InterContinental Hotels Group PLC · LSE:IHG
InterContinental Hotels — H1 2003 Earnings Presentation
12 slides from InterContinental Hotels's earnings presentation, 2003
Slide 1: Richard North, Chief Executive Officer
Richard North Chief Executive Officer 29
Slide 2: Driving Returns
Driving Returns Driving revenue Improved ROCE and Reduced overhead costs Free Cash Flow Lower capital intensity 30
Slide 3: Driving Revenue
Driving Revenue In the 6 months to March 2003: z RevPAR premium against competitive segments z 1.7m new Priority Club members z System delivery up from 25.7% to 27.3% z New leadership in EMEA 31
Slide 4: Reduced Overhead Costs: Organisation Redesign
Reduced Overhead Costs Organisation Redesign $m Labour related savings by Geographic Region Americas 29 EMEA 27 Asia Pacific 5 Corporate 14 Facilities NAS 9 Satellite Offices 3 IT Efficiencies 8 Other 5 100 32
Slide 5: Reduced Overhead Costs: Organisation Redesign
Reduced Overhead Costs Organisation Redesign Savings $m IT 24 Finance 14 HR 13 Facilities 12 Operations, sales and marketing 19 Development 8 Legal and other 10 100 33
Slide 6: Reduced Overhead Costs: Organisation Redesign
Reduced Overhead Costs Organisation Redesign z 381 positions eliminated to date z Annualised saving of $39m achieved z Target of $75m annualised savings by year end z Next steps - EMEA consultation concludes end May - London HQ to be closed by 30th September - On-going phased reductions in regions t
Slide 7: Reduced Overhead Costs: One-off costs to achieve
Reduced Overhead Costs Organisation Redesign One-off costs to achieve at least $100m overhead savings 100 Facilities $m 50 Severance Other 0 35
Slide 8: Lower Capital Intensity: Capital Expenditure
Lower Capital Intensity Capital Expenditure Hotels : Capital Expenditure 450 450 Expansion 400 400 375 Renovation 350 210 Maintenance 300 190 £m 180 250 200 120 90 150 75 100 50 120 120 120 0 YE Sep 2003 YE Sep 2003 YE Dec 2003 Original Revised 36
Slide 9: Britvic Soft Drinks
Britvic Soft Drinks z Strong portfolio brands z GB bottler of Pepsi brands z Strong cash generator z Currently Pepsi barrier to sale for value 37
Slide 10: Current Trading: RevPAR 2003 vs 2002
Current Trading RevPAR 2003 vs 2002 Jan Feb Mar Apr Mar/Apr Americas InterContinental (Owned & Leased) 0.1% 1.4% 3.7% (1.0)% 1.2% Crowne Plaza (3.3)% (2.4)% (1.9)% (13.7)% (7.8)% Holiday Inn (0.6)% (3.2)% (2.4)% (8.1)% (5.2)% Holiday Inn Express (1.2)% (1.4)% (0.2)% (2.7)% (1.4)% EMEA InterContinent
Slide 11: Summary
Summary Revenue pressure Cost reduction on target Asset review underway 39
Slide 12: InterContinental Hotels Group
\_\e INTERCONTINENTAL. HOTELS GROUP
InterContinental Hotels Group — H1 2003 Earnings Presentation on 6ix