Intercontinental Hotels Group Plc · LSE:IHG
Intercontinental Hotels — H1 2003 Earnings Presentation
25 slides from Intercontinental Hotels's earnings presentation, May 2003
Slide 1: Richard Solomons, Finance Director
Richard Solomons Finance Director 4
Slide 2: Change in Year End
Change in Year End z New 31 December year end - better reflects annual corporate negotiations timing - brings us in line with other quoted hotel groups z Quarterly reporting for calendar 2003 z Supplementary information for calendar 2002 5
Slide 3: Results: 6 months to 31 March 2003
Results 6 months to 31 March 2003 Operating Profit £m Hotels 79 Down 27.5% Soft Drinks 20 Up 25.0% 6
Slide 4: Pro forma Group Results
Results 6 months to 31 March 2003 Pro forma Group Results EBITDA Down 6.7% Profit Before Tax Down 31.3% Earnings per share Down 32.6% 7
Slide 5: Operating Profit 3 months to 31 December 2002
Operating Profit 3 months to 31 December 2002 3 mths to 3 mths to % $m 31 Dec 02 31 Dec 01 Americas - Owned & Leased 4 3 33.3 - Managed & Upscale Franchised 9 11 (18.2) - Midscale Franchised 42 40 5.0 Total Americas 55 54 1.9 EMEA - Owned & Leased 22 33 (33.3) - Managed & Franchised 9 8 12.5 Total E
Slide 6: Operating Profit 3 months to 31 March 2003
Operating Profit 3 months to 31 March 2003 3 mths to 3 mths to % $m 31 Mar 03 31 Mar 02 Americas - Owned & Leased - 1 - - Managed & Upscale Franchised 7 9 (22.2) - Midscale Franchised 45 43 4.7 Total Americas 52 53 (1.9) EMEA - Owned & Leased 9 20 (55.0) - Managed & Franchised 10 11 (9.1) Total EMEA
Slide 7: Operating Profit 6 months to 31 March 2003
Operating Profit 6 months to 31 March 2003 6 mths to 6 mths to % $m 31 Mar 03 31 Mar 02 Americas - Owned & Leased 4 4 - - Managed & Upscale Franchised 16 20 (20.0) - Midscale Franchised 87 83 4.8 Total Americas 107 107 - EMEA - Owned & Leased 31 53 (41.5) - Managed & Franchised 19 19 - Total EMEA 50
Slide 8: Operating Profit Performance
Operating Profit Performance z Hotels revenue up by 7.5% z Hotels operating profit down $31m z Key factors adversely affecting profit flowthrough: - Occupancy driven RevPAR - InterContinental marketing spend - Depreciation - InterContinental Le Grand Hotel Paris - Insurance - FelCor 11
Slide 9: Americas Owned & Leased RevPAR Outperformance
Americas Owned & Leased RevPAR Outperformance InterContinental O&L Upper Upscale Segment 30.0% % growth RevPar 10.0% (10.0%) Oct-02 Nov-02 Dec-02 Jan-03 Feb-03 Mar-03 Source; IHG and Smith Travel data 12
Slide 10: Americas Owned & Leased: Operating profit flat at $4m
Americas Owned & Leased 3 mths to 3 mths to 6 mths to 31 Dec 02 31 Mar 03 31 Mar 03 RevPAR Growth - InterContinental 20.8% 1.8% 11.3% 13 Operating profit flat at $4m
Slide 11: Americas Managed & Upscale Franchise: Operating profit down 20% at $16m
Americas Managed & Upscale Franchise 3 mths to 3 mths to 6 mths to 31 Dec 02 31 Mar 03 31 Mar 03 RevPAR Growth - InterContinental Managed (11.5)% (24.1)% (18.1)% - Crowne Plaza Managed 5.6% (3.0)% 1.4% - Crowne Plaza Franchised 4.3% (1.3)% 1.3% 14 Operating profit down 20% at $16m
Slide 12: Americas Midscale Franchise RevPAR Outperformance
Americas Midscale Franchise RevPAR Outperformance 10.0% Express Brands Midscale without F&B Segment % growth RevPAR 0.0% (10.0%) Oct-02 Nov-02 Dec-02 Jan-03 Feb-03 Mar-03 Source; IHG and Smith Travel data 15
Slide 13: Americas Midscale Franchise RevPAR Performance
Americas Midscale Franchise RevPAR Performance 10.0% Holiday Inn Brands Midscale with F&B Segment % growth RevPAR 0.0% (10.0%) Oct-02 Nov-02 Dec-02 Jan-03 Feb-03 Mar-03 Source; IHG and Smith Travel data 16
Slide 14: Americas Midscale Franchise: Operating profit up 4.8% at $87m
