SECURITIES
AND EXCHANGE COMMISSION
Washington
DC 20549
FORM 6-K
REPORT
OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13a-16 AND 15d-16
OF
THE
SECURITIES EXCHANGE ACT OF 1934
For 9
August 2022
InterContinental Hotels Group PLC
(Registrant's
name)
Broadwater
Park, Denham, Buckinghamshire, UB9 5HJ, United Kingdom
(Address
of principal executive offices)
Indicate
by check mark whether the registrant files or will file annual
reports under cover Form 20-F or Form 40-F.
Form
20-F
Form 40-F
Indicate
by check mark whether the registrant by furnishing the information
contained in this form is also thereby furnishing the information
to the Commission pursuant to Rule 12g3-2(b) under the Securities
Exchange Act of 1934.
Yes
No
If
"Yes" is marked, indicate below the file number assigned to the
registrant in connection with Rule 12g3-2(b): Not
applicable
EXHIBIT
INDEX
99.1
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Half-year
Report dated 9 August 2022
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Exhibit
No: 99.1
InterContinental Hotels Group PLC
Half Year Results to 30 June 2022
9
August 2022
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Reported
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Underlying1
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2022
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2021
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% change2
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% change
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REPORTABLE SEGMENTS1:
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Revenue1
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$840m
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$565m
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+49%
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+53%
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Revenue from fee business1
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$664m
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$505m
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+31%
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+33%
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Operating profit1
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$377m
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$188m
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+101%
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+91%
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Fee margin1
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55.9%
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44.1%
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+11.8%pts
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Adjusted EPS1
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121.7¢
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40.4¢
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+201%
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KEY METRICS:
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GROUP RESULTS:
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● $11.7bn total gross
revenue1
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Total revenue
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$1,794m
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$1,179m
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+52%
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+48% vs
2021, (14)% vs 2019
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Operating profit
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$361m
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$138m
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+162%
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● +51% global H1
RevPAR1
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Basic EPS
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117.4¢
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26.2¢
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+348%
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vs
2021, (10.5)% vs 2019
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Interim dividend per share
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43.9¢
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-
¢
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NM
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● +44% global Q2
RevPAR1
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Net debt1
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$1,718m
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$2,458m
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(30)%
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vs
2021, (4.5)% vs 2019
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1
Definitions for
non-GAAP measures can be found in the ‘Use of key performance
measures and non-GAAP measures’ section, along with
reconciliations of these measures to the most directly comparable
line items within the Financial Statements.
2
Percentage change
shown unless not meaningful, such as where a positive balance in
the latest period is comparable to a negative or zero balance in
the prior period.
●
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Further
significant improvement in trading: Americas Q2 RevPAR vs 2019
+3.5%, strong sequential improvement also in EMEAA to (10.3)%;
Greater China (48.9)% due to localised travel
restrictions
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●
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H1
average daily rate +24% vs 2021, up +4% vs 2019; occupancy +10%pts
vs 2021, (10)%pts vs 2019
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●
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Gross
system growth +4.8% YOY, net +3.0% YOY (adjusted for Holiday Inn
and Crowne Plaza removals in H2 2021, and the impact of
exiting Russia in H1 2022)
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●
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Opened
14.9k rooms (96 hotels) in H1; global estate now at 883k rooms
(6,028 hotels)
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●
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Signed
30.7k rooms (210 hotels) in H1; global pipeline now at 278k rooms
(1,858 hotels)
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●
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Luxury
& Lifestyle portfolio now 445 hotels, 12% of system size; a
further 287 hotels represent 19% of group pipeline
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●
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IHG One
Rewards transforms our loyalty programme; further developments to
enhance our digital advantage
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●
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Operating
profit from reportable segments of $377m, +101% vs 2021, (down (8)%
vs 2019); reported operating profit of $361m, after System Fund
result of $3m and operating exceptionals of $(19)m
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●
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Net
cash from operating activities of $175m (2021: $173m), with
adjusted free cash flow1 of $142m (2021:
$147m); net debt reduction of $163m since start of the year
includes $227m of net foreign exchange benefit
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●
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Trailing
12-month adjusted EBITDA1 of $812m, +78% on a
year earlier; net debt:adjusted EBITDA reduced to 2.1x
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Resumption
of interim dividend at 43.9¢, +10% on prior interim payment in
2019
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●
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Additional
$500m of surplus capital to be returned via new share buyback
programme
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Keith Barr, Chief Executive Officer, IHG Hotels & Resorts,
said:
“We
saw continued strong trading in the first half of 2022 with
increased demand for travel in most of our markets. This brought
group RevPAR very close to pre-pandemic levels in the second
quarter. Alongside leisure stays, the return of business and group
travel demand continued to build over the period, and our hotels
are seeing increased pricing power due to the strength of
IHG’s brands, loyalty programme and technology
platform.
The
recovery in demand and pricing led to group profit more than
doubling versus 2021, with profitability in the Americas now ahead
of 2019. The EMEAA region also saw excellent improvement in
performance. Whilst Greater China had a tough period as
Covid-related travel restrictions were tightened, we have since
seen a strong recovery in the most recent months, although risk of
further volatility in trading in the region still
remains.
Our
overall performance reflects a continued focus to build a stronger
business for our guests and owners. We have significantly enhanced
and expanded our brand portfolio in recent years, and invested in
our enterprise platform to drive performance and accelerate our
growth. The investments we have made to innovate our technology and
distribution channels continue to drive improvements in both the
guest experience and owner returns. Some of the biggest
achievements this year include the critical step of transforming
our loyalty programme, IHG One Rewards, and the redesign of our
mobile app and digital channels to deliver a faster, simpler
booking experience.
We
opened almost 100 hotels in the half, passing the 6,000 milestone
globally, and signed more than 200 properties to take our pipeline
to 1,858, representing over 30% of today’s system
size. We
continue to see growing interest in conversion opportunities which
represented more than a quarter of openings in the period. This
illustrates the increasing appeal to hotel owners of accessing
IHG’s brands and the significant scale and demand delivery
capability of our enterprise platform.
IHG’s
clear strategy over the last five years has seen us emerge from the
pandemic a stronger and more resilient company, delivering on key
priorities and progressing our ambitious 2030 Journey to Tomorrow
responsible business commitments. Whilst the economic outlook faces
uncertainties as central banks and governments take action to
manage inflation, we remain confident in our business model and the
attractive industry fundamentals that will drive long-term
sustainable growth. Having reinstated a final dividend in respect
of 2021 six months ago, the strong performance seen in 2022 to
date, together with the confidence we have in continued progress,
has led us to reintroduce an interim dividend at a level 10% higher
than when last paid and launch an initial $500m share
buyback.”
For further information, please contact:
Investor
Relations:
|
Stuart
Ford (+44 (0)7823 828 739); Aleksandar Milenkovic (+44 (0)7469 905
720);
Joe
Simpson (+44 (0)7976 862 072)
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Media
Relations:
|
Amy
Shields (+44 (0)7881 035 550); Claire Scicluna (+44 (0)7776 778
808)
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Presentation for analysts and institutional
shareholders:
A
conference call and webcast presented by Keith Barr, Chief
Executive Officer, and Paul Edgecliffe-Johnson, Chief Financial
Officer and Group Head of Strategy, will commence at 9:30am (London
time) on 9 August 2022 and can be accessed at www.ihgplc.com/en/investors/results-and-presentations
or directly on https://www.investis-live.com/ihg/62cea1f8d9438014007fbae3/ihgq2
Analysts
and institutional shareholders wishing to ask questions should use
the following dial-in details for a Q&A facility:
UK:
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0800
640 6441
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UK
local:
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0203
936 2999
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US:
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+1 855
979 6654
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US
local:
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+1 646
664 1960
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All
other locations:
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+44 203
936 2999
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Passcode:
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91 98
94
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An
archived webcast of the presentation is expected to be available
later on the day of the results and will remain on it for the
foreseeable future, accessed at www.ihgplc.com/en/investors/results-and-presentations.
An audio replay will also be available for 7 days using the
following details:
UK:
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0203
936 3001
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US:
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+1 845
709 8569
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All
other locations:
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+44 203
936 3001
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Passcode:
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07 07
21
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Website:
The
full release and supplementary data will be available on our
website from 7:00am (London time) on 9 August. The web address is
www.ihgplc.com/en/investors/results-and-presentations.
About IHG Hotels & Resorts:
IHG Hotels & Resorts [LON:IHG, NYSE:IHG (ADRs)] is a
global hospitality company, with a purpose to provide True
Hospitality for Good.
With a
family of 17 hotel brands and IHG One
Rewards, one of the world’s largest hotel loyalty
programmes, IHG has over 6,000 open hotels in more than 100
countries, and more than 1,800 in the development
pipeline.
-
Luxury & Lifestyle: Six Senses Hotels
Resorts Spas, Regent Hotels &
Resorts, InterContinental
Hotels & Resorts, Vignette
Collection, Kimpton Hotels &
Restaurants, Hotel
Indigo
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Premium: voco
hotels,
HUALUXE
Hotels & Resorts, Crowne
Plaza Hotels
& Resorts,
EVEN
Hotels
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Essentials: Holiday Inn Hotels
& Resorts, Holiday Inn
Express, avid
hotels
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Suites: Atwell Suites,
Staybridge
Suites, Holiday Inn Club
Vacations, Candlewood
Suites
InterContinental
Hotels Group PLC is the Group’s holding company and is
incorporated and registered in England and Wales. Approximately
325,000 people work across IHG’s hotels and corporate offices
globally.
Visit
us online for more about our hotels and
reservations and IHG One
Rewards. To download the new IHG One Rewards app, visit the
Apple
App or
Google
Play stores.
For our
latest news, visit our Newsroom and
follow us on LinkedIn,
Facebook and
Twitter.
Cautionary note regarding forward-looking statements:
This
announcement 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 relate only to historical
or current facts. Forward-looking statements often use words such
as ‘anticipate’, ‘target’,
‘expect’, ‘estimate’, ‘intend’,
‘plan’, ‘goal’, ‘believe’ or
other words of similar meaning. These statements are based on
assumptions and assessments made by InterContinental Hotels Group
PLC’s management in light of their experience and their
perception of historical trends, current conditions, expected
future developments and other factors they believe to be
appropriate. By their nature, forward-looking statements are
inherently predictive, speculative and involve risk and
uncertainty. There are a number of factors that could cause actual
results and developments to differ materially from those expressed
in or implied by, such forward-looking statements. The main factors
that could affect the business and the financial results are
described in the ‘Risk Factors’ section in the current
InterContinental Hotels Group PLC’s Annual report and Form
20-F filed with the United States Securities and Exchange
Commission.
System size and pipeline progress
The
long-term attractiveness of IHG’s brands and the markets we
operate in have supported continued openings and signings activity
in the first half of 2022:
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Global
system of 883k rooms (6,028 hotels) at 30 June 2022, weighted 68%
across midscale segments and 32% across upscale and
luxury
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Gross
growth of +4.8% YOY, with 14.9k rooms (96 hotels) opened in H1, of
which 8.3k (51 hotels) in Q2
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Removal
of 12.4k rooms (59 hotels) in H1; this includes the impact of
ceasing all operations in Russia, resulting in the removal of 6.5k
rooms (28 hotels), equivalent to 0.7% of IHG’s global
system
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Underlying
removal rate of 1.8% YOY; the removals in H1 2022 equate to an
annualised underlying rate of 1.4%, broadly in line with historical
average underlying rate of ~1.5%
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Net
system size growth of +3.0% YOY (adjusted for Holiday Inn and
Crowne Plaza removals in H2 2021, and for Russia operations in H1
2022); unadjusted YOY growth of (0.2)%
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●
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Global
pipeline of 278k rooms (1,858 hotels), which represents over 30% of
current system size; pipeline growth YTD of +2.7% (+3.5% excluding
2.2k rooms impact from 7 pipeline hotels in Russia)
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Signed
30.7k rooms (210 hotels) in H1, of which 14.1k (90 hotels) in
Q2
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Signings
mix drives pipeline to be weighted 56% across midscale segments and
44% across upscale and luxury
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More
than 40% of the global pipeline is under construction, broadly in
line with prior years
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System and pipeline summary of movements in H1 2022 and total
closing position (rooms):
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System
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Pipeline
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Openings
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Removals
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Net
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Total
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YTD%
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YOY%
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Adjusted YOY%a
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Signings
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Total
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Group
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14,949
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(12,379)
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2,570
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882,897
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+0.3%
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(0.2)%
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+3.0%
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30,732
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278,275
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Americas
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4,287
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(2,188)
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2,099
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501,188
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+0.4%
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(1.8)%
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+0.6%
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11,504
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100,401
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EMEAA
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6,828
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(8,844)
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(2,016)
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222,184
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(0.9)%
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(0.6)%
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+5.2%
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8,111
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80,079
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G.
China
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3,834
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(1,347)
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2,487
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159,525
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+1.6%
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+5.9%
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+8.2%
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11,117
|
97,795
|
a
Adjusted for: 1)
the removal of Holiday Inn and Crowne Plaza rooms that occurred in
H2 2021, driven by the review that was completed that year with
34.3k (151 hotels) exiting IHG’s system for these two brands
for the year as a whole, of which 13.3k (57 hotels) exited in H1
2021 and 21.1k (94 hotels) exited in the H2 2021; 2) the removal of
6.5k rooms (28 hotels) in Russia, following IHG’s
announcements regarding ceasing all operations in that
country.
The
regional performance reviews provide further detail of the system
and pipeline by region, and further analysis by brand and by
ownership type.
Updates on our strategic priorities
Our
four strategic priorities put the expanded brand portfolio we have
built in recent years at the heart of our business, and our owners
and guests at the heart of our thinking. Our priorities recognise
the crucial role of a sophisticated, well-invested digital
approach, ensure we meet our growing responsibility to care for and
invest in our people, and make a positive difference to our
communities and planet.
We have
increased our level of investment spending to meet these
priorities, including on developing our brand portfolio and hotel
formats further, the critical step of transforming our loyalty
programme, and rolling out more digital solutions. We have also
invested in the resiliency and flexibility of our core
revenue-generating technology platforms to support future growth,
alongside enhancing the capabilities of our core HR systems and in
developments that help IHG and our hotel owners meet our Journey to
Tomorrow responsible business commitments.
We will
continue to be agile and thoughtful on how we focus and shift our
own cost resources, together with those of the System Fund, as part
of building out competencies and capturing the significant
opportunities for growth of IHG’s enterprise system. In 2021,
fee business cost savings of $75m were achieved and are sustainable
into this and future years. As intended, the additional temporary
reductions in the 2021 cost base of $25m have been redeployed this
year. Whilst there is some pressure to the underlying level of cost
inflation in our overheads base, IHG is adept at driving
incremental efficiencies and scale advantage to help offset these,
and delivering productivity gains to further support our hotel
owners.
1.
Build
loved and trusted brands
We
continue to invest in all our brands, helping achieve scale and
focusing on design, service and quality. Recent highlights
included:
Continued growth of our most established brands.
●
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The
InterContinental brand opened three hotels in the period; growing
to 205 across more than 60 countries. Its pipeline of 83 hotels and
resorts represents growth equivalent to 30% of current system
size.
|
●
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Having
reached 3,000 hotels in its 30th year last year, Holiday Inn
Express is now in 50 countries, and has a pipeline for a further
26% growth. Holiday Inn Express achieved more than 60 signings in
the period, with our Candlewood Suites and Staybridge Suites
extended stay brands together adding over 40 more.
|
Strengthening Holiday Inn and Crowne Plaza. Our review in 2021 addressed the
consistency and quality of the estates for these two brands,
resulting in the removal of 151 hotels or 10% of their combined
estate, and owners committing to improvements in 83
hotels.
●
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Both
brands have pipelines equivalent to over 20% of their current
system size.
|
●
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Two-thirds
of the Americas Holiday Inn estate and three-quarters of the Crowne
Plaza estate will have been recently updated. As part of this, 28
Crowne Plaza hotels are being renovated in 2022, equivalent to the
combined number renovated over the previous four years. Recently
renovated hotels are showing strong performance metrics across
occupancy, room rate, revenue market share and guest satisfaction
scores.
|
Driving more conversion to our brands. Conversions have grown to represent
around a quarter of signings and openings thanks to growing demand
for access to our revenue-generating systems, marketing and loyalty
programmes to support performance, increase efficiencies and drive
returns for owners.
●
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Vignette
Collection, our Luxury & Lifestyle conversion brand that
launched last August, has secured its first eight properties, with
further strong progress expected over the remainder of
2022.
|
●
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Our
upscale conversion brand, voco, has reached 80 open and pipeline
hotels. With nine openings in the period, these included the first
all-suites format in Doha, a flagship property for the brand in
Melbourne, and a presence in four new country markets. The brand
was recognised as the World’s Leading Premium Hotel Brand at
the World Travel Awards, and is achieving top guest satisfaction
scores versus equivalent competing brands.
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●
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Portfolio
opportunities are also increasing, due to the broader suite of
brands and the overall enterprise system we can offer owners to
support their growth; three portfolio deals in EMEAA in H1 added 10
hotels across six brands.
|
Excellent progress in growing our Luxury & Lifestyle
presence. We have grown this category to 12% of IHG’s
system size, and the proportion of our pipeline is bigger still at
19%, up from 13% five years ago.
●
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A
number of brand halo properties opened in the period, including an
all-suites-and-villas Regent property in Phu Quoc (Vietnam) and
Australia’s first Kimpton (Sydney).
|
●
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There
were six further Kimpton signings in the period and more resort
destinations for the brand including Kimpton Aysla Mallorca will be
opening soon.
|
●
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Signings
for Six Senses increased its pipeline to 35 hotels, on top of 21
currently open.
|
●
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Hotel
Indigo is set for a record year of openings; it has reached 134
properties across more than 20 countries, which is set to nearly
double with a pipeline of 120 hotels. There were 16 signings for
the brand in the half, including new resort properties in Barbados
and Grand Cayman.
|
First Atwell Suites openings and the rapid scale of
avid.
●
|
The
first two Atwell Suites properties to open have been the prototype
new-build at Denver Airport and an adaptive re-use at Miami
Brickell, with 23 further hotels in the pipeline.
|
●
|
Five
new avid hotels opened in the half, taking the brand’s
presence to 53 locations, with the first opening in Canada later
this year. The avid pipeline totals 157 properties and the brand is
outperforming peers in guest satisfaction.
|
2.
Customer
centric in all we do
Delivering
True Hospitality for Good means creating seamless and tailored
guest experiences that generate increased demand, whilst delivering
high returns for our owners.
IHG’s
Guest Satisfaction Index (GSI) has continued to maintain a global
score of over 100, which reflects outperformance against peers. The
score on a rolling 12-month basis to June 2022 was higher than the
equivalent 2019 pre-Covid benchmark.
Transforming loyalty
Our
loyalty programme is critical to our business and future growth.
Our more than 100 million loyalty members are responsible for
around half of all room nights globally each year, they stay in our
hotels more often, and spend 20% more than non-members. They are
also 9x more likely to book direct, which is our most profitable
channel for owners.
This
year we launched our transformed loyalty programme, IHG One
Rewards, to offer industry-leading value, richer benefits and
greater choice for members to enhance their stays. It also aims to
attract more next-generation travellers. The enhanced rewards
include free breakfast for Diamond Elite members and the ability
for guests to choose the rewards that matter to them most through
the introduction of Milestone Rewards. To date:
●
|
14%
more points have been redeemed year-to-date compared to 2019, with
an 18% increase in reward nights booked.
|
●
|
Enrolments
in Q2 2022 were more than 30% higher than the comparable period
last year, and year-on-year 11 million more loyalty members have
been added.
|
●
|
Within
a month of launching Milestone Rewards, engagement has exceeded our
expectations and over 800,000 rewards have been
earned.
|
●
|
We also
launched our largest marketing campaign in more than a decade to
help raise awareness and drive more revenue to our hotels for our
owners.
|
Lowering costs and driving efficiencies for our owners
With
increasing supply costs and supply chain issues, together with
labour shortages, our owners around the world rely heavily on IHG
to help them run an efficient business. We have continued to expand
the benefits for owners of being part of the IHG system, whilst
also improving guest experience.
●
|
We have
further expanded the scale and reach of our procurement solutions
for operating supplies and equipment. More than 2,900 hotels in the
Americas are now participating in our F&B purchasing programme.
These programmes support menu optimisation, help owners mitigate
inflationary pressures and achieve absolute savings. Smaller owner
groups recently onboarded in the UK have seen typical savings of
7-15% on food costs and 10-15% on beverage costs.
|
●
|
We are
also helping owners lower construction and refurbishment costs in
our latest format upgrades and helping reduce other costs
associated with operating and maintaining their building
infrastructure.
|
●
|
IHG
Voice Cloud, our enhanced intelligent call services solution, will
be supporting several hundred hotels by the end of the year. This
typically saves an owner around 50 hours a month of on-premises
call handling, whilst also driving better guest experiences,
boosting loyalty enrolment and delivering revenue
up-sell.
|
●
|
We are
piloting renewable energy sourcing on behalf of our owners and
developing a power purchase agreement in a very competitive market.
Owners have also been able to lock-in substantial savings though
our fixed negotiated rates on other energy costs.
|
●
|
The
rollout of our IHG NextGen Payments system during 2022 and 2023
adds more guest payment options including e-wallet, and lowers
transaction and support fees for our owners.
|
3.
Create
digital advantage
Our
digital-first approach drives a higher percentage of direct
bookings, creates cost efficiencies, and delivers data and insights
to optimise revenue management decisions. Developments to date in
2022 included:
●
|
Booking flow improvements. Newly designed webpages that
combine rooms and rates choices have contributed to increases in
booking conversion of up to one percentage point and revenue uplift
of 2 to 3%. This new web experience has also driven a 10 percentage
point increase in enrolments to our IHG One Rewards
programme.
|
●
|
Stay enhancements and attribute pricing. Pilots progressing well to drive
cross-sell of non-room extras and for room up-sell which enable
owners to generate maximum value from the unique attributes of
their room inventory.
|
●
|
Next generation IHG mobile app released. The IHG mobile app is our
fastest-growing revenue channel. Amongst many enhancements, the new
app offers streamlined booking and allows guests to check-in
faster, and it powers IHG One Rewards to provide members with
seamless access to their loyalty benefits, including the ability to
choose and redeem Milestone Rewards. Enhancements are expected to
further increase direct bookings and loyalty engagement, and drive
incremental spend during stays. Since its relaunch, revenue driven
by our mobile app for the Americas and EMEAA regions has been at
30% higher levels than 2019.
|
4.
