InterContinental Hotels Group PLC · LSE:IHG
InterContinental Hotels — H1 2023 Earnings Presentation
54 slides from InterContinental Hotels's earnings presentation, Aug 8, 2023
Slide 1: 2023 Half Year Results
IHG HOTELS & RESORTS 2023 Half Year Results 8 August 2023
Slide 2: Cautionary note regarding forward-looking statements
Cautionary note regarding forward-looking statements This presentation may contain projections and forward looking-statements. The words “believe”, “expect”, “anticipate”, “intend” and “plan” and similar expressions identify forward-looking statements. All statements other than statements of histori
Slide 3: Elie Maalouf, Chief Executive Officer
Elie Maalouf Chief Executive Officer
Slide 4: RevPAR Profit and Earnings
HY 2023 RevPAR Profit and Earnings - Hi global RevPAR - System 925k rooms (6,227 hotels) - 58.8% fee margin, +3.3%pts - $277m FCF'2($142m in H1'22) +24% yoy; +8.7% vs 19 . Q2 global RevPAR - +6.3% gross system growth YOY; - Leverage ratio of 2.3x - Q2 global Rev! 0, 417% YoY; +9.9% vs 19 +4.B% net s
Slide 5: Financial Review
HY 2023 Financial Review Michael Glover Chief Financial Officer
Slide 6: Financial performance overview
Financial performance overview Results from reportable segments H1 2023 H1 20222 Reported Underlying H1 20192 % change % change Revenue $1,031m $840m +23% +27% $1,012m Operating profit $479m $377m +27% +30% $410m Revenue from fee business $799m $659m +21% +24% See note 2 Operating profit from fee bu
Slide 7: RevPAR, occupancy and ADR recovery across regions
RevPAR, occupancy and ADR recovery across regions IHG Group monthly RevPAR, Occupancy and ADR (vs 2019) 2021 2022 2023 Jan Mar May Jul — RevPAR (%) EMEAA monthly RevPAR, Occupancy and ADR (vs 2019) 2021 2022 2023 M6 48 43.4 14 18798 38 4g 194 +8 Jan Mar May Jul Sep Nov Jan Mar May Sep Nov Jan Mar Ma
Slide 8: HY2022 HY2023 HY2022
+14% +16% Room Nights +4% +7% ADR HY2022 HY2023 HY2022 HY2023 +6% Room Nights -1% -4% -9% ADR +7% +2% Room Nights -26% -19% ADR
Slide 9: Fee margin 330bps ahead of HY 2022
Fee margin 330bps ahead of HY 2022, driven by recovery in EMEAA and Greater China TOTAL IHG HY 2023 58.8% FY 2022 55.9% HY 2022 55.5% FY 2021 49.5% FY 2020 See note FY 2019 See note Europe, Middle East, Asia and Africa HY 2023 57.1% FY 2022 52.7% HY 2022 49.1% 21.5% FY 2020 FY 2019 FY 2021 -17.9% 58
Slide 10: Net system size growth of +4.8% YOY
Net system size growth of +4.8% YOY; delivered through strength of brands and enterprise platform Net System Size Growth (YOY) Net System Size Growth (YTD) +9.8% Gross additions 45.4% +4.1% cee Net system size growth Z 7% sit, 3% +0.8% AMER EMEAA Greater China Group AMER = | China = mm 0.6% | 7 Ez T
Slide 11: Signings up +11%; development activity robust
n Signings up +11%; development activity robust Americas EMEAA Greater China TOTAL vs 2022 Q1 Signings 5.4k 5.2k 5.9k 16.5k Down -1% Q2 Signings HY Signings 7.9k 13.3k 4.8k 10.0k 5.0k 10.9k 17.7k 34.2k Up +25% Up +11% 2023 Half Year Results ©IHG Pipeline at 30 June 2023 Americas 106.0k Greater China
Slide 12: Targeted capital expenditure to drive growth
Targeted capital expenditure to drive growth $m HY 2023 HY 2022 Key money and maintenance capex Key money’ (64) (35) + Key money: used to secure hotel signings Maintenance capex (16) (15) + Maintenance: relates to owned, leased and Total (80) (50) managed lease hotels and corporate infrastructure Re
Slide 13: Cash flow
Cash flow HY 2023 ($m) 34 (3) | | nil A719 513 System Depreciation Fund? wong Exceptional and capital & other cash flow . (19) (8) Share amortisation movements? “tems interest Dividends pa ybacks andtax ya, including Maintenance 277 Gross Net Reo ansaction Pes y System Fund recyclable costs y capex
Slide 14: $15bn returned to shareholders since 2003
$15bn returned to shareholders since 2003, and our strategy for uses of cash generated remains unchanged Rolling share buybacks routinely expected to return surplus capital Invest in the business Sustainably grow Return surplus funds to drive growth the ordinary dividend to shareholders $ GS mill ha
