rising Acute/Chronic Cost L M H
due to increased frequency of extreme weather
Transition • Rising carbon tax increasing IWG’s operational cost Regulation/ Cost L M H
Compliance
• IWG not meeting externally stated commitments Reputation Market cap. L M H
(including meeting existing and emerging Revenue
regulations) resulting in reputational damage
• Supply chain disrupted due to climate-related Supply Chain/ Ops. disruption L M H
risks impacting operations and increased costs Market Cost
Opportunities Category

Transition • Establish market leadership in providing Reputation Revenue L M H

sustainable workspaces
* Impact Rating
Rating: Financial impact:
(Project Management Institute – risk analysis & management for financial impact)
Based on estimated % impact on cost or revenue, against 2021 revenue and cost. L Low 0-5%
M Medium 5-10%
H High >15%

Strategy Our scenario analysis has Scenario analysis

allowed us to be more targeted findings
Climate-risk analysis in our understanding of the
IWG has an acute understanding current resilience to climate Based on our climate scenario
that climate-related risks and change and focus on developing analysis, we have determined
opportunities have the potential appropriate mitigation strategies that our strategic plans and
to impact our work and at the Group, regional and local capabilities position us
stakeholders. In response, we levels. The table above effectively to address risks and
have taken the necessary steps summarises the findings of opportunities associated with
to identify and assess the our scenario assessment – climate change. As the world
potential materiality of these, in identifying the potential impact continues to evolve, certain
accordance with TCFD of both physical and transition areas of our business will face
recommendations. risks and opportunities. greater challenges than others,
but our modelling indicates that
This year, we commissioned a we have a robust strategy that
third-party independent aligns with our purpose of
assessment to identify the helping everyone have a great
climate-related risks and day at work, whilst protecting
opportunities that are most people and planet.
relevant to our business model.
We identified five climate-
related risks and one climate-
related opportunity that could
have the potential to materially
impact our business under three
plausible climate scenarios
(1.5°C, 2°C and 2.5°C).

IWG plc Annual Report and Accounts 2022 67

Governance and task force on climate-related financial disclosures continued

In particular, our analysis indicates Transition risks, including existing We fully recognise that scenario
that IWG centres are at low risk of and emerging policy, markets and analysis is a dynamic process and
significant impact from the physical technology, have been classified as iterative exercise and our findings
risks of extreme weather and ‘low’ risk. This is due to IWG are not a definitive prediction of the
temperature rises. Furthermore, the transitioning away from carbon future but rather to help us envision
direct financial impact to IWG is intensive operations and continuing potential future outcomes.
limited due to our low freehold model, to drive a localised supply chain
partnership growth strategy and our model. Whilst the potential to impact
Centre Sustainability Framework remains, these risks are expected to
which enables the early identification be minimised through delivery of our
of climate risks in our investment Net Zero strategy and continued
process. collaboration with relevant partners.

Financial impacts of operating costs Our analysis also presents significant

and insurance due to physical climate opportunities for IWG due to the
risks, are able to be mitigated through increasing requirement to reduce
stringent cost management and rate employee commuting and ensure
inflation. To minimise disruptions workspace buildings are sustainable.
caused by physical climate risks, IWG Given IWG’s leading position and
will maintain robust tenancy existing investment in sustainable
contracts and business continuity workspaces, the Company is
plans, including displacement well-positioned to align with
procedures. emerging regulations, drive relevance
and growth in both existing and new
markets – particularly in urban and
rural areas.

68 IWG plc Annual Report and Accounts 2022

 Strategic report
Risk management Our methodology uses available data The path forward
from Scope 1 and 2 activities to develop
IWG operates an enterprise-wide risk energy consumption averages per built As a global organisation, managing
management process in order to square meter (SQM). These averages are climate-related risks and opportunities
identify and report key business and extrapolated across IWG’s operational remains a top business priority. IWG will
strategic risks. We have renewed our boundary to estimate our carbon continue to progress the journey to Net
overall approach to climate risk footprint. For the year 2022, we have Zero for our customers and employees.
management and fully integrated calculated our Scope 1 emissions to be
climate risk considerations into our 87k tCO2e, while our Scope 2 emissions We have used guidance from the
Group-wide risk management amounted to 138k tCO2e. Transition Pathway Initiative’s four-level
framework. As a result, climate change staircase to assess our progress and are
was formally considered a standalone Our carbon footprint pleased to have reached level 2
principal risk to the business in 2022. tCO2e 2022 2021 awareness. We recognise that our
This risk is managed through the three Total carbon commitment to driving positive change
lines of defence, to ensure robust emissions will require progressive changes and we
oversight – see page 45 for further (Scope 1 & 2)1 225k 240k expect to continue driving towards a
information. low-carbon future for our people and the
We intend to take further steps during communities we serve.
Furthermore, our sustainability 2023 to improve data quality and
objectives are reflected in our risk consistency used in our total carbon
management frameworks to ensure our emissions calculations. Furthermore,
risk appetite is aligned with wider IWG’s 2030 target is to source 100%
business objectives and external green electricity, introduce innovative
commitments. services and solutions for a more
sustainable future and help our
As part of our wider strategic process, we customers achieve their own climate
continue to carry out risk assessments commitments. These achievements will
throughout the year. Annual disclosures accelerate our push towards Net Zero
to frameworks, including CDP, allows risk operations.
management processes to be captured,
and mitigation measures assessed. For more information, please
For more information on IWG’s risk see page pages 56-59.
management, please see pages 44 to 53.

Metrics and targets

IWG has successfully established the
metrics and targets for the effective
management of our impact on the
environment. This includes monitoring
and reporting our global Scope 1 and 2
emissions – in alignment with guidance
provided by the Greenhouse
Gas Protocol. Our Scope 1 and 2
greenhouse gas emissions information
has received limited assurance for 2021
and 2022 through independent third
parties.

1. GHG Conversion Factors for Company Reporting 2022

(Scope 1) and the International Energy Agency (Scope 2)

IWG plc Annual Report and Accounts 2022 69

Governance and task force on climate-related financial disclosures continued

ESG - Governance “IWG will continue to look for ways

Robust governance helps us
base the decisions we make on to lead the journey to Net Zero for
what is right for: our people and
shareholders; the communities our customers and employees.”
where we work; our customers
and their employees; our
partners; and society at large. Douglas Sutherland
Full details of our Corporate Chairman
Governance Framework can
be found on pages 72 to 121.

Board sustainability The Board delegates All sensitive information is

responsibility for risk encrypted and all systems are
oversight management, including the compliant with data protection
The Chairman of the Board has impact of climate change on and privacy regulation of all the
responsiblity for the oversight financial statements to the Audit markets in which we operate.
of IWG’s ESG agenda. He leads Committee. Further details are Security awareness training is
the Board in setting the available on pages 92 and 93. mandatory for all employees and
Company’s sustainability and contractors and covers
climate change strategy and Climate change risk is recognised Information Security, PCI and
monitoring implementation as a standalone principal risk to GDPR. Our commitment to
against agreed milestones. the business. It also presents a safeguarding personal
unique opportunity for the Group information is set out in our
The Board receives updates at all in providing sustainable office Terms and Conditions and
scheduled Board meetings from solutions for clients who may not Privacy Policy.
the Executive Directors. During be able to meet climate change
2022 three ESG sessions were targets alone. We detail key risks Visit www.iwgplc.com to
held during Board meetings, and actions to mitigate these in learn more.
these sessions focused on our Risk report on pages 44 to 52
refreshing our climate strategy and in our TCFD disclosures on Compliance with
and detailed reviews of the pages 67 to 69. local legislation
progress made towards achieving
the milestones in the plan to Data security and risk We make every effort to take
achieve Net Zero carbon all reasonable and practical
Information security is a top steps to ensure we comply with
emissions by 2040. priority for IWG and remains a local legislation and regulations
standing agenda item with the in all the countries where we
The Nomination Committee Board. We continue to make
ensures that the Board has the operate. Compliance reporting
significant investments in this is part of our internal control and
skill set needed to implement area to ensure that the IWG
and oversee its sustainability risk management process, and
Information Security the Audit Committee receives
strategy and on 1 December Management System (ISMS)
2022, Sophie L’Hélias, who has regular updates. We also provide
meets the Group’s objectives. compliance training including for
significant corporate governance A summary of the policies,
and relevant ESG experience, local legislation to all employees
procedures, structures and and encourage them to make
was appointed as a Non- technologies used to implement
Executive Director. use of our whistleblowing
effective controls can be found channel without fear of
on page 51. repercussions. See pages
The Board also receives regular
updates on employee 77 to 78 and page 93 for
IWG’s data privacy policy is further details.
engagement and corporate to process only the minimum
social responsibility initiatives necessary amounts of personal
through Nina Henderson, the data, to the extent necessary
Non-Executive Director who has to provide a service to our
oversight of these areas on customers, and ensure the
behalf of the Board. appropriate safeguards and
controls are in place to protect
Risk governance this data.
The Board defines IWG’s risk
appetite and tolerance and
annually reviews the principal
risks the Group faces and the
plans for mitigating them.

70 IWG plc Annual Report and Accounts 2022

 Strategic report
Ethics and compliance Bribery and corruption Modern slavery
The Board is committed to We give all employees training IWG has zero tolerance of
instilling an ethical and on our Bribery and Corruption slavery and human trafficking.
conscientious culture, ensuring Policy, and you can see our You can read our statement
that IWG does what is right for Statement of Commitment at made in accordance with the
people and planet and that our www.iwgplc.com. Modern Slavery Act 2015, which
people act fairly and can be found on the Company’s
professionally in all business For more information on our website: www.iwgplc.com.
activities. ‘Right to Speak’ policy and our We give all employees training
robust whistleblowing procedure through the IWG Learning
For more information on our where issues can be raised Academy.
suite of compliance training anonymously to an independent
courses see pages 61 and 62 third party see pages 77, 78,
and for information on our and 93.
independent whistleblowing
channel see pages 77, 78 and 93.

Diversity
See pages 60 and 61 for
information on IWG’s diversity
initiatives. Details of the Board
Diversity Policy can be found in
our Nomination Committee
report on page 85.

IWG plc Annual Report and Accounts 2022 71

Board of Directors

Leading the way

Douglas Sutherland Mark Dixon Laurie Harris Nina Henderson

Chairman Chief Executive Officer Independent Non- Independent Non-
Executive Director Executive Director with
oversight of employee
engagement and CSR

N A R N A R N

Appointment* Founder Appointment Appointment

27 August 2008 1989 14 May 2019 20 May 2014
Nationality Nationality Nationality Nationality
American and Luxembourgish British American American
Experience Experience Experience Experience
Douglas was Chief Financial Chief Executive Officer and Laurie was a global engagement During her 30-year career with
Officer of Skype during its founder, Mark is one of Europe’s audit partner with Bestfoods and its predecessor
acquisition by eBay. Prior to this, best-known entrepreneurs. PricewaterhouseCoopers LLP, company CPC International,
Douglas was an Arthur Andersen Since founding the Regus Group where she advised large public Nina held a number of
Partner with international in Brussels, Belgium in 1989, companies, including Fortune international and North American
management responsibilities. he has achieved a formidable 100 financial services general management and
He has served as a director reputation for leadership and companies, in the United States executive marketing positions,
of companies in multiple innovation. Prior to Regus and and internationally over her including Corporate Vice
jurisdictions and was the IWG he established businesses 38-year career. Laurie is Chair President of Bestfoods and
founding Chairman of the in the retail and wholesale food of the Audit Committee as the President of Bestfoods Grocery.
American Chamber of industries. A recipient of several Board considers her to have She has also served as a director
Commerce in Luxembourg. awards for enterprise, Mark has recent and relevant financial of numerous companies including
External appointments revolutionised the way business experience. AXA Financial Inc., Royal Dutch
approaches its property needs External appointments Shell plc, Del Monte Food
Douglas is currently also the
with his vision of the future Company and Pactiv Corporation.
Chairman of Socrates Health Laurie currently serves as an
of work. External appointments
Solutions Inc., a Director Independent Director and Audit
of Medtop Group S.A., and Committee Chair of QBE North Nina is a Non-Executive Director
a member of the board America, an integrated specialist of Hikma Pharmaceuticals plc
of managers of AI Monet insurer which is part of QBE and Chair of their Remuneration
Parento S.àr.l. (ASX: QBE); Synchronoss Committee. She is also Director
Technologies, Inc. (NASAQ: of CNO Financial Inc. (Bankers
* Independent on appointment SNCR), a global leader and Life, Washington, National and
as Chairman on 18 May 2010. innovator in cloud, messaging Colonial Penn insurance
and digital e-platforms and companies) and Chair of their
products; Hagerty Inc (NYSE: Human Resource Compensation
HGTY), an automotive lifestyle Committee. Nina is also Vice
company and the world’s largest Chair of Drexel University’s Board
provider of specialty insurance of Trustees, Commissioner
for enthusiast vehicles; and of the Smithsonian National
Everlake Insurance Company, Portrait Gallery and a Director
a US-based insurance company of the Foreign Policy Association
specialising in life assurance and and VNS Health. Nina holds a
annuities which is owned by an Bachelor of Science with honours
affiliate of an investment fund from Drexel University.
managed by the Blackstone
Group (NYSE: BX).
72 IWG plc Annual Report and Accounts 2022
 Committee A Audit

membership R Remuneration

key

Governance
N Nomination

Chair

Tarun Lal Sophie L’Hélias François Pauly Charlie Steel

Independent Independent Senior Independent Chief Financial Officer
Non-Executive Director Non-Executive Director Non-Executive Director

A N A R A R N

Appointment Appointment Appointment Appointment

10 May 2022 1 December 2022 19 May 2015 1 November 2022
Nationality Nationality Nationality Nationality
American French Luxembourgish British and Irish
Experience Experience Experience Experience
Tarun, born in Bhagalpur and Sophie is President of François is CEO of the Edmond Before joining IWG, Charlie was
raised in Delhi, India, brings LeaderXXchange™ which de Rothschild Group in Geneva CFO of Babylon Holdings (NYSE:
extensive franchising expertise advises investors and and has over 30 years of BBLN). As CFO at Babylon,
to the Board from over 25 years companies on diversity, management experience in the Charlie had oversight of Finance,
with Yum! Brands, Inc., where he sustainability and ESG. She banking sector. Until April 2016 Legal, Property, Procurement,
currently serves as President of initially practised as a M&A François served as Chief Risk and Compliance, and was
KFC U.S. and has previously held lawyer and later specialised in Executive and Chairman of the heavily involved in the
executive roles, including KFC’s finance as Managing Director of Management Board of Banque formulation and execution of
Global Chief Operating Officer a New York-based investment Internationale à Luxembourg. strategy. Prior to Babylon,
and Managing Director – KFC fund. She also launched an Previous management Charlie was Global Head of
Middle East, Pakistan, Turkey, investor consulting business experience includes executive Corporate Development at CMC
Africa, and India. focused on corporate appointments at BIP Investment Markets Plc (LSE: CMCX) and
External appointments governance investment Partners S.A., Dexia Group and was also a Vice President in the
strategies and is a co-founder at Sal. Oppenheim Jr. & Cie. Investment Banking Division at
Tarun Is the President
of the International Corporate S.C.A. He was also Senior Deutsche Bank AG. Charlie holds
of KFC U.S.
Governance Network. She has Advisory Partner at Castik a degree in Economics and
served as Chair of Suez SA Capital Partners. Management from the University
and Lead Independent Director External appointments of Oxford.
of Kering. External appointments
In addition to being CEO of the
External appointments Edmond de Rothschild Group in Charlie is also a Non-Executive
Sophie serves as Non-Executive Geneva, François serves as Member on the Transformation
Director on the Boards of: Non-Executive Chairman of Advisory Committee at the
Herbalife (NYSE); Africa50; Compagnie Financière La Department of Work and
Agence France-Locale; Luxembourgeoise SA and as Pensions in the UK Government.
Echiquier Positive Impact Non-Executive Director of
Europe funds; and the ECGI Cobepa SA. François also
(European Corporate serves on the Boards of several
Governance Institute). She is charitable organisations.
a member of the HCGE (Haut
Comité de Gouvernement
d’Entreprise) and is a Senior
Fellow at The Conference Board
ESG Center in New York.

IWG plc Annual Report and Accounts 2022 73

Corporate governance

Managing our
business
responsibly
Attendance Dear Shareholder,
(out of
possible I am pleased to introduce the
maximum
number of Corporate Governance report
Members meetings) for 2022. This report explains
Douglas Sutherland, our approach to corporate
Chairman 11/11 governance and details the
governance structure we have
Mark Dixon 11/11
Sustainability and
implemented to facilitate
Laurie Harris 11/11 an effective Board and

social Nina Henderson 11/11

entrepreneurial management
whilst ensuring the long-term

responsibility
Glyn Hughes 1
10/10 sustainable success of the
Tarun Lal2 5/5 Company for the benefit

underpin our
of our stakeholders.
Sophie L'Hélias3 1/1
Sustainability and
strategy; they are
François Pauly 10/11
Florence Pierre4 10/10 social responsibility
key considerations Charlie Steel5 1/1 Delivering a sustainable business
for the benefit of our customers,
in all Board 1.
2.
resigned 31 October 2022
appointed 10 May 2022
employees, partners, investors
and society is a critical element
decision-making.”
3. appointed 1 December 2022
4. resigned 30 November 2022 of IWG’s purpose and drives our
5. appointed 1 November 2022 culture and values. Sustainability
and social responsibility
underpin our strategy; they are
Douglas Sutherland key considerations in all Board
Length of tenure of decision-making.
Chairman
Non-Executive Directors
As Chairman of the Board
I have overall responsibility
for the oversight of corporate
sustainability; this year the
Board has been actively engaged
in refreshing our climate policy
to meet the expectations of our
stakeholders and ensure we
work to benefit society. Further
details of our climate policy and
how we measure success are
detailed on pages 66 to 69.

We are on track to achieve

our target of carbon neutrality
■ 0-3 years 33.3%
during 2023. We are working to
■ 3-5 years 16.7%
continuously reduce emissions,
■ 6–9 years 33.3%
targeting Net Zero carbon
■ 9+ years 16.7%
emissions no later than 2040.
Further information on our
carbon reduction journey and
74 IWG plc Annual Report and Accounts 2022
 The Remuneration Committee Diversity Policy can be found

Governance
made the successful in our Nomination Committee
establishment of Worka part Report on pages 84 to 89.
of the strategic objectives in
relation to the 2022 annual UK Corporate
bonus plan for Executive Governance Code
Directors, further information on
our assessment of the objective During 2022 we have complied
can be found on page 110. with the UK Corporate
Governance Code published by
Board changes the Financial Reporting Council
in July 2018 (the “Code”), except
During 2022 we continued for provision 10. My time as
our work of creating a stronger Chairman has exceeded nine
and more diverse Board. We years from the date of my first
increased our Board membership appointment to the Board. This
to eight and welcomed three is regularly reviewed by the
new Board members. Nomination Committee which,
as further explained on page 87,
the milestones we have set As reported in last year’s annual has concluded that in
ourselves for achieving Net Zero report, in March 2022 we were consideration of the Group’s
carbon emissions can be found pleased to announce the near-term strategic objectives,
on pages 56 to 59. appointment of Tarun Lal. it remains in the best interests of
Tarun joined the Board as our stakeholders that I currently
Targets related to achieving Non-Executive Director on continue in the Chairman role,
our environment and climate 10 May 2022 and we are subject to regular review by the
change objectives continue to benefiting from his extensive Nomination Committee.
be incorporated as targets in our franchising industry expertise
annual bonus plan for Executive gained from over 25 years with A copy of the Code is available
Directors. Further information Yum! Brands, Inc. on www.frc.org.uk.
can be found in our Directors’
Remuneration report on In September 2022 we were Annual Report
pages 96 to 117. pleased to announce the
appointment of Charlie Steel Your Board and the Audit
Establishment of as Chief Financial Officer in Committee have reviewed this
Worka place of Glyn Hughes. Charlie Annual Report and consider that
joined the Board on 1 November it provides the information
During 2022 the Board approved 2022 and brings with him necessary for you to assess
and oversaw the merger a proven track record of the Company’s position and
of certain digital assets with formulating and delivering performance, business model
The Instant Group to create strategy, most recently in his and strategy.
Worka, the world’s leading fully role as CFO at Babylon Holdings.
integrated independent We consider the Annual Report,
workspace platform. Enlarging On 1 December 2022 we taken as a whole, to be fair,
the hybrid work marketplace, welcomed Sophie L’Hélias, balanced and understandable
through the creation of Worka, who has extensive corporate and seek your approval of the
will enable more corporates to governance experience and Annual Report at the Company’s
transition to hybrid working, relevant ESG knowledge, annual general meeting which
creating clear benefits for the to the Board as Independent will be held on 9 May 2023.
planet and the work-life balance Non-Executive Director.
of the global workforce. The Douglas Sutherland
Board is committed to the Sophie was appointed in place
independent management and Chairman
of Florence Pierre who stepped
continued growth of Worka. down after nine years of
Further Information on the committed service to IWG as
Board’s decision making can be Non-Executive Director. During
found on page 78. her tenure IWG continued to In this section
strengthen its position as the
During 2022 the Board carefully global leader in the rapidly
monitored the establishment of developing flexible workspace Corporate governance 74
Worka, receiving regular updates market and we were fortunate
from Worka's independent Nomination Committee report 84
to benefit from her expertise.
management team. The Audit Audit Committee report 90
Committee oversaw the In recommending new Board
successful coordination appointees the Nomination Directors’ Remuneration report 96
of Worka with our reporting Committee took into account Directors’ report 118
and annual Audit as further all elements of diversity. Further
detailed in the Audit Committee information on the Board changes Directors’ statement 121
report on pages 90 to 95. and the application of our Board

IWG plc Annual Report and Accounts 2022 75

 Corporate governance continued

Board effectiveness When time-sensitive approvals • changes to the Group’s

were anticipated between management and control
Our governance framework aims meetings the Board delegated its structure;
to ensure the Board is effective authority to a committee to be • capital expenditure in excess
and able to provide leadership convened as appropriate. of £5m; and
and oversight of the Company • material contracts (with an
within a framework of effective The Chairman and the Company annual value in excess of £5m).
controls that enables risk to be Secretary ensure that our Board
assessed and managed and where meetings are structured to ensure Full details of the matters reserved
assumptions and ideas can time for in-depth discussions for the Board are available on:
be challenged and debated. on key issues and to allow time www.iwgplc.com.
Our framework enables the Board for the Chairman to meet with
to function as an effective team in Non-Executive Directors without Development and
order to develop and promote its
collective vision of the Company’s
the Executive Directors present.
They ensure that the Board
support
purpose, its culture, and the receives clear, concise and timely To ensure continuing development
behaviours that the Board wishes information on all relevant matters and provide appropriate support,
to promote in conducting business. so that discussions are well- all Directors have:
informed.
Board composition • a customised and comprehensive
Our Board is made up of eight Board papers are made available induction programme prepared
unique individuals with a diverse in advance of meetings on a secure by the Chairman with the support
combination of skills, drive, beliefs, board portal. This portal is also used of the Company Secretary,
knowledge, personal attributes and to distribute relevant reference ensuring they can quickly and
experiences. Individual biographies material, including the monthly effectively contribute to
can be found on pages 72 and 73. Board Report and Business Review. discussion and decision-making;
Minutes are taken of all Board • the opportunity to meet with
The benefits of having a strong and discussions and decisions. major shareholders;
diverse Board are clear and in its • access to the Company’s
regular review of Board In the event that a Director has operations and employees;
composition the Nomination a concern about the running of the • access to training which is
Committee considers how new Company or a proposed action, provided and reviewed on an
appointments can strengthen our such concerns are recorded in the ongoing basis to meet particular
decision-making by increasing Board minutes or can be recorded needs;
Board diversity and ensuring we by Non-Executive Directors who
• access to the advice and
have the expertise needed to are resigning, in a written
services of the Company
meet our strategic ambitions. statement which is circulated
Secretary; and
to the Board. No such concerns
were raised in 2022. • access to independent
Further information on the work professional advice at the
of the Nomination Committee,
including our Board Diversity Policy, Matters reserved for Company’s expense.
succession planning and annual the Board
performance review, can be found Matters that are considered
in our Nomination Committee report sufficiently material that they can
on pages 84 to 89. only be decided by the Board as a Induction
whole and cannot be delegated
Board meetings include: The Chairman, supported
by the Company Secretary,
The Chairman and the Company
• approval of long-term objectives is responsible for preparing
Secretary plan an annual schedule
and commercial strategy; and coordinating a customised
of matters to be considered by the
and comprehensive induction
Board, ensuring all key issues are • approval of the annual plan;
programme for each newly
covered and that topics are • approval of regulatory appointed Director, ensuring
covered at appropriate times. announcements including the they can contribute effectively
interim and annual financial to discussion and decision-
Initially seven meetings were statements; making. Details of the induction
scheduled for 2022 with additional • approval of terms of reference programme developed for
meetings to be arranged as and membership of the Board Tarun Lal are included here.
needed to ensure the Board was and its Committees; Induction programmes for
kept abreast of our strategic • appointment and removal of the Charlie Steel and Sophie
projects and to respond Company Secretary; L’Hélias are in progress and
to business challenges and
• approval of risk management will be reported on in our
opportunities in a timely manner.
strategy; 2023 Annual Report.
In total the Board met 11 times • changes to the Group’s
during 2022, including a two-day capital structure;
strategy session in September.

76 IWG plc Annual Report and Accounts 2022

Conflicts of interest creation framework on pages eight that our people act ethically

Governance
and nine. Our purpose underpins and without bias or discrimination
Directors are required to notify the everything we do and is closely in all our business activities.
Company as soon as they become aligned with our three-year plan
aware of a conflict of interest and strategy which is reviewed As a Board we are very aware of our
or a potential conflict of interest. annually by the Board. impact on the climate and the
At the start of each Board meeting importance of our climate policy.
the Chairman requires each Director The two-day Board meeting held We continue to identify climate
to confirm that they do not have in September allowed the Board change as a standalone principal
a conflict of interest with any of the to undertake its annual deep-dive risk and have carefully monitored
matters to be discussed; if a conflict strategic assessment. This progress made towards our goal of
does arise the Director is excluded included a review of performance, achieving carbon neutrality during
from that discussion. purpose and culture, personnel 2023 as well as steps being taken
and ESG as well as presentations across the Group to reduce our
Time commitment from key areas of the business. emissions. This year we refreshed
Directors are required to have our climate strategy and have set
sufficient time to meet their Board The Board is also responsible for a target of achieving Net Zero
responsibilities; this is considered approving the Group’s operating carbon emissions by 2040.
when making new appointments. model and annual plan, ensuring Further information on this can
Following their appointment that the right structure, talent be found in our Environment report
Directors are required to seek and resources are available on pages 56 to 59.
Board approval before taking on to implement its strategy
additional external appointments. and long-term objectives. As a Board we aim to balance the
benefits of meeting in person with
Insurance and Full details of our approved strategy our environmental goals and
can be found in our Strategic Report accordingly we use commercial
indemnity on pages 1 to 71. flights, avoid unnecessary air travel
Appropriate insurance cover is and choose environment-friendly
obtained to protect the Directors in Culture, values and options for travel where possible.
the event of a claim being brought ethics
against them. In accordance with To support our culture, values and
our articles and to the extent Our people are at the heart ethics we provide access to the
permitted by law, an indemnity of our culture which is based IWG Learning Academy to all
is provided to Directors of the on our pioneering spirit, mutual employees. The platform includes
Company in respect of liability empowerment, shared leadership training on our Code of Conduct,
incurred as a result of their office. and unified global network that compliance policies and approach
is united by trust in one another. to diversity and inclusion.
Purpose and strategy
Your Board is committed to doing Our “Right to Speak” policy
The Board is responsible for what is right, ensuring that we do encourages employees to speak
reviewing and approving the what is right for the environment out without fear of repercussions
Group’s purpose and strategy as and for our people and ensuring or retaliation. We have implemented
further detailed in our value
a robust and confidential
whistleblowing procedure where
issues can be raised anonymously;
Tarun Lal was appointed as Non-Executive Director on 10 May 2022.
this is operated by an independent
The following activities were included in his induction programme:
third party ensuring protection for
whistleblowers against retaliation.
Activity Summary
During 2022 we received 41 reports
Documentation Relevant documents were made available including recent through our whistleblowing channel;
Board and Committee minutes, meeting papers and Board 14 of these were classified as
reports, recent Board reviews, policies and procedures, the requiring further investigation and
Company’s articles of association, Directors’ duties, matters were reported to the Audit
reserved for the Board, Committee terms of reference, Annual Committee; of these 14 reports,
Report and Accounts, investor presentations, and broker and 11 have been resolved to date and
analyst reports. the remaining reports, are under
Meetings Virtual and in-person meetings were held with the Chairman, investigation.
Chief Executive Officer, all Non-Executive Directors, the
Company Secretary and certain members of the Senior We maintain a zero-tolerance
Leadership Team. Care was taken to address a broad range policy both to bribery and
of relevant topics including: strategy; performance monitoring; corruption and to slavery and
culture; ESG, stakeholder engagement; remuneration; talent; human trafficking. Training is
succession planning; governance and legal. provided to all employees and our
statements on these are reviewed
Visits Tarun spent time with geographic leadership while visiting our annually and made available
offices in Dubai and our operations in Dallas, USA. on www.iwgplc.com.

IWG plc Annual Report and Accounts 2022 77

Corporate governance continued

During 2022 four instances of these accounts as detailed on of the principal risks it is willing
bribery and corruption were page 135, and reviewing the stress to take to achieve its strategy
investigated and reported to the testing and analysis which and long-term objectives, and
Audit Committee along with the underpins the Viability statement also those risks and emerging
steps taken to prevent recurrence. as detailed on page 53. risks that threaten its business
model, future performance,
Performance The Board also reviews the Group’s solvency or liquidity.
monitoring ESG activities and reporting,
receiving updates on: The key risks to the Group,
The Board monitors performance both financial and non-financial,
through a regular report covering • the Group’s carbon footprint and and the steps taken to manage
key performance indicators, progress made in achieving the and mitigate them which were
profitability and cash flow, agreed milestones; reviewed and approved by the
regional updates, costs, treasury • the diversity of our workforce; Board, are detailed on pages
and investor relations. Trading 44 to 52. Information on climate
and finance updates as well as • the culture of the Group and the
wellbeing of employees; change risk can also be found
updates on strategic projects are on pages 67 to 69.
provided at all scheduled Board • the Group’s talent; and
meetings, allowing the Board • the initiatives we support in the The Board has delegated authority
to monitor and measure local communities in which we for overseeing and reviewing its
performance and to make operate. system of internal controls and
decisions on matters reserved risk management to the Audit
for the Board in order to support Further information on ESG can be Committee, which reports
the delivery of its strategy. found on pages 54 to 71. regularly to the Board. Details of
the system and the Committee’s
The Board is responsible for Prudent and effective review of its effectiveness are
approving results, dividends and controls reported on pages 92 and 93.
announcements, including the
going concern basis for preparing The Board is responsible for
assessing the nature and extent

Board decision-making The following are some of the demands for hybrid working and
decisions taken by the Board achieve the long-term success
As a Jersey-incorporated during the year and the of the Company for the benefit
Company we are not required consideration given to the of our customers, employees,
to make a Section 172 Statement stakeholder interests and impacts: partners and investors. Our review
under the UK Companies Act; was informed by the results of
we do however maintain the same Net Zero carbon emissions pulse surveys undertaken with
high standards when complying employees and business leaders
by 2040
with our Director duties in on the future of work and
accordance with Jersey company We are committed to achieving
discussions with our customers,
law. Our Directors are required to Net Zero carbon emissions by
landlords, franchise partners
act in good faith and in the best 2040 and have set milestones
and investors to understand
interests of the Company and in to ensure this is achieved.
their views.
doing this our Directors have
regard, amongst other matters, to: In reaching this decision the Board
A particular focus was on how
took particular account of the
we could enlarge the hybrid work
• the likely consequences of impact of the Company’s
marketplace to enable more
any decision in the long term; operations on the environment,
corporates to transition to hybrid
• the interests of the Company’s the Company’s desire to position
working, creating clear benefits for
employees; itself as a leader in sustainability
the planet and the work-life
and social responsibility and
• the need to foster the balance of the global workforce.
the views of our stakeholders,
Company’s business
including our employees, Our review concluded that our
relationships with suppliers,
customers, franchise partners, stakeholders would benefit from
customers and others;
landlords and shareholders. a structural separation of some
• the impact of the Company’s
of the Group’s operating assets
operations on the community Further information can be found
and capabilities. As a result, in
and the environment; in our Environment report on
2022, the Board approved and
• the desirability of the Company pages 56 to 59.
oversaw the separation of certain
maintaining a reputation for high digital assets, which were then
standards of business conduct; Establishment of Worka
merged with The Instant Group to
and The Board made a detailed review create Worka, the world’s leading
• the need to act fairly as of its organisational structure in fully integrated independent
between members of the 2021. In our review we considered workspace platform.
Company. the best structure to position the
Company to meet the future

78 IWG plc Annual Report and Accounts 2022

Key activities of Corporate reporting Governance

Governance
the Board in 2022 and performance • Reviewed and approved the
Strategy monitoring Notice of annual general
• Received regular performance meeting
• Approved the purpose • Received updates from the
and values updates at scheduled
meetings and through Board Nomination Committee
• Approved strategy Chairman on succession
reports
and objectives planning, searches for Board
• Reviewed and agreed a new
• Refreshed our climate strategy members and diversity
Board Reporting process.
• Set milestones to achieve • Appointment and induction
• Received updates from the
Net Zero carbon emissions of Tarun Lal as Non-Executive
Remuneration Committee
by 2040 Director
Chair on key areas discussed
• Approved the three-year plan • Appointment of Charlie Steel
• Approved the Company’s
• Approved the operating model year-end and interim results as Chief Financial Officer
and annual plan • Appointment of Sophie
• Approved Q1 and Q3 trading
• Regular review of forecast, statements and trading L’Hélias as Non-Executive
strategy and objectives updates Director
• Approved the separation of • Reviewed the Group’s talent • Monitored employee
IWG’s digital assets and their strategy and culture engagement and ESG
subsequent merger with The • Reviewed the performance
Instant Group to create Worka Stakeholder of the Board, its Committees
• Monitored and reviewed the engagement and all Directors
Group’s response to COVID-19 • Approved the Board Diversity
• Monitored and reviewed the • Received policy statements Policy and reviewed our
Group’s response to the war in provided by significant performance against prior year
Ukraine and sanctions on shareholders • Reviewed and approved
Russia and Belarus • Received reports from the statements on anti-slavery
• Approved strategic projects Chairman, CEO and CFO on and human trafficking, and
and monitored implementation feedback from shareholder anti-bribery and corruption
meetings and correspondence
Financing • Engaged with shareholders
to further understand the
• Regular review of the Group’s significant minority vote
financial structure and against our 2021 Annual Report
approval of amendments on Remuneration
• Approval and monitoring • Consulted with shareholders
of share buybacks regarding the Remuneration
• Determined that no final Policy update
dividend should be declared • Attended investor
in respect of the financial year presentations and virtual
ended 31 December 2021 and meetings
that no interim dividend
should be declared in respect • Reviewed monthly updates on
of the financial year ended investor relations
31 December 2022 • Reviewed updates on our
global franchise partners
Prudent and effective • Reviewed updates on
controls employee engagement
initiatives including our 2022
• Assessed the Company’s global engagement survey
viability over a three-year • Reviewed updates on ESG
period taking into activities and reporting and
consideration the risks and community initiatives
scenarios that could affect
the Group
• Reviewed the Group’s key risks
and mitigating actions
• Received updates from the
Audit Committee Chair on key
areas discussed
• Renewed the Group’s
insurance programme

IWG plc Annual Report and Accounts 2022 79

Corporate governance continued

The Chairman, Chief Executive

The Chairman, Chief Executive Officer and Chief Financial

Officer maintain a close dialogue

Officer and Chief Financial Officer with institutional investors on

the Company’s performance,

maintain a close dialogue with sustainability initiatives,

governance, plans and

institutional investors on the objectives. They regularly

participate in investor meetings

Company’s performance, and make themselves available

for questions, at the time of

sustainability initiatives, major announcements and on

request. The Chairman and the

governance, plans and objectives. Chief Executive regularly update

the Board on the results of these
meetings and the opinions of
investors. All Directors have a
Stakeholder conference held in January 2022 standing invitation to participate
and our Regional Leadership in investor meetings.
engagement conferences which were held
Building and maintaining in person at the end of 2022 Committee Chairs engage with
strong relationships with our and in January 2023. shareholders when there are
stakeholders is key to the significant changes within their
long-term success of our The Board also seeks to align areas of responsibility.
business. During 2022 we our strategy to the needs
worked closely with our partners of our primary stakeholders. General meetings
and our decision-making has For example, by providing
The annual general meeting each
been informed by their views hybrid working solutions to our
year is held in May, save in
and experiences. customers we are enabling their
exceptional circumstances,
people to work away from city
in Switzerland and is attended
Your Board seeks to take the centres, closer to their homes,
by all members of the Board.
views of its key stakeholders: families and friends, potentially
In addition to the formal
our shareholders, customers, improving the work-life balance
business of the meeting, there
franchise partners, landlord for millions and enhancing
is normally a trading update
partners, employees and employee engagement, loyalty
and shareholders have the
communities, into account and job satisfaction.
opportunity to ask questions
in its discussions and decision- and to meet the Directors
making. The Board receives Further information on how
afterwards.
regular updates from the Chief we have placed our stakeholders
Executive Officer on the views of at the centre of our strategy
All Directors attended our
key stakeholders on the Group’s can be found throughout our
2022 annual general meeting
strategic agenda as well as Strategic Report and details
in person and were also available
receiving insights from other of how we create value for our
to respond to shareholder
members of the Board and primary stakeholders can be
queries outside of the meeting.
through the Company’s found on pages 20 and 21.
All resolutions were voted on
stakeholder engagement separately by means of a poll
initiatives. Your Board is proud of the work
and the final results were
undertaken by our employees
published after the meeting.
Key stakeholder engagement throughout the world to engage
initiatives undertaken by the with our communities and
All resolutions were passed with
Company in 2022 included; reduce our environmental
at least 91.8% of votes in favour
pulse surveys with business impact; further details
except for resolution 2, the
leaders and employees about of this work can be found
advisory vote in relation to our
the workplace and preferred on pages 64 and 65.
2021 Annual Report on
ways of working; our Global Remuneration which was passed
Engagement Survey which Shareholder by 72.6%. The Board recognised
sought feedback from all engagement the significant minority vote
employees; the employee against the Annual Report on
Investor meetings
engagement programme Remuneration and we announced
overseen from the Board The Board is kept informed the steps that would be taken to
by Nina Henderson; our global of investor views through the understand the reasons behind
Voice Councils; and initiatives distribution of analyst and the vote following the annual
to engage with the Group’s broker briefings and monthly general meeting. In September
strategic franchise partners, investor relations updates. 2022 we provided an update on
many of whom attended the In 2022 investor relations the steps taken which included
Company’s virtual Leadership held over 500 meetings engagement with the dissenting
with investors and analysts. shareholders.

80 IWG plc Annual Report and Accounts 2022

Further information on this her with their reactions

Governance
can be found in our Directors’ and views on our strategic
Remuneration report endeavours, sustainability
on pages 98 and 117. initiatives, reward plans and the
resources available to them to
The 2023 annual general meeting deliver job performance.
will be held on Tuesday 9 May
2023. Notice of the meeting will Nina ensures that the Board are
be in a separate document sent aware of the views of employees
out at least 20 working days and the feedback she receives
before the meeting. As always, through her role. This year she
the Directors will be available on was delighted to report the
request to respond to any results of our 2022 Global
shareholder queries outside of Engagement survey to the Board,
the meeting and will publish plans which showed that 77% of IWG
to understand any significant employees recommend IWG as
votes against any resolutions. an employer to friends and
family; this was also endorsed by
Company website our UK Leading Employer Award.
Our website www.iwgplc.com
On behalf of the Board, Nina

77%
has a dedicated Investor
supports IWG’s ongoing efforts
Relations section which includes
focused on enhancing diversity,
our Annual Reports, results
equity and inclusion. In the USA,
presentations and our
she is a sponsor of the African
financial calendar.
American Affinity Network
Senior Independent Director Group’s advisory board and
participates in their membership of IWG employees
Our Senior Independent Director, meetings. She provides the
François Pauly, is available Board with valuable insights
recommend IWG
to address any shareholder from these interactions. as an employer to
concerns that cannot be resolved friends and family.
through normal channels In 2022 the Board continued to
of communication. support and monitor the
success of our global Voice
Employee improved sense of team work
Councils. This is a team
and empowering our employees.
engagement member-led initiative providing
We believe this is an effective
employees with a dedicated
The health, safety and emotional way to learn from our employees
forum where they can express
wellbeing of our people is of and forms a key part of our
their views with the relevant
paramount importance to us. commitment to deliver on our
senior audience in order to
On behalf of the Board, Nina promise to give team members
establish greater understanding
Henderson, our Non-Executive interesting and achievable work.
of the needs in the business.
Director with responsibility for
employee engagement, has We also continue to operate our
Regional webinars are held with
continued to monitor and report confidential ‘Right to Speak’ policy,
elected representatives from all
back to the Board on initiatives encouraging employees to make
countries on a quarterly basis.
in place around the Group to help use of our third party managed
The agenda of each meeting
support our employees. whistleblowing system without
is led by the Voice Council
fear of retaliation. In addition, we
representatives who gather
During 2022 Nina continued her have various programmes in place
questions, feedback and
programme of meeting with our to provide employees with
suggestions from colleagues
global workforce and had the confidential counselling services,
to be discussed. Answers and
privilege to interact with a wide 24/7 and 365 days a year.
suggestions are captured and
variety of employees through; distributed for information to the
our on-line leadership We are extremely proud
broader population and progress of our diverse global workforce
conference with 300 managers on actions is monitored.
in January 2022 and through site and further information on our
visits and on-line meetings with talent strategy can be found
We are pleased that these
smaller groups of employees on pages 60 to 63.
meetings have not only served
throughout the year. Most as a way to continuously
recently she attended one of our improve the business in an
Regional Leadership conferences orchestrated manner, but have
which were held in person for the also increased engagement
first time since the COVID-19 between leadership and the
pandemic. Employees provided centre teams, providing an

IWG plc Annual Report and Accounts 2022 81

Corporate governance continued

Division of responsibilities
There is a clear separation of responsibilities between the running of the Board and the Executive
responsibility for running the business.

