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 22
February 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
|
Final
Results dated 22 February 2022
|
|
|
Exhibit
No: 99.1
This announcement contains inside information
IHG PLC - Full Year Results to 31
December 2021
|
Reported
|
|
Underlying1
|
|
2021
|
2020
|
% change2
|
|
% change
|
|
REPORTABLE SEGMENTS1:
|
|
|
|
|
|
|
Revenue1
|
$1,390m
|
$992m
|
+40%
|
|
+39%
|
|
Revenue from fee
business1
|
$1,153m
|
$823m
|
+40%
|
|
+38%
|
|
Operating
profit1
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$534m
|
$219m
|
+144%
|
|
+138%
|
|
Fee
margin1
|
49.6%
|
34.1%
|
+15.5%pts
|
|
|
Adjusted
EPS1
|
147.0¢
|
31.3¢
|
+370%
|
|
KEY METRICS:
|
GROUP RESULTS:
|
|
|
|
|
● $19.4bn total gross revenue1
|
Total revenue
|
$2,907m
|
$2,394m
|
+21%
|
|
(30)%
vs 2019 (+43% vs 2020)
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Operating profit/(loss)
|
$494m
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$(153)m
|
NM
|
|
● (30)% global FY RevPAR1
|
Basic EPS
|
145.4¢
|
(142.9)¢
|
NM
|
|
vs
2019 (+46% vs 2020)
|
Total dividend per share
|
85.9¢
|
- ¢
|
NM
|
|
● (17)% global Q4 RevPAR1
|
Net
debt1
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$1,881m
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$2,529m
|
(26)%
|
|
vs
2019 (+71% vs 2020)
|
1 Definitions
for non-GAAP measures can be found in the 'Use of 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.
●
|
Significant improvement in trading during the year, with RevPAR
recovering to 70% of 2019 levels (83% in Q4)
|
●
|
Particularly strong recovery in the US, resulting in Americas FY
RevPAR (20)% vs 2019, with Greater China (29)% and EMEAA (52)%; in
Q4, Americas improved to (7)% vs 2019, with Greater China (33)% and
EMEAA (33)%
|
●
|
Global Q4 RevPAR of (17)% vs 2019 reflected rate attained
broadly in line with 2019 levels and occupancy 11%pts lower;
Q4 occupancy was 56% (53% FY), with the US reaching 61% (61%
FY)
|
●
|
Operating profit from reportable segments of $534m, +144% vs 2020,
(down 38% vs 2019); reported operating profit of $494m, after
System Fund result of $(11)m and operating exceptionals of
$(29)m
|
●
|
Fee business cost savings of $75m vs 2019 achieved and
sustainable in future years; additional temporary reductions in the
2021 cost base of $25m are not expected to be retained
|
●
|
Net cash from operating activities of $636m (2020: $137m), with
adjusted free cash flow1 of
$571m (2020: $29m); result includes strong cash conversion and a
System Fund inflow following an outflow in the prior
year
|
●
|
Leverage substantially reduced, with our net debt:adjusted EBITDA
ratio now 3.0x
|
●
|
Final dividend of 85.9¢ proposed, equivalent to the withdrawn
final payment in respect of 2019
|
●
|
Gross system growth of +5.0% YOY; net (0.6)% YOY, after 49.7k rooms
removed; ~70% of removals were across Holiday Inn and Crowne Plaza,
driven by the completion of the estate review for these two
brands
|
●
|
Opened 44.0k rooms (291 hotels) over the year, +12% vs
2020; global estate now at 880k rooms (5,991
hotels)
|
●
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Significant acceleration in signings in Q4 at 23.7k, close to
levels achieved in 2019; strongest increase in EMEAA
|
●
|
Signed 68.9k rooms (437 hotels) in total in 2021, +23% vs 2020;
global pipeline now at 271k rooms (1,797 hotels)
|
●
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Conversions ~25% of openings; first six properties secured for new
Luxury & Lifestyle brand, Vignette Collection
|
Keith Barr, Chief Executive Officer, IHG Hotels & Resorts,
said:
"Trading improved significantly in 2021, with RevPAR getting closer
to pre-pandemic levels as the year went on, profitability and cash
flow rebounding strongly, and signings accelerating in Q4. Working
hand in hand, our colleagues and hotel owners have once again shown
incredible efforts to navigate the ebbs and flows of recovery. As
vaccination rates rise and restrictions are lifted around the
world, we are seeing the demand for travel increase. While there
may be unexpected challenges ahead, we are confident in our ability
to respond and adapt to what consumers and owners need as we
position IHG for strong future growth.
Through our strategic priorities, we continue to build a better,
stronger company for guests and owners. Our commitment to
maintaining a high-quality estate and investing in operations,
service and new designs is driving the success of our established
brands. The addition of attractive new brands in multiple segments
has opened up further growth opportunities globally. Our loyalty
programme will be transformed this year, alongside important
enhancements to our digital channels and experiences, and we are
committed to ensuring that as we grow around the world, we do so in
the right way through our Journey to Tomorrow plan and joining
campaigns such as Race to Zero.
Recognising the scale of our ambitions and the strengths and
efficiencies of our distribution and technology platforms, owner
interest in our brands continues to increase. Development activity
was well ahead of 2020, with 437 hotel signings contributing to a
global pipeline that represents more than 30% of today's system
size.
With the strong financial improvements delivered in 2021, including
more than doubling our operating profit from reportable segments
and substantially reducing our net debt, the Board is pleased to be
recommending the reinstatement of a dividend. The signs are
encouraging that we are nearing the end of the pandemic, and we are
confident in the strength of IHG's enterprise, market positioning
and ability to drive attractive levels of long-term, sustainable
growth."
For further information, please contact:
Investor Relations (Stuart Ford; Rakesh Patel)
|
+44 (0)1895 512 176
|
+44 (0)7527 419 431
|
Media Relations (Yasmin Diamond; Mark Debenham)
|
+44 (0)1895 512 097
|
+44 (0)7527 424 046
|
For the purposes of the Market Abuse Regulation, the person
responsible for arranging the release of this announcement is
Nicolette Henfrey, EVP, General Counsel & Company
Secretary.
Presentation for analysts and 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 22 February 2022 and can be accessed
at www.ihgplc.com/en/investors/results-and-presentations or
directly on https://www.investis-live.com/ihg/61f4103a5acd270d004e5aed/tyyt.
For analysts and shareholders wishing to ask questions, please use
the dial-in details below which will have a Q&A
facility:
UK:
|
0800 640 6441
|
UK Local:
|
0203 936 2999
|
US:
|
+1 646 664 1960
|
All other locations:
|
+44 203 936 2999
|
Passcode:
|
26 40 39
|
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:
|
0203 936 3001
|
US:
|
+1 845 709 8569
|
All other locations:
|
+44 203 936 3001
|
Passcode:
|
24 66 47
|
Website:
The full release and supplementary data will be available on our
website from 7:00am (London time) on 22 February. 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
Rewards, one of the world's
largest hotel loyalty programmes, IHG has nearly 6,000 open hotels
in more than 100 countries, and a further 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
-
Premium: voco
hotels, HUALUXE
Hotels & Resorts, Crowne Plaza Hotels
& Resorts, EVEN
Hotels
-
Essentials: Holiday Inn Hotels
& Resorts, Holiday Inn
Express, avid
hotels
-
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
Rewards. 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.
Attractive industry fundamentals
The long-term attractiveness of our markets and their future growth
potential are considered to be unchanged by the Covid-19 pandemic.
The pre-existing industry tailwinds, such as a growing global
population, rising middle classes, the increasing desire for travel
and new experiences, and the human need to physically interact and
collaborate, give confidence as drivers of continued growth. The
Travel & Tourism sector contributed almost $9 trillion or 10%
to the world's GDP in 2019. The sector outpaced global economic
growth each year for a decade. Over that period, the hotel industry
saw consistent growth in RevPAR and the expansion of branded market
share, benefitting from consumer trends and the strength of global
brands and enterprise systems such as those of IHG.
The industry is expected to return to robust levels of growth in
new-build supply over the longer term, which is in addition to the
RevPAR growth driven by the existing hotel room inventory. We also
anticipate that further increases in consumer focus on trusted
brands, technology platforms and booking flexibility should favour
leading brands such as IHG's with both owners and
guests.
2021 has already demonstrated a strong recovery from the
significant demand suppression that our industry incurred in 2020
as a result of the pandemic. A rapid return in demand has been led
by removals of travel restrictions, vaccinations, and a revival of
economic activity. This return has been quickest in domestic
leisure, whilst essential business demand had already proved
resilient. Discretionary business travel, group bookings and
international trips have also more recently shown encouraging signs
of recovery.
We understand the shifting trends and are responding and adapting.
The pandemic may lead to some structural changes for our industry,
such as an element of technology replacing certain kinds of
business travel. However, we are already seeing clear signs of
business demand returning. There will also be other trends,
including a greater use of hotels to facilitate a global shift to
increasingly flexible working arrangements. These further support a
view that overall demand levels could be little
changed.
We therefore anticipate the attractive industry fundamentals to be
fully restored in the longer term, even though a volatile demand
environment may still continue in the short term whilst temporary
travel restrictions prevail. Supporting this, according to Oxford
Economics, global hotel room nights consumed grew at a CAGR of just
under 5% in the decade through to 2019, and are expected to be back
above 2019 levels by 2023, and to resume growing at a similar CAGR
of just under 5% in their forecasts through to 2030. Furthermore,
the latest industry forecasts by STR and CBRE, providers of
hospitality industry analytics, expect US industry RevPAR to return
to 2019 levels by the end of 2023.
IHG strongly positioned for both resiliency and growth in
shareholder value
IHG's weighting towards essential business and domestic leisure
travel has driven resilience relative to the wider industry during
the Covid pandemic. The midscale segments, which represent ~70% of
our system size and includes our market-leading Holiday Inn Express
brand, have historically been impacted less and recovered faster
than other segments in economic downturns. Our business is also
weighted towards non-urban markets that are less reliant on
international inbound travel (~95% of our US business is domestic
driven) and less reliant on large group meetings and events. These
weightings supported IHG's ability to outperform the wider industry
during the pandemic. Our asset light, fee-based, predominantly
franchised model has also delivered resilience in terms of cash
flow and profitability.
As we look to future growth, in addition to the attractive RevPAR
growth characteristics of our overall industry, IHG expects to be
able to gain further market share. This will be driven by the
expansion of our estate, leveraging our scale efficiencies and
investing in our brands, technology and loyalty programmes. Our
system size growth will in part be driven by increased conversion
activity (either from independently branded hotels or other real
estate), as well as an ongoing level of new-build development,
reflecting lenders' recognition of the strength and value of IHG's
enterprise system and reputation for generating attractive
investment returns. Our ambition is to deliver industry-leading net
rooms growth. Whilst 2020 and 2021 saw IHG's net system size remain
broadly flat, we are confident of reverting back to pre-pandemic
levels, with IHG's net system growth being 4.8% in 2018 and 5.6% in
2019.
Our ability to expand the Group's fee margins will increase our
profitability, additive to the long-term attractive levels of
growth in RevPAR and net system size, which drive IHG's fee
revenue. The benefit of scale advantages and efficiencies, along
with brands and markets becoming more mature, saw fee margins
expand on average by over a 100bps a year over the decade through
to 2019, to reach 54.1% that year. Our progress on sustainable cost
reductions in 2021 will also support increased margins. In the
Americas region, given the strong recovery of demand in the US and
our particular weighting to the franchise model in this market,
margins in 2021 are already ahead of 2019.
As an asset-light business, we focus on growing our fee revenues
and fee margins, with limited requirements for capital. This
enables us to grow our business whilst generating high returns on
invested capital. Our track record of strong cash generation has
also enabled IHG to enhance earnings growth through our approach of
returning excess capital to shareholders.
Summary of our approach to capital allocation and shareholder
returns
Our 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.
IHG has a strong track record of paying shareholders a sustainably
growing ordinary dividend, and additionally returning surplus funds
to shareholders when these are not required to invest in the
business for optimising growth and long-term shareholder value
creation. Since demerger in 2003, IHG has returned some $13.6bn to
shareholders, $2.4bn through ordinary dividends and $11.2bn via
additional returns.
In 2020, in response to the onset of Covid and as part of our
actions to preserve cash in order to maintain substantial liquidity
and support our conservative balance sheet approach, IHG's Board
withdrew its recommendation of a final dividend in respect of 2019,
a payment of which would have had a cash outflow of ~$150m in the
first half of 2020.
Since then, trading has improved significantly in 2021, leading to
profitability rebounding, accompanied by strong cash flow and a
reduction in net debt. 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, funding a sustainably
growing dividend, and then returning excess funds to shareholders,
whilst maintaining our leverage ratio within a range of 2.5-3.0x
net debt:adjusted EBITDA. This ratio was 3.0x at 31 December
2021.
The Board is therefore proposing a final dividend of 85.9¢ in
respect of 2021, an amount equivalent to the withdrawn final
payment in respect of 2019. No interim dividend was paid in respect
of 2021. Going forward, dividend payments will be reflective of
IHG's prior approach to sustainably grow the ordinary dividend
whilst targeting a level of leverage that maintains an investment
grade credit rating, and ensuring careful consideration of our
responsibilities to all stakeholders. The Board will also continue
to actively assess the opportunity for any surplus capital to be
additionally returned through special dividends or share
buybacks.
The ex-dividend date is Thursday 31 March 2022 and the Record date
is Friday 1 April. Subject to shareholder approval at the AGM on
Friday 6 May, the dividend will be paid on Tuesday 17
May.
System size and pipeline progress
The long-term attractiveness of IHG's brands and the markets we
operate in have supported increased opening and signings activity
in 2021:
●
|
Global system of 880k rooms (5,991 hotels) at 31 December 2021,
weighted 68% across midscale segments and 32% across upscale and
luxury
|
●
|
Gross growth of 5.0%, with 44.0k rooms (291 hotels) opened, up +12%
vs 2020
|
●
|
Removals of 49.7k rooms (264 hotels) or (5.6)%; of these, 34.3k
(151 hotels) were Holiday Inn and Crowne Plaza rooms, driven by the
completed review, and impacting total global system size by
(3.9)%
|
●
|
Future removal rate expected to revert to average
~1.5%
|
●
|
Global pipeline of 271k rooms (1,797 hotels), which represents over
30% of current system size; pipeline change YOY of
(0.4)%
|
●
|
Signed 68.9k rooms (437 hotels), up +23% vs 2020
|
●
|
More than 40% of the global pipeline is under construction, in line
with prior years, and with some improving trends in ground breaks
starting to be seen by Q4
|
●
|
45 hotels or less than 1% of the global estate remained temporarily
closed at 31 December 2021, a significant improvement from nearly
300 hotels at the start of the year
|
System and pipeline summary of movements in 2021 and total closing
position (rooms):
|
System
|
Pipeline
|
|
Openings
|
Removals
|
Net
|
Total
|
Change YOY%
|
Signings
|
Total
|
Group
|
43,958
|
(49,667)
|
(5,709)
|
880,327
|
(0.6)%
|
68,870
|
270,960
|
Americas
|
15,739
|
(30,662)
|
(14,923)
|
499,089
|
(2.9)%
|
17,647
|
96,603
|
EMEAA
|
10,162
|
(13,811)
|
(3,649)
|
224,200
|
(1.6)%
|
20,376
|
80,932
|
G. China
|
18,057
|
(5,194)
|
12,863
|
157,038
|
+8.9%
|
30,847
|
93,425
|
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
1. Build loved and trusted brands
Across our portfolio, we continue to move at pace to introduce new
brands, take recent brand additions to scale, and invest in the
further growth of our established brands through an ongoing focus
on design, service and quality.
