Intercontinental Hotels Group Plc · LSE:IHG
Intercontinental Hotels — Investor Presentation (May 2024)
134 slides from Intercontinental Hotels's investor presentation, May 2024
Slide 1: Investor Presentation May 2024
Investor Presentation May 2024
Slide 2: Contents
Contents Part 1 Pages A1-A2 2024 Q1 Trading Update (3 May 2024) Part 2 Pages B1-B90 2024 Update on Strategic Priorities (20 February 2024) Part 3 Pages C1-C40 2023 Full Year Results (20 February 2024)
Slide 3: 2024 Q1 Trading Update
2024 Q1 Trading Update 3 May 2024 A1
Slide 4: Q1 2024 Continued growth in RevPAR and development activity
Q1 2024 Continued growth in RevPAR and development activity; further validation of the attraction of joining IHG’s enterprise, and the power and efficiency of our model • Group RevPAR +2.6% YOY Trading • Regional RevPAR YOY: Americas -0.3%, EMEAA +8.9% and Greater China +2.5% performance • ADR +2.3%
Slide 5: 2024 Update on Strategic Priorities
2024 Update on Strategic Priorities 20 February 2024 B1
Slide 6: 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 7: Introductory video
B3 Introductory video True Hos 'e)
Slide 8: Elie Maalouf, Chief Executive Officer
Elie Maalouf Chief Executive Officer B4
Slide 9: Agenda
Agenda Our industry IHG’s business model, track record and growth algorithm Strategic priorities Regional updates Margin potential, cash generation and capital allocation Conclusions Q&A B5
Slide 10: Leadership Team
Leadership Team Daniel Aylmer Heather Balsley Jolyon Bulley Yasmin Diamond Michael Glover Managing Director, Chief Customer Officer CEO, Americas Executive Vice President, Chief Financial Officer Greater China Global Corporate Affairs Nicolette Henfrey Wayne Hoare Elie Maalouf Kenneth Macpherson Geo
Slide 11: Our industry
IHG HOTELS & RESORTS Our industry B7
Slide 12: Attractions of our industry
Our industry Attractions of our industry – The industry benefits from enduring structural growth drivers of Leading global hotel companies – Growing populations and rising middle classes continue their long-term trend of – Driving business and commerce taking market share – Inherent desire to travel
Slide 13: Industry growth forecasts
Our industry Industry growth forecasts Estimated growth in hotel room nights consumed (decade through to 2033) Global US China RoW +4.0% +2.7% +4.2% +4.3% CAGR CAGR CAGR CAGR Estimated growth in Travel & Tourism spending1 (decade through to 2033) Global US China RoW +8.0% +5.1% +13.4% +7.5% CAGR CAG
Slide 14: IHG's business model, track record and growth algorithm
IHG’s business model, track record and growth algorithm B10
Slide 15: IHG's strong business model: sustainable competitive advantage
IHG’s business model, track record and growth algorithm IHG’s strong business model: sustainable competitive advantage Well-invested High-value geographic Asset-light, Robust pipeline portfolio and and chain scale fee-based, delivering enterprise platform diversification mainly franchised multi-year
Slide 16: Our strong track record
IHG’s business model, track record and growth algorithm Our strong track record Decade through to 2019 RevPAR Net unit growth Fee margin expansion Adjusted EPS +3.9% CAGR +3.2% CAGR +130bps p.a. +11.4% CAGR Total capital returned Cash conversion1 Ordinary dividends2 Recent share buybacks to sharehol
Slide 17: Our outlook: compounding growth and sustainable shareholder value creation
IHG’s business model, track record and growth algorithm Our outlook: compounding growth and sustainable shareholder value creation Growth algorithm fundamentals RevPAR growth HSD % CAGR +100-150bps p.a. ~10% CAGR ~100% +12-15% CAGR + Fee revenue Fee margin EBIT Strong cash Adjusted EPS Net system si
Slide 18: Underpinned by clear purpose, ambition and strategic priorities
IHG’s business model, track record and growth algorithm Underpinned by clear purpose, ambition and strategic priorities OUR PURPOSE OUR AMBITION WHAT WE DO WHY WE DO IT Provide True To be the hotel company of choice Hospitality for Good for guests and owners OUR STRATEGIC PRIORITIES HOW WE MAKE IT H
Slide 19: Strategic priorities
IHG HOTELS & RESORTS Strategic priorities BI5
Slide 20: Relentless focus on growth
Strategic priorities OUR PILLARS RELENTLESS FOCUS ON GROWTH B16
Slide 21: Asset light, mainly franchised, and geographically diverse
Strategic priorities: relentless focus on growth Asset light, mainly franchised, and geographically diverse 6,300+ open hotels; a further 2,000+ in the pipeline, representing +31% rooms growth System size System size (rooms) 2% <1% (rooms) 179k 520k 28% 70% 19% 55% 946k 946k 247k 26% Franchised Mana
Slide 22: Three regions of scale with notable growth potential
Strategic priorities: relentless focus on growth Three regions of scale with notable growth potential Our largest, the Americas, has a further +21% growth secured in its pipeline; EMEAA +33%, Greater China +59% Americas Europe, Middle East, Greater China Asia and Africa SYSTEM + PIPELINE FY23 OPENIN
Slide 23: Brand portfolio expansion since 2015