Care
for our people, communities and planet
Central
to our priority to care for our people, communities and planet, and
our purpose of True Hospitality for Good, is our 2030 Journey to
Tomorrow plan, which
launched in 2021 with a series of ambitious
commitments.
People
Creating
a culture where everyone feels valued and able to thrive is a vital
part of our ability to attract, develop and retain a more diverse
range of talent with different experiences and backgrounds. We are
making investments in multiple areas to achieve this:
●
|
Over
the next three years we are investing significantly to enhance the
capabilities of our core HR platforms and technology, to deliver a
more seamless user experience and the right data and insights
needed to drive performance. A new flagship learning and
development offering is also being developed across the business to
support talent.
|
●
|
We
continue to make progress on our commitment to increase ethnic
minority leadership representation at a corporate level, notably US
ethnic minority leadership where we have committed to doubling
representation between 2020 and 2025 (was 13%, now 20%, with a goal
of 26% in 2025). Conscious inclusion training is being extended to
frontline hotel employees and we are also piloting new inclusive
hiring practices in different markets.
|
●
|
As one
of many programmes to diversify representation in leadership roles,
more than 100 colleagues have so far graduated from our RISE
programme to increase the number of women in General Manager and
other senior positions in our managed hotels.
|
Communities
IHG is
proud to be at the heart of thousands of communities around the
world, as we strive to make a difference every day by delivering
our purpose of True Hospitality for Good.
●
|
The IHG
Skills Academy, a free virtual learning platform, is being
translated into more languages to broaden the global reach of our
IHG Academy programme and continue to break down barriers to
education and training.
|
●
|
In
response to the war in Ukraine and the humanitarian crisis it has
caused, IHG made significant donations to our humanitarian charity
partners, and has committed to work with our hotel owners in other
countries to shelter and recruit refugees. We have a dedicated
Refugees Careers Site at
careers.ihg.com/Ukraine-support.
|
Planet
As part
of our Journey to Tomorrow commitments, our 2030 science-based
target is to reduce scope 1, 2 and 3 greenhouse gas emissions by
46%.
●
|
New
training has been rolled out for our Hotel Energy Reduction
Opportunities (HERO) tool, which gives owners bespoke
sustainability recommendations, costs and savings based upon their
hotel’s individual data and characteristics.
|
●
|
We
continue to roll-out automated data collection across our business
to make it easier for our hotels to understand and measure their
environmental impacts, identify areas for reduction and track
progress.
|
●
|
An
energy metric has been introduced for all hotels as part of our
strategy to decarbonise the existing estate, as well as adding
further measures to our brand standards to conserve energy and
water.
|
●
|
As part
of our commitments to tackle waste, we recently announced a global
collaboration with Unilever to replace bathroom miniatures with
bulk amenities for 4,000 more hotels. The initiative is expected to
save at least 850 tonnes of plastic annually in the Americas region
alone and provide hotels with savings of 10-30% versus current
costs.
|
Capital allocation: resumption of interim dividend at 10% increased
level and $500m share buyback
IHG’s
asset-light business model is highly cash generative through the
cycle and enables us to invest in our brands and strengthen our
enterprise. We have a disciplined approach to capital allocation
which ensures that the business is appropriately invested in,
whilst looking to maintain an efficient and conservative balance
sheet.
The
Board’s perspectives on the uses of cash generated by the
business are unchanged: ensuring the business is appropriately
invested in to optimise growth that drives long-term shareholder
value creation, funding a sustainably growing dividend, and then
returning surplus capital to shareholders, whilst targeting our
leverage ratio within a range of 2.5-3.0x net debt:adjusted EBITDA
to maintain an investment grade credit rating. IHG’s capital
allocation approach delivered a strong track record of returning
$13.6bn to shareholders since demerger in 2003 through to 2019,
$2.4bn through ordinary dividends and $11.2bn via additional
returns.
In
February, we announced the results for 2021 showing that trading
had improved significantly, leading to profitability rebounding,
accompanied by strong cash flow and a reduction in net debt. This
resulted in our net debt:adjusted EBITDA ratio returning to 3.0x at
31 December 2021. As a consequence, a final dividend of 85.9¢
in respect of 2021 was proposed by the Board and subsequently paid
in May 2022, resulting in a cash outflow of $154m. This dividend
was equivalent to the final payment in respect of 2019 that was
withdrawn in 2020 in response to the onset of Covid.
With
the further improvement in profitability and reduction in net debt
in the first half of 2022, our net debt:adjusted EBITDA ratio
reduced to 2.1x at 30 June 2022. The Board is therefore
recommending an interim dividend of 43.9¢, which represents
growth of 10% on the 39.9¢ interim dividend paid in 2019 (no
interim dividend was paid in respect of 2020 or 2021). The
ex-dividend date is Thursday 1 September 2022 and the Record date
is Friday 2 September 2022. The dividend will be paid on Thursday 6
October 2022, resulting in a cash outflow of around $80m. This will
result in total dividends paid to shareholders in 2022 amounting to
approximately $235m.
Furthermore,
the Board has reviewed the opportunity to return surplus capital to
shareholders. As a result, an additional $500m is expected to be
returned through a share buyback programme that will commence
immediately and end no later than 31 January 2023. This initial
additional return is considered appropriate in the current
environment, maintaining our disciplined approach to investing in
the business to drive future growth, which in 2022 includes
significant increases in capital expenditure as well as substantial
operating cost investment to deliver our strategic
priorities.
It is
expected that substantial additional capacity will be generated in
the coming years to enable continued investment to drive growth,
the funding of a sustainably growing ordinary dividend, and further
surplus capital to be returned to shareholders. The Board will
continue to actively assess these opportunities as the trading
environment further evolves.
Summary
of financial performance
INCOME STATEMENT SUMMARY
|
6
months ended 30 June
|
|
|
|
|
|
2022
|
2021
|
%
|
|
$m
|
$m
|
change
|
Revenue
|
|
|
|
Americas
|
471
|
325
|
44.9
|
EMEAA
|
239
|
84
|
184.5
|
Greater
China
|
36
|
59
|
(39.0)
|
Central
|
94
|
97
|
(3.1)
|
|
____
|
____
|
____
|
Revenue
from reportable segmentsa
|
840
|
565
|
48.7
|
|
|
|
|
System
Fund revenues
|
554
|
378
|
46.6
|
Reimbursement
of costs
|
400
|
236
|
69.5
|
|
_____
|
_____
|
_____
|
Total
revenue
|
1,794
|
1,179
|
52.2
|
|
_____
|
_____
|
_____
|
Operating profit
|
|
|
|
Americas
|
351
|
224
|
56.7
|
EMEAA
|
59
|
(27)
|
NMb
|
Greater
China
|
5
|
31
|
(83.9)
|
Central
|
(38)
|
(40)
|
(5.0)
|
|
_____
|
____
|
_____
|
Operating
profit from reportable segmentsa
|
377
|
188
|
100.5
|
Analysed as:
|
|
|
|
Fee Business excluding central
|
410
|
264
|
55.3
|
Owned, leased and managed lease
|
5
|
(36)
|
NMb
|
Central
|
(38)
|
(40)
|
(5.0)
|
|
|
|
|
System
Fund result
|
3
|
(46)
|
NMb
|
|
____
|
____
|
____
|
Operating
profit before exceptional items
|
380
|
142
|
167.6
|
Operating
exceptional items
|
(19)
|
(4)
|
375.0
|
|
____
|
____
|
____
|
Operating profit
|
361
|
138
|
161.6
|
|
|
|
|
Net
financial expenses
|
(69)
|
(72)
|
(4.2)
|
Analysed as:
|
|
|
|
Adjusted interest expensea
|
(64)
|
(72)
|
(11.1)
|
System Fund interest
|
3
|
-
|
NMb
|
Foreign exchange losses
|
(8)
|
-
|
NMb
|
|
|
|
|
Fair
value gains on contingent purchase consideration
|
7
|
1
|
600.0
|
|
____
|
____
|
____
|
Profit before tax
|
299
|
67
|
346.3
|
|
|
|
|
Tax
|
(83)
|
(19)
|
336.8
|
Analysed as;
|
|
|
|
Tax before exceptional items and System Funda
|
(88)
|
(42)
|
109.5
|
Tax on exceptional items and exceptional tax
|
5
|
23
|
(78.3)
|
|
____
|
____
|
____
|
Profit for the period
|
216
|
48
|
350.0
|
|
|
|
|
Adjusted
earningsc
|
224
|
74
|
202.7
|
|
|
|
|
Basic
weighted average number of ordinary shares (millions)
|
184
|
183
|
0.5
|
|
____
|
____
|
____
|
Earnings per ordinary share
|
|
|
|
|
Basic
|
117.4¢
|
26.2¢
|
348.1
|
|
Adjusteda
|
121.7¢
|
40.4¢
|
201.2
|
|
|
|
|
|
Dividend per share
|
43.9¢
|
-
|
NMb
|
|
|
|
|
|
Average
US dollar to sterling exchange rate
|
$1: £0.77
|
$1:
£0.72
|
6.9
|
|
|
|
|
a
Definitions for
non-GAAP measures can be found in the Use of key performance
measures and non-GAAP measures section along with reconciliations
of these measures to the most directly comparable line items within
the Interim Financial Statements.
b Percentage
change considered not meaningful, such as where a positive balance
in the latest period is comparable to a negative or zero balance in
the prior period.
c Adjusted
earnings as used within adjusted earnings per share, a non-GAAP
measure.
Revenue
Trading
improved significantly over the first half of 2022, with Group
comparable RevPARa at the end of the
first half reaching near pre-pandemic levels. Through the first
half, trading conditions improved as government-mandated
restrictions eased across many markets. Strong trading in Americas
was predominantly driven by leisure demand in the US, supported by
improving corporate and group bookings. Trading in the EMEAA region
also saw strong sequential improvement whilst Greater China was
impacted by localised travel restrictions for much of the first
half.
Group
comparable RevPARa improved 60.8% in
the first quarter, then grew 43.9% in the second quarter and 50.7%
in the half. When compared to the pre-pandemic levels of 2019,
Group comparable RevPARa declined 17.7% in
the first quarter, 4.5% in the second quarter and 10.5% in the
half.
Our
other key driver of revenue, net system size, decreased by 0.2%
year-on-year to 882.9k rooms, impacted by 21.1k Holiday Inn and
Crowne Plaza removals in H2 2021 related to last year’s
review of the estates of these two brands and by 6.5k of removals
relating to Russia in H1 2022. Adjusting for these, net system size
increased 3.0%.
During
the six months ended 30 June 2022, total revenue increased by $615m
(52%) to $1,794m, including a $164m increase in cost reimbursement
revenue. Revenue from reportable segmentsb increased by $275m
(49%) to $840m, driven by the improved trading conditions.
Underlying revenueb increased by $287m
to $833m, with underlying fee revenueb increasing by $162m.
Owned, leased and managed lease revenue increased by
$116m.
Operating profit and margin
Operating
profit improved by $223m from $138m to $361m, including a $15m
increase in charges from operating exceptional items and a $49m
improvement in the System Fund result, from a $46m deficit to a $3m
surplus.
Operating
profit from reportable segmentsb increased by $189m
(101%) to $377m, driven by improvement in trading conditions.
Underlying operating profitb increased $175m to
$368m.
Fee
marginb
increased by 11.8 percentage points to 55.9%, benefitting from the
improvement in trading and focussed cost management.
The
impact of the movement in average USD exchange rates for the first
half of 2021 compared to the first half of 2022 netted to a $3m
gain on operating profit from reportable segmentsb.
If the
average exchange rate during July 2022 had existed throughout the
first half of 2022, the 2022 operating profit from reportable
segments would have been $4m higher.
System Fund
The
Group operates a System Fund to collect and administer cash
assessments from hotel owners for the specific purpose of use in
marketing, reservations, and the Group’s loyalty programme,
IHG One Rewards. The System Fund also benefits from proceeds from
the sale of loyalty points under third-party co-branding
arrangements. The Fund is not managed to generate a profit or loss
for IHG over the longer term, although an in-year surplus or
deficit can arise, but is managed for the benefit of hotels in the
IHG System with the objective of driving revenues for the
hotels.
In the
six months to 30 June 2022, System Fund revenues increased $176m
(46%) to $554m, primarily driven by the recovery in travel demand
yielding higher assessment revenues.
The
System Fund result improved from a $46m deficit to a $3m surplus,
primarily due to the rebound in travel demand and associated
assessment income, partially offset by increased investments in
consumer marketing, loyalty and direct channels.
Reimbursement of costs
Cost
reimbursement revenue represents reimbursements of expenses
incurred on behalf of managed and franchised properties and
relates, predominantly, to payroll costs at managed properties
where we are the employer. As we record cost reimbursements based
upon costs incurred with no added mark up, this revenue and related
expenses have no impact on either our operating profit or net
profit for the year.
In the
six months to 30 June 2022, reimbursable revenue increased by $164m
(70%) to $400m. The increase reflects the overall recovery in US
trading conditions.
a
Comparable RevPAR
includes the impact of hotels temporarily closed as a result of
Covid-19.
b
Definitions for
non-GAAP measures can be found in the Use of key performance
measures and non-GAAP measures section along with reconciliations
of these measures to the most directly comparable line items within
the Interim Financial Statements.
Operating exceptional items
Operating
exceptional items totalled $19m and comprises the costs of ceasing
operations in Russia and the impairment of contract assets relating
to managed and franchised hotels in Russia. Further information on
exceptional items can be found in note 5 to the Interim Financial
Statements.
Net financial expenses
Net
financial expenses decreased by $3m to $69m. Adjusted
interesta,
which excludes exceptional finance expenses, and adds back interest
relating to the System Fund, reduced by $8m compared to 2021,
driven by favourable translation of sterling bond interest
expense.
Fair value gains on contingent purchase consideration
Contingent
purchase consideration arose on the acquisition of Regent. The net
gain of $7m (2021: $1m) relates to a favourable movement in the
bond rates used in the valuation. The total contingent purchase
consideration liability at 30 June 2022 is $66m (31 December 2021:
$73m).
Taxation
The interim effective rate of tax on profit, before exceptional
items and System Fund, was 28% (2021: 36%). This lower effective
tax rate (‘ETR’) is a result of the continued recovery
of the business, in particular, changes to the Group’s profit
mix and a lesser impact of fixed items of tax within the ETR (due
to the higher profit base). Taxation within exceptional items
totalled a credit of $5m (2021: $23m) and predominantly relates to
the tax reliefs on the costs of ceasing business in Russia. Further
information on tax within exceptional items can be found in note 5
to the Interim Financial Statements. Net tax paid totalled $124m
(2021: $47m). Further information on tax can be found in
note 6 to the Interim Financial Statements.
Earnings per share
The
Group’s basic earnings per ordinary share is 117.4¢
(2021: 26.2¢). Adjusted earnings per ordinary
sharea
increased by 81.3¢ to 121.7¢.
Dividends and shareholder returns
With
the further improvement in profitability and reduction in net debt
in the first half of 2022, our net debt:adjusted EBITDA ratio
reduced to 2.1x at 30 June 2022. The Board is therefore
recommending an interim dividend of 43.9¢, which represents
growth of 10% on the 39.9¢ interim dividend paid in 2019 (no
interim dividend was paid in respect of 2020 or 2021).
The
ex-dividend date is Thursday 1 September 2022 and the Record date
is Friday 2 September 2022. The
corresponding dividend amount in Pence Sterling per ordinary share
will be announced on 15 September 2022, calculated based on the
average of the market exchange rates for the three working days
commencing 12 September 2022. The dividend will be paid on
Thursday 6 October, resulting in a cash outflow of around $80m.
This will result in total dividends paid to shareholders in 2022
amounting to approximately $235m.
In
addition to the interim dividend, in line with its strategy to
return surplus capital to shareholders, in August 2022 the Board
also approved a $500m share buyback programme that will commence on
9 August and end no later than 31 January 2023.
a
Definitions for
non-GAAP measures can be found in the Use of key performance
measures and non-GAAP measures section along with reconciliations
of these measures to the most directly comparable line items within
the Interim Financial Statements.
Summary of cash flow, working capital, net debt and
liquidity
Adjusted EBITDA reconciliation
|
6
months ended 30 June
|
|
2022
|
2021
|
|
$m
|
$m
Restateda
|
|
|
|
Cash flow from operations
|
336
|
259
|
Cash flows relating to exceptional items
|
15
|
12
|
Impairment loss on financial assets
|
(5)
|
(8)
|
Other non-cash adjustments to operating profit/loss
|
(34)
|
(35)
|
System Fund result
|
(3)
|
46
|
System Fund depreciation and amortisation
|
(42)
|
(41)
|
Other non-cash adjustments to System Fund result
|
(13)
|
(10)
|
Working capital and other adjustments
|
124
|
(6)
|
Capital expenditure: contract acquisition costs (key
money)
|
35
|
16
|
|
________
|
________
|
Adjusted EBITDA
|
413
|
233
|
|
____
|
____
|
CASH FLOW SUMMARY
|
6
months ended 30 June
|
|
2022
|
2021
|
$m
|
|
$m
|
$m
|
change
|
|
|
|
|
Adjusted EBITDAb
|
413
|
233
|
180
|
|
|
|
|
Working
capital and other adjustments
|
(124)
|
6
|
|
Impairment
loss on financial assets
|
5
|
8
|
|
Other
non-cash adjustments to operating profit/loss
|
34
|
35
|
|
System
Fund result
|
3
|
(46)
|
|
Non-cash
adjustments to System Fund result
|
55
|
51
|
|
Capital
expenditure: contract acquisition costs (key money) net of
repayments
|
(35)
|
(16)
|
|
Capital
expenditure: maintenance
|
(15)
|
(9)
|
|
Cash
flows relating to exceptional items
|
(15)
|
(12)
|
|
Net
interest paid
|
(37)
|
(39)
|
|
Tax
paid
|
(124)
|
(47)
|
|
Principal
element of lease payments
|
(18)
|
(17)
|
|
|
____
|
____
|
____
|
Adjusted free cash flowb
|
142
|
147
|
(5)
|
|
|
|
|
Capital
expenditure: gross recyclable investments
|
(1)
|
(9)
|
|
Capital
expenditure: gross System Fund capital investments
|
(18)
|
(7)
|
|
Deferred
purchase consideration paid
|
-
|
(13)
|
|
Disposals
and repayments, including other financial assets
|
7
|
1
|
|
Dividends
paid to shareholders
|
(154)
|
-
|
|
|
____
|
____
|
____
|
Net cash flow before other net debt movements
|
(24)
|
119
|
(143)
|
|
|
|
|
Add
back principal element of lease repayments within adjusted free
cash flow
|
18
|
17
|
|
Exchange
and other non-cash adjustments
|
169
|
(65)
|
|
|
____
|
____
|
____
|
Decrease in net debtb
|
163
|
71
|
92
|
|
|
|
|
Net
debt at beginning of the period
|
(1,881)
|
(2,529)
|
|
|
______
|
______
|
____
|
Net debt at end of the period
|
(1,718)
|
(2,458)
|
740
|
|
______
|
______
|
____
|
a The definition and reconciliation of Adjusted EBITDA has
been amended to reconcile to the nearest GAAP measure, cash flow
from operations, reflecting the fact Adjusted EBITDA is primarily
used by the Group as a liquidity measure. The value of Adjusted
EBITDA is unchanged from 2021.
b Definitions for non-GAAP measures can be found in the
‘Use of key performance measures and non-GAAP measures’
section along with reconciliations of these measures to the most
directly comparable line items within the Interim Financial
Statements.
Cash flow from operations
Cash
flow from operations was $336m for the six months ended 30 June
2022, an increase of $77m on the previous year, primarily
reflecting the increase in operating profit, offset by negative
working capital movements (see below).
Cash
flow from operations is the principal source of cash used to fund
the ongoing operating expenses, interest payments, maintenance
capital expenditure and normal dividend payments of the
Group.
Cash from investing activities
Net
cash outflows from investing activities decreased by $10m to $27m,
largely due to the non-recurrence of deferred consideration paid in
H1 2021 of $13m in relation to the acquisition of the Regent brand.
There was an overall increase in purchases of property, plant and
equipment and intangible assets of $17m, partially offset by
reduced investment in other financial assets of $9m. The Group had
committed contractual capital expenditure of $26m at 30 June 2022
(31 December 2021: $17m).
Cash used in financing activities
Net
cash outflows from financing activities totalled $172m (2021:
$845m) primarily comprising payment of ordinary dividends of $154m.
There were no debt repayments in H1 2022 (H1 2021: repayment of the
£600m commercial paper under the UK Covid Corporate Financing
Facility (CCFF)).
Adjusted free cash flow
Adjusted
free cash flowa was an inflow of
$142m, a reduction of $5m on the six months to June 2021,
reflecting an improvement in operating profit from reportable
segmentsa
and system fund result, offset by related tax payments and net
working capital outflows. Exceptional cash costs of $15m increased
by $3m and include the cost of ceasing operations in
Russia.
Working capital
Trade
and other receivables increased by $117m, from $574m at 31 December
2021 to $691m, primarily due to the significant increase in RevPAR
in the second quarter of 2022 compared to the fourth quarter of
2021. Trade and other payables reduced by $66m primarily driven by
payment of the 2021 bonus. The cash inflow related to deferred
revenue was $65m driven by an increase in the future redeemable
points balance related to the loyalty programme.
Net and gross capital expenditure
Net capital expenditurea was $22m (2021: $1m) and gross capital
expenditure was $72m (2021: $42m). Gross capital expenditure
comprised: $53m maintenance capex and key money; $1m gross
recyclable investments; and $18m System Fund capital investments.
Net capital expenditure includes the offset from $4m proceeds from
other financial assets, $3m net disposal proceeds, $3m key money
repayments and $40m System Fund depreciation and
amortisationb.
