InterContinental Hotels Group PLC · LSE:IHG
InterContinental Hotels — Investor Presentation (November 2012)
100 slides from InterContinental Hotels's investor presentation, November 2012
Slide 1: Great hotels guests love
Great hotels suestslove November 2012
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Slide 3: IHG's commanding scale
IHG’s commanding scale 4,573 hotels Almost 100 countries Top 3 position in 345,000 people 672,252 rooms and territories 13 of 20 top markets* 157m room nights 1,042 pipeline hotels 2011: $20.2bn +$1bn booked in 2011 165,945 pipeline rooms gross revenues system funds Source: IHG 30 Sept 2012 *system
Slide 4: IHG's broad geographic distribution
IHG’s broad geographic distribution YTD 2012 Operating Profit* YTD 2012 Open Rooms YTD 2012 Pipeline Rooms 9% 9% 11% 9% 31% 44% 15% 15% 65% 67% 16% 9% Americas Europe AMEA Greater China (US, Canada, (UK & Ireland, (Asia, (China, Hong Kong, Latin America Continental Middle East Macau, Taiwan) Caribbe
Slide 5: IHG's brand distribution
IHG’s brand distribution Open Rooms Pipeline Rooms 672,252 165,945 1% 2% 3% 4% 4% 8% 10% 3% 4% 5% 16% 19% 30% 31% 34% 26% InterContinental Crowne Plaza Holiday Inn Holiday Inn Express Staybridge Suites Candlewood Suites Indigo HUALUXE EVEN Other Source : IHG 30 September 2012 5
Slide 6: Good results in Q3 2012 - delivering high quality growth
Good results in Q3 2012 - delivering high quality growth • Preferred brands drive RevPAR up 5.6% Q3 YTD – Q3 RevPAR up 3.9%, with rate up 3.4% – 9th successive quarter of rate growth • Substantial growth opportunities globally – Strengthening existing brands, two new brands launched • Focus on effic
Slide 7: Progressive increase in fee-based profit margins
Progressive increase in fee-based profit margins • Fee-based operating margin¹ up 2.3%pts – Continuing scale benefits plus some benefit from phasing Fee based¹ operating profit margin 42.9% 39.7% 40.6% 36.0% 35.9% H1 2008 H1 2009 H1 2010 H1 2011 H1 2012 • Scale efficiencies deliver reinvestment and
Slide 8: High quality growth - driving market share
High quality growth - driving market share • Net system growth – up 2.1% year on year – 26k rooms added – 12k rooms removed – Limited hotel debt finance – Continue to expect 2% - 3% net system growth in 2012 • Industry leading, high quality pipeline – 35k rooms signed – >50% of pipeline outside the
Slide 9: Harnessing the power of free cash flow
Harnessing the power of free cash flow Free cash Asset disposals flow Investment grade credit rating Growth capital Sustainable ordinary Capital returns investment dividend 9
Slide 10: Growth capital investment - methodology
Growth capital investment - methodology • Continue to fund through recycling • Returns above risk-adjusted WACC by year 3 • Drives additional fee revenue stream • Accelerates growth • Directed towards strategic priorities: Accelerates scale key market • China JV to establish Holiday Inn 1. $10m pene
Slide 11: Capital returns - track record
Capital returns - track record • $1bn of returns, comprising – $500m special dividend with share consolidation – paid 22 Oct – $500m share buyback – to commence in Q4 • Maintains strong track record – $8.9bn total returns since demerger – Includes c.$1.3bn of ordinary dividends – Cash generative bus
Slide 12: Strong performance to date - IHG's journey
Strong performance to date - IHG’s journey 2003-2007 2008-2010 2011 onwards Restructuring Recession & High quality recovery growth • Asset sales • Proved resilience • Organisation change • Holiday Inn relaunch • Cut costs • Maintained dividend • Exceeded rooms target 12
Slide 13: IHG's priorities for high quality growth
IHG’s priorities for high quality growth “Delivering Great Hotels Guests Love” Priorities for high quality growth BEST IN PREFERRED TALENTED CLASS BRANDS PEOPLE DELIVERY RESPONSIBLE BUSINESS PRACTICE INVEST IN GROWTH GROW MARKET SHARE SUSTAINABLE MARGIN GROWTH 13