Strategic priorities: relentless focus on growth Brand portfolio expansion since 2015 Nine brands added to our industry-leading portfolio through a combination of organic launches, acquisitions and commercial partnerships Legend New Brand LUXURY & LIFESTYLE PREMIUM ESSENTIALS SUITES EXCLUSIVE PARTNE
Slide 24: Balanced portfolio mix of 19 preferred brands across segments
Strategic priorities: relentless focus on growth Balanced portfolio mix of 19 preferred brands across segments Luxury & Lifestyle and Premium now represent 29% of the system and 41% of the pipeline LUXURY & PREMIUM ESSENTIALS SUITES EXCLUSIVE LIFESTYLE PARTNERS IHG SYSTEM IHG SYSTEM IHG SYSTEM IHG S
Slide 25: Each of our brand categories is demonstrating robust growth
Strategic priorities: relentless focus on growth Each of our brand categories is demonstrating robust growth From Essentials with +24% growth in the pipeline to Luxury & Lifestyle with +50% growth LUXURY & PREMIUM ESSENTIALS SUITES EXCLUSIVE LIFESTYLE PARTNERS SYSTEM + PIPELINE SYSTEM + PIPELINE SYS
Slide 26: Healthy pipelines across each of our brands
Strategic priorities: relentless focus on growth Healthy pipelines across each of our brands Every brand has >20% growth already in the pipeline SYSTEM + PIPELINE SYSTEM + PIPELINE SYSTEM + PIPELINE SYSTEM + PIPELINE 4.8k rooms 29.7k rooms 414.3k rooms 4.3k rooms +174% growth +75% growth +23% growth
Slide 27: Large embedded annual fee revenue growth in our pipeline today
Strategic priorities: relentless focus on growth Large embedded annual fee revenue growth in our pipeline today The 297k rooms (2,016 hotels) in the pipeline, if open today, represent an estimated annual fee revenue of $0.5bn Pipeline by region Embedded Pipeline by brand segment (rooms) (rooms) annu
Slide 28: Established and new brands have significant growth potential
Strategic priorities: relentless focus on growth Both our established and new brands have significant growth potential Signed 57k rooms (397 hotels) across our established brands and a further 21k more rooms (154 hotels) across our new brands Established brands New brands SYSTEM + PIPELINE FY23 OPEN
Slide 29: Investment in Luxury & Lifestyle brands and capabilities
Strategic priorities: relentless focus on growth Investment in Luxury & Lifestyle brands and capabilities Top 2 largest Luxury & Lifestyle portfolio by number of rooms and hotels; dedicated teams powering the L&L guest acquisition and return Luxury & Lifestyle portfolio growth L&L portfolio in 2014
Slide 30: An update on our newest brands: Garner
Strategic priorities: relentless focus on growth An update on our newest brands: Garner Redefining the midscale market with a differentiated proposition; targeting >500 hotels over the next 10 years and >1,000 hotels over the next 20 years in the US alone Garner – Launched new best-in-class midscale
Slide 31: An update on our newest brands: Iberostar Beachfront Resorts
Strategic priorities: relentless focus on growth An update on our newest brands: Iberostar Beachfront Resorts Now live across all IHG channels including web and mobile app; IHG One Rewards members can now enjoy full member benefits and earn and redeem points Iberostar Beachfront Resorts – Added Excl
Slide 32: An update on our newest brands: voco and Vignette Collection
Strategic priorities: relentless focus on growth An update on our newest brands: voco and Vignette Collection Attracting world-class conversion hotels to our leading brand portfolio, powerful enterprise platform and strong loyalty programme voco Vignette Collection – Upscale conversion brand launche
Slide 33: Increases in new build as well as conversions signings
Strategic priorities: relentless focus on growth Increases in new build as well as conversions signings Improving owner confidence validated by positive new build signings trajectory; excellent growth in conversion opportunities and success in securing them 2020-2023 new build and conversion signing
Slide 34: Brands guests and owners love
Strategic priorities OUR PILLARS BRANDS GUESTS AND OWNERS LOVE B30
Slide 35: Strengthening the IHG Hotels & Resorts masterbrand
Strategic priorities: brands guests and owners love Strengthening the IHG Hotels & Resorts masterbrand A fully integrated approach based on investment in media, partnerships and PR Global marketing campaigns Driving uplifts in perception and engagement US: +4pts +3pts +4pts UK: +9pts +3pts +1pts Awa
Slide 36: Driving demand to hotels by leveraging advanced analytics
Strategic priorities: brands guests and owners love Driving demand to hotels by leveraging advanced analytics Using data science and artificial intelligence to drive superior marketing ROI Destination campaigns – Using data and artificial intelligence to predict guest needs and behaviours – Improvin
Slide 37: Evolved brand designs to improve owner returns
Strategic priorities: brands guests and owners love Evolved brand designs to improve owner returns Continuous evolution and optimisation of our brand prototypes Holiday Inn EVEN Staybridge Candlewood Express Suites Suites Further reduced build cost New prototype with ~9% Improved efficiency of More