Net debt
At 30
June 2022, net debta was $1,718m (31
December 2021: $1,881m), after favourable foreign exchange of $227m
driven by translation of the Group’s sterling bond debt,
offset by $58m of other non-cash adjustments.
Sources of liquidity
As at
30 June 2022, the Group had total liquidity of $2,613m (31 December
2021: $2,655m), comprising $1,350m of undrawn bank facilities and
$1,263m of cash and cash equivalents (net of overdrafts and
restricted cash). The change in total liquidity from December 2021
is due to the decrease in cash and cash equivalents, net of
overdrafts, of $24m and unfavourable foreign exchange movement on
cash of $70m, offset by the change in restricted cash balances of
$52mc.
The
Group currently has $2,550m of sterling and euro bonds outstanding.
The current bonds mature in November 2022 (£173m), October
2024 (€500m), August 2025 (£300m), August 2026
(£350m), May 2027 (€500m) and October 2028 (£400m).
There are currency swaps in place on both the euro bonds, fixing
the October 2024 bond at £454m and the May 2027 bond at
£436m.
The
Group currently has a senior unsecured long-term credit rating of
BBB- from Standard and Poor’s.
a.
Definitions for
non-GAAP measures can be found in the Use of key performance
measures and non-GAAP measures section along with reconciliations
of these measures to the most directly comparable line items within
the Interim Financial Statements.
b.
Excluding $2m
depreciation of right-of-use assets.
c.
See note 10 within
the Interim Financial Statements for further details.
In
April, IHG entered into a new $1.35bn syndicated bank revolving
credit facility (RCF). The previous $1.275bn syndicated facility
and $75m bilateral facility have been cancelled. The covenant
amendments to the previous facilities announced in December 2020,
which included a relaxation of covenants for June 2022 and December
2022 and the $400m minimum liquidity covenant, are no longer in
effect. The new five-year RCF matures in April 2027. Two one-year
extension options are at the lenders’ discretion. There are
two financial covenants: interest cover and leverage ratio.
Covenants are tested at half year and full year on a trailing
12-month basis. The interest cover covenant requires a ratio of
Covenant EBITDA to Covenant interest payable above 3.5:1 and the
leverage ratio requires Covenant net debt to Covenant EBITDA below
4.0:1. These covenants now include the impact of IFRS 16, Leases,
which was previously excluded due to ‘frozen GAAP’
treatment in the previous agreement. The new facility uses
alternative reference rates instead of LIBOR.
At 30
June 2022 the leverage ratio was 2.16x and the interest cover ratio
was 6.11x. See note 10 in the Interim Financial Statements for
further information. The facility was undrawn at 30 June
2022.
The
Group is in compliance with all of the applicable financial
covenants in its loan documents, none of which are expected to
present a material restriction on funding in the near
future.
In the
Group’s opinion, the available facilities are sufficient for
the Group’s present liquidity requirements. However, the
Group continues to assess its liquidity position and financing
options and will take further actions as necessary.
The
Group had net liabilities of $1,175m at 30 June 2022 ($1,474m at 31
December 2021).
Additional revenue, global system size and pipeline
analysis
Total gross revenue
Total
gross revenuea provides a measure
of the overall strength of the Group’s brands. It comprises
total rooms revenue from franchised hotels and total hotel revenue
from managed, owned, leased and managed lease hotels and excludes
revenue from the System Fund and reimbursement of costs. Other than
owned, leased and managed lease hotels, total gross revenue is not
revenue attributable to IHG as it is derived from hotels owned by
third parties.
6 months ended 30 June
|
|
|
|
|
|
|
|
2022
|
|
2021
|
|
%
|
|
$bn
|
|
$bn
|
|
changeb
|
Analysed by brand
|
|
|
|
|
|
|
|
|
|
|
|
InterContinental
|
1.7
|
|
1.0
|
|
65.6
|
Kimpton
|
0.6
|
|
0.3
|
|
116.9
|
Hotel Indigo
|
0.3
|
|
0.2
|
|
92.8
|
Crowne Plaza
|
1.3
|
|
1.0
|
|
35.8
|
Holiday Inn
|
2.4
|
|
1.6
|
|
46.7
|
Holiday Inn Express
|
3.8
|
|
2.7
|
|
40.4
|
Staybridge Suites
|
0.6
|
|
0.4
|
|
35.7
|
Candlewood Suites
|
0.4
|
|
0.3
|
|
20.3
|
Other
|
0.6
|
|
0.4
|
|
50.0
|
|
____
|
|
____
|
|
____
|
Total
|
11.7
|
|
7.9
|
|
48.0
|
|
____
|
|
____
|
|
____
|
|
|
|
|
|
|
Analysed by ownership type
|
|
|
|
|
|
Fee business
|
11.5
|
|
7.8
|
|
46.9
|
Owned, leased and managed lease
|
0.2
|
|
0.1
|
|
189.1
|
|
____
|
|
____
|
|
____
|
Total
|
11.7
|
|
7.9
|
|
48.0
|
|
____
|
|
____
|
|
____
|
Total
gross revenue in IHG’s system increased by 48% (50% increase
at constant currency) to $11.7bn, driven by the improvement in
trading conditions in many markets.
a.
Definitions for the
key performance measures can be found in the Use of key performance
measures and non-GAAP measures section.
b.
Year-on-year
percentage movement calculated from source figures.
RevPARa
movement summary
|
Half Year 2022 vs 2021
|
Half Year 2022 vs 2019
|
|
RevPAR
|
ADR
|
Occupancy
|
RevPAR
|
ADR
|
Occupancy
|
Group
|
50.7%
|
24.4%
|
10.1%pts
|
(10.5)%
|
3.9%
|
(9.5)%pts
|
Americas
|
45.2%
|
22.1%
|
10.2%pts
|
(1.6)%
|
5.6%
|
(4.7)%pts
|
EMEAA
|
138.4%
|
35.3%
|
24.2%pts
|
(20.9)%
|
1.0%
|
(15.7)%pts
|
G.
China
|
(27.2)%
|
(4.3)%
|
(11.9)%pts
|
(45.9)%
|
(17.9)%
|
(20.1)%pts
|
|
Q2 2022 vs 2021
|
Q2 2022 vs 2019
|
|
RevPAR
|
ADR
|
Occupancy
|
RevPAR
|
ADR
|
Occupancy
|
Group
|
43.9%
|
23.5%
|
9.0%pts
|
(4.5)%
|
7.4%
|
(8.1)%pts
|
Americas
|
37.0%
|
20.2%
|
8.5%pts
|
3.5%
|
9.0%
|
(3.7)%pts
|
EMEAA
|
146.8%
|
35.8%
|
28.8%pts
|
(10.3)%
|
4.0%
|
(10.4)%pts
|
G.
China
|
(39.5)%
|
(8.9)%
|
(19.8)%pts
|
(48.9)%
|
(18.7)%
|
(23.5)%pts
|
RevPARa
movement at constant exchange rates (CER) vs. actual exchange rates
(AER)
|
Half Year 2022 vs 2021
|
Half Year 2022 vs 2019
|
|
CER
|
AER
|
Difference
|
CER
|
AER
|
Difference
|
Group
|
50.7%
|
48.6%
|
2.1%pts
|
(10.5)%
|
(11.2)%
|
0.7%pts
|
Americas
|
45.2%
|
45.1%
|
0.1%pts
|
(1.6)%
|
(1.9)%
|
0.3%pts
|
EMEAA
|
138.4%
|
121.7%
|
16.7%pts
|
(20.9)%
|
(23.7)%
|
2.9%pts
|
G.
China
|
(27.2)%
|
(27.4)%
|
0.2%pts
|
(45.9)%
|
(43.6)%
|
(2.3)%pts
|
|
Q2 2022 vs 2021
|
Q2 2022 vs 2019
|
|
CER
|
AER
|
Difference
|
CER
|
AER
|
Difference
|
Group
|
43.9%
|
41.0%
|
2.9%pts
|
(4.5)%
|
(5.6)%
|
1.1%pts
|
Americas
|
37.0%
|
36.8%
|
0.2%pts
|
3.5%
|
3.2%
|
0.3%pts
|
EMEAA
|
146.8%
|
124.9%
|
21.9%pts
|
(10.3)%
|
(14.9)%
|
4.6%pts
|
G.
China
|
(39.5)%
|
(40.9)%
|
1.4%pts
|
(48.9)%
|
(47.4)%
|
(1.5)%pts
|
Monthly RevPARa (CER)
2022 vs 2021
|
Jan
|
Feb
|
Mar
|
Apr
|
May
|
Jun
|
Group
|
54.8%
|
72.3%
|
56.9%
|
50.1%
|
43.8%
|
39.2%
|
Americas
|
53.7%
|
65.1%
|
55.7%
|
48.1%
|
37.6%
|
28.0%
|
EMEAA
|
92.7%
|
122.7%
|
146.1%
|
165.1%
|
156.3%
|
126.0%
|
G.
China
|
5.6%
|
36.9%
|
(39.8)%
|
(51.5)%
|
(45.6)%
|
(17.7)%
|
2022 vs 2019
|
Jan
|
Feb
|
Mar
|
Apr
|
May
|
Jun
|
Group
|
(24.4)%
|
(18.1)%
|
(12.1)%
|
(7.9)%
|
(5.4)%
|
(0.6)%
|
Americas
|
(14.2)%
|
(8.2)%
|
(2.6)%
|
2.9%
|
2.0%
|
5.5%
|
EMEAA
|
(41.9)%
|
(36.6)%
|
(22.5)%
|
(17.2)%
|
(8.3)%
|
(6.0)%
|
G.
China
|
(38.4)%
|
(31.7)%
|
(53.1)%
|
(58.6)%
|
(51.6)%
|
(35.5)%
|
2021 vs 2019
|
Jan
|
Feb
|
Mar
|
Apr
|
May
|
Jun
|
Jul
|
Aug
|
Sep
|
Oct
|
Nov
|
Dec
|
Group
|
(52.5)%
|
(53.8)%
|
(46.6)%
|
(41.4)%
|
(37.1)%
|
(31.0)%
|
(18.4)%
|
(23.0)%
|
(21.5)%
|
(19.2)%
|
(19.1)%
|
(12.1)%
|
Americas
|
(45.1)%
|
(45.4)%
|
(39.4)%
|
(32.3)%
|
(27.8)%
|
(19.7)%
|
(7.3)%
|
(12.1)%
|
(10.6)%
|
(10.5)%
|
(7.4)%
|
0.4%
|
EMEAA
|
(71.1)%
|
(72.7)%
|
(70.6)%
|
(70.1)%
|
(65.8)%
|
(59.4)%
|
(48.2)%
|
(38.2)%
|
(42.8)%
|
(36.3)%
|
(33.2)%
|
(30.2)%
|
G.
China
|
(41.5)%
|
(51.1)%
|
(23.2)%
|
(14.9)%
|
(12.0)%
|
(21.5)%
|
(6.4)%
|
(55.2)%
|
(25.9)%
|
(24.6)%
|
(46.3)%
|
(28.1)%
|
2020 vs 2019
|
Jan
|
Feb
|
Mar
|
Apr
|
May
|
Jun
|
Jul
|
Aug
|
Sep
|
Oct
|
Nov
|
Dec
|
Group
|
(1.5)%
|
(10.8)%
|
(55.1)%
|
(81.9)%
|
(75.6)%
|
(67.4)%
|
(58.1)%
|
(51.0)%
|
(50.9)%
|
(51.9)%
|
(55.3)%
|
(52.4)%
|
Americas
|
0.2%
|
(0.9)%
|
(49.0)%
|
(80.1)%
|
(72.5)%
|
(62.0)%
|
(54.0)%
|
(48.6)%
|
(46.4)%
|
(48.0)%
|
(51.4)%
|
(49.5)%
|
EMEAA
|
2.1%
|
(11.3)%
|
(62.7)%
|
(89.3)%
|
(88.5)%
|
(85.3)%
|
(74.7)%
|
(66.3)%
|
(69.9)%
|
(70.5)%
|
(72.4)%
|
(68.6)%
|
G.
China
|
(24.6)%
|
(89.3)%
|
(81.4)%
|
(71.2)%
|
(57.1)%
|
(48.6)%
|
(35.9)%
|
(20.2)%
|
(11.0)%
|
(16.9)%
|
(22.5)%
|
(15.1)%
|
a.
RevPAR is presented
on a comparable basis, comprising groupings of hotels that have
traded in all months in both years being compared. Comparable hotel
groupings will be different for comparisons between 2022 vs 2021,
2022 vs 2019, 2021 vs 2019 and 2020 vs 2019. See Use of key
performance measures and non-GAAP measures section for further
information on the definition of RevPAR.
|
Hotels
|
Rooms
|
|
Global hotel and room count
|
|
Change over
|
|
Change over
|
|
2022
|
2021
|
2022
|
2021
|
|
30 June
|
31 December
|
30 June
|
31 December
|
Analysed by brand
|
|
|
|
|
|
Six Senses
|
21
|
-
|
1,439
|
27
|
Regent
|
8
|
1
|
2,532
|
342
|
|
InterContinental
|
205
|
1
|
69,525
|
123
|
|
Vignette Collection
|
2
|
1
|
539
|
393
|
|
Kimpton
|
75
|
-
|
13,304
|
21
|
|
Hotel Indigo
|
134
|
4
|
17,056
|
713
|
|
voco
|
40
|
9
|
9,447
|
2,002
|
|
HUALUXE
|
18
|
2
|
5,147
|
544
|
|
Crowne Plaza
|
402
|
(2)
|
110,317
|
(861)
|
|
EVEN Hotels
|
22
|
1
|
3,180
|
186
|
|
Holiday Inna
|
1,206
|
(12)
|
220,860
|
(3,824)
|
|
Holiday Inn Express
|
3,044
|
28
|
320,970
|
3,641
|
avid hotels
|
53
|
5
|
4,771
|
491
|
|
Atwell Suites
|
2
|
2
|
186
|
186
|
|
Staybridge Suites
|
314
|
(1)
|
33,924
|
(382)
|
|
Candlewood Suites
|
363
|
2
|
32,222
|
197
|
|
Otherb
|
119
|
(4)
|
37,478
|
(1,229)
|
|
|
_____
|
____
|
_______
|
______
|
Total
|
6,028
|
37
|
882,897
|
2,570
|
|
|
_____
|
____
|
_______
|
______
|
Analysed by ownership type
|
|
|
|
|
|
Franchised
|
5,078
|
45
|
630,895
|
4,780
|
|
Managed
|
931
|
(8)
|
247,381
|
(2,210)
|
|
Owned, leased and managed lease
|
19
|
-
|
4,621
|
-
|
|
|
_____
|
____
|
_______
|
______
|
Total
|
6,028
|
37
|
882,897
|
2,570
|
|
|
_____
|
____
|
_______
|
______
|
|
|
|
|
|
|
a.
Includes 28 Holiday
Inn Club Vacations properties (8,822 rooms) (2021: 28 Holiday Inn
Club Vacations properties (8,679 rooms)).
b.
Includes three open
hotels that will be re-branded to voco.
|
Hotels
|
Rooms
|
|
Global Pipeline
|
|
Change over
|
|
Change over
|
|
2022
|
2021
|
2022
|
2021
|
|
30 June
|
31 December
|
30 June
|
31 December
|
Analysed by brand
|
|
|
|
|
|
Six Senses
|
35
|
2
|
2,532
|
108
|
Regent
|
8
|
-
|
1,806
|
(132)
|
|
InterContinental
|
83
|
4
|
20,859
|
1,180
|
|
Vignette Collection
|
1
|
1
|
40
|
40
|
|
Kimpton
|
40
|
5
|
7,952
|
1,100
|
|
Hotel Indigo
|
120
|
6
|
19,403
|
951
|
|
voco
|
34
|
(4)
|
9,360
|
(730)
|
|
HUALUXE
|
21
|
(2)
|
5,506
|
(539)
|
|
Crowne Plaza
|
114
|
18
|
29,448
|
4,187
|
|
EVEN Hotels
|
28
|
(1)
|
4,776
|
(131)
|
|
Holiday Inn
|
245
|
1
|
47,234
|
(844)
|
|
Holiday Inn Express
|
650
|
5
|
82,079
|
(947)
|
avid hotels
|
157
|
(7)
|
13,601
|
(894)
|
|
Atwell Suites
|
23
|
-
|
2,268
|
(7)
|
|
Staybridge Suites
|
164
|
8
|
18,140
|
1,297
|
|
Candlewood Suites
|
111
|
18
|
9,213
|
1,448
|
|
Othera
|
24
|
7
|
4,058
|
1,228
|
|
|
_____
|
____
|
_______
|
_____
|
Total
|
1,858
|
61
|
278,275
|
7,315
|
|
|
_____
|
____
|
_______
|
_____
|
Analysed by ownership type
|
|
|
|
|
|
Franchised
|
1,328
|
38
|
162,276
|
4,444
|
|
Managed
|
529
|
23
|
115,844
|
2,871
|
Owned, leased and managed lease
|
1
|
-
|
155
|
-
|
|
|
_____
|
____
|
_______
|
_____
|
Total
|
1,858
|
61
|
278,275
|
7,315
|
|
|
_____
|
____
|
_______
|
_____
|
a.
Includes three voco
pipeline hotels and five Vignette Collection pipeline
hotels.
Regional performance reviews, system size and pipeline
analysis
AMERICAS
|
6 months ended 30 June
|
Americas Results
|
|
|
|
|
2022
|
2021
|
%
|
|
$m
|
$m
|
change
|
Revenue from
the reportable segmenta
|
|
|
|
|
Fee
business
|
413
|
296
|
39.5
|
|
Owned,
leased and managed lease
|
58
|
29
|
100.0
|
|
____
|
____
|
____
|
Total
|
471
|
325
|
44.9
|
|
____
|
____
|
____
|
Operating profit from the reportable segmenta
|
|
|
|
|
Fee
business
|
342
|
236
|
44.9
|
|
Owned,
leased and managed lease
|
9
|
(12)
|
NMc
|
|
____
|
____
|
____
|
|
351
|
224
|
56.7
|
Operating
exceptional items
|
-
|
(4)
|
NMc
|
|
____
|
____
|
____
|
Operating
profit
|
351
|
220
|
59.5
|
|
____
|
_____
|
_______
|
Americas Comparable RevPARb movement on previous
year
|
6 months ended
30 June 2022
|
Fee
business
|
|
|
InterContinental
|
162.3%
|
|
Kimpton
|
101.0%
|
|
Hotel
Indigo
|
62.8%
|
|
Crowne
Plaza
|
83.2%
|
|
EVEN
Hotels
|
108.9%
|
|
Holiday
Inn
|
50.0%
|
|
Holiday
Inn Express
|
34.2%
|
|
Staybridge
Suites
|
29.1%
|
|
Candlewood
Suites
|
20.1%
|
|
All
brands
|
44.9%
|
Owned,
leased and managed lease
|
|
|
All
brands
|
119.5%
|
|
|
|
H1
Comparable RevPARb was up +45% vs 2021
(down (1.6)% vs 2019). Trading in January was challenging given the
initial impacts on travel volumes as a result of the Omicron
variant of Covid-19; sequential improvements in RevPARb resumed in February.
Leisure demand continued to be strongest, with business demand
strengthening as the period went on with more corporate bookings
and group activity and events returning. Q2 RevPARb was up +37% vs 2021
(up +3.5% vs 2019) with occupancy of 70%; occupancy was four
percentage points lower than 2019, which was more than offset by
rate 9% higher than 2019 levels. US Q2 RevPARb was up +3.9% vs 2019
with occupancy four percentage points lower and rate 9% higher than
2019 levels. As the recovery has broadened, the range of
performance has narrowed. Across our US franchised estate, which is
weighted to domestic demand in upper midscale hotels, Q2
RevPARb
increased by +5% vs 2019. The US managed estate, weighted to
upscale and luxury hotels in urban locations, declined by (2)% vs
2019.
Revenue
from the reportable segmenta in H1 increased by
$146m (+45%) to $471m (a decrease of $49m or 9% vs 2019). Operating
profit increased by $131m to $351m, driven by the increase in
revenue. Operating profit from the reportable segmenta increased by $127m
(+57%) to $351m (an increase of $7m or 2% vs 2019). There were $7m
of incentive management fees recorded for the period (2021: $4m;
2019: $7m).
Fee
business revenuea increased by $117m
(+40%) to $413m. Fee business operating profita increased by $106m
(+45%) to $342m, driven by the improvement in trading. Also
benefiting from the prior delivery of sustainable fee business cost
savings, H1 fee margina increased to 82.8%,
compared to 79.7% in 2021 and 77.3% in 2019. Operating profit from
the reportable segment included $2m of ongoing support received in
the form of tax credits which relate to the Group’s corporate
office presence in certain locations, down from $5m benefit in the
comparable period.
Owned,
leased and managed lease revenue increased by $29m to $58m, with
comparable RevPARb up 120% (down 23% vs
2019) leading to an owned, leased and managed leased operating
profit of $9m compared to a $12m loss in the comparable period.
Excluding the results of three owned EVEN hotels which were
disposed and retained under franchise contracts in November 2021,
revenue increased by $34m and operating profit improved by
$17m.
a.
Definitions
for non-GAAP measures can be found in the Use of key performance
measures and non-GAAP measures section along with reconciliations
of these measures to the most directly comparable line items within
the Interim Financial Statements.
b.
Comparable
RevPAR and occupancy include the impact of hotels temporarily
closed as a result of Covid-19.
c.