Slide 14: Strengthen established brands - significant value created
Strengthen established brands - significant value created • Driving financial performance – RevPAR premium up 6%pts in 5 yrs • Driving quality system growth – 2% system size growth, signings increasing – Average hotel age reduced to 10yrs • Driving guest satisfaction – JD Power Award – "Highest in G
Slide 15: Strengthen established brands - Crowne Plaza repositioning
Strengthen established brands - Crowne Plaza repositioning • Globally significant brand – $3.9bn* brand (19% of IHG’s gross revenues) – Fastest growing upscale brand in Asia Pacific – Performance gap Americas vs. Rest of World • Significant opportunity to reposition brand Phase 2012 2013 2014 2015 1
Slide 16: Develop new brands - rationale for HUALUXE and EVEN
Develop new brands - rationale for HUALUXE and EVEN • Unmet need for 5-star international ‘Chinese’ hotel • Unmet consumer need for mainstream wellness hotel GUEST • Growth in travel – by 2015: product • 3.3bn domestic travellers • Targets 17m US travellers • 100m outbound trips • Strong owner deman
Slide 17: Well positioned for continued high quality growth
Well positioned for continued high quality growth • Confident outlook, despite short term uncertainties – Provisional October RevPAR up 4.8% • Americas 6.1%, Europe 2.3%, AMEA 3.4%, Greater China 0.3% – Solid positive trends in booking pace and travel intentions – Continued favourable supply and dem
Slide 18: Harnessing the power of free cash flow
Harnessing the power of free cash flow Hotel Indigo, Shanghai on the Bund 18
Slide 19: Harnessing the power of free cash flow
Harnessing the power of free cash flow Free cash Asset disposals flow Investment grade credit rating Growth capital Sustainable ordinary Capital returns investment dividend 19
Slide 20: Growth capital investment - driving future market share gains
Growth capital investment - driving future market share gains • Continue to fund growth through capital recycling – From 2007 – 2011: • $625m cash released from disposals • $333m of growth capital expenditure • Medium term growth capital expenditure $100m - $200m per annum – Modest H1 growth capital
Slide 21: Growth capital investment - funded by recycling
Growth capital investment - funded by recycling • $625m from cash disposals from 2007 - 2011 • $333m on growth capital expenditure 2007 - 2011 300 291 250 186 227 200 211 150 130 157 100 135 109 $m 50 86 0 35 -9 -38 -50 -102 -91 -93 -100 -150 2007 2008 2009 2010 2011 Disposal receipts Growth capital
Slide 22: Growth capital investment - methodology
Growth capital investment - methodology • Continue to fund through recycling • Returns above risk-adjusted WACC by year 3 • Drives additional fee revenue stream • Accelerates growth • Directed towards strategic priorities: Accelerates scale key market • China JV to establish Holiday Inn 1. $10m pene
Slide 23: Growth capital investment - track record of high returns
Growth capital investment - track record of high returns H1’12 H1’12 Original Current 2011 Open & Open & Type of spend gross capital Gross Pipeline Pipeline Investment invested revenues* hotels rooms Brand 2003 $17m $17m $508m 375 35,246 acquisition 1998- Brand $228m - 2002 launch $576m 261 28,425 2
Slide 24: Sustainable ordinary dividend growth
Sustainable ordinary dividend growth - 2012 interim dividend rebalanced • 31%¹ interim dividend growth to 21.0¢ • Rebalance towards one third: two thirds weight for interim and final dividends • Dividend maintained through the downturn • c.$1.3bn paid in ordinary dividends since 2003 Ordinary divide
Slide 25: Capital returns - track record
Capital returns - track record • $1bn of returns, comprising – $500m special dividend with share consolidation – paid 22 Oct – $500m share buyback – to commence in Q4 • Maintains strong track record – $8.9bn total returns since demerger – Includes c.$1.3bn of ordinary dividends – Cash generative bus
Slide 26: Capital returns - track record