Americas Midscale Franchise 3 mths to 3 mths to 6 mths to 31 Dec 02 31 Mar 03 31 Mar 03 RevPAR Growth - Holiday Inn 2.1% (2.0)% - - Express 3.3% (0.6)% 1.3% Holiday Inn Express Increase in royalty rate 0.05% pts 0.01% pts Change in number of (1.7)% 7.4% rooms available 17 Operating profit up 4.8% at
Slide 15: EMEA Operating Profit
EMEA Operating Profit 6 mths to 6 mths to % 31 Mar 03 31 Mar 02 US Dollar Analysis $m $m Total Operating Profit 50 72 (30.6) Sterling Analysis £m £m Owned & Leased 20 37 (45.9) Managed & Franchised 12 13 (7.7) Total Operating Profit 32 50 (36.0) 18
Slide 16: EMEA Owned & Leased: Operating profit down 45.9% at £20m
EMEA Owned & Leased 3 mths to 3 mths to 6 mths to 31 Dec 02 31 Mar 03 31 Mar 03 RevPAR Growth - InterContinental 12.8% (6.1)% 3.3% - Crowne Plaza 2.0% (1.6)% 0.3% - Holiday Inn 4.9% (1.0)% 2.0% 19 Operating profit down 45.9% at £20m
Slide 17: EMEA Holiday Inn UK RevPAR Outperformance
EMEA Holiday Inn UK RevPAR Outperformance 30.0% Regions Hotel Benchmark Segment London Hotel Benchmark Segment Regions Holiday Inn London Holiday Inn 20.0% 10.0% % growth 0.0% (10.0%) (20.0%) Oct-02 Nov-02 Dec-02 Jan-03 Feb-03 Mar-03 Source; IHG and Smith Travel data 20
Slide 18: EMEA Managed & Franchised: Operating profit down 7.7% to £12m
EMEA Managed & Franchised 3 mths to 3 mths to 6 mths to 31 Dec 02 31 Mar 03 31 Mar 03 RevPAR Growth - InterContinental Managed 33.3% (4.0)% 11.8% - Holiday Inn Franchised 6.7% 1.1% 4.0% - Express Franchised 6.3% (2.2)% 2.0% 21 Operating profit down 7.7% to £12m
Slide 19: Asia Pacific: Operating profit up 25% to $25m
Asia Pacific 3 mths to 3 mths to 6 mths to 31 Dec 02 31 Mar 03 31 Mar 03 RevPAR Growth - IC Hong Kong 59.6% 2.7% 30.0% - Managed 9.7% 3.4% 6.7% 22 Operating profit up 25% to $25m
Slide 20: Operating Profit 6 months to 31 March 2003
Operating Profit 6 months to 31 March 2003 6 mths to 6 mths to % 31 Mar 03 31 Mar 02 $m $m Americas - Owned & Leased 4 4 - - Managed & Upscale Franchised 16 20 (20.0) - Midscale Franchised 87 83 4.8 Total Americas 107 107 - EMEA - Owned & Leased 31 53 (41.5) - Managed & Franchised 19 19 - Total EMEA
Slide 21: Britvic Soft Drinks Results
Britvic Soft Drinks Results z Volume up 3.6% z Market share growth z Turnover up 6.5% to £310m z Improved profit margins 24 Operating profit up 25% to £20m
Slide 22: Pro forma Profit & Loss Account
Pro forma Profit & Loss Account 6 mths to 6 mths to Growth £m 31 Mar 03 31 Mar 02 % EBITDA 196 210 (6.7) Operating profit 93 123 (24.4) Interest (25) (24) (4.2) Profit before tax 68 99 (31.3) Tax (17) (28) 39.3 Minority interests (7) (6) (16.7) Retained Profit 44 65 (32.3) Earnings per share (pence)
Slide 23: Pro forma Cash Flow
Pro forma Cash Flow 6 mths to 6 mths to £m 31 Mar 03 31 Mar 02 Operating profit 93 123 Depreciation / Amortisation 103 87 Working capital / Other 24 (86) Capital expenditure (net) (172) (176) Operating cash flow 48 (52) 26
Slide 24: Pro forma Balance Sheet
Pro forma Balance Sheet £m 31 Mar 03 31 Dec 02 Tangible assets 4,516 4,383 Intangible assets 160 157 Working capital (58) (22) Long-term liabilities (165) (160) Net operating assets 4,453 4,358 zNet debt at separation approximately £1bn zNet assets at separation approximately £2.5bn 27
Slide 25: Dividends
Dividends z 6.6p paid by Six Continents PLC on 9 April for period prior to separation z InterContinental Hotels Group PLC expects to declare dividends of 13.5p for 2003 - interim payable October 2003 - final payable June 2004 z Final dividend expected to account for 70% z Targeting real increases in
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