Slide 38: Lowering costs and driving efficiencies for our owners
Strategic priorities: brands guests and owners love Lowering costs and driving efficiencies for our owners Supporting superior performance and returns Cost to build & renovate Cost to open Cost to operate Evolved dual branded Built Garner supply chain in less Implemented hotel procure-to-pay avid/Ca
Slide 39: Leading commercial engine
Strategic priorities OUR PILLARS LEADING COMMERCIAL ENGINE B35
Slide 40: A powerful loyalty programme with increased member engagement
Strategic priorities: leading commercial engine A powerful loyalty programme with increased member engagement IHG One Rewards rapidly grown to >130m loyalty members that are ~10x more likely to book direct and spend ~20% more than non members Richer Benefits Faster Earn Exceptional Choice New, custo
Slide 41: Our Enterprise Contribution continues to strengthen
Strategic priorities: leading commercial engine Our Enterprise Contribution continues to strengthen Driving higher value customers at a lower cost of acquisition for our hotels, reinforced by the investments we have made in our loyalty programme and digital channels Enterprise Contribution Digital c
Slide 42: Innovating our hotel tech stack
Strategic priorities: leading commercial engine Innovating our hotel tech stack Creating a superior value proposition for our owners through best-in-class technology platforms 1 2 3 Guest Reservation Revenue Management Property Management System System System (GRS) (RMS) (PMS) B38
Slide 43: Capitalising on enhanced GRS capabilities
Strategic priorities: leading commercial engine Capitalising on enhanced GRS capabilities Driving value for our owners and IHG through ongoing, agile and rapid development Room attribute upsell: ‘Better View’, ‘Bigger Room’ and Stay enhancements: the cross-sell of guest-stay extras ‘Higher Floor’ no
Slide 44: IHG mobile app is our fastest growing distribution channel
Strategic priorities: leading commercial engine IHG mobile app is our fastest growing distribution channel Continuous updates leading to improved conversion, revenue and guest experience >1,000 updates and All time high app downloads: Mobile accounts for Revenue from mobile: Diamond members visit ne
Slide 45: Developing a best-in-class revenue management capability
Strategic priorities: leading commercial engine Developing a best-in-class revenue management capability A new cloud-based RMS platform that brings together leading data science and forecasting tools, to deliver advanced insights and recommendations to hotels Revenue management offer Market-leading
Slide 46: Care for our people, communities and planet
Strategic priorities OUR PILLARS CARE FOR OUR PEOPLE, COMMUNITIES AND PLANET B42
Slide 47: Journey to Tomorrow
Strategic priorities: care for our people, communities and planet Journey to Tomorrow Aligned to our purpose of True Hospitality for Good and building on years of important progress, Journey to Tomorrow puts IHG on a longer-term path to positive change for our people, communities and planet Our peop
Slide 48: Our people
Strategic priorities: care for our people, communities and planet Our people Championing a diverse culture where everyone can thrive Gender balance Diversity Culture of inclusion *** *Leaders are defined as colleagues working at VP level and above. **This population consists individuals in our corpo
Slide 49: Communities
Strategic priorities: care for our people, communities and planet Communities Improving the lives of 30 million people by 2030 in our communities around the world Skills training Disaster response Food security 30k - Responded to 15 relief efforts globally - Supported The Global FoodBanking > Networ
Slide 50: Carbon & energy
Strategic priorities: care for our people, communities and planet Carbon & energy Targeting reductions in energy use and carbon emissions in line with climate science Decarbonising our Developing new-build hotels that Sourcing existing hotels operate at very low or zero carbon renewable energy - Pro
Slide 51: Responsible procurement
Strategic priorities: care for our people, communities and planet Responsible procurement Working with suppliers who share our commitment to operating responsibly and adopt ethical work practices Sourcing Global Embedding best practice responsibly supplier diversity across the business 110m - Sustai
Slide 52: Americas, Jolyon Bulley
Americas Jolyon Bulley CEO, Americas B48
Slide 53: Americas: overview
Regional update: Americas Americas: overview +21% growth secured in the pipeline, further adding to our scale advantage and leading positions in the region Scale Largest markets Franchised vs Countries and 1. United States System Pipeline Managed1 territories SYSTEM + PIPELINE FY23 OPENINGS 8.0k roo
Slide 54: Americas: brand portfolio mix
Regional update: Americas Americas: brand portfolio mix Adding more balance to the mix and developing in large and high growth segments LUXURY & PREMIUM ESSENTIALS SUITES EXCLUSIVE LIFESTYLE PARTNERS AMERICAS SYSTEM AMERICAS SYSTEM AMERICAS SYSTEM AMERICAS SYSTEM AMERICAS SYSTEM 9% 6% 68% 15% 2% AME