Capital returns - track record Quantum Year Mode £m $m 2004 Special dividend 501 2004 Share buyback 250 2005 Capital return 996 2006 Share buyback 250 2006 Special dividend 497 2007 Share buyback 250 2007 Special dividend 709 2007 Share buyback 120 £3,573m $6,636m 2012 Special dividend $500m 2012 -
Slide 27: Clearly executed asset light strategy
Clearly executed asset light strategy • Reduction in asset intensity of the business $m i. Asset disposals including Britvic since demerger 6,365 ii. Net book value¹ of remaining assets at 30 September 2012 - InterContinental New York Barclay 220 - InterContinental London Park Lane (start disposal 2
Slide 28: Current trading and outlook
Current trading and outlook Strategy • Q1 RevPAR up 7.0% with rate up 3.3% – Americas +7.7%; Europe +2.6%; AMEA +6.9%; Greater China +11.9% – April Group RevPAR up 6.1%, with rate up 4.2% • IHG outlook – Booking pace up across all regions – 2012 corporate rates: mid-single digit growth – Visibility
Slide 29: IHG's growth strategy to create sustainable value
IHG’s growth strategy to create sustainable value Making best use of our scale to build and grow preferred hotel brands for guests and owners in high value markets “Where we play” “How we win” Markets Preferred brands Segments Best revenue delivery systems Model Aligned and engaged organisation Room
Slide 30: How we win
How we win Hotel Indigo, San Diego Del Mar 30
Slide 31: Best in class delivery - the power of IHG's system
Best in class delivery - the power of IHG’s system Scale Brand Portfolio Priority Club Web / mobile Rewards >4,500 hotels 11 preferred 11 languages 153m guests 69m members hotel brands 8 language apps annually Revenue Food & Management Beverage 69% room >$4.6bn of F&B World class revenue delivery re
Slide 32: IHG's sales and marketing system - funding the system
IHG’s sales and marketing system - funding the system All hotels contribute c.3.0% of rooms revenue c.4.75% total Other fees for (service contribution fee) + PCR bill + value add services Advertising & Marketing Distribution Priority Club Rewards (c.25%) (Reservations and Channels) (c.40%) (c.35%) $
Slide 33: Best in class delivery - 69% revenue delivery to IHG hotels
Best in class delivery - 69% revenue delivery to IHG hotels $12.0bn $16.4bn 2% 6% 11% 12% 14% 11% 14% 21% Online Travel Agency 12% Global Distribution System 19% Call centres PCR Hotel Direct 47% IHG Websites 31% Hotel Direct 2005 2011 Note: 2010 constant USD rates 33
Slide 34: Best in class delivery - Priority Club Rewards
Best in class delivery - Priority Club Rewards • PCR members account for 42% of revenue in 2011 • Valuable guests - pay more, stay more, cost less • Largest hotel loyalty scheme – 69m members • Next generation PCR launched in 2011 – Greater customer flexibility, showcase IHG brand 34
Slide 35: Best in class delivery - industry leading web/mobile strategy
Best in class delivery - industry leading web/ mobile strategy Web – $3bn of revenues in 2011 – top 10 online US retailer – 11 languages supported – Double digit rate premium – Industry leading “best price guarantee” launched Sept 2011 – Founding partner of Roomkey.com launched January 2012 Mobile –
Slide 36: Best in class delivery - growing share through sales innovations
Best in class delivery - growing share through sales innovations Dynamic pricing – 41% of negotiated corporate rates (FY’11: 34%) – Targeting 44% by end 2012 – Q3’12: 14%pt increase in revenue vs. fixed rate accounts Strategic account management – Top 25 strategic accounts – 1%pt share gain in 2011
Slide 37: Best in class delivery - world class revenue management tools
Best in class delivery - world class revenue management tools Price Optimisation • Industry first, recognized by several awards Inventory • Automated rate calculations • Used in >2,600 hotels Yield Pricing Manage • Average 4.3% RevPAR uplift -ment 37
Slide 38: Aligned & engaged organisation - delivering consistent brand experiences
