Intercontinental Hotels Group Plc · LSE:IHG
Intercontinental Hotels — Investor Presentation (November 2023)
69 slides from Intercontinental Hotels's investor presentation, November 2023
Slide 1: Investor Presentation November 2023
IHG HOTELS & RESORTS Investor Presentation November 2023
Slide 2: Purpose, ambition, strategy and priorities
IHG HOTELS & RESORTS A global hospitality leader with 6,200+ open hotels and a further 1,900+ in the pipeline; driven by clear purpose, ambition, strategy and priorities Our Purpose True Hospitality for Good. Our Priorities Our Ambition To deliver industry-leading growth in our scale, enterprise pla
Slide 3: Strong portfolio of preferred brands across chain scales
Strong portfolio of 19 preferred brands across chain scales LUXURY & PREMIUM ESSENTIALS SUITES EXCLUSIVE LIFESTYLE PARTNERS SYSTEM SYSTEM SYSTEM SYSTEM SYSTEM a ee | 14% 15% PIPELINE PIPELINE PIPELINE PIPELINE a 22% 18% e se voco Fig UTES "REGENT HUALUxE tf | INTERCONTINENTAL FERAAARA Holiday Inn x
Slide 4: Asset light, mainly franchised, and geographically diverse
Asset light, mainly franchised, and geographically diverse System size and pipeline System size: 2% <1% 172k 28% | 70% 24% 26% Q3Ok ® Exclusive Partners © OLML ® Franchised ® Managed Pipeline: 1% _<1% 41% | 58% 106k. Franchised @ Exclusive Partners ®Managed © OLML Note: data as at 30 September 2023
Slide 5: Our asset light business model
Our asset light business model Franchised Managed 28% Fee revenue: Base Management Fee: fixed percentage of total hotel revenue Incentive Management Fee: based on hotel's profitability or cash flows 70% Fee revenue: Royalty Fee: fixed percentage of rooms revenue Franchised je) ( \a $ RevPAR (S) Syst
Slide 6: RevPAR, occupancy and ADR recovery across regions
RevPAR, occupancy and ADR recovery across regions IHG Group monthly RevPAR, Occupancy and ADR (vs 2019 2023 2021 2022 — RevPAR (%) EMEAA monthly RevPAR, Occupancy and ADR (vs 2019) 2023 2021 2022 Note: from January 2023, RevPAR growth definition has reverted back to pre-Covid comparability definitio
Slide 7: Net system size growth
Net system size growth: delivered through strength of brands and enterprise platform Improvement in gross openings... 7.8% 7.1% 5.4% 5.0% [a 5.6% 4.5% 2016 2017 2018 =2019. 2020. 2021'_~=— 2022 ...combined with structurally lower removals -4.2%' 5.6% 1.6% average removal rate for estate excluding Ho
Slide 8: Q3 2023 net system size growth of +4.7% YOY
Q3 2023 net system size growth of +4.7% YOY (+2.0% YTD); delivered through strength of brands and enterprise platform Net System Size Growth (YOY) +10.0% +8.1% Gross additions +6.2% +3.9% sree Net system size growth AMER EMEAA Greater China Group Total removals Investor Presentation November 2023 ©
Slide 9: Q3 signings up +16% YTD; development activity robust
Q3 signings up +16% YTD; development activity robust coe - _ . Pipeline at Q1 Signings Q2 Signings Q3 Signings YTD Signings 30 September 2023 Americas 5.4k 7.9k 5.1k 18.4k Americas 106.8k EMEAA 5.2k 4.8k 4.8k 14.8k Greater China Greater China 5.9k 5.0k 6.9k 17.8k 106.4k TOTAL 16.5k 17.7k 16.8k 50.9k
Slide 10: HY 2023 fee margin 330bps ahead of HY 2022
HY 2023 fee margin 330bps ahead of HY 2022, driven by recovery in EMEAA and Greater China TOTAL IHG Americas HY 2023 58.8% HY 2023 81.9% FY 2022 55.9% FY 2022 84.3% HY 2022 55.5% HY 2022 82.8% FY 2021 49.5% FY 2021 82.2% FY 2020 See note FY 2020 710.7% FY 2019 See note FY 2019 711% Europe, Middle Ea
Slide 11: An attractive industry and a strong business model
An attractive industry and a strong business model that drives growth and shareholder value Attractions of our industry 660 ® " Enduring structural growth drivers of expanding GDP, rising middle class, and people's inherent desire to travel and physically interact Demand strength and resiliency well
Slide 12: $15bn returned to shareholders since 2003
$15bn returned to shareholders since 2003, and our strategy for uses of cash generated remains unchanged Rolling share buybacks routinely expected to return surplus capital Invest in the business Sustainably grow Return surplus funds to drive growth the ordinary dividend to shareholders $ GS mill ha