Slide 55: Americas: continued growth potential in Essentials and Suites
Regional update: Americas Americas: continued growth potential in Essentials and Suites Driving volume growth; ~16% future system growth in Essentials and ~43% in Suites Americas: Essentials portfolio growth Americas: Suites portfolio growth open rooms (last bar showing open + pipeline) open rooms (
Slide 56: Americas: investing in Luxury & Lifestyle
Regional update: Americas Americas: investing in Luxury & Lifestyle Large high-value opportunity in the region, bringing across the groups wider skills and relationships, and adding to Americas existing scale across three established brands Americas: Luxury & Lifestyle portfolio growth Americas RevP
Slide 57: Americas: demand tailwinds continue
Regional update: Americas Americas: demand tailwinds continue The continued return of business, groups and international travel; a full recovery expected for all stay occasions, with demand drivers for Groups indicating turn to positive in 2024 Leisure Business Groups US international revenue revenu
Slide 58: Americas: profit and fee margin accretion potential
Regional update: Americas Americas: profit and fee margin accretion potential Sustainably higher than pre-Covid, with further opportunities to increase Americas fee margin2 Drivers of further margin accretion FY23 operating - RevPAR growth FY 2023 82.2% profit1,2 - Growth of system size, spearheaded
Slide 59: Europe, Middle East, Asia and Africa, Kenneth Macpherson
Europe, Middle East, Asia and Africa Kenneth Macpherson CEO, Europe, Middle East, Asia and Africa B55
Slide 60: EMEAA: overview
Regional update: EMEAA EMEAA: overview +33% growth secured in the pipeline, with excellent opportunities across high-value and high growth markets, and building scale advantage Scale Largest markets Franchised vs Countries and 1. United Kingdom System Pipeline Managed1 territories SYSTEM + PIPELINE
Slide 61: EMEAA: brand portfolio mix
Regional update: EMEAA EMEAA: brand portfolio mix Strongly balanced and with opportunities across all brands and segments LUXURY & PREMIUM ESSENTIALS SUITES EXCLUSIVE LIFESTYLE PARTNERS EMEAA SYSTEM EMEAA SYSTEM EMEAA SYSTEM EMEAA SYSTEM EMEAA SYSTEM 21% 23% 51% 1% 4% EMEAA PIPELINE EMEAA PIPELINE E
Slide 62: EMEAA: our brand portfolio today and growth opportunities
Regional update: EMEAA EMEAA: our brand portfolio today and growth opportunities Four of the group’s existing brands still to be developed in EMEAA; already shown how successful this can be with Kimpton and taking other brands global Present in EMEAA today Potential for future introduction LUXURY &
Slide 63: EMEAA: investing in Luxury & Lifestyle
Regional update: EMEAA EMEAA: investing in Luxury & Lifestyle A leading position, with incredible further potential across the region EMEAA: Luxury & Lifestyle portfolio growth Open rooms (last bar showing open + pipeline) 79k (403 hotels) Further 60% growth in the pipeline 49k (228 hotels) Just get
Slide 64: EMEAA: signings and openings
Regional update: EMEAA EMEAA: signings and openings Rebound in signings feeding through to openings Growing strength in signings… . . . resulting in stronger openings 29.1k1 (160 hotels) 25.8k2 24.8k3 (128 hotels) (151 hotels) 20.4k 21.2k6 (109 hotels) (87 hotels) 15.3k4 16.2k5 13.9k (90 hotels) (79
Slide 65: EMEAA: market prioritisation to achieve growth ambitions
Regional update: EMEAA EMEAA: market prioritisation to achieve growth ambitions Clear market-by-market strategy to optimise potential Market categorisation Deep penetration, full localisation, further high-value growth Category 1: large and well-established markets opportunity leveraging full brand
Slide 66: EMEAA: growth acceleration opportunities
Regional update: EMEAA EMEAA: growth acceleration opportunities Across both established and high growth markets GERMANY JAPAN KSA INDIA THAILAND SYSTEM + PIPELINE SYSTEM + PIPELINE SYSTEM + PIPELINE SYSTEM + PIPELINE SYSTEM + PIPELINE 20.6k rooms 15.1k rooms 31.8k rooms 15.4k rooms 18.1k rooms +11%
Slide 67: EMEAA: profit and fee margin accretion potential
Regional update: EMEAA EMEAA: profit and fee margin accretion potential Sustainably higher than pre-Covid, with further opportunities to increase Europe, Middle East, Asia and Africa Drivers of further margin accretion FY23 fee margin2 operating - RevPAR growth FY 2023 60.5% profit1,2 - Growth of sy
Slide 68: Greater China, Daniel Aylmer
Greater China Daniel Aylmer Managing Director, Greater China B64
Slide 69: Greater China: overview
Regional update: Greater China Greater China: overview +59% growth secured in the pipeline, with excellent opportunities in a high growth market that will also bring maturity benefits and further scale advantage as it develops Scale Our market Franchised vs Leadership Greater China System Pipeline M
Slide 70: Greater China: robust growth across key industry drivers