Board
Non-Executive Chairman
Douglas Sutherland

See responsibilities on page 83

Executive Directors Non-Executive Directors

Mark Dixon Charlie Steel François Pauly Laurie Harris,

Chief Executive Chief Financial Senior Independent Nina Henderson,
Officer Director Tarun Lal
Sophie L’Hélias
Non-Executive
Directors

Delegation of responsibility
See Executive responsibilities on page 83 See Non-Executive responsibilities on page 83

Accountability
Audit Remuneration Nomination Oversight of
Committee Committee Committee employee
engagement
and CSR

Laurie Harris Nina Henderson François Pauly Nina Henderson

Chair Chair Chair
Terms of reference Terms of reference Terms of reference Terms of reference
page 91 page 107 page 87 page 83

Senior Leadership Team

Accountable for delivery against the
Group’s strategic and operating objectives

Certain matters are reserved for the Board; these are detailed on page 76

82 IWG plc Annual Report and Accounts 2022

Role of Board Mark Dixon Non-Executive

Governance
members Chief Executive Officer Directors
There is a clear division The Chief Executive Officer The independent counsel,
of responsibilities at the head is responsible for formulating character and judgement
of the Company between strategy and for its delivery of the Non-Executive Directors
the running of the Board through the Senior Leadership enhance the development
and the running of the Team once agreed by the Board. of strategy and the overall
Company’s business. He creates a framework of decision-making of the Board.
No one individual Director strategy, values and objectives The Non-Executive Directors
has unfettered powers to ensure the successful delivery scrutinise the performance
of decision-making and of key targets and allocates of management and monitor
all Directors are required decision-making and the reporting of business
to act in the best interests responsibilities accordingly. performance, satisfying
of the Company. themselves as to the integrity
of financial information
The responsibilities of the Charlie Steel and that financial controls
Chairman, the Chief Executive and systems of risk management
Chief Financial Officer
Officer and the Senior are robust and defensible.
Independent Director are The Chief Financial Officer They are also responsible for
available on www.iwgplc.com. is responsible for leading determining appropriate levels
the finance and accounting of Executive remuneration.
functions of the Group. He is also
Douglas Sutherland responsible for business ethics, Timothy Regan
Chairman good governance, assisting
with strategy and compliance. Company Secretary
The Chairman is responsible The Company Secretary is
for leading the Board, setting responsible for advising the
high governance standards François Pauly Board, through the Chairman,
and focusing the Board on all governance matters and
Senior Independent Director
on strategic matters. ensuring that the Board has the
He oversees the Group's The Senior Independent Director policies, processes, information,
business and implementation acts as a sounding board and time and resources it needs
of the Group’s sustainability confidant for the Chairman, as to function efficiently
policies and strategy. an intermediary for other and effectively.
Directors as required, and leads
The Chairman sets the Board’s
the appraisal of the Chairman’s Role of Committees
performance. He is also available
agenda ensuring adequate time to shareholders if they have The Board is supported by
is available for all agenda items, concerns that cannot a number of Committees
particularly strategic issues. be resolved through to which it has delegated
He monitors the effectiveness normal channels. certain powers. The role
of the Board and ensures of these Committees
effective communication is summarised below:
with shareholders and that Nina Henderson
the Board is aware of the Non-Executive Director Audit Committee
views of all major stakeholders. with oversight of employee Responsible for oversight
engagement and CSR of financial reporting, audit,
He facilitates the contribution internal control, compliance
The Non-Executive Director
of the Non-Executive Directors and risk management.
with oversight of employee
and ensures constructive
engagement and CSR is Nomination Committee
relations between the Executive
responsible for overseeing
Directors and Non-Executive
and keeping the Board informed Responsible for Board
Directors. He regularly meets
on engagement with the composition, appointment
with the Non-Executive
workforce and the corporate of Directors and senior
Directors without the Executive
responsibility activities of the management and
Directors being present.
Group, including community succession planning.
and environmental projects.
Remuneration
Committee
Determines the remuneration
of Executive Directors,
the Chairman and senior
management and oversees
remuneration policy for
all employees.

IWG plc Annual Report and Accounts 2022 83

Nomination Committee report

Achieving strength,
diversity and
sustainability
Attendance Dear Shareholder,
(out of
possible I am pleased to present to you
maximum
number of our report on the work of the
Members meetings) Nomination Committee (the
François Pauly 5/5 “Committee”) during 2022.
Laurie Harris 5/5 During 2022 , in recognition of

We define Nina Henderson 5/5 the skill set needed to achieve

Tarun Lal1 3/3
the Company’s strategic plans,

‘Diversity’ as
we increased the size and skill
Florence Pierre2 3/3 set of our Board. In accordance

achieving strength Douglas Sutherland 5/5 with our Board Diversity

Policy objectives for 2022

and sustainability
1. Tarun Lal joined the Committee we have 37.5% female Board
on 10 May 2022
2. Florence Pierre stepped down as
representation and we also made

through actively Committee member on 10 May 2022 our first appointment aimed at
broadening the ethnic diversity

embracing and
All members of the Committee are of our Board.
independent.

being inclusive of
Key activities Included:

all aspects (visible Length of tenure of Non-Executive • identifying and recommending

Directors within the Committee the appointment of Tarun Lal

and invisible) of
as Non-Executive Director;
• identifying and recommending

what makes every the appointment of Charlie

Steel as Chief Financial Officer

individual unique.” and Director;

• identifying and recommending
the appointment of Sophie
L’Hélias as Non-Executive
François Pauly Director;
Chair, Nomination Committee • measuring the effectiveness
of our Board through our
Internal Board Review;
• overseeing changes to the
Senior Leadership Team;
• reviewing our succession plans
■ 0-3 years 20%
for the Board and Senior
■ 3-5 years 20%
Leadership Team; and
■ 6–9 years 40%
■ 9+ years 20%
• measuring progress made
in respect of our diversity
objectives and revising the
objectives for 2023.

84 IWG plc Annual Report and Accounts 2022

 We consider that the Board We are proud of our workforce

Governance
changes made in 2022 have diversity at IWG. We are an equal
strengthened our Board, adding opportunities employer and are
new viewpoints and positions proactively looking to identify,
to our Board discussions and develop and promote key talent
supporting our ongoing efforts from within our organisation
to maintain an independent which will in turn improve our
and challenging Board. diversity at senior levels. Further
information on our work to
Diversity Policy support diversity and inclusivity
and objectives within our workforce can be
found on pages 60 and 61.
In our Board Diversity Policy we
define “Diversity” as achieving Board Review
strength and sustainability
through actively embracing and The performance of your Board,
being inclusive of all aspects its Committees, the Chairman
(visible and invisible) of what and individual Directors is
makes every individual unique conducted annually and every
Board composition including education, personalities, third year our review is facilitated
skill sets, experiences, externally. The last external Board
As at the date of this report, your communication styles, review was conducted in respect
Board comprised eight members knowledge bases, social of 2021 by Condign Board
(seven in 2021), being: the economic backgrounds, age, Consulting and was reported on
Non-Executive Chairman race, gender, religious beliefs, in last year’s Annual Report.
(independent at the time of physical abilities and disabilities,
appointment); two Executive neurocognition, ethnicity, sexual The 2022 Board Evaluation was
Directors; and five independent orientation and political beliefs. conducted internally by our
Non-Executive Directors. Chairman through a series of
The biographies of Board Progress made against the one-to-one discussions with
members can be found Diversity objectives we set Board members. The results
on pages 72 and 73. ourselves for 2022 can be found of the review were discussed
on page 89. Our objectives for by the Board and the Committee.
In last year’s annual report 2023 which will be reported All suggestions for improvement
we reported on our nomination on in 2024 are to: are being incorporated into our
of Tarun Lal as Non-Executive ongoing efforts to continuously
Director. Tarun was elected at • maintain a level of at least improve the processes and
our annual general meeting and 37.5% female Directors on the effectiveness of the Board.
joined the Board on 10 May 2022. IWG plc Board in the short term We continue to have full
His appointment increased the rising to 40% in the medium confidence in the Board’s
ethnic diversity of our Board and term; members and processes.
also made a significant addition
• assist the development
to our franchising expertise. The Committee uses the Board
of a pipeline of high-calibre
candidates by encouraging Review process to monitor
Charlie Steel was appointed effectiveness, performance,
a broad range of senior
as Chief Financial Officer and balance, diversity, independence,
individuals within the business
Director on 1 November 2022 leadership and succession
to take on additional roles to
in place of Glyn Hughes; details planning, enabling the Committee
gain valuable Board experience;
of the Committee’s search and to identify strengths and
ultimate nomination of Charlie • consider candidates for
weaknesses and ensuring
can be found on page 86. appointment as Non-Executive
that we are able to identify
Charlie will seek election Directors from a wide
the capabilities required for
by our shareholders at the international pool including
particular Board appointments.
2023 annual general meeting. those with little or no previous
FTSE Board experience; Re-election
• ensure Non-Executive Director
During 2022 we led a search
longlists have at least 50% of
of the Board
to identify a new Non-Executive
Director or Directors. In our candidates reflecting diversity All Directors (unless they are
search and when drawing including women and retiring) submit themselves
up our longlist of candidates candidates with different racial for re-election by shareholders
we considered all aspects and ethnic backgrounds; and annually.
of diversity and ultimately • engage executive search firms
recommended the appointment who have signed up to the Directors appointed during the
of Sophie L’Hélias. Sophie will November 2017 Voluntary Code period since the last annual
seek election by our shareholders of Conduct on gender diversity general meeting are required
at our 2023 annual general and best practice. to seek election at the next
meeting. Further Information annual general meeting under
on the search and nomination of the Company’s articles of
Sophie can be found on page 86. association.

IWG plc Annual Report and Accounts 2022 85

Nomination Committee report continued

Reasons why the contribution

of Directors offering themselves
for re-election or election Appointment Appointment
continues to be important of Charlie Steel of Sophie L’Hélias
to the long-term success of the In drawing up a profile for the Following a review of the balance
Company are described in the role of Chief Financial Officer, of existing skills, knowledge,
Notice of annual general meeting. the Committee reviewed the diversity and experience on the
balance of existing skills, Board and the results of the 2021
The Committee reviewed knowledge and experience both Board Evaluation, the Committee
the independence of all Non- on the Board and within the commenced a search for a
Executive Directors in 2022; Senior Leadership Team and Non-Executive Director or
all are independent and considered the strategic plans Directors with a requirement
continue to make independent for the Group. that 50% of all candidates
contributions and effectively longlisted reflect aspects of
challenge management. The Committee provided its diversity including gender,
search criteria to Korn Ferry, ethnicity and disability.
Board appointments who provide executive search
The Committee leads the consultancy and have no other The Committee used Audeliss
process for the appointment connection to the Company. Executive Search, who provide
of all new Directors and, in Korn Ferry identified a longlist executive search consultancy
identifying and recommending of candidates from diverse and have no other connection
candidates to the Board, the backgrounds and all candidates to the Company, as well as its
Committee considers candidates were considered on merit industry connections,
on merit against objective criteria against the criteria set by the professional advisors and
and in accordance with the Board Committee giving due regard networks, to identify a longlist
Diversity Policy. to all aspects of diversity. of candidates. Candidates were
considered on merit against the
Nominations are based The shortlisted candidates criteria set by the Committee.
on the existing balance of skills, met with all members of the The shortlisted candidates met
knowledge, diversity and Committee, the Chief Executive with members of the Committee
experience on the Board, Officer and other members of and the Chief Executive Officer.
on the merits and capabilities the Senior Leadership Team.
of the nominee and on the time The Committee extensively The Committee extensively
they are able to give to the role discussed the merits of all the discussed the merits of the
in order to promote the success candidates and recommended candidates and recommended
of the Company. the appointment of Charlie Steel Sophie L’Hélias be appointed
who brought highly relevant as Non-Executive Director.
Senior experience to the role from his The Board accepted the
Leadership Team previous positions. recommendation of the
Committee and Sophie was
The Committee oversees The Board accepted the appointed to the Board
changes to the Senior Leadership recommendation of the on 1 December 2022. Sophie
Team, and supports initiatives Committee and Charlie was is a trained lawyer with strong
to strengthen the executive appointed to the Board as Chief knowledge of financial markets,
talent pipeline. Financial Officer with effect from extensive corporate governance
1 November 2022. His biography experience and relevant ESG
can be found on page 73. knowledge. Her biography can
be found on page 73.

86 IWG plc Annual Report and Accounts 2022

Succession planning Terms of Reference

Governance
We monitor that succession Below is a summary of the terms
plans are in place for the orderly of reference of the Committee:
succession of appointments to
the Board and senior positions, • Board appointment and
so that there is an appropriate composition: to regularly
balance of skills, experience and review the structure, size
diversity. Succession planning and composition of the Board
discussions and a talent review and make recommendations
process continue to be an on the role and nomination of
integral priority of the Company’s Directors for appointment and
business planning and review re-appointment to the Board.
process, as is the continued • Board Committees: to make
development of both recommendations to the Board
management capacity and in relation to the suitability
capabilities within the business. of candidates for membership
of the Audit and Remuneration
As previously advised our current Committees.
Chairman, Douglas Sutherland, • Board effectiveness: to review
has been on the Board for annually and make appropriate
more than nine years. He was recommendations.
appointed as Chairman • Board performance: to assist
on 18 May 2010 having been the Chairman with the annual
a Non-Executive Director of the performance review to assess
Company since 27 August 2008. the performance and
His continuation in the role of effectiveness of the overall
Chairman is subject to regular Board and individual Directors.
review by the Committee,
without the presence of the • Leadership: to remain fully
Chairman. After reviewing the informed about strategic issues
Chairman’s performance and and commercial matters
input from the 2022 Internal affecting the Company
Board Review as well as the 2021 and to keep under review
External Board Review, and in the leadership needs of the
consideration of the Group’s organisation to enable
near-term strategic objectives, it to compete effectively.
the Committee considers that • Complete details of the above
it is in the best interests of its are available on the Company’s
stakeholders for the Chairman website www.iwgplc.com.
to continue in his role. This is
considered to be a short-term François Pauly
situation and the Committee
is considering plans for the role Chairman,
in the long term. Nomination Committee

IWG plc Annual Report and Accounts 2022 87

Nomination Committee report continued

Board Diversity
Nationality split of the Board Age split of the Board Ethnicity split of the Board

■ American 50% ■ 36-45 years 12.5% ■ Asian 12.5%

■ British 25% ■ 46-55 years 12.5% ■ White 87.5%
■ French 12.5% ■ 56-65 years 50%
Information on the ethnicity of
■ Irish 12.5% ■ 66-75 years 25% employees is included on pages 60
■ Luxembourgish 25% and 61
Two directors are dual nationals.

Gender split of the Board Experience of the Board Number of Directors

Corporate Governance 7
Working Internationally 8
Rapid Growth Strategies 5
Digital Transformation 6
Franchising 3
Enterprise Risk Management 7
Outsourcing 4
Mergers and acquisitions 8

■ Female 37.5%
■ Male 62.5%

Employee Diversity
Gender split of Senior leadership Gender split of Regional Leadership Gender split of all employees

■ Female 25% ■ Female 42% ■ Female 65%

■ Male 75% ■ Male 58% ■ Male 35%
Further information on employee diversity is available on pages 60 and 61

88 IWG plc Annual Report and Accounts 2022

Performance against 2022 Diversity objectives

Governance
Objective Performance achieved
Maintain a level of at least 35% female Directors Throughout 2022 we have had three female Board members,
on the IWG plc Board in the short term rising currently representing 37.5% of our Board.
to 40% in the medium term.
Assist the development of a pipeline The Committee supports initiatives aimed at strengthening the
of high-calibre candidates by encouraging executive talent pipeline and ensuring that high potential people
a broad range of senior individuals within the at every level are developed and retained within the business.
business to take on additional roles to gain Senior individuals are encouraged to gain Board experience
valuable Board experience. through internal and external Board appointments and are also
invited to present at IWG plc Board meetings. Further information
on our talent strategy can be found on pages 60 to 63.
Consider candidates for appointment as Our profile resulting in the appointment of Sophie L'Hélias was
Non-Executive Directors from a wider pool drawn up to allow us to consider a wider pool of talent; FTSE
including those with little or no previous FTSE experience was not a pre-requisite.
Board experience.
Ensure Non-Executive Director longlists have Our profile resulting in the appointment of Sophie L'Hélias was
at least 50% of candidates reflecting diversity drawn up to ensure that longlists reflect our desire to continue to
including women and candidates with different improve the diversity of our Board and to ensure that we maintain
racial and ethnic backgrounds. a level of at least 35% female directors in the short term rising
to 40% in the long term.
Engage executive search firms who have signed During 2022 we worked with Audeliss Executive Search, Korn Ferry
up to the November 2017 Voluntary Code and Spencer Stuart, each of whom are signatories to the
of Conduct on gender balance, diversity November 2017 Voluntary Code of Conduct.
and best practice.

IWG plc Annual Report and Accounts 2022 89

Audit Committee report

Managing our
business ethically
and responsibly
Attendance Dear Shareholder,
(out of
possible I am pleased to present you with
maximum
number of this report on the work of the
Members meetings) Audit Committee (the
Laurie Harris 6/6 “Committee”) during 2022.
Nina Henderson 6/6 This report sets out the role and

Responsible Tarun Lal1 3/3 responsibilities of the

Sophie L’Hélias2 1/1
Committee and our key

corporate
activities during the year. It
François Pauly 6/6 explains how we manage the

behaviour is an Florence Pierre3 5/5 integrity of our financial

reporting and the effectiveness

integral part of the

1. Tarun Lal joined the Committee of our risk management and
on 10 May 2022
2. Sophie L’Hélias joined the Committee
control processes for the benefit

overall governance on 1 December 2022 of our stakeholders, including our

3. Florence Pierre stepped down shareholders, customers,

framework and our

as Committee member partners, employees and
on 30 November 2022 communities.

management All members of the Committee are

independent.
This year has been a busy year

structures.”
for the Committee with key
activities including:

• Overseeing the coordination

Laurie Harris of Worka with our reporting,
Length of tenure of Non-Executive following its establishment
Chair, Audit Committee through the acquisition of The
Directors within the Committee
Instant Group in March 2022
and the merger of certain
digital assets.
• Interacting with KPMG with
regard to their planning and
execution of the Group audit.
In particular, detailed
discussions were held with
KPMG in relation to the
coordination of Worka
into our annual audit.
The acquisition of The Instant
Group involved a number of
judgements and assumptions
in determining the fair value of
■ 0-3 years 40% assets and liabilities acquired
■ 3-5 years 20% by the Group on completion of
■ 6–9 years 40% the transaction which required
our involvement.

90 IWG plc Annual Report and Accounts 2022

 Membership and Activities of the

Governance
meetings Audit Committee
The Committee consists entirely during the year
of independent Non-Executive This section summarises
Directors. the main focus areas of the
Committee during 2022 and the
Six Committee meetings were results of the work undertaken.
held in the year and where
time-sensitive approvals were Financial reporting
needed authority was delegated
to a sub-committee. Our main focus was the review
of the half-year results and this
At my request, the external Annual Report together with the
auditors, Executive Directors, formal announcements relating
the Chairman, the Company thereto. Before recommending
Secretary (as secretary to the these to the Board we
Committee) and the Business determined that the actions
Assurance Director may and judgements made by
• Review of management’s management were appropriate.
assessment of the impact attend meetings.
Particular focus was given to:
on the Company’s operations
and financial statements At least annually, the Committee
meets independently, without • critical accounting policies
caused by the war in Ukraine and practices and changes
and the resulting sanctions. management, with the
Company’s external auditors and thereto;
It was concluded that there • changes in the control
were no material impacts the Business Assurance Director.
In addition I regularly meet with environment;
on the financial statements
the external lead audit partner • control observations identified
of the Group.
and the Business Assurance by the auditor;
• Monitoring the Group’s Director outside of the formal • decisions delegated to and
implementation of its policies Committee process. requiring judgements by
and targets on climate change.
management;
This included reviewing the Responsibilities • adjustments resulting from
limited assurance work
performed by an independent Below is a summary of the terms the audit;
third party on our Scope 1 of reference of the Committee • clarity of the disclosures
and 2 greenhouse gas (the full text of which is available made;
emissions information on the Company’s website • compliance with accounting
included on page 69, as well as www.iwgplc.com): standards and relevant
the Committee’s assessment financial and governance
of the impact of climate • Financial reporting: monitoring reporting requirements; and
change on the Group’s the integrity of financial • the process surrounding
financial statements as reporting for compliance with compilation of the Annual
detailed in note 2 on page 134. applicable statutes and Report to confirm it is fair,
The Committee also reviewed accounting standards. balanced and understandable.
the enhanced disclosures on • Internal control and risk:
climate change provided on reviewing the effectiveness The Committee formally
pages 66 to 69 in compliance of internal controls and risk considers (and minutes)
with the framework provided management systems. key audit matters as detailed
by the Task Force on Climate- • Internal audit: monitoring the on page 94 before
Related Financial Disclosure. internal audit programme, recommending the financial
reviewing all findings and statements to the Board.
Key objective making certain that the function
Our key objective is to provide is sufficiently resourced and The Committee recommends
effective governance over the free from restrictions. the Annual Report to the Board.
Company’s financial reporting; • External audit: advising on the It considers the Annual Report,
this is achieved by monitoring, appointment, reappointment, taken as a whole, to be fair,
reviewing and making remuneration and removal of balanced and understandable,
recommendations the external auditor. providing the information
to the Board on: • Employee concerns: reviewing necessary for shareholders to
whistleblowing arrangements. assess the Company’s position
• the integrity of financial and performance, business
reporting; I routinely report to the Board model and strategy.
• the systems for internal on how the Committee has
control, risk management and discharged its responsibilities,
compliance; and as well as highlighting any
• the Company’s external concerns raised.
auditors.

IWG plc Annual Report and Accounts 2022 91

Audit Committee report continued

Risk management Internal control • reviews of the effectiveness

of management actions in
The Board is responsible for The Committee has a delegated addressing key Group risks
establishing the risk appetite responsibility for the Company’s identified by the Board have
for the Group. The Committee system of internal control and been undertaken; and
oversees and reviews an ongoing risk management and for • a system of regular reports from
process for identifying, reviewing the effectiveness of management setting out key
evaluating and managing this system. Such a system is performance and risk indicators
the risks faced by the Group. designed to identify, evaluate has been developed.
Major business risks and their and control the significant risks
financial implications are associated with the Group’s This process is designed
appraised by the responsible achievement of its business to provide assurance by way
executives as part of the objectives with a view to of cumulative assessment
planning process and are safeguarding shareholders’ and is embedded in operational
endorsed by regional investments and the Group’s management and governance
management. Key risks are assets. Due to the limitations processes.
reported to the Committee, that are inherent in any system
which reports on them to the of internal control, this system Key elements of the Group’s
Board. The appropriateness is designed to meet the Group’s system of internal control which
of controls is considered particular needs and the risks have operated throughout the
by the executives, having regard to which it is exposed and year under review are as follows:
to cost, benefit, materiality is designed to manage rather
and the likelihood of risks than eliminate risk. Accordingly, • the risk assessments of all
crystallising. Key risks and such a system can provide significant business decisions
actions to mitigate those risks reasonable, but not absolute, at the individual transaction
were considered by both the assurance against material level, and as part of the annual
Committee and the Board misstatement or loss. business planning process;
and were formally reviewed • a Group-wide risk register is
and approved. In accordance with the FRC’s maintained and updated at least
Guidance on Risk Management, annually whereby all inherent
Climate change risk Internal Control and Related risks are identified and assessed,
Financial and Business Reporting and appropriate action plans
Climate change risk is
(the “FRC Guidance”), the developed to manage the risk
recognised as a standalone
Committee confirms there is an per the risk appetite of the
principal risk to the business.
ongoing process for identifying, Group as established by the
It also presents a unique
evaluating and managing Board. The Board reviews
opportunity for the Group
significant risks faced by the the Group’s principal risks
in providing sustainable office
Group. register at least annually
solutions for clients who may
not be able to meet climate and management periodically
During 2022, the Committee reports on the progress against
change targets alone. Further
continued to revisit its risk agreed actions, enabling the
information can be found on
identification and assessment Committee to monitor how key
page 48 and pages 67 to 69.
processes, inviting Board risks are managed;
Emerging and members and senior
management to convene • the annual strategic planning
principal risks and discuss the Group’s key process, which is designed
risks and mitigating controls. to ensure consistency with
There are a number of existing the Company’s strategic
and emerging risks and objectives. The final plan
uncertainties which could A risk-based approach has been
adopted in establishing the is reviewed and approved
have an impact on the Group’s by the Board. Performance
long-term performance. Group’s system of internal
control and in reviewing its is reviewed against objectives
The Group has a risk at each Board meeting;
management structure in place effectiveness. To identify and
manage key risks: • comprehensive monthly
designed to identify, manage
business review processes
and mitigate such business risks.
• Group-wide procedures, under which business
Risk assessment and evaluation
policies and standards have performance is reviewed at
are an integral part of the annual
been established; business centre, area, country,
planning process, as well as the
• a framework for reporting and regional and functional levels.
Group’s monthly review cycle.
escalating significant matters Actual results are reviewed
is maintained; against targets, explanations
The Group’s principal risks,
are received for all material
together with an explanation
movements, and recovery plans
of how the Group manages
are agreed where appropriate;
these risks are presented
on pages 44 to 52 of this
Annual Report.

92 IWG plc Annual Report and Accounts 2022

• the documentation of key • the availability of Group and Whistleblowing

Governance
policies and control country-specific policies, via
procedures (including finance, the Group’s internal platforms,
policy
operations, and health and including the Company’s Code A whistleblowing channel, hosted
safety) having Group-wide of Conduct, detailed guidance by an independent third party
application. These are available on employee policies and the and which may be used
to all staff through the IWG standards of behaviour anonymously, is available
Learning Academy; required of staff; to all employees via email,
• formal procedures for the • policies, procedure manuals the web, or on the IWG Learning
review and approval of all and guidelines are readily Academy. We operate
investment and acquisition accessible through the IWG a “Right to Speak” policy,
projects. The Group’s Learning Academy; the aim of which is to encourage
Investment Committee • operational audit and self- all employees, regardless of
reviews and approves all certification tools which seniority, to bring matters that
investments. Additionally, the require individual managers to cause them concern to the
form and content of routine confirm their adherence to attention of the Committee,
investment proposals are Group policies and through the whistleblowing
standardised to facilitate the procedures; and channel, without fear of
review process; • a Group-wide policy to recruit repercussions or retaliation.
• the delegation of authority and develop appropriately Employees can monitor the
limits with regard to the skilled employees of high progress of the reports they
approval of transactions; calibre and integrity and with have made.
• the generation of targeted, appropriate disciplines.
action-oriented reports from The Business Assurance Director,
the Group’s sales and operating The Committee and the Board in consultation with the Senior
systems on a daily, weekly and regard responsible corporate Leadership Team, decides on the
monthly basis, which provide behaviour as an integral part appropriate method and level of
management at all levels with of the overall governance investigation. The Committee is
performance data for their area framework and believe that it notified of all material discourses
of responsibility, and which help should be fully integrated into made and receives reports on
them to focus on key issues and management structures and the results of investigations and
manage them more effectively; systems. Therefore, the risk actions taken on a regular basis.
management policies, The Committee has the power
• the delivery of a centrally
procedures and monitoring to request further information,
coordinated assurance
methods described above apply conduct its own enquiries
programme by the business
equally to the identification, or order additional action
assurance department that
evaluation and control of the as it sees fit.
includes key business risk
areas. The findings and Company’s safety, ethical and
environmental risks and During 2022 we received
recommendations of each
opportunities. This approach 41 reports through our
review are reported to both
makes sure that the Company whistleblowing channel.
management and the
has the necessary and adequate 14 of these were classified
Committee; and
information to identify and as requiring further investigation
• the maintenance of high and were reported to the
standards of behaviour which assess risks and opportunities
affecting the Company’s Committee; of these 14 reports,
are demanded from staff at all 11 have been resolved to date
levels in the Group. The long-term value arising from
its handling of corporate and the remaining reports, which
following procedures support were received are under
this: responsibility and corporate
governance matters. investigation. Four of the reports
• a clearly defined organisation involved instances of bribery
structure with established and corruption; these were
responsibilities; The Committee has completed
its annual review of the investigated and reported to the
• an induction process to effectiveness of the system Committee along with the steps
educate new team members of internal control for the year taken to prevent recurrence.
on the standards required to 31 December 2022 and
from them in their role, is satisfied that it is in
including business ethics accordance with the FRC
and compliance, regulation Guidance and the Code.
and internal policies; The assessment included
consideration of the
effectiveness of the Board’s
ongoing process for identifying,
evaluating and managing the
risks facing the Group.

IWG plc Annual Report and Accounts 2022 93

Audit Committee report continued

External audit
Significant financial reporting judgements KPMG Ireland (“KPMG”) were
appointed in 2016 as the
The Committee discussed and reviewed the following significant issues with auditors of IWG plc. Whilst IWG
KPMG and management in relation to the financial statements for 2022. For plc is a Jersey company, after
each area, we discussed with KPMG their procedures to challenge and consultation with KPMG, the
evaluate management’s assumptions. The Committee was satisfied with the Committee determined that
accounting and disclosures in the financial statements. appointing a Jersey-registered
KPMG Ireland audit partner
Area of focus Action taken would best serve the needs
Goodwill and The Committee has considered the impairment of the Group. The Committee
intangible assets testing undertaken and disclosures made in is responsible for oversight of
relation to the value of the Company’s goodwill the external auditor, including
and intangibles and has challenged the key an annual assessment of their
assumptions made by management in their independence and objectivity
valuation methodology. The Committee considers and the measures in place
that an appropriately cautious approach has to safeguard this.
been used by management and is satisfied that
no additional impairment of intangibles and During the year, KPMG audited
goodwill is required. See notes 13 and 14 for the consolidated financial
further information. statements of the Group for the
year ended 31 December 2021
Valuation of The Committee considered and discussed and completed a review of the
intangibles with management the key assumptions used half-year results of the Group
– The Instant in determining the fair value of assets and liabilities for the period to 30 June 2022.
acquired and was satisfied that the process and
Group acquisition assumptions used in determining the fair values The value of non-audit services
of assets and liabilities in conjunction with provided by KPMG in 2022
management's independently engaged experts amounted to £0.3m
had been appropriately challenged and were (2021: £0.3m). Non-audit
sufficiently robust. The Committee agreed with services primarily related
management’s assessment of the fair values of to assurance and audit
assets and liabilities acquired through business related services.
combinations and was satisfied that the related
disclosures required under IFRS 3 were complete, During the year there were
accurate and understandable. See note 28 for no circumstances where
further information. KPMG were engaged to provide
Recognition of The Committee has reviewed the basis on which services which might have led
deferred tax management has recognised and valued deferred to a conflict of interest.
assets tax assets, with particular focus on the
recoverability of deferred tax assets associated The Committee safeguards
with the Group’s intellectual property in KPMG’s independence through
Switzerland. The Committee is satisfied that its policy on non-audit related
management’s judgements on the generation services, which includes the
of future taxable profits in the foreseeable future following measures:
are aligned with the Group’s other business
forecasting processes. The Committee has • the external auditor is used
considered the presentation and disclosure for non-audit related services
(in accordance with IAS 1 and IAS 12) in respect only where their use will deliver
of taxation-related balances and is satisfied that a demonstrable benefit
the Group’s disclosures reflect the risks inherent as compared with the use
in accounting for the deferred taxation balances. of other potential providers
See note 8. and where it will not impair
their independence or
Impairment of The Committee reviewed the process used objectivity;
leasehold by management during 2022 to assess all open,
non-franchise business centres across the Group • all proposals for permitted
property, plant defined non-audit services
for indicators of impairment. We challenged key
and equipment judgements and estimates relating to the to use the external auditor
(“PPE”) and impairment of leasehold PPE and ROU assets must be submitted to, and
right-of-use and ultimately concluded that management’s authorised by, the Chief
judgements and the disclosure of these Financial Officer and/or
(“ROU”) assets Committee Chair before
impairments were appropriate. See note 15.
any work is performed;
• permitted non-audit services
are reviewed annually by the
Committee and currently

94 IWG plc Annual Report and Accounts 2022

 include: consultation on In assessing the effectiveness

Governance
financial accounting and of the external audit process
regulatory reporting matters; for 2022 the Committee
reviews of internal accounting has considered:
and risk management controls;
reviews of compliance with • the audit process as a whole
policies and procedures; and its suitability for the
non-statutory audits challenges facing the Group;
(e.g. regarding acquisitions • the strength and
and disposal of assets independence of the external
and interests in companies) audit team;
and assurance on finance- • the exercise by the external
related projects; audit team of its professional
• prohibited non-audit services scepticism during the 2022
include: tax compliance and audit process and its ability
advisory services; legal to challenge management
services; book-keeping and assumptions where necessary
other accounting services; such as in the valuation
design, provision and of The Instant Group’s
implementation of information intangible assets;
technology services; internal • the audit team’s
audit services; valuation understanding of the control
services; payroll services; environment;
recruitment services in relation • the culture of the external
to key management positions; auditor in seeking continuous
HR services relating to the improvement and increased
organisation structure and quality;
cost control; and transaction
(acquisitions, mergers and • the quality and timeliness of
dispositions) work that communications and reports
includes investment banking received; and
services, preparation of • the quality of interaction with
forecasts or investment management.
proposals and deal execution
services; and Following the Committee’s
• KPMG confirm at every assessment of the effectiveness
Committee meeting that, of the external audit process for
since the prior meeting, there 2022 and of KPMG’s continuing
have been no significant issues independence, the Committee
affecting their objectivity has recommended to the Board
and independence arising that a resolution to reappoint
from the provision KPMG as the Company’s auditor
of non-audit services. in respect of the financial year
ending 31 December 2023
KPMG are required to adhere be proposed at the annual
to a rotation policy requiring general meeting.
rotation of the lead audit partner
at least every five years.
Corporate
Our lead audit partner rotated governance changes
onto our account in respect During 2022 we have also
of the audit of the 2021 discussed the consultation
financial statements. paper published by BEIS
on restoring trust in audit
Our last audit tendering process and corporate governance
was undertaken in 2018. and are assessing the potential
implications to the Group.
The breakdown of the fees paid
to the external auditor during the
year to 31 December 2022 can
Laurie Harris
be found in note 5 on page 145. Chair, Audit Committee

IWG plc Annual Report and Accounts 2022 95

Directors’ Remuneration report

Fostering the
long-term success
of the Company
Attendance Dear Shareholder,
(out of
possible On behalf of the Board’s
maximum
number of Remuneration Committee
Members meetings) (the “Committee”), I present
Nina Henderson 7/7 the 2022 Directors’ Remuneration
report. The Committee has
Laurie Harris 7/7 designed performance-driven

The Committee François Pauly 7/7 remuneration policies that

Florence Pierre 1
6/6
reward delivery of our strategic

has designed
priorities and support our culture
Sophie L'Hélias2 1/1 and values to foster the Group’s

performance- 1. Resigned 30 November 2022 sustainable long-term success.

2. Appointed 1 December 2022

driven
A challenging 2022 was
All members of the Committee are marked by COVID-19’s

remuneration
independent. continuing impact combined with
macroeconomic headwinds of

policies that
inflation, currency movements,
and a highly competitive
Length of tenure of Non-Executive
reward delivery
marketplace for talent. The
Directors within the Committee seismic shift in how and where

of our strategic
work is conducted continues
with the widespread adoption

priorities and
of hybrid working. IWG has
continued to execute its strategy

support our
to meet the needs created by
this evolving shift in how work

culture and
is conducted. IWG’s intention
is to assure its position as the

values to foster
preeminent provider of global
hybrid work solutions.

the Group’s Achievements during 2022

sustainable long-
include: the record signing of
462 new capital-light contracts;

term success.”
merging key digital assets with The
■ 0-3 years 25% Instant Group to create the leading
■ 3-5 years 25% digital platform, Worka, to serve
■ 6-9 years 50% the broader flexible office market;
Nina Henderson improving margins through actively
managing sequential occupancy
Remuneration Committee Chair and pricing improvements; as well
as minimising the impacts of
inflationary pressures through
Group-wide cost control initiatives.

96 IWG plc Annual Report and Accounts 2022

 The Chair of the Committee and The award was subject to a

Governance
Board Chairman will continue to relative TSR condition only.
consult with shareholders to Performance was assessed
assure the alignment of Policy to as below the median of the
strategy implementation and FTSE350 (excluding investment
creation of value for all trusts). Therefore, the 2020 PSP
stakeholders. award will lapse in full in March
2023
The full Policy can be found
on pages 100 to 106 of this Whilst the 2020-2023 award will
Annual Report. lapse in full and no discretionary
adjustments will be made,
2022 Remuneration the Committee considers
Outcomes management’s performance
and stewardship of the group
Annual bonus to have been exceptional during
At the start of the year, the this period.
Committee set targets for three
measures for the annual bonus, Specifically, management has
These accomplishments,
each with an equal weighting. navigated the Group through
requiring current investment,
These were operating profit, the pandemic impacts and
will continue to provide future
relative TSR, and strategic unforeseen macroeconomic
benefits and create value for
objectives. The achieved results factors, delivering significant
all stakeholders.
for operating profit and TSR were achievements, including:
Remuneration Policy below the targets set. Although
• Renegotiating the majority
these measures continued to be
Our Remuneration Policy impacted by significant of over 3,400 lease
(the “Policy”) was last approved unforeseen circumstances, no agreements, significantly
by shareholders at the 2020 annual bonus for 2022 will be reducing the Group's
annual general meeting, receiving payable under these two cost base.
widespread support from 94.3% measures. • Accelerating capital-light
of shareholders. As three years network expansion through
have now passed, we are required The Committee considered management agreements
to submit our Policy delivery against the strategic to provide more convenient
for shareholder approval. objectives set at the start of locations to support hybrid
the year. A comprehensive working; 91% of the Group's
The Committee carefully disclosure of this assessment network locations were signed
considered whether any can be found on page 110, with as capital-light, partnered deals.
changes were required to the the Committee determining that • Ongoing cost reduction
Policy, to ensure it allows the the strategic objectives had programmes to improve
Company flexibility to been achieved in full. This margins and address
implement remuneration in resulted in an overall formulaic inflationary pressures.
line with our evolving strategy outcome of 33.33% of maximum • Investing in expanding
and aligns with best practice for the 2022 annual bonus. digital capabilities through
governance expectations.
in-house developed
Performance Share Plan (“PSP”) offerings and acquisitions.
The Chair of the Committee and
the Board Chairman consulted The Committee acknowledges • Merging key digital assets with
with shareholders regarding the the unprecedented trading The Instant Group to create
Policy and after consideration of conditions of the last three years Worka, the leading digital
the consultations and the strong for providers of workspaces and platform for independently
level of support in 2020 the the associated negative impact serving the entire flexible
Committee are confident that on IWG’s financial outcomes and office market.
the current Policy is the right relative TSR.
one for the immediate future. In the Committee’s judgement,
As such the proposed Policy The PSP award was made in management’s leadership of the
being submitted for approval March 2020, shortly before Group through this period has
at the 2023 annual general the potential severity of the been noteworthy. Their actions
meeting is effectively unchanged COVID-19 pandemic began to have not only seen the Group
from 2020. emerge. At that time, the navigate the challenges created
Company’s share price was by the non-predictive pandemic,
experiencing all-time highs. but have also positioned the
Company to capture the unique
opportunities created by the
shift to hybrid working.

IWG plc Annual Report and Accounts 2022 97

Directors’ Remuneration report continued

Response to 2022 The year ahead Executive changes

annual general Assuming shareholder approval As previously announced,
meeting outcome of the Policy originally designed Charlie Steel was appointed
Whilst a significant majority of and approved in 2020, to the Board as Chief Financial
shareholders (72.6%) approved the Committee plans Officer with effect from
our Annual Report on implementation of 2023 1 November 2022. Upon
Remuneration in 2022, the level of remuneration as follows: appointment Charlie’s
votes against was higher than we remuneration was set fully in
typically receive. The Committee • Executive Director salaries will line with our approved Policy.
is aware that the shareholders be subject to the annual salary His salary was set at £440,000
who voted against the Annual review process. per annum, his maximum bonus
Report on Remuneration last year • The maximum annual bonus opportunity is 150% of base
did not agree with the Committee will remain unchanged at 150% salary and maximum PSP
applying its discretion by of base salary for Executive opportunity is 250% of salary.
considering management’s Directors with half of any He received a buy-out award to
achievements in mitigating the bonus paid deferred in shares replace the value of incentives
unexpected negative impact of which vest after three years. he was forgoing as a result of
new COVID-19 variants, which Performance will be measured his recruitment. The Committee
led to additional lockdowns, against EBITDA, net debt sought to ensure this award was
when determining the Executive reduction and strategic metrics. granted on a ‘like for like’ basis
Director bonus outcome for 2021. • Awards of 250% of base salary with that forgone, including the
were granted under the PSP in application of performance
The Committee consulted with line with the approved Policy. conditions. Full details are
shareholders prior to the annual 100% of these awards will vest provided on page 112.
general meeting, the majority of subject to a relative TSR target
whom were supportive of the measured over three financial Upon departure, the Committee
rationale for the Committee’s years, 2023-2025. Any award determined an appropriate exit
decision-making. Following that vests will be subject to package for Glyn Hughes with
the annual general meeting, an additional two-year due consideration to
the Committee Chair and the holding period. shareholders, and specific
Board Chairman contacted reference to the Policy and the
major shareholders who had The Committee is satisfied that Company’s legal and contractual
not supported our Annual Report our variable pay model remains commitments to him. Full details
on Remuneration to understand fit for purpose in the face of are provided on page 117.
the reasons for their vote and to pandemic impacts and the
offer further engagement to hybrid work evolution, and Workforce
understand. ensures alignment between engagement and
pay and performance through wider workforce pay
Following our engagement, robust target setting.
Through my role as Non-Executive
we are comfortable that those
The Committee has considered Director with oversight of
shareholders who voted against
the pay and conditions across employee engagement I have
the Annual Report on
the Group’s workforce, the continued my programme of
Remuneration for 2022 did not
experiences of the Company meeting with our global
have ongoing concerns with the
and its stakeholders along with workforce. During 2022 I had the
overall approach to
the need to reward executive privilege to interact with a wide
remuneration at IWG.
performance that enables the variety of employees through
future success of the Company. our online leadership conference
We are thankful for all
with 300 managers in January
engagement with our
2022 and though site visits and
shareholders on this matter over
online meetings with smaller
the last year. No discretion has
groups of employees
been used in determining
throughout the year.
incentive outcomes in 2023.