Slide 13: Q3 2023 conclusions
13 Q3 2023 conclusions A well-invested, high-performing business that drives growth and shareholder value — RevPAR growth +10.5% YOY, +12.8% vs 2019 - Gross system growth of +6.2% YOY; net system growth of +4.7% YOY; pipeline growth of +5.1% YOY - Cash generation funding growth investment and ~$1bn
Slide 14: HY 2023 RevPAR, Profit and Earnings
HY 2023 RevPAR Profit and Earnings - Hi global RevPAR - System 925k rooms (6,227 hotels) - 58.8% fee margin!, +3.3%pts - $277m FCF'2($142m in H1'22) +24% yoy; +8.7% vs 19 . Q2 global RevPAR - +6.3% gross system growth YOY; - Leverage ratio of 2.3x - Q2 global Rev! 0, 417% YoY; +9.9% vs 19 +4.B% net
Slide 15: Additional Information
IHG HOTELS & RESORTS Additional Information
Slide 16: Contents: Additional Information
16 Contents: Additional Information Page Pages Page Page Pages Pages Pages Pages Page Page Page Page Page Page Pages Page Page Page Page Page Page Page Page 7 18-19 20 21 22-25 26-42 43-44 45-47 48 49 50 51 52 53-56 57-58 59-60 61 62 63 64 65 66 67 Update on Our Industry and IHG’s Positioning Curren
Slide 17: Update on Our Industry and IHG's Positioning
IHG HOTELS & RESORTS Update on Our Industry and IHG’s Positioning
Slide 18: Current industry forces
Current industry forces Further recovery in international, corporate and group travel China re-opening: domestic, inbound, and outbound travel Trends in working practices: hybrid working, bleisure travel, digital nomads Full employment; household incomes and savings remain healthy Lower oil & gas pr
Slide 19: Attractive long-term industry growth drivers
Attractive long-term industry growth drivers - Demand resiliency is well proven — Industry revenue CAGR of +3.3% from 2000 to 2022 — Outpaced global economic growth in 18 of last 23 years - Further new hotel supply supported by both healthy asset returns and long-term structural growth drivers — Glo
Slide 20: Investing for performance, growth and competitive advantage
Investing for performance, growth and competitive advantage enabling us to deliver on our strategic priorities System Fund IHG - Leveraging scale efficiencies across: — Key Money and Maintenance Capex of ~$150m p.a. that - ~$1bn+ of Opex annually further strengthens the enterprise platform — ~$0.3bn
Slide 21: Update on Strategic Priorities
IHG HOTELS & RESORTS Update on Strategic Priorities
Slide 22: Customers: Being customer centric in all we do
Slide 23: IHG Hotels & Resorts Masterbrand
IHG Hotels & Resorts Masterbrand strengthening the bond between our masterbrand and our individual hotel brands Guest U} guest Px gue oe IHG = HOTELS & RESORTS how you {y Driving uplifts in perception and engagement +6 pts! +7 pts! Aided Awareness Brand Favourability ‘Data as of December 2022 23 THG
Slide 24: IHG One Rewards
24 IHG One Rewards One year since our biggest transformation and marketing investment; delivering significant improvements across key metrics ONE Richer Benefits 08 Faster Earn ; o- Exceptional Choice - REWARDS New, customer-preferred =P More bonus points across tiers ~O— Unique options to personali
Slide 25: Lowering costs and driving efficiencies for our owners
Lowering costs and driving efficiencies for our owners supporting performance and returns (aa\ NSF, Cost to build & renovate Cost to operate - Deployed value engineering to mitigate the impact of - Relaunched lighter touch Daily Room Refresh inflation by 10-20% across furniture, fixtures and houseke
Slide 26: Building loved and trusted brands
- SWISS. SESS SSS 4 SS OSS AAA LSS SSS. WE = SSS SSS SSS 20H] Building loyed and trusted brands
Slide 27: IHG brand portfolio
27 IHG HOTELS & RESORTS LUXURY & LIFESTYLE rn) Horet rere REGENT INTERCONTINENTAL NIGNETTE KIMPTON INDIGO PREMIUM i 3) vVOco HUALUXE CROWNE PLAZA Il EVEN SSNARAR ESSENTIALS res Garner avid SUITES ATWELL . . ° SUITES isan eannpyoon EXCLUSIVE PARTNERS. * IBEROSTAR IHG 4] ReWaros
Slide 28: Luxury & Lifestyle