Launch of Vignette Collection
Launched in August 2021, our collection brand, Vignette
Collection, complements our existing Luxury & Lifestyle brands,
whilst also offering a different price point to our upscale
conversion brand voco. Six Vignette properties have already been
secured, the first of which was open by the end of the year. Owners
that join the collection will gain access to our world class
revenue delivery systems, technology platforms, loyalty offering,
operational expertise and procurement savings, without high upfront
costs or any compromise on their hotel's distinctive identity.
Accelerating IHG's growth, we expect to attract more than 100
properties over the next decade.
The upscale and luxury segments currently represent 32% of our
system size and 42% of our pipeline. These market segments were
worth over $100bn in rooms revenue globally in 2019, and over 40%
or around 1.5 million rooms are currently independent. Owners of
independent hotels and small chains are increasingly attracted by
the opportunity to benefit from the scale, expertise and investment
of a global system, illustrated by conversions as a proportion of
our total signings growing since 2019.
Completion of the Holiday Inn and Crowne Plaza review
Holiday Inn and Crowne Plaza are two powerful global brands. In
2021, 68 new hotels were opened, whilst 84 signings grew their
combined pipeline to 340 hotels, equivalent to over 20% growth on
the current system of 1,594 properties.
To protect their significant future growth prospects, in 2021 we
completed a review to address the consistency and quality of the
hotel estate, reflective of the expectations of IHG, our owners and
guests. In total, 151 hotels were removed from the Holiday Inn and
Crowne Plaza estates. The reduction of 34.3k rooms represented 10%
of the combined estate for these two brands at the start of the
year, or 3.9% of our global system size. In addition, as part of
the review, a further 83 hotels in the Americas and EMEAA regions
have committed to improvement plans or scopes of work, reflecting
significant investment by owners. Through the outcomes of the
review, together with other property improvements and new openings
over the last four years, this will result in two-thirds of the
Americas Holiday Inn estate having been updated recently, and
three-quarters of the Crowne Plaza estate.
Completion of the review will lead the future removal rate for
these brands to align more with the remainder of the estate, which
averaged 1.6% a year between 2016 and 2019. Given the prior
elevated levels of removals of Holiday Inn and Crowne Plaza hotels,
the removal rate of the overall IHG estate averaged 2.2% over these
years.
Other notable developments in 2021 included:
● Strengthening our IHG Hotels
& Resorts masterbrand. New masterbrand marketing approach adopted
to increase reach and enhance perception among consumers of IHG's
brands across Luxury & Lifestyle, Premium, Essentials and
Suites. This drove uplifts in brand awareness and brand preference
metrics.
● Increased conversion
activity. Achieved 21
signings for voco, taking it to 69 openings and signings across 25
countries since launch in 2018. The addition of resort destinations
and all-suites properties demonstrate the brand's flexibility.
Conversions represented 13 of voco's signings in 2021, with a
further 83 conversion signings across our other brands, including
several multi-brand portfolio deals that reflect the increased
breadth of IHG's offering.
● Driving avid and Atwell Suites
to scale. Our avid brand
has already become the second largest
contributor to system growth, with a doubling of the
number of hotels open to 48, a further 164 in the pipeline and the
brand outperforming peers in guest satisfaction. Our first Atwell
Suites property is set to open in Miami in the coming weeks, and
the accelerated signings pace in 2021 resulted in a pipeline of 23
hotels.
● Growing momentum behind Six
Senses and Regent. Six
Senses has grown to 21 open properties and a pipeline of 33, which
combined represents an increase of more than 50% in its presence
since acquisition in 2019. Regent now has seven open properties and
a further eight in the pipeline, with strong international owner
interest that will be supported by the opening of the flagship
Regent Hong Kong later in 2022.
● More market
debuts. Kimpton's growth
to 75 hotels included its first in France, and its pipeline of 35
includes market debuts in Mainland China and Australia this year.
Hotel Indigo has reached 130 properties in over 20 countries, and
with focused work on accelerating the speed to open for the brand,
a record year of openings is expected for 2022. Our extended stay
brands, Candlewood Suites and Staybridge Suites, continued to be
among the strongest RevPAR performers in our portfolio, with recent
signings for Staybridge including its first hotels in France, Spain
and India.
● Holiday Inn Express
well-positioned for further growth. In its 30th year,
Holiday Inn Express reached 3,000 properties globally and now has a
pipeline of 645 hotels, representing 26% of its current system
size. The brand achieved a leading share of signings in its chain
scale in the US, whilst a first opening in Japan extended its
presence to 50 countries.
● InterContinental Hotels &
Resorts celebrates its 75th Diamond
Anniversary year. Maintaining its position as a global leader
in luxury, our InterContinental estate grew to 204 hotels, with 23
signings, including 15 in EMEAA, increasing its global pipeline to
79 properties. Our work on contemporising and future proofing the
brand continues, and guest satisfaction scores saw another year of
outperformance against its brand peers.
2. Customer centric in all we do
Delivering True Hospitality means creating seamless and tailored
guest experiences that generate increased demand, and ensuring that
as we deliver those things, we do so with efficient operations and
high returns in mind for our owners.
Transforming loyalty
Our IHG Rewards 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,
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.
In 2021, highlights in the development of our loyalty proposition
included:
○
|
Reward Night bookings largely recovering to pre-pandemic levels,
with participation rates of our higher tiered members, and
particularly leisure customers, exceeding pre-pandemic
levels
|
○
|
A further nine million loyalty members added, despite the
Covid-related challenges to on-property enrolment, and with record
enrolments over our web and mobile channels
|
○
|
Through growth in Reward Night dynamic pricing, on average the
number of loyalty points required to book IHG hotels is expected to
be around 15% less in 2022 than 2019, helping members get free
nights faster, and without increased cost to our owners due to
compensating changes in the reimbursement rates
|
○
|
We extended membership tier status and continued the temporary
pause on points expiration, used targeted loyalty promotions and
Enrol & Stay campaigns to drive new guests and members and
fast-track the status of returning travellers, and integrated more
Six Senses resorts into the programme
|
As announced in January 2022, we will be relaunching a transformed
IHG Rewards programme this year, designed to offer more rewarding
member tiers and points value; provide richer benefits and
exceptional choice, especially for our elite members; and attract
more next generation travellers. This will be brought to life by a
re-energised frontline culture to deliver great member experiences,
supported by new tools, training and incentives.
The first phase was announced in January and goes live in March.
This creates a new, simplified tier structure based upon nights and
points qualification, with more bonus points awarded across the new
Silver Elite, Gold Elite and Platinum Elite tiers, and maintaining
our industry-leading bonus points for the Diamond Elite tier, our
most loyal customers. The programme is designed to maximise return
on investment for our hotel owners, and will continue to be
self-funded through the System Fund. Greater efficiency will be
enabled by member choice, with costs incurred for only the benefits
that individual member values most. Cost will be reduced for all
hotels through eliminating some previous welcome amenities and
enrolling stay assessments, which creates capacity to invest in the
new higher-value benefits.
To be announced in the coming months will be further phases which
will bring new, customer-preferred benefits, and to enable unique
options to personalise and put the member in control, supported by
the next generation of our IHG mobile app.
Other customer centric developments in the year
included:
● Supporting owners with
operational challenges
○
|
Brand standards have been evolved or removed to help create more
efficient and effective operations for owners, whilst still
delivering on guest expectations - all supported by clear hotel
action plans and training to drive performance and address
opportunities from guest feedback. This assistance continues, for
example with 80 brand standards still being relaxed for owners in
the Americas region to support managing costs.
|
○
|
Staffing challenges met with new hiring resources, deeper
relationships with job platforms, targeted social media campaigns,
and new flexible working initiatives. New or enhanced programmes
have also been introduced to support retention and accelerate
development of talent.
|
○
|
Supply chain pressures met with an expanded procurement offer that
uses IHG's scale and expertise to deliver new solutions, resulting
in net year-on-year savings of more than 10% for owners across the
$1.3bn of spend managed by IHG. One important cost category,
particularly in our select service formats, is breakfast, which has
seen our procurement solutions lower costs by around
15%.
|
● Driving more demand to our
hotels. IHG has created
increasingly tailored marketing campaigns and promotions, supported
by new resources and services within our Revenue Management for
Hire (RMH) programme that helps hotels quickly identify and act on
revenue opportunities using business intelligence and data. Key
demographics of returning demand within specific leisure travel
categories have been targeted with real-time search/location
campaigns, and corporate travellers with tailored 'Welcome Back to
Business' campaigns. IHG's award-winning dedicated SME programme,
IHG Business Edge, increased enrolled accounts by 44% to over
57,000, gaining share.
● Improving rate negotiations for
our owners. Delivered
revenue improvements and faster responses for owners using IHG's
award-winning centralised RFP processes (CRFP), with 2,200 hotels
now using the service. The process to roll over corporate rates has
also been successful, with high adoption and corporate customers
also embracing IHG's strategic pricing model which transitions from
static to dynamic rates and helps shift market share of corporate
account volumes to IHG.
● Updating guest room and public
space designs. Ongoing
programmes across brands further enhance the guest experience and
drive stronger returns for owners. These include our Formula Blue
concept for Holiday Inn Express adopted in over 1,200 hotels in the
Americas since its introduction in 2014, with an enhanced '2.0'
iteration further reducing the cost-per-key for owners across
furniture, fixtures and equipment (FF&E) by approximately 10%.
Other 'next-gen' formats and refurbishments are being widely
applied across Holiday Inn, Candlewood Suites and Staybridge
Suites.
● Evolving the stay
experience. Food and
beverage options have been reintroduced for guests, whilst new
solutions for group events were added to our award-winning Meet
with Confidence programme. These, in combination with all our other
developments and initiatives, supported IHG's Guest Satisfaction
Index (GSI) continuing to improve during 2021 and achieving scores
of 100 or better for each of our brands, reflecting outperformance
against peers.
3. Create digital advantage
Our digital-first approach enables seamless experiences across the
guest journey, drives direct bookings, creates efficiencies, and
delivers the right data, insights, technology and platforms to
drive performance for owners.
Developments in the year included:
● Enabling attribute pricing
and the selection of stay enhancements. Around 95% of hotels have now completed
detailed room inventory assessments to prepare for attribute
pricing on our industry-leading Guest Reservation System (GRS),
which will allow guests to choose specific room characteristics
when booking their stay and seamlessly add additional non-room stay
enhancements. These, together with other booking flow improvements,
enable guests to fully tailor their trip, and owners to generate
maximum value from their hotel's unique
attributes.
● Simple room
rates. To improve the
booking experience for guests we have simplified room rates and
focused on achieving consistency across all channels, as we look to
encourage booking direct and drive low-cost revenue for our owners.
In January 2022, we also moved to centralise our wholesale
distribution.
● Enhancing customer
service. AI
voice-activated platforms used to answer and route customer calls
is helping increase both satisfaction scores and higher average
daily rates on bookings, whilst a digital concierge chatbot has
also been introduced on IHG.com and the IHG mobile app to further
assist customer bookings and communication. Further streamlining
the digital guest experience, digital arrivals has now expanded to
nearly 4,000 properties.
● Next generation IHG mobile app
under development and piloting. With full roll out planned in 2022, our
next-gen App, using data insights and new designs, will provide a
richer customer experience, enable personal and timely marketing
offers, and allow us to introduce new features, fast, including
enabling new benefits as part of the transformed loyalty offer. The
enhancements are expected to increase direct bookings and loyalty
engagement for our owners and drive incremental spend during
stays.
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.
Developments in 2021 included:
● Carbon &
energy
○
|
Joining the UN's Race to Zero campaign, we upgraded our 2030
science-based target to align with the most ambitious target of the
Paris Agreement to limit global warming to 1.5°C, with our aim
to now reduce absolute scope 1, 2 and 3 greenhouse gas emissions by
46% by 2030. IHG also became the first hotel group to join the UK's
Zero Carbon Forum.
|
○
|
We have developed a comprehensive decarbonisation roadmap, setting
out plans to improve the energy efficiency of existing hotels, help
owners source renewable energy, and establish our approach for
new-build hotels to operate at very low or zero-carbon in the
future. Immediate steps included launching an automated data
collection programme for all hotels globally, and creating a new
Hotel Energy Reduction Opportunities (HERO) tool, which will be key
to helping our hotels develop energy, carbon and water reductions.
In 2022, every IHG hotel will have an individual energy reduction
target.
|
● Diversity, equity &
inclusion (DE&I)
○
|
Corporate employees completed more than 10,000 hours of conscious
inclusion training during the year, and new Inclusion and Wellness
Metrics were incorporated into our employee engagement survey to
help measure our progress over time.
|
○
|
New programmes such as Ascend in the Americas were launched to help
increase ethnically diverse representation in leadership roles and
IHG's progress was recognised recently for an 8th year
running as a 'Best Place to Work for LGBTQ Equality', with a 100%
rating in the Corporate Equality Index, alongside a Highly
Commended award in the Company of the Year category at the European
Diversity Awards.
|
● Human
rights. Requirements
related to mitigating migrant worker risks in our hotels were
developed in the year, alongside a continued assessment of our
supply chain risks and approach to the due diligence of
suppliers.
● Communities. More
than 40,000 colleagues volunteered to help more than 350,000 people
during IHG's Giving for Good month. The IHG Academy programme
expanded with the IHG Skills Academy, a free global virtual
learning platform that breaks down barriers to education and
training. IHG also continued to support its many charity partners
responding to natural disasters around the
world.
● Water. Work continued on water stewardship projects
in Shenzhen, China, and Hayman Island, Australia, in partnership
with the Alliance for Water Stewardship.
● Waste. Bathroom bulk amenities solutions were secured for
all IHG hotel brands and markets, with the switch reducing our
plastic usage by an estimated 850 tonnes in the Americas region
alone. Negotiated through IHG Procurement, these bulk products also
provide hotels with cost savings of 10-30%. A global food waste
training module was developed for our hotels ahead of rollout in
2022.