98 IWG plc Annual Report and Accounts 2022

Most recently I attended one In addition to its review of

Governance
of our Regional Leadership executive remuneration,
conferences which were held the Committee reviews the
in person for the first time remuneration approaches and
since the COVID-19 pandemic. practices in place across the
Employees provided me with Group. The Committee ensures
their reactions and views on our that there is strong rationale for
strategic endeavours and reward how compensation approaches
plans and resources available to evolve across different levels of
them to deliver job performance. the organisation and that we
offer competitive and fair pay
I ensure that the Committee and across the Group which is free
the Board are aware of the views from all forms of discrimination.
of employees and the feedback
I receive through my role. This The majority of our
year I was delighted to report the approximately 10,000
results of our Global Engagement employees’ remuneration
survey to the Board. The results is determined by role,
showed that 77% of IWG performance, location,
employees recommend IWG and longevity within the
as an employer to friends and Group compared to marketplace
family, and this was endorsed by benchmarks. Salaries are
our UK Leading Employer Award. reviewed annually, and all eligible
employees share in our success
I also support IWG’s ongoing through performance related
efforts focused on enhancing incentives. The average pay rise
diversity, equity and inclusion. awarded to employees who
In the USA, I am a sponsor of the received an increase in respect
African American Affinity of 2022 is 3%.
Network Group’s advisory
board and participate in their Annual general
membership meetings. This meeting
enables me to provide the
Committee with insights Shareholders will be asked
from these interactions. to approve resolutions in
support of the 2022 Annual
I provide a sounding board Report on Remuneration and
for the team designing IWG’s the 2023 Policy.
climate and environmental
initiatives. During 2022, I met On behalf of the Committee,
with the team over seven times I commend this report to you
and coordinated regular Board and look forward to your support
updates on their progress. for the resolutions at the annual
general meeting.

Nina Henderson
Chair, Remuneration Committee

IWG plc Annual Report and Accounts 2022 99

Directors’ Remuneration report continued

Directors’ Remuneration Policy

This report sets out the Group’s Policy on remuneration for Executive and Non-Executive Directors, to be proposed
to shareholders at the annual general meeting on 9 May 2023, from which date the Policy will apply if approved.

Overview of Directors’ Remuneration Policy

The Policy considers principles of clarity, simplicity, risk, predictability, proportionality and alignment to culture
and has the following objectives:

• to provide a balanced package between fixed and variable pay, and long- and short-term elements;
• to align with the Company’s strategic goals and time horizons whilst encouraging prudent risk management;
• to incorporate incentives that are aligned with and support the Group’s business strategy and align executives
to the creation of long-term shareholder value, within a framework that is sufficiently flexible to adapt as our
strategy evolves;
• to align the interests of the Executive Directors, senior executives and employees with the long-term interests
of shareholders and strategic objectives of the Company;
• to ensure ongoing alignment with the changes to the UK Corporate Governance Code 2018;
• to align management and shareholder interests through building material share ownership over time;
• to reflect the remuneration received by the wider employees, considering proportionality;
• to ensure that our remuneration structures are transparent and easily understood;
• to ensure that remuneration practices are consistent with and encourage the principles of equality;
diversity and inclusion; and
• to reflect the global operating model of the Group whilst taking account of governance best practice.

Policy table for Executive Directors

Purpose/link Performance
Component to strategy Operation Maximum framework
Base salary To provide a Salaries are set by the Committee. There is no prescribed While there are no
competitive The Committee reviews all relevant maximum salary. Salary performance targets
component factors such as: the scope and increases will normally attached to the payment
of fixed responsibilities of the role, the skills, be in line with increases of salary, performance
remuneration experience and circumstances of the awarded to other is a factor considered
to attract and individual, sustained performance in role, employees in the in the annual salary
retain people the level of increase for other roles within business, although review process.
of the highest the business, and appropriate market data. the Committee retains
calibre and Salaries are normally reviewed annually, discretion to award
experience and any changes normally made effective larger increases if it
needed to from 1 January. considers it appropriate
shape and (e.g. to reflect a change
execute the in role, development and
Company’s performance in role, or
strategy. to align to market data).
Benefits To provide a Incorporates various cash and non-cash Benefit provision is N/A
competitive benefits which may include: a company car set at an appropriate
benefits (or allowance) and fuel allowance, private competitive market
package. health insurance, life assurance, and, where rate for the nature
necessary, other benefits to reflect specific and location of the role.
individual circumstances, such as housing There is no prescribed
or relocation allowances, representation maximum as some
allowances, reimbursement of school fees, costs may change in
travel allowances, or other expatriate benefits. accordance with
Any reasonable business-related expenses market conditions.
(including tax thereon) can be reimbursed
if determined to be a taxable benefit.
Executive Directors are eligible for other
benefits which are introduced for the wider
workforce on broadly similar terms. Executive
Directors will be eligible to participate in any
all-employee share plan operated by the
Company, on the same terms as other
eligible employees. The maximum level of
participation is subject to limits imposed
by relevant legislation from time to time
(or a lower cap set by the Company).

100 IWG plc Annual Report and Accounts 2022

 Purpose/link Performance

Governance
Component to strategy Operation Maximum framework
Pension To provide Provided through participation in the Set at a level N/A
retirement Company’s money purchase (personal commensurate with the
benefits in pension) scheme, under which the workforce in the
line with Company matches individual contributions executive’s location
the overall up to a maximum of base salary. (currently 7% of base
Group Policy. salary for existing
The Company may amend the form of an
Directors)
Executive Director’s pension arrangement
in response to changes in legislation or
similar developments.
Annual bonus To incentivise Provides an opportunity for additional reward 150% of base salary per Performance metrics
and reward (up to a maximum specified as a % of salary) annum. are selected annually
annual based on annual performance against targets based on the current
performance set and assessed by the Committee. business objectives.
and create At least 70% will be
Half of any annual bonus paid will be
further linked to key financial
deferred in shares which will vest after
alignment metrics, of which
three years, subject to continued
with there will typically
employment but no further performance
shareholders be a significant
targets. The other half is paid in cash
through the profit-based element
following the relevant year end.
delivery and
Performance below
retention A dividend equivalent provision allows
threshold results
of deferred the Committee to pay dividends, at the
in zero payment.
equity. Committee’s discretion, on vested shares
Payments rise
at the time of vesting and may assume
from 0% to 100% of the
the reinvestment of dividends on a
maximum opportunity
cumulative basis.
levels for performance
Recovery and withholding provisions apply between the threshold
to bonus awards (see note 1 below). and maximum targets.
Performance Motivates and Awards will normally be made annually The normal plan limit is Awards have a
Share Plan rewards the under the PSP and will take the form of 250% of base salary. performance period of
(“PSP”) creation of either nil-cost options or conditional share three financial years
long-term awards. Participation and individual award starting at the beginning
shareholder levels will be determined at the discretion of the financial year in
value. of the Committee within the Policy. which the award is
made. Performance
Aligns Awards vest three years following grant,
conditions will measure
executives’ subject to performance against pre-
the long-term success
interests with determined targets which are set and
of the Company.
those of the communicated at the time of grant.
The Committee may
shareholders.
Vested awards are subject to a holding introduce or reweight
period of two years following achievement performance measures
of performance conditions. This requires so that they are directly
the Executive Directors to retain the aligned with the
net-of-tax number of vested shares for Company’s strategic
a period of two years following vesting. objectives for each
Recovery and withholding provisions performance period.
apply to PSP awards (see note 1 below). In respect of each
A dividend equivalent provision allows performance measure,
the Committee to pay dividends, at the performance below the
Committee’s discretion, on vested shares threshold target results
at the time of vesting and may assume in zero vesting.
the reinvestment of dividends on a The starting point
cumulative basis. for vesting of each
performance
element will be no
higher than 25%.

IWG plc Annual Report and Accounts 2022 101

Directors’ Remuneration report continued

Purpose/link Performance
Component to strategy Operation Maximum framework
Shareholding To align Executive Directors are expected to build N/A N/A
guidelines Executive a holding in the Company’s shares to a
Directors’ minimum value of two times their base salary
interests with within five years. This may be built through
those of our the retention of the net-of-tax shares vesting
long-term under the Company’s equity-based share
shareholders plans. Deferred shares and shares subject to
and other a holding period (net-of-tax) can be counted
stakeholders. towards the total.
Post- To align Executive Directors are expected to hold,
cessation Executive for up to two years post-cessation, the
shareholding Directors’ existing shareholding requirement or the
requirement interests with actual shareholding at cessation, if lower.
those of our
long-term
shareholders
and other
stakeholders

Notes to the policy table:

1. Recovery and withholding provisions may be applied in circumstances which include misconduct or material error by a participant, material misstatement
in the Company’s audited accounts or a material downturn in the performance of the Company, or error in the assessment of performance and in other
circumstances in which the Committee thinks the operation of the process is appropriate, including a failure in risk management or material reputational
damage. Awards subsequent to the grant, but before the expiry of the holding period, may be reduced or an Executive Director may be required to repay
an award at any time within three years of the date on which the award vests. All annual cash and share bonuses alongside long-term incentives are
subject to a malus and clawback policy.
2. For the avoidance of doubt, by approval of the Policy, authority has been given to the Company to honour any commitments entered into with current
or former Directors (such as the payment of a pension or the unwinding of legacy share schemes) that have been disclosed to shareholders in previous
Directors’ Remuneration reports. Details of any payments to former Directors will be set out in the Annual Report on Remuneration as they arise.
3. As IWG operates in a number of geographies, employee remuneration practices vary across the Group to reflect local market practice. However,
employee remuneration policies are based on the same broad principles. Our primary objective in awarding variable pay is to drive achievement of
results, according to role, and to recognise and reward excellent performance. Accordingly, to account for variances in responsibilities, influence and
seniority, incentive schemes are not uniform in approach. Performance targets are set annually taking into account a number of internal and external
reference points including: the level of performance that is achievable over a sustained period of time; historic performance and internal forecasts
of future performance; market expectations, and any guidance provided to the market.
4. In order to ensure that the Policy achieves its intended aims, the Committee retains discretion over the operation of certain elements of the variable
pay policy. This includes the discretion to adjust the annual bonus and PSP outcome if it is not considered to be reflective of the wider performance of
IWG and to ensure that it can, in appropriate circumstances, override formulaic outcomes. In addition,
the Committee may adjust elements of the plans including but not limited to:
• participation;
• in exceptional circumstances determining that any share-based award (or any dividend equivalent) will be settled (in full or in part) in cash;
• determining the extent of payment or vesting of an award based on the assessment of any performance condition, including discretion as to the
basis on which performance is to be measured if an award vests in advance of normal timetable (on cessation of employment as a good leaver or on
the occurrence of a corporate event) and whether (and to what extent) pro-ration will apply in such circumstances;
• whether (and to what extent) recovery and/or withholding will apply to any award;
• ability to adjust the number of shares under the DSBP, PSP or other share-based award to take into account a variation in the share capital;
• the timing of the grant of award and/or payment;
• the size of an award (up to plan limits) and/or payment within the limits set out in the policy table above;
• discretion relating to the measurement of performance within the limits set out in the policy table above in the event of a change of control;
• determination of a good leaver (in addition to any specified categories) for incentive plan purposes;
• adjustments required in certain circumstances (e.g. rights issues, corporate restructuring and special dividends); and
• the ability to adjust existing performance conditions for exceptional events at any point before vesting so that they can still fulfil their original
purpose. Should any such discretions be exercised, an explanation would be provided in the following Annual Report on Remuneration and may be
subject to shareholder consultation as appropriate.
5. For the avoidance of doubt, in approving this Policy, authority is given to the Company to make payments and honour any prior commitments entered
into with current or former Directors (such as the payment of pension or the unwinding of legacy share schemes prior to the approval of the current
Policy). Details of any payments will be set out in the Annual Report on Remuneration as they arise. The Committee reserves the right to make any
remuneration payments and payments for loss of office (including exercising any discretions available to it in connection with such payments)
notwithstanding that they are not in line with the Policy set out above where the terms of the payment were agreed (i) before the Policy came into
effect or (ii) at a time when the relevant individual was not a Director of the Company and, in the opinion of the Committee, the payment was not in
consideration for the individual becoming a Director of the Company. For these purposes “payments” include the Committee satisfying awards of
variable remuneration and, in relation to an award over shares, the terms of the payment are “agreed” at the time the award is granted.

102 IWG plc Annual Report and Accounts 2022

Policy table for the Chairman and Non-Executive Directors

Governance
Component Purpose/link to strategy Operation Maximum
Chairman fees Normally reviewed, but not necessarily increased, annually There is no prescribed The Chairman is
and as determined by the Committee. The Committee will maximum although not eligible for any
consider, where appropriate, pay data at companies of a fees and fee increases performance-related
similar scale and relevant multi-country operating model. will be considered in remuneration.
line with the increases
A single fee which reflects all Board and Committee duties.
of the wider workforce
Set at a level sufficient to attract and retain individuals with and market rates.
the required skills, experience and knowledge to allow the
Board to effectively carry out its duties.
Non- Normally reviewed, but not necessarily increased, annually There is no prescribed The Non-Executive
Executive and as determined by the Chairman and the Executive maximum although fees Directors are not
Director fees Directors. and fee increases will be eligible for any
considered in line with performance-related
The Committee will consider, where appropriate, pay data
the increases of the remuneration.
at companies of a similar scale and relevant multi-country
wider workforce and
operating model.
market rates.
A base fee is payable with additional fees for chairing key
Board Committees, for being the Senior Independent Director
and for being responsible for the oversight of employee
engagement and CSR.
Set at a level sufficient to attract and retain individuals with
the required skills, experience and knowledge to allow the
Board to effectively carry out its duties. Any reasonable
business-related expenses (including tax thereon) can be
reimbursed if determined to be a taxable benefit. Additional
fees may be payable in relation to extra responsibilities
undertaken such as chairing a Board Committee or other
similar duties or being a member of a committee. If there is a
temporary yet material increase in the time commitments for
Non-Executive Directors, the Board may pay extra fees on a
pro-rata basis to recognise the additional workload.
Fees are paid entirely in cash.

Consideration of is considered by the Committee salary, pension and benefits and

and informs the overall decision eligibility for a discretionary
conditions elsewhere making. This Policy is unchanged annual bonus. The level of bonus
in the Group from our previous Policy, which opportunity is determined by
The Committee has regard provides consistency and means role and responsibility. Executive
to the pay and employment there are no changes in how Directors, the first layer of
conditions of employees within executive policy aligns with our management below the
the Group when it sets the Policy more broadly. Board and other selected senior
Policy for the remuneration of executives participate in the
Executive Directors, the first The general principles of the Company’s share schemes to
layer of management below the Policy are broadly applied aid retention and motivate the
Board, the Company Secretary throughout the Group and are delivery of long-term growth in
and the Chairman of the Board. designed to support recruitment, shareholder value and to align
The Committee does not consult motivation and retention as well their interests with those of
directly with employees. as to reward high performance in shareholders. Annual base pay
However the Committee Chair is a framework of approved risk increases for the Executive
the dedicated NED responsible management, and to promote Directors and the first layer of
for employee engagement the long-term sustainable management below the Board
and ensuring a two way success of the Company. are normally limited to the
dialogue between the Board average base pay increase for
and the workforce. A summary The structure of total the wider employee population
of some of the activities remuneration packages for those unless there are exceptional
undertaken is included on pages within the Committee’s remit circumstances such as a change
98 to 99 and all information and for the broader employee in role or salary progression for
gathered from this engagement population is similar, comprising a newly appointed Director.

IWG plc Annual Report and Accounts 2022 103

Directors’ Remuneration report continued

Consideration of appointment. Salaries would • Where an individual forfeits

reflect the skills and remuneration at a previous
shareholder views experience of the individual, employer as a result of
The Committee is dedicated and may (but not necessarily) appointment to the Company,
to ensuring that shareholders be set at a level to allow future the Committee may offer
understand and support our salary progression to reflect compensatory payments
remuneration structures. performance in the role. Where or awards to facilitate
Accordingly, where changes are salaries are set below market, recruitment. Such payments
being made to the Policy, or in multi-year staged increases or awards could include cash
the event of a significant may be awarded to achieve as well as performance and
exercise of discretion, we will the desired market positioning non-performance-related share
consult with shareholders, as over time. Where necessary awards and would be in such
appropriate, to explain our these increases may be above form as the Committee
approach and rationale fully. those of the wider workforce considers appropriate taking
Additionally, the Committee but will be subject to into account all relevant factors
considers shareholder feedback continued development such as the form, expected
received in relation to each in the role. value, anticipated vesting and
annual general meeting • Benefits will be limited to timing of the forfeited
alongside any views expressed those outlined in the Policy, remuneration. The aim of any
during the year. We actively with relocation assistance such award would be to ensure
engage with our largest provided where appropriate. that, so far as possible,
shareholders and consider Where provided, relocation the expected value and
the range of views expressed. assistance will normally be structure of the award will
In exceptional circumstances, for a capped amount and/or be no more generous than
the members of the Committee, limited time. Pension the amount forfeited.
including the Committee Chair, provisions will be set in • Any share-based awards
attend the Company’s annual line with the Policy. referred to in this section will
general meeting and are • The Committee may offer be granted as far as possible
available to listen to views and additional cash and/or under the Company’s existing
to answer shareholders’ share-based payments in the share plans. If necessary,
questions about Directors’ year of appointment when it awards may be granted
remuneration. considers these to be in the outside of these plans as
best interests of the Company permitted under the Listing
The Committee also reviews and, therefore, shareholders. Rules, and in line with the
the executive remuneration In accordance with the Policy, approach and the limits
framework in the context of the maximum level of variable set out above.
published shareholder guidelines. remuneration which may be • In the case of an internal
awarded is 400% of salary (of appointment, variable pay
Approach to which 250% is permitted awarded in respect of the
recruitment under the PSP under the incumbent’s prior role may
remuneration exceptional circumstances pay out according to its
limit and 150% under the terms of grant. In addition,
When determining the annual bonus plan). any other ongoing
remuneration package for Performance conditions for remuneration obligations
a newly appointed Executive variable pay in the year of prior to their appointment
Director, the Committee appointment may be different may continue, provided that
would seek to apply the to those applying to other they are put to shareholders
following principles: Directors, which would be for approval at the first
subject to stretching annual general meeting
• The package must be performance conditions. following their appointment.
sufficiently competitive to
• Depending on the timing of the • For an overseas appointment,
facilitate the recruitment
appointment, the Committee the Committee will have
of individuals of the highest
may deem it appropriate to discretion to offer cost-
calibre and experience
set different performance effective benefits, including
needed to shape and
conditions to the current expatriate benefits, and
execute the Company’s
Executive Directors for the pension provisions which
strategy. At the same time,
first performance year of reflect market practice and
the Committee would seek to
appointment. A long-term relevant legislation.
pay no more than necessary.
incentive award can be
• The remuneration package made shortly following an The remuneration package
for a new Executive Director appointment (assuming for a newly appointed
would be set in accordance the Company is not in Non-Executive Director
with the terms of the Policy a close period). would normally be in line
in force at the time of the with the structure set out in the
Policy table for Non-Executive
Directors on page 103.

104 IWG plc Annual Report and Accounts 2022

Service contracts • Treatment of annual bonus: • The Committee reserves the

Governance
right to make additional exit
Executive Directors have service There is no contractual right to payments where such
contracts with the Group receive an annual bonus in the payments are made in good
which can be terminated by the year of termination. However, faith in discharge of an existing
Company or the Director by giving the Committee has discretion, legal obligation (or by way of
12 months’ notice. The service for certain leavers, to make a damages for breach of such
contract policy for new payment under the annual an obligation) or by way of
appointments will be on bonus entirely in cash. settlement or compromise of
similar terms as those for existing This will reflect the period any claim arising in connection
Executive Directors, with the of service during the year and with the termination of a
facility to include a notice performance (measured at the Director’s office or
period of no more than 12 months. same time as performance for employment. The Committee
The Company may terminate other plan participants, if may also pay reasonable
employment of the Executive feasible). Should the Committee outplacement and legal fees
Directors by making a payment make a payment in these where considered appropriate.
in lieu of notice which would not circumstances, the rationale
exceed 12 months’ salary. would be set out in the following Policy in respect of
Annual Report on Remuneration. external Board
Under the current service
agreements, Mark Dixon’s
appointments for
• Treatment of share plans:
contract provides that, on Executive Directors
a change of control, he may If an Executive Director It is recognised that external
terminate the contract by giving leaves employment with non-executive directorships
one month’s notice and will, the Company, unvested PSP may be beneficial for both
in addition to contractual and deferred bonus shares the Company and Executive
payments for the one-month will lapse unless the Directors. At the discretion of
notice period, receive a payment Committee in its absolute the Board, Executive Directors
equal to 12 months’ salary, discretion determines are permitted to retain fees
and remain eligible for a otherwise (good leaver) for received in respect of any such
discretionary bonus. reasons including, amongst non-executive directorship.
others, injury, disability,
The Chairman and Non- retirement, redundancy Illustration of
Executive Directors are
appointed for a three-year term,
and death or in any other Remuneration Policy
circumstances at the
which is renewable, with six discretion of the Committee. The charts below illustrate the
months’ notice on either side, application of the Policy set out
no contractual termination In such circumstances an in the Policy table for Executive
payments being due and subject Executive Director’s award Directors. This assumes the level
to retirement pursuant to the will vest at the normal vesting of fixed remuneration (salary,
articles of association at the date, may be pro-rated, and will benefits and pension) as at
annual general meeting. be subject to achievement of 1 January 2023 and the following
performance criteria. in respect of each scenario:
The Directors’ service contracts Any post-vesting or
are available for inspection at post-cessation holding • “Fixed” represents fixed
the Company’s registered office requirements, as defined in the remuneration only (i.e. current
within normal business hours. Policy, will also normally apply. salary, benefits and pension).
• “Target” represents fixed
Policy on payment for remuneration plus an annual at
Should the Committee adjust
loss of office the time pro-rating, then this
target bonus of 90% of salary
and 50% of salary (20% of
Where an Executive would be explained in the
maximum) vesting of the
Director leaves employment, following Annual Report on
maximum PSP award. Note,
the Committee’s approach to Remuneration. If the Executive
target levels of award are for
determining any payment for loss Director ceases to be an
illustrative purposes only.
of office will normally be based employee for any reason other
than those specified above • “Maximum” represents the
on the following principles:
then the award shall lapse maximum annual bonus of
immediately on such cessation. 150% of salary and full vesting
• The Committee’s objective
of the PSP grant of 250% of
is to find an outcome which
base salary.
is in the best interests of the Awards will vest on the
Company and its shareholders, • “Maximum + 50% share price
normal vesting date unless
taking into account the specific growth” represents maximum
the Committee determines,
circumstances, contractual levels of award plus the impact
in its discretion, that awards
obligations and seeking to pay of 50% share price growth on
will vest at the date of cessation.
no more than is warranted. the PSP award.
Payments in lieu of notice will
not exceed 12 months’ salary
and benefits.

IWG plc Annual Report and Accounts 2022 105

Directors’ Remuneration report continued

Remuneration Policy
Chief Executive Officer

Minimum £944 100%

Target £2,169 44% 36% 20%

Maximum £4,444 21% 30% 49%

Maximum, with 50%
£5,538 17% 24% 59%
share price growth
Fixed pay
Annual bonus
Long-term incentives
Chief Financial Officer

Minimum £479 100%

Target £1,095 44% 36% 20%

Maximum £2,239 21% 30% 49%

Maximum, with 50%
£2,789 17% 24% 59%
share price growth
Fixed pay
Annual bonus
Long-term incentives

All figures in £’000s and rounded to the nearest thousand.

Benefits and pension values are based on the value of benefits received in relation to 2022 calculated on a full-year-basis.

106 IWG plc Annual Report and Accounts 2022

Annual Report on Remuneration

Governance
Membership and meetings
All members of the Committee are independent. Committee membership during the year and attendance at
the meetings is set out on page 96. In addition to the designated members of the Committee, the Chairman,
Chief Executive Officer and Company Secretary also attended Committee meetings during the year although
none were present during discussions concerning their own remuneration.

Terms of reference
The Committee’s terms of reference are available on the Company’s website: www.iwgplc.com.

Implementation of the Remuneration Policy for 2023

This Annual Report on Remuneration (and the Committee Chair’s annual statement) will be put to a single advisory
shareholder vote at the 2023 annual general meeting. The information below includes how we intend to operate our
Policy in 2023 and the pay outcomes in respect of the 2022 financial year.

Reporting
The Group continues to use pre-IFRS 16 results for its primary management reporting including performance
target-setting and measuring achievements against those targets. Therefore the figures in this report are presented
on a pre-IFRS 16 basis.

Base salaries for the Executive Directors

The current salaries as at 1 January 2023 (and compared to 2022) are as follows:

Effective Effective
1 Jan 2023 1 Jan 2022 Percentage
(£’000) (£’000) change

Mark Dixon £875 £875 0%

Charlie Steel £440 £440(1) 0%
1. Charlie Steel was appointed on 1 November 2022.

For context, the average base salary increase for eligible employees in respect of 2022 is 3%.

Benefits and pension

Benefits and pension provisions will operate in line with the approved Policy.

Annual bonus
For 2023 the maximum bonus potential for both Executive Directors is 150% of salary. The on-target bonus is 90%
of salary. Half of any bonus paid will normally be deferred into shares under the Deferred Share Bonus Plan (“DSBP”),
which will vest after three years subject to continued employment.

The 2023 annual bonus will be based 50% on measurement against EBITDA targets, 20% on measurement against
net debt reduction targets and 30% against measurement of strategic targets, a portion of which will be focused on
achieving specific environment and climate change objectives. The targets are not being disclosed prospectively as
they are commercially sensitive; however, a description of the performance against targets set will be included in next
year’s Annual Report.

IWG plc Annual Report and Accounts 2022 107

Directors’ Remuneration report continued

Performance Share Plan (“PSP”)

Recognising the substantial increase in opportunity for long-term value to be created for our shareholders through our strategic
transformation including our franchising strategy, PSP share option awards have been made at 250% of current salary (up to the
Policy maximum) to Executive Directors with performance measured over a three-year period ending 31 December 2025.
The awards are subject to a TSR performance metric as summarised below. The Committee will continue to review the
suitability of the TSR metric and may revert back to a broader selection of metrics on the PSP in the future.

Performance conditions Threshold vesting Threshold performance Maximum vesting Maximum performance

Relative TSR versus FTSE 350 excluding 10% compound annual

investment trusts (100% weighting) 25% Median 100% growth above median

Awards are subject to a holding period of two years following achievement of performance conditions. This requires the
Executive Directors to retain the net-of-tax number of vested shares for a period of two years following vesting.

Chairman and Non-Executive fees

The current fees as at 1 January 2023 (and compared to 2022) are as follows:

2023 2022 Percentage

(£’000) (£’000) change

Non-Executive Chairman 300 300 0%

Basic fee for Non-Executive Director 62 62 0%
Additional fees:
Chair of Audit Committee 15 15 0%
Chair of Remuneration Committee 15 15 0%
Senior Independent Director combined with Chair of Nomination Committee 15 15 0%
Oversight of employee engagement and CSR 15 15 –
Variable dislocation allowance for non-Swiss Directors (1)
5 to 10 5 to 10 0%
1. The level of dislocation allowance for non-Swiss Directors is determined according to their country of residence.

Remuneration outcomes for 2022

Single total figure of remuneration table (Audited)
The following table shows the total remuneration in respect of the year ending 31 December 2022, together with the
prior year comparative.

Executive Directors
Long Term
Salary Benefits Pension Other Annual bonus Incentive Awards Total Total fixed Total variable
£’000 2022 2021 2022 2021 2022 2021 2022 2021 2022 2021 2022 2021 2022 2021 2022 2021 2022 2021

Mark
Dixon 875 875 – – 61 84 – – 438 656 – 274 1,374 1,890 936 959 438 931
Charlie
Steel 74 – – – 6 – 74 – – – – – 154 – 154 – – –
Glyn
Hughes 366 291 – – 26 20 – – 183 218 – – 575 528 392 310 183 218

108 IWG plc Annual Report and Accounts 2022

Non-Executive Directors

Governance
Long Term
Fees Benefits Pension Annual bonus Incentive Awards Total
£’000 2022 2021 2022 2021 2022 2021 2022 2021 2022 2021 2022 2021

Douglas Sutherland 300 300 – – – – – – – – 300 300

Laurie Harris 87 87 – – – – – – – – 87 87
Nina Henderson 102 102 – – – – – – – – 102 102
Tarun Lal 46 – – – – – – – – – 46 –
Sophie L'Hélias 6 – – – – – – – – – 6 –
Florence Pierre 61 67 – – – – – – – – 61 67
François Pauly 82 82 – – – – – – – – 82 82

Annual bonus – The bonus shown is the full award in respect of the relevant financial year. Half of the bonus awarded to Executive Directors was deferred
into shares for three years.

Pension - This includes a cash payment to Charlie Steel in lieu of a pension contribution.

Other - This includes a bonus award that was agreed to be paid to Charlie Steel as part of his recruitment, given he joined IWG towards the very end
of the financial year. See page 112 for further information.

Long Term Incentive Awards – Includes the value of awards made to Mark Dixon under the PSP in previous years which vested in respect of a
performance period ending in the relevant financial year. The 2019 PSP award (118,054 shares) vested in March 2022 based on performance until
31 December 2021; the value of this is shown in 2021 and reflects a price on the date of vesting of 232.4p. None of the 2019 PSP value of £274.4k was
attributable to share price increase.

Charlie Steel was appointed as Director and Chief Financial Officer on 1 November 2022. Remuneration detailed above reflects time served in respect
of the role during the relevant period.

Glyn Hughes was appointed as Director and Chief Financial Officer on 25 March 2021 and resigned on 31 October 2022. Remuneration detailed above
reflects time served in respect of the role during the relevant period.

Tarun Lal was appointed as Non-Executive Director on 10 May 2022. Remuneration detailed above reflects time served in respect of the role during
the relevant period.

Sophie L’Hélias was appointed as Non-Executive Director on 1 December 2022. Remuneration detailed above reflects time served in respect of the role
during the relevant period.

Florence Pierre resigned as Non-Executive Director on 30 November 2022. Remuneration detailed above reflects time served in respect of the role
during the relevant periods.

IWG plc Annual Report and Accounts 2022 109

Directors’ Remuneration report continued

Determination of 2022 annual bonus (Audited)

The targets set for the 2022 bonus at the start of the year were as follows:

Threshold Target
payout (60% of Maximum
Measure (% of maximum) Threshold maximum) (100% of award) Achieved

Operating profit (pre-IFRS 16 basis) (33.3% weighting) 33% £117m £130m £150m £(48)m(1)
Relative TSR versus FTSE 350 (excluding investment Exceeds the Below
trusts) (33.3% weighting) 25% Median – median by 10% median
Targets met Targets met
Strategic objectives (including ESG) (33.3% weighting)(2) N/A N/A N/A in full in full
1. Reflects the achieved pre-IFRS 16 operating profit after adjusting items.
2. Assessment of the strategic objectives is shown below.

The strategic objectives for the annual bonus were assessed against two equally weighted measures. The targets and
outcome against each measure were as follows:

Measure Assessment Outcome

Successful establishment of Worka Strategic development 100%

through the combination of IWG digital During the year under review executive leadership actions were taken to
assets with The Instant Group (50%) ensure that Worka was created, through the combination of IWG digital
comprising: assets with The Instant Group, to operate as a standalone entity serving
the flexible workspace industry.
• Strategic development (1/3)
• Financial performance (1/3) Financial performance
• Migration of assets (1/3) The 2022 financial performance targets for Worka were achieved,
resulting in an EBITA of £115m.

Migration of assets
The migration of relevant IWG digital assets into Worka was successfully
achieved, contributing to meeting the strategic and financial objectives.

Environment and climate change (50%): The Executives have been active in refreshing our climate strategy during 100%
2022 and have put measures in place to ensure that we are continuously
Clear actions and commitment to achieve working to reduce carbon emissions. As a result of management’s actions
Net Carbon Neutrality during 2023 (1/2), during 2022 we are on track to achieve our target of carbon neutrality
with meaningful targets and plans with during 2023 and have put in place plans to enable us to target attainment
interim milestones for achieving the of 100% certified green energy by 2030 and Net Zero carbon emissions no
conversion to green certified electricity later than 2040. Full achievement was based on environment and climate
and Net Zero carbon emissions (1/2) change objectives being fully integrated into our strategy.

During 2022 we were rated as an AA organisation by the MSCI index. Further

information on our achievements in 2022 and our carbon reduction journey
can be found in our Environment report on pages 56 to 59.

Bonus
maximum Bonus Deferred
(% of base awarded (% Bonus awarded Cash bonus shares
Director salary) of award) (£’000) (£’000) (£’000)(1)

Mark Dixon 150% 33.33% 438 219 219

Glyn Hughes(2) 150% 33.33% 183 92 92
1. Half of the bonus was awarded in cash, with half deferred in shares which vest after three years.
2. Glyn Hughes resigned on 31 October 2022. Bonus detailed reflects time served in respect of the role.

110 IWG plc Annual Report and Accounts 2022

PSP awards vesting in 2023 (Audited)

Governance
The award made to Executive Directors under the PSP in 2020 was subject to a TSR performance metric measured
over the three financial years ending 31 December 2022. Performance and vesting are as detailed below.

Threshold Maximum Performance

Performance conditions Threshold vesting performance Maximum vesting performance achieved Actual % vesting

Relative TSR versus FTSE 350 10% compound

excluding investment trusts annual growth Below
(100% weighting) 25% Median 100% above median median 0%

PSP awards vesting in 2024 (Audited)

PSP awards granted to Executive Directors on 9 March 2022 which vest subject to a three-year performance period
ending 31 December 2024 were as follows:

% of maximum
Number of Value of award amount receivable
Executive share options % of base salary (£’000)(1) for threshold vesting

Mark Dixon 857,844 250% £2,187 25%

Glyn Hughes(2) 431,373 250% £1,100 25%
1. Based on a face value grant of 250% of salary and using the share price of 255.0p on 9 March 2022.
2. Glyn Hughes’ award has lapsed following his resignation on 31 October 2022.

The awards are subject to a TSR performance metric as summarised below.

Threshold Maximum
Performance conditions Threshold vesting performance Maximum vesting performance

10% compound
Relative TSR versus FTSE 350 excluding investment trusts annual growth
(100% weighting) 25% Median 100% above median

The Company’s current share price, including current assumptions regarding the future implementation of the Company’s
strategic transformation referenced in analysts’ reports, has been taken into account when setting stretching relative
TSR targets.

Awards are subject to a post-vesting holding period of two years. This requires the Executive Directors to hold on to the
net-of-tax number of vested shares for a period of two years following vesting.

IWG plc Annual Report and Accounts 2022 111

Directors’ Remuneration report continued

DSBP awards granted in the year

DSBP awards granted to Executive Directors on 9 March 2022 as a deferred bonus in respect of the financial year ended
31 December 2021 and which become exercisable on the third anniversary after the date of grant, subject to continuous
employment, were as follows:

Number of share % of Value of award(1)

Executive options 2021 bonus (£’000)

Mark Dixon 128,677 50% £328

Glyn Hughes 42,738 50% £109

Recruitment terms for new CFO

To facilitate the recruitment of Charlie Steel, a one-off award was granted at the time of his appointment in recognition
of the awards being forgone in leaving his previous employer.

The Committee considered the value and nature of awards being forgone when determining the form of any
replacement award. The Committee determined to grant the buyout award through a PSP with forward looking
performance conditions, as this ensures that the incoming executive is aligned to IWG performance and shareholders’
interests immediately. The Committee sought to replicate the target value of awards being forgone when determining
the value of the buyout award.

The below award will vest five years from the date of grant, and the number of interests granted was as follows:

% of maximum
Number of share Value of award amount receivable
Executive options (£’000)(1) for threshold vesting

Charlie Steel 511,751 £675 25%

1. Determined by reference to the middle market quotation at close on 1 November 2022, being 131.9p.

The award is subject to a TSR performance metric, assessed over a three-year performance period beginning
on 23 August 2022. This condition is summarised below.

Threshold Threshold Maximum Maximum

Performance conditions vesting performance vesting performance

10% compound
Relative TSR versus FTSE 350 excluding investment trusts annual growth
(100% weighting) 25% Median 100% above median

In addition, to facilitate his recruitment and in recognition of a 2022 bonus award being forgone and the fact that he
joined IWG towards the end of the financial year, the Committee agreed to award a bonus at 100% of salary for 2022,
pro-rated for when he commenced employment. Given his start date of 1 November 2022, the total bonus awarded is
£73k. 50% of this award will be deferred into shares under the DSBP which will vest after three years, in line with our
general policy for Executive Directors. This provides further immediate alignment to IWG share price.

Total pension benefits

During the year under review, the Executive Directors received pension contributions of 7% of salary into defined
contribution arrangements (or cash equivalent) plus any contributions in accordance with standard local practice or
employment regulations. Details of the value of pension contributions received in the year under review are set out in
the Pension column of the single figure of remuneration table on page 108.

112 IWG plc Annual Report and Accounts 2022

Statement of share scheme interests and shareholdings (Audited)

Governance
Executive Directors are expected to build a holding in the Company’s shares to a minimum value of two times their
base salary within five years of their appointment. This must be built through the retention of the net-of-tax shares
vesting under the Company’s equity-based share plans. The following table sets out, for Directors who served during
the year, the total number of shares held (including the interests of connected persons) as at 31 December 2022
alongside the interests in share schemes for the Executive Directors. Details for Glyn Hughes are as at 31 October 2022
when he resigned as Director and Chief Financial Officer. Details for Florence Pierre are as at 30 November 2022 when
she resigned as Non-Executive Director.

Shareholding guidelines
Options under
the Share Option
PSP options for Plan or as a One
PSP options which Off Award
Deferred Share subject to performance subject to
Shares held % of salary Guideline % of salary Bonus Plan performance conditions have performance
outright required met? attained(1) options(2) conditions(3) been achieved(4) conditions)

Executive
Directors
Mark Dixon 289,178,386 200% Yes 54,761.3% 301,031 1,495,972 945,190 –
Charlie Steel – 200% No – – – – 511,751(5)
Glyn Hughes – 200% No – 42,738 752,260 – 300,000(6)
Non-Executive
Directors
Douglas
Sutherland 400,000
Laurie Harris 15,000
Nina Henderson 30,800
Tarun Lal –
Sophie L'Hélias –
François Pauly 125,000
Florence Pierre –
1. Based on a share price of 166p and base salary as at 31 December 2022.
2. Half of any bonus awarded is deferred in share options which vest after three years, subject to continued employment but no further performance
targets.
3. Unvested awards under the 2021 and 2022 PSP are subject to further performance conditions. PSP awards granted to Glyn Hughes lapsed following his
resignation on 31 October 2022.
4. Options under the PSP for which performance conditions have been achieved are subject to a two-year holding period requirement and become
exercisable on the fifth anniversary of the date of grant and remain exercisable until the day before the tenth anniversary of the date of grant.
5. On 2 November 2022 Charlie received a conditional award over 511,751 shares at nil cost. This was granted as a one-off award arrangement established
under Listing Rule 9.4.2(2) in order to facilitate his recruitment. The level of the award was determined by reference to compensation otherwise due
Charlie, that he gave up upon accepting employment with IWG. See further information on page 112.
6. In August 2020 Glyn Hughes was granted unvested conditional options under the Company’s Share Option Plan at an exercise price of 222.6p per
share. These options lapsed following his resignation on 31 October 2022.

With the exception of the Directors’ interests disclosed in the table above, no Director had any additional interest in the
share capital of the Company during the year. Movements in Directors’ share interests since year end to the date of
this report are as follows:

• On 8 March 2023 1,139,027 options were issued to Mark Dixon under the PSP as further detailed on page 108.
• On 8 March 2023 572,768 options were issued to Charlie Steel under the PSP as further detailed on page 108.
• On 8 March 2023 113,903 options were issued to Mark Dixon under the DSBP as part of the 2022 annual bonus as
further detailed on page 110.
• On 8 March 2023 19,145 options were issued to Charlie Steel under the DSBP as part of a bonus to facilitate his
recruitment as detailed on page 112.

IWG plc Annual Report and Accounts 2022 113

Directors’ Remuneration report continued

Supporting disclosures and additional context

Percentage change in remuneration of Directors compared to employees
The table below shows the percentage change in remuneration of each Director compared to our employees in
Switzerland (determined to be the most representative comparison) on a full-time equivalent basis, between the year
ending 31 December 2019 and the year ending 31 December 2022. Comparisons have been made to employees on a
full time-equivalent basis.

Year-on-year change in Directors’ and employees’ pay

2022 2021(1) 2020
Annual
Base salary Benefits bonus Base salary Benefits Annual bonus Base salary Benefits Annual bonus
% change % change % change % change % change % change % change % change % change

Executive Directors
Mark Dixon 0% – (33)% 0% – NM(4) 6% – (100)%(2)
Charlie Steele – – – – – – – – –
Glyn Hughes (5)
26% – (19)% – – NM (4)
– – –
Non-Executive Directors
Douglas Sutherland 0% – – 0% – – 20% – –
Laurie Harris 0% – – 0% – – 12% –
Nina Henderson 0% – – 0% – – 33% – –
Tarun Lal – – – – – – – – –
Sophie L'Hélias – – – – – – – – –
François Pauly 0% – – 0% – – 12% – –
Florence Pierre(6) (8)% – – 0% – – 9% – –
Employees 3% (1)%(7) 3% 6% (3)%(7) NM(4) 9% 2% (100)%(3)
1. All Executive Directors and Non-Executive Directors had a salary freeze / fee freeze between 2020 and 2021. In addition, in response to the
COVID-19 pandemic Executive Directors and Non-Executive Directors voluntarily agreed to a 50% reduction in their base salaries from 1 May 2020 to
31 December 2020 and the salary increases reflecting performance, increased responsibilities (Nina Henderson’s responsibilities increased to include
oversight of employee engagement and CSR) and market comparables, which were approved at the 2020 annual general meeting, were voluntarily
deferred until 1 January 2021. There will be no recovery of the deferred increases or the voluntary reductions. The table reflects the % changes
excluding the effect of these voluntary waivers and deferrals during the height of the COVID-19 pandemic.
2. No annual bonus was paid to Mark Dixon in respect of 2020. A bonus of £1,237.5k was paid in respect of 2019.
3. No annual bonuses were paid to employees in Switzerland in respect of 2020.
4. The percentage change is not meaningful due to no annual bonuses being paid in respect of 2020.
5. Glyn Hughes was appointed as Director and Chief Financial Officer on 25 March 2021 and resigned on 31 October 2022. Bonus and base salary changes
are calculated with reference to time served in the role in the relevant period.
6. Florence Pierre resigned on 30 November 2022. Remuneration detailed above reflects time served in respect of the role during the relevant period.
7. Reductions in employee benefits during 2021 and 2022 were primarily due to reductions in disturbance allowances and car allowances resulting from
changes in the way employees worked during the COVID-19 pandemic.

Relative importance of spend on pay

The table below shows total employee remuneration and distributions to shareholders in respect of the years ending
31 December 2022 and 31 December 2021 and the percentage changes between years:

Change
2022 2021 2021 to 2022

Total employee remuneration £423m £342m 23.7%

Distributions to shareholders via dividends and share buybacks £6m £0m NM(1)%
1. No distributions to shareholders were made in respect of 2021, in 2022 2.1m shares were repurchased.

114 IWG plc Annual Report and Accounts 2022

Chief Executive Officer’s pay ratio

Governance
The table below shows our voluntary disclosure of the Chief Executive Officer’s pay ratio information from 2019 and the
required disclosure from 2020 to 2022 at the 25th, 50th and 75th percentiles compared to the pay of our UK employees.
The ratios have been calculated based on the single total figure of remuneration for Mark Dixon and the total pay of our
employees on a full-time equivalent basis under calculation methodology A of the regulations. No element was omitted
for the purpose of the calculation.