Regional update: Greater China Greater China: robust growth across key industry drivers Travel & tourism spending is forecast to exceed growth in middle income households and GDP over the next decade; huge opportunity for hotel rooms penetration GDP Middle income Travel & tourism Hotel rooms (real;
Slide 71: Greater China: brand portfolio mix
Regional update: Greater China Greater China: brand portfolio mix Leading brand positions established in each of the Luxury & Lifestyle, Premium and Essentials categories, with more opportunity to come LUXURY & PREMIUM ESSENTIALS SUITES EXCLUSIVE LIFESTYLE PARTNERS GREATER CHINA SYSTEM GREATER CHINA
Slide 72: Greater China: our brand portfolio today and growth opportunities
Regional update: Greater China Greater China: our brand portfolio today and growth opportunities Five of the group’s existing brands still to be developed in the region; already shown how successful this can be with bringing across the Group’s other brands Present in Greater China Potential for futu
Slide 73: Greater China: franchising growth
Regional update: Greater China Greater China: franchising growth Benefit of continued gradual shift to scale-advantaged franchise model, whilst still capturing rapid growth opportunities in a huge developing economy First IHG hotel ‘Franchise Plus’ in Mainland China 100 IHG hotels model launched 400
Slide 74: Greater China: signings and openings
Regional update: Greater China Greater China: signings and openings Resilience and recovery in signings reflects strength of brands and IHG’s enterprise platform; further recovery in openings now to increasingly feed through Signings Openings 35.7k1 (158 hotels) 30.8k 28.2k (153 hotels) (141 hotels)
Slide 75: Greater China: profit and fee margin accretion potential
Regional update: Greater China Greater China: profit and fee margin accretion potential Sustainably higher than pre-Covid, with further opportunities for to increase Greater China fee margin2 Drivers of further margin accretion FY23 operating - RevPAR growth FY 2023 59.6% profit1,2 - Growth of syste
Slide 76: Group margin potential, cash generation and capital allocation
Group margin potential, cash generation and capital allocation Michael Glover Chief Financial Officer B72
Slide 77: Strong track record of margin accretion in fee business
Group margin potential, cash generation and capital allocation Strong track record of margin accretion by delivering growth in fee business revenue whilst leveraging an efficient overhead base $1,600m 60% – 130bps fee margin annual increase on average over the decade to 2019 $1,400m 55% – 100-150bps
Slide 78: IHG typically converts >100% of earnings into free cash
Group margin potential, cash generation and capital allocation IHG typically converts >100% of earnings into free cash 1,000 Conversion 250% 800 200% 600 150% 400 100% 200 50% 0 0% 2015 2016 2017 2018 2019 2020 2021 2022 2023 Adjusted Free Cash Flow Adjusted Earnings Conversion Rate (%) Since 2015,
Slide 79: Continuing our capital allocation approach to return surplus capital
Group margin potential, cash generation and capital allocation Continuing our capital allocation approach to routinely return surplus capital to shareholders: $500m 2022, $750m 2023, $800m 2024 #1: Invest in the business #2: Sustainably grow the #3: Return surplus funds to drive growth ordinary divi
Slide 80: Proven model of investing for growth and returning surplus capital
Group margin potential, cash generation and capital allocation Proven model of investing for growth, sustainably growing the dividend and routinely returning surplus capital – Key Money and Maintenance Capex increasing to up to $200m p.a. from ~$150m p.a. historically – System Fund is well-invested
Slide 81: Conclusions, Elie Maalouf
Conclusions Elie Maalouf Chief Executive Officer B77
Slide 82: IHG's strong business model: sustainable competitive advantage
Conclusions IHG’s strong business model: sustainable competitive advantage Well-invested High-value geographic Asset-light, Robust pipeline portfolio and and chain scale fee-based, delivering enterprise platform diversification mainly franchised multi-year growth Proven ability to capture Efficient
Slide 83: Our growth algorithm
Conclusions Our growth algorithm Strong track record, recovery and potential for future growth compounding and sustainable shareholder value creation IHG's strong track record IHG's strong recovery IHG's strong potential through to 2019 2023 vs 2019 looking ahead RevPAR +3.9% CAGR +11% ahead HSD % C
Slide 84: Q&A
Q&A Analysts and institutional investors wishing to ask questions should use the following dial-in details: UK: 0800 048 7798 US: 800 579 2543 International: (+1) 785 424 1789 Conference ID: IHG; To ask a question, press *1. To withdraw a question, press *2. B80
Slide 85: Appendices
IHG HOTELS & RESORTS Appendices B81
Slide 86: Asset light, mainly franchised, and geographically diverse
Appendices Asset light, mainly franchised, and geographically diverse System size and pipeline Strong competitive position in an industry where System size (rooms): Luxury branded players are gaining 2% <1% 11% 179k 520k market share 28% 70% 19% 55% Upscale/ Upper Midscale/ With a larger share Upsca