Luxury & Lifestyle Driving high-value growth through an industry-leading collection of brands; contributed 26% of H1 2023 signings, increasing the pipeline mix and the future system mix Global system Luxury & Lifestyle and pipeline mix pipeline represents high future % growth of system size SYSTEM G
Slide 29: Luxury & Lifestyle
Luxury & Lifestyle Driving high-value growth through an industry-leading collection of brands; growth will be driven across all regions and brands Luxury & Lifestyle system size by region - H1 2023 123k rooms across 479 hotels Greater China 27% (87 hotels) Americas 123k 35% (181 hotels) rooms Europe
Slide 30: Luxury & Lifestyle
Luxury & Lifestyle In 4 years since acquisition, hotel system growth of >40% and O pipeline more than doubled ee Six Senses Rome=Italy 1,605 rooms (23 hotels) ipeline: 2,835 rooms (39 hotels) Pipeli' 9 m Size: 177% Note: data as at 30 June 2023, In 5 years since acquisition, hotel system growth of 5
Slide 31: Luxury & Lifestyle
Luxury & Lifestyle First four hotels now open, 21in the pipeline, and sizeable market opportunity NIGNETTE™ COLLECTION The boutique luxury lifestyle brand continues its global expansion; expected to be in ~20 countries py2025 KIMPTON JOTELS & RESTAURANTS System Size: 934 rooms (4 hotels) Pipeline: 3
Slide 32: Premium
Premium Our conversion-focused premium brand has already secured 110 properties within 5 years of launch 7 voco 14,221 rooms (52 hotels) 10,324 rooms (58 hotels) Ze: 73% Note: data as at 30 June 2023, Designed specifically with the Chinese premium guest in mind, now with >40 open and pipeline hotels
Slide 33: Essentials and Suites
33 Essentials and Suites Evolution of our midscale, upper midscale, and extended stay brand portfolio Suites Essentials 1952 e 1991 e 2017 . 2023 ® avid NEW BRAND Sern, Wes lee Upscale extended stay CANDLEWOOD. SUITES Midscale extended stay Timeshare family resorts Investor Presentation November 202
Slide 34: Essentials and Suites
34 Essentials and Suites Continued volume growth; as at H1 2023, 5.1k properties in the system; 1.4k in the pipeline, representing ~27% future system growth Essentials portfolio growth Suites portfolio growth open rooms (last bar showing open + pipeline) open rooms (last bar showing open + pipeline)
Slide 35: Essentials
Essentials The world’s largest hotel brand, Refreshed estate with a further >200 open and pipeline continuing its category leadership evolved design and format, properties; strong guest and strong growth and a new premium satisfaction and owner de breakfast offering returns press Hf a Holiday inn iv
Slide 36: Launching a new best-in-class midscale conversion brand
Launching a new best-in-class midscale conversion brand Scale of opportunity Clear positioning - Targeting sizeable existing midscale supply; 9.5 hotels midscale upper midscale (705k rooms), representing $14bn in annual hotel revenue in : the US alone Garner WV tf +f antag were. Holiday Inn ~ STR fo
Slide 37: avid
avid a brand of scale; an engine of future growth Launched in ood September 2017 Today, present in DA US states and will be in 34 3b25 2021-2022 social review scores 43 4. 3.9 STR comp set 37 Jan2021 Jul2021. Jan 2022» Jul2022. Dec. 2022 Total open and pipeline hotels Note: data as at 31 December 20
Slide 38: Suites
Suites Our premium extended stay Our newest extended stay brand Our Americas-focused midscale Internationalising our collection brand with a growing global with significant interest and an extended stay brand with over of spacious, fun-filled, footprint =STAYBRIDGES accelerating pipeline »aTWELL 370
Slide 39: Exclusive Partners
Exclusive Partners Demonstrating the strength of the IHG enterprise platform and desire for strategic partners to join the IHG system Iberostar Beachfront Resorts Our 18th brand substantially grows our resort and all-inclusive Pa presence IBEROSTAR Son Ss : 5 ‘ar Selection, Hacienda Dominicus~ Domin
Slide 40: System size as at June 2023
System size as at 30 June 2023 By sub-region Airport 8% Urban Interstate 14% Small Town / Metro 19% ° Suburban Resort 40% 5% Americas 56%, 516.3k rooms Other JAPAC Australia / 2% Japan 5% 6% United Kingdom South East Asia 21% and Korea 13% France South West 3% Asia Germany 3% 8% Middle East and Afri