Aligned & engaged organisation - delivering consistent brand experiences • Industry leading employee engagement – 2% point improvement in engagement year on year – 93% of employees proud to work for IHG – One of “Fortune’s 100 Best Companies to Work for” • Recruiting, training and retaining the righ
Slide 39: Preferred Brands
Preferred Brands InterContinental Resort Jiuzhai Paradise 39
Slide 40: Participating where IHG creates value
Participating where IHG creates value Criteria for success % branded Segment IHG participation? revenues Scale System Branded benefits delivery value Super Luxury 4% Luxury/ Upper 34% Upscale Upscale 27% Midscale 28% Economy 7% Some Source: IHG analysis; revenues global STR average 07-12 ,12 month a
Slide 41: IHG has fewer brands, with a narrower focus
IHG has fewer brands, with a narrower focus Open rooms 672k² 648k² 638k¹ 334k² 529¹ 497k² Pipeline rooms 166k² 120k² 155k¹ 95k² 81k¹ 360 hotels² 87% 71% 100% 56% 97% 67% Segment focus upscale - upscale - upscale - economy- economy- midscale luxury luxury luxury midscale midscale 62% 83% 84% 58% 51%
Slide 42: IHG's portfolio of preferred brands - target guest positioning
IHG’s portfolio of preferred brands - target guest positioning Brand Positioning Tier Product Brand Launch IHG Involvement “Championing the CORE1 real you” Upper Acquired 1988 - Full Service 1952 1990 Unpretentious, comfor Midscale table, reliable “Championing the real you” Upper Select Service 1991
Slide 43: Portfolio of preferred brands
Portfolio of preferred brands Brand Positioning Tier Product Brand Launch IHG Involvement “Refreshingly local” Neighbourhood Upscale Full Service 2004 Launched story, welcoming, unexpected Chinese business travellers Upscale Full Service 2012 Launched Tradition, rejuvenation, stat us and familiar sp
Slide 44: Strengthen existing brands - insight behind the relaunch
Strengthen existing brands - insight behind the relaunch Emotional Differentiation Consistency Connection $1bn Holiday Inn relaunch 1. 2. 3. 4. 5. Remove Add High 100% Complete Install poorer Quality New Quality Service Hallmarks hotels Hotels Compliance Training 44
Slide 45: Strengthen established brands - significant value created
Strengthen established brands - significant value created • Driving financial performance – RevPAR premium up 6%pts in 5 yrs • Driving quality system growth – 2% system size growth, signings increasing – Average hotel age reduced to 10yrs • Driving guest satisfaction – JD Power Award – "Highest in G
Slide 46: Strengthen existing brands - entire estate relaunched
Strengthen existing brands - entire estate Entire relaunched estate refreshed Global Holiday Inn brand family rooms 2003 – H1’12 400 66 Number of rooms (‘000s) 300 197 150 200 428 408 100 211 0 Closing Exits Existing New build Conversion Closing system size hotels additions additions system size Dec
Slide 47: Strengthen established brands - delivering enhanced brand awareness
Strengthen established brands - delivering enhanced brand awareness Consumer recognition • JD Power award winner – JD Power Award – Holiday Inn has received the J.D. Power and Associates Award for "Highest in Guest Satisfaction among Midscale Full Service Hotel Chains" both in 2011 and 2012 * Enhanc
Slide 48: Strengthen established brands - Crowne Plaza repositioning
Strengthen established brands - Crowne Plaza repositioning • Globally significant brand – $3.9bn* brand (19% of IHG’s gross revenues) – Fastest growing upscale brand in Asia Pacific – Performance gap Americas vs. Rest of World • Significant opportunity to reposition brand Phase 2012 2013 2014 2015 1
Slide 49: Strengthen established brands - global growth
Strengthen established brands - global growth Entire estate refreshed Global InterContinental room Global InterContinental room pipeline 2006- H1’12 system 2006- H1 ‘12 4 6 (10) 17 Number of rooms (‘000s) Number of rooms (‘000s) (17) 29 57 (9) 50 13 16 Closing Signings Openings Attrition Closing Clo