Summary of financial performance
INCOME STATEMENT SUMMARY
|
12 months
ended 31 December
|
|
|
|
|
|
2021
|
2020
|
%
|
|
$m
|
$m
|
change
|
Revenue
|
|
|
|
Americas
|
774
|
512
|
51.2
|
EMEAA
|
303
|
221
|
37.1
|
Greater China
|
116
|
77
|
50.6
|
Central
|
197
|
182
|
8.2
|
|
____
|
____
|
____
|
Revenue from reportable segmentsa
|
1,390
|
992
|
40.1
|
|
|
|
|
System Fund revenues
|
928
|
765
|
21.3
|
Reimbursement of costs
|
589
|
637
|
(7.5)
|
|
_____
|
_____
|
_____
|
Total revenue
|
2,907
|
2,394
|
21.4
|
|
_____
|
_____
|
_____
|
Operating profit/(loss)
|
|
|
|
Americas
|
559
|
296
|
88.9
|
EMEAA
|
5
|
(50)
|
NMb
|
Greater China
|
58
|
35
|
65.7
|
Central
|
(88)
|
(62)
|
41.9
|
|
____
|
____
|
_____
|
Operating profit from reportable segmentsa
|
534
|
219
|
143.8
|
Analysed as:
|
|
|
|
Fee Business
excluding central
|
658
|
340
|
93.5
|
Owned, leased
and managed lease
|
(36)
|
(59)
|
(39.0)
|
Central
|
(88)
|
(62)
|
41.9
|
|
|
|
|
System Fund result
|
(11)
|
(102)
|
(89.2)
|
|
____
|
____
|
____
|
Operating profit before exceptional items
|
523
|
117
|
347.0
|
Operating exceptional items
|
(29)
|
(270)
|
(89.3)
|
|
____
|
____
|
____
|
Operating profit/(loss)
|
494
|
(153)
|
NMb
|
|
|
|
|
Net financial expenses
|
(139)
|
(140)
|
(0.7)
|
Analysed as:
|
|
|
|
Adjusted
interest expensea
|
(142)
|
(130)
|
9.2
|
System Fund
interest
|
3
|
4
|
(25.0)
|
Exceptional
financial expenses
|
-
|
(14)
|
-
|
|
|
|
|
Fair value gains on contingent purchase consideration
|
6
|
13
|
(53.8)
|
|
____
|
____
|
____
|
Profit/(loss) before tax
|
361
|
(280)
|
NMb
|
|
|
|
|
Tax
|
(96)
|
20
|
NMb
|
Analysed as
|
|
|
|
Tax
before exceptional items and System Funda
|
(125)
|
(32)
|
290.6
|
Tax on
exceptional items and exceptional tax
|
29
|
52
|
(44.2)
|
|
____
|
____
|
____
|
Profit/(loss) for the year
|
265
|
(260)
|
NMb
|
|
|
|
|
Adjusted earningsc
|
269
|
57
|
371.9
|
|
|
|
|
Basic weighted average number of ordinary shares
(millions)
|
183
|
182
|
0.5
|
|
____
|
____
|
____
|
Earnings/(loss) per ordinary share
|
|
|
|
|
Basic
|
145.4¢
|
(142.9)¢
|
NMb
|
|
Adjusteda
|
147.0¢
|
31.3¢
|
369.6
|
|
|
|
|
|
Dividend per share
|
85.9¢
|
-
|
NMb
|
|
|
|
|
|
Average US dollar to sterling exchange rate
|
$1: £0.73
|
$1: £0.78
|
(6.4)
|
|
|
|
|
a
Definitions for non-GAAP measures can be found in the 'Use of
non-GAAP measures' section along with reconciliations of these
measures to the most directly comparable line items within the
Group 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 during the year, with Group
comparable RevPARa getting
closer to pre-pandemic levels. More travel demand returned as
vaccines rolled out, government-mandated restrictions eased and
economic activity started to rebuild. Through the summer months
many markets, including the US and UK, saw significant
improvements, driven by domestic leisure travel. Whilst the ability
of travellers to freely move between and within countries continued
to vary significantly, the second half of the year saw a gradual
further improvement in overall trading
conditions.
Group comparable RevPARa declined
34% in the first quarter, then grew 151% in the second quarter, 66%
in the third quarter, 71% in the fourth quarter and 46% in the full
year. When compared to the pre-pandemic levels of 2019, Group
comparable RevPARa declined
51% in the first quarter, 36% in the second quarter, 21% in the
third quarter, 17% in the fourth quarter and 30% in the full
year.
Our other key driver of revenue, net system size, decreased by 0.6%
year-on-year to 880.3k rooms, impacted by 34.3k Holiday Inn and
Crowne Plaza removals as we concluded our quality review of these
brands.
During the year ended 31 December 2021, total revenue increased by
$513m (21.4%) to $2,907m, including a $48m reduction in cost
reimbursement revenue. Revenue from reportable
segmentsb increased
by $398m (40.1%) to $1,390m, driven by the improved trading
conditions. Underlying revenueb increased
by $387m to $1,373m, with underlying fee revenueb increasing
by $314m. Owned, leased and managed lease revenue increased by
$68m.
Operating profit and margin
Operating profit improved by $647m from a loss of $153m to a profit
of $494m, including a $241m net reduction in operating exceptional
items, a $91m improvement in the System Fund result, from a $102m
deficit to an $11m deficit, and a $36m decrease in the charge for
expected credit losses on corporate trade receivables.
Operating profit from reportable segmentsb increased
by $315m (143.8%) to $534m, driven by improved demand and the
delivery of sustainable fee business cost savings. Underlying
operating profitb increased
$308m to $531m.
Fee marginb increased
by 15.5 percentage points to 49.6%, benefitting from the
improvement in trading and focussed cost
management.
The impact of the movement in average USD exchange rates for 2021
netted to a nil impact on operating profit from reportable
segmentsb.
If the average exchange rate during January 2022 had existed
throughout 2021, the 2021 operating profit from reportable segments
would have been $5m 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 hotel loyalty programme, IHG
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 year to 31 December 2021, System Fund revenues increased
$163m (21%) to $928m, primarily driven by the recovery in travel
demand yielding higher assessment revenues.
The System Fund income statement deficit reduced by $91m to $11m,
primarily due to the rebound in travel demand and associated
assessment income, partially offset by the reversal of temporary
savings realised in 2020.
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 year to 31 December 2021, reimbursable revenue decreased by
$48m (7.5%) to $589m. The reduction reflects the impact of the
prior year termination of the SVC portfolio in the Americas estate,
meaning the overall scale of reimbursements fell.
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
non-GAAP measures' section along with reconciliations of these
measures to the most directly comparable line items within the
Group Financial Statements.
Operating exceptional items
Operating exceptional items totalled $29m, comprising the $25m
provisionally agreed costs to settle two commercial disputes in the
Americas and EMEAA, and the reversal of a $4m fair value gain
recorded in 2020 on the put option over part of the Group's
investment in the InterContinental Barclay hotel.
Further information on exceptional items can be found in note 5 to
the preliminary Group Financial Statements.
Net financial expenses
Net financial expenses decreased by $1m to $139m. Adjusted
interesta,
which excludes exceptional finance expenses, and adds back interest
relating to the System Fund, increased by $12m to an expense of
$142m. The increase in adjusted interesta was
primarily driven by increased average bond
debt.
Fair value gains on contingent purchase consideration
Contingent purchase consideration arose on the acquisitions of
Regent, the UK portfolio and Six Senses. The net gain of $6m (2020:
$13m) primarily arises from the conditions related to the Six
Senses contingent purchase consideration no longer being met. The
total contingent purchase consideration liability at 31 December
2021 is $73m (2020: $79m).
Taxation
The effective rate of tax on profit before exceptional items and
System Funda was
31% (2020: 38%); this was lower than 2020 largely due to the
improved profit base. In May 2021, a change to the UK rate of
Corporation Tax was enacted which led to a $30m credit; $26m was
recorded as an exceptional credit within the Income Statement and
$4m within the Statement of Other Comprehensive Income. A net
credit of $3m arose on other accounting exceptional items (2020:
$52m). Further information on tax within exceptional items can be
found in note 5 to the preliminary Group Financial Statements. Net
tax paid in 2021 totalled $86m (2020: $41m) and included refunds in
the US of $15m (2020: $24m). No more significant refunds are
expected.
IHG pursues an approach to tax that is consistent with its business
strategy and its overall business conduct principles. The approach
seeks to ensure full compliance with all tax filing, payment and
reporting obligations on the basis of communicative and transparent
relationships with tax authorities. The IHG Audit Committee reviews
IHG's approach to tax annually, including consideration of the
Group's current tax profile.
Further information on tax can be found in note 6 to the
preliminary Group Financial Statements.
Earnings per share
The Group's basic earnings per ordinary share is
145.4¢ (2020: basic loss per ordinary share: 142.9¢).
Adjusted earnings per ordinary sharea increased
by 115.7¢ to 147.0¢.
Dividends
The
Board is proposing a final dividend of 85.9¢ in respect of
2021, an amount equivalent to the withdrawn final payment in
respect of 2019. No interim dividend was paid in respect of 2021.
Going forward, dividend payments will be reflective of IHG's prior
approach to sustainably grow the ordinary dividend, whilst
targeting a level of leverage that maintains an investment grade
credit rating and ensuring careful consideration of our
responsibilities to all stakeholders. The Board will also continue
to actively assess the opportunity for any surplus capital to be
additionally returned through special dividends or share
buybacks.
The ex-dividend date is Thursday 31 March 2022 and the Record date
is Friday 1 April. The corresponding dividend amount in Pence
Sterling per ordinary share will be announced on 27 April 2022,
calculated based on the average of the market exchange rates for
the three working days commencing 22 April 2022. Subject to
shareholder approval at the AGM on Friday 6 May, the dividend will
be paid on Tuesday 17 May.
a
Definitions for non-GAAP measures can be found in the 'Use of
non-GAAP measures' section along with reconciliations of these
measures to the most directly comparable line items within the
Group Financial Statements.
Summary of cash flow, working capital, net debt and
liquidity
CASH FLOW SUMMARY
|
12 months
ended 31 December
|
|
2021
|
2020
|
$m
|
|
$m
|
$m
|
change
|
GAAP cash flow summary
|
|
|
|
Net cash from operating activities
|
636
|
137
|
499
|
Net cash from investing activities
|
(12)
|
(61)
|
49
|
Net cash from financing activities
|
(860)
|
1,354
|
(2,214)
|
|
____
|
____
|
______
|
Net movement in cash and cash equivalents in the year
|
(236)
|
1,430
|
(1,666)
|
|
12 months
ended 31 December
|
|
2021
|
2020
|
$m
|
|
$m
|
$m
|
change
|
|
|
|
|
Operating profit from reportable segments
|
534
|
219
|
|
Depreciation and amortisation
|
98
|
110
|
|
|
____
|
____
|
____
|
Adjusted EBITDA
|
632
|
329
|
303
|
|
|
|
|
Working capital and other adjustments
|
110
|
(27)
|
|
Impairment loss on financial assets
|
-
|
40
|
|
Other non-cash adjustments to operating
profit/lossb
|
71
|
60
|
|
|
|
|
|
System Fund result
|
(11)
|
(102)
|
|
System Fund depreciation and amortisation
|
94
|
62
|
|
Other non-cash adjustments to System Fund result
|
6
|
97
|
|
|
|
|
|
Capital expenditure: contract acquisition costs (key money) net of
repayments
|
(42)
|
(64)
|
|
Capital expenditure: maintenance
|
(33)
|
(43)
|
|
|
|
|
|
Cash flows relating to exceptional items
|
(12)
|
(87)
|
|
Net interest paid
|
(126)
|
(130)
|
|
Tax paid
|
(86)
|
(41)
|
|
Principal element of lease payments
|
(32)
|
(65)
|
|
|
____
|
____
|
____
|
Adjusted free cash
flowa
|
571
|
29
|
542
|
|
|
|
|
Capital expenditure: gross recyclable investments
|
(5)
|
(6)
|
|
Capital expenditure: gross System Fund capital
investments
|
(19)
|
(35)
|
|
Deferred purchase consideration paid
|
(13)
|
-
|
|
Disposals and repayments, including other financial
assets
|
58
|
18
|
|
Distributions from associates and joint ventures
|
-
|
5
|
|
Other items
|
-
|
3
|
|
|
____
|
____
|
____
|
Net cash flow before other net debt movements
|
592
|
14
|
578
|
|
|
|
|
Add back principal element of lease repayments within adjusted free
cash flow
|
32
|
65
|
|
Exchange and other non-cash adjustments
|
24
|
57
|
|
|
____
|
____
|
____
|
Decrease in net debt
|
648
|
136
|
512
|
|
|
|
|
Net debt at beginning of the year
|
(2,529)
|
(2,665)
|
|
|
______
|
______
|
____
|
Net debt at end of the year
|
(1,881)
|
(2,529)
|
648
|
|
______
|
______
|
____
|
a
Definitions for non-GAAP measures can be found in the 'Use of
non-GAAP measures' section along with reconciliations of these
measures to the most directly comparable line items within the
Group Financial Statements.
b
2020 Excludes $48m related to trade deposits and loans which were
recognised as exceptional items.
Cash from operating activities
Net
cash from operating activities totalled $636m for the year ended 31
December 2021, an increase of $499m on the previous year, primarily
reflecting the increase in operating profit and improvement in
working capital (see below) and other adjustments.
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 $49m to $12m,
driven by $44m net proceeds from the sale of three hotels in the
Americas region. There was an overall decrease in purchases of
property, plant and equipment and intangible assets of $24m.
Deferred consideration paid of $13m related to the acquisition of
the Regent brand (2020: $nil). The Group had committed contractual
capital expenditure of $17m at 31 December 2021 (2020:
$19m).
Cash used in financing activities
Net
cash outflows from financing activities totalled $860m (2020:
$1,354m inflow). This was primarily due to the 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 $571m, an increase of $542m on 2020, driven by an
improvement in operating profit from reportable
segmentsa partially
offset by related tax payments, coupled with a $137m improvement in
working capital as explained below. Exceptional cash costs of $12m
decreased by $75m due to lower restructuring expenses and the
timing of litigation payments.
Working capital
On
the Group statement of financial position, trade and other
receivables increased by $60m, from $514m to $574m, primarily due
to the significant increase in RevPAR in the fourth quarter
compared to 2020. Trade and other payables increased by $108m, from
$560m to $668m, primarily due to an increase in bonus accruals
compared to prior year. Deferred revenue increased by $44m, from
$1,569m to $1,613m, reflecting an increase in the future redeemable
points balance related to the loyalty programme.
Net and gross capital expenditure
Net capital expenditurea was
a $50m inflow (2020: $67m outflow) and gross capital
expenditure was $100m (2020: $148m). Gross capital expenditure
comprised: $76m maintenance capex and key money; $5m gross
recyclable investments; and $19m System Fund capital investments.
Net capital expenditure includes the offset from $58m net disposal
proceeds and $91m System Fund depreciation and
amortisationb.
Our capex guidance is unchanged at around $150m net per annum and
up to $350m gross into the medium term.
Net debt
At 31 December 2021, net debta was
$1,881m, after favourable foreign exchange and other non-cash
adjustments of $24m, and compared to $2,529m at 31 December
2020.
Sources of liquidity
As at 31 December 2021 the Group had total
liquidity of $2,655m (31 December 2020: $2,925m), comprising
$1,350m of undrawn bank facilities and $1,305m of cash and cash
equivalents (net of overdrafts and restricted cash). The reduction
in total liquidity from December 2020 is due to the repayment of
the £600m CCFF in March 2021, largely offset by the net cash
flow before other net debt movements of $592mc.
The Group currently has $2,786m 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. In the event this rating was
downgraded below BBB- there would be an additional step-up of
125bps payable on the bonds which would result in an additional
interest cost of approximately $35m per year.
a.
Definitions for non-GAAP measures can be found in the 'Use of
non-GAAP measures' section along with reconciliations of these
measures to the most directly comparable line items within the
Group Financial Statements.
b.
Excluding $3m depreciation of right-of-use
assets.
c.
As shown in Cash Flow Summary on page 4.
The $1,275m revolving syndicated bank facility (the Syndicated
Facility) and the $75m revolving bilateral facility (the Bilateral
Facility) mature in September 2023. The facilities were
undrawn at 31 December 2021. The Syndicated and Bilateral
Facilities contain the same terms and two financial covenants:
interest cover and a leverage ratio. Covenants are monitored on a
'frozen GAAP' basis excluding the impact of IFRS 16 and 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 of below 3.5:1.
Covenant EBITDA is calculated (on a frozen GAAP basis) as operating
profit before exceptional items, depreciation and amortisation and
System Fund revenues and expenses.
These covenants have been amended for test dates in 2022. A minimum
liquidity covenant of $400m has been introduced which will be
tested at each test date up to and including 31 December 2022. The
amended leverage ratio and interest cover covenant test levels for
the facilities are as follows:
|
June 2022
|
December 2022
|
Leverage Ratio
|
Less than 7.5x
|
Less than 6.5x
|
Interest Cover
|
Greater than 1.5x
|
Greater than 2.0x
|
At 31 December 2021 the leverage ratio was 3.0x and the interest
cover ratio was 4.5x. See note 10 in the preliminary Group
Financial Statements for further information.