Slide 41: New brands offer significant fee growth opportunity
New brands offer significant fee growth opportunity Targeting annual fees of at least $50m each; potential to drive aggregate $300m+ in annual fee income REGENT — VOCO avid = NIGNETTE WEL Date launched/ 2019 2018 2018 2017 2021 2019 acquired Al ~ ae required 14 90 ~228 Pipeline 39 a N 58 146 “ " > |
Slide 42: Conversions
Conversions growing in importance and future opportunity 2016-2022 share of conversion signings 2020-2022 conversion signings by brand across all IHG brands (excluding Iberostar) 25% InterContinental 4% (12 hotels) Holiday Inn Express Vignette Collection 27% (75 hotels) 4% (12 hotels) Hotel Indigo 5
Slide 43: Digital: Creating digital advantage
Slide 44: Innovating our technology and distribution platforms
Innovating our technology and distribution platforms Driving value for our owners and IHG through ongoing, agile and rapid development Attribute Upsell: ‘Better View’ and ‘Bigger Room’ now available in 5,000+ hotels Add Extras Upgrades InterContinental: Sydney ne =e [i] Early results - average value
Slide 45: Caring for our people, communities and planet
Caring for our people, communities and planet
Slide 46: Being a responsible business
46 BEING A Our actions as a responsible business are shaped by a culture of strong governance, RESPONSIBLE clear policies and a series of ambitious commitments set out in our Journey to BUSINESS : , Tomorrow 2030 responsible business plan. Our 2030 Journey to Tomorrow plan Key to delivering our stra
Slide 47: Providing a community solar offering for hotel owners
Providing a community solar offering for hotel owners — First hotel company to provide owners a community solar offering — Supporting the development of clean energy — Helping hotels reduce greenhouse gas emissions by accessing renewable energy — Currently active for hotels across Illinois, Maine an
Slide 48: HY 2023 Financial Review
IHG HOTELS & RESORTS HY 2023 Financial Review
Slide 49: Financial performance overview
49 Financial performance overview Results from reportable segments H1 2023 H1 2022? Reported Underlying % change % change Revenue $1,031m $840m +23% +27% Operating profit $479m $377m +27% +30% Revenue from fee business $799m $659m +21% +24% Operating profit from fee business $470m $369m +27% +30% Fe
Slide 50: US Leisure, Business and Groups demand
+14% +16% Room Nights +4% +7% ADR HY2022 HY2023 HY2022 HY2023 +6% Room Nights -1% -4% -9% ADR +7% +2% Room Nights -26% -19% ADR
Slide 51: Targeted capital expenditure to drive growth
Targeted capital expenditure to drive growth $m HY 2023 HY 2022 Key money and maintenance capex Key money’ (64) (35) + Key money: used to secure hotel signings Maintenance capex (16) (15) + Maintenance: relates to owned, leased and Total (80) (50) managed lease hotels and corporate infrastructure Re
Slide 52: Cash flow
Cash flow HY 2023 ($m) 34 (3) | | nil A719 513 System Depreciation Fund? wong Exceptional and capital & other cash flow . (19) (8) Share amortisation movements? “tems interest Dividends pa ybacks andtax ya, including Maintenance 277 Gross Net Reo ansaction Pes y System Fund recyclable costs y capex
Slide 53: Revenue and operating profit breakdown
Revenue and operating profit breakdown Results from reportable segments H12023 H12022 '23vs'22 ‘23. vs ‘22 FY 2022 $change %change Franchise and base management fees $625m $533m $92m 17% $1,147m Incentive management fees $73m $37m $36m 97% $103m Central revenue $101m $89m $12m 13% $184m Revenue from
Slide 54: Revenue growth rate analysis HY 2023 vs HY 2022
54 Revenue growth rate analysis HY 2023 vs HY 2022 RevPAR growth % Net rooms growth % Underlying Fee Revenue! Comparable Total YOY Available Growth % Comments Hotels that have _Alll hotels that were traded in all open in HY 2023 Aggregate number months being and HY 2022 (incl of rooms available comp
Slide 55: Revenue and operating profit 2021-2023 (post-IFRS 17)