Slide 87: Strong portfolio of 19 preferred brands across chain scales
Appendices Strong portfolio of 19 preferred brands across chain scales Having added nine brands to our portfolio since 2015 LUXURY & PREMIUM ESSENTIALS SUITES EXCLUSIVE LIFESTYLE PARTNERS SYSTEM SYSTEM SYSTEM SYSTEM SYSTEM 14% 15% 61% 8% 2% PIPELINE PIPELINE PIPELINE PIPELINE PIPELINE 22% 19% 46% 12
Slide 88: Luxury & Lifestyle
Appendices Luxury & Lifestyle Driving high-value growth through an industry-leading collection of brands; at FY23, 509 properties in the system; pipeline of 357 more represents future rooms growth of ~50% Six Senses Regent InterContinental In 5 years In 6 years World’s largest luxury hotel brand sin
Slide 89: Luxury & Lifestyle
Appendices Luxury & Lifestyle Driving high-value growth through an industry-leading collection of brands; at FY23, 509 properties in the system; pipeline of 357 more represents future rooms growth of ~50% Vignette Collection Kimpton Hotel Indigo First 16 hotels now open, The boutique luxury lifestyl
Slide 90: Premium
Appendices Premium Uniquely tailored to target upscale customer segments; at FY23, 524 properties in the system; pipeline of 258 more represents future rooms growth of ~41% voco HUALUXE Crowne Plaza EVEN Our conversion-focused Designed specifically with the Our refreshed premium brand; The premium w
Slide 91: Essentials
Appendices Essentials Continued opportunity for growth in our core segment; at FY23, 4.4k properties in the system; pipeline of 1.0k more represents future rooms growth of ~24% Holiday Inn Express Holiday Inn Garner avid The world’s largest hotel Refreshed estate with an Our new midscale conversion
Slide 92: Suites
Appendices Suites An expanding portfolio of extended stay properties across chain scales; at FY23, 733 properties in the system; pipeline of 358 more represents future rooms growth of ~45% Staybridge Atwell Candlewood Holiday Inn Suites Suites Suites Club Vacations Our premium extended stay Our newe
Slide 93: Exclusive Partners
Appendices Exclusive Partners Demonstrating the strength of the IHG enterprise platform and desire for strategic partners to join our system Iberostar Beachfront Resorts Substantially strengthens our resort and all-inclusive presence Iberostar Selection Hacienda Dominicus – Dominican Rep. System Siz
Slide 94: IHG brand logos
IHG sesorrs e ees REGENT * Il EVEN IBEROSTAR 0 INTERCONTINENTAL 4f Holiday Inn NIGNETTE Garner KIMPTON avid HOTEL INDIGO ATWELL SUITES VOco qISTAYBRIDGER ne | B90 fe) CROWNE PLAZA (5) CANDLEWOOD SUITES REWARDS,
Slide 95: 2023 Full Year Results
2023 Full Year Results 20 February 2024 C1
Slide 96: Cautionary note regarding forward-looking statements
Cautionary note regarding forward-looking statements This presentation contains certain forward-looking statements as defined under United States law (Section 21E of the Securities Exchange Act of 1934) and otherwise. These forward-looking statements can be identified by the fact that they do not re
Slide 97: Elie Maalouf, Chief Executive Officer
Elie Maalouf Chief Executive Officer C3
Slide 98: A year of strong financial performance, impressive openings and excellent signings
FY 2023 A year of strong financial performance, impressive openings and excellent signings; demonstrates the enduring attractions and benefits of our business model RevPAR System Size Profit and Earnings Capital Returns FY global RevPAR 946k rooms (6,363 hotels) 59.3% fee margin1, +3.4%pts $
Slide 99: FY 2023 Financial Review, Michael Glover
FY 2023 Financial Review Michael Glover Chief Financial Officer C5
Slide 100: Financial performance overview
Financial performance overview Results from reportable segments FY 2023 FY 20222 Reported Underlying FY 20192 % change % change Revenue 1 $2,164m $1,843m +17% +19% $2,083m Operating profit (EBIT) 1 $1,019m $828m +23% +25% $865m Revenue from fee business 1 $1,672m $1,434m +17% +17% $1,510m2 Operating
Slide 101: RevPAR, occupancy and ADR recovery across regions
RevPAR, occupancy and ADR recovery across regions IHG Group monthly RevPAR, Occupancy and ADR (vs 2019) Americas monthly RevPAR, Occupancy and ADR (vs 2019) 2021 2022 2023 2021 2022 2023 +4 +8 +9 +10 +9 +11 +13 +11+15 +11 +11 +17 +12 +13+13 +11 +18+13+13+16 Jan Mar May Jul Sep Nov Jan Mar May +1 +4
Slide 102: Group RevPAR performance has now normalised
On a YoY basis, after lapping Omicron-impacted comparators in H1, Group RevPAR performance has now normalised Group monthly RevPAR, Occupancy and ADR (vs 2022) 40.8 33.5 27.2 21.7 17.0 15.0 9.9 13.3 8.7 11.6 9.5 10.4 6.3 8.7 5.3 7.2 6.6 4.9 3.1 4.5 4.7 10.0 11.3 10.0 3.1 8.6 6.9 2.7 1.0 5.4 4.3 3.8
Slide 103: Leisure, Business and Groups demand recovery
Leisure strength of demand has sustained; Business and Groups demand recovery continued and is now complete IHG total estate Leisure demand performance (vs 2019) 2020 2021 2022 2023 Apr Jul Oct Apr Jul Oct Apr Jul Oct Apr Jul Oct Dec +17% Jan Jan Jan Jan +14% +13% Room Nights +0% ADR FY22 vs FY19 FY