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 has taken certain actions during 2021 regarding the
discontinuation of LIBOR. The Group's main exposure to LIBOR is the
underlying reference rate in the Syndicated and Bilateral
Facilities. The terms of these agreements will need to be
renegotiated to address the discontinuation of LIBOR. The
replacement of LIBOR with alternative reference rates is not
expected to have a material impact on the Group at this
stage.
The Group had net liabilities of $1,474m at 31 December 2021
($1,849m at 31 December 2020).
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.
|
12 months ended 31 December
|
|
|
|
|
|
2021
|
2020
|
%
|
|
$bn
|
$bn
|
changeb
|
Analysed by brand
|
|
|
|
|
|
|
|
InterContinental
|
2.7
|
2.0
|
31.6
|
Kimpton
|
0.7
|
0.4
|
83.9
|
HUALUXE
|
0.1
|
0.1
|
36.5
|
Crowne Plaza
|
2.3
|
1.8
|
25.7
|
Hotel Indigo
|
0.4
|
0.3
|
73.9
|
EVEN hotels
|
0.1
|
0.0
|
127.0
|
Holiday Inn
|
4.0
|
2.8
|
42.7
|
Holiday Inn Express
|
6.5
|
4.2
|
54.2
|
Staybridge Suites
|
1.0
|
0.7
|
38.2
|
Candlewood Suites
|
0.7
|
0.7
|
11.5
|
Other
|
0.9
|
0.5
|
51.9
|
|
____
|
____
|
____
|
Total
|
19.4
|
13.5
|
42.8
|
|
____
|
____
|
____
|
|
|
|
|
Analysed by ownership type
|
|
|
|
Fee business
|
19.2
|
13.3
|
42.8
|
Owned, leased and managed lease
|
0.2
|
0.2
|
40.3
|
|
____
|
____
|
____
|
Total
|
19.4
|
13.5
|
42.8
|
|
____
|
____
|
____
|
|
|
|
|
Total gross revenue in IHG's system increased by 42.8% (40.5%
increase at constant currency) to $19.4bn (70% of 2019 levels),
driven by the improvement in trading conditions in many markets,
particularly through the second half of 2021.
a.
Definitions for non-GAAP measures can be found in the 'Use of
non-GAAP measures' section along with reconciliations of these
measures to the most directly comparable line items within the
Group Financial Statements.
b.
Year-on-year percentage movement calculated from source figures to
provide better illustration of relative impact of Covid-19 on
brands and on fee business and owned, leased and managed lease
hotels.
RevPARa movement
summary
|
Full Year 2021 vs 2020
|
Full Year 2021 vs 2019
|
|
RevPAR
|
ADR
|
Occupancy
|
RevPAR
|
ADR
|
Occupancy
|
Group
|
46.0%
|
10.6%
|
12.7%pts
|
(29.8)%
|
(8.0)%
|
(16.5)%pts
|
Americas
|
54.0%
|
12.2%
|
15.9%pts
|
(19.8)%
|
(5.5)%
|
(10.4)%pts
|
EMEAA
|
35.0%
|
5.3%
|
9.1%pts
|
(51.8)%
|
(14.2)%
|
(32.4)%pts
|
G. China
|
20.6%
|
3.6%
|
6.9%pts
|
(28.7)%
|
(10.7)%
|
(12.4)%pts
|
|
Q4 2021 vs 2020
|
Q4 2021 vs 2019
|
|
RevPAR
|
ADR
|
Occupancy
|
RevPAR
|
ADR
|
Occupancy
|
Group
|
71.3%
|
26.7%
|
14.5%pts
|
(17.1)%
|
(0.9)%
|
(11.0)%pts
|
Americas
|
79.6%
|
27.0%
|
17.7%pts
|
(6.5)%
|
1.0%
|
(4.8)%pts
|
EMEAA
|
118.3%
|
24.5%
|
22.2%pts
|
(33.4)%
|
(5.4)%
|
(21.9)%pts
|
G. China
|
(17.4)%
|
1.5%
|
(10.5)%pts
|
(32.9)%
|
(8.2)%
|
(17.2)%pts
|
RevPARa movement
at constant exchange rates (CER) vs. actual exchange rates
(AER)
|
Full Year 2021 vs 2020
|
Full Year 2021 vs 2019
|
|
CER
|
AER
|
Difference
|
CER
|
AER
|
Difference
|
Group
|
46.0%
|
47.9%
|
(1.9)%pts
|
(29.8)%
|
(28.9)%
|
0.9%pts
|
Americas
|
54.0%
|
54.2%
|
(0.3)%pts
|
(19.8)%
|
(20.0)%
|
(0.2)%pts
|
EMEAA
|
35.0%
|
38.3%
|
(3.3)%pts
|
(51.8)%
|
(50.3)%
|
1.5%pts
|
G. China
|
20.6%
|
27.7%
|
(7.1)%pts
|
(28.7)%
|
(23.8)%
|
4.8%pts
|
|
Q4 2021 vs 2020
|
Q4 2021 vs 2019
|
|
CER
|
AER
|
Difference
|
CER
|
AER
|
Difference
|
Group
|
71.3%
|
71.0%
|
0.3%pts
|
(17.1)%
|
(16.3)%
|
0.8%pts
|
Americas
|
79.6%
|
79.4%
|
0.1%pts
|
(6.5)%
|
(6.9)%
|
(0.4)%pts
|
EMEAA
|
118.3%
|
114.8%
|
3.5%pts
|
(33.4)%
|
(32.8)%
|
0.7%pts
|
G. China
|
(17.4)%
|
(14.5)%
|
(2.8)%pts
|
(32.9)%
|
(26.5)%
|
6.4%pts
|
Monthly RevPARa (CER)
2021 vs 2020
|
Jan
|
Feb
|
Mar
|
Apr
|
May
|
Jun
|
Jul
|
Aug
|
Sep
|
Oct
|
Nov
|
Dec
|
Group
|
(51.7)%
|
(47.7)%
|
20.8%
|
228.0%
|
156.7%
|
108.4%
|
91.9%
|
52.8%
|
55.7%
|
62.8%
|
75.8%
|
77.9%
|
Americas
|
(44.2)%
|
(44.2)%
|
20.7%
|
245.3%
|
160.4%
|
108.0%
|
98.6%
|
68.3%
|
63.0%
|
67.2%
|
84.7%
|
92.0%
|
EMEAA
|
(72.2)%
|
(69.7)%
|
(21.5)%
|
183.4%
|
194.1%
|
165.4%
|
100.9%
|
77.8%
|
82.4%
|
107.9%
|
137.1%
|
112.0%
|
G. China
|
(21.9)%
|
335.0%
|
288.6%
|
199.6%
|
107.5%
|
51.3%
|
45.3%
|
(43.0)%
|
(15.6)%
|
(8.7)%
|
(30.4)%
|
(14.6)%
|
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 2021 vs 2019,
2021 vs 2020 and 2020 vs 2019. See 'Use of non-GAAP measures'
section for further information on the definition of
RevPAR.
|
Hotels
|
|
Rooms
|
|
Global hotel and room count
|
|
Change over
|
|
|
Change over
|
|
2021
|
2020
|
|
2021
|
2020
|
|
31 December
|
31 December
|
|
31 December
|
31 December
|
Analysed by brand
|
|
|
|
|
|
|
Six Senses
|
21
|
5
|
|
1,412
|
283
|
Regent
|
7
|
-
|
|
2,190
|
-
|
|
InterContinental
|
204
|
(1)
|
|
69,402
|
(539)
|
|
Vignette Collection
|
1
|
1
|
|
146
|
146
|
|
Kimpton
|
75
|
2
|
|
13,283
|
198
|
|
HUALUXE
|
16
|
4
|
|
4,603
|
1,170
|
|
Crowne Plaza
|
404
|
(25)
|
|
111,178
|
(7,701)
|
|
Hotel Indigo
|
130
|
5
|
|
16,343
|
739
|
|
EVEN Hotels
|
21
|
5
|
|
2,994
|
584
|
|
voco
|
31
|
13
|
|
7,445
|
2,368
|
|
Holiday Inna
|
1,218
|
(58)
|
|
224,684
|
(11,870)
|
|
Holiday Inn Express
|
3,016
|
50
|
|
317,329
|
7,842
|
avid hotels
|
48
|
24
|
|
4,280
|
2,124
|
|
Staybridge Suites
|
315
|
12
|
|
34,306
|
1,411
|
|
Candlewood Suites
|
361
|
(5)
|
|
32,025
|
(410)
|
|
Otherb
|
123
|
(5)
|
|
38,707
|
(2,054)
|
|
|
_____
|
____
|
|
_______
|
______
|
Total
|
5,991
|
27
|
|
880,327
|
(5,709)
|
|
|
_____
|
____
|
|
_______
|
______
|
Analysed by ownership type
|
|
|
|
|
|
|
Franchised
|
5,033
|
28
|
|
626,115
|
(1,233)
|
|
Managed
|
939
|
3
|
|
249,591
|
(3,697)
|
|
Owned, leased and managed lease
|
19
|
(4)
|
|
4,621
|
(779)
|
|
|
_____
|
____
|
|
_______
|
______
|
Total
|
5,991
|
27
|
|
880,327
|
(5,709)
|
|
|
_____
|
____
|
|
_______
|
______
|
|
|
|
|
|
|
|
a.
Includes 41 Holiday Inn Resort properties (10,454 rooms) and 28
Holiday Inn Club Vacations properties (8,679 rooms) (2020: 47
Holiday Inn Resort properties (11,446 rooms) and 28 Holiday Inn
Club Vacations properties (8,679 rooms)).
b.
Includes three open hotels that will be re-branded to voco and one
open hotel that will be re-branded to Vignette
Collection.
|
Hotels
|
|
Rooms
|
|
Global Pipeline
|
|
Change over
|
|
|
Change over
|
|
2021
|
2020
|
|
2021
|
2020
|
|
31 December
|
31 December
|
|
31 December
|
31 December
|
Analysed by brand
|
|
|
|
|
|
|
Six Senses
|
33
|
2
|
|
2,424
|
185
|
Regent
|
8
|
2
|
|
1,938
|
403
|
|
InterContinental
|
79
|
10
|
|
19,679
|
1,905
|
|
Kimpton
|
35
|
3
|
|
6,852
|
587
|
|
HUALUXE
|
23
|
(2)
|
|
6,045
|
(862)
|
|
Crowne Plaza
|
96
|
7
|
|
25,261
|
1,033
|
|
Hotel Indigo
|
114
|
10
|
|
18,452
|
2,748
|
|
EVEN Hotels
|
29
|
(2)
|
|
4,907
|
(139)
|
|
voco
|
38
|
9
|
|
10,090
|
1,911
|
|
Holiday Inna
|
244
|
(18)
|
|
48,078
|
(3,085)
|
|
Holiday Inn Express
|
645
|
(38)
|
|
83,026
|
(4,126)
|
avid hotels
|
164
|
(28)
|
|
14,495
|
(3,031)
|
|
Staybridge Suites
|
156
|
1
|
|
16,843
|
(647)
|
|
Candlewood Suites
|
93
|
20
|
|
7,765
|
1,396
|
|
Atwell Suites
|
23
|
4
|
|
2,275
|
426
|
|
Otherb
|
17
|
2
|
|
2,830
|
199
|
|
|
_____
|
____
|
|
_______
|
_____
|
Total
|
1,797
|
(18)
|
|
270,960
|
(1,097)
|
|
|
_____
|
____
|
|
_______
|
_____
|
Analysed by ownership type
|
|
|
|
|
|
|
Franchised
|
1,290
|
(20)
|
|
157,832
|
(1,236)
|
|
Managed
|
506
|
2
|
|
112,973
|
139
|
Owned, leased and managed lease
|
1
|
-
|
|
155
|
-
|
|
|
_____
|
____
|
|
_______
|
_____
|
Total
|
1,797
|
(18)
|
|
270,960
|
(1,097)
|
|
|
_____
|
____
|
|
_______
|
_____
|
a.
Includes 35 Holiday Inn Resort properties (8,219 rooms) (2020: 34
Holiday Inn Resort properties (7,251 rooms)).
b.
Includes four Vignette
Collection pipeline hotels.
Net system size declined by 0.6% year-on-year. 43,958 rooms (291
hotels) were opened in the year, 11.6% higher than in 2020. 264
hotels (49,667 rooms) left the IHG system in 2021, including 151
Holiday Inn and Crowne Plaza hotels (34,345 rooms) as we concluded
our review of these brands. In 2020, 224 hotels (36,919 rooms) left
the IHG system, of which 102 hotels (16,655 rooms) related to the
termination of the SVC portfolio in the Americas
estate.
At the end of 2021, the global pipeline totalled 270,960 rooms
(1,797 hotels), a 0.4% decrease of 1,097 rooms (18 hotels), as the
increase in signings was more than offset by the strong openings
pace out of the pipeline and a normal level of terminations from
the pipeline. The IHG pipeline represents hotels where a contract
has been signed and the appropriate fees paid.
Group signings increased from 360 hotels in 2020 to 437 hotels, and
rooms increased from 56,146 in 2020 to 68,870 rooms, growth of
22.7%. Signings in 2021 included 205 hotels (31,169 rooms) signed
for the Holiday Inn Brand Family, almost half of which were
contributed by Greater China (89 hotels, 16,260 rooms). Conversions
represented 22% of Group signings in 2021, including six for our
newest brand, Vignette Collection.
Regional performance reviews, system size and pipeline
analysis
AMERICAS
|
12
months ended 31 December
|
Americas Results
|
|
|
|
|
2021
|
2020
|
%
|
|
$m
|
$m
|
change
|
Revenue from
the reportable segmenta
|
|
|
|
|
Fee business
|
691
|
457
|
51.2
|
|
Owned, leased and managed lease
|
83
|
55
|
50.9
|
|
____
|
____
|
____
|
Total
|
|
774
|
512
|
51.2
|
|
____
|
____
|
____
|
Operating profit from the reportable
segmenta
|
|
|
|
|
Fee business
|
568
|
323
|
75.9
|
|
Owned, leased and managed lease
|
(9)
|
(27)
|
(66.7)
|
|
____
|
____
|
____
|
|
|
559
|
296
|
88.9
|
Operating exceptional items
|
|
(22)
|
(118)
|
(81.4)
|
|
____
|
____
|
______
|
Operating profit
|
537
|
178
|
201.7
|
|
____
|
_____
|
_______
|
Americas Comparable
RevPARb movement
on previous year
|
12 months ended
31 December 2021
|
Fee business
|
|
|
InterContinental
|
73.0%
|
|
Kimpton
|
90.1%
|
|
Crowne Plaza
|
54.4%
|
|
Hotel Indigo
|
82.4%
|
|
EVEN Hotels
|
112.4%
|
|
Holiday Inn
|
56.8%
|
|
Holiday Inn Express
|
53.3%
|
|
avid hotels
|
115.4%
|
|
Staybridge Suites
|
40.4%
|
|
Candlewood Suites
|
30.5%
|
|
All brands
|
53.8%
|
Owned, leased and managed lease
|
|
|
All brands
|
91.6%
|
|
|
|
|
|
|
|
|
|
|
|
Comparable RevPARb was
up 54.0% vs 2020 (down 19.8% vs 2019). The pick-up in demand that
began in March continued through the year, benefitting from
improved domestic leisure demand, particularly in non-urban and
resort locations, as well as an improvement in business demand. Q4
RevPARb was
up 79.6% vs 2020 (down 6.5% vs 2019) with occupancy of 60% (down
five percentage points relative to 2019 with rate 1% higher than
2019 levels). US Q4 RevPARb was
down 4.6% vs 2019 with particular strength during December where
RevPAR was up 2.2% vs 2019. Across our US franchised estate, which
is weighted to domestic demand in upper midscale hotels, Q4
RevPARb declined
by 2% vs 2019. The US managed estate, weighted to upscale and
luxury hotels in urban locations, declined by 23% vs
2019.