Slide 50: Strengthen established brands - Strong presence outside the Americas
Strengthen established brands - Strong presence outside the Americas Rooms System Pipeline System 6% 17% 5% 31% 27% 62% 36% 16% Americas Europe AMEA Greater China As at 30 September 2012 50
Slide 51: Develop New Brands
Develop New Brands Hotel Indigo, San Diego Del Mar 51
Slide 52: Develop new brands - the hotel brand development cycle
Develop new brands - the hotel brand development cycle 3 Brand maturity Number of hotels 2 Accelerate growth Build distribution & awareness 1 Time from brand launch 52
Slide 53: Develop new brands - rationale for new hotel brands
Develop new brands - rationale for new hotel brands DEMAND SUPPLY • Consumer needs are evolving and • Hotel owners seek to maximise multiplying market opportunities • Sophisticated and scalable revenue • Natural market limits on single generation systems brand density Grow market share through multi
Slide 54: Develop new brands - IHG's approach to new brand development
Develop new brands - IHG’s approach to new brand development GUEST • Bespoke market research • Future trends identification • Differentiated experience OWNER IHG • Brand management expertise • Create owner/ lender momentum • Growth capital expenditure • Deliver great ROI • Revenue generation systems
Slide 55: Develop new brands - rationale for HUALUXE
Develop new brands - rationale for HUALUXE • Unmet need for 5-star international ‘Chinese’ hotel GUEST • Growth in travel – by 2015: • 3.3bn domestic travellers • 100m outbound trips • Strong owner demand • 12 signings since launch, 14 OWNER LOIs • 8 signings in Q3 • China market expertise • Potenti
Slide 56: Develop new brands - rationale for EVEN
Develop new brands - rationale for EVEN • Unmet consumer need for mainstream wellness hotel GUEST product • Targets 17m US travellers • Good conversion brand OWNER • Strong initial owner interest • Mainstream hotel expertise • IHG will invest up to $150m capex over 3 years IHG • 100 signings expecte
Slide 57: Develop new brands - proven success
Develop new brands - proven success • Proven success with Hotel Indigo Growth in system and pipeline – Americas launch 2004, global roll-out 2008 59 51 – 48 hotels open, 51 in the pipeline 56 • 37 Americas, 11 Rest of World • YTD‘12: 11 openings, 15 signings 39 48 3 22 2004 2008 2011 Q3 2012 • Resea
Slide 58: Significant future contribution from new brands
Significant future contribution from new brands • IHG’s gross revenues* in 2011 totalled $20.2bn • 14% of H1’12 pipeline is Hotel Indigo, Staybridge Suites, Candlewood Suites and HUALUXE Hotels & Resorts Expected proportion of IHG’s gross revenues* from Hotel Indigo, Candlewood Suites, Staybridge Su
Slide 59: Where we play
Where we play Holiday Inn, Macau 59
Slide 60: Model - why focus on managing and franchising?
Model - why focus on managing and franchising? • Low capital expenditure requirements for IHG • Faster unit growth and organisational focus • Flexibility to operate in more markets • Local partner expertise • More resilient fee stream • High margin, scalable cost model 60
Slide 61: High performance business model
High performance business model Preferred BRANDS Reinvestment RevPAR out-performance Low capital intensity Scaleable cost base Rising margins Operating Owner efficiencies ROI More deals/ more scale 61
Slide 62: Top 20 markets account for 83% of global industry
Top 20 markets account for 83% of global industry- IHG has leadership positions in 13 % of ‘11 % of ‘11 IHG IHG global global Rank Country Leadership Rank Country Leadership accom. accom. position position spend spend 1 United States 24% 11 Middle East 2% 2 Italy 8% 12 Australia 2% 3 Japan 8% 13 Aus
Slide 63: Favourable lodging market - a significant opportunity