Percentage
change considered not meaningful, such as where a positive balance
in the latest period is comparable to a negative or zero balance in
the prior period.
|
Hotels
|
Rooms
|
|
Americas hotel and room count
|
|
Change over
|
|
Change over
|
|
2022
|
2021
|
2022
|
2021
|
|
30 June
|
31 December
|
30 June
|
31 December
|
Analysed by brand
|
|
|
|
|
|
Six Senses
|
1
|
-
|
20
|
-
|
|
InterContinental
|
43
|
-
|
15,652
|
1
|
|
Kimpton
|
63
|
(1)
|
10,857
|
(151)
|
|
Hotel Indigo
|
70
|
4
|
9,282
|
537
|
|
voco
|
5
|
-
|
469
|
-
|
|
Crowne Plaza
|
112
|
-
|
28,035
|
105
|
|
EVEN Hotels
|
19
|
-
|
2,743
|
-
|
|
Holiday Inna
|
716
|
-
|
120,911
|
61
|
|
Holiday Inn Express
|
2,451
|
15
|
222,944
|
1,217
|
avid hotels
|
53
|
5
|
4,771
|
491
|
|
Atwell Suites
|
2
|
2
|
186
|
186
|
|
Staybridge Suites
|
296
|
-
|
30,992
|
(105)
|
|
Candlewood Suites
|
363
|
2
|
32,222
|
197
|
|
Otherb
|
99
|
(2)
|
22,104
|
(440)
|
|
|
_____
|
____
|
_______
|
______
|
Total
|
4,293
|
25
|
501,188
|
2,099
|
|
|
_____
|
____
|
_______
|
______
|
Analysed by ownership type
|
|
|
|
|
|
Franchised
|
4,118
|
31
|
463,430
|
3,173
|
|
Managed
|
172
|
(6)
|
36,431
|
(1,074)
|
Owned, leased and managed lease
|
3
|
-
|
1,327
|
-
|
|
|
_____
|
____
|
_______
|
______
|
Total
|
4,293
|
25
|
501,188
|
2,099
|
|
|
_____
|
____
|
_______
|
______
|
a.
Includes
28 Holiday Inn Club Vacations properties (8,822 rooms) (2021: 28
Holiday Inn Club Vacations properties (8,679 rooms)).
b.
Includes
two open hotels that will be re-branded to voco.
|
Hotels
|
Rooms
|
|
Americas Pipeline
|
|
Change over
|
|
Change over
|
|
2022
|
2021
|
2022
|
2021
|
|
30 June
|
31 December
|
30 June
|
31 December
|
Analysed by brand
|
|
|
|
|
|
Six Senses
|
5
|
(1)
|
338
|
(133)
|
|
InterContinental
|
9
|
-
|
2.252
|
-
|
|
Kimpton
|
23
|
4
|
4,300
|
869
|
|
Hotel Indigo
|
28
|
(1)
|
4.009
|
(61)
|
|
voco
|
4
|
(1)
|
920
|
(125)
|
|
Crowne Plaza
|
8
|
-
|
1,644
|
1
|
|
EVEN Hotels
|
10
|
-
|
1,161
|
(5)
|
|
Holiday Inn
|
73
|
(1)
|
9,444
|
(24)
|
|
Holiday Inn Express
|
352
|
14
|
34,336
|
1,635
|
avid hotels
|
157
|
(7)
|
13,601
|
(894)
|
|
Atwell Suites
|
23
|
-
|
2,268
|
(7)
|
|
Staybridge Suites
|
143
|
6
|
14,910
|
860
|
|
Candlewood Suites
|
111
|
18
|
9,213
|
1,448
|
|
Othera
|
13
|
2
|
2,005
|
234
|
|
|
____
|
____
|
______
|
______
|
Total
|
959
|
33
|
100,401
|
3,798
|
|
|
____
|
____
|
______
|
______
|
Analysed by ownership type
|
|
|
|
|
|
Franchised
|
922
|
33
|
94,367
|
3,635
|
|
Managed
|
37
|
-
|
6,034
|
163
|
|
|
____
|
____
|
______
|
______
|
Total
|
959
|
33
|
100,401
|
3,798
|
|
|
____
|
____
|
______
|
______
|
a.
Includes
one pipeline hotel that will be re-branded to voco.
Gross
system size growth was +2.3% year-on-year. We opened 4.3k rooms (42
hotels) during the first half, including 25 hotels across the
Holiday Inn Brand Family. There were five avid hotels opened,
including Fort Lauderdale Airport, and four Hotel Indigo
properties. The first two Atwell Suites properties opened in Miami
and Denver. There were 2.2k rooms (17 hotels) removed in the first
half.
Net
system size declined (1.8)% year-on-year; on an adjusted basis (for
the Holiday Inn and Crowne Plaza removals that occurred in the
second half of 2021, driven by last year’s review of the
estates of these two brands), net system size growth was
+0.6%.
There
were 11.5k rooms (108 hotels) signed during the first half
(including 3.7k (35 hotels) during Q2). There were 45 hotel
signings across the Holiday Inn Brand Family and 38 across
Staybridge Suites and Candlewood Suites. Other notable signings
included a strong period for Kimpton with four signings, nine
further avid hotels and four further Atwell Suites.
The
pipeline stands at 100.4k rooms (959 hotels), which represents 20%
of the current system size in the region.
EMEAA
|
6
months ended 30 June
|
EMEAA results
|
|
|
|
|
2022
|
2021
|
%
|
|
$m
|
$m
|
change
|
Revenue from the reportable segmenta
|
|
|
|
|
Fee
business
|
121
|
53
|
128.3
|
|
Owned,
leased and managed lease
|
118
|
31
|
280.6
|
|
____
|
____
|
____
|
Total
|
|
239
|
84
|
184.5
|
|
____
|
____
|
____
|
Operating profit/(loss) from the reportable segmenta
|
|
|
|
|
Fee
business
|
63
|
(3)
|
NMc
|
|
Owned,
leased and managed lease
|
(4)
|
(24)
|
(83.3)
|
|
____
|
____
|
____
|
|
59
|
(27)
|
NMc
|
Operating
exceptional items
|
(19)
|
-
|
NMc
|
|
____
|
____
|
_____
|
Operating
profit/(loss)
|
40
|
(27)
|
NMc
|
|
____
|
____
|
_____
|
EMEAA comparable RevPARb movement on previous
year
|
6 months ended
30 June 2022
|
|
|
Fee
business
|
|
|
Six
Senses
|
161.6%
|
|
Regent
|
39.9%
|
|
InterContinental
|
115.8%
|
|
Kimpton
|
334.5%
|
|
Hotel
Indigo
|
375.6%
|
|
voco
|
95.4%
|
|
Crowne
Plaza
|
120.7%
|
|
Holiday
Inn
|
143.5%
|
|
Holiday
Inn Express
|
157.6%
|
|
Staybridge
Suites
|
53.9%
|
|
All
brands
|
135.1%
|
|
|
|
Owned,
leased and managed lease
|
|
|
All
brands
|
422.6%
|
|
|
|
H1
Comparable RevPARb was up +138% vs 2021
(down (20.9)% vs 2019). The industry faced some renewed challenges
to travel volumes at the start of the year from the Omicron variant
of Covid-19. However, from February and over subsequent months,
easing of previous restrictions on international travel contributed
to strong sequential improvements in RevPAR. Leisure stays and
transient business were the strongest categories, with corporate
bookings and group activity picking up in their pace of recovery as
the period went on. Q2 RevPARb was up +147% vs 2021
(down (10.3)% vs 2019) with occupancy of 64%; occupancy was 10
percentage points lower relative to 2019, partially offset by rate
4% higher than 2019 levels. Variance in performance within the
region continued to predominantly reflect the timing of the lifting
of restrictions. The UK, which saw one of the earlier easing of
restrictions, saw RevPARb down (8)% in H1 vs
2019 and down (2)% in Q2 vs 2019. Strong improvements in London
trading saw Q2 RevPARb down (10)% vs 2019,
rapidly closing the performance gap with the provinces which saw
RevPARb up
+1% vs 2019. Elsewhere, Q2 RevPARb vs 2019 was down
(3)% in Australia, (6)% in Continental Europe, (8)% in the Middle
East, (34)% in South East Asia & Korea and (50)% in
Japan.
Revenue
from the reportable segmenta in H1 increased by
$155m (+185%) to $239m (a decrease of $99m or 29% vs 2019).
Operating profit increased by $67m to a $40m profit, driven by the
increase in revenue, partially offset by $19m of operating
exceptional charges relating to ceasing all operations in Russia.
Operating profit from the reportable segmenta increased by $86m to
a $59m profit (a decrease of $29m vs 2019). There were $25m of
incentive management fees recorded for the period (2021: $11m;
2019: $41m). Revenue and operating profit from the reportable
segmenta
also included the benefit of a $7m individually significant
liquidated damages settlement.
Fee
business revenuea increased by $68m
(+128%) to $121m. Fee business operating profita increased to a $63m
profit from a $3m loss in the comparable period, driven by the
improvement in trading. Together with the prior delivery of
sustainable fee business cost savings, H1 fee margina was 49.1%, compared
to -5.7% in 2021 and 57.8% in 2019.
Owned,
leased and managed lease revenue sharply increased by $87m to
$118m, with comparable RevPARb up 423% (down 36% vs
2019) leading to an owned, leased and managed leased operating loss
that decreased to $4m compared to a $24m loss in the comparable
period. The lifting of travel restrictions, predominantly in the
UK, began to ease the trading challenges on this largely
urban-centred portfolio. Excluding the result of one
InterContinental hotel which was disposed of in January 2022,
revenue increased by $91m and operating loss decreased to
$6m.
a.
Definitions
for non-GAAP measures can be found in the Use of key performance
measures and non-GAAP measures section along with reconciliations
of these measures to the most directly comparable line items within
the Interim Financial Statements.
b.
Comparable
RevPAR and occupancy include the impact of hotels temporarily
closed as a result of Covid-19.
c.
Percentage
change considered not meaningful, such as where a positive balance
in the latest period is comparable to a negative or zero balance in
the prior period.
|
Hotels
|
Rooms
|
|
EMEAA hotel and room count
|
|
Change over
|
|
Change over
|
|
2022
|
2021
|
2022
|
2021
|
|
30 June
|
31 December
|
30 June
|
31 December
|
Analysed by brand
|
|
|
|
|
|
Six Senses
|
19
|
-
|
1,289
|
19
|
Regent
|
4
|
1
|
1,113
|
342
|
|
InterContinental
|
109
|
1
|
32,667
|
106
|
|
Vignette Collection
|
2
|
1
|
539
|
393
|
|
Kimpton
|
11
|
1
|
2,318
|
172
|
|
Hotel Indigo
|
49
|
1
|
5,488
|
305
|
|
voco
|
29
|
8
|
7,758
|
1,876
|
|
Crowne Plaza
|
179
|
(3)
|
43,671
|
(1,157)
|
|
Holiday Inn
|
370
|
(10)
|
67,389
|
(3,435)
|
|
Holiday Inn Express
|
335
|
2
|
48,977
|
429
|
|
Staybridge Suites
|
18
|
(1)
|
2,932
|
(277)
|
|
Other
|
11
|
(2)
|
8,043
|
(789)
|
|
|
_____
|
____
|
_______
|
______
|
Total
|
1,136
|
(1)
|
222,184
|
(2,016)
|
|
|
_____
|
____
|
_______
|
______
|
Analysed by ownership type
|
|
|
|
|
|
Franchised
|
772
|
5
|
125,560
|
(147)
|
|
Managed
|
348
|
(6)
|
93,330
|
(1,869)
|
Owned, leased and managed lease
|
16
|
-
|
3,294
|
-
|
|
|
_____
|
____
|
_______
|
______
|
Total
|
1,136
|
(1)
|
222,184
|
(2,016)
|
|
|
_____
|
____
|
_______
|
______
|
|
Hotels
|
Rooms
|
|
EMEAA Pipeline
|
|
Change over
|
|
Change over
|
|
2022
|
2021
|
2022
|
2021
|
|
30 June
|
31 December
|
30 June
|
31 December
|
Analysed by brand
|
|
|
|
|
|
Six Senses
|
26
|
3
|
1,961
|
241
|
Regent
|
5
|
(1)
|
999
|
(342)
|
|
InterContinental
|
47
|
4
|
10,709
|
1,189
|
|
Vignette Collection
|
1
|
1
|
40
|
40
|
|
Kimpton
|
9
|
-
|
1,626
|
(48)
|
|
Hotel Indigo
|
45
|
1
|
7,068
|
64
|
|
voco
|
26
|
(5)
|
7,695
|
(1,058)
|
|
Crowne Plaza
|
44
|
4
|
11,040
|
579
|
|
Holiday Inn
|
94
|
(4)
|
18,803
|
(2,211)
|
|
Holiday Inn Express
|
96
|
(3)
|
14,855
|
(738)
|
|
Staybridge Suites
|
21
|
2
|
3,230
|
437
|
|
Othera
|
11
|
5
|
2,053
|
994
|
|
|
____
|
____
|
______
|
_____
|
Total
|
425
|
7
|
80,079
|
(853)
|
|
|
____
|
____
|
______
|
_____
|
Analysed by ownership type
|
|
|
|
|
|
Franchised
|
167
|
(8)
|
24,957
|
(2,088)
|
|
Managed
|
257
|
15
|
54,967
|
1,235
|
Owned, leased and managed lease
|
1
|
-
|
155
|
-
|
|
|
____
|
____
|
______
|
_____
|
Total
|
425
|
7
|
80,079
|
(853)
|
|
|
____
|
____
|
______
|
_____
|
a.
Includes
two voco pipeline hotels and five Vignette Collection pipeline
hotels.
Gross
system size growth was +7.3% year-on-year. We opened 6.8k rooms (35
hotels) during the first half. There were 16 openings across the
Holiday Inn Brand Family, including resort locations such as
Holiday Inn Resort Ho Tram Beach (Vietnam) and Holiday Inn &
Suites Sydney Bondi Junction, and urban locations such as Holiday
Inn Express Auckland City Centre and at Cambridge West in the UK.
There were eight voco properties opened, including Doha West Bay,
Johannesburg and a flagship new-build at Melbourne Central. Other
notable openings included InterContinental properties in Bali, Ras
Al Khaimah and Appi Kogen Resort, Japan, and the first Vignette
Collection hotel to open in Asia at Sindhorn Midtown Hotel Bangkok.
There were 8.8k rooms (36 hotels) removed in the first half, of
which 6.5k (28 hotels) related to our ceasing of operations in
Russia.
Net
system size declined (0.6)% year-on-year; on an adjusted basis (for
the Holiday Inn and Crowne Plaza removals that occurred in the
second half of 2021, driven by last year’s review of the
estates of these two brands, and also adjusting for the removal of
hotels in Russia following IHG’s announcement regarding
ceasing all operations in that country), net system size growth was
+5.2%.
There
were 8.1k rooms (49 hotels) signed during the first half (including
5.8k (34 hotels) during Q2). This included 14 across the Holiday
Inn Brand Family and a particularly strong period for the
InterContinental brand with seven signings. Other notable signings
included the fourth Kimpton in Thailand with Kimpton Hua Hin
Resort, voco Osaka Central (the first for the brand in Japan) and a
three-brand portfolio signing in Vietnam, bringing the Hotel
Indigo, Crowne Plaza and Holiday Inn Express brands to Hoi An and
its UNESCO world heritage site.
The
pipeline stands at 80.1k rooms (425 hotels), which represents 36%
of the current system size in the region.
GREATER CHINA
|
6 months ended 30
June
|
|
|
|
|
Greater China results
|
2022
|
2021
|
%
|
|
$m
|
$m
|
change
|
|
|
|
|
Revenue from the reportable segmenta
|
|
|
|
|
Fee
business
|
36
|
59
|
(39.0)
|
|
|
____
|
____
|
_____
|
Total
|
|
36
|
59
|
(39.0)
|
|
____
|
____
|
_____
|
Operating profit from the reportable segmenta
|
|
|
|
|
Fee
business
|
5
|
31
|
(83.9)
|
|
____
|
____
|
____
|
Operating
profit
|
5
|
31
|
(83.9)
|
|
____
|
____
|
____
|
Greater China comparable RevPARb movement on previous
year
|
6 months ended
30 June 2022
|
|
|
Fee
business
|
|
|
Regent
|
(20.0)%
|
|
InterContinental
|
(40.3)%
|
|
Hotel
Indigo
|
(23.8)%
|
|
HUALUXE
|
(28.5)%
|
|
Crowne
Plaza
|
(23.9)%
|
|
Holiday
Inn
|
(18.5)%
|
|
Holiday
Inn Express
|
(21.8)%
|
|
All
brands
|
(27.2)%
|
H1
Comparable RevPARb was down (27.2)% vs
2021 (down (45.9)% vs 2019). Localised travel restrictions were
reimplemented following increased Covid-19 cases, which saw the
industry substantially impacted. At the peak of these restrictions,
around 40% of IHG’s estate was repurposed for quarantine
hotels or temporarily closed. The monthly RevPARb performance bottomed
in April at down (59)% vs 2019 levels, and saw sequential
improvements resume in May; by June, overall RevPAR was down (36)%
vs 2019. Tier 1 cities were the most severely impacted by the
latest restrictions, declining (56)% in H1 vs 2019. Tier 2-4
cities, which are more weighted to domestic and leisure demand,
performed better with a decline of (39)%; these cities were still
significantly impacted given the larger Tier 1 cities represent
much of the source markets for travellers into these locations. As
many of the restrictions have now been lifted or reduced, a rapid
recovery has begun. However, future intermittent lockdowns would
continue to cause further trading volatility.
Revenue
from the reportable segmenta in H1 decreased by
$23m (39%) to $36m (a decrease of $30m or 45% vs 2019). Operating
profit decreased by $26m to $5m driven by the reduction in revenue.
Operating profit from the reportable segmenta decreased by $26m
(84%) to $5m (a decrease of $31m vs 2019). The impact on trading of
the Covid-related restrictions at our managed hotels led to $5m
recognition of incentive management fees compared to $15m in 2021
(2019: $24m). H1 fee margina reduced to 13.9%,
compared to 47.2% in 2021 and 54.5% in 2019.
a.
Definitions
for non-GAAP measures can be found in the Use of key performance
measures and non-GAAP measures section along with reconciliations
of these measures to the most directly comparable line items within
the Interim Financial Statements.
b.
Comparable
RevPAR and occupancy include the impact of hotels temporarily
closed as a result of Covid-19.
|
Hotels
|
Rooms
|
|
Greater China hotel and room count
|
|
Change over
|
|
Change over
|
|
2022
|
2021
|
2022
|
2021
|
|
30 June
|
31 December
|
30 June
|
31 December
|
Analysed by brand
|
|
|
|
|
|
Six Senses
|
1
|
-
|
130
|
8
|
Regent
|
4
|
-
|
1,419
|
-
|
|
InterContinental
|
53
|
-
|
21,206
|
16
|
|
Kimpton
|
1
|
-
|
129
|
-
|
|
Hotel Indigo
|
15
|
(1)
|
2,286
|
(129)
|
|
voco
|
6
|
1
|
1,220
|
126
|
|
HUALUXE
|
18
|
2
|
5,147
|
544
|
|
Crowne Plaza
|
111
|
1
|
38,611
|
191
|
|
EVEN Hotels
|
3
|
1
|
437
|
186
|
|
Holiday Inn
|
120
|
(2)
|
32,560
|
(450)
|
|
Holiday Inn Express
|
258
|
11
|
49,049
|
1,995
|
|
Othera
|
9
|
-
|
7,331
|
-
|
|
|
____
|
____
|
_______
|
_____
|
Total
|
599
|
13
|
159,525
|
2,487
|
|
|
____
|
____
|
_______
|
_____
|
Analysed by ownership type
|
|
|
|
|
|
Franchised
|
188
|
9
|
41,905
|
1,754
|
|
Managed
|
411
|
4
|
117,620
|
733
|
|
|
____
|
____
|
_______
|
_____
|
Total
|
599
|
13
|
159,525
|
2,487
|
|
|
____
|
____
|
_______
|
_____
|
a.
Includes
one open hotel that will be re-branded to voco.
|
Hotels
|
Rooms
|
|
Greater China Pipeline
|
|
Change over
|
|
Change over
|
|
2022
|
2021
|
2022
|
2021
|
|
30
June
|
31 December
|
30 June
|
31 December
|
Analysed by brand
|
|
|
|
|
|
Six Senses
|
4
|
-
|
233
|
-
|
Regent
|
3
|
1
|
807
|
210
|
|
InterContinental
|
27
|
-
|
7,898
|
(9)
|
|
Kimpton
|
8
|
1
|
2.026
|
279
|
|
Hotel Indigo
|
47
|
6
|
8,326
|
948
|
|
voco
|
4
|
2
|
745
|
453
|
|
HUALUXE
|
21
|
(2)
|
5,506
|
(539)
|
|
Crowne Plaza
|
62
|
14
|
16,764
|
3,607
|
|
EVEN Hotels
|
18
|
(1)
|
3,615
|
(126)
|
|
Holiday Inn
|
78
|
6
|
18,987
|
1,391
|
|
Holiday Inn Express
|
202
|
(6)
|
32,888
|
(1,844)
|
|
Other
|
-
|
-
|
-
|
-
|
|
|
____
|
____
|
______
|
_____
|
Total
|
474
|
21
|
97,795
|
4,370
|
|
|
____
|
____
|
______
|
_____
|
Analysed by ownership type
|
|
|
|
|
|
Franchised
|
239
|
13
|
42,952
|
2,897
|
|
Managed
|
235
|
8
|
54,843
|
1,473
|
|
|
____
|
____
|
______
|
_____
|
Total
|
474
|
21
|
97,795
|
4,370
|
|
|
____
|
____
|
______
|
_____
|
Gross
system size growth was +10.1% year-on-year. The Covid-related
restrictions in the latest period have however significantly
impacted the ability for new hotels to open. There were 3.8k rooms
(19 hotels) added to our system during the first half, a sharp
reduction from the 7.0k rooms (36 hotels) in the comparable period.
Those that were able to open included Holiday Inn & Suites
Sanya Yalong Bay, Hualuxe Qingdao Licang, voco Nanjing Garden Expo
and EVEN Hotel Chengdu Jinniu. There were 1.3k rooms (6 hotels)
removed in the first half.
Net
system size growth was +5.9% year-on-year; on an adjusted basis
(for the Holiday Inn and Crowne Plaza removals that occurred in the
second half of 2021, driven by last year’s review of the
estates of these two brands), net system size growth was
+8.2%.