Slide 104: Fee margin expansion +340bps YoY
Fee margin1 expansion +340bps YoY, driven by the completed recovery in EMEAA and Greater China TOTAL IHG Americas FY 2023 59.3% FY 2023 82.2% FY 2022 55.9% FY 2022 84.3% FY 2021 49.5% FY 2021 82.2% FY 2020 34.1% (prior to adoption of IFRS 17) FY 2020 70.7% FY 2019 54.1% (prior to adoption of IFRS 17
Slide 105: Net system size growth of +3.8%
Net system size growth of +3.8%; delivered through strength of brands and enterprise platform Net System Size Growth (FY) Openings mix +9.8% +9.2% +7.7% +7.7% New build Conversion 61% 39% +5.3% +3.8% Net system size growth +2.0% Gross additions +0.8% AMER EMEAA Greater China IHG Total Removals -1.2%
Slide 106: Q4 signings performance; FY signings up +26%
Q4 had the third strongest quarterly signings performance on record; FY signings up +26%1, supporting future system growth potential Pipeline at Q4 Signings FY Signings 31 December 2023 (rooms) (rooms) (rooms) Americas Americas 9.9k 28.3k 109.2k +26%1 YoY increase in FY signings driven by EMEAA conv
Slide 107: Americas highlights
Americas highlights Trading performance – RevPAR up +7.0% vs 2022 (up +13.0% vs 2019) with occupancy of 68.2% up +1.5%pts and rate +4.6% higher – Q4 RevPAR up +1.5% vs 2022 (up +14.0% vs 2019), with occupancy of 63.9% down -1.0%pt and rate +3.1% higher – Fee margin1 82.2% (84.3% in 2022, 77.7% in 20
Slide 108: EMEAA highlights
EMEAA highlights Trading performance – RevPAR up +23.7% vs 2022 (up +15.4% vs 2019) with occupancy of 70.4% up +7.9%pts and rate +9.8% higher – Q4 RevPAR up +7.0% vs 2022 (up +18.5% vs 2019), with occupancy of 71.5% up +2.2%pts and rate +3.7% higher – Fee margin1 60.5% (52.7% in 2022, 58.6% in 2019)
Slide 109: Greater China highlights
Greater China highlights Trading performance – RevPAR up +71.7% vs 2022 (up +0.7% vs 2019) with occupancy of 61.1% up +19.1%pts and rate +18.0% higher – Q4 RevPAR up +72.0% vs 2022 (down -0.6% vs 2019), with occupancy of 59.5% up +17.6%pts and rate +21.1% higher – Fee margin1 59.6% (26.4% in 2022, 5
Slide 110: Targeted capital expenditure to drive growth
Targeted capital expenditure to drive growth $m FY 2023 FY 2022 Key money and maintenance capex Key money 1 (101) (64) – Key money: used to secure hotel signings Maintenance capex (38) (44) – Maintenance: relates to owned, leased and Total (139) (108) managed lease hotels and corporate infrastructur
Slide 111: Cash flow
Cash flow FY 2023 (29) 129% conversion of adjusted ($m) +102 Exceptional earnings into FCF +67 +125 Working cash flow items (326) capital & other 1,086 System movements3 Depreciation Fund2 1,019 (46) and Interest (139) Amortisation and tax (53) Maintenance 819 capex and key Gross System Fund Net mon
Slide 112: Capital allocation approach; further $800m buyback announced for 2024
Continuing our capital allocation approach to routinely return surplus capital to shareholders – further $800m buyback announced for 2024 #1: Invest in the business #2: Sustainably grow the #3: Return surplus funds to drive growth ordinary dividend to shareholders Objective of maintaining an investm
Slide 113: Modelling considerations
Modelling considerations FY24 and near-term: Interest expense Tax rate Capital expenditure Adjusted interest expense1 is expected to Effective adjusted tax rate1 is expected to Key money and maintenance capex in total expected to be increase in FY24 to $155m-$170m be ~27% in FY24 and for the near te
Slide 114: Elie Maalouf, Chief Executive Officer
Elie Maalouf Chief Executive Officer C20
Slide 115: Conclusions
Conclusions A well-invested, high-performing business that drives growth and shareholder value – RevPAR growth +16.1% YoY, +10.9% vs 2019 – Gross system growth of +5.3% YoY; net system growth of +3.8%; pipeline growth of +5.5% – Operating profit from reportable segments1 +23% to $1,019m; adjusted EP
Slide 116: Appendices 2023 Full Year Results
Appendices 2023 Full Year Results C22
Slide 117: Revenue and operating profit breakdown
Revenue and operating profit breakdown Results from reportable segments FY 2023 FY 2022 ‘23 vs ’22 ‘23 vs ‘22 $ change % change Franchise and base management fees $1,304m $1,147m $157m 14% Incentive management fees $168m $103m $65m 63% Central revenue $200m $184m $16m 9% Revenue from fee business $1
Slide 118: Revenue growth rate analysis FY 2023 vs FY 2022
Revenue growth rate analysis FY 2023 vs FY 2022 RevPAR growth % Net rooms growth % Underlying Fee Revenue1 Comparable Total YoY Available Growth % Comments Hotels that have All hotels that were traded in all open in FY 2023 Aggregate number months being and FY 2022 (incl of rooms available compared
Slide 119: Revenue and operating profit 2021-2023 (post-IFRS 17)
Revenue and operating profit 2021-2023 (post-IFRS 17) Total Revenue Total Operating Profit¹ Actual US$ FY 2023 FY 2022 FY 2021 FY 2023 FY 2022 FY 2021 Franchise and Base Management Fees 936 861 683 - - - Incentive Management Fees 21 18 8 - - - Fee Business 957 879 691 787 741 568 Owned, Leased & Man