Favourable lodging market - a significant opportunity • Global hotel industry revenues total $430bn¹ – IHG has a 5% share • By 2030 global industry revenues forecast to double – >50% of growth will come from US, China & India • Branded share continuing to grow Share of branded rooms Global industry
Slide 64: Favourable lodging market - growing global middle class
Favourable lodging market - growing global middle class 2010 - 2030 middle class population growth by economy type COUNTRY CAGR (‘10-30) 1.4bn Developed 1% BRIC 7% 1.1bn Emerging 4% 682m 2010 2020 2030 Source: Oxford Economics Market Strength Index Database 2011 64
Slide 65: Favourable lodging market - growing airline capacity and demand
Favourable lodging market - growing airline capacity and demand 2006 - 2016 airline people capacity and people carried Airline Capacity Airline Demand +4% CAGR +2% CAGR 5.6bn 4.7bn 4.2bn 4.1bn 3.1bn 3.4bn 2006 2011 2016 Source: EuroMonitor Passport Data 2011 65
Slide 66: Favourable lodging market - ageing developed world population
Favourable lodging market - ageing developed world population Developing World Developed 30 29% 28% 27% 25% 25 % Population > 65 20 15 10 5 0 2011 2014 2017 2020 Source: UN World Population Database 2011 66
Slide 67: Favourable lodging market - new sources of international tourist travel
Favourable lodging market - new sources of international tourist travel International Tourist Arrivals (1950-2020) 1,400 1,300 Actual Forecast 1,200 1,100 1,000 900 million 800 700 600 500 400 300 200 100 0 1960 1970 1980 1990 2000 2010 2020 South Asia Middle East Africa East Asia / Pacific Americas
Slide 68: Favourable lodging market - growing internet penetration
Favourable lodging market - growing internet penetration Internet Access >80% of population 60-80% of population 40-60-% of population 20-40% of population < 20% of population 2011: 2.1bn users 2020: 3.0bn users Source: Internet World Stats Note: July 2011 data 68
Slide 69: The China Opportunity
The China Opportunity Holiday Inn Express Hangzhou Grand Canal 69
Slide 70: IHG is well established as the leading global hotel operator
IHG is well established as the leading global hotel operator IHG System Size and Pipeline by Brand (‘000 rooms) 120 110 100 90 Pipeline 80 70 60 50 40 30 20 10 0 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Q3'12 Source: IHG 70
Slide 71: IHG will continue to be the leading global hotel operator in China
IHG will continue to be the leading global hotel operator in China Greater China system & pipeline 120 100 System Pipeline 80 No of rooms ‘000 60 40 20 0 IHG Wyndham Accor Starwood Marriott Shangri La Hyatt Hilton Source: IHG 30 September 2012; other data is STR Global 30 September 2012 71
Slide 72: Industry leading upscale & midscale distribution
Industry leading upscale & midscale distribution 100 80 Pipeline 57% No of rooms ‘000 60 86% 40 System 20 0 Source: IHG 30 September 2012 72
Slide 73: Sustainable growth strategy - high quality growth
Sustainable growth strategy – high quality growth Aligned with “go west” • Clear, focused development strategy Targeting emerging middle development plans class – Tier 2 and Tier 3 cities • Presence* in 94 cities including – All four tier one cities Crowne Plaza Chongqing – 36 out of 38 tier two cit
Slide 74: Unrivalled portfolio in Greater China - Open system
Unrivalled portfolio in Greater China - Open system Total System System System SUIFENHE Rooms Hotels HARBIN MUDANJIANG 9,517 23 SHENYANG 20,553 57 TANGSHAN DANDONG 20,579 63 QINGHUANGDAO HOHHOT BEIJING DALIAN DATONG 9,154 36 ORDOS TIANJIN SHIJIAZHUANG YANTAI JINAN QINGDAO 312 2 YINCHUAN ZHENGZHOU NA
Slide 75: Unrivalled portfolio in Greater China - development pipeline
Unrivalled portfolio in Greater China - development pipeline Pipeline Pipeline DAQING Pipeline Rooms Hotels HARBIN JILIN 10,182 23 CHANGCHUN CHANGBAISHAN SHENYANG 18,784 51 ANSHAN 11,302 38 BEIJING PANJIN 6,524 31 BAOTOU TAIYUAN BAODING ORDOS WEIHAI TIANJIN ZHENGZHOUJINAN QINGDAO 528 5 LUOYANG YANCH
Slide 76: China's hotel market is expected to overtake the U.S.