The median pay ratio was lower this year as compared with last year largely due to the CEO’s bonus for 2022 being
awarded at 33.33% of maximum compared to the 2021 bonus which was awarded at 50% of maximum. Due to the
differences in remuneration structure between the CEO and employees and the higher weighting put on the variable
pay elements for the CEO, we expect this ratio to fluctuate year on year.

Overall, the Committee is satisfied that the median ratio is consistent with IWG’s pay, reward and progression policies
for all employees which relate pay levels to performance and market benchmarks. Bonus schemes, participated in by
the majority of employees, and long-term incentives align performance with shareholder experience.

P25 P75
(Lower P50 (Upper
Financial year Methodology quartile) (Median) quartile)

2019 Option A 231:1 148:1 102:1

2020 Option A 43:1 35:1 20:1
2021 Option A 74:1 50:1 29:1
2022 Option A 49:1 36:1 24:1
Mark Dixon P25 P50 P75
2022 (£’000) (£’000) (£’000) (£’000)

Total pay 1,374 28 38 57

Base salary 875 27 36 51

Performance graph and table

The graph below shows the TSR of IWG in the ten-year period to 31 December 2022 against the TSR of the FTSE 350
(excluding investment trusts). TSR reflects share price growth and assumes dividends are reinvested over the relevant
period. The Committee considers the FTSE 350 (excluding investment trusts) relevant since it is an index of companies
of similar size to IWG.

IWG plc 500

Value (£)
(rebased)
400

300

200

100

Dec Dec Dec Dec Dec Dec Dec Dec Dec Dec Dec
2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
■ IWG
■ FTSE 350 (exclusing investment trusts)
Source: Eikon from Refinitiv

This graph shows the value, by 31 December 2022, of £100 invested in IWG plc on 31 December 2012, compared with
the value of £100 invested in the FTSE 350 (excluding investment trusts) Index on the same date.

IWG plc Annual Report and Accounts 2022 115

Directors’ Remuneration report continued

The table below provides remuneration data for the Chief Executive Officer for each of the ten financial years over the
equivalent period.
2013 2014 2015 2016 2017 2018 2019 2020 2021(1) 2022

Single total figure

of remuneration £1,854k £2,770k £1,968k £3,035k £1,132k £1,451k £4,181k £1,454k £1,890k £1,374k
Bonus (% of
maximum) 79% 100% 100% 93% 0% 43% 100% 0% 50% 33%
Long-term
incentive vesting
(% of maximum) 35% 86% 97% 91% 11% 2% 100% 33% 17.1% 0%
1. The single total figure of remuneration has been restated to reflect that the share price for the 2019 PSP on the date of vesting is now known.

Service contracts/letters of appointment

Executive Directors have service contracts with the Group which can be terminated by the Company or the Director by giving
12 months’ notice. The Chairman and Non-Executive Directors are appointed for an initial three-year term, which shall continue
unless terminated with six months’ notice on either side, no contractual termination payments being due and subject to
retirement pursuant to the articles of association at the annual general meeting.

The Directors’ service contracts are available for inspection at the Company’s registered office within normal business hours.
The following table sets out the dates that each Director was first appointed by the Group, the expiry date of the current term
and the length of service as of 31 December 2022. Charlie Steel and Sophie L’Hélias will seek election at the 2023 annual general
meeting when all other directors, except those retiring, will seek re-election.

Initial appointment Length of service

date as Director within Expiry of as Director
Current service contract/appointment agreement the Group current term with the Group

Executive Directors
Mark Dixon Appointment agreement – 19 December 2016 Founder – Founder
Director service agreement – 1 July 2020
Charlie Steel Appointment agreement – 23 August 2022 1 November 2022 – 2 months
Employment agreement – 23 August 2022
Non-Executive
Directors
Douglas Sutherland Appointment agreement – 16 February 2017 27 August 2008 – 14 years 5 months (11
years 8 months as
Chairman)
Laurie Harris Appointment agreement – 14 May 2019 14 May 2019 – 3 years 8 months
Nina Henderson Appointment agreement – 19 December 2016 20 May 2014 – 8 years 8 months
Tarun Lal Appointment agreement – 7 March 2022 10 May 2022 9 May 2025 8 months
Sophie L'Hélias Appointment agreement – 30 November 2022 1 December 2022 1 December 1 month
2025
François Pauly Appointment agreement – 19 December 2016 19 May 2015 – 7 years 8 months

116 IWG plc Annual Report and Accounts 2022

Payments to past Directors/payments for loss of office – Glyn Hughes

Governance
(Audited)
Glyn Hughes stepped down from the Board on 31 October 2022.

In respect of 2022 the Committee determined that Glyn would remain eligible to receive a bonus for 2022, pro-rated
for time served to 31 October 2022. They also determined that Glyn would not be eligible to receive a PSP award in
respect of 2022.

In relation to unvested equity awards, the Committee determined that Glyn was a good leaver, under the terms of the
relevant share plan rules. In line with the Policy, the Committee sought to find an outcome which is in the best interests
of the Company and its shareholders, taking into account the specific circumstances, contractual obligations and
seeking to pay no more than is warranted.

In its absolute discretion the Committee determined that the following awards would lapse in their entirety:

• Share Option Plan award granted on 5 August 2020 (prior to joining the Board); and
• PSP awards granted on 26 March 2021 and 9 March 2022.

The awards granted under the DSBP on 9 March 2022 and 8 March 2023, will become exercisable at the normal times,
on 9 March 2025 and 8 March 2026 respectively, subject to the rules of the DSBP.

Advisors to the Committee

The Executive Compensation team within PwC provided independent advice to the Committee during the year. No other
services were provided by PwC during the year. PwC was appointed by the Committee during 2020. The fees charged by PwC
for the provision of independent advice to the Committee during 2022 were £37k (2021: £19k). With regard to remuneration
advice, the Committee is comfortable that PwC’s engagement partner and team are objective and independent.

Statement of voting at general meeting

The Committee is directly accountable to shareholders and, in this context, is committed to an open and transparent
dialogue with shareholders on the issue of executive remuneration. The members of the Committee attend the
Company’s annual general meeting and are available to answer shareholders’ questions about Directors’ remuneration.
Votes cast by proxy and at the annual general meetings held on 12 May 2020 and 10 May 2022 in respect of
remuneration-related resolutions are shown in the table below:

Votes for Votes against

Resolution # % # % Total votes cast Votes withheld

Approval of Directors’ Remuneration Policy

at the 2020 annual general meeting 727,136,890 94.33% 43,747,207 5.67% 770,884,097 1,177,273
Approval of the Annual Report on Remuneration
for year ending 31 December 2021 598,542,469 72.6% 225,876,892 27.4% 824,423,243 3,882

Whilst the resolution approving the Annual Report on Remuneration on for the financial year ending 31 December 2021
on an advisory basis was supported by a clear majority of shareholders the significant minority vote against was
recognised. The Committee consulted with shareholders before the 2022 annual general meeting. The majority of
shareholders who the Committee engaged were supportive of the rationale used in applying its discretion in respect of
the Executive Director bonus outcome for 2021 but the Committee recognises the views of some shareholders and
proxy advisors who did not support this use of discretion. Overall the Committee believes that it acted fairly and
appropriately in determining the bonus outcome for Executive Directors in 2021. Following the 2022 annual general
meeting, Nina Henderson, the Committee Chair, and Douglas Sutherland, the Chairman of the Board, contacted major
shareholders who had not supported the Annual Report on Remuneration to understand the reasons for their vote and
to offer further engagement.

For and on behalf of the Committee

Nina Henderson
Chair of the Remuneration Committee

IWG plc Annual Report and Accounts 2022 117

Directors’ report

Directors’
report
The Directors of the Details of the role of the Board Principal activity
Company present their can be found on pages 82
and 83, and the process for The Company works with
Annual Report and the the appointment of Directors franchise partners, landlords and
audited financial can be found on page 86. property owners to provide the
world’s largest network of flexible
statements of the workspace.
The Directors’ biographies,
Company and its Corporate Governance report,
subsidiaries (together Nomination Committee report, Business review
the “Group”) for the year Audit Committee report, The Directors have presented
Directors’ Remuneration report a Strategic report on pages 1
ended 31 December 2022. and Directors’ statement on to 71 as follows:
pages 72 to 117 and 121 all form
Directors part of this report. • The Chief Executive Officer’s
The Directors of the Company review and Chief Financial
who held office during the
Corporate Officer’s review, on pages 14
financial year under review were: Governance to 17 and 36 to 43 respectively,
Statement address:
Executive Directors The Governance section of this • the review of the Company’s
• Mark Dixon Annual Report on pages 72 to 121, business (pages 14 to 17);
• Charlie Steel (appointed together with information
contained in the Shareholder • an indication of the likely
1 November 2022) future developments in the
• Glyn Hughes (resigned information section on page 190,
constitutes our Corporate business (pages 16 and 17);
31 October 2022) • the development and
Governance Statement. This
performance of the business
Non-Executive includes:
during the financial year
Directors • information on how the (pages 36 to 40); and
• Douglas Sutherland (Chairman) Company complies with the • the position of the business
• Laurie Harris UK Corporate Governance at the end of the year (pages
• Nina Henderson Code published by the 40 to 43).
• Tarun Lal (appointed Financial Reporting Council
in July 2018 (the "Code"), and • The Risk management and
10 May 2022) principal risks report, on pages
where the Code is publicly
• Sophie L’Hélias (appointed available (page 75); 44 to 52, includes a description
1 December 2022) of the principal risks facing the
• a description of the main
• Florence Pierre (resigned features of our internal Company, including financial
30 November 2022) control and risk management risks, and the steps taken and
• François Pauly arrangements in relation policies implemented to
to the financial reporting mitigate those risks.
Biographical details for the current process (pages 92 and 93); • Climate change has been
Directors are shown on pages 72 • a description of the identified as a stand-alone
and 73. composition and operation of principal risk and the steps taken
the Board and its Committees to manage this risk are detailed
Details of the Directors’ interests (pages 74 to 117); and on page 48 and pages 67 to 69.
and shareholdings are given • The Company’s activities in
in the Directors’ Remuneration • our Board Diversity Policy
set out on page 85. research and development are
report on page 113. detailed on page 25 and in the
Risk management and principal
risks report on page 47.

118 IWG plc Annual Report and Accounts 2022

• The ESG section, on pages 54 Results and dividends Political and

Governance
to 71, includes the following
reports: The loss before taxation for the charitable donations
year was £105m (2021: loss of It is the Group’s policy not
• Environment Report £259m). to make political donations either
on pages 56 to 59; in the UK or overseas.
• Social Report on pages 60 No interim dividend has been paid
to 65 covering employee and the Directors do not The Group made charitable
development, diversity recommend a final dividend in donations of £0.5m during the
and performance, and respect of the 2022 financial year year (2021: £0.4m).
community engagement; (2021: £nil).
and Capital structure
• Task Force on Climate
Policy and practice on
payment of creditors The Company’s share capital
Related Financial Disclosures (including treasury shares)
on pages 66 to 69. The Group does not follow a comprises 1,057,248,651 issued
• The Nomination Committee universal code dealing specifically and fully paid up ordinary shares
report on pages 84 to 89 with payments to suppliers but, of 1p nominal value in IWG plc
covers our approach to Board where appropriate, our practice (2021: 1,057,248,651). All ordinary
diversity. is to: shares (excluding treasury shares)
• The Directors’ statement on have the same rights to vote at
page 121 includes the statutory • agree the terms of payment general meetings of the Company
statement in respect of upfront with the supplier; and to participate in distributions.
disclosure to the auditor. • ensure that suppliers are made There are no securities in issue
aware of these terms of that carry special rights in relation
The Directors do not consider payment; and to the control of the Company.
any contractual or other • pay in accordance with The Company’s shares are traded
relationships with external contractual and other legal on the London Stock Exchange.
parties to be essential to the obligations.
business of the Group. Details of the Company’s
Employees employee share schemes can be
Anti-bribery and The Group treats applicants for
found in note 26 of the notes to
anti-corruption the accounts on pages 168 to 175.
employment with disabilities with The Company’s employee share
The Company is committed full and fair consideration schemes contain provisions
to carrying out business in an according to their skills and relating to a change of control
honest and ethical manner and capabilities. of the Company. The terms,
has a zero tolerance of bribery conditions and discretions for
and corruption. All employees Should an employee become the vesting and exercise of
receive training on our bribery disabled during their employment, awards and options may be
and corruption policy. efforts are made to retain them in amended in the event of a change
The Company’s statement their current employment or to of control of the Company.
of commitment can be found explore opportunities for their
on the Company’s website: retraining or redeployment
www.iwgplc.com. elsewhere within the Group.

Respect for human All employees are encouraged

rights to become involved in the
Company’s performance.
The Company has zero tolerance Employee surveys are routinely
to slavery and human trafficking fielded to gather information
and our statement made in on the Company, employee
accordance with the Modern contribution to performance
Slavery Act 2015, which is and other issues, and through our
reviewed by the Board annually, global Voice Councils employees
can be found on the Company’s are provided with a dedicated
website: www.iwgplc.com. forum where they can express
their views to the relevant senior
audience.

IWG plc Annual Report and Accounts 2022 119

Directors’ report continued

Power for the Substantial interests

Company to At 17 March 2023, the Company has been notified of the following
issue shares substantial interests held in the issued share capital of the Company.
At the Company’s annual general Number of % of issued share capital
meeting held on 10 May 2022 the voting rights (excluding treasury shares)
shareholders of the Company
Estorn Limited(1) 289,178,386 28.73%
approved resolutions giving
authority for the Company to allot Toscafund Asset Management LLP 146,625,056 16.80%
ordinary shares in the Company 1. Mark Dixon owns 100% of Estorn Limited.
up to one-third of the Company’s
issued share capital and up to
two-thirds of the Company’s
issued share capital in connection
1,479,685 shares were Post balance sheet
repurchased during 2022, the
with a rights issue and to purpose of which was to satisfy
events
dis-apply pre-emption rights, share option obligations and as Subsequent events are detailed
in each case, until the earlier of part of a share buyback in note 34 of the notes to the
the conclusion of the Company’s programme supporting the accounts on page 175.
next annual general meeting or Board’s prudent approach to
9 August 2023. managing its capital structure. Auditors
On 21 December 2020 the Branches In accordance with Jersey law,
a resolution for the
shareholders of the Company
approved resolutions at a general The Company is incorporated in reappointment of KPMG Ireland
meeting for the allotment and Jersey with a head office branch as auditors of the Company
issue of new ordinary shares in Switzerland. is to be proposed at the
on a non-pre-emptive basis forthcoming annual
upon conversion of £350m
Going concern general meeting.
unsubordinated unsecured The Directors, having made
guaranteed convertible bonds appropriate enquiries, have a
Approval
due 2027 (the “Bonds”) into reasonable expectation that the This report was approved by the
ordinary shares in IWG plc in Group and the Company have Board on 20 March 2023.
accordance with their terms. adequate resources to continue
in operational existence for a On behalf of the Board
Such authority is limited period of at least 12 months from
to the allotment and issue of new the date of approval of the
ordinary shares pursuant to the financial statements. For this Timothy Regan
conversion of the Bonds, with no reason, they continue to adopt
such conversion occurring during Company Secretary
the going concern basis
2022. Following a change of in preparing the accounts
control of the Company, the on pages 129 to 182. 20 March 2023
holder of each Bond may exercise
their conversion right using the In adopting the going concern
formula set out in the terms of the basis for preparing the financial
Bonds or may require the issuer statements, the Directors have
to redeem that Bond at its considered the further
principal amount, together with information included in the
accrued and unpaid interest. business activities commentary
as set out on pages 14 to 17,
Power for the as well as the Group’s principal
Company to risks and uncertainties as set
repurchase shares out on pages 44 to 52 and
the outcomes of modelled
At the Company’s annual general and stress-tested scenarios set
meeting held on 10 May 2022 out in the Viability statement
the shareholders of the on page 53.
Company approved a resolution
giving authority for the Company Further details on the going
to purchase in the market up concern basis of preparation
to 100,717,023 ordinary shares can be found in note 2 of the
representing approximately notes to the accounts,
10% of the issued share capital on page 135.
(excluding treasury shares)
as at 5 April 2022.

120 IWG plc Annual Report and Accounts 2022

Directors’ statement

Directors’

Governance
statement
Statement of Directors’ The Directors are responsible for relevant audit information and
responsibilities in keeping adequate accounting to establish that the Group’s
records that are sufficient to show auditor is aware of that
respect of the Annual and explain the Group’s transactions information. These financial
Report and financial and which disclose with reasonable statements have been approved
statements accuracy at any time the financial by the Directors of the Company.
position of the Group and to enable The Directors confirm that the
The Directors are responsible for them to ensure that its financial financial statements have been
preparing the Annual Report and statements comply with the Law prepared in accordance with
the Group financial statements and IFRS. They have general applicable law and regulations.
in accordance with applicable responsibility for taking such steps
law and regulations. as are reasonably open to them to Statement of
In accordance with the Companies
safeguard the assets of the Group responsibility
and to prevent and detect fraud and
(Jersey) Law 1991 (the “Law) the other irregularities. We confirm that to the best
Directors are responsible for of our knowledge:
preparing Group financial Under applicable law and
statements each financial year regulations, the Directors are also 1. the financial statements
using generally accepted responsible for preparing a prepared in accordance with
accounting principles (“GAAP”) Directors’ report, a Strategic report, the applicable set of accounting
as prescribed in the Law. The a Directors’ Remuneration report standards give a true and fair
Directors use International Financial and a Corporate Governance view of the assets, liabilities,
Reporting Standards (“IFRS”) as Statement that comply with that financial position and profit or
adopted by the EU which have law and those regulations. loss of the Group;
been specified as meeting the 2. the Directors’ report, including
Law’s prescribed standards. The Directors are responsible content contained by reference,
for the maintenance and integrity includes a fair review of the
In accordance with the Law, the of the corporate and financial development and performance
Directors must not approve the information included on the of the business and the position
financial statements unless they Company’s website. of the Group taken as a whole,
are satisfied that they give a true together with a description of the
and fair view of the state of affairs Legislation in the UK and Jersey principal risks and uncertainties
of the Group and its profit or loss governing the preparation and that they face; and
for the period. In preparing the dissemination of financial 3. the Annual Report and financial
Group financial statements, the statements may differ from statements, taken as a whole, is
Directors are required to: legislation in other jurisdictions. fair, balanced and understandable
and provides the information
1. select suitable accounting Statutory statement necessary for shareholders to
policies and then apply them
consistently;
as to disclosure to assess the Group’s position and
2. make judgements and estimates auditor performance, business model
and strategy.
that are reasonable and prudent; The Directors who held office at
3. state which prescribed GAAP the date of approval of this By order of the Board
the financial statements have Directors’ statement confirm that:
been prepared in accordance Mark Dixon
with; and • so far as they are each aware,
4. prepare the financial statements there is no relevant audit Chief Executive Officer
on the going concern basis unless information of which the Group’s
it is inappropriate to presume that auditor is unaware; and
the Group and the parent • each Director has taken all the Charlie Steel
company will continue in business. steps that they ought to have Chief Financial Officer
taken as a Director in order to
make themselves aware of any
20 March 2023

IWG plc Annual Report and Accounts 2022 121

Independent auditor’s report to the members of IWG plc

Report on the Audit of the Financial Statements Opinion

We have audited the financial statements of IWG plc and its consolidated undertakings (‘the Group’) for the year ended
31 December 2022 set out on pages 129 to 182, which comprise the consolidated income statement, consolidated
statement of comprehensive income, consolidated statement of changes in equity, consolidated balance sheet,
consolidated statement of cash flows and related notes, including the summary of significant accounting policies set
out in note 2. The financial reporting framework that has been applied in their preparation is Jersey Law and
International Financial Reporting Standards (IFRS) as adopted by the European Union.
In our opinion:
• the financial statements give a true and fair view of the state of the Group’s affairs as at 31 December 2022 and of the
Group’s loss for the year then ended;
• the financial statements have been properly prepared in accordance with IFRS as adopted by the European Union;
and
• the financial statements have been prepared in accordance with the requirements of Companies (Jersey) Law 1991.

Basis for Opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (“ISAs (UK)”) and applicable law.
Our responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the
financial statements section of our report. We believe that the audit evidence we have obtained is a sufficient and
appropriate basis for our opinion. Our audit opinion is consistent with our report to the audit committee.
We were appointed as auditor by the directors on 21 December 2016. The period of total uninterrupted engagement is
for the 7 financial years ended 31 December 2022. We have fulfilled our ethical responsibilities and we remain
independent of the Group in accordance with UK ethical requirements, including the Financial Reporting Council (FRC)'s
Ethical Standard as applied to listed public interest entities. No non-audit services prohibited by that standard were
provided.

Conclusions relating to going concern

The directors have prepared the financial statements on the going concern basis as they do not intend to liquidate the
Group or to cease their operations, and as they have concluded that the Group’s financial position means that this is
realistic. They have also concluded that there are no material uncertainties that could have cast significant doubt over
their ability to continue as a going concern for at least a year from the date of approval of the financial statements (“the
going concern period”).
In auditing the financial statements, we have concluded that the directors’ use of the going concern basis of accounting
in the preparation of the financial statements is appropriate. Our evaluation of the directors’ assessment of the Group’s
ability to continue to adopt the going concern basis of accounting included considering the strategic risks relevant to
the Group’s business model and analysing how those risks might affect the Group’s financial resources or ability to
continue operations for the going concern period.
The sensitivity we considered most likely to adversely affect the Group’s available financial resources over the going
concern period was the potential economic impact of a prolonged economic downturn impacting the Group’s ability to
generate revenue.
We considered various downside scenarios which were more pessimistic than those indicated by the Group’s own
forecasts. A key judgement in the downside scenarios of the Group is that there is a reasonable expectation that the
existing committed debt facilities in place are adequate to cover the Group’s liquidity requirements in such scenarios.
There were no other risks identified that we considered were likely to have a material adverse effect on the Group’s
available financial resources over this period.
Based on the work we have performed, we have not identified any material uncertainties relating to events or
conditions that, individually or collectively, may cast significant doubt on the Group’s ability to continue as a going
concern for a period of at least twelve months from the date when the financial statements are authorised for issue.
In relation to the Group’s reporting on how they have applied the UK Corporate Governance Code, we have nothing
material to add or draw attention to in relation to the Directors’ statement in the financial statements about whether
the directors considered it appropriate to adopt the going concern basis of accounting.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant
sections of this report.
However, as we cannot predict all future events or conditions and as subsequent events may result in outcomes that
are inconsistent with judgements that were reasonable at the time they were made, the absence of reference to a
material uncertainty in this auditor's report is not a guarantee that the Group will continue in operation.

122 IWG plc Annual Report and Accounts 2022 122

Detecting Irregularities including Fraud
We identified areas of laws and regulations that could reasonably be expected to have a material effect on the financial
statements and risks of material misstatement due to fraud, using our understanding of the entity's industry, regulatory
environment and other external factors and inquiry with the directors. In addition, our risk assessment procedures
included:
• Inquiring with the directors and other management as to the Group’s policies and procedures regarding compliance
with laws and regulations, identifying, evaluating and accounting for litigation and claims, as well as whether they have
knowledge of non-compliance or instances of litigation or claims.
• Inquiring of directors as to the Group’s high-level policies and procedures to prevent and detect fraud, as well as
whether they have knowledge of any actual, suspected or alleged fraud.
• Inquiring of directors regarding their assessment of the risk that the financial statements may be materially misstated
due to irregularities, including fraud.
• Reading audit committee, nomination committee, remuneration committee and Board meeting minutes.

Financial statements
• Planning and performing analytical procedures to identify any usual or unexpected relationships.
We discussed identified laws and regulations, fraud risk factors and the need to remain alert among the audit team. This
included communication from the Group to component audit teams of relevant laws and regulations and any fraud
risks identified at Group level and request to component audit teams to report to the Group audit team any instances
of fraud that could give rise to a material misstatement at Group level.
Firstly, the Group is subject to laws and regulations that directly affect the financial statements including financial
reporting legislation (including related companies legislation), distributable profits legislation and taxation legislation.
We assessed the extent of compliance with these laws and regulations as part of our procedures on the related
financial statement items, including assessing the financial statement disclosures and agreeing them to supporting
documentation when necessary.
Secondly, the Group is subject to many other laws and regulations where the consequences of non-compliance could
have a material effect on amounts or disclosures in the financial statements, for instance through the imposition of
fines or litigation or the loss of Group’s licence to operate. We identified the following areas as those most likely to have
such an effect: health and safety, employment law and certain aspects of company legislation recognising the nature of
the Group’s activities.
Auditing standards limit the required audit procedures to identify non-compliance with these non-direct laws and
regulations to inquiry of the directors and other management and inspection of regulatory and legal correspondence, if
any. These limited procedures did not identify actual or suspected non-compliance.
We assessed events or conditions that could indicate an incentive or pressure to commit fraud or provide an
opportunity to commit fraud. As required by auditing standards, we performed procedures to address the risk of
management override of controls and the risk of fraudulent revenue recognition. We did not identify any additional
fraud risks.
In response to the fraud risks, we also performed procedures including:
• Identifying journal entries to test based on specific risk criteria and comparing the identified entries to supporting
documentation.
• Evaluating the business purpose of significant unusual transactions, if any.
• Assessing significant accounting estimates for bias.
As the Group is regulated, our assessment of risks involved obtaining an understanding of the legal and regulatory
framework that the Group operates and gaining an understanding of the control environment including the entity’s
procedures for complying with regulatory requirements.
Owing to the inherent limitations of an audit, there is an unavoidable risk that we may not have detected some material
misstatements in the financial statements, even though we have properly planned and performed our audit in
accordance with auditing standards. For example, the further removed non-compliance with laws and regulations
(irregularities) is from the events and transactions reflected in the financial statements, the less likely the inherently
limited procedures required by auditing standards would identify it.
In addition, as with any audit, there remained a higher risk of non-detection of irregularities, as these may involve
collusion, forgery, intentional omissions, misrepresentations, or the override of internal controls. We are not responsible
for preventing non-compliance and cannot be expected to detect non-compliance with all laws and regulations.

123 IWG plc Annual Report and Accounts 2022 123

Independent auditor’s report to the members of IWG plc continued

Key Audit Matters: Our Assessment of Risk of Material Misstatement

Key audit matters are those matters that, in our professional judgement, were of most significance in the audit of the
financial statements and include the most significant assessed risks of material misstatement (whether or not due to
fraud) identified by us, including those which had the greatest effect on: the overall audit strategy; the allocation of
resources in the audit; and directing the efforts of the engagement team.
These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our
opinion thereon, and we do not provide a separate opinion on these matters.
Except for the ‘Valuation of intangible assets arising on acquisition of The Instant Group’, the key audit matters are
consistent with our 2021 audit.
In arriving at our audit opinion above, the key audit matters, in decreasing order of audit significance, were as follows:

Goodwill and Intangible Assets – £1,148 million (2021: £782 million)

Refer to pages 138 (accounting policy) and pages 152 to 155 (financial disclosures)

The Key Audit Matter

There is a risk that the carrying amounts of the Group’s goodwill and intangible assets will be more than the estimated
recoverable amount, if future cash flows are not sufficient to recover the Group’s investment. This could occur if
forecasted cash flows decline in certain markets or where revenue and costs are subject to significant fluctuations. Key
assumptions include revenue growth, occupancy rates, discount rates and terminal values. The recoverability of
goodwill is spread across multiple geographies and economies as highlighted in note 13 and is dependent on individual
businesses acquired achieving or sustaining sufficient profitability in the future. Goodwill relating to the US and UK
(including Worka) country operations accounts for 78% of the total carrying amount with the latter having limited
headroom in the impairment model.
We focus on this area due to the inherent uncertainty involved in forecasting and discounting future cash flows,
particularly in projected revenue growth, which forms the basis of the assessment of recoverability.

How the matter was addressed in our audit

Our audit procedures in this area included, but were not limited to, our assessment of the historical accuracy of the
Group’s forecasts and challenging management’s profitability forecasts underlying their impairment model. We
obtained and documented our understanding of the impairment testing process and tested the design and
implementation of the relevant control therein.
We used our own valuation specialists to assist us in evaluating the key judgements used by the Group, in particular
those relating to the discount rates and terminal growth calculations used to determine the present value of the cash
flow projections. We compared the value in use for the Group as a whole to the Group’s market capitalisation and
noted that the Group’s market capitalisation exceeded the net book value of assets at year end.
We compared the key assumptions to external industry specific and general economic data and performed sensitivity
analysis considering various downside scenarios which were more pessimistic than those considered by the Group. The
key judgement in our approach to addressing the key audit matter was that we focused on the assumptions around
carrying value of UK goodwill due to the limited headroom in the UK operations in the past, and given its significance to
the Group’s goodwill balance.
The Group’s impairment model identified an impairment of £3 million at 31 December 2022 relating to the Group’s
Brazilian Goodwill. Based on the procedures we performed, we found that the key assumptions underpinning
management’s assessment of the recoverable amount of goodwill and intangible assets, are reasonable.

Valuation of intangible assets arising on acquisition of The Instant Group – £324 million
Refer to page 138 (accounting policy) and page 176 (financial disclosures)

The Key Audit Matter

During the year, the Group acquired a majority shareholding in ‘The Instant Group’ as highlighted in Note 28.
At the date of initial recognition, the Group is required to quantify the fair value of the identifiable net assets acquired,
the fair value of the consideration transferred and the amounts allocated to intangibles and goodwill. The identification
of intangible assets and the measurement of fair values involves a significant degree of judgement and estimation.
We focused on this area due to the significance of the goodwill and intangible assets acquired on acquisition and due
to the judgement and estimation involved in the identification, recognition, valuation of intangibles and allocation of this
value to each intangible component.

124 IWG plc Annual Report and Accounts 2022 124

How the matter was addressed in our audit
We obtained and documented our understanding of the process surrounding acquisition and valuation of intangibles
and tested the related design and implementation of the relevant control.
Our audit procedures in this area, among others, included inspection of the underlying legal agreement and related
documentation to ensure the appropriateness of the acquisition accounting applied including the date at which control
is deemed to have passed.
We challenged the Group's critical assumptions in relation to the identification and valuation of intangible assets by
assessing whether intangible assets have been appropriately identified, whether the useful lives determined are
appropriate and by ensuring the mathematical accuracy of the calculations underpinning the values.
With the assistance of our in-house valuation specialists, we evaluated the appropriateness of the methodology used
to value the intangibles by comparing the key assumptions used to external data and by evaluating the work
completed by external experts used by management to assist in preparing the valuation.

Financial statements
We also considered the adequacy of the disclosures in respect of new acquisition to ensure that they are in
compliance with IFRS 3.
We found the judgements made by the Group in the valuation of intangible assets on acquisition of The Instant Group
is reasonable and the disclosures in the financial statements is appropriate.

Recognition of Deferred Tax Assets associated with the Group’s intellectual property in
Switzerland - £77 million (2021: £70 million)
Refer to pages 140 and 141 (accounting policy) and pages 147 to 149 (financial disclosures).

The key audit matter

The Group has significant deferred tax assets in respect of the future benefit of deductible temporary differences and
accumulated tax losses where it is considered probable that they would be utilised or recovered in the foreseeable
future through the generation of future taxable profits by the relevant Group entities or by offset against deferred tax
liabilities. In addition, a significant amount of deferred tax assets were not recognised at the reporting date due to the
uncertainty of the relevant Group entities being able to generate future taxable profits against which the tax losses may
be utilised before they expire.
We identified the recognition of certain deferred tax assets as a key audit matter because of the inherent uncertainty
associated with key assumptions made by management when forecasting future taxable profits, which determine the
extent to which deferred tax assets are or are not recognised. In addition, we considered the significance of the
recognised deferred tax assets in assessing this key audit matter. The estimation uncertainty has continued to be
elevated in 2022 due to the ongoing strategic developments in the business. We focused our attention in particular on
the key assumptions applied by management, including revenue growth, when assessing the recoverability of deferred
tax assets associated with the Group’s intellectual property in Switzerland.

How the matter was addressed in our audit

In this area our audit procedures included using our work on the Group’s forecasts described in the goodwill key audit
matter above. We obtained and documented our understanding of processes related to management’s assessment of
the recoverability of deferred tax assets and tested the design and implementation of the relevant control therein. In
addition, we used our own tax specialists to assist us in evaluating and challenging the key assumptions used by the
Group in calculating the deferred tax assets including assessing the recoverability of the tax losses against the forecast
future taxable profits, taking into account the Group’s tax position, the timing of forecast taxable profits, and our
knowledge and experience of the application of relevant tax legislation.
We considered the historical accuracy of forecasts of future taxable profits made by management by comparing the
actual taxable profits for the current year with management’s estimates in the forecasts made in the previous year and
assessing whether there were any indicators of management bias in the selection of key assumptions.
We considered the impact of the ongoing changes in the Group’s strategy which places greater focus on developing
their capital light model and the impact of this on management’s assessment of the recoverability of the assets
recognised. We challenged management’s key assumptions in relation to the recoverability of the deferred tax assets
recognised in Switzerland, arising on the transfer of the Group’s intellectual property in 2019, by involving our taxation
specialists to evaluate the recoverability of the deferred tax asset in relation to the deductible temporary differences
available. We evaluated whether management’s judgements on the generation of future taxable profits in the
foreseeable future were aligned with the Group’s other business forecasting processes. We assessed the presentation
and disclosure (in accordance with IAS 1 and IAS 12) in respect of taxation related balances and considered whether the
Group’s disclosures reflected the risks inherent in the accounting for the taxation balances.
Based on the audit procedures performed, we found that the key assumptions used by management in calculating the
future taxable profits of the Group for the purpose of assessing the recoverability of deferred tax assets relating to
Swiss intellectual property assets are reasonable.

125 IWG plc Annual Report and Accounts 2022 125

Independent auditor’s report to the members of IWG plc continued

Impairment of Leasehold Property, Plant and Equipment (‘PPE’) and Right of Use (‘ROU’)
assets – £52 million net reversal of impairment (2021: £54 million net reversal of
impairment)
Refer to pages 136 and 138 (accounting policy) and page 156 (financial disclosures).

The key audit matter

There is a risk that the carrying value of the Group’s business centres exceeds the recoverable amount of each centre
given the Group’s ongoing network rationalisation programme which has resulted in the closure and planned closure of
certain centres. In response to this risk, the Group has performed an assessment of the Group’s CGUs (identified as
individual business centres) to identify indicators of impairment. Management carried out an impairment analysis for
each CGU where impairment indicators were identified and impaired the associated Leasehold Improvements PPE and
Right of Use assets to their estimated recoverable amount. Management also reviewed each CGU impaired at 31
December 2021 to determine if previously recognised impairment losses no longer existed or had decreased such that
the carrying value of the CGU should be increased to its recoverable amount at 31 December 2022. We consider this
area to be a key audit matter, in consideration of the significance of the assets and the related net impairment charge
reversal, the judgements made in assessing impairment indicators for each CGU and the key assumptions used to
determine the future cash flows of each CGU, which are used to determine the recoverable amount.
The recoverability of the Group’s Leasehold Improvements PPE and Right of Use assets and the associated impairment
charge recognised in the year have been identified as a key audit matter.

How the matter was addressed in our audit

The audit procedures we have designed to respond to this risk include assessing whether there were indicators of
impairment at the CGU level, including comparing the performance of business centres against expected profitability
measures. We obtained and documented our understanding of the impairment testing process and the design and
implementation of the relevant key control. We tested the completeness of management’s identification of business
centres performing below expectations and accordingly at a greater risk of impairment. Where centres performed
below expectations, we considered whether this was an indicator of impairment given our understanding of the
maturity of the business centre, the status of rent renegotiations with landlords and assessment of the current
performance of the business centre. Where there were indicators of impairment, or where there were indicators that
previously recognised impairment should be reversed, we assessed the Group’s impairment analysis and challenged
the assumptions in relation to the cash flow forecasts used to determine the recoverable amount of each CGU. This
included assessing any expected cash outflows where a business centre will be closed and analysing the change in
circumstances giving rise to an impairment reversal.
We performed testing over the impairment charge and reversal of impairment to validate the accuracy of the net credit
recorded in the income statement in the year. We recalculated the impairment charge and impairment charge reversal
for the year and validated the mathematical accuracy of management’s calculation. The Group recognised a net
reversal of impairment charges of £39 million and £13 million related to Right of Use assets and Leasehold
Improvements PPE respectively in the year ended 31 December 2022. As a result of our audit procedures, we found
that the identification of indicators of impairment and impairment reversals by management was supported by
reasonable judgements. We found the judgements made by management in relation to future cash flow forecasts to
assess the recoverability of individual business centres were supported by reasonable key assumptions and the
calculation of the impairment charge and impairment charge reversal recognised in the year were accurately recorded.
We also considered the adequacy of the disclosures to ensure that they are in compliance with IAS 36 including the
presentation of the net impairment reversal as ‘business as usual’ and ‘adjusting items’.
We found the judgements made by management in relation to future cash flow forecasts to assess the recoverability of
individual business centres were supported by reasonable key assumptions and calculation of the impairment charge
and impairment charge reversal recognised in the year were accurately recorded.

Our application of materiality and an overview of the scope of our audit

The materiality for the consolidated financial statements as a whole was set at £9 million (2021: £9 million) which is
0.33% (2021: 0.40%) of total revenues. In 2022, consistent with 2021, we have used revenue as the benchmark for
materiality. Consistent with 2021, we determined that adjusted profit before tax was not an appropriate benchmark in
2022 given that the Group has recorded a loss for the year. We have determined, in our professional judgement, that
revenue is the principal benchmark within the financial statements relevant to members of the Group in assessing
financial performance.
In line with our audit methodology, our procedures on individual account balances and disclosures were performed to a
lower threshold, performance materiality, so as to reduce to an acceptable level the risk that individually immaterial
misstatements in individual account balances add up to a material amount across the financial statements as a whole.
Performance materiality was set at 75% (2021: 75%) of materiality for the financial statements as a whole, which
equates to £6.8 million (2021: £6.8 million) for the group. We applied this percentage in our determination of
performance materiality because we did not identify any factors indicating an elevated level of risk.
We agreed with the audit committee to report corrected and uncorrected misstatements we identified through our
audit with a value in excess of £0.45 million (2021: £0.45 million). We also agreed to report other audit misstatements
below that threshold that we believe warranted reporting on qualitative grounds.

126 IWG plc Annual Report and Accounts 2022 126

We applied materiality to assist us determine what risks were significant risks and the appropriate audit procedures to
be performed.
The structure of the Group’s finance function is such that certain transactions and balances are accounted for by
central Group finance teams, with the remainder accounted for in the operating units. We performed comprehensive
audit procedures, including those in relation to the key audit matters, on those transactions and balances accounted
for at Group and operating unit level. In determining those components in the Group on which we perform audit
procedures, we considered the relevant size and risk profile of the components.
In relation to the Group’s operating units, audits for Group reporting purposes were performed at twelve identified key
reporting components, augmented by risk focused audit procedures which were performed for certain other
components. These audits covered 83% (2021: 81%) of total Group revenue and 84% (2021: 95%) of Group total assets.
The Group audit team instructed component auditors as to the significant areas to be covered, including the relevant
risks detailed above and the information to be reported back. Planning meetings were held with component auditors in

Financial statements
order to assess the key audit risks, audit strategy and work to be undertaken. The Group audit team approved the
materiality of each of the components, which ranged from £1m to £6m, having regard to the mix of size and risk profile
of the components. Detailed audit instructions were sent to the auditors of each of these identified locations. These
instructions covered the significant audit areas to be covered by these audits (which included the relevant risks of
material misstatement detailed above) and set out the information required to be reported to the Group audit team.
Senior members of the Group audit team, including the lead engagement partner, attended each component audit
closing meeting via video conferencing facilities, at which the results of component audits were discussed with
divisional and Group management.
At these meetings, the findings reported to the Group audit team were discussed in more detail, and any further work
required by the Group audit team was then performed by the component auditor. The Group audit team interacted
with the component teams where appropriate during various stages of the audit, inspected key working papers and
were responsible for the scope and direction of the audit process. This, together with the additional procedures
performed at Group level, gave us appropriate evidence for our opinion on the Group financial statements.

We have nothing to report on the other information in the annual report

The directors are responsible for the other information presented in the annual report together with the financial
statements. The other information comprises the information included in the Strategic Report and Governance sections
of the Annual Report, as well as the unaudited appendices (including the unaudited Alternative Performance Measures,
summarised extract of the unaudited Company balance sheet, the five-year summary and the glossary).
The financial statements and our auditor’s report thereon do not comprise part of the other information. Our opinion on
the financial statements does not cover the other information and, accordingly, we do not express an audit opinion or,
except as explicitly stated below, any form of assurance conclusion thereon.
Our responsibility is to read the other information and, in doing so, consider whether, based on our financial statements
audit work, the information therein is materially misstated or inconsistent with the financial statements or our audit
knowledge. Based solely on that work we have not identified material misstatements in the other information.

Corporate Governance Statement

The Listing Rules require us to review the Directors' statement in relation to going concern, longer-term viability and
that part of the Corporate Governance Statement relating to the Group’s compliance with the provisions of the UK
Corporate Governance Code published by the Financial Reporting Council in July 2018 specified for our review. Based
on the work undertaken as part of our audit, we have concluded that each of the following elements of the Corporate
Governance Statement is materially consistent with the financial statements or our knowledge obtained during the
audit:
• Directors’ statement with regards the appropriateness of adopting the going concern basis of accounting and any
material uncertainties identified set out on page 121;
• Directors’ explanation as to its assessment of the Group’s prospects, the period this assessment covers and why the
period is appropriate set out on page 121;
• Directors’ statement on whether it has a reasonable expectation that the Group will be able to continue in operation
and meets its liabilities set out on page 121;
• Directors’ statement on the annual report and financial statements, taken as a whole on fair, balanced and
understandable and the information necessary for shareholders to assess the Group's position and performance,
business model and strategy set out on page 121;
• Board’s confirmation that it has carried out a robust assessment of the emerging and principal risks and the
disclosures in the annual report that describe the principal risks and the procedures in place to identify emerging
risks and explain how they are being managed or mitigated set out on pages 44 to 53;
• The section of the annual report that describes the review of effectiveness of risk management and internal control
systems set out on page 92; and
• The section describing the work of the audit committee set out on pages 90 to 95.

127 IWG plc Annual Report and Accounts 2022 127

Independent auditor’s report to the members of IWG plc continued

We have nothing to report on the other matters on which we are required to report by
exception
Under Company (Jersey) Law 1991, we are required to report to you if, in our opinion:
• adequate accounting records have not been kept by the parent company, or
• returns adequate for our audit have not been received from branches not visited by us; or
• the financial statements are not in agreement with the accounting records and returns; or
• we have not received all the information and explanations we require for our audit.
We have nothing to report in respect of the above responsibilities.