Slide 15: Update on Strategic Priorities
Update on Strategic Priorities 15 Elie Maalouf Chief Executive Officer
Slide 16: An attractive industry and a strong business model
An attractive industry and a strong business model that drives growth and shareholder value Attractions of our industry 660 ® 16 Enduring structural growth drivers of expanding GDP, rising middle class, and people’s inherent desire to travel and physically interact Demand strength and resiliency wel
Slide 17: Building loved and trusted brands
- SWISS. SESS SSS 4 SS OSS AAA LSS SSS. WE = SSS SSS SSS 20H] Building loyed and trusted brands
Slide 18: Essentials and Suites
18 Essentials and Suites Evolution of our midscale, upper midscale, and extended stay brand portfolio Suites Essentials 1952 e 1991 e 2017 . 2023 ® Sern, Wes lee Upscale extended stay CANDLEWOOD. SUITES Midscale extended stay 2023 Half Year Resi @IHe Timeshare family resorts NEW BRAND id Holidaylnn
Slide 19: Essentials and Suites
19 Essentials and Suites Continued volume growth; 5.1k properties in the system; 1.4k in the pipeline, representing ~27% future system growth Essentials portfolio growth open rooms (last bar showing open + pipeline) Launched avid 531k 540k 538k 548k 550k 506k , 487k 2014 2015 2016 2017 2018 2019 202
Slide 20: Essentials
Essentials The world’s largest hotel brand, Refreshed estate with a further >200 open and pipeline continuing its category leadership evolved design and format, properties; strong guest and strong growth and a new premium satisfaction and owner de breakfast offering returns press Hf a Holiday inn iv
Slide 21: Launching a new best-in-class midscale conversion brand
Launching a new best-in-class midscale conversion brand Scale of opportunity Clear positioning - Targeting sizeable existing midscale supply; 9.5 hotels midscale (705k rooms), representing $14bn in annual hotel revenue in NEW the US alone BRAND iV - STR forecast this segment to grow to $18bn by 2030
Slide 22: Suites
Suites Our premium extended stay brand with a growing global footprint Our newest extended stay brand with significant interest and an accelerating pipeline ~aTWELL SUITES JISTAYBRIDGER 370 open hotels Fane Candlewood Suite Brighton - UK Atwell Suites Denver Airport - Tower Road - US e: 34,791 rooms
Slide 23: Luxury & Lifestyle
Luxury & Lifestyle Driving high-value growth through an industry-leading collection of brands; contributed 26% of H1 signings, increasing the pipeline mix and the future system mix Global system Luxury & Lifestyle and pipeline mix pipeline represents high future % growth of system size SYSTEM GROUP
Slide 24: Luxury & Lifestyle
Luxury & Lifestyle Driving high-value growth through an industry-leading collection of brands; growth will be driven across all regions and brands Luxury & Lifestyle system size by region - H1 2023 123k rooms across 479 hotels Greater China 27% (87 hotels) Americas 123k 35% (181 hotels) rooms Europe
Slide 25: Luxury & Lifestyle
Luxury & Lifestyle In 4 years In 5 years World’s largest luxury hotel brand since acquisition, hotel system since acquisition, hotel system with more than 200 open growth of >40% and O growth of 50% and pipeline hotels and a further pipeline more than doubled ee more than tripled 93 in the pipeline
Slide 26: Luxury & Lifestyle
Luxury & Lifestyle First four hotels now open, 21in the pipeline, and sizeable market opportunity NIGNETTE™ COLLECTION The boutique luxury lifestyle brand continues its global expansion; expected to be in ~20 countries py2025 KIMPTON JOTELS & RESTAURANTS System Size: 934 rooms (4 hotels) Pipeline: 3
Slide 27: Customer centric
ustomer cen Cr 9 Cigital eG ee » \ . \ IHG &
Slide 28: IHG One Rewards
28 IHG One Rewards One year since our biggest transformation and marketing investment; delivering significant improvements across key metrics ONE Richer Benefits 08 Faster Earn ; o- Exceptional Choice - REWARDS New, customer-preferred =P More bonus points across tiers ~O— Unique options to personali
Slide 29: Innovating our technology and distribution platforms