There
were 11.1k rooms (53 hotels) signed during the first half
(including 4.5k (21 hotels) during Q2). Of 30 franchise contracts
signed during the first half, 13 were for Holiday Inn Express. This
was a particularly strong period for Crowne Plaza, with a total of
16 signings growing its pipeline to 62 hotels. Other notable
signings included: Regent Shenzhen Bay, a key market given the
city’s leading economic importance; our second Kimpton
property in Suzhou; Hotel Indigo and the accompanying Holiday Inn
Resort at Kanas Hemu, a rapidly growing ski resort; and Hotel
Indigo Shanghai Harbour City, the first example of an online
signing ceremony.
The
pipeline stands at 97.8k rooms (474 hotels), which represents 61%
of the current system size in the region.
CENTRAL
|
6 months ended 30 June
|
|
|
|
|
|
2022
|
2021
|
%
|
Central results
|
$m
|
$m
|
change
|
|
|
|
|
Revenue
|
94
|
97
|
(3.1)
|
Gross
costs
|
(132)
|
(137)
|
(3.6)
|
|
____
|
____
|
____
|
Operating
loss
|
(38)
|
(40)
|
(5.0)
|
|
____
|
____
|
____
|
Central
revenue, which is mainly comprised of technology fee income,
decreased by $3m (3%) to $94m, driven by the impact of localised
travel restrictions for much of the first half in Greater
China.
Gross
costs decreased by $5m (3.6%) year-on-year, due to timing of
spend.
The
operating loss decreased by $2m.
Use of key performance measures and non-GAAP measures
In
addition to performance measures directly observable in the
Financial Statements (IFRS measures), the Business Review presents
certain financial measures when discussing the Group’s
performance which are not measures of financial performance or
liquidity under International Financial Reporting Standards (IFRS).
In management’s view these measures provide investors and
other stakeholders with an enhanced understanding of IHG’s
operating performance, profitability, financial strength and
funding requirements. These measures do not have standardised
meanings under IFRS, and companies do not necessarily calculate
these in the same way. As these measures exclude certain items (for
example impairment and the costs of individually significant legal
cases or commercial disputes) these financial measures may be
materially different to the measures prescribed by IFRS and may
result in a more favourable view of performance. Accordingly, they
should be viewed as complementary to, and not as a substitute for,
the measures prescribed by IFRS and as included in the Group
Financial Statements.
Global revenue per available room (RevPAR) growth
RevPAR
is the primary metric used by management to track hotel performance
across regions and brands. RevPAR is also a commonly used
performance measure in the hotel industry.
RevPAR
comprises IHG’s System rooms revenue divided by the number of
room nights available and can be derived from occupancy rate
multiplied by average daily rate (ADR). ADR is rooms revenue
divided by the number of room nights sold.
References
to RevPAR, occupancy and ADR are presented on a comparable basis,
comprising groupings of hotels that have traded in all months in
both the current and comparable year. The principal exclusions in
deriving this measure are new hotels (including those acquired),
hotels closed for major refurbishment and hotels sold in either of
the comparable years. These measures include the impact of hotels
temporarily closed as a result of Covid-19.
RevPAR
and ADR are quoted at a constant US$ conversion rate, in order to
allow a better understanding of the comparable year-on-year trading
performance excluding distortions created by fluctuations in
exchange rates.
Total gross revenue from hotels in IHG’s System
Total
gross revenue is revenue not wholly attributable to IHG, however,
management believes this measure is meaningful to investors and
other stakeholders as it provides a measure of System performance,
giving an indication of the strength of IHG’s brands and the
combined impact of IHG’s growth strategy and RevPAR
performance.
Total
gross revenue refers to revenue which IHG has a role in driving and
from which IHG derives an income stream.
Total
gross revenue comprises:
●
|
total
rooms revenue from franchised hotels;
|
●
|
total
hotel revenue from managed hotels (includes food and beverage,
meetings and other revenues and reflects the value IHG drives to
managed hotel owners by optimising the performance of their
hotels); and
|
●
|
total
hotel revenue from owned, leased and managed lease
hotels.
|
Other
than total hotel revenue from owned, leased and managed lease
hotels, total gross hotel revenue is not revenue attributable to
IHG as managed and franchised hotels are owned by third
parties.
Total
gross revenue is used to describe this measure as it aligns with
terms used in the Group’s management and franchise agreements
and therefore is well understood by owners and other
stakeholders.
Revenue and operating profit measures
Revenue
and operating profit from (1) fee business and (2) owned, leased
and managed lease hotels, are described as ‘revenue from
reportable segments’ and ‘operating profit from
reportable segments’, respectively. These measures are
presented for each of the Group’s regions. Management
believes revenue and operating profit from reportable segments is
meaningful to investors and other stakeholders as it excludes the
following elements and reflects how management monitors the
business:
●
|
System
Fund – the Fund is not managed to generate a profit or loss
for IHG over the longer term, but is managed for the benefit of the
hotels within the IHG System. The System Fund is operated to
collect and administer cash assessments from hotel owners for the
specific purpose of use in marketing, the Guest Reservation Systems
and loyalty programme.
|
●
|
Revenues
related to the reimbursement of costs – there is a cost equal
to these revenues so there is no profit impact. Cost reimbursements
are not applicable to all hotels, and growth in these revenues is
not reflective of growth in the performance of the Group. As such,
management does not include these revenues in their analysis of
results.
|
●
|
Exceptional
items – these are identified by virtue of their size, nature,
or incidence and can include, but are not restricted to, gains and
losses on the disposal of assets, impairment charges and reversals,
the costs of individually significant legal cases or commercial
disputes, and reorganisation costs. As each item is different in
nature and scope, there will be little continuity in the detailed
composition and size of the reported amounts which affect
performance in successive periods. Separate disclosure of these
amounts facilitates the understanding of performance including and
excluding such items. Further detail of amounts presented as
exceptional is included in note 5 to the interim Group Financial
Statements.
|
In
further discussing the Group’s performance in respect of
revenue and operating profit, additional non-IFRS measures are used
and explained further below:
●
|
Underlying
revenue;
|
●
|
Underlying
operating profit;
|
●
|
Underlying
fee revenue; and
|
●
|
Fee
margin.
|
Operating
profit measures are, by their nature, before interest and tax.
Management believes such measures are useful for investors and
other stakeholders when comparing performance across different
companies as interest and tax can vary widely across different
industries or among companies within the same industry. For
example, interest expense can be highly dependent on a
company’s capital structure, debt levels and credit ratings.
In addition, the tax positions of companies can vary because of
their differing abilities to take advantage of tax benefits and
because of the tax policies of the various jurisdictions in which
they operate.
Although
management believes these measures are useful to investors and
other stakeholders in assessing the Group’s ongoing financial
performance and provide improved comparability between periods,
there are limitations in their use as compared to measures of
financial performance under IFRS. As such, they should not be
considered in isolation or viewed as a substitute for IFRS
measures. In addition, these measures may not necessarily be
comparable to other similarly titled measures of other companies
due to potential inconsistencies in the methods of
calculation.
Underlying revenue and underlying operating profit
These
measures adjust revenue from reportable segments and operating
profit from reportable segments, respectively, to exclude revenue
and operating profit generated by owned, leased and managed lease
hotels which have been disposed, and significant liquidated
damages, which are not comparable year-on-year and are not
indicative of the Group’s ongoing profitability. The revenue
and operating profit of current year acquisitions are also excluded
as these obscure underlying business results and trends when
comparing to the prior year. In addition, in order to remove the
impact of fluctuations in foreign exchange, which would distort the
comparability of the Group’s operating performance, prior
year measures are restated at constant currency using current year
exchange rates.
Management
believes these are meaningful to investors and other stakeholders
to better understand comparable year-on-year trading and enable
assessment of the underlying trends in the Group’s financial
performance.
Underlying fee revenue growth
Underlying
fee revenue is used to calculate underlying fee revenue growth.
Underlying fee revenue is calculated on the same basis as
underlying revenue as described above but for the fee business
only.
Management
believes underlying fee revenue is meaningful to investors and
other stakeholders as an indicator of IHG’s ability to grow
the core fee-based business, aligned to IHG’s asset-light
strategy.
Fee margin
Fee
margin is presented at actual exchange rates and is a measure of
the profit arising from fee revenue. Fee margin is calculated by
dividing ‘fee operating profit’ by ‘fee
revenue’. Fee revenue and fee operating profit are calculated
from the revenue from reportable segments and operating profit from
reportable segments, as defined above, adjusted to exclude the
revenue and operating profit from the Group’s owned, leased
and managed lease hotels and significant liquidated
damages.
In
addition, fee margin is adjusted for the results of the
Group’s captive insurance company, where premiums are
intended to match the expected claims over the longer term, and as
such these amounts are adjusted from the fee margin to better
depict the profitability of the fee business.
Management
believes fee margin is meaningful to investors and other
stakeholders as an indicator of the sustainable long-term growth in
the profitability of IHG’s core fee-based business, as the
scale of IHG’s operations increases with growth in
IHG’s System size.
Adjusted interest
Adjusted
interest is presented before exceptional items and excludes foreign
exchange gains / losses primarily related to the Group’s
internal funding structure and the following items of interest
which are recorded within the System Fund:
●
|
Interest
income is recorded in the System Fund on the outstanding cash
balance relating to the IHG loyalty programme. These interest
payments are recognised as interest expense for IHG.
|
●
|
Other
components of System Fund interest income and expense, including
capitalised interest, lease interest expense and interest income on
overdue receivables.
|
As the
Fund is included on the Group Income Statement, these amounts are
included in the reported net Group financial expenses, reducing the
Group’s effective interest cost. Given results related to the
System Fund are excluded from
adjusted
measures used by management, these are excluded from adjusted
interest and adjusted earnings per ordinary share (see page
28).
The
exclusion of foreign exchange gains / losses provides greater
comparability with covenant interest as calculated under the terms
of the Group’s revolving credit facility.
Management
believes adjusted interest is a meaningful measure for investors
and other stakeholders as it provides an indication of the
comparable year-on-year expense associated with financing the
business including the interest on any balance held on behalf of
the System Fund.
Tax excluding the impact of exceptional items and System
Fund
As
outlined above, exceptional items can vary year-on-year and, where
subject to tax at a different rate than the Group as a whole, they
can impact the current year’s tax charge. The System Fund is
not managed to a profit or loss for IHG over the longer term and
is, in general, not subject to tax either.
Management
believes removing these provides a better view of the Group’s
underlying tax rate on ordinary operations and aids comparability
year-on-year, thus providing a more meaningful understanding of the
Group’s ongoing tax charge. A reconciliation of the tax
charge as recorded in the Group income statement, to tax excluding
the impact of exceptional items and System Fund, can be found in
note 6 to the Interim Financial Statements.
Adjusted earnings per ordinary share
Adjusted
earnings per ordinary share adjusts the profit available for equity
holders used in the calculation of basic earnings per share to
remove System Fund revenue and expenses, the items of interest
related to the System Fund and foreign exchange gains / losses as
excluded in adjusted interest (above), change in fair value of
contingent purchase consideration, exceptional items, and the
related tax impacts of such adjustments.
Management
believes that adjusted earnings per share is a meaningful measure
for investors and other stakeholders as it provides a more
comparable earnings per share measure aligned with how management
monitors the business.
Net debt
Net
debt is used in the monitoring of the Group’s liquidity and
capital structure and is used by management in the calculation of
the key ratios attached to the Group’s bank covenants and
with the objective of maintaining an investment grade credit
rating. Net debt is used by investors and other stakeholders to
evaluate the financial strength of the business.
Net
debt comprises loans and other borrowings, lease liabilities, the
exchange element of the fair value of derivatives hedging debt
values, less cash and cash equivalents. A summary of the
composition of net debt is included in note 10 to the interim Group
Financial Statements.
Adjusted EBITDA
One of
the key measures used by the Group in monitoring its debt and
capital structure is the net debt:adjusted EBITDA ratio, which is
managed with the objective of maintaining an investment grade
credit rating. The Group has a stated aim of maintaining this ratio
at 2.5-3.0x. Adjusted EBITDA is defined as cash flow from
operations, excluding cash flows relating to exceptional items,
cash flows arising from the System Fund result, other non-cash
adjustments to operating profit or loss, working capital and other
adjustments, and contract acquisition costs (key
money).
Adjusted
EBITDA is useful to investors as an approximation of operational
cash flow generation and is also relevant to the Group’s
banking covenants, which use Covenant EBITDA in calculating the
leverage ratio. Details of covenant levels and performance against
these is provided in note 10 to the Interim Financial
Statements.
Gross capital expenditure, net capital expenditure, adjusted free
cash flow
These
measures have limitations as they omit certain components of the
overall cash flow statement. They are not intended to represent
IHG’s residual cash flow available for discretionary
expenditures, nor do they reflect the Group’s future capital
commitments. These measures are used by many companies, but there
can be differences in how each company defines the terms, limiting
their usefulness as a comparative measure. Therefore, it is
important to view these measures only as a complement to the Group
statement of cash flows.
Gross capital expenditure
Gross
capital expenditure represents the consolidated capital expenditure
of IHG inclusive of System Fund capital investments. Gross capital
expenditure is defined as net cash from investing activities,
adjusted to include contract acquisition costs (key money). In
order to demonstrate the capital outflow of the Group, cash flows
arising from any disposals or distributions from associates and
joint ventures are excluded. The measure also excludes any material
investments made in acquiring businesses, including any subsequent
payments of deferred or contingent purchase consideration included
within investing activities, which represent ongoing payments for
acquisitions.
Gross
capital expenditure is reported as either maintenance, recyclable,
or System Fund. This disaggregation provides useful information as
it enables users to distinguish between:
●
|
System
Fund capital investments which are strategic investments to drive
growth at hotel level;
|
●
|
Recyclable
investments (such as investments in associates and joint ventures),
which are intended to be recoverable in the medium term and are to
drive the growth of the Group’s brands and expansion in
priority markets; and
|
●
|
Maintenance
capital expenditure (including contract acquisition costs), which
represents a permanent cash outflow.
|
Management
believes gross capital expenditure is a useful measure as it
illustrates how the Group continues to invest in the business to
drive growth. It also allows for comparison
year-on-year.
Net capital expenditure
Net
capital expenditure provides an indicator of the capital intensity
of IHG’s business model. Net capital expenditure is derived
from net cash from investing activities, adjusted to include
contract acquisition costs (net of repayments) and to exclude any
material investments made in acquiring businesses, including any
subsequent payments of deferred or contingent purchase
consideration included within investing activities which are
typically non-recurring in nature. Net capital expenditure includes
the inflows arising from any disposal receipts, or distributions
from associates and joint ventures.
In
addition, System Fund depreciation and amortisation relating to
property, plant and equipment and intangible assets, respectively,
is added back, reducing the overall cash outflow. This reflects the
way in which System Funded capital investments are recovered from
the System Fund, over the life of the asset.
Management
believes net capital expenditure is a useful measure as it
illustrates the net capital investment by IHG, after taking into
account capital recycling through asset disposal and the funding of
strategic investments by the System Fund. It provides investors and
other stakeholders with visibility of the cash flows which are
allocated to long-term investments to drive the Group’s
strategy.
Adjusted free cash flow
Adjusted
free cash flow is net cash from operating activities adjusted for:
(1) the inclusion of the cash outflow arising from the purchase of
shares by employee share trusts reflecting the requirement to
satisfy incentive schemes which are linked to operating
performance; (2) the inclusion of maintenance capital expenditure
(excluding contract acquisition costs); (3) the inclusion of the
principal element of lease payments; and (4) the exclusion of
payments of deferred or contingent purchase consideration included
within net cash from operating activities.
Management
believes adjusted free cash flow is a useful measure for investors
and other stakeholders, as it represents the cash available to
invest back into the business to drive future growth and pay the
ordinary dividend, with any surplus being available for additional
returns to shareholders.
Changes in definitions to the 2021 Annual Report and
Accounts
The
following definitions have been amended:
●
|
Adjusted
interest and adjusted earnings per ordinary share have been amended
to exclude foreign exchange gains / losses recorded within
financial expenses. Since the gains / losses are principally as a
result of the Group’s internal funding structure they are not
reflective of the performance of the Group, excluding these amounts
provides a more comparable year-on-year measure for investors and
other users, aligned to how management monitor the business.
Comparatives have not been restated as the impact of these changes
are not material in 2021.
|
●
|
The
definition and reconciliation of Adjusted EBITDA has been amended
to reconcile to the nearest GAAP measure, cash flow from
operations, reflecting the fact Adjusted EBITDA is primarily used
by the Group as a liquidity measure. The value of Adjusted EBITDA
is unchanged from 2021.
|
Revenue and operating profit non-GAAP reconciliations
Highlights for the 6 months ended 30 June
Reportable segments
|
Revenue
|
|
Operating profit
|
|
|
|
|
|
|
|
|
|
2022
|
2021
|
%
|
|
2022
|
2021
|
%
|
|
$m
|
$m
|
change
|
|
$m
|
$m
|
change
|
|
|
|
|
|
|
|
|
Per Group income statement
|
1,794
|
1,179
|
52.2
|
|
361
|
138
|
161.6
|
System Fund
|
(554)
|
(378)
|
46.6
|
|
(3)
|
46
|
NMa
|
Reimbursement of costs
|
(400)
|
(236)
|
69.5
|
|
-
|
-
|
-
|
Operating exceptional items
|
-
|
-
|
-
|
|
19
|
4
|
375.0
|
|
_____
|
_____
|
_____
|
|
_____
|
_____
|
_____
|
Reportable segments
|
840
|
565
|
48.7
|
|
377
|
188
|
100.5
|
|
_____
|
_____
|
_____
|
|
_____
|
_____
|
_____
|
Reportable segments analysed as:
|
|
|
|
|
|
|
|
Fee business
|
664
|
505
|
31.5
|
|
372
|
224
|
66.1
|
Owned, leased and managed lease
|
176
|
60
|
193.3
|
|
5
|
(36)
|
NMa
|
|
_____
|
_____
|
_____
|
|
_____
|
_____
|
_____
|
Reportable segments
|
840
|
565
|
48.7
|
|
377
|
188
|
100.5
|
a.
Percentage
change considered not meaningful, such as where a positive balance
in the latest period is comparable to a negative or zero balance in
the prior period.
Underlying revenue and underlying operating profit
|
Revenue
|
|
Operating profit
|
|
|
|
|
|
|
|
|
|
2022
|
2021
|
%
|
|
2022
|
2021
|
%
|
|
$m
|
$m
|
change
|
|
$m
|
$m
|
Change
|
|
|
|
|
|
|
|
|
Reportable segments (see above)
|
840
|
565
|
48.7
|
|
377
|
188
|
100.5
|
Significant liquidated damagesb
|
(7)
|
(6)
|
16.7
|
|
(7)
|
(6)
|
16.7
|
Owned and leased asset disposalsc
|
-
|
(6)
|
NMa
|
|
(2)
|
8
|
NMa
|
Currency impact
|
-
|
(7)
|
NMa
|
|
-
|
3
|
NMa
|
|
____
|
_____
|
_____
|
|
_____
|
_____
|
_____
|
Underlying revenue and underlying operating profit
|
833
|
546
|
52.6
|
|
368
|
193
|
90.7
|
a. Percentage change
considered not meaningful, such
as where a positive balance in the latest period is comparable to a
negative or zero balance in the prior period.
b.
$7m recongnised in 2022 reflects the
significant liquidated damages related to one hotel in EMEAA and
$6m recognised in 2021 reflects the significant liquidated damages
related to one hotel in Greater China.
c.
The results of one InterContinental
Hotel have been removed in 2022 (being the year of disposal) and
the prior year to determine underlying growth. The results of the
hotels removed in 2021 (being the year of disposal of these
hotels) have also been removed to determine underlying
growth.
Underlying fee revenue and underlying fee operating
profit
|
Revenue
|
Operating profit
|
|
2022
|
2021
|
%
|
|
2022
|
2021
|
%
|
|
$m
|
$m
|
change
|
|
$m
|
$m
|
change
|
|
|
|
|
|
|
|
|
Reportable segments fee business (see above)
|
664
|
505
|
31.5
|
|
372
|
224
|
66.1
|
Significant liquidated damagesb
|
(7)
|
(6)
|
16.7
|
|
(7)
|
(6)
|
16.7
|
Currency impact
|
-
|
(4)
|
NMa
|
|
-
|
1
|
NMa
|
|
_____
|
_____
|
_____
|
|
_____
|
_____
|
_____
|
Underlying fee revenue and underlying fee operating
profit
|
657
|
495
|
32.7
|
|
365
|
219
|
66.7
|
a.
Percentage change
considered not meaningful, such as where a positive balance in the
latest period is comparable to a negative or zero balance in the
prior period.
b.
$7m recognised in
2022 reflects the significant liquidated damages related to one
hotel in EMEAA and $6m recognised in 2021 reflects the significant
liquidated damages related to one hotel in Greater
China.
Americas
|
Revenue
|
|
Operating profita
|
|
2022
|
2021
|
%
|
|
2022
|
2021
|
%
|
|
$m
|
$m
|
change
|
|
$m
|
$m
|
change
|
|
|
|
|
|
|
|
|
Per Interim financial statements
|
471
|
325
|
44.9
|
|
351
|
224
|
56.7
|
|
|
|
|
|
|
|
|
Reportable segments analysed as:
|
|
|
|
|
|
|
|
Fee business
|
413
|
296
|
39.5
|
|
342
|
236
|
44.9
|
Owned, leased and managed lease
|
58
|
29
|
100.0
|
|
9
|
(12)
|
NMb
|
|
_____
|
_____
|
_____
|
|
_____
|
_____
|
_____
|
|
471
|
325
|
44.9
|
|
351
|
224
|
56.7
|
|
|
|
|
|
|
|
|
Reportable segments (see above)
|
471
|
325
|
44.9
|
|
351
|
224
|
56.7
|
Owned and leased asset disposalsc
|
-
|
(5)
|
NMb
|
|
-
|
4
|
(100.0)
|
Currency impact
|
-
|
(1)
|
NMb
|
|
-
|
(1)
|
NMb
|
|
_____
|
_____
|
_____
|
|
_____
|
_____
|
_____
|
Underlying revenue and underlying operating profit
|
471
|
319
|
47.6
|
|
351
|
227
|
54.6
|
|
|
|
|
|
|
|
|
Owned, leased and managed lease included in the above
|
(58)
|
(24)
|
141.7
|
|
(9)
|
8
|
NMb
|
|
_____
|
_____
|
_____
|
|
_____
|
_____
|
_____
|
Underlying fee business
|
413
|
295
|
40.0
|
|
342
|
235
|
45.5
|
a.