China’s hotel market is expected to overtake the U.S. by 2025 Projected room supply for China Million rooms 10 9.1 9 China 7.5 8 7.8 USA 7 6.1 6.7 6 4.9 5 By 2039 China’s room supply 4 will be: 3 • 4x the size it is today 2 2.3 • Almost 2x the size of the US 1 market today 0 2005 2015 2025 2035 2039
Slide 77: Luxury / upper upscale / upscale is growing fast while midscale remains sizeable
Luxury / upper upscale / upscale is growing fast while midscale remains sizeable 2010 2020 (likely) 2039 (likely) No. of rooms No. of rooms No. of rooms = 2.3m = 4.8m = 9.1m Luxury / Upper Upscale / Upscale Midscale Economy Source: NBS; China Economy Hotel Survey, IHG 77
Slide 78: Significant opportunity for upscale / midscale branded players
Significant opportunity for upscale / midscale branded players China branded¹ rooms share growth Other markets branded¹ rooms share 2010 2030 US = 70% Branded 36% 48% UK = 60% Continental Europe = 40% Unbranded IHG share of China branded¹ rooms H1 2012 10% IHG share China branded rooms All China bra
Slide 79: Our China share potential
Our China share potential China industry rooms growth IHG illustrative rooms potential c.28% c.48% Maintain c.10% of branded share branded¹ branded¹ 8 7.5m 400 IHG Greater China rooms(‘000) 7 350 China hotel rooms (m) 6 300 3.6m 5 250 4 200 360k 3 150 2.1m 2 3.9m 100 0.6m 1 50 1.5m 55.2k 0 0 2011 20
Slide 80: Why IHG is winning in China
Why IHG is winning in China • Well established as the leading international hotel operator • Broad portfolio of strong brands in key locations • Longest established loyalty programme • The deepest relationships with key strategic partners • The most focused development strategy • Localisation of bra
Slide 81: IHG in the Middle East
IHG in the Middle East InterContinental and Crowne Plaza Dubai Festival City 81
Slide 82: IHG is well positioned in the right locations
IHG is well positioned in the right locations Near East Syria Gulf Total System Rooms Hotels Rooms Hotels & Pipeline Egypt Libya 9,033 28 1,921 7 5,082 19 1,980 5 Saudi Arabia 4,031 20 1,843 7 Oman Saudi 1,263 5 304 2 728 6 225 1 Other 291 2 TOTAL 20,004 76 6,697 26 Note: IHG manages Israel as part
Slide 83: IHG's India prospects
IHG’s India prospects Crowne Plaza New Delhi Rohini, India 83
Slide 84: IHG is building on a leadership position
IHG is building on a leadership position System: 1,893 rooms (11 hotels) – In final stages of eliminating sub-standard properties Current pipeline: 8,052 rooms (38 hotels) – 2nd largest international branded pipeline* – Duet JV – 19 Holiday Inn Express hotels by 2016 Almost 50 years’ experience – De
Slide 85: Appendices
Appendices Holiday Inn, Stratford 85
Slide 86: Hotel franchising - RevPAR drives 9% royalty fee growth
Hotel franchising - RevPAR drives 9% royalty fee growth Total gross revenue $bn¹ (rooms only) Group Royalty drivers H1‘12 vs. H1’11 H1 2012 5.8 Average rooms 1% H1 2011 5.4 RevPAR 6.3% H1 2010 5 Royalty fees 9% Franchise Fees $m Franchise EBIT $m (margin %) H1 2012 313 H1 2012 263 (84%) H1 2011 295
Slide 87: Hotel management - strong margin growth momentum
Hotel management - strong margin growth momentum Total gross revenue $bn¹ (total hotel) Management Fees² $m H1 2012 4.2 H1 2012 176 H1 2011 3.9 H1 2011 166 H1 2010 3.6 H1 2010 152 Managed EBIT² $m (margin %) Managed lease revenue and EBIT $m H1 2012 101 (57%) $m H1 2012 H1 2011 Americas Revenue 19 3
Slide 88: Owned & leased - rate drives margin growth
Owned & leased - rate drives margin growth O&L revenue $m O&L EBIT $m (margin %) H1 2012 276 H1 2012 50 (18%) H1 2011 274 H1 2011 46 (17%) H1 2010 243 H1 2010 30 (12%) O&L EBITDA $m H1 2012 69 H1 2011 68 H1 2010 54 Based on actual USD. All charts exclude results from disposed assets: InterContinenta
Slide 89: Free Cash Flow Generation