Respective responsibilities and restrictions on use

Responsibilities of directors for the financial statements

As explained more fully in the directors’ responsibilities statement set out on page 118, the directors are responsible for:
the preparation of the financial statements in accordance with IFRS as adopted by the European Union and otherwise
comply with the Companies (Jersey) Law 1991 including being satisfied that they give a true and fair view; such internal
control as they determine is necessary to enable the preparation of financial statements that are free from material
misstatement, whether due to fraud or error; assessing the Group’s ability to continue as a going concern, disclosing, as
applicable, matters related to going concern; and using the going concern basis of accounting unless they either intend
to liquidate the Group or to cease operations, or have no realistic alternative but to do so.

Auditor’s responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from
material misstatement, whether due to fraud, other irregularities or error, and to issue an opinion in an auditor’s report.
Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with
ISAs (UK) will always detect a material misstatement when it exists.
Misstatements can arise from fraud, other irregularities or error and are considered material if, individually or in the
aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these
financial statements.
A fuller description of our responsibilities is provided on the FRC’s website at www.frc.org.uk/auditorsresponsibilities.

The purpose of our audit work and to whom we owe our responsibilities
Our report is made solely to the Group’s members, as a body, in accordance with Article 113A of the Companies
(Jersey) Law 1991. Our audit work has been undertaken so that we might state to the Group’s members those matters
we are required to state to them in an auditor’s report and for no other purpose. To the fullest extent permitted by law,
we do not accept or assume responsibility to anyone other than the Group and the Group’s members, as a body, for
our audit work, for this report, or for the opinions we have formed.

Barrie O’Connell
20 March 2023
for and on behalf of KPMG

1 Stokes Place,
St. Stephen’s Green,
Dublin 2,
Ireland

128 IWG plc Annual Report and Accounts 2022 128

Consolidated income statement

Year ended
Year ended 31 Dec 2021
£m Notes 31 Dec 2022 Restated(1)

Revenue 3 2,751 2,227

Total cost of sales (2,182) (1,885)
Cost of sales (2,169) (1,869)
Adjusting items to cost of sales(2) (65) (70)
Net reversal of impairment of property, plant, equipment and right-of-use assets(2) 3,5 52 54
Expected credit reversal/(losses) on trade receivables(2) 5 6 (99)
Gross profit (centre contribution) 3 575 243
Total selling, general and administration expenses (427) (328)
Selling, general and administration expenses (406) (295)

Financial statements
Adjusting items to selling, general and administration expenses 10 (21) (33)
Share of loss of equity-accounted investees, net of tax 21 (1) (2)
Operating profit/(loss) 5 147 (87)
Finance expense 7 (287) (198)
Finance income 7 35 26
Net finance expense (252) (172)
Loss before tax for the year from continuing operations (105) (259)
Income tax expense 8 (16) (10)
Loss after tax for the year from continuing operations (121) (269)
Profit after tax for the period from discontinued operations 9 1 59
Loss for the year (120) (210)
Attributable to equity shareholders of the Group (117) (205)
Attributable to non-controlling interests 23 (3) (5)

Loss per ordinary share (EPS):

Attributable to ordinary shareholders

Basic (p) 11 (11.2) (20.4)
Diluted (p) 11 (11.2) (20.4)

From continuing operations

Basic (p) 11 (11.3) (26.2)
Diluted (p) 11 (11.3) (26.2)
1. The comparative information has been restated to reflect the impact of discontinued operations (note 9).
2. The net reversal of adjusting items of £17m (2021: £2m) comprises the following items included in the balances referenced (note 10):
A reversal of the impairment of property, plant and equipment and right-of-use assets of £73m (2021: £125m), impairment of Ukraine and Russia of
£9m (2021: £nil), the adjusting items to costs of sales of £65m (2021: £70m) and £nil (2021: £53m) of the expected credit losses on trade receivables
balances reported.

The above consolidated income statement should be read in conjunction with the accompanying notes.

129 IWG plc Annual Report and Accounts 2022 129

Consolidated statement of comprehensive income

Year ended Year ended

£m Notes 31 Dec 2022 31 Dec 2021

Loss for the year (120) (210)

Other comprehensive income/(loss) that is or may be reclassified to profit or loss in subsequent

periods:
Foreign exchange recycled to profit or loss from discontinued operations 9 – –
Foreign currency translation gain/(loss) for foreign operations 5 (20)
Items that are or may be reclassified to profit or loss in subsequent periods 5 (20)

Other comprehensive income that will never be reclassified to profit or loss in

subsequent periods:
Items that will never be reclassified to profit or loss in subsequent periods – –

Other comprehensive profit/(loss) for the period, net of tax 5 (20)

Total comprehensive loss for the year, net of tax (115) (230)
Attributable to shareholders of the Group (112) (225)
Attributable to non-controlling interests 23 (3) (5)

The above consolidated statement of comprehensive income should be read in conjunction with the
accompanying notes.

130 IWG plc Annual Report and Accounts 2022130

Consolidated statement of changes in equity

Total
Foreign equity
Issued currency attributable Non-
share Share Treasury translation Other Retained to equity controlling
£m Notes capital premium shares reserve reserves(1) earnings shareholders interests Total equity

Balance at 1 January 2021 10 313 (154) 36 26 283 514 – 514

Total comprehensive income/(loss)
for the year:
Loss for the year – – – – – (205) (205) (5) (210)
Other comprehensive
income/(loss):
Foreign exchange recycled to profit or 9 – – – – – – – – –
loss from discontinued operations
Foreign currency translation – – – (20) – – (20) – (20)

Financial statements
gain/(loss) for foreign operations
Other comprehensive – – – (20) – – (20) – (20)
income/(loss), net of tax
Total comprehensive income/(loss) – – – (20) – (205) (225) (5) (230)
for the year
Transactions with owners of the
Company
Share-based payments 6 – – – – – 6 6 – 6
Ordinary dividend paid 12 – – – – – – – – –
Purchase of shares 22 – – – – – – – – –
Proceeds from exercise of share 22 – – 3 – – (2) 1 – 1
awards
Total transactions with owners of – – 3 – – 4 7 – 7
the Company
Acquisition of subsidiary with non- 23 – – – – – – – 14 14
controlling interests
Balance at 31 December 2021 10 313 (151) 16 26 82 296 9 305
Total comprehensive income/(loss)
for the year:
Loss for the year – – – – – (117) (117) (3) (120)
Other comprehensive
income/(loss):
Foreign exchange recycled to profit or 9 – – – – – – – – –
loss from discontinued operations
Foreign currency translation – – – 5 – – 5 – 5
gain/(loss) for foreign operations
Other comprehensive income, net – – – 5 – – 5 – 5
of tax
Total comprehensive income/(loss) – – – 5 – (117) (112) (3) (115)
for the year
Transactions with owners of the
Company
Share-based payments 6 – – – – – 4 4 – 4
Ordinary dividend paid 12 – – – – – – – – –
Purchase of shares 22 – – (5) – – – (5) – (5)
Proceeds from exercise of share 22 – – 4 – – (4) – – –
awards
Total transactions with owners of – – (1) – – – (1) – (1)
the Company
Acquisition of subsidiary with non- 23 – – – – – – – 53 53
controlling interests
Divestiture of subsidiary with non- 23 – – – – – – – (7) (7)
controlling interests
Balance at 31 December 2022 10 313 (152) 21 26 (35) 183 52 235
1. Other reserves include £11m for the restatement of the assets and liabilities of the UK associate, from historic to fair value at the time of the acquisition
of the outstanding 58% interest on 19 April 2006, £38m arising from the Scheme of Arrangement undertaken on 14 October 2008, £6m relating to
merger reserves and £nil to the redemption of preference shares, partly offset by £29m arising from the Scheme of Arrangement undertaken in 2003.

The above consolidated statement of changes in equity should be read in conjunction with the accompanying notes.

131 IWG plc Annual Report and Accounts 2022 131

Consolidated balance sheet

As at As at
£m Notes 31 Dec 2022 31 Dec 2021

Non-current assets
Goodwill 13 934 704
Other intangible assets 14 214 78
Property, plant and equipment 15 6,234 6,376
Right-of-use assets 15 5,009 5,254
Other property, plant and equipment 15 1,225 1,122
Non-current net investment in finance leases 24 95 –
Deferred tax assets 8 350 327
Other long-term receivables 16 57 50
Investments in joint ventures 21 45 45
Other investments – –
Total non-current assets 7,929 7,580

Current assets
Inventory 1 1
Trade and other receivables 17 919 734
Current net investment in finance leases 24 52 –
Corporation tax receivable 8 19 19
Cash and cash equivalents 24 161 78
Total current assets 1,152 832
Total assets 9,081 8,412

Current liabilities
Trade and other payables (incl. customer deposits) 18 1,202 923
Deferred revenue 455 346
Corporation tax payable 8 45 36
Bank and other loans 19,24 285 22
Lease liabilities 24 1,002 932
Provisions 20 31 8
Total current liabilities 3,020 2,267

Non-current liabilities
Other long-term payables 11 10
Deferred tax liability 8 145 141
Bank and other loans 19,24 588 453
Lease liabilities 24 5,037 5,189
Derivative financial liabilities 25 – 27
Provisions 20 37 12
Provision for deficit on joint ventures 21 6 6
Retirement benefit obligations 27 2 2
Total non-current liabilities 5,826 5,840
Total liabilities 8,846 8,107

Total equity
Issued share capital 22 10 10
Issued share premium 313 313
Treasury shares 22 (152) (151)
Foreign currency translation reserve 21 16
Other reserves 26 26
Retained earnings (35) 82
Total shareholders' equity 183 296
Non-controlling interests 23 52 9
Total equity 235 305
Total equity and liabilities 9,081 8,412

The financial statements on pages 129 to 182 were approved by the Board on 20 March 2023

Mark Dixon Charlie Steel

Chief Executive Officer Chief Financial Officer
The above consolidated balance sheet should be read in conjunction with the accompanying notes.

132 IWG plc Annual Report and Accounts 2022 132

Consolidated statement of cash flows

Year ended
Year ended 31 Dec 2021
£m Notes 31 Dec 2022 Restated(1)
Operating activities
Loss for the year from continuing operations (121) (269)
Adjustments for:
Profit from discontinued operations 9 – 2
Net finance expense(2) 7 252 173
Share of loss on equity-accounted investees, net of tax 21 1 2
Depreciation charge 15 1,145 1,096
Right-of-use assets 15 955 893
Other property, plant and equipment 15 190 203
Loss on impairment of goodwill 13 3 –
Loss on disposal of property, plant and equipment 5 34 64

Financial statements
Profit on disposal of right-of-use assets and related lease liabilities 5,24 (31) (42)
Profit on sales of current assets – (1)
Loss on disposal of intangible assets 5 – –
Net reversal of impairment of property, plant and equipment 5,15 (13) (7)
Net reversal of impairment of right-of-use assets 5,15 (39) (47)
Amortisation of intangible assets 5,14 44 14
Negative goodwill arising on an acquisition 28 – (1)
Tax expense 8 16 10
Expected credit reversal/(losses) on trade receivables 5 (6) 99
Increase/(decrease) in provisions 20 40 (15)
Share-based payments 6 4 6
Other non-cash movements (3) (11)
Operating cash flows before movements in working capital 1,326 1,073
Proceeds from partner contributions (reimbursement of costs)(4) 15 19 20
Increase in trade and other receivables (97) (127)
Increase/(decrease) in trade and other payables 191 (40)
Cash generated from operations 1,439 926
Interest paid and similar charges on bank loans and corporate borrowings (38) (19)
Interest paid on lease liabilities 24 (230) (167)
Tax paid (24) (5)
Net cash inflows from operating activities 1,147 735

Investing activities
Purchase of property, plant and equipment 15 (242) (221)
Payment of initial direct costs related to right-of-use assets (1) –
Interest received on net lease investment 7 7 –
Payment received from net lease investment 24 41 –
Purchase of subsidiary undertakings, net of cash acquired 28 (307) 11
Purchase of intangible assets 14 (39) (34)
Purchase of other investments – (33)
Proceeds on the sale of discontinued operations, net of cash disposed of 9 1 52
Proceeds on sale of property, plant and equipment 1 1
Proceeds on other current receivables(3) 17 – 283
Interest received 7 1 3
Net cash (outflows)/inflows from investing activities (538) 62

Financing activities
Proceeds from issue of loans 24 1,340 983
Repayment of loans 24 (954) (947)
Payment of lease liabilities 24 (997) (865)
Proceeds from partner contributions (lease incentives)(4) 15 31 36
Proceeds from Non-controlling interests 23 53 –
Purchase of treasury shares 22 (5) –
Proceeds from exercise of share awards – 1
Payment of ordinary dividend 12 – –
Net cash outflows from financing activities (532) (792)

Net increase in cash and cash equivalents 77 5

Cash and cash equivalents at beginning of the year 78 71
Effect of exchange rate fluctuations on cash held 6 2
Cash and cash equivalents at end of the year 24 161 78
1. The comparative information has been restated to reflect the impact of discontinued operations (note 9).
2. The net finance expense includes mark-to-market adjustments of £27m (2021: £23m).
3. Included in other receivables at 31 December 2020 was mezzanine and senior debt recognised at amortised cost of £276m. This receivable balance
was fully repaid to the Group in February 2021, in addition to associated costs reimbursements, resulting in an additional £1m gain on settlement.
4. The total proceeds from partner contributions relating to the reimbursement of costs and lease incentives of £50m (2021: £56m) are allocated
between maintenance partner contributions of £11m (2021: £6m) and growth partner contributions of £39m (2021: £50m), on pages 185 and 186.

The above consolidated statement of cash flows should be read in conjunction with the accompanying notes.

133 IWG plc Annual Report and Accounts 2022 133

Notes to the accounts

1. Authorisation of financial statements

IWG plc is a public limited company incorporated in Jersey and registered and domiciled in Switzerland. The
Company’s ordinary shares are traded on the London Stock Exchange. The Group and Company financial statements
for the year ended 31 December 2022 were authorised for issue by the Board of Directors on 20 March 2023 and the
balance sheets were signed on the Board’s behalf by Mark Dixon and Charlie Steel. The audited Group accounts are
included from pages 129 to 182.
IWG plc owns, and is a franchise operator of, a network of business centres which are utilised by a variety of business
customers. Information on the Group’s structure is provided in note 32, and information on other related party
relationships of the Group is provided in note 31.
The Group financial statements have been prepared and approved by the Directors in accordance with Companies
(Jersey) Law 1991 and International Financial Reporting Standards as adopted by the European Union (‘Adopted IFRSs’).
The Company prepares its parent company annual accounts in accordance with accounting policies based on the
Swiss Code of Obligations; extracts from these unaudited accounts are presented on page 183.

2. Accounting policies
Basis of preparation
The Group financial statements consolidate those of the parent company and its subsidiaries (together referred to as
the ‘Group’) and equity account the Group’s interest in joint ventures. The extract from the parent company annual
accounts presents information about the Company as a separate entity and not about its Group.
The accounting policies set out below have been applied consistently to all periods presented in these Group financial
statements. Amendments to adopted IFRSs issued by the International Accounting Standards Board (IASB) and the
International Financial Reporting Interpretations Committee (IFRIC) with an effective date from 1 January 2022 did not
have a material effect on the Group financial statements, unless otherwise indicated.
The following standards, interpretations and amendments to standards were adopted by the Group for periods
commencing on or after 1 January 2022, with no material impact on the Group:
Onerous contracts – Cost of Fulfilling a Contract (Amendments to IAS 37)
Annual Improvements to IFRS Standards 2018-2020
Property, Plant and Equipment: Proceeds before Intended Use (Amendments to IAS 16)
Reference to the Conceptual Framework – Amendments to IFRS 3

These Group consolidated financial statements are presented in pounds sterling (£), which is IWG plc’s functional
currency, and all values are in million pounds, except where indicated otherwise.

The consolidated financial statements are prepared on a historical cost basis, with the exception of certain financial
assets and liabilities that are measured at fair value.
The attributable results of those companies acquired or disposed of during the year are included for the periods of
ownership.
Judgements made by the Directors in the application of these accounting policies that have significant effect on the
consolidated financial statements and estimates with a significant risk of material adjustment in the next year are
discussed in note 33.

Climate change
The potential climate change-related risks and opportunities to which the Group is exposed, as identified by
management, are disclosed in the Group’s TCFD disclosures on pages 67 and 68. Management has assessed the
potential financial impacts relating to the identified risks, primarily considering the useful lives of, and retirement
obligations for, property, plant and equipment, the possibility of impairment of goodwill and other long-lived assets and
the recoverability of the Group’s deferred tax assets. Management has exercised judgement in concluding that there
are no further material financial impacts of the Group’s climate-related risks and opportunities on the consolidated
financial statements. These judgements will be kept under review by management as the future impacts of climate
change depend on environmental, regulatory and other factors outside of the Group’s control which are not all currently
known.

134 IWG plc Annual Report and Accounts 2022 134

Going concern
The Group reported a loss after tax of £121m (2021: £269m) from continuing operations for the year, while net cash of
£1,147m (2021: £735m) was generated from operations during the year. Although the Group’s balance sheet at 31
December 2022 reports a net current liability position of £1,868m (2021: £1,435m) which could give rise to a potential
liquidity risk, the Directors concluded and are satisfied after a comprehensive review that no liquidity risk exists after
taking into account the following considerations:
1. The Group had funding available under the Group’s £750m revolving credit facility. £173m (2021: £530m) was
available and undrawn at 31 December 2022. This facility is committed until March 2025 with an option to extend until
2026 (note 25);
2.The Group’s £330m non-recourse bridge facility, to fund the investment in The Instant Group, matures in September
2023. The Instant Group, combined with the IWG digital assets in Worka has been highly cash generative and reduced
its net debt to £176m, excluding £4m of net lease liabilities, at 31 December 2022. Based on the modelled scenarios
the Directors expect that Worka will continue to reduce its net debt position by September 2023. The Group is

Financial statements
pursuing various options available to address this, including repaying the bridge facility through asset sales, cash
generated from operations, and/or the extension or replacement of this facility to ensure continued funding of this
highly successful and cash generative business; and
3.The Group maintains a 12-month rolling forecast and a three-year strategic outlook. It also monitors the covenants in
its facilities to manage the risk of potential breach. The Group expects to remain within covenants throughout the
forecast period. In reaching this conclusion, the Directors have assessed:
• the potential cash generation of the Group against a range of illustrative scenarios (including a severe but plausible
outcome); and
• mitigating actions to reduce operating costs and optimise cash flows during any ongoing global restrictions.
Details of the principal risks, outcomes of modelled and stress-tested scenarios are set out in the Viability statement
review on page 53.
Based on the above, the Directors consider that the Group is well placed to successfully manage the actual and
potential liquidity risks faced by the organisation subject to successful resolution of the uncertainty with regard to the
bridge facility referred to in section 2 above.
On the basis of their assessment, the Directors have a reasonable expectation that the Group has adequate resources
to continue in operational existence for a period of at least 12 months from the date of approval of these Group
consolidated financial statements and consider it appropriate to continue to adopt the going concern basis in
preparing the financial statements of the Group.

IFRS not yet effective

The following new or amended standards and interpretations that are mandatory for 2023 annual periods (and future
years) are not expected to have a material impact on the Group financial statements:
Deferred Tax related to Assets and Liabilities arising from a Single Transaction – Amendments to IAS 12 1 January 2023
Classification of Liabilities as Current or Non-Current (Amendment to IAS 1) 1 January 2023
IFRS 17 Insurance Contracts and amendments to IFRS 17 Insurance Contracts 1 January 2023
Amendments to IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors: Definition
of Accounting Estimates 1 January 2023
Disclosure of Accounting Policies (Amendments to IAS 1 and IFRS Practice Statement 2) 1 January 2023

There are no other IFRS standards or interpretations that are not yet effective that would be expected to have a
material impact on the Group.
The Group has not early adopted any standard, interpretation or amendment that has been issued but is not
yet effective.

135 IWG plc Annual Report and Accounts 2022 135

Notes to the accounts continued

2. Accounting policies continued

Basis of consolidation
Subsidiaries are entities controlled by the Group. Control exists when the Group controls an entity, when it is exposed
to, or has the rights to, variable returns from its involvement with the entity and has the ability to affect those returns
through its power over the entity. The financial statements of subsidiaries are included in the consolidated financial
statements from the date that control commences. The results are consolidated until the date control ceases or the
subsidiary qualifies as a disposal group, at which point the assets and liabilities are carried at the lower of fair value less
costs to sell and carrying value.
Joint ventures are those entities over whose activities the Group has joint control, whereby the Group has rights to the
net assets of the arrangement, rather than rights to its assets and obligations for its liabilities. The consolidated
financial statements include the Group’s share of the total recognised gains and losses of joint ventures on an equity-
accounted basis, from the date that joint control commences until the date that joint control ceases or the joint
venture qualifies as a disposal group, at which point the investment is carried at the lower of fair value less costs to sell
and carrying value. When the Group’s share of losses exceeds its interest in a joint venture, the Group’s carrying
amount is reduced to nil and recognition of further losses is discontinued except to the extent that the Group has
incurred legal or constructive obligations or made payments on behalf of a joint venture.
Leases
The nature of the Group’s leases relates primarily to the rental of commercial office real estate premises globally.
1. Right-of-use assets
The Group recognises right-of-use assets at the commencement date of the lease. Right-of-use assets are
measured at cost, less any accumulated depreciation and impairment losses, and adjusted for any re-measurement
of lease liabilities. The cost of right-of-use assets includes the amount of lease liabilities recognised and initial direct
costs incurred. The recognised right-of-use assets are depreciated on a straight-line basis over the shorter of its
estimated useful life and the lease term.
Right-of-use assets are subject to impairment review on an annual basis.
2. Lease liabilities
At the commencement date of the lease, the Group recognises lease liabilities measured at the present value of lease
payments to be made over the lease term. The lease payments include fixed payments and variable lease payments
that depend on an index or a rate. The variable lease payments that do not depend on an index or a rate are
recognised as a rent expense in the period in which they are incurred.
In calculating the present value of lease payments, the Group uses the incremental borrowing rate at the lease
commencement date as the interest rate implicit in the lease is not readily determinable. After the commencement
date, the amount of lease liabilities is increased to reflect the accretion of interest and reduced for the lease
payments made. In addition, the carrying amount of lease liabilities is re-measured if there is a modification, a change
in the lease term or a change in the fixed lease payments.
3. Lease modifications
The carrying amount of lease liabilities is re-measured where there is a modification, a change in the lease term, a
change in the lease payments (e.g. changes to future payments resulting from a change in an index or rate used to
determine such lease payments) or a change in the assessment of an option to purchase the underlying asset. The
impact of the modification is recognised against the carrying amount of the right-of-use assets or is recorded in
profit or loss if the carrying amount of the right-of-use assets has been reduced to zero.
4. Short-term leases and leases of low-value assets
The Group applies the short-term lease recognition exemption to short-term leases (i.e. those leases that have a
lease term of 12 months or less from commencement). It also applies the lease of low-value assets recognition
exemption under IFRS 16 to leases that are considered of low value. Lease payments on short-term leases and leases
of low-value assets are recognised as a rent expense on a straight-line basis over the lease term.
5. Partner contributions
Partner contributions are contributions from our business partners (property owners and landlords) towards the
initial costs of opening a business centre, including the fit-out of the property. Partner contributions representing a
reimbursement to the lessee (IWG) are accounted for as agency arrangements, and form part of the lessor’s
(landlord’s) assets.
Partner contributions for lease incentives are received at or before the lease commencement date for commercial
reasons and, where the Group retains ownership of the fit-out assets, are accounted for as a lease incentive and
recognised by reducing the right-of-use asset. Any other partner contributions for lease incentives received
subsequent to the commencement of the lease are accounted for as part of the associated lease modification.

136 IWG plc Annual Report and Accounts 2022136

6. Lease term
The lease term represents the period from lease inception up to either:
• The earliest point at which the lease could be broken, where break clauses exist;
• The point at which the lease could be extended, but no further, where extension options exist; or
• To the end of the contractual lease term in all other cases.
7. Lease break penalties
Lease break penalties, where the lease term has been determined as the period from inception up to a break clause
and when there are break payments or penalties, have been appropriately included in the measurement of the lease
liability.
8. Net investment in finance leases
The Group acts as an intermediate lessor where certain commercial office real estate properties, rented under a

Financial statements
separate ‘head’ lease agreement, are sublet as part of a separate sublease agreement. Interest in the ‘head’ lease and
sublease are accounted for separately, with the classification of the sublease assessed with reference to the right-
of-use assets arising from the head lease (not with reference to the underlying asset).
The initial net investment in finance leases is equal to the present value of the lease receipts during the lease term
that have not yet been paid. The right-of-use asset arising from the head lease is offset by the initial measurement of
the net investment in the finance lease, plus any additional direct costs associated with setting up the lease.
If the sublease agreement contains lease and non-lease components, the Group applies IFRS 15 in determining the
allocation of the agreement consideration.
Client contributions are contributions received from sub-lessees towards the initial costs of preparing the
commercial property for their use, including the fit-out of the property. These contributions represent a
reimbursement of costs incurred by the Group and are accounted for as agency arrangements, and form part of the
sub-lessees’ assets.

Dilapidations
A provision is recognised for those potential dilapidation payments when it is probable that an outflow will occur and
can be reliably estimated.

Impairment of non-financial assets

For goodwill, assets that have an indefinite useful life and intangible assets that are not yet available for use, the
recoverable amount was estimated at 30 September 2022. At each reporting date, the Group reviews the carrying
amount of these assets to determine whether there is an indicator of impairment. If any indicator is identified, then the
assets’ recoverable amount is re-evaluated.
The carrying amount of the Group’s other non-financial assets (other than deferred tax assets and inventory), including
right-of-use assets, is reviewed at the reporting date to determine whether there is an indicator of impairment. If any
such indication exists, the assets’ recoverable amount is estimated.
An impairment loss is recognised whenever the carrying amount of an asset or its cash-generating unit (CGU) exceeds
its recoverable amount. Impairment losses are recognised in the income statement.
At each reporting date, the Group assesses whether there is an indication that a previously recognised impairment loss
has reversed because of a change in th estimates used to determine the impairment loss. If there is such an indication,
and the recoverable amount of the impaired asset or CGU subsequently increases, then the impairment loss is
generally reversed.
A CGU is the smallest identifiable group of assets that generates cash inflows that are largely independent of the cash
inflows from other assets or groups of assets. The Group has identified individual business centres as the CGU.
The potential impairment of immovable property, plant and equipment and right-of-use assets at the centre (CGU)
level are evaluated where there are indicators of impairment.
Centres (CGUs) are grouped by country of operation for the purposes of carrying out impairment reviews of goodwill as
this is the lowest level at which it can be assessed.
Individual fittings and equipment in centres or elsewhere in the business that become obsolete or are damaged are
assessed and impaired where appropriate.
The recoverable amount of relevant assets is the greater of their fair value less costs to sell and value-in-use. In
assessing value-in-use, the estimated future cash flows are discounted to their present value using a pre-tax discount
rate that reflects current market assessments of the time value of money and the risks specific to the asset. For an
asset that does not generate largely independent cash inflows, the recoverable amount is determined for the cash-
generating unit to which the asset belongs.

137 IWG plc Annual Report and Accounts 2022 137

Notes to the accounts continued

2. Accounting policies continued

Goodwill
All business combinations are accounted for using the purchase method. Goodwill is initially measured at fair value,
being the excess of the aggregate of the fair value of the consideration transferred and the amount recognised for non-
controlling interests, and any previous interest held, over the net identifiable assets acquired and liabilities assumed. If
the fair value of the net assets acquired is in excess of the aggregate consideration transferred, the Group reassesses
whether it has correctly identified all of the assets acquired and all of the liabilities assumed and reviews the
procedures used to measure the amounts to be recognised at the acquisition date. If the reassessment still results in
an excess of the fair value of net assets acquired over the aggregate consideration transferred (negative goodwill), then
the gain is recognised in profit or loss.
Positive goodwill is stated at cost less any provision for impairment in value. An impairment test is carried out annually
and, in addition, whenever indicators exist that the carrying amount may not be recoverable. Negative goodwill is
recognised directly in profit or loss.

Intangible assets
Intangible assets acquired separately from the business are capitalised at cost. Intangible assets acquired as part of an
acquisition of a business are capitalised separately from goodwill if their fair value can be identified and measured
reliably on initial recognition.
Intangible assets are amortised on a straight-line basis over the estimated useful life of the assets as follows:
Brand – Regus brand Indefinite life
Brand – Other acquired brands 20 years
Computer software Up to 5 years
Customer lists – service agreements 2 years
Customer lists – sublease agreements Up to 5 years

Amortisation of intangible assets is expensed through administration expenses in the income statement.

Acquisitions of non-controlling interests

Acquisitions of non-controlling interests are accounted for as transactions with owners in their capacity as owners and
therefore no goodwill is recognised as a result. Adjustments to non-controlling interests arising from transactions that
do not involve the loss of control are based on a proportionate amount of the net assets of the subsidiary.

Property, plant and equipment

Property, plant and equipment is stated at cost less accumulated depreciation and any impairment in value. Asset lives
and recoverable amounts are reviewed on an annual basis. Depreciation is calculated on a straight-line basis over the
estimated useful life of the assets as follows:
Right-of-use assets(1) Over the lease term
Buildings 50 years
Leasehold improvements(1) 10 years
Furniture and equipment 5 – 10 years
Computer hardware 3 – 5 years
1. 10 years represents the average useful economic life across the lease portfolio.

138 IWG plc Annual Report and Accounts 2022 138

Revenue
The Group’s primary activity is the provision of fully integrated, end-to-end global workspace solutions.
1. Workstations
The Group recognises workstation revenue when it transfers services to a customer. It is measured based on the
consideration specified in a contract with a customer. Services transfer to the customer equally over the contract
period based on the time elapsed. Where discounted periods are granted to customers, service income is spread on
a straight-line basis over the duration of the customer contract. Invoices are generally issued in advance, on a
monthly basis with normal credit terms of 15 days, and initially recognised as deferred revenue.
Workstation revenue is recognised over time as the services are provided. Amounts invoiced in advance are
accounted for as deferred revenue (contract liability) and recognised as revenue upon provision of the service.
2. Management and franchise fees
Fees received for the provision of initial and subsequent services are recognised over time as the services are

Financial statements
rendered. Fees charged for the use of continuing rights granted by the agreement are measured based on the
contractually agreed percentage of revenue, generated by the operation, except where a different basis is
determined in the contractual arrangements. Fees charged for other services provided, during the period of the
agreement, are recognised as revenue as the services provided or the rights used. Invoices are generally issued on a
monthly basis with normal credit terms of 30 days.
3. Customer service income
Service income (including the provision of workspace bookings, meeting rooms and inventory management) is
recognised over time as the services are delivered or at a point in time depending on contractual obligations. Invoices
are generally issued when the service is provided and subject to immediate settlement. In circumstances where the
Group acts as an agent for the sale and purchase of goods to customers, only the commission fee earned is
recognised as revenue.
4. Membership card income
Revenue from the sale of membership cards is deferred and recognised over time within the period that the benefits
of the membership card are expected to be provided.
5. Customer deposits
Deposits received from customers against non-performance of the contract are held on the balance sheet as a
current liability until they are either returned to the customer at the end of their relationship with the Group, or
released to the income statement.
The Group has concluded that it is the principal in its revenue arrangements, except where noted above.

Deferred revenue
Invoices issued in advance of services provided, in accordance with contractual arrangements with customers, are held
on the balance sheet as a current liability until the services have been rendered.

Adjusting items
Significant infrequent transactions not indicative of the underlying performance of the consolidated Group are reported
separately as non-recurring/adjusting items.
Adjusting items are separately disclosed by the Group to provide readers with helpful, additional information on the
performance of the business across periods. Items arising specifically from the impact of the COVID-19 pandemic,
geopolitical circumstances in the Ukraine and related sanctions against Russia, have been deemed to meet the
definition of adjusting items. Each of these items is considered to be significant in nature and/or size and are also
consistent with items treated as adjusting in prior periods in which significant non-recurring transactions occurred. The
exclusion of these items is consistent with how the business performance is planned by, and reported to, the Board.
The profit before tax and adjusting items measure is not a recognised profit measure under IFRS and may not be
directly comparable with adjusted profit measures used by other companies.
The classification of adjusting items requires significant management judgement after considering the nature and
intentions of a transaction. Adjusting items recognised are based on the actual costs incurred and/or calculated on a
basis consistent with the key judgements and estimates disclosed in note 33. The classification of adjusting items
requires management judgement after considering the nature and intentions of a transaction. Where necessary, this
judgement applied is based on a formal methodology, including the comparison of current centre performance against
pre-COVID-19 performance, to determine whether or not some, or all, of the associated costs are arising in the ordinary
course of business.

139 IWG plc Annual Report and Accounts 2022 139

Notes to the accounts continued

2. Accounting policies continued

Employee benefits
The majority of the Group’s pension plans are of the defined contribution type. For these plans the Group’s contribution
and other paid and unpaid benefits earned by the employees are charged to the income statement as incurred.
The cost of providing benefits under the defined benefit plans is determined using the projected unit credit method.
Re-measurements, comprising actuarial gains and losses, the effect of the asset ceiling and the return on plan assets,
excluding net interest, are recognised immediately in the balance sheet with a corresponding debit or credit to retained
earnings through other comprehensive income in the period in which they occur. Re-measurements are not reclassified
to profit or loss in subsequent periods.
Service costs are recognised in profit or loss, and include current and past service costs as well as gains and losses on
curtailments.
Net interest is calculated by applying the discount rate to the net defined benefit liability or asset. The Group
recognises the following changes in the net defined benefit obligation under ‘cost of sales’ and ‘selling, general and
administration expenses’ in the consolidated income statement: service costs comprising current service costs; past
service costs; and gains and losses on curtailments and non-routine settlements.
Settlements of defined benefit schemes are recognised in the period in which the settlement occurs.
Grants that compensate the Group for expenses incurred are recognised in profit or loss on a systematic basis in the
periods in which the expenses are recognised.

Share-based payments
The share awards programme entitles certain directors and employees to acquire shares of the ultimate parent
company (IWG plc); these awards are granted by the ultimate parent company (IWG plc) and are equity-settled.
The fair value of options and awards granted under the Group’s share-based payment plans outlined in note 26 is
recognised as an employee expense with a corresponding increase in equity. The fair value is measured at grant date
and spread over the period during which the employees become unconditionally entitled to the options. The fair value
of the options granted is measured using the Black-Scholes valuation model or the Monte Carlo method, taking into
account the terms and conditions upon which the options were granted. The amount recognised as an expense is
adjusted to reflect the actual number of share options that vest in respect of non-market conditions except where
forfeiture is due to the expiry of the option.

Taxation
Tax on the profit for the year comprises current and deferred tax. Tax is recognised in the income statement except to
the extent that it relates to items recognised directly in equity, in which case it is recognised in equity.
Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or substantively
enacted at the balance sheet date, and any adjustment to tax payable in respect of previous years.
Deferred tax is provided on temporary differences between the carrying amounts of assets and liabilities for financial
reporting purposes and the amounts used for taxation purposes. Deferred tax assets and liabilities are not subject to
discounting. The following temporary differences are not provided for: the initial recognition of goodwill; the initial
recognition of assets and liabilities that affect neither accounting nor taxable profit other than in a business
combination; and differences relating to investments in subsidiaries to the extent that they will probably not reverse in
the foreseeable future. The amount of deferred tax provided is based on the expected manner of realisation or
settlement of the carrying amount of assets and liabilities, using tax rates enacted or substantively enacted at the
reporting date.
A deferred tax asset is recognised for unused tax losses only to the extent that it is probable that future taxable profits
will be available against which the asset can be utilised.
The carrying amount of a deferred tax asset or liability may change for reasons other than a change in the temporary
difference itself. Such changes might arise as a result of a change in tax rates or laws, a reassessment of the
recoverability of a deferred tax asset or a change in the expected manner of recovery of an asset or the expected
manner of a settlement of a liability. The impact of these changes is recognised in the income statement or in other
comprehensive income depending on where the original deferred tax balance was recognised.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against
current tax liabilities and when they relate to income taxes levied by the same taxation authority and the Group intends
to settle its current tax assets and liabilities on a net basis.
Upon adoption of IFRIC Interpretation 23, the Group considered whether it has any uncertain tax positions, particularly
those relating to transfer pricing. The Company’s and the subsidiaries’ tax filings in different jurisdictions include
deductions related to transfer pricing and the taxation authorities may challenge those tax treatments. The Group
determined, based on its tax compliance and transfer pricing studies, that in most jurisdictions it is probable that its tax
treatments (including those for the subsidiaries) will be accepted by the taxation authorities. The Group has, where
considered appropriate, provided for the potential impact of uncertain tax positions where the likelihood of tax

140 IWG plc Annual Report and Accounts 2022140

authority adjustment is considered to be more likely than not. The adoption of the interpretation did not have an
impact on the consolidated financial statements of the Group.

Provisions
A provision is recognised in the balance sheet when the Group has a present legal or constructive obligation as a result
of a past event that can be estimated reliably, and it is probable that an outflow of economic benefits will be required
to settle the obligation.
Restructuring provisions are made for direct expenditures of a business reorganisation where the plans are sufficiently
detailed and well-advanced and where the appropriate communication to those affected has been undertaken at the
reporting date.
Provision is made for closure costs to the extent that the unavoidable costs of meeting the obligations exceed the
economic benefits expected to be delivered.

Financial statements
Equity
Equity instruments issued by the Group are recorded at the value of proceeds received, net of direct issue costs.
When shares recognised as equity are repurchased, the amount of the consideration paid, which includes directly
attributable costs, net of any tax effects, is recognised as a deduction from equity. Repurchased shares are classified
as treasury shares and are presented in the treasury share reserve. When treasury shares are sold or re-issued
subsequently, the amount received is recognised as an increase in equity and the resulting surplus or deficit on the
transaction is presented within retained earnings.

Inventory
Inventories relate to consumable items which are measured at the lower of cost or net realisable value. The cost of
inventories is based on the first-in, first-out principle.

Net finance expense

Interest charges and income are accounted for in the income statement on an accrual basis. Financing transaction
costs that relate to financial liabilities are charged to interest expense using the effective interest rate method and are
recognised within the carrying value of the related financial liability on the balance sheet. Fees paid for the arrangement
of credit facilities are recognised as an asset and recognised through the finance expense over the term of the facility.
Where assets or liabilities on the Group balance sheet are carried at net present value, the increase in the amount due
to unwinding the discount is recognised as a finance expense or finance income as appropriate.
Costs arising on bank guarantees and letters of credit and foreign exchange gains or losses are included in other
finance costs (note 7).

Interest-bearing borrowings and other financial liabilities

Financial liabilities, including interest-bearing borrowings, are recognised initially at fair value less attributable
transaction costs. Subsequent to initial recognition, financial liabilities are stated at amortised cost with any difference
between cost and redemption value being recognised in the income statement over the period of the borrowings on an
effective interest rate method.
The Group derecognises financial liabilities when the Group’s obligations are discharged, cancelled or expired.
Financial liabilities are classified as financial liabilities at fair value through profit or loss where the liability is either held
for trading or is designated as held at fair value through profit or loss on initial recognition. Financial liabilities at fair
value through profit or loss are stated at fair value with any resultant gain or loss recognised in the income statement.
Compound financial instruments issued by the Group comprise convertible bonds denominated in pounds sterling that
can be converted to ordinary shares at the option of the holder.
The debt component of compound financial instruments is initially recognised at the fair value of a similar liability that
does not have an equity conversion option. The conversion option represents a derivative financial liability and is
initially recognised as the difference between the fair value of the compound financial instrument as a whole and the
fair value of the liability component. Any directly attributable transaction costs are allocated to the debt host.
Subsequent to initial recognition, the debt component of a compound financial instrument is measured at amortised
cost using the effective interest rate method. The derivative component of a compound financial instrument is re-
measured at fair value through profit or loss. Interest related to the debt is recognised as a finance expense in profit or
loss.

Derivative financial instruments

The Group’s policy on the use of derivative financial instruments can be found in note 25. Derivative financial
instruments are measured initially at fair value and changes in the fair value are recognised through profit or loss unless
the derivative financial instrument has been designated as a cash flow hedge whereby the effective portion of changes
in the fair value are deferred in equity.

141 IWG plc Annual Report and Accounts 2022 141

Notes to the accounts continued

2. Accounting policies continued

Financial assets
Financial assets are classified and subsequently measured at amortised cost, fair value through the profit or loss, or fair
value through other comprehensive income (OCI). The classification depends on the nature and purpose of the
financial assets and is determined on initial recognition.
Financial assets (including trade and other receivables) are measured at amortised cost if both of the following
conditions are met:
• The financial asset is held within a business model whose objective is to hold assets to collect contractual cash flows;
and
• Its contractual terms give rise on specified dates to cash flows that are solely payments of principal and interest on
the principal amount outstanding.
The effective interest rate is the rate that exactly discounts estimated future cash payments or receipts through the
expected life of the financial instruments to the gross carrying amount of the financial assets.
Financial assets at fair value through profit or loss are measured at fair value and changes therein, including any interest
or dividend income, are recognised in profit or loss.
Financial assets (including trade and other receivables) are measured at fair value through OCI if both of the following
conditions are met:
• The financial asset is held within a business model whose objective is achieved by both collecting cash flows and
selling financial assets; and
• Its contractual terms give rise on specified dates to cash flows that are solely payments of principal and interest on
the principal amount outstanding.
IFRS 9 requires the Group to record expected credit losses on all of its financial assets held at amortised cost, on either
a 12-month or a lifetime basis. The Group applies the simplified approach to trade receivables and recognises expected
credit losses based on the lifetime expected losses. Provisions for receivables are established based on both expected
credit losses and information available that the Group will not be able to collect all amounts due according to the
original terms of the receivables.

Cash and cash equivalents

Cash and cash equivalents comprise cash at bank and in hand and are subject to an insignificant risk of change in value.

Non-controlling interests
Non-controlling interests are measured initially at their proportionate share of the acquiree's identifiable net assets at
the date of acquisitions.

Discontinued operations
A discontinued operation is a component of the Group’s business, the operations and cash flows of which can be
clearly distinguished from the rest of the Group and which:
• represents a separate major line of business or geographic area of operations;
• is part of a single coordinated plan to dispose of a separate major line of business or geographic area of operations;
or
• is a subsidiary acquired exclusively with a view to resale.
Classification as a discontinued operation occurs at the earlier of disposal or when the operation meets the criteria to
be classified as held-for-sale. When an operation is classified as a discontinued operation, the comparative statement
of profit or loss and OCI is re-presented as if the operation had been discontinued from the start of the comparative
year.