Before exceptional
items.
b.
Percentage change
considered not meaningful, such as where a positive balance in the
latest period is comparable to a negative or zero balance in the
prior period.
c.
The results of the
hotels removed in 2021 (being the year of disposal of these hotels)
have been removed to determine underlying growth.
EMEAA
|
Revenue
|
|
Operating profita
|
|
2022
|
2021
|
%
|
|
2022
|
2021
|
%
|
|
$m
|
$m
|
change
|
|
$m
|
$m
|
change
|
|
|
|
|
|
|
|
|
Per Interim financial statements
|
239
|
84
|
184.5
|
|
59
|
(27)
|
NMb
|
|
|
|
|
|
|
|
|
Reportable segments analysed as:
|
|
|
|
|
|
|
|
Fee business
|
121
|
53
|
128.3
|
|
63
|
(3)
|
NMb
|
Owned, leased and managed lease
|
118
|
31
|
280.6
|
|
(4)
|
(24)
|
83.3
|
|
_____
|
_____
|
_____
|
|
_____
|
_____
|
_____
|
|
239
|
84
|
184.5
|
|
59
|
(27)
|
NMb
|
|
|
|
|
|
|
|
|
Reportable segments (see above)
|
239
|
84
|
184.5
|
|
59
|
(27)
|
NMb
|
Significant liquidated damages
|
(7)
|
-
|
NMb
|
|
(7)
|
-
|
NMb
|
Owned and leased asset disposalsc
|
-
|
(1)
|
NMb
|
|
(2)
|
4
|
NMb
|
Currency impact
|
-
|
(5)
|
NMb
|
|
-
|
2
|
NMb
|
|
_____
|
_____
|
_____
|
|
_____
|
_____
|
_____
|
Underlying revenue and underlying operating profit
|
232
|
78
|
197.4
|
|
50
|
(21)
|
NMb
|
|
|
|
|
|
|
|
|
Owned, leased and managed lease included in the above
|
(118)
|
(27)
|
337.0
|
|
6
|
18
|
(66.7)
|
|
_____
|
_____
|
_____
|
|
_____
|
_____
|
_____
|
Underlying fee business
|
114
|
51
|
123.5
|
|
56
|
(3)
|
NMb
|
a.
Before exceptional
items.
b.
Percentage change
considered not meaningful, such as where a positive balance in the
latest period is comparable to a negative or zero balance in the
prior period.
c.
The results of one
InterContinental Hotel have been removed in 2022 (being the year of
disposal) and the prior year to determine underlying
growth.
Greater China
|
Revenue
|
|
Operating profita
|
|
2022
|
2021
|
%
|
|
2022
|
2021
|
%
|
|
$m
|
$m
|
change
|
|
$m
|
$m
|
change
|
Per Interim financial statements
|
|
|
|
|
|
|
|
Reportable segments analysed as:
|
36
|
59
|
(39.0)
|
|
5
|
31
|
(83.9)
|
|
_____
|
_____
|
_____
|
|
_____
|
_____
|
_____
|
Fee business
|
36
|
59
|
(39.0)
|
|
5
|
31
|
(83.9)
|
|
|
|
|
|
|
|
|
Reportable segments (see above)
|
36
|
59
|
(39.0)
|
|
5
|
31
|
(83.9)
|
Significant liquidated damagesc
|
-
|
(6)
|
NMb
|
|
-
|
(6)
|
NMb
|
|
_____
|
_____
|
_____
|
|
_____
|
_____
|
_____
|
Underlying revenue and underlying operating profit
|
36
|
53
|
(32.1)
|
|
5
|
25
|
(80.0)
|
a.
Before exceptional
items.
b.
Percentage change
considered not meaningful, such as where a positive balance in the
latest period is comparable to a negative or zero balance in the
prior period.
c.
$6m recognised in
2021 reflects the significant liquidated damages related to one
property.
Fee margin reconciliation
|
6 months ended 30 June
|
2022
|
|
|
|
|
|
|
Americas
|
EMEAA
|
Greater China
|
Central
|
Total
|
Revenue $m
|
|
|
|
|
|
Reportable segments analysed as fee business (see
above)
|
413
|
121
|
36
|
94
|
664
|
Significant liquidated damages
|
-
|
(7)
|
-
|
-
|
(7)
|
Captive insurance company
|
-
|
-
|
-
|
(8)
|
(8)
|
|
_____
|
_____
|
_____
|
_____
|
_____
|
|
413
|
114
|
36
|
86
|
649
|
|
|
|
|
|
|
Operating profit $m
|
|
|
|
|
|
Reportable segments analysed as fee business (see
above)
|
342
|
63
|
5
|
(38)
|
372
|
Significant liquidated damages
|
-
|
(7)
|
-
|
-
|
(7)
|
Captive insurance company
|
-
|
-
|
-
|
(2)
|
(2)
|
|
_____
|
_____
|
_____
|
_____
|
_____
|
|
342
|
56
|
5
|
(40)
|
363
|
|
|
|
|
|
|
Fee margin %
|
82.8%
|
49.1%
|
13.9%
|
(46.5%)
|
55.9%
|
|
6 months ended 30 June
|
2021
|
|
|
|
|
|
|
Americas
|
EMEAA
|
Greater China
|
Central
|
Total
|
Revenue $m
|
|
|
|
|
|
Reportable segments analysed as fee business (see
above)
|
296
|
53
|
59
|
97
|
505
|
Significant liquidated damages
|
-
|
-
|
(6)
|
-
|
(6)
|
Captive insurance company
|
-
|
-
|
-
|
(9)
|
(9)
|
|
_____
|
_____
|
_____
|
_____
|
_____
|
|
296
|
53
|
53
|
88
|
490
|
|
|
|
|
|
|
Operating profit $m
|
|
|
|
|
|
Reportable segments analysed as fee business (see
above)
|
236
|
(3)
|
31
|
(40)
|
224
|
Significant liquidated damages
|
-
|
-
|
(6)
|
-
|
(6)
|
Captive insurance company
|
-
|
-
|
-
|
(2)
|
(2)
|
|
_____
|
_____
|
_____
|
_____
|
_____
|
|
236
|
(3)
|
25
|
(42)
|
216
|
|
|
|
|
|
|
Fee margin %
|
79.7%
|
(5.7%)
|
47.2%
|
(47.7%)
|
44.1%
|
Net capital expenditure reconciliation
|
6 months ended
30 June
|
|
|
|
|
2022
|
2021
|
|
$m
|
$m
|
|
|
|
Net cash from investing activities
|
(27)
|
(37)
|
Adjusted for:
|
|
|
Contract acquisition costs, net of
repayments
|
(35)
|
(16)
|
System
Fund depreciation and amortisationa
|
40
|
39
|
Deferred purchase consideration
paid
|
-
|
13
|
|
_____
|
_____
|
Net capital expenditure
|
(22)
|
(1)
|
|
_____
|
_____
|
Analysed as:
|
|
|
Capital expenditure: maintenance (including contract acquisition
costs, net of repayments of $35m (2021: $16m))
|
(50)
|
(25)
|
Capital expenditure: recyclable investments
|
6
|
(8)
|
Capital expenditure: System Fund capital investments
|
22
|
32
|
|
_____
|
_____
|
Net capital expenditure
|
(22)
|
(1)
|
|
_____
|
_____
|
a.
Excludes
depreciation of right-of-use assets.
Gross capital expenditure reconciliation
|
6 months ended
30 June
|
|
|
|
|
2022
|
2021
|
|
$m
|
$m
|
|
|
|
Net capital expenditure
|
(22)
|
(1)
|
Add back:
|
|
|
Disposal receipts
|
(7)
|
(1)
|
Repayments of contract acquisition
costs
|
(3)
|
(1)
|
System
Fund depreciation and amortisationa
|
(40)
|
(39)
|
|
_____
|
_____
|
Gross capital expenditure
|
(72)
|
(42)
|
|
_____
|
_____
|
Analysed as:
|
|
|
Capital
expenditure: maintenance (including contract
|
(53)
|
(26)
|
acquisition costs of $38m (2021:
$17m))
|
Capital
expenditure: recyclable investments
|
(1)
|
(9)
|
Capital
expenditure: System Fund capital investments
|
(18)
|
(7)
|
|
_____
|
_____
|
Gross capital expenditure
|
(72)
|
(42)
|
|
_____
|
_____
|
a.
Excludes
depreciation of right-of-use assets.
Adjusted free cash flow reconciliation
|
6 months ended
30 June
|
|
2022
|
2021
|
|
$m
|
$m
|
|
|
|
Net cash from operating activities
|
175
|
173
|
Adjusted for:
|
|
|
Principal
element of lease payments
|
(18)
|
(17)
|
Capital
expenditure: maintenance (excluding contract acquisition
costs)
|
(15)
|
(9)
|
|
_____
|
_____
|
Adjusted free cash flow
|
142
|
147
|
|
_____
|
_____
|
Adjusted interest reconciliation
The
following table reconciles net financial expenses to adjusted
interest.
|
6 months ended
30 June
|
|
2022
|
2021
|
|
$m
|
$m
|
Net financial expenses
|
|
|
Financial income
|
5
|
1
|
Financial expenses
|
(74)
|
(73)
|
|
_____
|
_____
|
|
(69)
|
(72)
|
Adjusted for:
|
|
|
Interest attributable to the System Fund
Foreign exchange losses*
|
(3)
8
|
-
n/a
|
|
_____
|
_____
|
|
5
|
-
|
|
|
|
Adjusted interest
|
(64)
|
(72)
|
* The
definition of adjusted interest has been updated. The impact to the
prior year is not material, and as such has not been
restated.
Adjusted earnings per ordinary share reconciliation
|
6 months ended
30 June
|
|
|
|
|
2022
|
2021
|
|
$m
|
$m
|
Profit
available for equity holders
|
216
|
48
|
Adjusting
items:
|
|
|
System
Fund revenues and expenses
|
(3)
|
46
|
Interest
attributable to the System Fund
|
(3)
|
-
|
Operating
exceptional items
|
19
|
4
|
Fair
value gain on contingent purchase consideration
|
(7)
|
(1)
|
Foreign
exchange losses*
|
8
|
n/a
|
Tax
on foreign exchange losses*
|
(1)
|
n/a
|
Tax
on exceptional items
|
(5)
|
(1)
|
Exceptional
tax
|
-
|
(22)
|
|
_____
|
_____
|
Adjusted earnings
|
224
|
74
|
|
|
|
Basic
weighted average number of ordinary shares (millions)
|
184
|
183
|
Adjusted
earnings per ordinary share (cents)
|
121.7
|
40.4
|
|
|
|
* The
definition of adjusted earnings per share has been updated. The
impact to the prior year is not material, and as such has not been
restated.
Highlights for the 6 months ended 30 June vs 2019
Reportable segments
|
Revenue
|
|
Operating profit
|
|
|
|
|
|
|
|
|
|
2022
|
2019
|
%
|
|
2022
|
2019
|
%
|
|
$m
|
$m
|
change
|
|
$m
|
$m
|
change
|
|
|
|
|
|
|
|
|
Per Group income statement
|
1,794
|
2,280
|
(21.3)
|
|
361
|
442
|
(18.3)
|
System Fund
|
(554)
|
(675)
|
(17.9)
|
|
(3)
|
(47)
|
(93.6)
|
Reimbursement of costs
|
(400)
|
(593)
|
(32.5)
|
|
-
|
-
|
-
|
Operating exceptional items
|
-
|
-
|
-
|
|
19
|
15
|
26.7
|
|
_____
|
_____
|
_____
|
|
_____
|
_____
|
_____
|
Reportable segments
|
840
|
1,012
|
(17.0)
|
|
377
|
410
|
(8.0)
|
|
_____
|
_____
|
_____
|
|
_____
|
_____
|
_____
|
Reportable segments analysed as:
|
|
|
|
|
|
|
|
Fee business
|
664
|
730
|
(9.0)
|
|
372
|
394
|
(5.6)
|
Owned, leased and managed lease
|
176
|
282
|
(37.6)
|
|
5
|
16
|
(68.8)
|
|
_____
|
_____
|
_____
|
|
_____
|
_____
|
_____
|
Reportable segments
|
840
|
1,012
|
(17.0)
|
|
377
|
410
|
(8.0)
|
Americas
|
Revenue
|
|
Operating profita
|
|
2022
|
2019
|
%
|
|
2022
|
2019
|
%
|
|
$m
|
$m
|
change
|
|
$m
|
$m
|
change
|
|
|
|
|
|
|
|
|
Per Interim financial statements
|
471
|
520
|
(9.4)
|
|
351
|
341
|
2.9
|
|
|
|
|
|
|
|
|
Reportable segments analysed as:
|
|
|
|
|
|
|
|
Fee business
|
413
|
418
|
(1.2)
|
|
342
|
323
|
5.9
|
Owned, leased and managed lease
|
58
|
102
|
(43.1)
|
|
9
|
21
|
(57.1)
|
|
_____
|
_____
|
_____
|
|
_____
|
_____
|
_____
|
|
471
|
520
|
(9.4)
|
|
351
|
344
|
2.0
|
|
|
|
|
|
|
|
|
a.
Before exceptional
items.
EMEAA
|
Revenue
|
|
Operating profita
|
|
2022
|
2019
|
%
|
|
2022
|
2019
|
%
|
|
$m
|
$m
|
change
|
|
$m
|
$m
|
change
|
|
|
|
|
|
|
|
|
Per Interim financial statements
|
239
|
338
|
(29.3)
|
|
59
|
88
|
(33.0)
|
|
|
|
|
|
|
|
|
Reportable segments analysed as:
|
|
|
|
|
|
|
|
Fee business
|
121
|
158
|
(23.4)
|
|
63
|
93
|
(32.3)
|
Owned, leased and managed lease
|
118
|
180
|
(34.4)
|
|
(4)
|
(5)
|
(20.0)
|
|
_____
|
_____
|
_____
|
|
_____
|
_____
|
_____
|
|
239
|
338
|
(29.3)
|
|
59
|
88
|
(33.0)
|
|
|
|
|
|
|
|
|
a.
Before exceptional
items.
Greater China
|
Revenue
|
|
Operating profita
|
|
2022
|
2019
|
%
|
|
2022
|
2019
|
%
|
|
$m
|
$m
|
change
|
|
$m
|
$m
|
change
|
Per Interim financial statements
|
|
|
|
|
|
|
|
Reportable segments analysed as:
|
36
|
66
|
(45.5)
|
|
5
|
36
|
(86.1)
|
|
_____
|
_____
|
_____
|
|
_____
|
_____
|
_____
|
Fee business
|
36
|
66
|
(45.5)
|
|
5
|
36
|
(86.1)
|
|
|
|
|
|
|
|
|
a.
Before exceptional
items.
Fee Margin Reconciliation
|
6 months ended 30th June
|
2019
|
|
|
|
|
|
|
Americas
|
EMEAA
|
Greater China
|
Central
|
Total
|
Revenue $m
|
|
|
|
|
|
Reportable segments analysed as fee business (see
above)
|
418
|
158
|
66
|
88
|
730
|
Significant liquidated damages
|
-
|
(4)
|
-
|
-
|
(4)
|
Captive insurance company
|
-
|
-
|
-
|
(7)
|
(7)
|
|
_____
|
_____
|
_____
|
_____
|
_____
|
|
418
|
154
|
66
|
81
|
719
|
|
|
|
|
|
|
Operating profit $m
|
|
|
|
|
|
Reportable segments analysed as fee business (see
above)
|
323
|
93
|
36
|
(58)
|
394
|
Significant liquidated damages
|
-
|
(4)
|
-
|
-
|
(4)
|
Captive insurance company
|
-
|
-
|
-
|
(1)
|
(1)
|
|
_____
|
_____
|
_____
|
_____
|
_____
|
|
323
|
89
|
36
|
(59)
|
389
|
|
|
|
|
|
|
Fee margin %
|
77.3%
|
57.8%
|
54.5%
|
(72.8%)
|
54.1%
|
PRINCIPAL RISKS AND UNCERTAINTIES
The
principal and emerging risks and uncertainties that could
substantially affect IHG’s business and results are set out
on pages 40 to 47 of
the IHG Annual Report and Form 20-F 2021 (the “Annual
Report”).
We have
continued to face dynamic risks relating to macro-economic and
geo-political factors, including those related to our Greater China
operations, the war in Ukraine and as central banks and governments
take action to manage inflation. These factors also create wider
accumulated uncertainties across our principal risk portfolio, for
example relating to global supply chains, inflationary cost
pressures and cyber security, which we will continue to monitor
closely over the remainder of the year. There may also be unknown
risks or risks currently believed to be inconsequential that emerge
and could become material.
Our
Board and management continue regularly to review our risk profile
and risk trends arising externally or internally, and risk
management and internal control arrangements.
As an
example of active senior executive and Board evaluation of risks
and considering the interests of our stakeholders, local and global
management teams have closely monitored and reported on the
developing situation in Ukraine, reviewing both local operational
matters and triggers of potential impact on IHG outside of the
immediate area which may require a more active response. This has
included monitoring of potential risk factors relating to national
/ international sanctions; payment systems; cybersecurity and
technology threats; and procurement and supply chain arrangements
for key geographies and commodities.
Following the outbreak of the war, we announced the suspension of
future investments, development activity and new hotel openings in
Russia and that we did not intend to resume any investment or
development activity in the foreseeable future. We also closed our
corporate office in Moscow. These steps followed significant
donations to our humanitarian charity partners and a commitment to
work with hotel owners in other countries to shelter
refugees.
Subsequently, we announced that we were in discussions with our
owners in Russia regarding the complex, long-term management and
franchise contracts under which these hotels operate. We are
ceasing all operations in Russia, consistent with evolving UK, US
and EU sanction regimes and the ongoing and increasing challenges
of operating there.
The
following summarises the risks and uncertainties set out in the
2021 Annual Report, which continue to apply:
●
|
Macro
external factors, such as political and economic disruption, or the
emerging risk of infectious diseases, could have an impact on
IHG’s ability to perform and grow; commercial performance,
financial loss and undermine stakeholder confidence;
|
●
|
Failure
to deliver IHG’s preferred brands and loyalty programme could
impact IHG’s competitive positioning, IHG’s growth
ambitions and reputation with guests and owners;
|
●
|
Failure
to effectively attract, develop and retain talent in key areas
could impact IHG’s ability to achieve its growth ambitions
and execute effectively;
|
●
|
Threats
to cybersecurity and information governance could lead to the
disruption or loss of IHG’s critical systems and sensitive
data and could impact IHG financially, reputationally or
operationally;
|
●
|
Failure
to capitalise on innovation in booking technology, and maintain and
enhance IHG’s functionality and resilience of its channel
management and technology platforms could impact IHG’s
revenues and growth ambitions;
|
●
|
Failure
to manage risks associated with delivering investment effectiveness
and efficiency may impact commercial performance, lead to financial
loss, and undermine stakeholder confidence;
|
●
|
Failure
to ensure contractual, legal, regulatory and ethical compliance
would impact IHG operationally and reputationally;
|
●
|
Failure
to effectively safeguard the safety and security of colleagues and
guests and respond appropriately to operational risk could result
in reputational and / or financial damage, and undermine
stakeholder confidence;
|
●
|
A
material breakdown in financial management and control systems
could lead to increased public scrutiny, regulatory investigation
and litigation; and
|
●
|
Environment
and social mega-trends have the potential to impact performance and
growth in key markets.
|
These
principal and emerging risks and uncertainties are supported by a
broader description of risk factors set out on pages 231 to 236 of
the Annual Report
RELATED PARTY TRANSACTIONS
There
were no material related party transactions during the six months
to 30 June 2022.
GOING CONCERN
As at
30 June 2022 the Group had total liquidity of $2,613m, comprising
$1,350m of undrawn bank facilities and $1,263m of cash and cash
equivalents (net of overdrafts and restricted cash).
There
remains a wide range of possible planning scenarios over the going
concern period. The scenarios considered and assessment made by the
Directors in adopting the going concern basis for preparing these
financial statements are included in note 1 to the Interim
Financial Statements.
Based
on the assessment completed, the Directors have a reasonable
expectation that the Group has sufficient resources to continue
operating until at least 31 December 2023. Accordingly, they
continue to adopt the going concern basis in preparing the interim
financial statements.
DIRECTORS’ RESPONSIBILITY STATEMENT
The
Directors confirm that to the best of their knowledge:
●
The condensed set
of Financial Statements has been prepared in accordance with
UK-adopted IAS 34;
●
The Interim
Management Report includes a fair review of the important events
during the first six months, and their impact on the financial
statements and a description of the principal risks and
uncertainties for the remaining six months of the year, as required
by DTR 4.2.7R; and
●
The Interim
Management Report includes a fair review of related party
transactions and changes therein, as required by DTR
4.2.8R.