Revenue from the reportable segmenta increased
by $262m (51%) to $774m (a decrease of $266m vs 2019). Operating
profit increased by $359m to $537m driven by the increase in
revenue and a $96m decrease in operating exceptional charges.
Operating profit from the reportable segmenta increased
by $263m (89%) to $559m (a decrease of $141m vs
2019).
Fee business revenuea increased
by $234m (51%) to $691m. Fee business operating
profita increased
by $245m (76%) to $568m, benefitting from the improvement in
demand, along with the delivery of sustainable fee business cost
savings. Operating profit from the reportable segment also included
the benefit of $11m payroll tax credits, which relates to the Group
corporate office presence in certain countries.
Owned, leased and managed lease revenue increased by $28m to $83m,
with comparable RevPARb up
91.6% (down 41.0% vs 2019) leading to an owned, leased and managed
leased operating loss of $9m compared to a $27m loss in the prior
year. Excluding the results of three owned EVEN hotels which were
disposed and retained under franchise contracts in November 2021,
and the impact of one leased hotel that exited in December 2020,
revenue increased by $34m and operating profit improved by
$14m.
a.
Definitions for non-GAAP measures can be found in the 'Use of
non-GAAP measures' section along with reconciliations of these
measures to the most directly comparable line items within the
Group Financial Statements.
b.
Comparable RevPAR and occupancy include the impact of hotels
temporarily closed as a result of Covid-19.
|
Hotels
|
|
Rooms
|
|
Americas hotel and room count
|
|
Change over
|
|
|
Change over
|
|
2021
|
2020
|
|
2021
|
2020
|
|
31 December
|
31 December
|
|
31 December
|
31 December
|
Analysed by brand
|
|
|
|
|
|
|
Six Senses
|
1
|
1
|
|
20
|
20
|
|
InterContinental
|
43
|
(3)
|
|
15,651
|
(1,138)
|
|
Kimpton
|
64
|
-
|
|
11,008
|
(89)
|
|
Crowne Plaza
|
112
|
(24)
|
|
27,930
|
(7,475)
|
|
Hotel Indigo
|
66
|
(1)
|
|
8,745
|
(48)
|
|
EVEN Hotels
|
19
|
4
|
|
2,743
|
504
|
|
voco
|
5
|
4
|
|
469
|
420
|
|
Holiday Inna
|
716
|
(50)
|
|
120,850
|
(10,092)
|
|
Holiday Inn Express
|
2,436
|
11
|
|
221,727
|
1,385
|
avid hotels
|
48
|
24
|
|
4,280
|
2,124
|
|
Staybridge Suites
|
296
|
11
|
|
31,097
|
1,040
|
|
Candlewood Suites
|
361
|
(5)
|
|
32,025
|
(410)
|
|
Otherb
|
101
|
(2)
|
|
22,544
|
(1,164)
|
|
|
_____
|
____
|
|
_______
|
______
|
Total
|
4,268
|
(30)
|
|
499,089
|
(14,923)
|
|
|
_____
|
____
|
|
_______
|
______
|
Analysed by ownership type
|
|
|
|
|
|
|
Franchised
|
4,087
|
(18)
|
|
460,257
|
(11,545)
|
|
Managed
|
178
|
(9)
|
|
37,505
|
(2,886)
|
Owned, leased and managed lease
|
3
|
(3)
|
|
1,327
|
(492)
|
|
|
_____
|
____
|
|
_______
|
______
|
Total
|
4,268
|
(30)
|
|
499,089
|
(14,923)
|
|
|
_____
|
____
|
|
_______
|
______
|
a.
Includes 19 Holiday Inn
Resort properties (5,334 rooms) and 28 Holiday Inn Club Vacations
properties (8,679 rooms) (2020: 22 Holiday Inn Resort properties
(6,003 rooms) and 28 Holiday Inn Club Vacations properties (8,679
rooms)).
b.
Includes one open hotel
that will be re-branded to voco.
|
Hotels
|
|
Rooms
|
|
Americas Pipeline
|
|
Change over
|
|
|
Change over
|
|
2021
|
2020
|
|
2021
|
2020
|
|
31 December
|
31 December
|
|
31 December
|
31 December
|
Analysed by brand
|
|
|
|
|
|
|
Six Senses
|
6
|
(1)
|
|
471
|
(48)
|
|
InterContinental
|
9
|
2
|
|
2,252
|
528
|
|
Kimpton
|
19
|
(1)
|
|
3,431
|
(52)
|
|
Crowne Plaza
|
8
|
2
|
|
1,643
|
393
|
|
Hotel Indigo
|
29
|
(2)
|
|
4,070
|
(85)
|
|
EVEN Hotels
|
10
|
(6)
|
|
1,166
|
(809)
|
|
voco
|
5
|
3
|
|
1,045
|
771
|
|
Holiday Inna
|
74
|
(6)
|
|
9,468
|
(978)
|
|
Holiday Inn Express
|
338
|
(48)
|
|
32,701
|
(4,654)
|
avid hotels
|
164
|
(27)
|
|
14,495
|
(2,816)
|
|
Staybridge Suites
|
137
|
2
|
|
14,050
|
(11)
|
|
Candlewood Suites
|
93
|
20
|
|
7,765
|
1,396
|
|
Atwell Suites
|
23
|
4
|
|
2,275
|
426
|
|
Other
|
11
|
(2)
|
|
1,771
|
(215)
|
|
|
____
|
____
|
|
______
|
______
|
Total
|
926
|
(60)
|
|
96,603
|
(6,154)
|
|
|
____
|
____
|
|
______
|
______
|
Analysed by ownership type
|
|
|
|
|
|
|
Franchised
|
889
|
(55)
|
|
90,732
|
(5,796)
|
|
Managed
|
37
|
(5)
|
|
5,871
|
(358)
|
|
|
____
|
____
|
|
______
|
______
|
Total
|
926
|
(60)
|
|
96,603
|
(6,154)
|
|
|
____
|
____
|
|
______
|
______
|
a.
Includes one Holiday Inn
Resort property (165 rooms) (2020: three Holiday Inn Resort
properties (490 rooms)).
Net system size declined by 2.9% year-on-year. We opened 15.7k
rooms (151 hotels) during the year including 85 across the Holiday
Inn Brand Family, with others of note including a further 24 avid
hotels, a dual-branded EVEN hotel and Staybridge Suites in
Rochester, Minnesota, Hotel Indigo Miami Bricknell and the voco
Times Square South in New York. 30.7k rooms (181 hotels) were
removed in the year of which 20.1k (92 hotels) were across Holiday
Inn and Crowne Plaza, driven by the completion of a review to
address the consistency and quality of the estates for these two
powerful global brands.
There were 17.6k rooms (175 hotels) signed during the year
including 5.8k (57 hotels) during Q4. Signings included 13 further
avid hotels, five voco properties as we further establish the brand
since launching in the Americas in the prior year, the
InterContinental Grenada and the InterContinental San Antonio,
Texas. The pipeline stands at 96.6k rooms (926 hotels), which
represents 19% of the current system size in the
region.
EMEAA
|
12 months ended 31
December
|
EMEAA results
|
|
|
|
|
2021
|
2020
|
%
|
|
$m
|
$m
|
change
|
Revenue from the reportable
segmenta
|
|
|
|
|
Fee business
|
149
|
107
|
39.3
|
|
Owned, leased and managed lease
|
154
|
114
|
35.1
|
|
____
|
____
|
____
|
Total
|
|
303
|
221
|
37.1
|
|
____
|
____
|
____
|
Operating profit/(loss) from the
reportable segmenta
|
|
|
|
|
Fee business
|
32
|
(18)
|
NMc
|
|
Owned, leased and managed lease
|
(27)
|
(32)
|
(15.6)
|
|
____
|
____
|
____
|
|
|
5
|
(50)
|
NMc
|
Operating exceptional items
|
|
(7)
|
(128)
|
(94.5)
|
|
|
____
|
____
|
_____
|
Operating loss
|
(2)
|
(178)
|
(98.9)
|
|
____
|
____
|
_____
|
|
|
|
|
|
|
EMEAA comparable
RevPARb movement
on previous year
|
12 months ended
31 December 2021
|
|
|
Fee business
|
|
|
Six Senses
|
32.7%
|
|
InterContinental
|
26.9%
|
|
Kimpton
|
(8.4)%
|
|
Crowne Plaza
|
34.3%
|
|
Hotel Indigo
|
62.6%
|
|
voco
|
24.1%
|
|
Holiday Inn
|
34.4%
|
|
Holiday Inn Express
|
46.2%
|
|
Staybridge Suites
|
46.2%
|
|
All brands
|
34.8%
|
|
|
|
Owned, leased and managed lease
|
|
|
InterContinental
|
0.1%
|
|
Kimpton
|
111.1%
|
|
voco
|
136.6%
|
|
All brands
|
46.6%
|
|
|
|
|
|
|
|
|
|
|
|
Comparable RevPARb in
the year was up 35.0% vs 2020 (down 51.8% vs 2019). Performance in
the first half of the year reflected the levels of
government-mandated closures and restrictions still largely in
place. As these eased, the improvement in RevPARb performance
seen in the third quarter continued into the fourth quarter, with
RevPARb up
118.3% vs 2020 (down 33.4% vs 2019). Variance in performance within
the region continued to predominantly reflect the differing levels
of restrictions. The UK, which saw an easing of restrictions
towards the end of May, saw RevPARb down
41% for the year vs. 2019 and down 16% in Q4 vs 2019, though this
included December down 21%, reflecting the impact of restrictions
following increased cases arising from the Omicron variant. As had
been seen through the year, the Provinces outperformed with
RevPARb down
2% vs 2019 in Q4 whilst London was down 39%. Elsewhere, the
differing timing and level of restrictions impacted performance
with Q4 RevPARb relative
to 2019 down 40% for Continental Europe, 53% in Australia, 56% for
Japan, and 59% for South East Asia and Korea. By contrast, Q4
RevPARb in
the Middle East was down 10% vs. 2019 reflecting demand during the
Expo 2020 event in Dubai.
Hotel reopenings continued, with only 21 hotels or 2% of the EMEAA
estate temporarily closed at the end of the year, compared to 215
at the start of the year; all 16 of the owned, leased and managed
lease hotels were open.
Revenue from the reportable segmenta increased
by $82m (37%) to $303m (a decrease of 58% vs 2019). The operating
loss decreased by $176m to a loss of $2m, driven by the increase in
revenue and a $121m decrease in operating exceptional charges.
Operating profit from the reportable segmenta increased
by $55m to $5m (a decline of $212m vs 2019). Results included $29m
of incentive management fees recorded (2020: $14m; 2019: $90m)
driven by an improvement in trading, particularly in the Middle
East.
Fee business revenuea increased
by $42m (39%) to $149m. Fee business operating
profita improved
by $50m to $32m, benefitting from the improvement in trading and
the delivery of sustainable fee business cost
savings.
Owned, leased and managed lease revenue increased by $40m to $154m,
with RevPARb up
46.6% (down 68.9% vs 2019) leading to an owned, leased and managed
lease operating loss of $27m compared to a $32m loss in the prior
year, as the lifting of travel restrictions, predominantly in the
UK, began to ease the trading challenges on this largely
urban-centred portfolio.
a.
Definitions for non-GAAP
measures can be found in the 'Use of non-GAAP measures' section
along with reconciliations of these measures to the most directly
comparable line items within the Group 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
|
|
2021
|
2020
|
2021
|
2020
|
|
31 December
|
31 December
|
31 December
|
31 December
|
Analysed by brand
|
|
|
|
|
|
Six Senses
|
19
|
4
|
1,270
|
263
|
Regent
|
3
|
-
|
771
|
-
|
|
InterContinental
|
108
|
-
|
32,561
|
87
|
|
Vignette Collection
|
1
|
1
|
146
|
146
|
|
Kimpton
|
10
|
2
|
2,146
|
287
|
|
Crowne Plaza
|
182
|
(6)
|
44,828
|
(1,696)
|
|
Hotel Indigo
|
48
|
2
|
5,183
|
117
|
|
voco
|
21
|
5
|
5,882
|
1,002
|
|
Holiday Inna
|
380
|
(21)
|
70,824
|
(4,160)
|
|
Holiday Inn Express
|
333
|
4
|
48,548
|
1,192
|
|
Staybridge Suites
|
19
|
1
|
3,209
|
371
|
|
Otherb
|
13
|
(4)
|
8,832
|
(1,258)
|
|
|
_____
|
____
|
_______
|
______
|
Total
|
1,137
|
(12)
|
224,200
|
(3,649)
|
|
|
_____
|
____
|
_______
|
______
|
Analysed by ownership type
|
|
|
|
|
|
Franchised
|
767
|
(7)
|
125,707
|
(13)
|
|
Managed
|
354
|
(4)
|
95,199
|
(3,349)
|
Owned, leased and managed lease
|
16
|
(1)
|
3,294
|
(287)
|
|
|
_____
|
____
|
_______
|
______
|
Total
|
1,137
|
(12)
|
224,200
|
(3,649)
|
|
|
_____
|
____
|
_______
|
______
|
a.
Includes 14 Holiday Inn
Resort properties (3,229 rooms) (2020: 17 Holiday Inn Resort
properties (3,330 rooms)).
b.
Includes two open hotels
that will be re-branded to voco and Vignette
Collection.
|
|
|
|
|
Hotels |
Rooms |
|
EMEAA Pipeline
|
|
Change over
|
|
Change over
|
|
|
2021
|
2020
|
2021
|
2020
|
|
|
31 December
|
31 December
|
31 December
|
31 December
|
|
Analysed by brand
|
|
|
|
|
|
|
Six Senses
|
23
|
2
|
1,720
|
169
|
|
Regent
|
6
|
1
|
1,341
|
86
|
|
|
InterContinental
|
43
|
10
|
9,520
|
2,035
|
|
|
Kimpton
|
9
|
3
|
1,674
|
546
|
|
|
Crowne Plaza
|
40
|
5
|
10,461
|
1,360
|
|
|
Hotel Indigo
|
44
|
3
|
7,004
|
957
|
|
|
voco
|
31
|
5
|
8,753
|
979
|
|
|
Holiday Inna
|
98
|
(10)
|
21,014
|
(1,540)
|
|
|
Holiday Inn Express
|
99
|
7
|
15,593
|
360
|
|
avid hotels
|
-
|
(1)
|
-
|
(215)
|
|
|
Staybridge Suites
|
19
|
(1)
|
2,793
|
(636)
|
|
|
Otherb
|
6
|
5
|
1,059
|
711
|
|
|
|
____
|
____
|
______
|
_____
|
|
Total
|
418
|
29
|
80,932
|
4,812
|
|
|
|
____
|
____
|
______
|
_____
|
|
Analysed by ownership type
|
|
|
|
|
|
|
Franchised
|
175
|
20
|
27,045
|
1,393
|
|
|
Managed
|
242
|
9
|
53,732
|
3,419
|
|
Owned, leased and managed lease
|
1
|
-
|
155
|
-
|
|
|
|
____
|
____
|
______
|
_____
|
|
Total
|
418
|
29
|
80,932
|
4,812
|
|
|
|
____
|
____
|
______
|
_____
|
|
a.
Includes 20 Holiday Inn
Resort properties (4,849 rooms) (2020: 18 Holiday Inn Resort
properties (3,553 rooms)).
b.