Slide 120: Revenue and operating profit 2019-2022 (pre-IFRS 17)
Revenue and operating profit 2019-2022 (pre-IFRS 17) Total Revenue Total Operating Profit¹ Actual US$ FY2022 FY2021 FY2020 FY2019 FY2022 FY2021 FY2020 FY2019 Franchise and Base Management Fees 861 683 452 840 - - - - Incentive Management Fees 18 8 5 13 - - - - Fee Business 879 691 457 853 741 568 32
Slide 121: FY 2023 underlying fee business revenue and operating profit reconciliations
FY 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 957 787 354 214 161 96 200 (
Slide 122: FY 2022 underlying fee business revenue and operating profit reconciliations
FY 2022 underlying fee business revenue and operating profit non-GAAP reconciliations Americas EMEAA Greater China Central Total IHG Operating Operating Operating Operating Operating $m Revenue Profit Revenue Profit Revenue Profit Revenue Loss Revenue Profit Fee business 879 741 284 153 87 23 184 (1
Slide 123: Net system size growth delivered through strength of brands
Net system size growth delivered through strength of brands and enterprise platform Net System Size Growth TOTAL IHG Americas (13.3) (6.3) 47.9 946.2 10.4 519.6 911.6 515.5 FY 2022 Openings Exits FY 2023 FY 2022 Openings Exits FY 2023 Europe, Middle East, Asia and Africa Greater China (3.6) (3.5) 24
Slide 124: Ordinary shares
Ordinary shares Number of shares (m) 2023 2022 Opening balance at 1 January 183 188 Closing balance at 31 December 172 183 Closing balance excluding treasury and ESOT shares1 164 175 Basic weighted average shares (excluding treasury and ESOT shares) 169 181 Dilutive potential ordinary shares1 1 1 Ba
Slide 125: Currency impacts
Currency impacts ($m) Reported FY22 at Reported FY23 at Revenue1 FY22 FY23 AER2 Var. FY23 FY22 AER3 Var. Americas 1,005 1,007 (2) 1,105 1,105 - EMEAA 552 554 (2) 677 679 (2) Greater China 87 82 5 161 169 (8) Central Overheads4 199 199 - 221 222 (1) Total IHG 1,843 1,842 1 2,164 2,175 (11) Operating
Slide 126: Asset light, mainly franchised, and geographically diverse
Asset light, mainly franchised, and geographically diverse System size and pipeline Strong competitive position in an industry where System size (rooms): Luxury branded players are gaining 2% <1% 11% 179k 520k market share 28% 70% 19% 55% Upscale/ Upper Midscale/ With a larger share Upscale Upper of
Slide 127: Strong portfolio of 19 preferred brands across chain scales
Strong portfolio of 19 preferred brands across chain scales Having added nine brands to our portfolio since 2015 LUXURY & PREMIUM ESSENTIALS SUITES EXCLUSIVE LIFESTYLE PARTNERS SYSTEM SYSTEM SYSTEM SYSTEM SYSTEM 14% 15% 61% 8% 2% PIPELINE PIPELINE PIPELINE PIPELINE PIPELINE 22% 19% 46% 12% 1% Note:
Slide 128: Luxury & Lifestyle
Luxury & Lifestyle Driving high-value growth through an industry-leading collection of brands; at FY23, 509 properties in the system; pipeline of 357 more represents future rooms growth of ~50% Six Senses Regent InterContinental In 5 years In 6 years World’s largest luxury hotel brand since acquisit
Slide 129: Luxury & Lifestyle
Luxury & Lifestyle Driving high-value growth through an industry-leading collection of brands; at FY23, 509 properties in the system; pipeline of 357 more represents future rooms growth of ~50% Vignette Collection Kimpton Hotel Indigo First 16 hotels now open, The boutique luxury lifestyle brand Ope
Slide 130: Premium
Premium Uniquely tailored to target upscale customer segments; at FY23, 524 properties in the system; pipeline of 258 more represents future rooms growth of ~41% voco HUALUXE Crowne Plaza EVEN Our conversion-focused Designed specifically with the Our refreshed premium brand; The premium wellness-foc
Slide 131: Essentials
Essentials Continued opportunity for growth in our core segment; at FY23, 4.4k properties in the system; pipeline of 1.0k more represents future rooms growth of ~24% Holiday Inn Express Holiday Inn Garner avid The world’s largest hotel Refreshed estate with an Our new midscale conversion >200 open a
Slide 132: Suites
Suites An expanding portfolio of extended stay properties across chain scales; at FY23, 733 properties in the system; pipeline of 358 more represents future rooms growth of ~45% Staybridge Atwell Candlewood Holiday Inn Suites Suites Suites Club Vacations Our premium extended stay Our newest extended
Slide 133: Exclusive Partners
Exclusive Partners Demonstrating the strength of the IHG enterprise platform and desire for strategic partners to join our system Iberostar Beachfront Resorts Substantially strengthens our resort and all-inclusive presence Iberostar Selection Hacienda Dominicus – Dominican Rep. System Size: 17,600 r
Slide 134: Cautionary note regarding forward-looking statements
Cautionary note regarding forward-looking statements This presentation contains certain forward-looking statements as defined under United States law (Section 21E of the Securities Exchange Act of 1934) and otherwise. These forward-looking statements can be identified by the fact that they do not re
InterContinental Hotels Group — Investor Presentation (May 2024) on 6ix