On
behalf of the Board
Keith
Barr
Paul Edgecliffe-Johnson
Chief Executive
Officer
Chief Financial
Officer
8 August
2022
8 August 2022
INTERCONTINENTAL HOTELS GROUP PLC
GROUP INCOME STATEMENT
For the six months ended 30 June 2022
|
2022
6
months ended
30
June
$m
|
2021
6
months ended
30
June
$m
|
|
|
|
Revenue
from fee business
|
664
|
505
|
Revenue
from owned, leased and managed lease hotels
|
176
|
60
|
System
Fund revenues
|
554
|
378
|
Reimbursement
of costs
|
400
|
236
|
|
_____
|
_____
|
Total revenue (notes 3 and 4)
|
1,794
|
1,179
|
|
|
|
Cost of
sales and administrative expenses
|
(450)
|
(321)
|
System
Fund expenses
|
(551)
|
(424)
|
Reimbursed
costs
|
(400)
|
(236)
|
Share
of losses of associates
|
-
|
(5)
|
Other
operating income
|
14
|
2
|
Depreciation
and amortisation
|
(36)
|
(45)
|
Impairment
loss on financial assets
|
(5)
|
(8)
|
Other
impairment charges (note 5)
|
(5)
|
(4)
|
|
_____
|
_____
|
Operating profit (note 3)
|
361
|
138
|
|
|
|
Operating
profit analysed as:
|
|
|
Operating profit
before System Fund and exceptional items
|
377
|
188
|
System
Fund
|
3
|
(46)
|
Operating
exceptional items (note 5)
|
(19)
|
(4)
|
|
_____
|
_____
|
|
361
|
138
|
|
|
|
Financial
income
|
5
|
1
|
Financial
expenses
|
(74)
|
(73)
|
Fair
value gains on contingent purchase consideration
|
7
|
1
|
|
_____
|
_____
|
Profit before tax
|
299
|
67
|
|
|
|
Tax
(note 6)
|
(83)
|
(19)
|
|
_____
|
_____
|
Profit for the period from continuing operations
|
216
|
48
|
|
_____
|
_____
|
|
|
|
Attributable
to:
|
|
|
|
Equity
holders of the parent
|
216
|
48
|
|
_____
|
_____
|
Earnings per ordinary share (note 7)
|
|
|
|
Basic
|
117.4¢
|
26.2¢
|
|
Diluted
|
116.8¢
|
26.1¢
|
|
|
|
INTERCONTINENTAL HOTELS GROUP PLC
GROUP STATEMENT OF COMPREHENSIVE INCOME
For the six months ended 30 June 2022
|
2022
6 months ended
30 June
$m
|
2021
6 months ended
30 June
$m
|
|
|
|
Profit for the period
|
216
|
48
|
|
|
|
Other comprehensive income
|
|
|
|
|
|
Items
that may be subsequently reclassified to profit or
loss:
|
|
|
|
Gains/(losses)
on cash flow hedges, including related tax credit of $1m (2021: $3m
charge)
|
13
|
(54)
|
|
Costs
of hedging
|
-
|
2
|
|
Hedging
(gains)/losses reclassified to financial expenses
|
(17)
|
66
|
|
Exchange
gains/(losses) on retranslation of foreign operations, including
related tax credit of $6m (2021: $nil)
|
198
|
(38)
|
|
_____
|
_____
|
|
194
|
(24)
|
Items
that will not be reclassified to profit or loss:
|
|
|
|
Gains
on equity instruments classified as fair value through other
comprehensive income, net of related tax charge of $2m (2021:
$1m)
|
3
|
9
|
|
Re-measurement
gains on defined benefit plans, net of related tax charge of $5m
(2021: tax credit of $1m)
|
15
|
5
|
|
Tax
related to pension contributions
|
-
|
2
|
|
|
_____
|
_____
|
|
|
18
|
16
|
|
_____
|
_____
|
Total other comprehensive income/(loss) for the period
|
212
|
(8)
|
|
_____
|
_____
|
Total comprehensive income for the period
|
428
|
40
|
|
_____
|
_____
|
Attributable
to:
|
|
|
|
Equity
holders of the parent
|
429
|
40
|
|
Non-controlling
interest
|
(1)
|
-
|
|
_____
|
_____
|
|
|
428
|
40
|
|
_____
|
_____
|
|
|
|
INTERCONTINENTAL HOTELS GROUP PLC
GROUP STATEMENT OF CHANGES IN EQUITY
For the six months ended 30 June 2022
|
6 months ended 30 June 2022
|
|
Equity share capital
|
Other reserves*
|
Retained earnings
|
Non-controlling interest
|
Total equity
|
|
$m
|
$m
|
$m
|
$m
|
$m
|
|
|
|
|
|
|
At
beginning of the period
|
154
|
(2,539)
|
904
|
7
|
(1,474)
|
|
|
|
|
|
|
Total
comprehensive income for the period
|
-
|
198
|
231
|
(1)
|
428
|
Release
of own shares by employee share trusts
|
-
|
17
|
(17)
|
-
|
-
|
Equity-settled
share-based cost
|
-
|
-
|
25
|
-
|
25
|
Equity
dividends paid
|
-
|
-
|
(154)
|
-
|
(154)
|
Exchange
adjustments
|
(16)
|
16
|
-
|
-
|
-
|
|
_____
|
_____
|
_____
|
_____
|
_____
|
At end of the period
|
138
|
(2,308)
|
989
|
6
|
(1,175)
|
|
_____
|
_____
|
_____
|
_____
|
_____
|
|
6 months ended 30 June 2021
|
|
Equity share capital
|
Other reserves*
|
Retained earnings
|
Non-controlling interest
|
Total equity
|
|
$m
|
$m
|
$m
|
$m
|
$m
|
|
|
|
|
|
|
At
beginning of the period
|
156
|
(2,581)
|
568
|
8
|
(1,849)
|
|
|
|
|
|
|
Total
comprehensive income for the period
|
-
|
(15)
|
55
|
-
|
40
|
Transfer
of treasury shares to employee share trusts
|
-
|
(14)
|
14
|
-
|
-
|
Release
of own shares by employee share trusts
|
-
|
13
|
(13)
|
-
|
-
|
Equity-settled
share-based cost
|
-
|
-
|
19
|
-
|
19
|
Tax
related to share schemes
|
-
|
-
|
1
|
-
|
1
|
Exchange
adjustments
|
3
|
(3)
|
-
|
-
|
-
|
|
_____
|
_____
|
_____
|
_____
|
_____
|
At end of the period
|
159
|
(2,600)
|
644
|
8
|
(1,789)
|
|
_____
|
_____
|
_____
|
_____
|
_____
|
*
Other reserves comprise the capital redemption reserve, shares held
by employee share trusts, other reserves, fair value reserve, cash
flow hedge reserves and currency translation reserve.
|
Total
comprehensive income is shown net of tax.
|
INTERCONTINENTAL HOTELS GROUP PLC
GROUP STATEMENT OF FINANCIAL POSITION
30 June 2022
|
2022
30 June
|
2021
31 December
|
|
$m
|
$m
|
ASSETS
|
|
|
Goodwill
and other intangible assets
|
1,160
|
1,195
|
Property,
plant and equipment
|
126
|
137
|
Right-of-use
assets
|
282
|
274
|
Investment
in associates
|
76
|
77
|
Retirement
benefit assets
|
2
|
2
|
Other
financial assets
|
169
|
173
|
Deferred
compensation plan investments
|
213
|
256
|
Non-current
tax receivable
|
-
|
1
|
Deferred
tax assets
|
130
|
147
|
Contract
costs
|
73
|
72
|
Contract
assets
|
328
|
316
|
|
______
|
______
|
Total non-current assets
|
2,559
|
2,650
|
|
______
|
______
|
Inventories
|
4
|
4
|
Trade
and other receivables
|
691
|
574
|
Current
tax receivable
|
11
|
1
|
Other
financial assets
|
-
|
2
|
Cash
and cash equivalents
|
1,361
|
1,450
|
Contract
costs
|
5
|
5
|
Contract
assets
|
30
|
30
|
|
______
|
______
|
Total current assets
|
2,102
|
2,066
|
|
______
|
______
|
Total assets
|
4,661
|
4,716
|
|
_____
|
_____
|
LIABILITIES
|
|
|
Loans
and other borrowings
|
(278)
|
(292)
|
Lease
liabilities
|
(25)
|
(35)
|
Trade
and other payables
|
(518)
|
(579)
|
Deferred
revenue
|
(658)
|
(617)
|
Provisions
|
(51)
|
(49)
|
Current
tax payable
|
(26)
|
(52)
|
|
______
|
______
|
Total current liabilities
|
(1,556)
|
(1,624)
|
|
______
|
______
|
Loans
and other borrowings
|
(2,336)
|
(2,553)
|
Lease
liabilities
|
(402)
|
(384)
|
Derivative
financial instruments
|
(37)
|
(62)
|
Retirement
benefit obligations
|
(69)
|
(92)
|
Deferred
compensation plan liabilities
|
(213)
|
(256)
|
Trade
and other payables
|
(84)
|
(89)
|
Deferred
revenue
|
(1,016)
|
(996)
|
Provisions
|
(36)
|
(41)
|
Deferred
tax liabilities
|
(87)
|
(93)
|
|
______
|
______
|
Total non-current liabilities
|
(4,280)
|
(4,566)
|
|
______
|
______
|
Total liabilities
|
(5,836)
|
(6,190)
|
|
_____
|
_____
|
Net liabilities
|
(1,175)
|
(1,474)
|
|
_____
|
_____
|
EQUITY
|
|
|
IHG
shareholders’ equity
|
(1,181)
|
(1,481)
|
Non-controlling
interest
|
6
|
7
|
|
______
|
______
|
Total equity
|
(1,175)
|
(1,474)
|
|
_____
|
_____
|
|
|
|
INTERCONTINENTAL HOTELS GROUP PLC
GROUP STATEMENT OF CASH FLOWS
For the six months ended 30 June 2022
|
2022
6 months ended
30 June
|
2021
6 months ended
30 June
|
|
$m
|
$m
|
|
|
|
Profit for the period
|
216
|
48
|
Adjustments
reconciling profit for the period to cash flow from operations
(note 9)
|
120
|
211
|
|
_____
|
_____
|
Cash flow from operations
|
336
|
259
|
Interest
paid
|
(42)
|
(40)
|
Interest
received
|
5
|
1
|
Tax
paid (note 6)
|
(124)
|
(47)
|
|
_____
|
_____
|
Net cash from operating activities
|
175
|
173
|
|
_____
|
_____
|
Cash flow from investing activities
|
|
|
Purchase
of property, plant and equipment
|
(12)
|
(3)
|
Purchase
of intangible assets
|
(21)
|
(13)
|
Investment
in associates
|
(1)
|
-
|
Investment
in other financial assets
|
-
|
(9)
|
Deferred
purchase consideration paid
|
-
|
(13)
|
Disposal
of property, plant and equipment
|
3
|
-
|
Repayments
of other financial assets
|
4
|
1
|
|
_____
|
_____
|
Net cash from investing activities
|
(27)
|
(37)
|
|
_____
|
_____
|
Cash flow from financing activities
|
|
|
Dividends
paid to shareholders (note 8)
|
(154)
|
-
|
Principal
element of lease payments
|
(18)
|
(17)
|
Repayment
of commercial paper
|
-
|
(828)
|
|
_____
|
_____
|
Net cash from financing activities
|
(172)
|
(845)
|
|
_____
|
_____
|
Net movement in cash and cash equivalents, net of overdrafts, in
the period
|
(24)
|
(709)
|
|
|
|
Cash
and cash equivalents, net of overdrafts, at beginning of the
period
|
1,391
|
1,624
|
Exchange
rate effects
|
(70)
|
20
|
|
_____
|
_____
|
Cash and cash equivalents, net of overdrafts, at end of the
period
|
1,297
|
935
|
|
_____
|
_____
|
INTERCONTINENTAL HOTELS GROUP PLC
NOTES TO THE INTERIM FINANCIAL STATEMENTS
1.
|
Basis of preparation
|
|
These condensed interim financial statements have been prepared in
accordance with the Disclosure Guidance and Transparency Rules of
the United Kingdom’s Financial Conduct Authority and
UK-adopted IAS 34 ‘Interim Financial Reporting’. They
have been prepared on a consistent basis using the same accounting
policies and methods of computation set out in the InterContinental
Hotels Group PLC (‘the Group’ or ‘IHG’)
Annual Report and Form 20-F for the year ended 31 December
2021.
These condensed interim financial statements are unaudited and do
not constitute statutory accounts of the Group within the meaning
of Section 435 of the Companies Act 2006. The auditors have carried
out a review of the financial information in accordance with the
guidance contained in ISRE (UK) 2410 ‘Review of Interim
Financial Information performed by the Independent Auditor of the
Entity’ issued by the Financial Reporting
Council.
Financial
information for the year ended 31 December 2021 has been extracted
from the Group’s published financial statements for that year
which were prepared in accordance with UK-adopted international
accounting standards and with applicable law and regulations and
which have been filed with the Registrar of Companies. The report
of the auditor was unqualified with no reference to matters to
which the auditor drew attention by way of emphasis and no
statement under s498(2) or s498(3) of the Companies Act
2006.
There are no changes in the Group’s critical judgements,
estimates and assumptions from those disclosed in the 2021 Annual
Report and Form 20-F. An updated sensitivity related to expected
credit losses is included in note 12(e).
Going concern
Trading
in the first half of 2022 continued to recover with ongoing
relaxation of travel restrictions supporting an increasing return
of travel demand, resulting in Global RevPAR recovering to
approximately 90% of 2019 levels. Continued focus on cash
conversion led to reported net cash from operating activities in
the first half of $175m and net debt reducing to
$1,718m.
The
Group’s bank facilities were refinanced in April 2022 with a
new revolving credit facility of $1,350m maturing in 2027, with
options to extend for a further two years. Previously negotiated
covenant relaxations and the $400m liquidity covenant, which were
applicable at 30 June and 31 December 2022 test dates, will no
longer apply. The leverage covenant has been adjusted to
incorporate the effects of IFRS 16 ‘Leases’ and has
been reset at 4.0x covenant net debt:covenant EBITDA (see note
10).
A period of 18 months has been used, from 1 July 2022 to 31
December 2023, to complete the going concern assessment. In
adopting the going concern basis for preparing these condensed
interim financial statements, the Directors have considered a
‘Base Case’ scenario which is based on continued
improvement in demand as travel restrictions are reduced, with
RevPAR continuing to recover towards pre-pandemic levels in 2023.
The only debt maturity in the period under consideration is the
£173m 3.875% November 2022 bond which is assumed to be repaid
with cash on maturity. The assumptions applied in the Base Case
scenario are consistent with those used for Group planning
purposes, for impairment testing and for assessing recoverability
of deferred tax assets. Under the Base Case scenario, the bank
facilities remain undrawn.
The principal risks and uncertainties which could be applicable
have been considered and are able to be absorbed within the
covenant requirements of the new bank facility. A large number of
the Group’s principal risks, for example macro external
factors or preferred brands and loyalty, would result in an impact
on RevPAR which is one of the sensitivities assessed against the
headroom available in the Base Case. Climate risks are not
considered to have a significant impact over the 18-month period of
assessment. Other principal risks that could result in a large
one-off incident that has a material impact on cash flow have also
been considered, for example a cybersecurity event.
The Directors have also reviewed a ‘Downside Case’
based on a recession scenario which assumes performance during the
second half of 2022 starts to worsen and then RevPAR decreases by
5% in 2023. The Directors have also reviewed a ‘Severe
Downside Case’ which is based on a severe but plausible
scenario equivalent to the market conditions experienced through
the 2008/2009 global financial crisis. This assumes that the
performance during the second half of 2022 starts to worsen and
then RevPAR decreases significantly by 17% in 2023. It is assumed
that the additional shareholder return of $500m announced on 9
August 2022 is completed in full in all scenarios before additional
actions are taken. Under the Downside Case and Severe Downside
case, the bank facilities remain undrawn.
Under the Severe Downside scenario, there is limited headroom to
the bank covenants at 31 December 2023 to absorb additional risks.
However, based on experience in 2020, the Directors reviewed a
number of actions to reduce discretionary spend, creating
substantial additional headroom. After these actions are taken,
there is significant headroom to the bank covenants to absorb the
principal risks and uncertainties which could be
applicable.
In the Severe Downside Case, the Group has substantial levels of
existing cash reserves available after additional actions are taken
(over $850m at 31 December 2023) and is not expected to draw on the
bank facilities.
The Directors reviewed a reverse stress test scenario to determine
what decrease in RevPAR would create a breach of the covenants, and
the cash reserves that would be available to the Group at that
time. The Directors concluded that the outcome of this reverse
stress test showed that it was very unlikely the bank facilities
would need to be drawn.
The leverage and interest cover covenant tests up to 31 December
2023 (the last day of the assessment period), have been considered
as part of the Base Case, Downside Case and Severe Downside Case
scenarios. However, as the bank facilities are unlikely to be drawn
even in a scenario significantly worse than the Severe Downside
scenario, the Group does not need to rely on the additional
liquidity provided by the bank facilities to remain a going
concern. In the event that a covenant amendment was required, the
Directors believe it is reasonable to expect that such an amendment
could be obtained based on prior experience in negotiating the 2020
amendments, however the going concern conclusion is not dependent
on this expectation.
The Group’s fee based model and wide geographic spread have
been proven to leave it well-placed to manage through uncertain
times. Having reviewed these scenarios, the Directors have a
reasonable expectation that the Group has sufficient resources to
continue operating until at least 31 December 2023. Accordingly,
they continue to adopt the going concern basis in preparing these
condensed interim financial statements.
|
|
2.
|
Exchange
rates
|
|
The
results of operations have been translated into US dollars at the
average rates of exchange for the period. In the case of sterling,
the translation rate is $1 = £0.77 (2021: $1 = £0.72). In
the case of the euro, the translation rate is $1 = €0.92
(2021: $1 = €0.83).
Assets
and liabilities have been translated into US dollars at the rates
of exchange on the last day of the period. In the case of sterling,
the translation rate is $1 = £0.83 (31 December 2021: $1 =
£0.74; 30 June 2021: $1 = £0.72). In the case
of the euro, the translation rate is $1 = €0.96 (31 December
2021: $1 = €0.88; 30 June 2021: $1 =
€0.84).
|
3.
|
Segmental Information
|
|
|
|
Revenue
|
2022
6 months ended
30 June
|
2021
6 months ended
30 June
|
|
|
$m
|
$m
|
|
|
|
|
|
Americas
|
471
|
325
|
|
EMEAA
|
239
|
84
|
|
Greater
China
|
36
|
59
|
|
Central
|
94
|
97
|
|
|
_____
|
_____
|
|
Revenue from reportable segments
|
840
|
565
|
|
System
Fund revenues
|
554
|
378
|
|
Reimbursement
of costs
|
400
|
236
|
|
|
_____
|
_____
|
|
Total revenue
|
1,794
|
1,179
|
|
|
_____
|
_____
|
|
Profit
|
2022
6 months ended
30 June
$m
|
2021
6 months ended
30 June
$m
|
|
|
|
|
|
Americas
|
351
|
224
|
|
EMEAA
|
59
|
(27)
|
|
Greater
China
|
5
|
31
|
|
Central
|
(38)
|
(40)
|
|
|
_____
|
_____
|
|
Operating profit from reportable segments
|
377
|
188
|
|
System
Fund
|
3
|
(46)
|
|
Operating
exceptional items (note 5)
|
(19)
|
(4)
|
|
|
_____
|
_____
|
|
Operating profit
|
361
|
138
|
|
Net
financial expenses
|
(69)
|
(72)
|
|
Fair
value gains on contingent purchase consideration
|
7
|
1
|
|
|
_____
|
_____
|
|
Profit before tax
|
299
|
67
|
|
|
_____
|
_____
|
4.
|
Revenue
|
|
Disaggregation of revenue
|
|
6 months ended 30 June 2022
|
|
|
|
|
|
|
Americas
$m
|
EMEAA
$m
|
Greater China
$m
|
Central
$m
|
Group
$m
|
|
|
|
|
|
|
Franchise
and base management fees
|
406
|
96
|
31
|
-
|
533
|
Incentive
management fees
|
7
|
25
|
5
|
-
|
37
|
Central
revenue
|
-
|
-
|
-
|
94
|
94
|
|
_____
|
_____
|
_____
|
_____
|
_____
|
Revenue
from fee business
|
413
|
121
|
36
|
94
|
664
|
Revenue
from owned, leased and managed lease hotels
|
58
|
118
|
-
|
-
|
176
|
|
_____
|
_____
|
_____
|
_____
|
_____
|
|
471
|
239
|
36
|
94
|
840
|
|
_____
|
_____
|
_____
|
_____
|
|
System
Fund revenues
|
|
|
|
|
554
|
Reimbursement
of costs
|
|
|
|
|
400
|
|
|
|
|
|
_____
|
Total revenue
|
|
|
|
|
1,794
|
|
|
|
|
|
_____
|
6 months ended 30 June 2021
|
|
|
|
|
|
|
Americas
$m
|
EMEAA
$m
|
Greater China
$m
|
Central
$m
|
Group
$m
|
|
|
|
|
|
|
Franchise
and base management fees
|
292
|
42
|
44
|
-
|
378
|
Incentive
management fees
|
4
|
11
|
15
|
-
|
30
|
Central
revenue
|
-
|
-
|
-
|
97
|
97
|
|
_____
|
_____
|
_____
|
_____
|
_____
|
Revenue
from fee business
|
296
|
53
|
59
|
97
|
505
|
Revenue
from owned, leased and managed lease hotels
|
29
|
31
|
-
|
-
|
60
|
|
_____
|
_____
|
_____
|
_____
|
_____
|
|
325
|
84
|
59
|
97
|
565
|
|
_____
|
_____
|
_____
|
_____
|
|
System
Fund revenues
|
|
|
|
|
378
|
Reimbursement
of costs
|
|
|
|
|
236
|
|
|
|
|
|
_____
|
Total revenue
|
|
|
|
|
1,179
|
|
|
|
|
|
_____
|
|
At
30 June 2022, the maximum exposure remaining under performance
guarantees was $80m (31 December 2021: $85m).
|
5.
|
Exceptional items
|
|
|
|
2022
6 months ended
30 June
$m
|
2021
6 months ended
30 June
$m
|
|
|
|
|
|
|
|
|
Cost of sales and administrative expenses
|
|
|
|
|
Costs
of ceasing operations in Russia
|
(14)
|
-
|
|
|
|
|
|
|
|
Other impairment charges
|
|
|
|
|
Impairment
of contract assets
|
(5)
|
-
|
|
|
Impairment
of associates
|
-
|
(4)
|
|
|
|
_____
|
_____
|
|
|
|
(5)
|
(4)
|
|
|
|
____
|
____
|
|
|
Total operating exceptional items
|
(19)
|
(4)
|
|
|
|
_____
|
_____
|
|
|
|
|
|
|
|
Tax on
exceptional items
|
5
|
1
|
|
|
Exceptional
tax
|
-
|
22
|
|
|
|
_____
|
_____
|
|
|
Tax (note 6)
|
5
|
23
|
|
|
|
_____
|
_____
|
|
|
Costs of ceasing operations in Russia
On 27
June 2022, the Group announced it is in the process of ceasing all
operations in Russia consistent with evolving UK, US and EU
sanction regimes and the ongoing and increasing challenges of
operating there. The costs associated with the cessation of
corporate operations in Moscow and long-term management and
franchise contracts are treated as exceptional due to the nature of
the war in Ukraine which has driven the Group’s
response.