Includes four hotels that
will be re-branded to Vignette Collection.
Net system size declined by 1.6% year-on-year. We opened 10.2k
rooms (52 hotels) during the year, including Hotel X Brisbane
Fortitude Valley, Australia, as part of the Vignette Collection,
and Hotel Indigo Cagnes-sur-Mer, France. 13.8k rooms (64 hotels)
were removed in the year, of which nearly 80% or 10.7k rooms (48
hotels) were across the Holiday Inn and Crowne Plaza estates driven
by the completion of the quality review.
There were 20.4k rooms (109 hotels) signed in the year, with a
notable pick-up in signing pace in Q4 which improved upon the level
achieved in 2019. Signings included a multi-property deal which
encompassed a new property for voco in Algarve, Portugal and three
hotels signed to the Vignette Collection in Austria and Portugal.
We also signed a further four-hotel portfolio deal in Vietnam which
included two Holiday Inn Resort properties, together with a Crowne
Plaza and voco. In total, there were 10 voco signings in the year,
whilst for the InterContinental brand there were 15, including
properties in Crete and Bali. Other notable signings included five
Six Senses properties, the Kimpton Khao Yai Resort in Thailand and
the Regent Kyoto, Japan. The pipeline stands at 80.9k rooms (418
hotels), which represents 36% of the current system size in the
region.
GREATER CHINA
|
12 months ended 31
December
|
|
|
|
|
Greater China results
|
2021
|
2020
|
%
|
|
$m
|
$m
|
change
|
|
|
|
|
Revenue from the reportable
segmenta
|
|
|
|
|
Fee business
|
116
|
77
|
50.6
|
|
|
____
|
____
|
_____
|
Total
|
|
116
|
77
|
50.6
|
|
____
|
____
|
_____
|
Operating profit from the reportable
segmenta
|
|
|
|
|
Fee business
|
58
|
35
|
65.7
|
|
____
|
____
|
____
|
Operating exceptional items
|
-
|
(5)
|
-
|
|
____
|
____
|
____
|
Operating profit
|
58
|
30
|
93.3
|
|
____
|
____
|
____
|
|
|
|
|
|
|
Greater China comparable
RevPARb movement
on previous year
|
12 months ended
31 December 2021
|
|
|
Fee business
|
|
|
Regent
|
9.6%
|
|
InterContinental
|
20.8%
|
|
HUALUXE
|
13.1%
|
|
Crowne Plaza
|
20.4%
|
|
Hotel Indigo
|
33.4%
|
|
Holiday Inn
|
21.8%
|
|
Holiday Inn Express
|
20.9%
|
|
All brands
|
20.6%
|
|
|
|
|
|
|
Comparable RevPARb in
the year was up 20.6% vs 2020 (down 28.7% vs 2019). The recovery
seen in the earlier part of the year, particularly from March
through to strong summer trading in July, slowed during the second
half of the year driven by increases in Covid-19 cases and the
reintroduction of temporar
Additional revenue, global system size and pipeline
analysis
y restrictions. The impact of more prevalent
restrictions in Q4 resulted in RevPARb declining
17.4% vs 2020 (down 32.9% vs 2019). Mainland China saw Q4
RevPARb in
Tier 1 cities down 15.0% vs 2020, whilst Tier 2-4 cities were down
23.1%. Against 2019 levels, Tier 1 cities declined 40.3%, whereas
Tier 2-4 cities, which are more weighted to domestic and leisure
demand, performed better with a decline of
29.3%.
Revenue from the reportable segmenta increased
by $39m (51%) to $116m (a decrease of 14% vs 2019). Operating
profit improved by $28m, driven by the increase in revenue and a
$5m decrease in operating exceptional charges. Operating profit
from the reportable segmenta increased
by $23m to $58m (a decline of 21% vs 2019). The improvement in
demand at our managed hotels led to $25m recognition of incentive
management fees compared to $16m in 2020 (2019: $48m). Revenue and
operating profit from the reportable segmenta also
included the benefit of a $6m individually significant liquidated
damages settlement.
a.
Definitions for non-GAAP
measures can be found in the 'Use of non-GAAP measures' section
along with reconciliations of these measures to the most directly
comparable line items within the Group 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
|
|
2021
|
2020
|
2021
|
2020
|
|
31 December
|
31 December
|
31 December
|
31 December
|
Analysed by brand
|
|
|
|
|
|
Six Senses
|
1
|
-
|
122
|
-
|
Regent
|
4
|
-
|
1,419
|
-
|
|
InterContinental
|
53
|
2
|
21,190
|
512
|
|
Kimpton
|
1
|
-
|
129
|
-
|
|
HUALUXE
|
16
|
4
|
4,603
|
1,170
|
|
Crowne Plaza
|
110
|
5
|
38,420
|
1,470
|
|
Hotel Indigo
|
16
|
4
|
2,415
|
670
|
|
EVEN Hotels
|
2
|
1
|
251
|
80
|
|
voco
|
5
|
4
|
1,094
|
946
|
|
Holiday Inna
|
122
|
13
|
33,010
|
2,382
|
|
Holiday Inn Express
|
247
|
35
|
47,054
|
5,265
|
|
Otherb
|
9
|
1
|
7,331
|
368
|
|
|
____
|
____
|
_______
|
_____
|
Total
|
586
|
69
|
157,038
|
12,863
|
|
|
____
|
____
|
_______
|
_____
|
Analysed by ownership type
|
|
|
|
|
|
Franchised
|
179
|
53
|
40,151
|
10,325
|
|
Managed
|
407
|
16
|
116,887
|
2,538
|
|
|
____
|
____
|
_______
|
_____
|
Total
|
586
|
69
|
157,038
|
12,863
|
|
|
____
|
____
|
_______
|
_____
|
a.
Includes eight Holiday
Inn Resort properties (1,891 rooms) (2020: eight Holiday Inn Resort
properties (2,113 rooms)).
b.
Includes one open hotel
that will be re-branded to voco.
|
Hotels
|
Rooms
|
|
Greater China Pipeline
|
|
Change over
|
|
Change over
|
|
2021
|
2020
|
2021
|
2020
|
|
31 December
|
31 December
|
31 December
|
31 December
|
Analysed by brand
|
|
|
|
|
|
Six Senses
|
4
|
1
|
233
|
64
|
Regent
|
2
|
1
|
597
|
317
|
|
InterContinental
|
27
|
(2)
|
7,907
|
(658)
|
|
Kimpton
|
7
|
1
|
1,747
|
93
|
|
HUALUXE
|
23
|
(2)
|
6,045
|
(862)
|
|
Crowne Plaza
|
48
|
-
|
13,157
|
(720)
|
|
Hotel Indigo
|
41
|
9
|
7,378
|
1,876
|
|
EVEN Hotels
|
19
|
4
|
3,741
|
670
|
|
voco
|
2
|
1
|
292
|
161
|
|
Holiday Inna
|
72
|
(2)
|
17,596
|
(567)
|
|
Holiday Inn Express
|
208
|
3
|
34,732
|
168
|
|
Other
|
-
|
(1)
|
-
|
(297)
|
|
|
____
|
____
|
______
|
_____
|
Total
|
453
|
13
|
93,425
|
245
|
|
|
____
|
____
|
______
|
_____
|
Analysed by ownership type
|
|
|
|
|
|
Franchised
|
226
|
15
|
40,055
|
3,167
|
|
Managed
|
227
|
(2)
|
53,370
|
(2,922)
|
|
|
____
|
____
|
______
|
_____
|
Total
|
453
|
13
|
93,425
|
245
|
|
|
____
|
____
|
______
|
_____
|
a.
Includes 14 Holiday Inn
Resort properties (3,205 rooms) (2020: 13 Holiday Inn Resort
properties (3,208 rooms)).
Net system size grew by 8.9% year-on-year. The opening of 88 hotels
(18.1k rooms) during the year matched that of 2019, and included
the first InterContinental hotel in Taiwan, voco Wuhan Xinhua and
the Crowne Plaza Chongli resort. There were 5.2k rooms (19 hotels)
removed during the year.
30.8k rooms (153 hotels) were signed in the year, including 80
franchise contracts, 50 of which were for Holiday Inn Express.
Other notable signings included Regent Sanya Haitang Bay and Hotel
Indigo Sanya Haitang Bay as part of a combined complex, the
InterContinental Taipei and the Holiday Inn Shenzhen Nanshan. The
pipeline stands at 93.4k rooms (453 hotels), which represents 59%
of the current system size.
CENTRAL
|
12 months ended 31 December
|
|
|
|
|
|
2021
|
2020
|
%
|
Central results
|
$m
|
$m
|
change
|
|
|
|
|
Revenue
|
197
|
182
|
8.2
|
Gross costs
|
(285)
|
(244)
|
16.8
|
|
____
|
____
|
____
|
|
|
(88)
|
(62)
|
41.9
|
Exceptional items
|
|
-
|
(19)
|
-
|
|
____
|
____
|
____
|
Operating loss
|
(88)
|
(81)
|
8.6
|
|
____
|
____
|
____
|
Central revenue, which mainly comprises technology fee income,
increased by $15m (8.2%) to $197m, driven by the temporary
discounts on technology fees in 2020 no longer being
applicable.
Gross costs increased by $41m (16.8%) year-on-year, as temporary
cost saving measures were introduced from the second quarter of
2020 which were not repeated in 2021. When comparing to 2019, gross
costs decreased by 8.1%, which includes sustainable cost savings
achieved in 2021.
The operating loss before exceptional items increased by $26m, a
decrease of $37m compared to 2019.
Use of 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 these managed and franchised hotels are owned by third
parties.
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 hotel 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 do 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 preliminary 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 the following items of interest which are recorded within
the System Fund:
●
IHG records an interest charge on the outstanding cash balance
relating to the IHG Rewards programme. These interest payments are
recognised as interest income for the Fund and interest expense for
IHG.
●
The System Fund also benefits from the capitalisation of interest
related to the development of the next-generation Guest Reservation
System.
●
Other components of System Fund interest income and expense,
including 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
below).
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 preliminary Group 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 as excluded in adjusted
interest, the 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 preliminary
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 operating profit,
excluding System Fund revenues and expenses, exceptional items and
depreciation and amortisation.
Adjusted EBITDA is useful to investors and other stakeholders for
comparing the performance of different companies as depreciation,
amortisation and exceptional items are eliminated. It can also be
used as an approximation of operational cash flow generation. This
measure is relevant to the Group's banking covenants, which have
been relaxed for test dates in 2022. Details of covenant levels and
performance against these is provided in note 10 to the preliminary
Group Financial Statements. The leverage ratio uses a Covenant
EBITDA measure which is calculated on a 'frozen GAAP' basis, which
excludes the effect of IFRS 16.
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 recharged to 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.
Revenue and operating profit non-GAAP reconciliations
Highlights for the 12 months ended 31 December
Reportable segments
|
Revenue
|
|
Operating profit
|
|
|
|
|
|
|
|
|
|
2021
|
2020
|
%
|
|
2021
|
2020
|
%
|
|
$m
|
$m
|
change
|
|
$m
|
$m
|
change
|
|
|
|
|
|
|
|
|
Per Group income statement
|
2,907
|
2,394
|
21.4
|
|
494
|
(153)
|
NMa
|
System Fund
|
(928)
|
(765)
|
21.3
|
|
11
|
102
|
(89.2)
|
Reimbursement of costs
|
(589)
|
(637)
|
(7.5)
|
|
-
|
-
|
-
|
Operating exceptional items
|
-
|
-
|
-
|
|
29
|
270
|
(89.3)
|
|
_____
|
_____
|
_____
|
|
_____
|
_____
|
_____
|
Reportable segments
|
1,390
|
992
|
40.1
|
|
534
|
219
|
143.8
|
|
_____
|
_____
|
_____
|
|
_____
|
_____
|
_____
|
Reportable segments analysed as:
|
|
|
|
|
|
|
|
Fee business
|
1,153
|
823
|
40.1
|
|
570
|
278
|
105.0
|
Owned, leased and managed lease
|
237
|
169
|
40.2
|
|
(36)
|
(59)
|
39.0
|
|
_____
|
_____
|
_____
|
|
_____
|
_____
|
_____
|
Reportable segments
|
1,390
|
992
|
40.1
|
|
534
|
219
|
143.8
|
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
|
|
|
|
|
|
|
|
|
|
|
|
2021
|
2020
|
%
|
|
2021
|
2020
|
%
|
|
$m
|
$m
|
change
|
|
$m
|
$m
|
Change
|
|
|
|
|
|
|
|
|
|
Reportable segments (see above)
|
1,390
|
992
|
40.1
|
|
534
|
219
|
143.8
|
Significant liquidated damagesa
|
(6)
|
(1)
|
500.0
|
|
(6)
|
(1)
|
500.0
|
Owned and leased asset disposalsb
|
(11)
|
(21)
|
(47.6)
|
|
3
|
6
|
(50.0)
|
Currency impact
|
-
|
16
|
-
|
|
-
|
(1)
|
-
|
|
____
|
_____
|
_____
|
|
_____
|
_____
|
_____
|
Underlying revenue and underlying operating profit
|
1,373
|
986
|
39.2
|
|
531
|
223
|
138.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
a.
$6m recognised in 2021
reflects the significant liquidated damages related to one hotel in
Greater China. The $1m recognised in 2020 reflects the continued
recognition of the significant liquidated damages related to the
previously disclosed exit of a portfolio of 2.1k hotels in
Germany.
b. The results of three
EVEN Hotels have been removed in 2021 (being the year of disposal
for these hotels) and the prior year to determine underlying
growth. The results of the hotels that were removed in 2020 (being
the year of disposal or lease termination for these hotels) have
also been removed to determine underlying
growth.
Underlying fee revenue and underlying fee operating
profit
|
Revenue
|
Operating profit
|
|
|
|
|
|
|
|
|
|
|
|
2021
|
2020
|
%
|
|
2021
|
2020
|
%
|
|
$m
|
$m
|
change
|
|
$m
|
$m
|
change
|
|
|
|
|
|
|
|
|
Reportable segments fee business (see above)
|
1,153
|
823
|
40.1
|
|
570
|
278
|
105.0
|
Significant liquidated damagesa
|
(6)
|
(1)
|
500.0
|
|
(6)
|
(1)
|
500.0
|
Currency impact
|
-
|
11
|
-
|
|
-
|
-
|
-
|
|
_____
|
_____
|
_____
|
|
_____
|
_____
|
_____
|
Underlying fee revenue and underlying fee operating
profit
|
1,147
|
833
|
37.7
|
|
564
|
277
|
103.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
a.
$6m recognised in 2021
reflects the significant liquidated damages related to one hotel in
Greater China. The $1m recognised in 2020 reflects the continued
recognition of the significant liquidated damages related to the
previously disclosed exit of a portfolio of 2.1k hotels in
Germany.