Foreign currency transactions and foreign operations

Transactions in foreign currencies are recorded using the rate of exchange ruling at the date of the transaction.
Monetary assets and liabilities denominated in foreign currencies are translated using the closing rate of exchange at
the balance sheet date and the gains or losses on translation are taken to the income statement. Non-monetary assets
and liabilities that are measured in terms of historical cost in a foreign currency are translated using the exchange rate
at the date of the transaction. The results and cash flows of foreign operations are translated using the average rate for
the period. Assets and liabilities, including goodwill and fair value adjustments, of foreign operations are translated using
the closing rate, with all exchange differences arising on consolidation being recognised in other comprehensive
income, and presented in the foreign currency translation reserve in equity. Exchange differences are reclassified to the
income statement on disposal.

142 IWG plc Annual Report and Accounts 2022 142

Foreign currency translation rates
At 31 December Annual average

2022 2021 2022 2021

US dollar 1.21 1.35 1.23 1.38

Euro 1.13 1.19 1.17 1.16

3. Segmental analysis
An operating segment is a component of the Group that engages in business activities from which it may earn revenue
and incur expenses. An operating segment’s results are reviewed regularly by the chief operating decision-maker (the
Board of Directors of the Group) on a pre-IFRS 16 basis to make decisions about resources to be allocated to the
segment and assess its performance, and for which distinct financial information is available. The segmental information
is presented on the same basis on which the chief operating decision-maker received reporting during the year.

Financial statements
Segmental assets and liabilities continue to be presented in accordance with IFRS.
The business is run on a worldwide basis but managed through two operating segments. The Group’s primary operating
segment is managed through three principal geographical segments: the Americas; EMEA (Continental Europe including
UK, Middle East and Africa); and Asia Pacific. The results of business centres in each of these regions, based on time
zones; economic relationships; market characteristics; cultural similarities; and language clusters, form the basis for
reporting geographical results to the chief operating decision-maker. As a result, the UK is now included in the EMEA
regional reporting. These geographical segments exclude the Group’s non-trading, holding and corporate management
companies, which are included in the Other segment. The impact from The Instant Group investment (note 28) has
been incorporated into Worka, which is disclosed as a separate operating segment. The combined digital assets in
Worka, represents the world’s leading fully integrated workspace platform. All reportable segments are involved in the
provision of global workplace solutions.
The Group’s reportable segments operate in different markets and are managed separately because of the different
economic characteristics that exist in each of those markets. Each reportable segment has its own distinct senior
management team responsible for the performance of the segment.
£m Americas EMEA(2) Asia Pacific Other Pre-Worka Worka Total

Continuing 2021 2021 2021 2021 2021 2021 2021

operations 2022 Restated(1) 2022 Restated(1) 2022 Restated(1) 2022 Restated(1) 2022 Restated(1) 2022 Restated(1) 2022 Restated(1)
Reported
revenue(3) 1,024 836 1,199 1,027 248 231 9 1 2,480 2,095 271 132 2,751 2,227
Rent income – – – – – – – – – – 50 – 50 –
Revenue on pre-
IFRS 16 basis 1,024 836 1,199 1,027 248 231 9 1 2,480 2,095 321 132 2,801 2,227
Workstation
revenue(4) 709 611 904 793 188 179 – – 1,801 1,583 50 – 1,851 1,583
Fee income 3 1 19 13 10 10 2 – 34 24 – – 34 24
Customer
Service income(5) 312 224 276 221 50 42 7 1 645 488 271 132 916 620
Gross
profit/(loss)
(centre
contribution) 82 (8) 120 14 26 3 13 (5) 241 4 142 78 383 82
Share of loss of
equity-
accounted
investees – – (1) (2) – – – – (1) (2) – – (1) (2)
Operating
(loss)/profit (23) (94) 23 (78) 2 (19) (130) (130) (128) (321) 85 73 (43) (248)
Finance expense (37) (31) (13) – (50) (31)
Finance income 27 26 – 27 26
(Loss)/profit
before tax for
the year (138) (326) 72 73 (66) (253)
Depreciation and
amortisation 166 147 116 111 27 27 21 16 330 301 30 1 360 302
Impairment of
assets – – – – – – – – – – – – – –
Assets(3) 3,587 3,364 3,782 3,937 549 532 475 535 8,393 8,368 688 44 9,081 8,412
Liabilities(3) (3,445) (3,232) (3,559) (3,682) (538) (540) (752) (645) (8,294) (8,099) (552) (8) (8,846) (8,107)
Net assets/
(liabilities) 142 132 223 255 11 (8) (277) (110) 99 268 136 36 235 305
Non-current
asset additions(6) 131 50 211 172 32 48 29 82 403 352 24 – 427 352
1. Restated to exclude revenue from discontinued operations (note 9) and/or the separate disclosure of the Worka segment.
2. Includes UK performance as follows: Revenue of £386m (2021: £346m), gross profit of £34m (2021: loss of £11m) and operating profit of £13m (2021: loss
of £34m).
3. Presented on a basis consistent with IFRS 16.
4. Includes customer deposits.
5. Includes membership card income.
6. Excluding deferred taxation.

143 IWG plc Annual Report and Accounts 2022 143

Notes to the accounts continued

3. Segmental analysis continued

Operating profit in the ‘Other’ category is generated from services related to the provision of workspace solutions,
offset by corporate overheads.
The operating segment’s results presented on a pre-IFRS 16 basis reconcile to the financial statements as follows:
£m Americas EMEA Asia Pacific Other Pre-Worka Worka Total

Continuing 2021 2021 2021 2021 2021 2021 2021

operations 2022 Restated(1) 2022 Restated(1) 2022 Restated(1) 2022 Restated(1) 2022 Restated(1) 2022 Restated(1) 2022 Restated(1)
Gross
profit/(loss)
(centre
contribution)
– pre-IFRS 16 82 (8) 120 14 26 3 13 (5) 241 4 142 78 383 82
Rent income – – – – – – – – – – (50) – (50) –
Rent 434 414 443 448 126 116 8 4 1,011 982 47 1 1,058 983
Depreciation
of property,
plant and
equipment
including
right-of-use
assets (345) (317) (389) (378) (90) (91) (3) (5) (827) (791) (1) – (828) (791)
Other 13 (16) 17 (6) (11) (8) (7) – 12 (30) – (1) 12 (31)
Gross
profit/(loss)
(centre
contribution) 184 73 191 78 51 20 11 (6) 437 165 138 78 575 243
1. Restated to reflect the impact of discontinued operations on a pre-IFRS 16 basis and/or the separate disclosure of the Worka segment.

£m Americas EMEA Asia Pacific Other Pre-Worka Worka Total

Continuing 2021 2021 2021 2021 2021 2021 2021

operations 2022 Restated(1) 2022 Restated(1) 2022 Restated(1) 2022 Restated(1) 2022 Restated(1) 2022 Restated(1) 2022 Restated(1)
Operating
profit/(loss) –
pre-IFRS 16 (23) (94) 23 (78) 2 (19) (130) (130) (128) (321) 85 73 (43) (248)
Rent income – – – – – – – – – – (50) – (50) –
Rent 434 414 443 448 126 116 9 5 1,012 983 47 – 1,059 983
Depreciation of
property, plant
and equipment
including right-of-
use assets (345) (317) (389) (378) (90) (91) (4) (7) (828) (793) (1) – (829) (793)
Other 11 (16) 15 (7) (11) (9) (5) 2 10 (30) – 1 10 (29)
Operating
profit/(loss) 77 (13) 92 (15) 27 (3) (130) (130) 66 (161) 81 74 147 (87)
1. Restated to reflect the impact of discontinued operations on a pre-IFRS 16 basis (note 5) and/or the separate disclosure of the Worka segment.

£m Americas EMEA Asia Pacific Other Pre-Worka Worka Total

Continuing 2021 2021 2021 2021 2021 2021 2021

operations 2022 Restated(1) 2022 Restated(1) 2022 Restated(1) 2022 Restated(1) 2022 Restated(1) 2022 Restated(1) 2022 Restated(1)
Depreciation and
amortisation –
pre-IFRS 16 166 147 116 111 27 27 21 16 330 301 30 1 360 302
Depreciation of
property, plant
and equipment
including right-of-
use assets 345 317 389 378 90 91 4 7 828 793 1 – 829 793
Depreciation and
amortisation 511 464 505 489 117 118 25 23 1,158 1,094 31 1 1,189 1,095
1. Restated to reflect the impact of discontinued operations on a pre-IFRS 16 basis (note 5) and/or the separate disclosure of the Worka segment.

£m Americas EMEA Asia Pacific Other Pre-Worka Worka Total

Continuing
operations 2022 2021 2022 2021 2022 2021 2022 2021 2022 2021 2022 2021 2022 2021
Impairment of
assets – pre-
IFRS 16 – – – – – – – – – – – – – –
(Net reversal)
/impairment of
property, plant
and equipment
including right-of-
use assets (30) (56) (16) (3) (6) 5 – – (52) (54) – – (52) (54)
(Net reversal)
/Impairment of
assets (30) (56) (16) (3) (6) 5 – – (52) (54) – – (52) (54)

144 IWG plc Annual Report and Accounts 2022 144

4. Segmental analysis – entity-wide disclosures
The Group’s primary activity is the provision of global workplace solutions, therefore all revenue is attributed to a single
group of similar products and services. Relevant product categories have; however, been included in the segmental
analysis in note 3. Revenue is recognised where the service is provided.
The Group has a diversified customer base and no single customer contributes a material percentage of the Group’s
revenue.
The Group’s revenue from external customers and non-current assets analysed by foreign country are as follows:
2022 2021

External Non-current External Non-current

£m revenue assets(1) revenue assets(1)

Country of tax domicile – Switzerland 5 – 4 –

Financial statements
United States of America 868 2,787 694 2,737
EMEA 1,199 3,264 1,027 3,467
Worka 271 429 132 34
All other countries(2) 408 1,099 370 1,015
2,751 7,579 2,227 7,253
1. Excluding deferred tax assets.
2. Revenue of £nil (2021: £34m) is included in discontinued operations (note 9).

5. Operating profit/(loss) – continuing operations

Operating profit/(loss) has been arrived at after crediting/(charging):
2021
£m Notes 2022 Restated(1)

Revenue 2,751 2,227

Depreciation on property, plant and equipment(2) 15 (1,145) (1,081)

Right-of-use assets 15 (955) (880)
Other property, plant and equipment 15 (190) (201)
Amortisation of intangible assets 14 (44) (14)
Variable property rents payable in respect of leases 24 (68) (63)
Lease expense on low-value assets 24 – (1)
Staff costs 6 (423) (342)
Facility and other property costs (496) (414)
Expected credit reversal/(losses) on trade receivables(3) 25 6 (99)
Loss on disposal of property, plant and equipment (34) (64)
Profit on disposal of right-of-use assets and related lease liabilities 31 42
Impairment of goodwill 13 (3) –
Net reversal of impairment of property, plant and equipment(4) 15 52 54
Net reversal of impairment of other property, plant and equipment 15 13 7
Net reversal of impairment of right-of-use assets 15 39 47
Negative goodwill arising on acquisition 28 – 1
Other costs (479) (331)
Operating profit/(loss) before equity-accounted investees 148 (85)
Share of loss of equity-accounted investees, net of tax 21 (1) (2)
Operating profit/(loss) 147 (87)
1. The comparative information has been restated to reflect the impact of discontinued operations.
2. Excludes depreciation expenses related to discontinued operations for right-of-use assets of £nil (2021: £13m) and other property, plant and
equipment of £nil (2021: £2m).
3. Of the £6m reversal of expected credit loss (2021: charge of £99m), £nil (2021: £53m) relates to COVID-19 adjusting items (note 10).
4. The net reversal of impairment of £52m (2021: £54m) includes an additional impairment of £39m (2021: £97m), offset by the reversal of £91m (2021:
£151m) previously provided for (note 15).

£m 2022 2021

Fees payable to the Group’s auditor and its associates for the audit of the Group accounts (2) (1)
Fees payable to the Group’s auditor and its associates for other services:
The audit of the Company’s subsidiaries pursuant to legislation (3) (3)
Other services pursuant to legislation – –
Other non-audit services – –

145IWG plc Annual Report and Accounts 2022 145

Notes to the accounts continued

6. Staff costs
2021
£m 2022(1) Restated(1)

The aggregate payroll costs were as follows:

Wages and salaries(2) 357 281
Social security 55 50
Pension costs 7 5
Share-based payments 4 6
423 342
1. Excludes staff costs related to discontinued operations of £nil (2021: £2m).
2. Includes worldwide financial support schemes disclosed in note 10.

2022 2021
Average Average
full-time full-time
Equivalents(1) Equivalents(1)

The average number of persons employed by the Group (including Executive Directors),
analysed by category and geography, was as follows:
Centre staff 6,572 6,142
Sales and marketing staff 532 510
Finance staff 647 640
Other staff 1,005 947
8,756 8,239

Americas 2,778 2,518

EMEA 3,356 3,129
Asia Pacific 995 998
Corporate functions 1,627 1,594
8,756 8,239
1. The average full-time equivalents exclude employees for disposals during 2022 of 2 (2021: 65).

Details of Directors’ emoluments and interests are given on pages 96 to 117 in the Directors’ Remuneration report, with
audited schedules identified where relevant.

7. Net finance expense

2021
£m Notes 2022 Restated(1)

Interest payable and similar charges on bank loans and corporate borrowings (39) (42)
Interest payable on lease liabilities(2) (230) (166)
Total interest expense (269) (208)
Other finance costs(3) (18) 10
Unwinding of discount rates – –
Total finance expense (287) (198)

Interest income 1 3
Interest received on net lease investment 7 –
Fair value gain on financial liabilities measured at FVTPL 19 27 23
Total finance income 35 26

Net finance expense (252) (172)

1. The comparative information has been restated to reflect the impact of discontinued operations.
2. Excludes lease liability finance expense related to discontinued operations of £nil (2021: £1m).
3. Excludes interest expense related to discontinued operations of £nil (2021: £nil).

146 IWG plc Annual Report and Accounts 2022146

8. Taxation
(a) Analysis of charge in the year
2021
£m 2022 Restated(1)

Current taxation
Corporate income tax (40) (24)
Previously unrecognised tax losses and temporary differences 6 8
Over provision in respect of prior years 1 5
Total current taxation (33) (11)
Deferred taxation
Origin and reversal of temporary differences 9 1

Financial statements
Previously unrecognised tax losses and other differences 8 –
Total deferred taxation 17 1
Tax charge on continuing operations (16) (10)
1. The comparative information has been restated to reflect the impact of discontinued operations.

(b) Reconciliation of taxation charge

2021
2022 Restated(1)

£m % £m %

Loss before tax from continuing operations (105) (259)

Tax on profit at 11.9% (2021: 11.9%) 13 (12) 31 (12)
Tax effects of:
Expenses not deductible for tax purposes (34) 32 (29) 11
Items not chargeable for tax purposes 12 (11) 34 (13)
Previously unrecognised temporary differences expected to be used in the future 14 (14) 8 (3)
Current year temporary differences not currently expected to be used (55) 52 (113) 44
Adjustment to tax charge in respect of previous years 1 (1) 5 (2)
Differences in tax rates on overseas earnings 33 (31) 54 (21)
(16) 15 (10) 4
1. The comparative information has been restated to reflect the impact of discontinued operations.

The applicable tax rate is determined based on the tax rate in the canton of Zug in Switzerland, which was the statutory
tax rate applicable in the country of domicile of the parent company of the Group at the end of the financial year.

(c) Factors that may affect the future tax charge

Unrecognised tax losses to carry forward against certain future overseas corporation tax liabilities have the following
expiration dates.

£m 2022 2021

2022 – 33
2023 54 41
2024 40 48
2025 56 49
2026 65 70
2027 72 36
2028 341 37
2029 71 25
2030 and later 1,434 1,431
2,133 1,770
Available indefinitely 1,468 1,302
Tax losses available to carry forward 3,601 3,072
Amount of tax losses recognised in deferred tax assets 64 125
Total tax losses available to carry forward 3,665 3,197

Additional tax losses have been generated in 2022. The above loss expiry table excludes £254m (2021: £238m) US
state tax losses.

147 IWG plc Annual Report and Accounts 2022 147

Notes to the accounts continued

8. Taxation continued
The following deferred tax assets have not been recognised due to uncertainties over recoverability.
£m 2022 2021

Intangibles 368 390

Accelerated capital allowances 33 30
Tax losses 852 758
Rent 63 49
Leases 37 30
Short-term temporary differences 11 7
1,364 1,264

(d) Corporation tax

£m 2022 2021

Corporation tax payable (45) (36)

Corporation tax receivable 19 19

(e) Deferred taxation

The movement in deferred tax is analysed below:
Property, Other
plant and temporary
£m Intangibles equipment Tax losses Rent Leases differences Total

Deferred tax asset

At 31 December 2020 22 (78) 257 63 107 (182) 189
Current year movement – 1 (17) 5 4 18 11
Prior year movement – – (199) – – – (199)
Disposals – – – – – – –
Transfers(1) 48 77 – – 1 200 326
Exchange rate movements – – – – – – –
At 31 December 2021 70 – 41 68 112 36 327
Current year movement 12 (4) (16) (4) 8 25 21
Prior year movement 1 13 (14) (3) – 3 –
Disposals – – – – – – –
Transfers – – – – – – –
Exchange rate movements (6) (9) 4 8 – 5 2
At 31 December 2022 77 – 15 69 120 69 350

Deferred tax liability

At 31 December 2020 – – – – – – –
Current year movement (3) (6) – – (5) 1 (13)
Prior year movement – – – – – 198 198
Disposals – – – – – – –
Transfers(1) (48) (77) – – (1) (200) (326)
Exchange rate movements – – – – – – –
At 31 December 2021 (51) (83) – – (6) (1) (141)
Current year movement (6) 2 – (1) 2 (1) (4)
Prior year movement – – – – – – –
Disposals – – – – – – –
Transfers – – – – – – –
Exchange rate movements – – – – – – –
At 31 December 2022 (57) (81) – (1) (4) (2) (145)
1. In 2021 the Group separately presented deferred tax assets and deferred tax liabilities on a country-by-country, or entity-by-entity basis where
available. The transfers line in the table above reflects the adjustment required to the opening balances as at 1 January 2021 to reflect this change in
presentation.

148 IWG plc Annual Report and Accounts 2022148

The movements in deferred taxes included above are after the offset of deferred tax assets and deferred tax liabilities
where there is a legally enforceable right to set off and they relate to income taxes levied by the same taxation
authority. The closing deferred tax position above represents the aggregated deferred tax asset or liability position
within individual legal entities, with some companies recognising deferred tax assets and others recognising deferred
tax liabilities. The closing position is a net deferred tax asset of £350m (2021: £327m) and a deferred tax liability of
£145m (2021: £141m).
In evaluating whether it is probable that taxable profits will be earned in future accounting periods for the purposes of
deferred tax asset recognition, management based their analysis on the Board-approved three-year forecasts
prepared for the purposes of reviewing goodwill for impairment.
Recognised deferred tax assets include assets that have arisen in the United States where despite recent losses the
Group considers it probable that sufficient taxable profits will be available against which these assets can be utilised
over a period of three years, based on the period corresponding to the Group’s business forecasting processes. Recent
losses recorded in the United States were incurred during a period of uncertainty as a result of the global COVID-19

Financial statements
pandemic. Management is confident that the Group will return to profitability in this region within the aforementioned
period. No reasonably possible change in any of the key assumptions would result in a significant reduction in projected
tax profits such that the recognised deferred tax asset would not be realised.
In 2022 the deferred tax asset recognised in respect of the fair market value of IP resulting from a group restructure in
2019, in relation to which the amortisation is deductible for Swiss corporate income tax purposes, increased to £77m
(2021: £70m) and this is included as Intangibles in the deferred tax table above. Recognition of this deferred tax asset is
based on the approved three-year forecast.
To address concerns about uneven profit distribution and tax contributions of large multinational corporations, various
agreements have been reached at the global level, including an agreement by over 135 jurisdictions to introduce a
global minimum tax rate of 15%. In December 2021, the Organisation for Economic Co-operation and Development
(OECD) released a draft legislative framework, followed by detailed guidance released March 2022, that is expected to
be used by individual jurisdictions that signed the agreement to amend their local tax laws. Once changes to the tax
laws in any jurisdiction in which the Group operates are enacted or substantively enacted, the Group may be subject to
top-up tax. At the date when the financial statements were authorised for issue, one jurisdiction in which the Group
operates had enacted or substantively enacted the tax legislation related to the top-up tax. The Group may be
potentially subject to the top-up tax because it operates in countries where the statutory tax rate is below 15%.
Management is closely monitoring the progress of the legislative process in each jurisdiction in which the Group
operates in. At 31 December 2022 the Group did not have sufficient information to determine the potential quantitative
impact.

9. Discontinued operations
During 2022, the Group completed the sale of various operations through the signing of franchise agreements. The
financial impact of these transactions is treated as discontinued operations in accordance with IFRS 5; however, these
operations under franchise will continue to be an important strategic component of the overall Group network. These
transactions form part of the larger change in strategy of the Group towards adopting a franchising model. Fees from
franchising activities subsequent to sale are reflected as franchise revenues in continuing operations. Closures in the
ordinary course of business are not considered part of discontinued operations.

Disposal of operations
During the year, the Group completed the sale of individually immaterial operations for the consideration of £1m (2021:
£52m). The results of these operations up to the date of disposal were as follows:
2021
£m 2022 Restated(1)

Revenue – 34
Expenses – (31)
Operating profit – 3
Net finance expense – (1)
Profit before tax for the year – 2
Income tax expense – (4)
Loss after tax for the year – (2)
Gain on the sale of discontinued operations 1 61
Profit after tax for the year 1 59
1. The comparative information has been restated to reflect the impact of discontinued operations.

149IWG plc Annual Report and Accounts 2022 149

Notes to the accounts continued

9. Discontinued operations continued

The assets and liabilities of these operations at their respective dates of disposal were as follows:
£m 2022 2021

Total assets 1 72
Total liabilities (1) (82)
Net liabilities – (10)
Costs directly associated with the disposal – 1
Foreign exchange recycled to profit and loss – –
– (9)
Consideration on disposal (net of cash and debt) (1) 1 52
Gain on sale of discontinued operations 1 61
1. The consideration recognised includes a non-cash element of £nil (2021: £33m).

The net cash flows incurred by these operations are as follows:

2021
£m 2022 Restated(1)

Operating – 48
Investing – (2)
Financing (1) (46)
Net cash outflow (1) –
1. The comparative information has been restated to reflect the impact of discontinued operations.

10. Adjusting items

The Group has recognised the following adjusting items for the year ended 31 December 2022:
£m 2022 2021

COVID-19 related adjusting items 4 31

Impairment of Ukraine and Russia 9 –
Total adjusting items 13 31

COVID-19 related adjusting items

Following the declaration by the World Health Organization of the COVID-19 pandemic and subsequent global
government restrictions, the Group has been unable to operate at full capacity. Given the political and economic
uncertainty resulting from COVID-19, the Group continued to see significant volatility and business disruption,
impacting performance in 2022.
The impact that COVID-19 has had on underlying trading performance is not recognised within adjusting items.
In order to improve the transparency and usefulness of the financial information presented and improve year-on-year
comparability, the Group has recognised a net charge of £4m (2021: £31m) relating to directly attributable charges
resulting from COVID-19. These charges are considered to be adjusting items as they meet the Group's definition, as
disclosed in previous annual reports, of being significant in both nature and value to the results of the Group in the
current period. Reversals of £17m (2021: £2m) have been recognised as adjusting items to cost of sales and charges of
£21m (2021: £33m) have been recognised as adjusting items to selling, general and administration expenses in the
Group’s income statement.
The charges relate to several separateIy identifiable areas of accounting judgement and estimates as follows:
2022 2021

Selling, Selling,
general and general and
administration administration
£m Cost of sales costs Cost of sales costs

Net reversal of impairment of property, plant and equipment (including right-of-

use assets) (73) – (125) –
Impairment of goodwill – 3 – –
Provision for expected credit losses – – 53 –
Network rationalisation 58 – 71 –
Other one-off items including restructuring(1) (2) 18 (1) 33
Total COVID-19 related adjusting items (17) 21 (2) 33
1. Included as adjusting items in selling, general and administration except for £2m (2021: £1m) in respect of worldwide financial support schemes which is
included in costs of sales.

150 IWG plc Annual Report and Accounts 2022150

• Impairments of property, plant and equipment (including right-of-use assets)
The continuation of COVID-19, including new and extended preventative measures in some of the Group’s markets,
continues to prolong the impact on our business in 2022. As a result of these measures, management continues to
carry out a comprehensive review exercise for potential impairments across the whole portfolio at a cash-generating
units (CGUs) level.
The impairment review formed part of the Group’s ongoing rationalisation process undertaken due to the impact of
COVID-19. This review compared the value-in-use of CGUs, based on management’s assumptions regarding likely
future trading performance, to the carrying values at 31 December 2022. Following this review, a net reversal of £73m
(2021: net reversal of £125m) was recognised within cost of sales. Of this net reversal, £22m (2021: £38m) and £51m
(2021: £87m) were recognised against property, plant and equipment and right-of-use assets respectively.
• Impairments of goodwill
COVID-19 and linked restrictions impacted our ability to trade our way to sustainable profitable growth in certain

Financial statements
markets. As a result, the projected cash flows for these markets continued to be evaluated to determine the carrying
value of the CGUs, with an additional impairment of £3m taken during 2022 (2021: £nil).
• Provision for expected credit losses
The Group continues to review the recoverability of its trade and other receivables portfolio; however, no additional
expected credit loss was deemed necessary (2021: £53m). The provision for expected credit losses reflecting the
greater likelihood of credit default by the Group’s debtors, directly attributable to the impact of COVID-19, is fully
utilised as at 31 December 2022.
• Network rationalisation
£58m (2021: £71m) of charges were incurred relating to network rationalisations that occurred in the year, which
includes the write-off of the book value of assets and direct closure costs related to these centres. A separate
rationalisation charge of £nil (£2021: £6m) has also been recorded which is not included as adjusting items.
• Other one-off items including restructuring
During the year, the Group incurred £nil (2021: £1m) of transaction costs in respect of master franchise agreements
that did not complete due to the outbreak of COVID-19.
Other charges of £18m (2021: £32m) were also incurred, including severance costs and restructurings arising from
mitigating actions taken by the Group in respect of COVID-19, completed by 31 December 2022, as well as claims in
respect of centre closures. In addition, during the year, the Group received a total of £2m (2021: £1m) in respect of
worldwide financial support schemes.
Should the estimated charges not prove to be in excess of the amounts required, the release of any amounts
provided for at year-end would be treated as adjusting items.
Impairment of Ukraine and Russia
As a result of geopolitical circumstances in the Ukraine and related sanctions against Russia, the Board has taken the
decision to recognise a total provision of £9m against the gross assets of both its Russian and Ukrainian operations.
These operations are not material to the Group, representing less than 1% of both total revenue and net assets of the
Group. Accordingly, the Group’s significant accounting judgements, estimates and assumptions have not changed.

11. Earnings per ordinary share (basic and diluted)

2022 2021

Basic and diluted loss for the year attributable to shareholders (£m) (120) (210)
Basic loss per share (p) (11.2) (20.4)
Diluted loss per share (p) (11.2) (20.4)
Basic and diluted loss for the year from continuing operations (£m) (121) (269)
Basic loss per share (p) (11.3) (26.2)
Diluted loss per share (p) (11.3) (26.2)
Basic and diluted profit for the year from discontinued operations (£m) 1 59
Basic earnings per share (p) 0.1 5.9
Diluted earnings per share (p) 0.1 5.4
Weighted average number of shares for basic EPS 1,006,884,755 1,007,214,854
Weighted average number of shares under option 35,393,807 39,512,057
Weighted average number of shares that would have been issued at average market price (29,608,587) (22,437,997)
Weighted average number of share awards under the CIP, PSP, DSBP and One-off Award 1,776,964 1,747,819
Weighted average number of shares on convertible bonds 76,408,203 76,408,203
Weighted average number of shares for diluted EPS 1,090,855,142 1,102,444,936

151 IWG plc Annual Report and Accounts 2022 151

Notes to the accounts continued

11. Earnings per ordinary share (basic and diluted) continued

Options are considered dilutive when they would result in the issue of ordinary shares for less than the market price of
ordinary shares in the period. The amount of the dilution is taken to be the average market price of shares during the
period minus the exercise price. There were no material awards considered anti-dilutive at the reporting date.
The Group issued £350m of convertible bonds in December 2020. The bond issue creates a potential 76,408,203
shares for bondholders. This represents a potential 7.1% dilutive impact at time of issue.
The average market price of one share during the year was 207.05p (2021: 321.95p), with a high of 302.10p on 4 January
2022 and a low of 115.40p on 12 October 2022.

12. Dividends
£m 2022 2021

Dividends per ordinary share proposed – –

Interim dividends per ordinary share declared and paid during the year – –

Given continuing macroeconomic uncertainties and geopolitical tensions, the Group’s capital allocation policy remains
unchanged, prioritising investment in the long-term growth of our business and dividend distribution to shareholders.

In order to protect our liquidity in the short-term, no dividend will be paid for the year ended 31 December 2022 (2021:
£nil) and future dividend payments continue to be placed on hold, with the intention to review the return to our
progressive dividend policy when appropriate.

13. Goodwill
£m Total

Cost
At 31 December 2020 696
Recognised on acquisition of subsidiaries(1) 16
Goodwill derecognised on sale of subsidiaries (1)
Goodwill impairment –
Exchange rate movements (7)
At 31 December 2021 704
Recognised on acquisition of subsidiaries(1) 188
Goodwill derecognised on sale of subsidiaries –
Goodwill impairment (3)
Exchange rate movements 45
At 31 December 2022 934

Net book value

At 31 December 2021 704
At 31 December 2022 934
1. Net of £nil derecognised on the finalisation of the accounting for prior year acquisitions previously reported on a provisional basis.

Cash-generating units (CGUs), defined as individual business centres, are grouped by country of operation and Worka
for the purposes of carrying out impairment reviews of goodwill as this is the lowest level at which it can be assessed.
Goodwill acquired through business combinations is held at a country and Worka level and is subject to impairment
reviews based on the cash flows of the CGUs within that country and the Worka segment.

152 IWG plc Annual Report and Accounts 2022 152

The carrying amount of goodwill attributable to the reportable business segments is as follows:
2021
£m 2022 Restated(1)

Americas 314 283

EMEA 373 367
Asia Pacific 27 25
Worka(2) 220 29
934 704
1. Restated to reflect the impact of the separate disclosure of the Worka segment.
2. Includes goodwill of £183m relating to the acquisition of The Instant Group and £5m from other immaterial acquisitions (note 28).

The carrying value of goodwill and indefinite life intangibles allocated to the USA, UK and Worka is material relative to
the total carrying value, comprising 78% of the total. The remaining 22% of the carrying value is allocated to a further 38

Financial statements
countries. The goodwill and indefinite life intangibles allocated to the USA, UK and Worka are set out below:
Intangible 2021
£m Goodwill assets(1) 2022 Restated(2)

USA 290 – 290 262

United Kingdom 219 11 230 230
Worka(3) 220 – 220 29
Other countries 205 – 205 194
934 11 945 715
1. The indefinite life intangible asset relates to the Regus brand.
2. Restated to reflect the impact of the separate disclosure of Worka.
3. Includes goodwill of £183m relating to the acquisition of The Instant Group and £5m from other immaterial acquisitions (note 28).

The value-in-use for each country and Worka has been determined using a model which derives the present value of
the expected future cash flows for each individual country and Worka. Although the model includes budgets and
forecasts prepared by management it also reflects external factors, such as capital market risk pricing as reflected in
the market capitalisation of the Group and prevailing tax rates, which have been used to determine the risk-adjusted
discount rate for the Group. Management believes that the projected cash flows are a reasonable reflection of the likely
outcomes over the medium to long-term. In the event that trading conditions deteriorate beyond the assumptions
used in the projected cash flows, it is also possible that impairment charges could arise in future periods.

153 IWG plc Annual Report and Accounts 2022 153

Notes to the accounts continued

13. Goodwill continued

The following key assumptions have been used in calculating the value-in-use for each country and Worka:
• Future cash flows are based on forecasts prepared by management. The model excludes cost savings and
restructurings that are anticipated but had not been committed to at the date of the determination of the value-in-
use. Thereafter, forecasts have been prepared by management for 2023, and for a further four years, that follow a
budgeting process approved by the Board;
• These forecasts exclude the impact of acquisitive growth expected to take place in future periods;
• Management considers these projections to be a reasonable projection of margins expected at the mid-cycle
position;
• A terminal value is included in the assessment, reflecting the Group’s expectation that it will continue to operate in
these markets and the long-term nature of the business; and
• The Group applies a country-specific pre-tax discount rate to the pre-tax cash flows for each country. The country-
specific discount rate is based on the underlying weighted average cost of capital (WACC) for the Group. The Group
WACC is then adjusted for each country to reflect the assessed market risk specific to that country. The Group pre-
tax WACC increased from 7.5% in 2021 to 9.1% in 2022 (post-tax WACC: 6.7%). The country-specific pre-tax WACC
reflecting the respective market risk adjustment has been set between 8.1% and 11.0% (2021: 7.2% to 9.7%).
The amounts by which the values-in-use exceed the carrying amounts of goodwill are sufficiently large to enable the
Directors to conclude that a reasonably possible change in the key assumptions would only result in a recognised
impairment of £3m (2021: £nil), in respect of individually immaterial countries. Foreseeable events are unlikely to result
in a change in the projections of such a significant nature as to result in the goodwill carrying amount exceeding their
recoverable amount. The forecast models used in assessing the impairment of goodwill are based on the related
business centre structure at the end of the year.
The US model assumes an average centre contribution of 21% (2021: 24%) over the next five years. A terminal value
centre gross margin of 23% is adopted from 2027, with a 0% long-term growth rate assumed on revenue and costs into
perpetuity. The cash flows have been discounted using a pre-tax discount rate of 8.5% (2021: 8.3%).
The UK model assumes an average centre contribution of 13% (2021: 18%) over the next five years. A terminal value
centre gross margin of 20% is adopted from 2027, with a 0% long-term growth rate assumed on revenue and costs into
perpetuity. The cash flows have been discounted using a pre-tax discount rate of 9.1% (2021: 7.5%).
The Worka model assumes an average contribution of 36% over the next five years. A terminal value centre gross
margin of 38% is adopted from 2027, with a 0% long-term growth rate assumed on revenue and costs into perpetuity.
The cash flows have been discounted using a pre-tax discount rate of 9.1%.
Management has considered the following sensitivities:
• Market growth and REVPOS – Management has considered the impact of a variance in market growth and REVPOS.
The value-in-use calculation shows that if the long-term growth rate is nil, the recoverable amount of the US, UK and
Worka would still be greater than their carrying value.
• Discount rate – Management has considered the impact of an increase in the discount rate applied to the calculation.
The value-in-use calculation shows that for the recoverable amount to be less than its carrying value, the pre-tax
discount rate would have to be increased to 216.6% (2021: 88.1%) for the US, 14.4% (2021: 25.3%) for the UK and 12.0%
for Worka.
• Occupancy – Management has considered the impact of a variance in occupancy. The value-in-use calculation
shows that for the recoverable amount to be less than its carrying value, occupancy in all future years would have to
decrease by 17.1% (2021: 23.0%) for the US and 8.1% (2021: 12.0%) for the UK.

154 IWG plc Annual Report and Accounts 2022154

14. Other intangible assets
Customer
£m Brand lists Software Total

Cost
At 31 December 2020 65 31 83 179
Additions at cost – – 34 34
Acquisition of subsidiaries 2 2 1 5
Disposals – – – –
Exchange rate movements – – – –
At 31 December 2021 67 33 118 218
Additions at cost – – 39 39
Acquisition of subsidiaries 24 77 40 141

Financial statements
Disposals – – – –
Exchange rate movements – 1 2 3
At 31 December 2022 91 111 199 401

Amortisation
At 31 December 2020 42 31 53 126
Charge for year 1 1 12 14
Disposals – – – –
Exchange rate movements – – – –
At 31 December 2021 43 32 65 140
Charge for year 2 17 25 44
Disposals – – – –
Exchange rate movements – 2 1 3
At 31 December 2022 45 51 91 187

Net book value

At 31 December 2020 23 – 30 53
At 31 December 2021 24 1 53 78
At 31 December 2022 46 60 108 214

During the year ended 31 December 2022, the Group completed the investment in The Instant Group. As part of the
purchase price allocation, the Group engaged with third party experts in recognising acquired brands valued at £24m,
customer lists from sublease agreements of £77m and digital asset software of £40m.

Included within the brand value is £11m relating to the acquisition of the remaining 58% of the UK business in the year
ended 31 December 2006. The Regus brand acquired in this transaction is assumed to have an indefinite useful life due
to the fact that the value of the brand is intrinsically linked to the continuing operation of the Group.
As a result of the Regus brand acquired with the UK business having an indefinite useful life no amortisation is charged
but the carrying value is assessed for impairment on an annual basis. The brand was tested at the balance sheet date
against the recoverable amount of the UK business segment at the same time as the goodwill arising on the acquisition
of the UK business (see note 13).

155IWG plc Annual Report and Accounts 2022 155

Notes to the accounts continued

15. Property, plant and equipment

Right-of-use Land and Leasehold Furniture and Computer
£m assets(1) buildings improvements equipment hardware Total

Cost
At 31 December 2020 9,530 150 1,521 775 129 12,105
Additions 176 11 110 73 7 377
Modifications(2) 479 – – – – 479
Acquisition of subsidiaries 78 – 23 2 – 103
Disposals(4) (852) (1) (147) (33) (6) (1,039)
Exchange rate movements (123) – (22) (6) (2) (153)
At 31 December 2021 9,288 160 1,485 811 128 11,872
Additions 253 – 139 78 6 476
Modifications(2) 313 – – – – 313
Acquisition of subsidiaries 4 – 16 – – 20
Disposals(4) (826) – (84) (36) (6) (952)
Exchange rate movements 622 – 149 70 10 851
At 31 December 2022 9,654 160 1,705 923 138 12,580

Accumulated depreciation
At 31 December 2020 3,883 8 836 421 101 5,249
Charge for the year(3) (6) 893 3 134 58 8 1,096
Disposals(4) (5) (675) – (66) (24) (5) (770)
Net reversal of impairment(7) (47) – (7) – – (54)
Exchange rate movements (20) – – (4) (1) (25)
At 31 December 2021 4,034 11 897 451 103 5,496
Charge for the year(3) (6) 955 3 115 65 7 1,145
Disposals(4) (5) (563) – (61) (25) (5) (654)
Net reversal of impairment(7) (39) – (13) – – (52)
Exchange rate movements 258 – 103 42 8 411
At 31 December 2022 4,645 14 1,041 533 113 6,346

Net book value

At 31 December 2020 5,647 142 685 354 28 6,856
At 31 December 2021 5,254 149 588 360 25 6,376
At 31 December 2022 5,009 146 664 390 25 6,234
1. Right-of-use assets consist of property-related leases.
2. Modifications includes lease modifications and extensions.
3. Includes depreciation expenses related to discontinued operations for right-of-use assets of £nil (2021: £13m) and other property, plant and
equipment of £nil (2021: £2m).
4. Includes disposals related to discontinued operations for right-of-use assets of £1m (2021: £39m) and other property, plant and equipment of £nil
(2021: £24m).
5. Disposals are net of £9m (2021: £19m) in respect of COVID-19 related adjusting items previously provided for (note 10).
6. Depreciation is net of £11m (2021: £25m) in respect of COVID-19 related adjusting items previously provided for (note 10).
7. The net reversal of impairment of £52m (2021: £54m) includes an additional COVID-19 related impairment of £22m (2021: £70m), offset by the reversal
of £75m (2021: £151m) previously provided for (note 10).

The key assumptions and methodology in calculating right-of-use assets and the corresponding lease liability remain
consistent with those noted in notes 2 and 33.

Impairment tests for property, plant and equipment (including right-of-use assets) are performed on a cash-generating
unit basis when impairment triggers arise. Cash-generating units (CGUs) are defined as individual business centres,
being the smallest identifiable group of assets that generate cash flows that are largely independent of other groups of
assets. The Group assesses whether there is an indication that a CGU may be impaired, including persistent operating
losses, net cash outflows and poor performance against forecasts. During the year, and as a direct result of the
challenging economic circumstances, this gave rise to impairment tests in relation to various centres where impairment
indicators were identified.
The recoverable amounts of property, plant and equipment are based on the higher of fair value less costs to sell and
value-in-use. The Group considered both fair value less costs to dispose and value-in-use in the impairment testing on
a centre-by-centre level, on a basis consistent with the impairment testing described in note 13. Impairment charges
are recognised within cost of sales in the consolidated income statement. In 2022, the Group recorded a net reversal of
impairment charges of £39m (2021: £47m) in respect of right-of-use assets and a net reversal of £13m (2021: £7m) in
respect of leasehold improvements.

156 IWG plc Annual Report and Accounts 2022156

16. Other long-term receivables
£m 2022 2021

Deposits held by landlords against rent obligations 57 50

Other receivables – –
57 50

17. Trade and other receivables

£m 2022 2021

Trade receivables, net 395 262

Prepayments and accrued income 152 134
Other receivables 174 146

Financial statements
Partner contributions receivables 23 30
VAT recoverable 172 159
Deposits held by landlords against rent obligations 3 3
919 734

18. Trade and other payables (including customer deposits)

£m 2022 2021

Customer deposits 447 385

Other accruals 252 189
Trade payables 220 163
VAT payable 119 104
Other payables 147 67
Other tax and social security 17 15
1,202 923

During 2021 the Group conducted a review of its customer deposits for inactive customer accounts. Based on this
review, the Group released the financial liabilities in respect of such deposits where the obligation qualified for
derecognition. The effect of these changes was an increase in operating profit of £22m in 2021.

19. Borrowings
The Group’s total loan and borrowing position at 31 December 2022 and at 31 December 2021 had the following
maturity profiles:

Bank and other loans

£m 2022 2021

Repayments falling due as follows:

In more than one year but not more than two years 5 5
In more than two years but not more than five years(1) 581 446
In more than five years 2 2
Total non-current 588 453
Total current 285 22
Total bank and other loans 873 475
1. Includes convertible bond debt of £318m (2021: £308m).

The Group issued £350m convertible bonds in December 2020, raising £343m, net of transaction fees. At the date of
issue, the convertible bonds were bifurcated between:
• A financial liability recognised at amortised cost of £298m, by using the discounted cash flow of interest payments
and the bonds’ nominal value; and subsequently remeasured at amortised cost of £318m (2021: £308m) at 31
December 2022. The financial liability is included in the above, falling due in more than two but not more than five
years.
• A derivative financial liability of £52m, not being closely related to the host financial liability, was recognised
separately and measured at fair value through profit or loss (note 25). A gain has been recognised at 31 December
2022 of £27m (2021: £23m) through net finance expenses, resulting in a year-end liability of £nil (2021: £27m).
Further information regarding the committed borrowings and the convertible bonds can be found on page 167 in
note 25.