Impairment of contract assets
Relates
to key money relating to managed and franchised hotels in Russia.
The impairment is treated as exceptional for consistency with the
costs of ceasing operations described above.
|
|
6.
|
Tax
|
|
|
2022
6 months ended
30 June
|
2021
6 months ended
30 June
|
|
|
Profit/(loss)
$m
|
Tax
$m
|
Tax
rate
|
Profit/(loss)
$m
|
Tax
$m
|
Tax
rate
|
|
|
|
|
|
|
|
|
|
Before
exceptional items and System Fund
|
315
|
(88)
|
28%
|
117
|
(42)
|
36%
|
|
System
Fund
|
3
|
-
|
|
(46)
|
-
|
|
|
Exceptional items
(note 5)
|
(19)
|
5
|
|
(4)
|
23
|
|
|
|
_____
|
_____
|
|
_____
|
_____
|
|
|
|
299
|
(83)
|
|
67
|
(19)
|
|
|
|
_____
|
_____
|
|
_____
|
_____
|
|
|
|
|
|
|
|
|
|
|
Analysed
as:
|
|
|
|
|
|
|
|
|
Current
tax
|
|
(88)
|
|
|
(43)
|
|
|
|
Deferred
tax
|
|
5
|
|
|
24
|
|
|
|
|
_____
|
|
|
_____
|
|
|
|
|
(83)
|
|
|
(19)
|
|
|
|
|
_____
|
|
|
_____
|
|
|
Further
analysed as:
|
|
|
|
|
|
|
|
|
UK
tax
|
|
(3)
|
|
|
23
|
|
|
|
Foreign
tax
|
|
(80)
|
|
|
(42)
|
|
|
|
|
_____
|
|
|
_____
|
|
|
|
|
(83)
|
|
|
(19)
|
|
|
|
|
_____
|
|
|
_____
|
|
|
Tax
before exceptional items and System Fund has been calculated by
applying a blended effective tax rate of 28%. This blended
effective rate represents the weighting of the annual tax rates of
the Group’s key territories using corporate income tax rates
substantively enacted at 30 June 2022 to provide the best estimate
for the full financial year. It is higher than the 2022 UK
Corporation Tax rate of 19% due to higher taxed overseas profits
(particularly in the US) and the impact of unrelieved foreign taxes
and other non-tax deductible expenses.
The
deferred tax asset comprises $109m (31 December 2021: $127m)
in the UK and $21m (31 December 2021: $20m) in respect of other
territories. The deferred tax asset has been recognised based upon
forecasts consistent with those used in the going concern
assessment.
Tax
paid of $124m in the period exceeds the current tax charge in the
Group income statement predominantly as a result of liabilities
already accrued at 1 January 2022 being settled in the period and
the phasing of the 2022 US instalment payments.
|
7.
|
Earnings per ordinary share
|
|
|
2022
6
months ended
30
June
|
2021
6
months ended
30 June
|
|
Basic earnings per ordinary share
|
|
|
|
Profit
available for equity holders ($m)
|
216
|
48
|
|
Basic
weighted average number of ordinary shares (millions)
|
184
|
183
|
|
Basic
earnings per ordinary share (cents)
|
117.4
|
26.2
|
|
|
_____
|
_____
|
|
Diluted earnings per ordinary share
|
|
|
|
Profit
available for equity holders ($m)
|
216
|
48
|
|
Diluted
weighted average number of ordinary shares (millions)
|
185
|
184
|
|
Diluted
earnings per ordinary share (cents)
|
116.8
|
26.1
|
|
|
_____
|
_____
|
|
The
diluted weighted average number of ordinary shares is calculated
as:
|
|
|
|
|
|
Basic
weighted average number of ordinary shares (millions)
|
184
|
183
|
|
Dilutive
potential ordinary shares (millions)
|
1
|
1
|
|
|
______
|
______
|
|
|
185
|
184
|
|
|
_____
|
_____
|
8.
|
Dividends
|
|
|
|
2022
|
|
2021
|
|
|
6 months ended
30 June
|
6 months ended
30 June
|
|
|
cents per share
|
$m
|
cents per share
|
$m
|
|
|
|
|
|
|
|
Paid
during the period
|
85.9
|
154
|
-
|
-
|
|
|
|
______
|
______
|
______
|
______
|
|
|
|
|
|
|
|
Proposed
for the interim period
|
43.9
|
81
|
-
|
-
|
|
|
______
|
______
|
______
|
______
|
|
|
|
|
|
|
|
In
addition to the interim dividend of 43.9 cents per share, in August
2022 the Board also approved a $500m share buyback programme that
will commence on 9 August and end no later than 31 January
2023.
|
9.
|
Reconciliation of profit for the period to cash flow from
operations
|
|
2022
6 months ended
30 June
|
2021
6 months ended
30 June
|
|
$m
|
$m
|
|
|
|
Profit
for the period
|
216
|
48
|
Adjustments
for:
|
|
|
|
|
|
|
Net
financial expenses
|
69
|
72
|
|
Fair
value gains on contingent purchase consideration
|
(7)
|
(1)
|
|
Income
tax charge
|
83
|
19
|
|
|
|
|
|
Operating profit
adjustments:
|
|
|
|
Impairment loss on
financial assets
|
5
|
8
|
|
Other
impairment charges
|
5
|
4
|
|
Other
operating exceptional items
|
14
|
-
|
|
Depreciation and
amortisation
|
36
|
45
|
|
|
_____
|
_____
|
|
|
60
|
57
|
|
|
|
|
|
Contract assets
deduction in revenue
|
17
|
16
|
|
Share-based
payments cost
|
17
|
14
|
|
Share
of losses of associates
|
-
|
5
|
|
|
_____
|
_____
|
|
|
34
|
35
|
|
|
|
|
|
System
Fund adjustments:
|
|
|
|
Depreciation and
amortisation
|
42
|
41
|
|
Impairment loss on
financial assets
|
4
|
3
|
|
Share-based
payments cost
|
9
|
6
|
|
Share
of losses of associates
|
-
|
1
|
|
|
_____
|
_____
|
|
|
55
|
51
|
|
|
|
|
|
Working
capital and other adjustments:
|
|
|
|
Increase in
deferred revenue
|
65
|
35
|
|
Changes
in working capital
|
(189)
|
(29)
|
|
|
_____
|
_____
|
|
|
(124)
|
6
|
|
|
|
|
|
Cash
flows relating to exceptional items
|
(15)
|
(12)
|
|
Contract
acquisition costs, net of repayments
|
(35)
|
(16)
|
|
|
_____
|
_____
|
Total
adjustments
|
120
|
211
|
|
_____
|
_____
|
Cash
flow from operations
|
336
|
259
|
|
_____
|
_____
|
10.
|
Net debt
|
|
|
2022
30
June
|
2021
31
December
|
|
|
$m
|
$m
|
|
|
|
|
|
Cash
and cash equivalents*
|
1,361
|
1,450
|
|
Loans
and other borrowings – current
|
(278)
|
(292)
|
|
Loans
and other borrowings – non-current
|
(2,336)
|
(2,553)
|
|
Lease
liabilities – current
|
(25)
|
(35)
|
|
Lease
liabilities – non-current
|
(402)
|
(384)
|
|
Derivative
financial instruments hedging debt values
|
(38)
|
(67)
|
|
|
_____
|
_____
|
|
Net debt**
|
(1,718)
|
(1,881)
|
|
|
_____
|
_____
|
|
* Of
which $152m (31 December 2021: $124m) is cash at bank and in
hand.
** See the Use of Non-GAAP measures section in the Interim
Management Report.
|
|
In the
Group statement of cash flows, cash and cash equivalents is
presented net of $64m bank overdrafts (31 December 2021:
$59m).
|
|
Cash
and cash equivalents includes $8m (31 December 2021: $9m)
restricted for use on capital expenditure under hotel lease
agreements and therefore not available for wider use by the Group.
An additional $26m (31 December 2021: $77m) is held within
countries from which funds are not currently able to be repatriated
to the Group’s central treasury company.
|
|
Bank facilities
In
April 2022, the Group’s $1,275m revolving syndicated bank
facility and $75m revolving bilateral facility were refinanced with
a $1,350m revolving syndicated bank facility. The facility was
undrawn at 30 June 2022.
The new
facility contains two financial covenants: interest cover and a
leverage ratio. These are tested at half year and full year on a
trailing 12-month basis, with 30 June 2022 being the first test
date.
The
interest cover covenant requires a ratio of Covenant EBITDA:
Covenant interest payable above 3.5:1 and the leverage ratio
requires Covenant net debt: Covenant EBITDA below
4.0:1.
The
previous covenants, as set out in the 2021 Annual Report and Form
20-F, were waived until 31 December 2021 and had been relaxed for
test dates in 2022. The temporary $400m liquidity covenant, which
was previously applicable at 30 June and 31 December 2022 test
dates, will no longer apply.
|
|
|
2022
30
June
|
2021
31
December*
|
|
|
|
|
|
Covenant
EBITDA ($m)
|
812
|
601
|
|
Covenant
net debt ($m)
|
1,752
|
1,801
|
|
Covenant
interest payable ($m)
|
133
|
133
|
|
Leverage
|
2.16
|
3.00
|
|
Interest
cover
|
6.11
|
4.52
|
|
Liquidity
($m)
|
n/a
|
2,655
|
|
|
|
|
|
* In
2021, covenant measures were reported on a frozen GAAP basis
excluding the effect of IFRS 16, an adjustment which is eliminated
under the new facility agreement.
|
11.
|
Movement in net debt
|
|
|
2022
6 months ended
30 June
|
2021
6
months ended
30 June
|
|
|
$m
|
$m
|
|
|
|
|
|
Net
decrease in cash and cash equivalents, net of
overdrafts
|
(24)
|
(709)
|
|
Add
back financing cash flows in respect of other components of net
debt:
|
|
|
|
|
Principal
element of lease payments
|
18
|
17
|
|
|
Repayment
of commercial paper
|
-
|
828
|
|
|
_____
|
_____
|
|
(Increase)/decrease
in net debt arising from cash flows
|
(6)
|
136
|
|
|
|
|
|
Other
movements:
|
|
|
|
|
Lease
liabilities
|
(32)
|
(3)
|
|
|
Increase
in accrued interest
|
(24)
|
(25)
|
|
|
Exchange
and other adjustments
|
225
|
(37)
|
|
|
_____
|
_____
|
|
Decrease in net debt
|
163
|
71
|
|
|
|
|
|
Net
debt at beginning of the period
|
(1,881)
|
(2,529)
|
|
|
_____
|
_____
|
|
Net debt at end of the period
|
(1,718)
|
(2,458)
|
|
|
_____
|
_____
|
12.
|
Financial instruments
|
|
|
a)
|
Fair value hierarchy
The
following table provides the carrying value (which is equal to the
fair value) and position in the fair value measurement hierarchy of
the Group’s financial assets and liabilities measured and
recognised at fair value on a recurring basis.
|
|
|
Value
|
|
|
Level 1
$m
|
Level 2
$m
|
Level 3
$m
|
Total
$m
|
|
Financial assets
|
|
|
|
|
|
Equity
securities*
|
-
|
-
|
109
|
109
|
|
Money
market funds**
|
882
|
-
|
-
|
882
|
|
Deferred
compensation plan investments
|
213
|
-
|
-
|
213
|
|
|
|
|
|
|
|
Financial liabilities
|
|
|
|
|
|
Derivative
financial instruments
|
-
|
(37)
|
-
|
(37)
|
|
Contingent
purchase consideration***
|
-
|
-
|
(66)
|
(66)
|
|
Deferred
compensation plan liabilities
|
(213)
|
-
|
-
|
(213)
|
|
*
Included in ‘other financial assets’.
**
Included in ‘other financial assets’ and ‘cash
and cash equivalents’.
***
Included in ‘trade and other payables’.
There
were no transfers between Level 1 and Level 2 fair value
measurements during the period and no transfers into or out of
Level 3.
|
b)
|
Valuation techniques
The
valuation techniques and types of input applied by the Group for
the six months ended 30 June 2022 are consistent with those
disclosed within the 2021 Annual
Report and Form 20-F. Changes in reported amounts are
primarily caused by payments made and received, changes in market
inputs, such as discount rates, and the impact of the time value of
money.
Within
Level 2 financial instruments, derivative financial liabilities
have fallen to $37m, primarily driven by movements in sterling:euro
exchange rates which impact the valuation of currency
swaps.
Equity securities
The
significant unobservable inputs used to determine the fair value of
the unquoted equity securities are RevPAR growth, pre-tax discount
rate (which ranged from 6.3% to 9.3%) and a non-marketability
factor (which ranged from 20% to 30%).
Applying
a one-year slower/faster RevPAR recovery period would result in a
$8m/$7m (decrease)/increase in fair value respectively. A one
percentage point increase/decrease in the discount rate would
result in a $10m (decrease)/increase in fair value respectively. A
five percentage point increase/decrease in the non-marketability
factor would result in a $6m (decrease)/increase in fair
value.
Contingent purchase consideration
Principally
comprises the present value of the expected amounts payable on
exercise of put and call options to acquire the remaining 49%
shareholding in Regent.
The
significant unobservable inputs are the projected trailing revenues
and the date of exercising the options. If the annual trailing
revenues were to exceed the floor by 10%, the amount of the
contingent purchase consideration recognised would increase by $7m.
If the date for exercising the options is assumed to be 2033, the
amount of the undiscounted contingent purchase consideration would
be $86m.
|
c)
|
Reconciliation of financial instruments classified as Level
3
|
|
|
Equity
securities
$m
|
Contingent
purchase consideration
$m
|
|
|
|
|
|
At 1
January 2022
|
106
|
(73)
|
|
Unrealised
changes in fair value
|
5
|
7
|
|
Exchange
and other adjustments
|
(2)
|
-
|
|
|
_____
|
_____
|
|
At 30 June 2022
|
109
|
(66)
|
|
|
_____
|
_____
|
|
|
|
|
|
Changes
in the fair value of equity securities are recognised within
‘Gains on equity instruments classified as fair value through
other comprehensive income’ in the Group statement of
comprehensive income.
Changes
in the fair value of contingent purchase consideration are
recognised within ‘Fair value gains on contingent purchase
consideration’ in the Group income statement.
|
d)
|
Fair value of other financial instruments
The
Group also holds a number of financial instruments which are not
measured at fair value in the Group statement of financial
position. With the exception of the Group’s bonds, their fair
values are not materially different to their carrying amounts,
since the interest receivable or payable is either close to current
market rates or the instruments are short-term in nature. The
Group’s bonds, which are classified as Level 1 fair value
measurements, have a carrying value of $2,550m and a fair value of
$2,378m.
The
Group did not measure any financial assets or liabilities at fair
value on a non-recurring basis as at 30 June 2022.
|
e)
|
Estimation uncertainty related to financial
instruments
Consistent
with 31 December 2021, the calculation of expected credit losses on
trade receivables is a significant estimate. Although the
collection of trade receivables has improved compared to the prior
year, there remains a significant amount of older debt which has
not yet been collected. There also remains a risk of reduced owner
liquidity. If historical evidence was applied to all owner groups
(rather than by reference to other sources of data), the provision
would reduce by approximately $11m; alternatively a 10% collection
rate of amounts over 270 days would reduce the provision by
approximately $9m.
|
13.
|
Commitments, contingencies and guarantees
|
|
At 30
June 2022, the amount contracted for but not provided for in the
financial statements for expenditure on property, plant and
equipment and intangible assets was $26m (31 December 2021:
$17m).
From
time to time, the Group is subject to legal proceedings the
ultimate outcome of each being always subject to many uncertainties
inherent in litigation. These legal claims and proceedings are in
various stages and include disputes related to specific hotels
where the potential materiality is not yet known; such proceedings,
either individually or in the aggregate, have not in the recent
past and are not likely to have a significant effect on the
Group’s financial position or profitability. In the EMEAA
region, one such dispute is expected to be resolved in the second
half of the year and, in the six months ended 30 June 2022, a
further dispute has been found in the Group’s favour, subject
to appeal, with no liability arising.
In
limited cases, the Group may guarantee bank loans made to
facilitate third-party ownership of hotels under IHG management or
franchise agreements. At 30 June 2022, there were guarantees of up
to $67m in place (31 December 2021: $69m).
Subsequent
to 30 June 2022, the Group has agreed to restructure the UK
portfolio leases with substantially lower rental payments. The
revised portfolio will comprise nine IHG-branded hotels, with the
leases of three unbranded hotels terminating in the second half of
2022. This is a non-adjusting event since commitments were made
after 30 June 2022. Documentation is expected to be signed in the
second half of 2022, subject to obtaining consent from superior
landlords.
The
structure of the revised leases is similar to the current leases
which contain guarantees that the Group will fund any shortfalls in
lease payments up to an annual and cumulative cap. These caps limit
the Group’s exposure to trading losses, meaning that rental
payments are reduced if insufficient cash flows are generated by
the hotels. In the event that rent reductions are not applicable,
annual base rental payments stabilise at £34m over the
remaining lease term of 21 years. Additional performance-based
rental payments are calculated using hotel revenues and net cash
flows.
The
revised terms are expected to result in an immaterial reversal of
previous impairment of property, plant and equipment and related
adjustments to deferred tax. Existing provisions for onerous
contractual expenditure will be utilised on termination of the
three leases.
|
|
INDEPENDENT REVIEW REPORT TO INTERCONTINENTAL HOTELS GROUP
PLC
REPORT ON THE CONDENSED CONSOLIDATED INTERIM FINANCIAL
STATEMENTS
Our conclusion
We have reviewed InterContinental Hotels Group PLC’s
condensed consolidated interim financial statements (the
‘interim financial statements’) in the Half Year
Results of InterContinental Hotels Group PLC for the six month
period ended 30 June 2022 (the
‘period’).
Based on our review, nothing has come to our attention that causes
us to believe that the interim financial statements are not
prepared, in all material respects, in accordance with UK-adopted
International Accounting Standard 34 ‘Interim Financial
Reporting’ and the Disclosure Guidance and Transparency Rules
sourcebook of the United Kingdom’s Financial Conduct
Authority.
The interim financial statements comprise:
●
the
Group statement of financial position at
30 June 2022;
●
the
Group income statement and Group statement of comprehensive income
for the period then ended;
●
the
Group statement of cash flows for the period then
ended;
●
the
Group statement of changes in equity for the period then ended;
and
●
the
explanatory notes to the interim financial statements.
The interim financial statements included in the Half Year Results
of InterContinental Hotels Group PLC have been prepared in
accordance with UK-adopted International Accounting Standard 34
‘Interim Financial Reporting’ and the Disclosure
Guidance and Transparency Rules sourcebook of the United
Kingdom’s Financial Conduct Authority.
Basis for conclusion
We conducted our review in accordance with International Standard
on Review Engagements (UK) 2410 ‘Review of Interim Financial
Information Performed by the Independent Auditor of the
Entity’ issued by the Financial Reporting Council for use in
the United Kingdom. A review of interim financial information
consists of making enquiries, primarily of persons responsible for
financial and accounting matters, and applying analytical and other
review procedures.
A review is substantially less in scope than an audit conducted in
accordance with International Standards on Auditing (UK) and,
consequently, does not enable us to obtain assurance that we would
become aware of all significant matters that might be identified in
an audit. Accordingly, we do not express an audit
opinion.
We have read the other information contained in the Half Year
Results and considered whether it contains any apparent
misstatements or material inconsistencies with the information in
the interim financial statements.
Conclusions relating to going concern
Based on our review procedures, which are less extensive than those
performed in an audit as described in the basis for conclusion
section of this report, nothing has come to our attention to
suggest that the Directors have inappropriately adopted the going
concern basis of accounting or that the Directors have identified
material uncertainties relating to going concern that are not
appropriately disclosed. This conclusion is based on the review
procedures performed in accordance with this ISRE. However, future
events or conditions may cause the Group to cease to continue as a
going concern.
|
|
RESPONSIBILITIES FOR THE INTERIM FINANCIAL STATEMENTS AND THE
REVIEW
Our responsibilities and those of the Directors
The Half Year Results, including the interim financial statements,
are the responsibility of, and have been approved by, the
Directors. The Directors are responsible for preparing the Half
Year Results in accordance with the Disclosure Guidance and
Transparency Rules sourcebook of the United Kingdom’s
Financial Conduct Authority. In preparing the Half Year Results,
including the interim financial statements, the Directors are
responsible for assessing the Group’s ability to continue as
a going concern, disclosing, as applicable, matters related to
going concern and using the going concern basis of accounting
unless the Directors either intend to liquidate the Group or to
cease operations or have no realistic alternative but to do
so.
Our responsibility is to express a conclusion on the interim
financial statements in the Half Year Results based on our review.
Our conclusion, including our conclusions relating to going
concern, is based on procedures that are less extensive than audit
procedures as described in the basis for conclusion paragraph of
this report. This report, including the conclusion, has been
prepared for and only for the company for the purpose of complying
with the Disclosure Guidance and Transparency Rules sourcebook of
the United Kingdom’s Financial Conduct Authority and for no
other purpose. We do not, in giving this conclusion, accept or
assume responsibility for any other purpose or to any other person
to whom this report is shown or into whose hands it may come save
where expressly agreed by our prior consent in
writing.
PricewaterhouseCoopers LLP
Chartered Accountants
London
8 August 2022
|
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf
by the undersigned, thereunto duly authorized.
|
|
InterContinental Hotels Group PLC
|
|
|
(Registrant)
|
|
|
|
|
By:
|
/s/ C.
Lindsay
|
|
Name:
|
C.
LINDSAY
|
|
Title:
|
ASSISTANT
COMPANY SECRETARY
|
|
|
|
|
Date:
|
9 August 2022
|
|
|
|
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