Americas
|
Revenue
|
|
Operating profita
|
|
|
|
|
|
|
|
|
|
|
|
2021
|
2020
|
%
|
|
2021
|
2020
|
%
|
|
|
$m
|
change
|
|
$m
|
$m
|
change
|
|
|
|
|
|
|
|
|
Per Group financial statements
|
774
|
512
|
51.2
|
|
559
|
296
|
88.9
|
|
|
|
|
|
|
|
|
Reportable segments analysed as:
|
|
|
|
|
|
|
|
Fee business
|
691
|
457
|
51.2
|
|
568
|
323
|
75.9
|
Owned, leased and managed lease
|
83
|
55
|
50.9
|
|
(9)
|
(27)
|
(66.7)
|
|
_____
|
_____
|
_____
|
|
_____
|
_____
|
_____
|
|
774
|
512
|
51.2
|
|
559
|
296
|
88.9
|
|
|
|
|
|
|
|
|
Reportable segments (see above)
|
774
|
512
|
51.2
|
|
559
|
296
|
88.9
|
Owned and leased asset disposalsb
|
(11)
|
(17)
|
(35.3)
|
|
3
|
7
|
(57.1)
|
Currency impact
|
-
|
-
|
-
|
|
-
|
2
|
-
|
|
_____
|
_____
|
_____
|
|
_____
|
_____
|
_____
|
Underlying revenue and underlying operating profit
|
763
|
495
|
54.1
|
|
562
|
305
|
84.3
|
|
|
|
|
|
|
|
|
Owned, leased and managed lease included in the above
|
(72)
|
(38)
|
89.5
|
|
6
|
19
|
(68.4)
|
|
_____
|
_____
|
_____
|
|
_____
|
_____
|
_____
|
Underlying fee business
|
691
|
457
|
51.2
|
|
568
|
324
|
75.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
a.
Before exceptional
items.
b.
The results of three EVEN
Hotels have been removed in 2021 (being the year of disposal for
these hotels) and the prior year to determine underlying growth.
The results of the hotels that were removed in 2020 (being the year
of disposal or lease termination for these hotels) have also been
removed to determine underlying growth.
EMEAA
|
Revenue
|
|
Operating profita
|
|
|
|
|
|
|
|
|
|
2021
|
2020
|
%
|
|
2021
|
2020
|
%
|
|
$m
|
$m
|
change
|
|
$m
|
$m
|
change
|
|
|
|
|
|
|
|
|
Per Group financial statements
|
303
|
221
|
37.1
|
|
5
|
(50)
|
NMd
|
|
|
|
|
|
|
|
|
Reportable segments analysed as:
|
|
|
|
|
|
|
|
Fee business
|
149
|
107
|
39.3
|
|
32
|
(18)
|
NMd
|
Owned, leased and managed lease
|
154
|
114
|
35.1
|
|
(27)
|
(32)
|
15.6
|
|
_____
|
_____
|
_____
|
|
_____
|
_____
|
_____
|
|
303
|
221
|
37.1
|
|
5
|
(50)
|
NMd
|
|
|
|
|
|
|
|
|
Reportable segments (see above)
|
303
|
221
|
37.1
|
|
5
|
(50)
|
NMd
|
Significant liquidated damagesb
|
-
|
(1)
|
-
|
|
-
|
(1)
|
-
|
Owned asset disposalsc
|
-
|
(4)
|
-
|
|
-
|
(1)
|
-
|
Currency impact
|
-
|
8
|
-
|
|
-
|
(2)
|
-
|
|
_____
|
_____
|
_____
|
|
_____
|
_____
|
_____
|
Underlying revenue and underlying operating profit
|
303
|
224
|
35.3
|
|
5
|
(54)
|
NMd
|
|
|
|
|
|
|
|
|
Owned, leased and managed lease included in the above
|
(154)
|
(115)
|
33.9
|
|
27
|
35
|
(22.9)
|
|
_____
|
_____
|
_____
|
|
_____
|
_____
|
_____
|
Underlying fee business
|
149
|
109
|
36.7
|
|
32
|
(19)
|
NMd
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
a. Before
exceptional items.
b.
$1m recognised in 2020
reflects the continued recognition of the significant liquidated
damages related to the previously disclosed exit of a portfolio of
2.1k hotels in Germany.
c.
The results of the hotels
removed in 2020 (being the year of disposal of these hotels) have
been removed to determine underlying growth.
d.
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.
Greater China
|
Revenue
|
|
Operating profita
|
|
|
|
|
|
|
|
|
|
|
|
2021
|
2020
|
%
|
|
2021
|
2020
|
%
|
|
$m
|
$m
|
change
|
|
$m
|
$m
|
change
|
Per Group financial statements
|
|
|
|
|
|
|
|
Reportable segments analysed as:
|
116
|
77
|
50.6
|
|
58
|
35
|
65.7
|
|
_____
|
_____
|
_____
|
|
_____
|
_____
|
_____
|
Fee business
|
116
|
77
|
50.6
|
|
58
|
35
|
65.7
|
|
|
|
|
|
|
|
|
Reportable segments (see above)
|
116
|
77
|
50.6
|
|
58
|
35
|
65.7
|
Significant liquidated damagesb
|
(6)
|
-
|
-
|
|
(6)
|
-
|
-
|
Currency impact
|
-
|
5
|
-
|
|
-
|
1
|
-
|
|
_____
|
_____
|
_____
|
|
_____
|
_____
|
_____
|
Underlying revenue and underlying operating profit
|
110
|
82
|
34.1
|
|
52
|
36
|
44.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
a.
Before exceptional
items.
b.
$6m recognised in 2021
reflects the significant liquidated damages related to one
property.
Fee margin reconciliation
|
2021
|
2020
|
|
$m
|
$m
|
Revenue
|
|
|
Reportable segments analysed as fee business (see
above)
|
1,153
|
823
|
Significant liquidated damages
|
(6)
|
(1)
|
Captive insurance company
|
(17)
|
(19)
|
|
_____
|
_____
|
|
1,130
|
803
|
Operating profit
|
|
|
Reportable segments analysed as fee business (see
above)
|
570
|
278
|
Significant liquidated damages
|
(6)
|
(1)
|
Captive insurance company
|
(3)
|
(3)
|
|
_____
|
_____
|
|
561
|
274
|
|
|
|
Fee margin
|
49.6%
|
34.1%
|
Net capital expenditure reconciliation
|
12 months ended
31 December
|
|
|
|
|
2021
|
2020
|
|
$m
|
$m
|
|
|
|
Net cash from investing activities
|
(12)
|
(61)
|
Adjusted for:
|
|
|
Contract acquisition costs, net of
repayments
|
(42)
|
(64)
|
System Fund
depreciation and amortisationa
|
91
|
58
|
Deferred purchase consideration paid
|
13
|
-
|
|
_____
|
_____
|
Net capital expenditure
|
50
|
(67)
|
|
_____
|
_____
|
Analysed as:
|
|
|
Capital expenditure: maintenance (including contract acquisition
costs, net of repayments of $42m (2020: $64m))
|
(75)
|
(107)
|
Capital expenditure: recyclable investments
|
53
|
17
|
Capital expenditure: System Fund capital investments
|
72
|
23
|
|
_____
|
_____
|
Net capital expenditure
|
50
|
(67)
|
|
|
|
a.
Excludes depreciation of
right-of-use assets.
Gross capital expenditure reconciliation
|
12 months ended
31 December
|
|
|
|
|
2021
|
2020
|
|
$m
|
$m
|
|
|
|
Net capital expenditure
|
50
|
(67)
|
Add back:
|
|
|
Disposal receipts
|
(58)
|
(18)
|
Repayments of contract acquisition costs
|
(1)
|
-
|
Distributions from associates and joint
ventures
|
-
|
(5)
|
System Fund
depreciation and amortisationa
|
(91)
|
(58)
|
|
_____
|
_____
|
Gross capital expenditure
|
(100)
|
(148)
|
|
_____
|
_____
|
Analysed as:
|
|
|
Capital
expenditure: maintenance
|
(76)
|
(107)
|
(including
gross contract acquisition costs of $43m (2020: $64m))
|
Capital
expenditure: recyclable investments
|
(5)
|
(6)
|
Capital
expenditure: System Fund capital investments
|
(19)
|
(35)
|
|
_____
|
_____
|
Gross capital expenditure
|
(100)
|
(148)
|
|
_____
|
_____
|
a.
Excludes depreciation of
right-of-use assets.
Adjusted free cash flow reconciliation
|
12 months ended
31 December
|
|
|
|
2021
|
2020
|
|
$m
|
$m
|
|
|
|
Net cash from operating activities
|
636
|
137
|
Adjusted for:
|
|
|
Principal
element of lease payments
|
(32)
|
(65)
|
Capital
expenditure: maintenance (excluding contract acquisition
costs)
|
(33)
|
(43)
|
|
_____
|
_____
|
Adjusted free cash flow
|
571
|
29
|
|
_____
|
_____
|
Adjusted interest reconciliation
The following table reconciles net financial expenses to adjusted
interest.
|
12 months ended
31 December
|
|
|
|
2021
|
2020
|
|
$m
|
$m
|
Net financial expenses
|
|
|
Financial income
|
8
|
4
|
Financial expenses
|
(147)
|
(144)
|
|
_____
|
_____
|
|
(139)
|
(140)
|
Adjusted for:
|
|
|
Interest attributable to the System Fund
Capitalised interest relating to System Fund assets
Exceptional financial expenses
|
(3)
-
-
|
(3)
(1)
14
|
|
_____
|
_____
|
|
(3)
|
10
|
|
|
|
Adjusted interest
|
(142)
|
(130)
|
|
|
|
|
Adjusted EBITDA reconciliation
|
|
12 months ended
31 December
|
|
2021
|
2020
|
|
$m
|
$m
|
Operating profit/(loss)
|
494
|
(153)
|
Add back:
|
|
|
System Fund result
|
11
|
102
|
Operating exceptional items
|
29
|
270
|
Depreciation
and amortisation
|
98
|
110
|
|
_____
|
_____
|
Adjusted EBITDA
|
632
|
329
|
|
|
|
|
|
Adjusted earnings per ordinary share
reconciliation
|
12 months ended
31 December
|
|
|
|
|
2021
|
2020
|
|
$m
|
$m
|
Profit/(loss) available for equity holders
|
266
|
(260)
|
Adjusting items:
|
|
|
System Fund revenues and expenses
|
11
|
102
|
Interest attributable to the System Fund
|
(3)
|
(4)
|
Operating exceptional items
|
29
|
270
|
Exceptional financial expenses
|
-
|
14
|
Fair value gains on contingent purchase
consideration
|
(6)
|
(13)
|
Tax on fair value gains on contingent purchase
consideration
|
1
|
-
|
Tax on exceptional items
|
(3)
|
(52)
|
Exceptional tax
|
(26)
|
-
|
|
_____
|
_____
|
Adjusted earnings
|
269
|
57
|
|
|
|
Basic weighted average number of ordinary shares
(millions)
|
183
|
182
|
Adjusted earnings per ordinary share (cents)
|
147.0
|
31.3
|
|
|
|
2019 reportable segments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue from reportable segments
|
|
|
|
|
|
|
Americas
$m
|
EMEAA
$m
|
Greater China
$m
|
Central
$m
|
Total
$m
|
|
|
|
|
|
|
Revenue from reportable segments
|
1,040
|
723
|
135
|
185
|
2,083
|
|
|
|
|
|
|
Fee Business
|
853
|
337
|
135
|
185
|
1,510
|
Owned & Leased
|
187
|
386
|
-
|
-
|
573
|
|
_____
|
_____
|
_____
|
_____
|
_____
|
|
1,040
|
723
|
135
|
185
|
2,083
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Profit from reportable segments
|
|
|
|
|
|
|
Americas
$m
|
EMEAA
$m
|
Greater China
$m
|
Central
$m
|
Total
$m
|
|
|
|
|
|
|
Operating Profit from reportable segments
|
700
|
217
|
73
|
(125)
|
865
|
|
|
|
|
|
|
Fee Business
|
663
|
202
|
73
|
(125)
|
813
|
Owned & Leased
|
37
|
15
|
-
|
-
|
52
|
|
_____
|
_____
|
_____
|
_____
|
_____
|
|
700
|
217
|
73
|
(125)
|
865
|
|
|
|
|
|
|
|
INTERCONTINENTAL HOTELS GROUP PLC
GROUP INCOME STATEMENT
For the year ended 31 December 2021
|
2021
Year ended
31 December
$m
|
2020
Year ended
31 December
$m
|
|
|
|
Revenue from fee business
|
1,153
|
823
|
Revenue from owned, leased and managed lease hotels
|
237
|
169
|
System Fund revenues
|
928
|
765
|
Reimbursement of costs
|
589
|
637
|
|
_____
|
_____
|
Total revenue (notes 3 and 4)
|
2,907
|
2,394
|
|
|
|
Cost of sales
|
(486)
|
(354)
|
System Fund expenses
|
(939)
|
(867)
|
Reimbursed costs
|
(589)
|
(637)
|
Administrative expenses
|
(300)
|
(267)
|
Share of losses of associates and joint ventures
|
(8)
|
(14)
|
Other operating income
|
11
|
16
|
Depreciation and amortisation
|
(98)
|
(110)
|
Impairment loss on financial assets
|
-
|
(88)
|
Other impairment charges (note 5)
|
(4)
|
(226)
|
|
_____
|
_____
|
Operating profit/(loss) (note 3)
|
494
|
(153)
|
|
|
|
Operating profit/(loss) analysed as:
|
|
|
Operating profit before System Fund and exceptional
items
|
534
|
219
|
System Fund
|
(11)
|
(102)
|
Operating exceptional items (note 5)
|
(29)
|
(270)
|
|
_____
|
_____
|
|
494
|
(153)
|
|
|
|
Financial income
|
8
|
4
|
Financial expenses
|
(147)
|
(144)
|
Fair value gains on contingent purchase consideration
|
6
|
13
|
|
_____
|
_____
|
Profit/(loss) before tax
|
361
|
(280)
|
|
|
|
Tax (note 6)
|
(96)
|
20
|
|
_____
|
_____
|
Profit/(loss) for the year from continuing operations
|
265
|
(260)
|
|
_____
|
_____
|
|
|
|
Attributable to:
|
|
|
|
Equity holders of the parent
|
266
|
(260)
|
|
Non-controlling interest
|
(1)
|
-
|
|
|
_____
|
_____
|
|
|
265
|
(260)
|
|
_____
|
_____
|
|
|
|
Earnings/(loss) per ordinary share (note 7)
|
|
|
|
Basic
|
145.4¢
|
(142.9)¢
|
|
Diluted
|
144.6¢
|
(142.9)¢
|
|
|
|
|
INTERCONTINENTAL HOTELS GROUP PLC
GROUP STATEMENT OF COMPREHENSIVE INCOME
For the year ended 31 December 2021
|
2021
Year ended
31 December
$m
|
2020
Year ended
31 December
$m
|
|
|
|
Profit/(loss) for the year
|
265
|
(260)
|
|
|
|
Other comprehensive income
|
|
|
|
|
|
Items that may be subsequently reclassified to profit or
loss:
|
|
|
|
Losses on cash flow hedges, including related tax charge of $7m
(2020: $4m credit)
|
(69)
|
3
|
|
Costs of hedging
|
2
|
(6)
|
|
Hedging losses/(gains) reclassified to financial
expenses
|
96
|
(13)
|
|
Exchange gains/(losses) on retranslation of foreign operations, net
of related tax charge of $4m (2020: $4m credit)
|
18
|
(85)
|
|
_____
|
_____
|
|
47
|
(101)
|
Items that will not be reclassified to profit or loss:
|
|
|
|
Gains/(losses) on equity instruments classified as fair value
through other comprehensive income, net of related tax charge of
$1m (2020: $4m credit)
|
14
|
(43)
|
|
Re-measurement gains/(losses) on defined benefit plans, including
related tax credit of $nil (2020: $1m credit)
|
7
|
(7)
|
|
Tax related to pension contributions
|
1
|
1
|
|
|
_____
|
_____
|
|
|
22
|
(49)
|
|
_____
|
_____
|
Total other comprehensive income/(loss) for the year
|
69
|
(150)
|
|
_____
|
_____
|
Total comprehensive income/(loss) for the year
|
334
|
(410)
|
|
_____
|
_____
|
|
|
|
Attributable to:
|
|
|
|
Equity holders of the parent
|
335
|
(410)
|
|
Non-controlling interest
|
(1)
|
-
|
|
|
_____
|
_____
|
|
|
334
|
(410)
|
|
_____
|
_____
|
|
|
|
INTERCONTINENTAL HOTELS GROUP PLC
GROUP STATEMENT OF CHANGES IN EQUITY
For the year ended 31 December 2021
|
Year ended 31 December 2021
|
|
Equity share capital
|
Other reserves*
|
Retained earnings
|
Non-controlling interest
|
Total equity
|
|
$m
|
$m
|
$m
|
$m
|
$m
|
|
|
|
|
|
|
|
At beginning of the year
|
156
|
(2,581)
|
568
|
8
|
(1,849)
|
|
|
|
|
|
|
Total comprehensive income for the year
|
-
|
61
|
274
|
(1)
|
334
|
Transfer of treasury shares to employee share trusts
|
-
|
(34)
|
34
|
-
|
-
|
Release of own shares by employee share trusts
|
-
|
13
|
(13)
|
-
|
-
|
Equity-settled share-based cost
|
-
|
-
|
39
|
-
|
39
|
Tax related to share schemes
|
-
|
-
|
2
|
-
|
2
|
Exchange adjustments
|
(2)
|
2
|
-
|
-
|
-
|
|
_____
|
_____
|
_____
|
_____
|
_____
|
At end of the year
|
154
|
(2,539)
|
904
|
7
|
(1,474)
|
|
_____
|
_____
|
_____
|
_____
|
_____
|
|
|
|
|
|
|
|
|
Year ended 31 December 2020
|
|
Equity share capital
|
Other reserves*
|
Retained earnings
|
Non-controlling interest
|
Total equity
|
|
$m
|
$m
|
$m
|
$m
|
$m
|
|
|
|
|
|
|
|
At beginning of the year
|
151
|
(2,433)
|
809
|
8
|
(1,465)
|
|
|
|
|
|
|
Total comprehensive loss for the year
|
-
|
(147)
|
(263)
|
-
|
(410)
|
Transfer of treasury shares to employee share trusts
|
-
|
(14)
|
14
|
-
|
-
|
Release of own shares by employee share trusts
|
-
|
18
|
(18)
|
-
|
-
|
Equity-settled share-based cost, net of $3m reclassification to
cash-settled awards
|
-
|
-
|
27
|
-
|
27
|
Tax related to share schemes
|
-
|
-
|
(1)
|
-
|
(1)
|
Exchange adjustments
|
5
|
(5)
|
-
|
-
|
-
|
|
_____
|
_____
|
_____
|
_____
|
_____
|
At end of the year
|
156
|
(2,581)
|
568
|
8
|
(1,849)
|
|
_____
|
_____
|
_____
|
_____
|
_____
|
|
|
|
|
|
|
|
*
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.