157 IWG plc Annual Report and Accounts 2022 157

Notes to the accounts continued

20. Provisions
2022 2021

£m Closures Other Total Closures Other Total

At 1 January 13 8 21 24 7 31
Acquired in the period 7 – 7 – 4 4
Provided in the period 38 6 44 12 3 15
Utilised in the period(1) (1) (6) (7) (22) (7) (29)
Exchange rate movements 3 – 3 (1) – (1)
At 31 December 60 8 68 13 7 20
Analysed between:
Current 23 8 31 1 7 8
Non-current 37 – 37 12 – 12
At 31 December 60 8 68 13 7 20
1. Includes provisions release related to discontinued operations of £nil (2021: £nil).

Closures
Provisions for closures relate to the expected costs of centre closures, including restructuring costs. Impairments of
right-of-use assets and property, plant and equipment (note 15) are not included above.

Other
Other provisions include the estimated costs of claims against the Group outstanding at 31 December 2022, of which,
due to their nature, the maximum period over which they are expected to be utilised is uncertain.
The Group is involved in various disputes, primarily related to potential lease obligations, some of which are in the
course of litigation. Where there is a dispute and where, based on legal counsel advice, the Group estimates that it is
probable that the dispute will result in an outflow of economic resources, provision is made based on the Group’s best
estimate of the likely financial outcome. Where a reliable estimate cannot be made, or where the Group, based on legal
counsel advice, considers that it is not probable that there will be an outflow of economic resources, no provision is
recognised. There are no disputes which are expected to have a material impact on the Group.

21. Investments in joint ventures

Provision for
Investments in deficit in
£m joint ventures joint ventures Total

At 31 December 2020 11 (5) 6

Acquisition of joint ventures(1) 33 – 33
Share of loss – (2) (2)
Exchange rate movements 1 1 2
At 31 December 2021 45 (6) 39
Acquisition of joint ventures – – –
Share of loss (1) – (1)
Exchange rate movements 1 – 1
At 31 December 2022 45 (6) 39
1. The acquisition of joint ventures was settled via a non-cash transaction of £33m.

The Group has 82 centres operating under joint venture agreements (2021: 82) at the reporting date, all of which are
individually immaterial. The Group has a legal obligation in respect of its share of any deficits recognised by these
operations.

158 IWG plc Annual Report and Accounts 2022158

The results of the joint ventures below are the full-year results of the joint ventures and do not represent the effective
share:
£m 2022 2021

Income statement
Revenue 86 35
Expenses (88) (38)
Loss before tax for the year (2) (3)
Tax charge (1) –
Loss after tax for the year (3) (3)
Balance sheet
Non-current assets 153 137

Financial statements
Current assets 329 169
Current liabilities (322) (160)
Non-current liabilities (139) (126)
Net assets 21 20

22. Share capital

Ordinary equity share capital
2022 2021

Nominal value Nominal value

Number £m Number £m

Authorised
Ordinary 1p shares in IWG plc at 1 January 8,000,000,000 80 8,000,000,000 80
Ordinary 1p shares in IWG plc at 31 December 8,000,000,000 80 8,000,000,000 80
Issued and fully paid up
Ordinary 1p shares in IWG plc at 1 January 1,057,248,651 10 1,057,248,651 10
Ordinary 1p shares issued for cash in the year – – – –
Ordinary 1p shares in IWG plc at 31 December 1,057,248,651 10 1,057,248,651 10

Treasury share transactions involving IWG plc shares between 1 January 2022 and 31 December 2022
During the year, 2,174,738 shares were purchased in the open market and 1,442,606 treasury shares held by the Group
were utilised to satisfy the exercise of share awards by employees. As at 7 March 2023, 50,564,853 treasury shares
were held. The holders of ordinary shares in IWG plc are entitled to receive such dividends as are declared by the
Company and are entitled to one vote per share at meetings of the Company. Treasury shares do not carry such rights
until reissued.
2022 2021
Number Number
of shares £m of shares £m

1 January 49,832,721 151 50,677,280 154

Purchase of treasury shares in IWG plc 2,174,738 5 – –
Treasury shares in IWG plc utilised (1,442,606) (4) (844,559) (3)
31 December 50,564,853 152 49,832,721 151

159IWG plc Annual Report and Accounts 2022 159

Notes to the accounts continued

23. Non-controlling interests

During 2022, the Group completed the investment in The Instant Group, acquiring 100% of the equity voting rights. In a
separate transaction, the Group sold a 13.4% non-controlling equity interest in a subsidiary of the Worka structure for a
consideration of £53m. The Group no longer exercises control of its 57% investment in The Wing and disposed of the
remaining £7m non-controlling interest during the year.
The following table summarises the information relating to each of the Group’s subsidiaries that have a material non-
controlling interest.
£m 2022 2021

NCI percentage 13.4% 43%

Non-current assets 413 42
Current assets 282 11
Non-current liabilities (131) (24)
Current liabilities (163) (7)
Net assets 401 22
Net assets attributable to NCI 52 9
Revenue 138 1
Loss after tax (13) (12)
Other comprehensive income – –
Total comprehensive income (13) (12)
Loss allocated to NCI (3) (5)
Other comprehensive income allocated to NCI – –
Cash flows from operating activities 31 (14)
Cash flows from investing activities 49 29
Cash flows from financing activities (33) (7)
Net increase in cash and cash equivalents 47 8

24. Net debt analysis

£m Notes 2022 2021

Cash and cash equivalents 161 78

Current net investment in finance leases 52 –
Non-current net investment in finance leases 95 –
Gross cash and lease receivables 308 78
Debt due within one year (285) (22)
Debt due after one year(1)(2) (588) (453)
Lease due within one year(3) (1,002) (932)
Lease due after one year(3) (5,037) (5,189)
Gross debt (6,912) (6,596)
Net debt (6,604) (6,518)
Derivative liability 19 – (27)
(6,604) (6,545)
1. Includes £318m (2021: £308m) convertible bond liability.
2. Excludes the convertible bond derivative liability element at 31 December 2022 of £nil (2021: £27m).
3. There are no significant lease commitments for leases not commenced at 31 December 2022.

160 IWG plc Annual Report and Accounts 2022160

The following table shows a reconciliation of net cash flow to movements in net debt:
£m 2022 2021

Net debt at 1 January (6,518) (6,910)

Net increase in cash and cash equivalents 77 5
Interest received on net lease investment (7) –
Payment received from net lease investment (41) –
Proceeds from issue of loans (1,340) (983)
Repayment of loans 954 947
Interest paid on lease liabilities 230 167
Payment of lease liability 997 865
Non-cash movements(1) (534) (729)

Financial statements
Exchange rate movements (422) 120
Net debt at 31 December (6,604) (6,518)
1. Includes acquired debt of £nil (2021: £6m), interests accrued on the convertible bond liability of £10m (£10m) and movements on leases in relation to
new leases, lease modifications/re-measurements and lease cessations of £524m (2021: £713m). Early termination of lease liabilities represent £294m
(2021: £232m) of the non-cash movements, including £1m (2021: £52m) related to discontinued operations.

Cash and cash equivalent balances held by the Group that are not available for use amounted to £7m at 31 December
2022 (2021: £7m). Of this balance, £1m (2021: £2m) is pledged as security against outstanding bank guarantees and a
further £6m (2021: £5m) is pledged against various other commitments of the Group.
Cash flows on debt relate to movements in the revolving credit facility and other borrowings. These net movements
align with the activities reported in the cash flow statement after taking into consideration the £nil (2021: £27m)
derivative liability recognised separately.
The following amounts are included in the Group’s consolidated financial statements in respect of its leases:
£m 2022 2021

Depreciation charge for right-of-use assets (955) (893)

Principal lease liability repayments (997) (865)
Interest expense on lease liabilities (230) (167)
Expenses relating to leases of low-value assets – 1
Expenses relating to variable lease payments not included in lease liabilities 68 63
Total cash outflow for leases comprising interest and capital payments 1,227 1,032
Additions to right-of-use assets 253 176
Acquired right-of-use assets 4 78
Interest income on net lease investment 7 –
Principal payments received from net lease investment 41 –

Total cash outflows of £1,295m (2021: £1,095m) for leases, including variable payments of £68m (2021: £63m), were
incurred in the year.

161 IWG plc Annual Report and Accounts 2022 161

Notes to the accounts continued

25. Financial instruments and financial risk management

The objectives, policies and strategies applied by the Group with respect to financial instruments and the management
of capital are determined at Group level. The Group’s Board maintains responsibility for the risk management strategy
of the Group and the Chief Financial Officer is responsible for policy on a day-to-day basis. The Chief Financial Officer
and Group Treasurer review the Group’s risk management strategy and policies on an ongoing basis. The Board has
delegated to the Group Audit Committee the responsibility for applying an effective system of internal control and
compliance with the Group’s risk management policies.
Exposures to credit, interest rate and currency risks arise in the normal course of business.

Going concern
The Strategic Report on pages 1 to 71 sets out the Group’s strategy and the factors that are likely to affect the future
performance and position of the business. The financial review on pages 36 to 43 within the Strategic Report reviews
the trading performance, financial position and cash flows of the Group. The Group’s net debt position increased by
£86m (2021: decreased by £392m) to a net debt position of £6,604m (2021: £6,518m) as at 31 December 2022.
Excluding the IFRS 16 net investment in finance leases and lease liabilities, the net debt position increased to £712m
(2021: £397m). The investment in growth is funded by a combination of cash flow generated from the Group’s mature
business centres, cash consideration received in franchising the business and debt. The Group had a £750m revolving
credit facility (RCF) provided by a group of relationship banks with a final maturity in 2025 with an option to extend
until 2026. As at 31 December 2022, £173m (2021: £530m) of the RCF was available and undrawn.
Although the Group has net current liabilities of £1,868m (2021: £1,435m), the Group does not consider that this gives
rise to a liquidity risk. A large proportion of the net current liabilities comprise non-cash liabilities such as deferred
revenue of £455m (2021: £346m) which will be recognised in future periods through the income statement. The Group
holds customer deposits of £447m (2021: £385m) which are spread across a large number of customers and no
deposit held for an individual customer is material. Therefore, the Group does not believe the net current liabilities
represents a liquidity risk.

Credit risk
Credit risk could occur where a customer or counterparty defaults under the contractual terms of a financial
instrument and arises principally in relation to customer contracts and the Group’s cash deposits.
A diversified customer base, requirement for customer deposits, and payments in advance on workstation contracts
minimise the Group’s exposure to customer credit risk. No single customer contributes a material percentage of the
Group’s revenue. The Group’s policy is to provide against trade receivables when specific debts are judged to be
irrecoverable or where formal recovery procedures have commenced. Trade debtors that are more than three months
overdue are considered to be in default and therefore, under the simplified lifetime approach, are impaired in full. This
reflects the Group’s experience of the likelihood of recoverability of these trade receivables based on both historical
and forward-looking information. These provisions, which take into consideration any customer deposits held, are
reviewed on an ongoing basis to assess changes in the likelihood of recoverability.
The Group has assessed the other receivable balances for expected credit losses, with no expected credit losses
recognised due to the nature and default history of these items.
The maximum exposure to credit risk for trade receivables at the reporting date, not taking into account customer
deposits held, analysed by geographic region, is summarised below.
2021
£m 2022 Restated(1)

Americas 151 103

EMEA 192 135
Asia Pacific 28 22
Worka 24 2
395 262
1. Restated to reflect the impact of the separate disclosure of the Worka segment.

All of the Group’s trade receivables relate to customers purchasing workplace solutions and associated services and no
individual customer has a material balance owing as a trade receivable.
The ageing of trade receivables at 31 December was:
2022 2021

£m Gross Provision Gross Provision

Not overdue 312 – 220 –

Past due 0 – 30 days 40 – 21 –
Past due 31 – 60 days 19 – 7 –
Past due 61 – 90 days 15 – 4 –
Past due more than 90 days 19 (10) 38 (28)
405 (10) 290 (28)

162 IWG plc Annual Report and Accounts 2022 162

At 31 December 2022, the Group maintained a provision of £10m for expected credit losses (2021: £28m) arising from
trade receivables. The Group had provided £nil (2021: £99m) in the year, utilised £12m (2021: £98m) and released £6m
(2021: £nil). Customer deposits of £447m (2021: £385m) are held by the Group, mitigating the risk of default.
IFRS 9 requires the Group to record expected credit losses on all of its receivables, on either a 12-month or a lifetime
basis. The Group has applied the simplified approach to all trade receivables, which requires the recognition of the
expected credit loss based on the lifetime expected losses. The expected credit loss is mitigated through the invoicing
of contracted services in advance and customer deposits.
Cash investments and derivative financial instruments are only transacted with counterparties of sound credit ratings,
and management does not expect any of these counterparties to fail to meet their obligations.

Liquidity risk
Liquidity risk represents the risk that the Group will not be able to meet its obligations as they fall due. The Group

Financial statements
manages liquidity risk by closely monitoring the global cash position, the available and undrawn credit facilities, and
forecast capital expenditure, and expects to have sufficient liquidity to meet its financial obligations as they fall due. In
response to ongoing political and economic uncertainty, the Group continues to focus on cash generation by reducing
cost, renegotiating rents and rationalising the network, resulting in short-term or long-term cash benefits. The Group
has free cash and liquid investments (excluding blocked cash) of £154m (2021: £71m). In addition to cash and liquid
investments, the Group had £173m (2021: £530m) available and undrawn under its committed borrowings. The
Directors consider the Group has adequate liquidity to meet day-to-day requirements.
The Group maintained a revolving credit facility provided by a group of international banks. At 31 December 2022, the
amount of the facility is £750m (2021: £950m) and the final maturity was extended in March 2020 to March 2025 with
an option to extend until 2026.
The Group actively reviews its exposure to interest rate movements. The issuance of the fixed rate convertible bond
significantly reduces the Group's exposure to an increase in interest rates. The final interest rate swap taken to hedge
against the floating interest rate obligations of debt drawn under the revolving credit facility matured in February 2021.
This had a nominal amount of £30m and a fixed rate of 1.2%.

Market risk
The Group is exposed to market risk primarily related to foreign currency exchange rates, interest rates and the market
value of our investments in financial assets. These exposures are actively managed by the Group Treasurer and Chief
Financial Officer in accordance with a written policy approved by the Board of Directors. The Group does not use
financial derivatives for trading or speculative reasons.

Interest rate risk

The Group manages its exposure to interest rate risk through the relative proportions of fixed rate debt and floating
rate debt. Any surplus cash balances are invested short-term, and at the end of 2022 no cash was invested for a period
exceeding three months (2021: £nil).

Foreign currency risk

The Group is exposed to foreign currency exchange rate movements. The majority of day-to-day transactions of
overseas subsidiaries are carried out in local currency and the underlying foreign exchange exposure is small.
Transactional exposures do arise in some countries where it is local market practice for a proportion of the payables or
receivables to be in other than the functional currency of the affiliate. Intercompany charging, funding and cash
management activity may also lead to foreign exchange exposures. It is the policy of the Group to seek to minimise
such transactional exposures through careful management of non-local currency assets and liabilities, thereby
minimising the potential volatility in the income statement. Net investments in IWG affiliates with a functional currency
other than pounds sterling are of a long-term nature and the Group does not normally hedge such foreign currency
translation exposures.
The principal exposures of the Group are to the US dollar and the euro, with approximately 36% (2021: 35%) of the
Group’s revenue being attributable to the US dollar and 23% (2021: 23%) to the euro.
From time to time the Group uses short-term derivative financial instruments to manage its transactional foreign
exchange exposures where these exposures cannot be eliminated through balancing the underlying risks. No
transactions of a speculative nature are undertaken.

163IWG plc Annual Report and Accounts 2022 163

Notes to the accounts continued

25. Financial instruments and financial risk management continued

The foreign currency exposure arising from open third-party transactions held in a currency other than the functional
currency of the related entity is summarised as follows:
2022

£m GBP EUR USD

Trade and other receivables – 4 7

Trade and other payables (1) (11) (15)
Net statement of financial position exposure (1) (7) (8)

2021

£m GBP EUR USD

Trade and other receivables – 2 1

Trade and other payables (1) (8) –
Net statement of financial position exposure (1) (6) 1

Other market risks

The Group does not hold any equity securities for fair value measurement under IFRS 9 and is therefore not subject to
risks of changes in equity prices in the income statement.

Sensitivity analysis
For the year ended 31 December 2022, it is estimated that a general increase of one percentage point in interest rates
would have increased the Group’s loss before tax by approximately £4m (2021: £1m) with a corresponding decrease in
total equity.
It is estimated that a five-percentage point weakening in the value of the US dollar against pounds sterling would have
increased the Group’s loss before tax by approximately £2m for the year ended 31 December 2022 (2021: £1m). It is
estimated that a five-percentage point weakening in the value of the euro against pounds sterling would have
increased the Group’s loss before tax by approximately £3m for the year ended 31 December 2022 (2021: £nil).
It is estimated that a five-percentage point weakening in the value of the US dollar against pounds sterling would have
decreased the Group’s total equity by approximately £5m for the year ended 31 December 2022 (2021: £8m). It is
estimated that a five-percentage point weakening in the value of the euro against pounds sterling would have
decreased the Group’s total equity by approximately £2m for the year ended 31 December 2021 (2021: £4m).

Capital management
The Group’s parent company is listed on the UK stock exchange and the Board’s policy is to maintain a strong capital
base. The Chief Financial Officer monitors the diversity of the Group’s major shareholders and further details of the
Group’s communication with key investors can be found in the Corporate Governance Report on page 74. In 2006, the
Board approved the commencement of a progressive dividend policy to enhance the total return to shareholders.
The Group’s Chief Executive Officer, Mark Dixon, is a major shareholder of the Company. Details of the Directors’
shareholdings can be found in the Directors’ Remuneration report on pages 96 to 117. In addition, the Group operates
various share option plans for key management and other senior employees.

Treasury share transactions involving IWG plc shares between 1 January 2022 and 31 December 2022
During the year, 2,174,738 shares were purchased in the open market and 1,442,606 treasury shares held by the Group
were utilised to satisfy the exercise of share awards by employees. As at 31 December 2022, 50,564,853 treasury
shares were held.
The Company declared and paid no interim dividend per share during the year ended 31 December 2022 (2021: nil
pence per share) and proposed no final dividend per share (2021: nil pence per share).
The Group’s objective when managing capital (equity and borrowings) is to safeguard the Group’s ability to continue as
a going concern and to maintain an optimal capital structure to reduce the cost of capital.

164 IWG plc Annual Report and Accounts 2022164

Effective interest rates
In respect of financial assets and financial liabilities, the following table indicates their effective interest rates at the
balance sheet date and the periods in which they mature.
Except for lease liabilities and the convertible bond, the undiscounted cash flow and fair values of these instruments is
not materially different from the carrying value.

As at 31 December 2022
Effective
interest rate Carrying Contractual Less than More than
£m % value cash flow 1 year 1-2 years 2-5 years 5 years

Cash and cash equivalents 0.3% 161 161 161 – – –

Trade and other receivables(1) – 767 767 767 – – –

Financial statements
Net investment in finance leases 5.6% 147 172 60 36 51 25
Other long-term receivables – 57 57 – 29 28 –
Financial assets(2) 1,132 1,157 988 65 79 25

Non-derivative financial liabilities(3):

Bank loans and corporate borrowings 4.8% (266) (266) – – (266) –
Convertible bonds – debt host 3.8% (318) (356) (2) (2) (352) –
Lease liabilities 4.1% (6,039) (8,235) (1,264) (1,203) (2,795) (2,973)
Other loans 0.0% (289) (289) (283) (3) (1) (2)
Deferred and contingent consideration – (8) (8) (4) (2) (2) –
Trade and other payables – (1,198) (1,198) (1,198) – – –
Other long-term payables – (7) (7) – (7) – –
Derivative financial liabilities:
Convertible bonds – embedded conversion
option – – – – – – –
Financial liabilities (8,125) (10,359) (2,751) (1,217) (3,416) (2,975)

As at 31 December 2021
Effective
interest rate Carrying Contractual Less than More than
£m % value cash flow 1 year 1-2 years 2-5 years 5 years

Cash and cash equivalents 0.0% 78 78 78 – – –

Trade and other receivables(1) – 600 600 600 – – –
Net investment in finance leases – – – – – – –
Other long-term receivables – 50 50 – 25 25 –
Financial assets(2) 728 728 678 25 25 –

Non-derivative financial liabilities(3):

Bank loans and corporate borrowings 4.0% (137) (137) (1) – (136) –
Convertible bonds – debt host 3.8% (308) (357) (2) (2) (353) –
Lease liabilities 3.3% (6,121) (7,869) (1,095) (1,069) (2,564) (3,141)
Other loans 0.0% (30) (30) (21) (5) (2) (2)
Deferred and contingent consideration – (12) (12) (8) – (2) (2)
Trade and other payables – (915) (915) (915) – – –
Other long-term payables – (6) (6) – (6) – –
Derivative financial liabilities:
Convertible bonds – embedded conversion
option – (27) (27) – – (27) –
Financial liabilities (7,556) (9,353) (2,042) (1,082) (3,084) (3,145)
1. Excluding prepayments.
2. Financial assets are all held at amortised cost.
3. All financial instruments are classified as variable rate instruments.

165IWG plc Annual Report and Accounts 2022 165

Notes to the accounts continued

25. Financial instruments and financial risk management continued

Fair value disclosures
The fair values together with the carrying amounts shown in the balance sheet are as follows:

31 December 2022
Carrying amount Fair value

Cash, Other
loans and financial
£m receivables liabilities Total Level 1 Level 2 Level 3 Total

Cash and cash equivalents 161 – 161 – – – –

Trade and other receivables(1) 767 – 767 – – – –
Other long-term receivables 57 – 57 – – – –
Derivative financial liabilities – – – – – – –
Bank loans and corporate borrowings – (266) (266) – – – –
Convertible bonds – (318) (318) – – (318) (318)
Other loans – (289) (289) – – – –
Deferred and contingent consideration – (8) (8) – – (8) (8)
Trade and other payables – (1,198) (1,198) – – – –
Other long-term payables – (7) (7) – – – –
985 (2,086) (1,101) – – (326) (326)

31 December 2021
Carrying amount Fair value
Cash, Other
loans and financial
£m receivables liabilities Total Level 1 Level 2 Level 3 Total

Cash and cash equivalents 78 – 78 – – – –

Trade and other receivables(1) 600 – 600 – – – –
Other long-term receivables 50 – 50 – – – –
Derivative financial liabilities – (27) (27) – – (27) (27)
Bank loans and corporate borrowings – (137) (137) – – – –
Convertible bonds – (308) (308) – – (308) (308)
Other loans – (30) (30) – – – –
Deferred and contingent consideration – (12) (12) – – (12) (12)
Trade and other payables – (915) (915) – – – –
Other long-term payables – (6) (6) – – – –
728 (1,435) (707) – – (347) (347)
1. Excluding prepayments.

At the date of issue, the £350m was bifurcated at £298m and £52m between corporate borrowings (debt) and a
derivative financial liability respectively. At 31 December 2022, the debt was valued at its amortised cost, £318m (2021:
£308m) and the derivative liability at its fair value, £nil (2021: £27m).
During the years ended 31 December 2022 and 31 December 2021, there were no transfers between levels for fair value
measured instruments.

Valuation techniques
When measuring the fair value of an asset or a liability, the Group uses market observable data as far as possible. Fair
values are categorised into different levels in a fair value hierarchy based on the inputs used in the valuation techniques
as follows:
• Level 1: quoted prices in active markets for identical assets or liabilities;
• Level 2: inputs other than quoted prices included in level 1 that are observable for the asset or liability, either directly
or indirectly; and
• Level 3: inputs for the asset or liability that are not based on observable market data.

166 IWG plc Annual Report and Accounts 2022166

The following tables show the valuation techniques used in measuring level 3 fair values and methods used for financial
assets and liabilities not measured at fair value:
Type Valuation technique

Cash and cash equivalents, trade and other For cash and cash equivalents, receivables/payables with a remaining life of less
receivables/payables, customer deposits and than one year and customer deposits, the book value approximates the fair value
investment loan receivables because of their short-term nature.
Loans, overdrafts and debt element of The fair value of bank loans, overdrafts and other loans approximates the carrying
convertible bonds value because interest rates are at floating rates where payments are reset to
market rates at intervals of less than one year.
Contingent consideration, foreign exchange The fair values are based on a combination of broker quotes, forward pricing, and
contracts, interest rate swaps and derivative swap models. The fair value of the derivative element of convertible bonds has been
element of convertible bonds calculated with reference to unobservable credit spreads.

Financial statements
Derivative financial instruments
Committed borrowings
2022 2021

£m Facility Available Facility Available

Revolving credit facility 750 173 950 530

Bridge facility 330 – – –

The Group maintains a revolving credit facility provided by a group of international banks. At 31 December 2022, the
amount of the facility remains £750m (2021: £950m) and the final maturity was extended in March 2020 to March
2025 with an option to extend until 2026. As at 31 December, £173m (2021: £530m) was available and undrawn under
this facility.
The £750m revolving credit facility is subject to financial covenants which include EBITDA, minimum liquidity, interest
cover and net debt to EBITDA ratio. The Group continued to operate in compliance with the covenants agreed with the
lenders.
A £330m non-recourse bridge facility specifically to fund the investment in The Instant Group, has been fully utilised.
The bridge facility, with an outstanding balance of £270m, has a maturity in September 2023. This facility is secured
and is subject to interest cover and net debt to EBITDA covenants. The Instant Group, combined with the IWG digital
assets in Worka has reduced its net debt to £176m, excluding £4m net lease liabilities, at 31 December 2022 and
continues to be highly cash generative.

Convertible bonds
In December 2020 the Group issued a £350m convertible bond, issued by IWG Group Holdings S.à r.l. and transferred
in the year to IWG International Holdings S.à r.l., a subsidiary of the Group and guaranteed by IWG plc, which is due for
repayment in 2027 if not previously converted into shares. If the conversion option is exercised by the holder of the
option, the issuer has the choice to settle by cash or equity shares in the Group. The holders of the bond have the right
to put the bonds back to the Group in 2025 at par. The bond carries a fixed coupon of 0.5% per annum. The bond
liability is split between corporate borrowings (debt) and a derivative financial liability. At the date of issue, the £350m
was bifurcated at £298m and £52m between corporate borrowings (debt) and a derivative financial liability,
respectively. At 31 December 2022, the debt was valued at its amortised cost, £318m (2021: £308m) and the derivative
liability at its fair value, £nil (2021: £27m).
The derivative liability represents a level 3 instrument, which has been valued with reference to the total convertible
bond price (a level 1 valuation) minus the level 3 valuation of the debt host. A change of 10 basis points in the credit
spread that is indirectly used to value the derivative liability would have increased or decreased profit or loss by £1m
(2021: £1m).
The Group actively reviews its exposure to interest rate movements. The issuance of the fixed rate convertible bond
significantly reduces the Group's exposure to an increase in interest rates.

167 IWG plc Annual Report and Accounts 2022 167

Notes to the accounts continued

26. Share-based payments

There are three share-based payment plans, details of which are outlined below:

Plan 1: IWG Group Share Option Plan

During 2004 the Group established the IWG Group Share Option Plan that entitles eligible employees to purchase
shares in IWG plc. In accordance with this programme, holders of vested options are entitled to purchase shares at the
mid-market closing price of the shares at the day before the date of grant.
The IWG Group also operates the IWG Group Share Option Plan (France) which is included within the numbers for the
IWG Share Option Plan disclosed above. The terms of the IWG Share Option Plan (France) are materially the same as
the IWG Group Share Option Plan with the exception that they are only exercisable from the fourth anniversary of the
date of grant, assuming the performance conditions have been met.

Reconciliation of outstanding share options

2022 2021

Weighted average Weighted average

Number of exercise price Number of exercise price
share options per share share options per share

At 1 January 42,827,743 195.65 42,926,841 184.38

Granted during the year 18,603,116 130.85 3,508,813 313.90
Lapsed during the year (7,829,580) 215.97 (2,566,253) 190.35
Exercised during the year (1,297,155) 118.47 (1,041,658) 142.60
Outstanding at 31 December 52,304,124 171.48 42,827,743 195.65
Exercisable at 31 December 12,273,441 213.23 11,694,349 198.51

Weighted average
Numbers exercise price per At 31 Dec
Date of grant granted share Lapsed Exercised 2022 Exercisable from Expiry date

13/06/2012 11,189,000 84.95 (3,944,407) (7,244,593) – (1) 13/06/2015 13/06/2022

12/06/2013 7,741,000 155.60 (4,306,000) (3,061,233) 373,767 (1) 12/06/2016 12/06/2023
20/05/2014 1,845,500 187.20 (1,658,500) (160,300) 26,700 (1) 20/05/2017 19/05/2024
05/11/2014 12,875,796 186.00 (9,366,754) (1,671,285) 1,837,757 (2) 05/11/2017 04/11/2024
19/05/2015 1,906,565 250.80 (1,862,565) – 44,000 (2) 19/05/2018 18/05/2025
22/12/2015 1,154,646 322.20 (395,186) (25,000) 734,460 (1) 22/12/2018 22/12/2025
29/06/2016 444,196 272.50 (389,150) (11,009) 44,037 (2) 29/06/2019 29/06/2026
28/09/2016 249,589 258.00 (214,313) (7,055) 28,221 (2) 28/09/2019 28/09/2026
01/03/2017 1,200,000 283.70 – – 1,200,000 (1) 01/03/2020 01/03/2027
21/12/2018 (Grant 1) 300,000 203.10 (75,000) – 225,000 (2) 21/12/2021 21/12/2028
28/12/2018 (Grant 2) 20,900,000 199.80 (8,841,662) (166,668) 11,891,670 (2) 28/12/2021 28/12/2028
15/05/2019 613,872 341.90 (595,834) – 18,038 (2) 15/05/2022 15/05/2029
13/09/2019 196,608 402.30 (156,608) – 40,000 (2) 13/09/2022 13/09/2029
19/12/2019 108,349 408.60 (81,428) – 26,921 (2) 19/12/2022 19/12/2029
02/04/2020 20,325,000 165.00 (4,020,834) – 16,304,166 (3) 02/04/2023 02/04/2030
15/05/2020 450,000 202.00 (300,000) – 150,000 (3) 15/05/2023 15/05/2030
05/08/2020 300,000 222.60 (300,000) – – (1) 05/08/2023 05/08/2030
09/09/2020 173,148 291.00 (155,964) – 17,184 (3) 09/09/2023 09/09/2030
26/03/2021 466,377 342.80 (58,345) – 408,032 (3) 26/03/2024 26/03/2031
11/05/2021 318,645 376.60 – – 318,645 (3) 11/05/2024 11/05/2031
28/06/2021 487,964 307.40 (487,964) – – (1) 28/06/2024 28/06/2031
12/08/2021 580,655 310.00 (161,292) – 419,363 (3) 12/08/2024 12/08/2031
10/11/2021 1,500,000 297.70 (1,500,000) – – (1) 10/11/2024 10/11/2031
09/12/2021 155,172 290.00 (155,172) – – (1) 09/12/2024 09/12/2031
09/03/2022 204,659 255.00 – – 204,659 (3) 09/03/2025 09/03/2032
10/05/2022 (Grant 1) 1,042,774 222.10 – – 1,042,774 (3) 10/05/2025 10/05/2032
17/05/2022 (Grant 2) 382,791 242.30 – – 382,791 (3) 17/05/2025 17/05/2032
14/10/2022 (Grant 1) 15,087,586 117.95 (406,953) – 14,680,633 (3) 14/10/2025 14/10/2032
17/10/2022 (Grant 2) 600,000 122.25 – – 600,000 (3) 17/10/2025 17/10/2032
01/12/2022 1,285,306 159.35 – – 1,285,306 (3) 01/12/2025 01/12/2032
104,085,198 (39,433,931) (12,347,143) 52,304,124
1. These options have fully vested as of 31 December 2022.
2. The performance targets for these options have been met and they are subject to vesting schedules as described below.
3. These options are subject to performance targets and vesting schedules as described below.

168 IWG plc Annual Report and Accounts 2022168

The vesting of share options is subject to an ongoing employment condition. As at 31 December 2022, there were
12,273,441 (2021: 11,649,349) outstanding share options which had fully vested with no further performance or holding
period requirements and which had a weighted average exercise price of £213.23 (2021: £198.51).

Performance conditions for share options

June 2013 share options
The share options outstanding under this grant at 31 December 2022 reflect the options that have been awarded and
vested, based on achievement against the relevant performance targets and are now exercisable with an expiry date of
June 2023.
May 2014 share options
The share options outstanding under this grant at 31 December 2022 reflect the options that have been awarded and
vested, based on achievement against the relevant performance targets and are now exercisable with an expiry date of

Financial statements
May 2024.
November 2014 share options
The share options outstanding under this grant at 31 December 2022 reflect the options that have been awarded and
vested, based on achievement against the relevant performance targets and are now exercisable with an expiry date of
November 2024.
May 2015 share options
The share options outstanding under this grant at 31 December 2022 reflect the options that have been awarded
based on achievement against the relevant performance targets and are now vesting ratably over a five-year period
beginning May 2020 and ending May 2024.
December 2015 share options
The share options outstanding under this grant at 31 December 2022 reflect the options that have been awarded and
vested, based on achievement against the relevant performance targets and are now exercisable with an expiry date of
December 2025.
June 2016 share options
The share options outstanding under this grant at 31 December 2022 reflect the options that have been awarded
based on achievement against the relevant performance targets and are now vesting ratably over a five-year period
beginning June 2019 and ending June 2023.
September 2016 share options
The share options outstanding under this grant at 31 December 2022 reflect the options that have been awarded
based on achievement against the relevant performance targets and are now vesting ratably over a five-year period
beginning September 2019 and ending September 2023.
March 2017 share options
The share options outstanding under this grant at 31 December 2022 reflect the options that have been awarded and
vested, based on achievement against the relevant performance targets and are now exercisable with an expiry date of
March 2027.
December 2018 (Grant 1) share options
The share options outstanding under this grant at 31 December 2022 reflect the options that have been awarded based
on achievement against the relevant performance targets and are now vesting ratably over a three-year period
beginning December 2021 and ending December 2023.
December 2018 (Grant 2) share options
The share options outstanding under this grant at 31 December 2022 reflect the options that have been awarded
based on achievement against performance targets and are now subject to vesting ratably over a three-year period
beginning December 2021 and ending December 2023.
May 2019 share options
The share options outstanding under this grant at 31 December 2022 reflect the options that have been awarded based
on achievement against the relevant performance targets and are now vesting ratably over a three-year period
beginning May 2022 and ending May 2024.
September 2019 share options
The share options outstanding under this grant at 31 December 2022 reflect the options that have been awarded
based on achievement against the relevant performance targets and are now vesting ratably over a five-year period
beginning September 2022 and ending September 2026.
December 2019 share options
The share options outstanding under this grant at 31 December 2022 reflect the options that have been awarded
based on achievement against the relevant performance targets and are now vesting ratably over a five-year period
beginning December 2022 and ending December 2026.

169IWG plc Annual Report and Accounts 2022 169

Notes to the accounts continued

26. Share-based payments continued

April 2020 share options
The share options outstanding under this grant at 31 December 2022 are subject to performance targets with 50% of
the options subject to the achievement of a performance target based on the Group ranking at or above the median for
TSR performance relative to a comparator group over a period of three years with a minimum performance threshold of
achieving a ranking at the median TSR or above and the maximum award being given for exceeding the comparator
group median TSR performance by 10% or more. The remaining 50% of outstanding options are subject to individual
and Group franchising targets for a three-year period with a minimum performance threshold based on achieving a
minimum level of franchises and the maximum award based on achieving a stretch target for franchises. Any shares
awarded based on achievement of these performance targets will then be subject to vesting ratably over a three-year
period beginning April 2023 and ending April 2025.
May 2020 share options
The share options outstanding under this grant at 31 December 2022 are subject to performance targets with 50% of
the options subject to the achievement of a performance target based on the Group ranking at or above the median for
TSR performance relative to a comparator group over a period of three years with a minimum performance threshold of
achieving a ranking at the median TSR or above and the maximum award being given for exceeding the comparator
group median TSR performance by 10% or more. The remaining 50% of outstanding options are subject to individual
and Group franchising targets for a three-year period with a minimum performance threshold based on achieving a
minimum level of franchises and the maximum award based on achieving a stretch target for franchises. Any shares
awarded based on achievement of these performance targets will then be subject to vesting ratably over a three-year
period beginning May 2023 and ending May 2025.
September 2020 share options
The share options outstanding under this grant at 31 December 2022 are subject to performance targets with 50% of
the options subject to the achievement of a performance target based on the Group ranking at or above the median for
TSR performance relative to a comparator group over a period of three years with a minimum performance threshold of
achieving a ranking at the median TSR or above and the maximum award being given for exceeding the comparator
group median TSR performance by 10% or more. The remaining 50% of outstanding options are subject to individual
and Group franchising targets for a three-year period with a minimum performance threshold based on achieving a
minimum level of franchises and the maximum award based on achieving a stretch target for franchises. Any shares
awarded based on achievement of these performance targets will then be subject to vesting ratably over a three-year
period beginning September 2023 and ending September 2025.
March 2021 share options
The share options outstanding under this grant at 31 December 2022 are subject to Group performance targets based
on the Group ranking at or above the median for TSR performance relative to a comparator group over a period of three
years with a minimum performance threshold of achieving a ranking at the median TSR or above and the maximum
award being given for exceeding the comparator group median TSR performance by 10% or more. Any shares awarded
based on achievement of these performance targets will then be subject to vesting ratably over a three-year period
beginning March 2024 and ending March 2026.
May 2021 share options
The share options outstanding under this grant at 31 December 2022 are subject to Group performance targets based
on the Group ranking at or above the median for TSR performance relative to a comparator group over a period of three
years with a minimum performance threshold of achieving a ranking at the median TSR or above and the maximum
award being given for exceeding the comparator group median TSR performance by 10% or more. Any shares awarded
based on achievement of these performance targets will then be subject to vesting ratably over a three-year period
beginning May 2024 and ending May 2026.
August 2021 share options
The share options outstanding under this grant at 31 December 2022 are subject to Group performance targets based
on the Group ranking at or above the median for TSR performance relative to a comparator group over a period of three
years with a minimum performance threshold of achieving a ranking at the median TSR or above and the maximum
award being given for exceeding the comparator group median TSR performance by 10% or more. Any shares awarded
based on achievement of these performance targets will then be subject to vesting ratably over a three-year period
beginning August 2024 and ending August 2026.
March 2022 share options
The share options outstanding under this grant at 31 December 2022 are subject to Group performance targets based
on the Group ranking at or above the median for TSR performance relative to a comparator group over a period of three
years with a minimum performance threshold of achieving a ranking at the median TSR or above and the maximum
award being given for exceeding the comparator group median TSR performance by 10% or more. Any shares awarded
based on achievement of these performance targets will then be subject to vesting ratably over a three-year period
beginning March 2025 and ending March 2027.

170 IWG plc Annual Report and Accounts 2022170

May 2022 (Grant 1) share options
The share options outstanding under this grant at 31 December 2022 are subject to Group performance targets based
on the Group ranking at or above the median for TSR performance relative to a comparator group over a period of three
years with a minimum performance threshold of achieving a ranking at the median TSR or above and the maximum
award being given for exceeding the comparator group median TSR performance by 10% or more. Any shares awarded
based on achievement of these performance targets will then be subject to vesting ratably over a three-year period
beginning May 2025 and ending May 2027.
May 2022 (Grant 2) share options
The share options outstanding under this grant at 31 December 2022 are subject to Group performance targets based
on the Group ranking at or above the median for TSR performance relative to a comparator group over a period of three
years with a minimum performance threshold of achieving a ranking at the median TSR or above and the maximum
award being given for exceeding the comparator group median TSR performance by 10% or more. Any shares awarded
based on achievement of these performance targets will then be subject to vesting ratably over a three-year period

Financial statements
beginning May 2025 and ending May 2027.
October 2022 (Grant 1) share options
The share options outstanding under this grant at 31 December 2022 are subject to Group performance targets based
on the Group ranking at or above the median for TSR performance relative to a comparator group over a period of three
years with a minimum performance threshold of achieving a ranking at the median TSR or above and the maximum
award being given for exceeding the comparator group median TSR performance by 10% or more. Any shares awarded
based on achievement of these performance targets will then be subject to vesting ratably over a three-year period
beginning October 2025 and ending October 2027.
October 2022 (Grant 2) share options
The share options outstanding under this grant at 31 December 2022 are subject to Group performance targets based
on the Group ranking at or above the median for TSR performance relative to a comparator group over a period of three
years with a minimum performance threshold of achieving a ranking at the median TSR or above and the maximum
award being given for exceeding the comparator group median TSR performance by 10% or more. Any shares awarded
based on achievement of these performance targets will then be subject to vesting ratably over a three-year period
beginning October 2025 and ending October 2027.
December 2022 share options
The share options outstanding under this grant at 31 December 2022 are subject to Group performance targets based
on the Group ranking at or above the median for TSR performance relative to a comparator group over a period of three
years with a minimum performance threshold of achieving a ranking at the median TSR or above and the maximum
award being given for exceeding the comparator group median TSR performance by 10% or more. Any shares awarded
based on achievement of these performance targets will then be subject to vesting ratably over a three-year period
beginning December 2025 and ending December 2027.
Measurement of fair values
The fair value of the rights granted through the employee share purchase plan was measured based on the Monte Carlo
simulation or the Black-Scholes formula. The expected volatility is based on the historic volatility adjusted for any
abnormal movement in share prices.
The inputs to the model are as follows:
October October May May

December 2022 2022 2022 2022 March

2022 (Grant 2) (Grant 1) (Grant 2) (Grant 1) 2022

Share price on grant date 159.35p 122.25p 117.95p 242.30p 222.10p 255.00p
Exercise price 159.35p 122.25p 117.95p 242.30p 222.10p 255.00p
Expected volatility 54.01% – 53.34% – 53.30% – 53.48% – 54.59% – 54.33% –
59.92% 58.16% 58.05% 56.71% 56.66% 57.32%
Option life 3-5 years 3-5 years 3-5 years 3-5 years 3-5 years 3-5 years
Expected dividend 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
Fair value of option at time of 106.53p - 81.12p - 78.24p – 153.52p – 142.70p – 162.79p –
grant 113.10p 85.29p 82.21p 158.97p 145.61p 168.44p
Risk-free interest rate 3.22% – 3.22% – 3.22% – 1.42% – 1.42% – 1.41% –
3.24% 3.24% 3.24% 1.60% 1.60% 1.49%

171 IWG plc Annual Report and Accounts 2022 171

Notes to the accounts continued

26. Share-based payments continued

August May March September May April December September
2021 2021 2021 2020 2020 2020 2019 2019

Share price on grant date 310.00p 376.60p 342.80p 291.00p 202.00p 165.00p 408.60p 402.30p
Exercise price 310.00p 376.60p 342.80p 291.00p 202.00p 165.00p 408.60p 402.30p
Expected volatility 53.67% – 53.78% – 53.64% – 51.81% – 50.15% – 49.02% – 36.24% – 36.33% –
57.07% 59.19% 59.13% 62.96% 61.06% 59.29% 44.72% 44.83%
Option life 3-5 years 3-5 years 3-5 years 3-5 years 3-5 years 3-5 years 3-7 years 3-7 years
Expected dividend 1.12% 0.96% 1.00% 2.39% 3.44% 4.21% 1.59% 1.62%
Fair value of option at time of grant 163.92p – 202.75p – 183.02p – 122.93p – 71.39p – 50.79p – 141.77p – 137.79p –
171.67p 217.81p 196.95p 146.68p 86.80p 62.29p 172.84p 169.19p
Risk-free interest rate 0.37% – 0.16% – 0.15% – (0.08%) – 0.00% – 0.00% – 0.57% – 0.48% –
0.49% 0.34% 0.33% (0.04%) 0.06% 0.06% 0.65% 0.50%

December December
May 2018 2018 March September June December May
2019 (Grant 2) (Grant 1) 2017 2016 2016 2015 2015

Share price on grant date 341.90p 199.80p 203.10p 283.70p 258.00p 272.50p 322.20p 250.80p
Exercise price 341.90p 199.80p 203.10p 283.70p 258.00p 272.50p 322.20p 250.80p
Expected volatility 38.84% – 37.66% – 37.63% – 27.42% – 27.45% – 27.71% – 24.80% – 27.23% –
45.75% 44.35% 44.25% 29.87% 32.35% 34.81% 37.08% 30.12%
Option life 3-5 years 3-5 years 3-5 years 3-5 years 3-7 years 3-7 years 3-7 years 3-7 years
Expected dividend 1.85% 2.95% 2.90% 1.80% 1.80% 1.71% 1.40% 1.59%
Fair value of option at time of grant 120.77p – 58.77% – 39.36p – 44.51p – 40.96p – 44.28p – 29.76p – 42.35p –
141.08p 69.33% 46.42p 76.88p 67.89p 78.68p 90.61p 69.12p
Risk-free interest rate 0.52% – 0.87% – 0.73% – 0.23% – 0.09% – 0.14% – 0.14% – 0.81% –
0.60p 1.01% 0.88% 0.56% 0.38% 0.39% 0.21% 1.53%

Plan 2: IWG plc Performance Share Plan (PSP)

The PSP provides for the Remuneration Committee to make standalone awards, based on normal plan limits, up to a
maximum of 250% of base salary.