Free Cash Flow Generation 9 months 9 months Year $m to 30 Sep to 30 Sep to 31 Dec 2012 2011 2011 Operating Profit* 453 422 559 Depreciation Hotel Depreciation 44 49 64 Non Hotel Depreciation 25 27 35 Working Capital & Other Movements (175) (159) (31) Movement in System Funds surplus and PCR liabilit
Slide 90: Uses of Free Cash Flow
Uses of Free Cash Flow 9 months 9 months Year $m to 30 Sept to 30 to 31 Dec 2012 Sept 2011 2011 Free Cash Flow 332 269 422 Investment Capital - Expenditure (10) (88) (93) Investment Capital - Receipts 5 148 157 Tax paid on disposals (2) (1) (1) Ordinary dividend (174) (102) (148) Pension Contributio
Slide 91: Managed & Franchised business models - the detail
Managed & Franchised business models - the detail Franchising Managing • One of largest franchisers • One of largest managers • 499,230 franchised rooms • 168,834 managed rooms • Typically owner operators • Typically institutional owners • Standard contract • Tailored contracts • 10 year agreement i
Slide 92: Comparable RevPAR - 3 months to 30 September 2012
Comparable RevPAR – 3 months to 30 September 2012 Constant US$ Franchised Comparable Managed Comparable Hotels Occ % ADR RevPAR Hotels Occ % ADR RevPAR 2012 Pts 2012 Growth 2012 Growth 2012 Pts 2012 Growth 2012 Growth InterContinental 26 64.7% 0.7% 128.59 4.9% 83.24 6.1% 21 76.4% 3.6% 198.85 5.0% 15
Slide 93: Comparable RevPAR - 3 months to 30 September 2012
Comparable RevPAR – 3 months to 30 September 2012 Constant US$ Owned & Leased Comparable Total Comparable Hotels Occ % ADR RevPAR Occ % ADR RevPAR 2012 Pts 2012 Growth 2012 Growth 2012 Pts 2012 Growth 2012 Growth InterContinental 3 89.3% (0.6%) 266.46 9.1% 237.93 8.4% 72.6% 2.0% 179.61 5.6% 130.37 8
Slide 94: Current trading - comparable RevPAR growth
Current trading – comparable RevPAR growth Constant US$ Qtr 1 Qtr 2 July Aug Sept Qtr 3 Sep Ytd United States: InterContinental 7.6% 10.1% 8.3% 10.1% 6.9% 8.4% 8.7% Crowne Plaza 6.3% 6.3% 5.1% 6.5% 2.0% 4.5% 5.6% Holiday Inn 7.7% 7.1% 4.7% 6.5% 3.8% 5.0% 6.4% Holiday Inn Express 9.1% 7.5% 3.7% 5.6%
Slide 95: 2012 Revenue & Operating Profit
2012 Revenue & Operating Profit Revenue Operating Profit Q1 Q2 Q3 Q4 Full Year Q1 Q2 Q3 Q4 Full Year Franchised 118 142 151 411 101 123 134 358 Managed 23 24 23 70 12 12 9 33 Owned & Leased 40 53 52 145 (2) 9 9 16 181 219 226 0 626 111 144 152 0 407 Regional Overhead (11) (11) (14) (36) Total Americ
Slide 96: 2011 Revenue & Operating Profit
2011 Revenue & Operating Profit Revenue Operating Profit Q1 Q2 Q3 Q4 Full Year Q1 Q2 Q3 Q4 Full Year Franchised 109 135 141 117 502 91 118 123 99 431 Managed 38 32 31 23 124 18 15 10 9 52 Owned & Leased 47 55 50 52 204 (1) 7 7 4 17 194 222 222 192 830 108 140 140 112 500 Regional Overhead (11) (12)
Slide 97: 2010 Revenue & Operating Profit
2010 Revenue & Operating Profit Revenue Operating Profit Q1 Q2 Q3 Q4 Full Year Q1 Q2 Q3 Q4 Full Year Franchised 98 123 132 112 465 81 107 113 91 392 Managed 29 30 29 31 119 7 6 2 6 21 Owned & Leased 51 62 54 56 223 (2) 6 4 5 13 178 215 215 199 807 86 119 119 102 426 Regional Overhead (14) (12) (14)
Slide 98: Hotel & Room Count at 30 September 2012
Hotel & Room Count at 30 September 2012 Franchised Managed Owned & Leased Total Hotels Rooms Hotels Rooms Hotels Rooms Hotels Rooms InterContinental 28 7,737 22 8,529 3 1,490 53 17,756 Crowne Plaza 176 46,266 11 3,491 0 0 187 49,757 Holiday Inn 790 138,154 26 8,010 2 695 818 146,859 Holiday Inn Expr
Slide 99: Pipeline at 30 September 2012
Pipeline at 30 September 2012 Franchised Managed Total Hotels Rooms Hotels Rooms Hotels Rooms InterContinental 1 220 3 705 4 925 Crowne Plaza 14 3,547 2 270 16 3,817 Holiday Inn 141 18,595 3 597 144 19,192 Holiday Inn Express 347 32,395 0 0 347 32,395 Staybridge Suites 62 6,421 1 197 63 6,618 Candle
Slide 100: November 2012 - Great hotels guests love
Great hotels guestslove
InterContinental Hotels Group — Investor Presentation (November 2012) on 6ix