Innovating our technology and distribution platforms Driving value for our owners and IHG through ongoing, agile and rapid development Attribute Upsell: ‘Better View’ and ‘Bigger Room’ now available in 5,000+ hotels Add Extras Upgrades Early results - average value per upsell booking: Luxury & Lifes
Slide 30: Caring for our people, communities and planet
Caring for our people, communities and planet
Slide 31: Being a responsible business: Journey to Tomorrow
31 BEING A Our actions as a responsible business are shaped by a culture of strong governance, RESPONSIBLE clear policies and a series of ambitious commitments set out in our Journey to BUSINESS : , Tomorrow 2030 responsible business plan. Our 2030 Journey to Tomorrow plan Key to delivering our stra
Slide 32: Providing a community solar offering for hotel owners
Providing a community solar offering for hotel owners — First hotel company to provide owners a community solar offering — Supporting the development of clean energy — Helping hotels reduce greenhouse gas emissions by accessing renewable energy — Currently active for hotels across Illinois, Maine an
Slide 33: Conclusions
33 Conclusions A well-invested, high-performing business that drives growth and shareholder value — RevPAR growth +24% YOY, +8.7% vs 2019 - Gross system growth of +6.3% YOY; net system growth of +4.8%; pipeline growth of +2.9% - Operating profit from reportable segments +27% to $479m; adjusted EPS +
Slide 34: IHG Hotels & Resorts
IHG HOTELS & RESORTS
Slide 35: Appendices
IHG HOTELS & RESORTS Appendices
Slide 36: Revenue and operating profit breakdown
Revenue and operating profit breakdown Results from reportable segments H12023 H12022 '23vs'22 ‘23. vs ‘22 FY 2022 $change %change Franchise and base management fees $625m $533m $92m 17% $1,147m Incentive management fees $73m $37m $36m 97% $103m Central revenue $101m $89m $12m 13% $184m Revenue from
Slide 37: Revenue growth rate analysis HY 2023 vs HY 2022
37 Revenue growth rate analysis HY 2023 vs HY 2022 RevPAR growth % Net rooms growth % Underlying Fee Revenue! Comparable Total YOY Available Growth % Comments Hotels that have _Alll hotels that were traded in all open in HY 2023 Aggregate number months being and HY 2022 (incl of rooms available comp
Slide 38: Revenue and operating profit 2021-2023 (post-IFRS 17)
Revenue and operating profit 2021-2023 (post-IFRS 17) Total Revenue HY FY Actual US$ 2023 2022 2022 2021 Franchise and Base Management Fees 456 406 861 683 Incentive Management Fees 7 7 18 8 Fee Business 463 A13 879 691 Owned, Leased & Managed Lease 74 58 126 83 Total Americas 537 4n 1,005 774 Franc
Slide 39: Revenue and operating profit 2019-2022 (pre-IFRS 17)
Revenue and operating profit 2019-2022 (pre-IFRS 17) Total Revenue Actual US$ Franchise and Base Management Fees Incentive Management Fees Fee Business Owned, Leased & Managed Lease Total Operating Profit Total Americas Franchise and Base Management Fees Incentive Management Fees Fee Business Owned,
Slide 40: HY 2023 underlying fee business revenue and operating profit
40 HY 2023 underlying fee business revenue and operating profit non-GAAP reconciliations Americas EMEAA Greater China Central Total IHG Operating Operating Operating Operating Operating $m Revenue Profit Revenue Profit Revenue Profit Revenue Loss Revenue Profit Fee business 463 379 161 92 74 43 101
Slide 41: HY 2022 underlying fee business revenue and operating profit
4 HY 2022 underlying fee business revenue and operating profit non-GAAP reconciliations Americas EMEAA Greater China Central Total IHG Operating Operating Operating Operating Operating $m Revenue Profit Revenue Profit Revenue Profit Revenue Loss Revenue Profit Fee business 413 342 121 63 36 5 89 (41
Slide 42: Net system size growth (YOY)
Net system size growth delivered through strength of brands and enterprise platform Net System Size Growth (YOY) Group Americas cerreree (13.1) — (5.3) Srreert 55.5 20.5 Bp seeeed HY 2022 Openings Exits HY 2023 HY 2022 Openings Exits HY 2023 Europe, Middle East, Asia and Africa Greater China _ — a:
Slide 43: Net system size growth (YTD)
Net system size growth delivered through strength of brands and enterprise platform Net System Size Growth (YTD) Group Americas FY 2022 Openings Exits HY 2023 FY 2022 Openings Exits HY 2023 Europe, Middle East, Asia and Africa Greater China ~ TOM... > 12.4 45 FY 2022 Openings Exits HY 2023 FY 2022 O
Slide 44: Ordinary shares
44 Ordinary shares Number of shares (m) 2023 2022 Opening balance at 1 January 183.1 187.7 Closing balance at 30 June 1777 187.7 Closing balance excluding treasury shares! 170.2 184.0 Basic weighted average shares (excluding treasury shares) 173.0 183.6 Dilutive potential ordinary shares' 11 1.0 Bas
Slide 45: Currency impacts
45 Currency impacts ($m) Revenue Reported HY22 HY22 at HY23 AER2 Var. Reported HY23 HY23 at HY22 AER2 Var. Americas 471 471 - 537 538 (1) EMEAA 239 232 7 309 320 (1) Greater China 36 34 2 74 79 (5) Central Overheads? 94 93 1 i" 12 (1) Total IHG 840 830 10 1,031 1,049 (18) Operating Profit Americas 3
Slide 46: IHG purpose, ambition, strategy and priorities
IHG HOTELS & RESORTS A global hospitality leader with 6,200+ open hotels and a further 1,900+ in the pipeline; driven by clear purpose, ambition, strategy and priorities Our Purpose True Hospitality for Good. Our Ambition To deliver industry-leading growth in our scale, enterprise platform and perfo
Slide 47: Strong portfolio of preferred brands across chain scales
Strong portfolio of 18 preferred brands across chain scales LUXURY & LIFESTYLE SYSTEM ee 13% PIPELINE es ee a | 21% REGENT IgROOTINENTA KIMPTON NIGNETTE” HOTEL INDIGO PREMIUM SYSTEM a 15% PIPELINE | 18% HUALUXE RLGAAARH CROWNE PLAZA Il EVEN SUITES ESSENTIALS SYSTEM SYSTEM PIPELINE PIPELINE ATWELL SU
Slide 48: Luxury & Lifestyle
Luxury & Lifestyle In 4 years In 5 years World’s largest luxury hotel brand since acquisition, hotel system since acquisition, hotel system with more than 200 open growth of >40% and O growth of 50% and pipeline hotels and a further pipeline more than doubled ee more than tripled 93 in the pipeline
Slide 49: Luxury & Lifestyle
Luxury & Lifestyle First four hotels now open, 21in the pipeline, and sizeable market opportunity NIGNETTE™ COLLECTION The boutique luxury lifestyle brand continues its global expansion; expected to be in ~20 countries py2025 KIMPTON JOTELS & RESTAURANTS System Size: 934 rooms (4 hotels) Pipeline: 3
Slide 50: Premium
Premium Our conversion-focused premium brand has already secured 110 properties within 5 years of launch 7 voco ‘58 hotels) 73% Designed specifically with the Chinese premium guest in mind, now with >40 open and pipeline hotels 4 sanaaann 5,604 rooms (20 hotels) ine: 5,850 rooms (23 hotels) 104% Our
Slide 51: Essentials
Essentials The world’s largest hotel brand, Refreshed estate with a further >200 open and pipeline continuing its category leadership evolved design and format, properties; strong guest and strong growth and a new premium satisfaction and owner de breakfast offering returns press Hf a Holiday inn iv
Slide 52: Suites
Suites Our premium extended stay brand with a growing global footprint Our newest extended stay brand with significant interest and an accelerating pipeline ~aTWELL SUITES JISTAYBRIDGER 370 open hotels Fane Candlewood Suite Brighton - UK Atwell Suites Denver Airport - Tower Road - US e: 34,791 rooms
Slide 53: Exclusive Partners
Exclusive Partners Demonstrating the strength of the IHG enterprise platform and desire for strategic partners to join the IHG system Iberostar Beachfront Resorts Our 18th brand substantially grows our resort and all-inclusive Pa presence IBEROSTAR Son Ss : 5 ‘ar Selection, Hacienda Dominicus~ Domin
Slide 54: IHG Hotels & Resorts brands
| H " HOTELS & RESORTS x 0 HOTEL ott REGENT INTERCONTINENTAL =NIGNETTE KIMPTON INDIGO VOoco CROWNE PLAZA SIX SENSES res BARR * 4 5 ATWELL ISTAYBRIDGER A) iperostan ‘Il EVEN a avid ‘fumes iemencay CANDLEWOOD et erick Holiday Inn sures ONE REWARDS
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