55 Revenue and operating profit 2021-2023 (post-IFRS 17) Total Revenue HY FY Actual US$ 2023 2022 2022 2021 Franchise and Base Management Fees 456 406 861 683 Incentive Management Fees 7 7 18 8 Fee Business 463 A13 879 691 Owned, Leased & Managed Lease 74 58 126 83 Total Americas 537 4n 1,005 774 Fr
Slide 56: Revenue and operating profit 2019-2022 (pre-IFRS 17)
Revenue and operating profit 2019-2022 (pre-IFRS 17) Total Revenue Actual US$ Franchise and Base Management Fees Incentive Management Fees Fee Business Owned, Leased & Managed Lease Total Operating Profit Total Americas Franchise and Base Management Fees Incentive Management Fees Fee Business Owned,
Slide 57: HY 2023 underlying fee business revenue and operating profit
57 HY 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 463 379 161 92 74 43 101
Slide 58: HY 2022 underlying fee business revenue and operating profit
58 HY 2022 underlying fee business revenue and operating profit non-GAAP reconciliations Americas EMEAA Greater China Central Total IHG Operating Operating Operating Operating Operating $m Revenue Profit Revenue Profit Revenue Profit Revenue Loss Revenue Profit Fee business 413 342 121 63 36 5 89 (4
Slide 59: Net system size growth (YOY)
Net system size growth delivered through strength of brands and enterprise platform Net System Size Growth (YOY) Group HY 2022 Openings Exits HY 2023 Europe, Middle East, Asia and Africa HY 2022 Openings Exits HY 2023 59 Americas HY 2022 Openings Exits HY 2023 Greater China 13.3 HY 2022 Openings Exi
Slide 60: Net system size growth (YTD)
Net system size growth delivered through strength of brands and enterprise platform Net System Size Growth (YTD) Group FY 2022 Openings Exits HY 2023 Europe, Middle East, Asia and Africa 12.4 FY 2022 Openings Exits HY 2023 60 In Americas FY 2022 Openings Exits HY 2023 Greater China FY 2022 Openings
Slide 61: Ordinary shares
Ordinary shares Number of shares (m) 2023 2022 Opening balance at 1 January 183.1 187.7 Closing balance at 30 June 1777 187.7 Closing balance excluding treasury shares! 170.2 184.0 Basic weighted average shares (excluding treasury shares) 173.0 183.6 Dilutive potential ordinary shares' 11 1.0 Basic
Slide 62: Currency impacts
Currency impacts ($m) Revenue Reported HY22 HY22 at HY23 AER2 Var. Reported HY23 HY23 at HY22 AER2 Var. Americas 471 471 - 537 538 (1) EMEAA 239 232 7 309 320 (1) Greater China 36 34 2 74 79 (5) Central Overheads? 94 93 1 i" 12 (1) Total IHG 840 830 10 1,031 1,049 (18) Operating Profit Americas 351
Slide 63: FY 2022 Financial Review
IHG HOTELS & RESORTS FY 2022 Financial Review
Slide 64: Financial performance overview
64 Financial performance overview Results from reportable segments’ Reported Underlying? FY 2022 FY 2021 FY 2019 FY 2021 FY 2019 % change % change % change % change Revenue® $1,843m $1,390m +33% $2,083m (12)% +39% (5)%° Operating profit $828m $534m +55% $865m (4)% +53% (1%? Revenue from fee business
Slide 65: Targeted capital expenditure to drive growth
Targeted capital expenditure to drive growth $m FY 2022 FY 2021 Key money and maintenance capex Key money’ (64) (42) + Key money: used to secure hotel signings Maintenance capex (44) (33) + Maintenance: relates to owned, leased and Total (108) (75) managed lease hotels and corporate infrastructure R
Slide 66: Cash flow
66 Cash flow FY 2022 ($m) 68 5 MY Sen wortng Fund? capital & other Eig Depecitin movements Amortisation (43) Ln] Exceptional cash flow items (315) Interest (35) and tax — Maintenance EYatay Gross capex and key System Fund money capex 1 Net Recyclable capex Dividends (233) Share buybacks* (482) FX, l
Slide 67: FY 2022 underlying fee business revenue and operating profit
67 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 74) 284 153 87 23 199
Slide 68: Cautionary note regarding forward-looking statements
68 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 hist
Slide 69: IHG aesorrs
IHG aesorrs e o if . REGENT —tegconivenrst — NIGNETTE KIMPTON NDIGQ = VOCO—nuatuxe crown ataza SIX SENSES * df 5 ATWELL —AsaysrIDGER 9° wasrosnan MMU EVEN va , Garner avid ‘Sumes ieee CANDLEWOOD foramowrnesons Holiday Inn ean ONE REWARDS 69
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