InterContinental Hotels Group PLC · LSE:IHG
InterContinental Hotels — H1 2003 Earnings Presentation
11 slides from InterContinental Hotels's earnings presentation, September 2003
Slide 1: Richard North, Chief Executive
Richard North Chief Executive 27
Slide 2: Driving Returns and Free Cash Flow
Driving Returns and Free Cash Flow Driving revenue Improved ROCE and Reduced overhead costs Free Cash Flow Lower capital intensity 28
Slide 3: Driving Revenue: System Delivery – PCR enrolments
Driving Revenue: System Delivery PCR enrolments Enrolments (millions) z 1.8 million new Priority Club 1.8 members enrolled in 6 months to June 2003 1.2 z Total membership base now over 17 million z InterContinental shows fastest growth z 28% rooms now booked by PCR members, up from 24% 6m to Jun 02
Slide 4: Driving Revenue: System Delivery – Channel Optimisation
Driving Revenue: System Delivery Channel Optimisation Change in CRO Call Volumes and Revenues z System delivery up from 24% to Jan - Jun 2003 30% 6% 4% 2% + $17m z Web delivery now accounts for 9.0% of bookings, up from 5.6% 0% last year - 2% - 4% - 6% - 1m z CRO conversion rates increased and activ
Slide 5: EMEA
EMEA Particularly hard hit by: Disproportionate exposure to US traveller Concentration in key gateway cities affected by the depressed euro zone economy Depreciation charges increased due to refurbs without associated market recovery Actions underway New EMEA leadership team fully in place
Slide 6: Reduced Overhead Costs: Annualised Savings
Reduced Overhead Costs: Annualised Savings $m, Annualised z Cost savings primarily 61 headcount related 39 z Result primarily from ending of EMEA consultation period allowing further redundancies z On target for $75m May August annualised savings by Dec 2003 and at least Positions 381 597 $100m by D
Slide 7: Lower Capital Intensity: Sale of Staybridge Suites
Lower Capital Intensity: Sale of 16 Staybridge Suites $185m sales price; over $15m above book value Strategic: z Brand defining No – all assets built to same design z Key location No – Geographic strength already established in the US Financial: z Current Relatively unaffected by downturn, and still
Slide 8: Lower Capital Intensity: Sale of InterContinental May Fair
Lower Capital Intensity: Sale of InterContinental May Fair £115m sale price; £400k per room Strategic: z Brand defining No – in need of major refurbishment z Key location Yes – but two other InterContinental hotels in London Financial: z Current Property tired, in need of substantial capex and was d
Slide 9: Britvic
Britvic Innovation success with strong pipeline z Britvic J2O up 114% z Robinsons Fruit Shoot up 64% Continued investment in core brands z Successful re-launch of Tango 35
Slide 10: Current Trading: RevPAR 2003 vs 2002
Current Trading RevPAR 2003 vs 2002 Apr May Jun Jul Aug Americas InterContinental (Owned & Leased) (1.0% ) 2.4% 7.2% 9.5% 5.2% Crowne Plaza (12.7% ) (8.9% ) (5.6% ) (0.2% ) (3.3% ) Holiday Inn (8.3% ) (4.0% ) (3.9% ) 1.1% (1.1% ) Holiday Inn Express (2.7% ) (0.2% ) (0.2% ) 3.4% 2.7% EMEA InterContin
Slide 11: Summary
Summary Driving revenue Improved ROCE and Reduced overhead costs Free Cash Flow Lower capital intensity 37
InterContinental Hotels Group — H1 2003 Earnings Presentation on 6ix