Reconciliation of outstanding share awards

2022 2021
Number of Number of
awards awards

At 1 January 3,160,617 3,237,768

PSP awards granted during the year 1,289,217 959,015
Lapsed during the year (1,324,583) (1,036,166)
Exercised during the year (583,039) –
Outstanding at 31 December 2,542,212 3,160,617
Exercisable at 31 December – –

There were 583,039 shares which were exercised during the year ended 31 December 2022 (2021: nil). The weighted
average share price at the date of exercise for share awards exercised during the year ended 31 December 2022 was
256.00p (2021: nil pence).
Numbers At 31 Dec
Plan Date of grant granted Lapsed Exercised 2022 Release date

PSP 01/03/2017 1,095,406 (512,367) (583,039) – 01/03/2022

PSP 07/03/2018 1,278,350 (1,051,546) – 226,804 07/03/2023
PSP 07/03/2019 1,058,578 (848,474) – 210,104 07/03/2024
PSP 04/03/2020 915,739 (306,407) – 609,332 04/03/2025
PSP 26/03/2021 959,015 (320,887) – 638,128 26/03/2026
PSP 09/03/2022 1,289,217 (431,373) – 857,844 09/03/2027
6,596,305 (3,471,054) (583,039) 2,542,212

172 IWG plc Annual Report and Accounts 2022 172

Measurement of fair values
The fair value of the rights granted through the employee share purchase plan was measured based on the Monte Carlo
simulation.
The inputs to the model are as follows:
March March March March March
2022 2021 2020 2019 2018

Share price on grant date 255.00p 346.40p 356.50p 244.90p 240.90p

Exercise price nil nil nil nil nil
Number of simulations 250,000 250,000 250,000 250,000 250,000
Number of companies 32 32 32 32 32
Award life 5 years 5 years 5 years 5 years 5 years
Expected dividend 0.00% 1.00% 1.95% 2.57% 2.37%

Financial statements
Fair value of award at time of grant 167.75p – 206.19p – 292.36p – 124.38p – 124.92p –
254.14p 312.37p 192.98p 188.43p 189.26p
Risk-free interest rate 1.45% 0.33% 0.06% 0.79% 1.21%

It is recognised by the Remuneration Committee that the EPS targets represent a highly challenging goal and
consequently, in determining whether they have been met, the Committee will exercise its discretion. The overall aim is
that the relevant EPS targets must have been met on a run-rate or underlying basis. As such, an adjusted measure of
EPS will be calculated to assess the underlying performance of the business.
2018 PSP investment grant
The total number of shares awarded was subject to three different performance conditions, with one third subject to
defined earnings per share (EPS) conditions, one third subject to relative total shareholder return (TSR) conditions and
one third subject to return on investment (ROI) conditions. These conditions are measured over three financial years
commencing on 1 January 2018.
Based on results as of 31 December 2020, the relative TSR target of exceeding the comparator group median TSR by
more than 10% was achieved in full, resulting in the vesting of 226,804 shares subject to a holding period ending March
2022. The performance targets for EPS and ROI were not met and the share awards pursuant to these targets lapsed.
2019 PSP investment grant
The total number of shares awarded is subject to three different performance conditions. These conditions are
measured over three financial years commencing on 1 January 2019. Thus, conditional on meeting these performance
targets, these shares will vest in March 2024. One third is subject to defined earnings per share (EPS) conditions, one
third is subject to relative total shareholder return (TSR) conditions and one third is subject to return on investment
(ROI) conditions.
Based on results as of 31 December 2021, the relative TSR target of exceeding the comparator group median TSR by
less than 10% was achieved, resulting in the vesting of 118,055 shares subject to a holding period ending March 2023.
The performance targets for EPS and ROI were not met and the share awards pursuant to these targets lapsed.
2020 PSP investment grant
The total number of shares awarded is subject to relative total shareholder return (TSR) conditions, measured over
three financial years commencing on 1 January 2020. Thus, conditional on meeting these performance targets, these
shares will vest in December 2025.
The relative TSR condition is based on the performance of the Group’s TSR growth against the median TSR growth of
the comparator group as follows:
% of the award that vests

Exceeds the median by 10% or more 100%

Exceeds the median by less than 10% On a straight-line basis between 25% and 100%
Ranked at median 25%
Ranked below the median 0%

173 IWG plc Annual Report and Accounts 2022 173

Notes to the accounts continued

26. Share-based payments continued

2021 PSP investment grant
The total number of shares awarded is subject to relative total shareholder return (TSR) conditions, measured over
three financial years commencing on 1 January 2021. Thus, conditional on meeting these performance targets, these
shares will vest in March 2026.
The relative TSR condition is based on the performance of the Group’s TSR growth against the median TSR growth of
the comparator group as follows:
% of the award that vests

Exceeds the median by 10% or more 100%

Exceeds the median by less than 10% On a straight-line basis between 25% and 100%
Ranked at median 25%
Ranked below the median 0%
2022 PSP investment grant
The total number of shares awarded is subject to relative total shareholder return (TSR) conditions, measured over
three financial years commencing on 1 January 2022. Thus, conditional on meeting these performance targets, these
shares will vest in March 2027.
The relative TSR condition is based on the performance of the Group’s TSR growth against the median TSR growth of
the comparator group as follows:
% of the award that vests

Exceeds the median by 10% or more 100%

Exceeds the median by less than 10% On a straight-line basis between 25% and 100%
Ranked at median 25%
Ranked below the median 0%

Plan 3: Deferred Share Bonus Plan

The Deferred Share Bonus Plan, established in 2016, enables the Board to award options to selected employees on a
discretionary basis. The awards are conditional on the ongoing employment of the related employees for a specified
period of time. Once this condition is satisfied, those awards that are eligible will vest three years after the date of
grant.

Reconciliation of outstanding share options

2022 2021
Number of Number of
awards awards

At 1 January 376,291 376,291

DSBP awards granted during the year 683,166 –
Lapsed during the year – –
Exercised during the year (112,014) –
Outstanding at 31 December 947,443 376,291
Exercisable at 31 December – –

The weighted average share price at the date of exercise for share awards exercised during the year ended 31
December 2022 was 256.00p (2021: nil pence).
Numbers At 31 Dec
Plan Date of grant granted Lapsed Exercised 2022 Release date

DSBP 07/03/2019 112,014 – (112,014) – 07/03/2022

DSBP 04/03/2020 264,277 – – 264,277 04/03/2023
DSBP 09/03/2022 171,415 – – 171,415 09/03/2025
DSBP 02/11/2022 511,751 – – 511,751 02/11/2027
1,059,457 – (112,014) 947,443

174 IWG plc Annual Report and Accounts 2022 174

Measurement of fair values
The fair value of the rights granted through the employee share purchase plan was measured based on the Black-
Scholes formula. The expected volatility is based on the historic volatility adjusted for any abnormal movement in share
prices.
The inputs to the model are as follows:
November March March March
2022 2022 2020 2019

Share price on grant date 131.90p 255.00p 356.50p 244.90p

Exercise price nil nil nil nil
Number of simulations – – – –
Number of companies – – – –

Financial statements
Award life 5 years 3 years 3 years 3 years
Expected dividend 0.00% 0.00% 1.95% 2.57%
Fair value of award at time of grant 131.18p 254.14p 292.36p 188.42p
Risk-free interest rate 3.24% 1.41% 0.00% 0.68%

27. Retirement benefit obligations

The Group accounts for the Swiss and Philippines pension plans as defined benefit plans under IAS 19 – Employee
Benefits.
The reconciliation of the net defined benefit liability and its components is as follows:
2022 2021

£m Switzerland Philippines Total Switzerland Philippines Total

Fair value of plan assets 6 – 6 5 – 5

Present value of obligations (7) (1) (8) (6) (1) (7)
Net funded obligations (1) (1) (2) (1) (1) (2)

175 IWG plc Annual Report and Accounts 2022 175

Notes to the accounts continued

28. Acquisitions
Current period acquisitions
The Instant Group
On 8 March 2022, the Group completed the investment in The Instant Group, acquiring 100% of the equity voting rights,
for a total consideration of £324m. The primary reason for the investment was to combine The Instant Group with the
IWG digital assets, to form Worka.
In a separate transaction on 8 March 2022, the Group sold a 13.4% non-controlling equity interest in a subsidiary of the
Worka structure, for a consideration of £53m.
Final
fair value Final
£m Book value adjustments fair value

Net assets acquired

Intangible assets 2 139 141
Right-of-use assets 3 – 3
Other property, plant and equipment 15 – 15
Net investment in finance leases 177 – 177
Cash 25 – 25
Other current and non-current assets 64 – 64
Lease liabilities (172) – (172)
Provisions due within one year (7) – (7)
Current liabilities (111) 6 (105)
(4) 145 141

Goodwill arising on acquisition 183

Total consideration 324
Cash flow on acquisition
Cash paid 324
Less: cash acquired (25)
Net cash outflow 299

The goodwill arising on this acquisition reflects the future benefits anticipated by the IWG Group.
If the above acquisition had occurred on 1 January 2022, the revenue and net retained loss arising from this acquisition
would have been £121m and £10m respectively. In the year, this acquisition contributed revenue of £104m and net
retained loss of £11m.
The was no deferred or contingent consideration arising on this acquisition.
The acquisition costs associated with this transaction were £11m, recorded within administration expenses in the
consolidated income statement.

176 IWG plc Annual Report and Accounts 2022 176

Other immaterial acquisitions
During the year ended 31 December 2022 the Group made various other individually immaterial acquisitions for a total
consideration of £5m.
Provisional
fair value Provisional
£m Book value adjustments fair value

Net assets acquired

Right-of-use assets 1 – 1
Other property, plant and equipment 1 – 1
Lease liabilities (1) – (1)
Current liabilities (1) – (1)
– – –

Financial statements
Goodwill arising on acquisition 5
Total consideration 5
Less: deferred consideration (1)
Less: contingent consideration (1)
Cash flow on acquisition
Cash paid 3
Net cash outflow 3

The goodwill arising on these other immaterial 2022 acquisitions reflects the anticipated future benefits IWG can obtain
from operating the businesses more efficiently, primarily through increasing occupancy and the addition of value-
adding products and services. Of the above goodwill, £5m is expected to be deductible for tax purposes.
If the above acquisitions had occurred on 1 January 2022, the revenue and net retained profit arising from these
acquisitions would have been £2m and £nil respectively. In the year, the acquisitions contributed revenue of £1m and
net retained profit of £nil.
Deferred consideration of £1m arose on the acquisitions made in the year and is held on the Group’s balance sheet at
31 December 2022. In addition, £5m deferred consideration relating to prior period acquisitions is held on the Group’s
balance sheet at 31 December 2022.
Contingent consideration of £1m arose on the 2022 acquisitions. Contingent consideration of £5m was paid and £1m
released, during the current year, with respect to milestones, achieved or not achieved, on previous acquisitions. In
addition, £1m contingent consideration is held on the Group’s balance sheet at 31 December 2022.
The acquisition costs associated with these transactions were £nil, recorded within administration expenses in the
consolidated income statement.
For acquisitions completed in 2022, except for The Instant Group, the fair value of assets acquired has only been
provisionally assessed, pending completion of a fair value assessment which has not yet been completed. The main
changes in the provisional fair values expected are primarily for customer relationships and property, plant and
equipment. The final assessment of the fair value of these assets will be made within 12 months of the acquisition dates
and any adjustments reported in future reports.

Goodwill of £188m arose relating to 2022 acquisitions.

177 IWG plc Annual Report and Accounts 2022 177

Notes to the accounts continued

28. Acquisitions continued

Prior period acquisitions
During the year ended 31 December 2021 the Group made acquisitions for a total consideration of £30m.
Provisional Final
fair value fair value Final
£m Book value adjustments adjustments fair value

Net assets acquired

Intangible assets 1 – – 1
Right-of-use assets 78 – – 78
Other property, plant and equipment 25 – – 25
Cash 32 – – 32
Other current and non-current assets 13 – – 13
Lease liabilities (81) – – (81)
Current liabilities (27) – – (27)
Provisions due after one year (4) – – (4)
Non-current liabilities (7) – – (7)
30 – – 30
NCI based on their proportionate interest in the recognised amounts of the assets
and liabilities of The Wing (15)
Goodwill arising on acquisition 16
Negative goodwill arising on acquisition (1)
Total consideration 30
Less: deferred consideration (5)
Less: contingent consideration (4)
Cash flow on acquisition
Cash paid 21
Less: cash acquired (32)
Net cash inflow (11)

Goodwill of £16m arose relating to 2021 acquisitions. Goodwill arising on acquisitions in 2021 includes negative goodwill
of £1m, recognised as part of the selling, general and administration expenses in the consolidated income statement.

The goodwill arising on the 2021 acquisitions reflects the anticipated future benefits IWG can obtain from operating the
businesses more efficiently, primarily through increasing occupancy and the addition of value-adding products and
services. Of the above goodwill, £16m is expected to be deductible for tax purposes.
Deferred consideration of £5m arose on the acquisitions made in the year and was held on the Group’s balance sheet
at 31 December 2021.
Contingent consideration of £4m arose on the 2021 acquisitions. No contingent consideration was paid during the
current year with respect to milestones achieved on previous acquisitions.
The acquisition costs associated with these transactions were £1m, recorded within administration expenses in the
consolidated income statement.
The prior year comparative information has not been restated due to the immaterial nature of the final fair value
adjustments recognised in 2022.

29. Capital commitments

£m 2022 2021

Contracts placed for future capital expenditure not provided for in the financial statements 76 89

These commitments are principally in respect of centre fit-out obligations. There are £1m (2021: £1m) of capital
commitments in respect of joint ventures and no significant lease commitments for leases not commenced at 31
December 2022.

30. Contingent assets and liabilities

The Group has bank guarantees and letters of credit held with certain banks, predominantly in support of leasehold
contracts with a variety of landlords, amounting to £337m (2021: £309m). There are no material lawsuits pending
against the Group.

178 IWG plc Annual Report and Accounts 2022 178

31. Related parties
Parent and subsidiary entities
The consolidated financial statements include the results of the Group and its subsidiaries.

Joint ventures
The following table provides the total amount of transactions that have been entered into with related parties for the
relevant financial year.
Management
fees received Amounts Amounts
from related owed by owed to
£m parties related party related party

Financial statements
2022
Joint ventures 6 51 49
2021
Joint ventures 4 20 20

As at 31 December 2022, none of the amounts due to the Group have been provided for as the expected credit losses
arising on the balances are considered immaterial (2021: £nil). All outstanding balances with these related parties are
priced on an arm’s length basis. None of the balances are secured.

Key management personnel

No loans or credit transactions were outstanding with Directors or Officers of the Company at the end of the year or
arose during the year that are required to be disclosed.

Compensation of key management personnel (including Directors)

Key management personnel include those personnel (including Directors) that have responsibility and authority for
planning, directing and controlling the activities of the Group:
£m 2022 2021

Short-term employee benefits 6 4

Retirement benefit obligations – –
Share-based payments 3 2
9 6

Share-based payments included in the table above reflect the accounting charge in the year. The full fair value of
awards granted in the year was £6m (2021: £6m). These awards are subject to performance conditions and vest over
three, four and five years from the award date (note 26).

Transactions with related parties

During the year ended 31 December 2022 the Group acquired goods and services from a company indirectly controlled
by a Director of the Company amounting to an insignificant amount of £19,015 (2021: £27,319). There was a £5,217
balance outstanding at the year-end (2021: £6,751).
All transactions with these related parties are priced on an arm’s length basis and are to be settled in cash. None of the
balances are secured.

179 IWG plc Annual Report and Accounts 2022 179

Notes to the accounts continued

32. Principal Group companies

The Group’s principal subsidiary undertakings at 31 December 2022, their principal activities and countries of
incorporation are set out below:
% of % of
ordinary ordinary
shares shares
and and
Country of votes Country of votes
Name of undertaking incorporation held Name of undertaking incorporation held

Trading companies Management companies

Regus Australia Management Pty Ltd Australia 100 RGN Management Limited Partnership Canada 100
Regus Belgium SA Belgium 100 Pathway IP II S.à r.l. Switzerland 100
Regus do Brasil Ltda Brazil 100 Franchise International GmbH Switzerland 100
Regus Business Service (Shenzen) Ltd China 100 Regus Service Centre Philippines B.V. Philippines 100
Regus Management ApS Denmark 100 Regus Global Management Centre SA Switzerland 100
Regus Management (Finland) Oy Finland 100 Regus Group Services Ltd United Kingdom 100
RBC Deutschland GmbH Germany 100 IW Group Services (UK) Ltd United Kingdom 100
Regus CME Ireland Limited Ireland 100 Regus Management Group LLC United States 100
Regus Business Centres Limited Israel 100
Regus Business Centres Italia S.r.l. Italy 100 Holding and finance companies
Regus Management Malaysia Sdn Bhd Malaysia 100 IWG Enterprise S.à r.l. Switzerland 100
Regus Management de Mexico, SA de CV Mexico 100 IWG Group Holdings S.à r.l. Luxembourg 100
Regus New Zealand Management Ltd New Zealand 100 IWG International Holdings S.à r.l. Luxembourg 100
Regus Business Centre Norge AS Norway 100 Genesis Finance S.à r.l. Switzerland 100
IWG Management Sp z.o.o. Poland 100 Pathway Finance S.à r.l. Switzerland 100
Regus Business Centre, Lda Portugal 100 Pathway Finance EUR 2 S.à r.l. Switzerland 100
Regus Management Singapore Pte Ltd Singapore 100 Pathway Finance USD 2 S.à r.l. Switzerland 100
Regus Management España SL Spain 100 Regus Group Limited United Kingdom 100
IWG Management (Sweden) AB Sweden 100 Global Platform Services GmbH United Kingdom 100
Avanta Managed Offices Ltd United Kingdom 100 Ibiza Holdings Limited Jersey 86.6
Basepoint Centres Limited United Kingdom 100 Ibiza Finance Limited Jersey 100
Green (Topco) Limited United Kingdom 86.6 Regus Corporation United States 100
HQ Global Workplaces LLC United States 100
RGN National Business Centre LLC United States 100
RB Centres LLC United States 100
Regus Management Group LLC United States 100

180 IWG plc Annual Report and Accounts 2022180

33. Key judgemental and estimates areas adopted in preparing these accounts
The preparation of consolidated financial statements in accordance with IFRS requires management to make certain
judgements and assumptions that affect reported amounts and related disclosures.

Key judgements
Adjusting items
Adjusting items are separately disclosed by the Group so as to provide readers with helpful additional information on
the performance of the business across periods. Items arising specifically from the impact of the COVID-19 pandemic,
geopolitical circumstances in the Ukraine and related sanctions against Russia, have been deemed to meet the
definition of adjusting items. Each of these items is considered to be significant in nature and/or size and is also
consistent with items treated as adjusting in prior periods in which significant non-recurring transactions occurred. The
exclusion of these items is consistent with how the business performance is planned by, and reported to, the Board and
the Operating Committee. The profit before tax and adjusting items measure is not a recognised profit measure under

Financial statements
IFRS and may not be directly comparable with adjusted profit measures used by other companies. The classification of
adjusting items requires significant management judgement after considering the nature and intentions of a transaction
or provision.
Tax assets and liabilities
The Group is subject to income taxes in numerous jurisdictions. Significant judgement is required in determining the
worldwide provision for income taxes. Where appropriate, the Group assesses the potential risk of future tax liabilities
arising from the operation of its business in multiple tax jurisdictions and includes provisions within tax liabilities for
those risks that can be estimated reliably. Changes in existing tax laws can affect large international groups such as
IWG and could result in additional tax liabilities over and above those already provided for.
Determining the lease term of contracts with renewal and termination options
IFRS 16 defines the lease term as the non-cancellable period of a lease together with the options to extend or terminate
a lease, if the lessee were reasonably certain to exercise that option. Where a lease includes the option for the Group to
extend the lease term, the Group makes a judgement as to whether it is reasonably certain that the option will be taken.
This will take into account the length of time remaining before the option is exercisable, macro-economic environment,
socio-political environment and other lease specific factors.
The lease term represents the period from lease inception up to either:
• The earliest point at which the lease could be broken, where break clauses exist;
• The point at which the lease could be extended, but no further, where extension options exist; or
• To the end of the contractual lease term in all other cases.

Key estimates
Impairment of intangibles and goodwill
We evaluate the fair value of goodwill and other indefinite life intangible assets to assess potential impairments on an
annual basis, or during the year if an event or other circumstance indicates that we may not be able to recover the
carrying amount of the asset. We evaluate the carrying value of goodwill based on our CGUs aggregated at a country
level and make that determination based upon future cash flow projections which assume certain growth projections
which may or may not occur. We record an impairment loss for goodwill when the carrying value of the asset is less
than its estimated recoverable amount. Further details of the methodology and assumptions applied to the impairment
review in the year ended 31 December 2022, including the sensitivity to changes in those assumptions, can be found in
note 13.
Deferred tax assets
We base our estimate of deferred tax assets and liabilities on current tax laws and rates and, where relevant, the
Group’s three-year business plans and other expectations about future outcomes. Changes in existing laws and rates,
and their related interpretations, and future business results may affect the amount of deferred tax liabilities or the
valuation of deferred tax assets over time. Our accounting for deferred tax consequences represents management’s
best estimate of future events that can be appropriately reflected in the accounting estimates. It is Group policy to
recognise a deferred tax asset to the extent that it is probable that future taxable profits will be available against which
the assets can be used. Significant changes to the Group's forecasts and other expectations of future outcomes could
significantly impact the recognition of deferred tax assets.
Given the significant level of corporate developments in the Group and the number of legal entities and countries in
which the Group operates, the determination of the period of time representing foreseeable future requires judgement
to be exercised. Management has determined the most suitable period to be the three-year period corresponding to
the Group’s business forecasting processes. Any changes in management’s approach to this assessment could
significantly impact the recognition of deferred tax assets.

181 IWG plc Annual Report and Accounts 2022 181

Notes to the accounts continued

33. Key judgemental and estimates areas adopted in preparing these accounts
continued
Impairment of property, plant and equipment (including right-of-use assets)
We evaluate the potential impairment of property, plant and equipment at a centre (CGU) level where there are
indicators of impairment at the balance sheet date. In the assessment of value-in-use, key judgemental areas in
determining future cash flow projections include: an assessment of the location of the centre; the local economic
situation; competition; local environmental factors; the management of the centre; and future changes in occupancy,
revenue and costs of the centre.
While centre costs remain relatively stable, revenue is a function of the expected levels of occupancy and the
corresponding pricing achieved. In assessing any impairment, the value-in-use calculated is therefore assessed for
sensitivity to changes in both occupancy and pricing, to determine the extent to which these estimates need to change
before an impairment arises. On a similar basis, overall performance is also a function of the discount rate applied
(which is based on the capital asset pricing model). The value-in-use calculation is therefore also assessed for
sensitivity to changes in this discount rate, to determine the extent to which this discount rate needs to change before
an impairment arises.
We evaluate the potential impairment of property, plant and equipment at a centre (CGU) level where there are
indicators of impairment at the balance sheet date and for centres which have been identified as part of the Group’s
rationalisation programme. The key area of estimation involved is in determining the recoverable amount of the
rationalised centres, over what period the rationalisation will take place, and the level of moveable assets that will be
utilised in other centres.
The Group has considered the impact of COVID-19 with respect to all judgements and estimates it makes in the
application of its accounting policies. This included assessing the impairment of property, plant and equipment,
goodwill and the recoverability of trade receivables. The result of these reviews is detailed in note 10.
Estimating the incremental borrowing rates on leases
The determination of applicable incremental borrowing rates on leases at the commencement of lease contracts also
requires judgement. The Group determines its incremental borrowing rates by obtaining interest rates from various
external financing sources and makes certain adjustments to reflect the terms of the lease. The Group considers the
relevant market interest rate, based on the weighted average of the timing of the lease payments under the lease
obligation. In addition, a spread over the market rate is applied based on the cost of funds to the Group, plus a spread
that represents the risk differential of the lessee entity compared to the Group funding cost.
Valuation of embedded conversion option (Level 3) in convertible bonds
The embedded conversion option relating to the Group's issue of convertible bonds is measured at mark-to-market
with reference to the traded price of the convertible bonds as well as external valuation inputs based on credit
comparables and bond spreads across competitors and wider markets.
Fair value accounting for business combinations
For each business combination, we assess the fair values of assets and liabilities acquired. Where there is not an active
market in the category of the non-current assets typically acquired with a business centre or where the books and
records of the acquired company do not provide sufficient information to derive an accurate valuation, management
calculates an estimated fair value based on available information and experience.
The main categories of acquired non-current assets where management’s judgement has an impact on the amounts
recorded include tangible fixed assets, customer list intangibles and the fair market value of leasehold assets and
liabilities. For significant business combinations management also obtains third-party valuations to provide additional
guidance as to the appropriate valuation to be included in the financial statements.

34. Subsequent events

In December 2022, TKP Corporation sold its Japanese operations to Mitsubishi Estate Co. which entered into a new 10-
year master franchise agreement with the Group. The transaction received regulatory approval in February 2023, when
the transaction became effective, and the Group received and recognised a settlement fee of £18m post year-end.
Concurrently the Group acquired the Taiwanese operations from TKP Corporation for a consideration of £6m.

182 IWG plc Annual Report and Accounts 2022 182

Parent Company Accounts

Summarised extract of unaudited company balance sheet

(Accounting policies are based on the Swiss Code of Obligations)
As at As at
£m 31 Dec 2022 31 Dec 2021

Trade and other receivables 2 2

Prepayments – –
Total current assets 2 2
Investments 3,069 3,069
Total non-current assets 3,069 3,069

Financial statements
Total assets 3,071 3,071

Trade and other payables 45 22

Accrued expenses 1 1
Total short-term liabilities 46 23
Long-term interest-bearing liabilities 99 99
Other long-term liabilities – –
Total long-term liabilities 99 99

Total liabilities 145 122

Issued share capital 10 10

Reserves from capital contributions 2,439 2,439
Retained earnings 650 875
Loss for the year (21) (224)
Treasury shares (152) (151)
Total shareholders’ equity 2,926 2,949

Total liabilities and shareholders’ equity 3,071 3,071

The values of the investments recognised have been considered by the Directors and are considered fully recoverable.

Approved by the Board on 20 March 2023

Mark Dixon Charlie Steel

Chief Executive Officer Chief Financial Officer

Accounting policies
Basis of preparation
These financial statements were prepared in accordance with accounting policies based on the Swiss Code of
Obligations.
The Company is included in the consolidated financial statements of IWG plc.
The balance sheet has been extracted from the non-statutory accounts of IWG plc for the year ended 31 December
2022, which are available from the Company’s registered office, Dammstrasse 19, CH-6300, Zug, Switzerland.

Investments
The value of the investment held in IWG Group is measured at acquisition cost.

183 IWG plc Annual Report and Accounts 2022 183

Reconciliation for alternative performance measures

Alternative performance measurement adjustments recognised

The purpose of these unaudited pages is to provide a reconciliation from the 2022 financial results to the alternative
performance measures in accordance with the previous pre-IFRS 16 policies adopted by the Group, and thereby give
the reader greater insight into the impact of IFRS 16 on the results of the Group. The recognition of these adjustments
will not impact the overall cash flows of the Group or the cash generation per share.
1. Rent income and finance income
Under IFRS 16, where the sublease is assessed with reference to the right-of-use assets arising from the head lease,
conventional rent income is not recognised in the profit or loss. The receipts associated with this income instead are
used to determine the net investment in finance leases noted above. The net investment in finance leases is
measured in subsequent periods using the effective interest rate method, based on the applicable interest rate. The
related finance income arising on subsequent measurement is recognised directly through profit or loss.
2. Rent expense and finance costs
Under IFRS 16, conventional rent charges are not recognised in the profit or loss. The payments associated with these
charges instead form part of the lease payments used in calculating the right-of-use assets and related lease
liabilities noted above. The lease liabilities are measured in subsequent periods using the effective interest rate
method, based on the applicable interest rate. The related finance costs arising on subsequent measurement are
recognised directly through profit or loss.
3. Depreciation, lease payments and lease receipts
Depreciation on the right-of-use assets recognised, is depreciated over the life of the lease on a straight-line basis,
adjusted for any period between the lease commencement date and the date the related centre opens, reflecting the
lease-related costs directly incurred in preparing the business centre for trading. Lease payments on head leases
reduce the lease liabilities recognised in the balance sheet. Lease receipts on subleases reduce the net investment in
finance leases recognised in the balance sheet.
4. Other adjustments
These adjustments primarily reflect the impairment of the right-of-use assets and other property, plant and
equipment as well as the reversal of the closure cost provision on a pre-IFRS 16 basis. Certain parking, storage and
brokerage costs are also reversed, as they form part of the lease payments.

Consolidated EBITDA (unaudited)

Year ended 31 December 2022
Other
£m Notes As reported Rent income Rent expense Depreciation adjustments(1) pre-IFRS 16

EBITDA 1,336 50 (1,059) – (10) 317

Depreciation on property plant and equipment 5 (1,145) – – 829 – (316)
Amortisation of intangible assets 5 (44) – – – – (44)
Operating profit/(loss) 147 50 (1,059) 829 (10) (43)
Operating profit/(loss) from discontinued
operations 9 – – – – – –
Operating profit/(loss) from continuing
operations 5 147 50 (1,059) 829 (10) (43)
1. Includes £52m of net reversals of impairment of property, plant and equipment including right-of-use assets.

Year ended 31 December 2021

Other
£m Notes As reported Rent income Rent expense Depreciation adjustments(1) pre-IFRS 16

EBITDA 1,026 – (997) – 30 59

Depreciation on property plant and equipment 5 (1,096) – 805 – (291)
Amortisation of intangible assets 5 (14) – – – (14)
Operating (loss)/profit (84) – (997) 805 30 (246)
Operating (loss)/profit from discontinued
operations 9 (3) – 14 (12) (1) (2)
Operating (loss)/profit from continuing
operations(2) 5 (87) – (983) 793 29 (248)
1. Includes £54m of net reversals of impairment of property, plant and equipment including right-of-use assets.
2. Restated to reflect the impact of discontinued operations on a pre-IFRS 16 basis.

184 IWG plc Annual Report and Accounts 2022184

Working capital (unaudited)
Year ended 31 December 2022
Rent income
& expense
and finance Depreciation
income & and lease Other
£m Reference As reported costs payments adjustments pre-IFRS 16

Partner contributions – reimbursement Statement of cash flows, p133 19 – (19) – –

(Increase)/decrease in trade and other
receivables Statement of cash flows, p133 (97) (54) – – (151)
Increase/(decrease) in trade and other
payables Statement of cash flows, p133 191 852 (906) (29) 108

Financial statements
Working capital 113 798 (925) (29) (43)
Analysed as:
Working capital (excluding amortisation
of partner contributions) CFO review, p41 22
Working capital related to the
amortisation of partner contributions CFO review, p41 (104)
Growth-related partner contributions CFO review, p41 39

Year ended 31 December 2021

Rent income &
expense and
finance Depreciation
income & and lease Other
£m Reference As reported costs payments adjustments pre-IFRS 16

Partner contributions – reimbursement Statement of cash flows, p133 20 – (20) – –

(Increase)/decrease in trade and other
receivables Statement of cash flows, p133 (127) 20 – – (107)
(Decrease)/increase in trade and other
payables Statement of cash flows, p133 (40) 829 (809) (47) (67)
Working capital (147) 849 (829) (47) (174)
Analysed as:
Working capital (excluding amortisation
of partner contributions) CFO review, p41 (129)
Working capital related to the
amortisation of partner contributions CFO review, p41 (95)
Growth-related partner contributions CFO review, p41 50

Partner contributions receivables (unaudited)

£m Reference 2022 2021

Opening partner contribution receivables Note 17 30 34

Net partner contributions recognised Statement of cash flows, p133 50 56
• Maintenance partner contributions CFO review, p41 11 6
• Growth partner contributions CFO review, p41 39 50
Settled in the period (59) (59)
Exchange differences 2 (1)
Closing partner contribution receivables Note 17 23 30

185IWG plc Annual Report and Accounts 2022 185

Reconciliation for alternative performance measures continued

Capital expenditure (unaudited)

Year ended 31 December 2022
Rent income
& expense
and finance
income &
£m Reference As reported costs pre-IFRS 16

Purchase of property, plant and equipment Statement of cash flows, p133 (242) (12) (254)
Purchase of intangible assets Statement of cash flows, p133 (39) – (39)
Total capital expenditure (281) (12) (293)

Net capital Partner Gross capital

Analysed as: expenditure contributions expenditure

Net maintenance capital expenditure CFO review, p41 (90) 11 (101)

Gross growth capital expenditure CFO review, p41 (141) 39 (180)
Capitalised rent related to centre openings CFO review, p41 (12) – (12)
(243) 50 (293)

Year ended 31 December 2021

Rent income
& expense
and finance
income &
£m Reference As reported costs pre-IFRS 16

Purchase of property, plant and equipment Statement of cash flows, p133 (221) (20) (241)
Purchase of intangible assets Statement of cash flows, p133 (34) – (34)
Total capital expenditure (255) (20) (275)

Net capital Partner Gross capital

Analysed as: expenditure contributions expenditure

Net maintenance capital expenditure CFO review, p41 (95) 6 (101)

Gross growth capital expenditure CFO review, p41 (104) 50 (154)
Capitalised rent related to centre openings CFO review, p41 (20) – (20)
(219) 56 (275)

186 IWG plc Annual Report and Accounts 2022186

Five-year summary

31 Dec 2021 31 Dec 2020 31 Dec 2019 31 Dec 2018

£m 31 Dec 2022 Restated(1) Restated(1) Restated(1) Restated(1)

Income statement (full year ended)

Revenue 2,751 2,227 2,432 2,593 2,355
Cost of sales (2,182) (1,885) (2,377) (2,043) (1,975)
Expected credit reversal/(losses) on trade receivables 6 (99) (35) (2) (18)
Gross profit (centre contribution) 575 243 20 548 362
Selling, general and administration expenses (427) (328) (367) (279) (247)
Share of (loss)/profit of equity-accounted investees, net of tax (1) (2) (3) 3 (2)
Operating profit/(loss) 147 (87) (350) 272 113
Finance expense (287) (198) (266) (229) (16)
Finance income 35 26 3 1 1

Financial statements
(Loss)/profit before tax for the year from continuing operations (105) (259) (613) 44 98
Income tax (expense)/credit (16) (10) (30) 22 (29)
(Loss)/profit for the year from continuing operations (121) (269) (643) 66 69
Profit/(loss) after tax for the year from discontinued operations 1 59 (4) 385 37
(Loss)/profit after tax for the year (120) (210) (647) 451 106

(Loss)/earnings per ordinary share (EPS):

Attributable to ordinary shareholders

Basic (p) (11.2) (20.4) (67.9) 50.5 11.7
Diluted (p) (11.2) (20.4) (67.9) 49.6 11.6
Weighted average number of shares outstanding (‘000s) 1,006,885 1,007,215 892,738 892,738 907,077

From continuing operations

Basic (p) (11.3) (26.2) (67.8) 7.4 7.6
Diluted (p) (11.3) (26.2) (67.8) 7.3 7.5
Weighted average number of shares outstanding (‘000s) 1,006,885 1,007,215 892,738 892,738 907,077

Balance sheet data (as at)

Intangible assets 1,148 782 749 720 722
Right-of-use assets 5,009 5,254 5,647 5,917 –
Property, plant and equipment 1,225 1,122 1,209 1,273 1,751
Net investment in finance leases 147 – – – –
Deferred tax assets 350 327 188 195 31
Other assets 1,041 849 1,100 781 848
Cash and cash equivalents 161 78 71 67 69
Total assets 9,081 8,412 8,964 8,953 3,421
Current liabilities 3,020 2,267 2,435 2,140 1,430
Non-current liabilities 5,826 5,840 6,015 5,933 1,240
Equity 235 305 514 880 751
Total equity and liabilities 9,081 8,412 8,964 8,953 3,421
1. The comparative information has been restated to reflect the impact of discontinued operations (note 9).

187 IWG plc Annual Report and Accounts 2022 187

Glossary

The Group reports certain alternative performance Growth capital expenditure

measures (APMs) that are not required under International
Financial Reporting Standards (IFRS) which represents the Capital expenditure in respect of centres which opened
generally accepted accounting principles (GAAP) under during the current or prior financial period.
which the Group reports. The Group believes that the
presentation of these APMs provides useful supplemental Growth estate
information, when viewed in conjunction with our IFRS Comprises centres which opened during the current or
financial information as follows: prior financial year.
• to evaluate the historical and planned underlying results
of our operations; Growth-related partner contributions
• to set Director and management remuneration; and Partner contributions received in respect of centres which
• to discuss and explain the Group’s performance with opened during the current or prior financial period.
the investment analyst community.
None of the APMs should be considered as an alternative Like-for-like
to financial measures derived in accordance with GAAP. The financial performance from centres owned and
The APMs can have limitations as analytical tools and operated for a full 12-month period prior to the start of
should not be considered in isolation or as a substitute for the financial year, which therefore have a full-year
an analysis of our results as reported under GAAP. These comparative.
performance measures may not be calculated uniformly
by all companies and therefore may not be directly
Maintenance capital expenditure
comparable with similarly titled measures and disclosures
of other companies. Capital expenditure in respect of centres owned for a full
12-month period prior to the start of the financial year and
Adjusted centre contribution operated throughout the current financial year, which
therefore have a full-year comparative.
Centre contribution excluding adjusting items.
Maintenance-related partner contributions
Adjusted EBITDA
Partner contributions received in respect of centres
EBITDA excluding adjusting items. owned for a full 12-month period prior to the start of the
financial year and operated throughout the current
Adjusted EPS financial year, which therefore have a full-year
EPS excluding adjusting items. comparative.

Adjusted operating profit/(loss) Net debt

Operating profit excluding adjusting items. Operations cash and cash equivalents, adjusted for both
short-term and long-term borrowings and lease liabilities.
Adjusting items
Net growth capital investment
Adjusting items reflects the impact of adjustments, both
incomes and costs, which are considered to be significant Growth capital expenditure net of growth-related partner
in nature and/or size. contributions.

EBIT Network rationalisation

Earnings before interest and tax. Network rationalisation for the current year is defined as a
centre that ceases operation during the period from 1
EBITDA January to December of the current year. Network
rationalisation for the prior year comparative is defined as
Earnings before interest, tax, depreciation and a centre that ceases operation from 1 January of the prior
amortisation. year to December of the current year.

EPS Occupancy
Earnings per share. Occupied square feet divided by available square feet
expressed as a percentage.
Expansions
A general term which includes new business centres Open centre revenue
established by IWG and acquired centres in the year. Revenue for all centres excluding closures.

Franchisee
The owners of business centres operating under a formal
franchise arrangement.

188 IWG plc Annual Report and Accounts 2022188

Operating profit/(loss) before growth
Reported operating profit adjusted for the gross profit
impact arising from centres opening in the preceding and
current years, and centres to be opened in the
subsequent year.

Partners
Owners or landlords of business centres, operating under
a management lease arrangement.

Pre-IFRS 16 basis
IFRS accounting standards effective as at the relevant
reporting date with the exception of IFRS 16.

Revenue development
Revenue programme on a continuing basis, for the last
four years.

TSR

Other information
Total shareholder return.

System wide revenue

Total reported revenue generated, including revenue from
franchise, managed centre and joint-venture partners, but
excluding fee income.

189IWG plc Annual Report and Accounts 2022 189

Shareholder Information

Corporate directory
Secretary and Registered Office Legal advisors to the Company as to English law
Tim Regan, Company Secretary Slaughter and May
IWG plc One Bunhill Row
Registered Office: Registered Head Office: London EC1Y 8YY
22 Grenville Street Dammstrasse 19
St Helier CH-6300 Legal advisors to the Company as to Jersey law
Jersey JE4 8PX Zug
Mourant Ozannes
Switzerland
22 Grenville Street
St Helier
Registered number
Jersey JE4 8PX
Jersey
122154 Legal advisors to the Company as to Swiss law
Bär & Karrer Ltd
Registrars
Brandschenkestrasse 90
Link Market Services (Jersey) Limited CH-8027
12 Castle Street Zurich
St Helier Switzerland
Jersey JE2 3RT
Corporate stockbrokers
Auditor
Investec Bank plc
KPMG 2 Gresham Street
1 Stokes Place London EC2V 7QP
St. Stephen’s Green
Barclays Bank plc
Dublin 2
5 The North Colonnade
DO2 DE03
Canary Wharf
Ireland
London E14 4BB
HSBC Bank plc
8 Canada Square
London E14 5HQ

Financial PR advisors
Brunswick Group LLP
16 Lincoln’s Inn Fields
London WC2A 3ED

190 IWG plc Annual Report and Accounts 2022190

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