|
All items within total comprehensive income/(loss) are shown net of
tax.
|
INTERCONTINENTAL HOTELS GROUP PLC
GROUP STATEMENT OF FINANCIAL POSITION
31 December 2021
|
2021
31 December
|
2020
31 December
|
|
$m
|
$m
|
ASSETS
|
|
|
Goodwill and other intangible assets
|
1,195
|
1,293
|
Property, plant and equipment
|
137
|
201
|
Right-of-use assets
|
274
|
303
|
Investment in associates
|
77
|
81
|
Retirement benefit assets
|
2
|
-
|
Other financial assets
|
173
|
168
|
Derivative financial instruments
|
-
|
5
|
Deferred compensation plan investments
|
256
|
236
|
Non-current tax receivable
|
1
|
15
|
Deferred tax assets
|
147
|
113
|
Contract costs
|
72
|
70
|
Contract assets
|
316
|
311
|
|
______
|
______
|
Total non-current assets
|
2,650
|
2,796
|
|
______
|
______
|
Inventories
|
4
|
5
|
Trade and other receivables
|
574
|
514
|
Current tax receivable
|
1
|
18
|
Other financial assets
|
2
|
1
|
Cash and cash equivalents
|
1,450
|
1,675
|
Contract costs
|
5
|
5
|
Contract assets
|
30
|
25
|
|
______
|
______
|
Total current assets
|
2,066
|
2,243
|
|
______
|
______
|
Total assets
|
4,716
|
5,039
|
|
_____
|
_____
|
LIABILITIES
|
|
|
Loans and other borrowings
|
(292)
|
(869)
|
Lease liabilities
|
(35)
|
(34)
|
Trade and other payables
|
(579)
|
(466)
|
Deferred revenue
|
(617)
|
(452)
|
Provisions
|
(49)
|
(16)
|
Current tax payable
|
(52)
|
(30)
|
|
______
|
______
|
Total current liabilities
|
(1,624)
|
(1,867)
|
|
______
|
______
|
Loans and other borrowings
|
(2,553)
|
(2,898)
|
Lease liabilities
|
(384)
|
(416)
|
Derivative financial instruments
|
(62)
|
(18)
|
Retirement benefit obligations
|
(92)
|
(103)
|
Deferred compensation plan liabilities
|
(256)
|
(236)
|
Trade and other payables
|
(89)
|
(94)
|
Deferred revenue
|
(996)
|
(1,117)
|
Provisions
|
(41)
|
(44)
|
Deferred tax liabilities
|
(93)
|
(95)
|
|
______
|
______
|
Total non-current liabilities
|
(4,566)
|
(5,021)
|
|
______
|
______
|
Total liabilities
|
(6,190)
|
(6,888)
|
|
_____
|
_____
|
Net liabilities
|
(1,474)
|
(1,849)
|
|
_____
|
_____
|
EQUITY
|
|
|
IHG shareholders' equity
|
(1,481)
|
(1,857)
|
Non-controlling interest
|
7
|
8
|
|
______
|
______
|
Total equity
|
(1,474)
|
(1,849)
|
|
_____
|
_____
|
|
|
|
INTERCONTINENTAL HOTELS GROUP PLC
GROUP STATEMENT OF CASH FLOWS
For the year ended 31 December 2021
|
2021
Year ended
31 December
|
2020
Year ended
31 December
|
|
$m
|
$m
|
|
|
|
Profit/(loss) for the year
|
265
|
(260)
|
Adjustments reconciling profit/(loss) for the year to cash flow
from operations (note 9)
|
583
|
568
|
|
_____
|
_____
|
Cash flow from operations
|
848
|
308
|
Interest paid
|
(134)
|
(132)
|
Interest received
|
8
|
2
|
Tax paid
|
(86)
|
(41)
|
|
_____
|
_____
|
Net cash from operating activities
|
636
|
137
|
|
_____
|
_____
|
Cash flow from investing activities
|
|
|
Purchase of property, plant and equipment
|
(17)
|
(26)
|
Purchase of intangible assets
|
(35)
|
(50)
|
Investment in associates
|
-
|
(2)
|
Investment in other financial assets
|
(5)
|
(5)
|
Deferred purchase consideration paid
|
(13)
|
-
|
Capitalised interest paid
|
-
|
(1)
|
Distributions from associates and joint ventures
|
-
|
5
|
Disposal of hotel assets, net of costs and cash
disposed
|
44
|
1
|
Repayments of other financial assets
|
14
|
13
|
Disposal of equity securities
|
-
|
4
|
|
_____
|
_____
|
Net cash from investing activities
|
(12)
|
(61)
|
|
_____
|
_____
|
Cash flow from financing activities
|
|
|
Issue of long-term bonds, including effect of currency
swaps
|
-
|
1,093
|
(Repayment)/issue of commercial paper
|
(828)
|
738
|
Repayment of long-term bonds
|
-
|
(290)
|
Principal element of lease payments
|
(32)
|
(65)
|
Decrease in other borrowings
|
-
|
(125)
|
Proceeds from currency swaps
|
-
|
3
|
|
_____
|
_____
|
Net cash from financing activities
|
(860)
|
1,354
|
|
_____
|
_____
|
Net movement in cash and cash equivalents, net of overdrafts, in
the year
|
(236)
|
1,430
|
|
|
|
Cash and cash equivalents, net of overdrafts, at beginning of the
year
|
1,624
|
108
|
Exchange rate effects
|
3
|
86
|
|
_____
|
_____
|
Cash and cash equivalents, net of overdrafts, at end of the
year
|
1,391
|
1,624
|
|
_____
|
_____
|
|
|
|
|
|
|
INTERCONTINENTAL HOTELS GROUP PLC
NOTES TO THE INTERIM FINANCIAL STATEMENTS
1.
|
Basis of preparation
|
|
The preliminary consolidated financial statements of
InterContinental Hotels Group PLC (the 'Group' or 'IHG') for the
year ended 31 December 2021 have been prepared in accordance with
UK-adopted international accounting standards and with applicable
law and regulations and with International Financial Reporting
Standards ('IFRSs') as issued by the IASB. The Group transitioned
to UK-adopted international accounting standards in its
consolidated financial statements on 1 January 2021. There was no
impact or change in accounting policies from the transition. The
preliminary statement of results shown in this announcement does
not represent the statutory accounts of the Group and its
subsidiaries within the meaning of Section 435 of the Companies Act
2006.
The Group financial statements for the year ended 31 December 2021
were approved by the Board on 21 February 2022. The auditor,
PricewaterhouseCoopers LLP, has given an unqualified report in
respect of those Group financial statements 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.
The Group financial statements for the year ended 31 December 2021
will be delivered to the Registrar of Companies in due
course.
Financial information for the year ended 31 December 2020 has been
extracted from the Group's published financial statements for that
year which were prepared in accordance with IFRSs adopted pursuant
to Regulation (EC) No 1606/2002 as it applies in the European Union
and with international accounting standards as applied in
accordance with the provisions of the Companies Act 2006 and which
have been filed with the Registrar of Companies. The Group's
previous auditor, Ernst & Young LLP, has reported on those
financial statements. Its report was unqualified with no reference
to matters to which Ernst & Young LLP drew attention by way of
emphasis and no statement under s498(2) or s498(3) of the Companies
Act 2006.
Going concern
The resilience of the Group's fee-based model, wide geographic
spread and strong cash management means that the Group has been
able to generate $636m of net cash from operating activities in a
year when trading has still been substantially impacted by the
global pandemic. Trading has recovered significantly during 2021,
with RevPAR up 46% on 2020 and returning to 70% of 2019's
pre-pandemic levels.
As at 31 December 2021 the Group had total liquidity of $2,655m,
comprising $1,350m of undrawn bank facilities and $1,305m of cash
and cash equivalents (net of overdrafts and restricted cash).
In March 2021 the Group used cash reserves to repay £600m
commercial paper under the UK's Covid Corporate Financing Facility
('CCFF').
In 2020, the Group agreed amendments of existing covenants on its
syndicated and bilateral revolving credit facilities ('the bank
facilities') until December 2022.
A period of 18 months has been used, from 1 January 2022 to 30 June
2023, to complete the going concern assessment. There are a wide
range of possible planning scenarios over the going concern period.
In adopting the going concern basis for preparing these financial
statements the Directors have considered a scenario (the 'Base
Case') which is based on continued improvement in demand as travel
restrictions are reduced, with RevPAR assumed to reach greater than
90% of 2019 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.
Under this 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 $400m
liquidity covenant and amended covenant requirements. 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 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.
|
|
|
The Directors have also reviewed a 'Downside Case' which is based
on current external market downside forecasts with RevPAR growth
reduced by 8% in 2022 in comparison to the Base Case followed by
similar growth rates to the Base Case in 2023. The Directors have
also reviewed a 'Severe Downside Case' which is based on a severe
but plausible scenario. This assumes that the performance
during 2022 continues without further recovery on 2021 levels with
RevPAR remaining at 70% of 2019 levels, and then with recovery in
2023. The assumptions used in the going concern assessment are
consistent with those used in the viability assessment. Under the
Downside Case and Severe Downside Case, the bank facilities remain
undrawn.
Under the Severe Downside scenario, there is limited headroom to
the covenants at 30 June 2023 to absorb additional risks. However,
based on experience in 2020, the Directors reviewed a number of
actions, such as reductions in bonuses and other discretionary
spend, creating substantial additional headroom. After these
actions are taken, the principal risks and uncertainties which
could be applicable can be absorbed within the amended covenant
requirements.
In the Severe Downside Case, the Group has substantial levels of
existing cash reserves available (approximately $1bn at 30 June
2023) and is not expected to draw on the bank facilities. These
cash reserves would increase after the additional actions are taken
as described above. The Directors reviewed a reverse stress test
scenario to determine how much additional RevPAR downside could be
absorbed before utilisation of the bank facilities would be
required. 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 at 30 June 2022, 31
December 2022 and 30 June 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
further 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 bank facilities mature in September 2023,
outside the period considered by the going concern assessment and
it has been assumed that these bank facilities are renewed as they
mature. However, as explained above, the going concern
conclusion is not dependent on the bank facilities. The Group
also has alternative options to manage this risk including raising
additional funding in the capital markets.
Having reviewed these scenarios, the Directors have a reasonable
expectation that the Group has sufficient resources to continue
operating until at least 30 June 2023 and there are no material
uncertainties that may cast doubt on the Group's going concern
status. Accordingly, they continue to adopt the going concern basis
in preparing the financial statements.
|
|
2.
|
Exchange rates
|
|
The
results of operations have been translated into US dollars at the
average rates of exchange for the year. In the case of sterling,
the translation rate is $1 = £0.73 (2020: $1 = £0.78). In
the case of the euro, the translation rate is $1 = €0.85
(2020: $1 = €0.88).
Assets
and liabilities have been translated into US dollars at the rates
of exchange on the last day of the year. In the case of sterling,
the translation rate is $1 = £0.74 (2020: $1 = £0.73). In
the case of the euro, the translation rate is $1 = €0.88
(2020: $1 = €0.81).
|
3.
|
Segmental Information
|
|
|
|
Revenue
|
2021
|
2020
|
|
|
$m
|
$m
|
|
|
|
|
|
Americas
|
774
|
512
|
|
EMEAA
|
303
|
221
|
|
Greater China
|
116
|
77
|
|
Central
|
197
|
182
|
|
|
_____
|
_____
|
|
Revenue from reportable segments
|
1,390
|
992
|
|
System Fund revenues
|
928
|
765
|
|
Reimbursement of costs
|
589
|
637
|
|
|
_____
|
_____
|
|
Total revenue
|
2,907
|
2,394
|
|
|
_____
|
_____
|
|
|
|
|
|
Profit/(loss)
|
2021
$m
|
2020
$m
|
|
|
|
|
|
Americas
|
559
|
296
|
|
EMEAA
|
5
|
(50)
|
|
Greater China
|
58
|
35
|
|
Central
|
(88)
|
(62)
|
|
|
_____
|
_____
|
|
Operating profit from reportable segments
|
534
|
219
|
|
System Fund
|
(11)
|
(102)
|
|
Operating exceptional items (note 5)
|
(29)
|
(270)
|
|
|
_____
|
_____
|
|
Operating profit/(loss)
|
494
|
(153)
|
|
Net financial expenses
|
(139)
|
(140)
|
|
Fair value gains on contingent purchase consideration
|
6
|
13
|
|
|
_____
|
_____
|
|
Profit/(loss) before tax
|
361
|
(280)
|
|
|
_____
|
_____
|
|
|
4.
|
Revenue
|
|
Disaggregation of revenue
|
|
Year
ended 31 December 2021
|
|
|
|
|
|
|
Americas
m
|
EMEAA
$m
|
Greater China
$m
|
Central
$m
|
Total
$m
|
|
|
|
|
|
|
Franchise
and base management fees
|
683
|
120
|
91
|
-
|
894
|
Incentive
management fees
|
8
|
29
|
25
|
-
|
62
|
Central
revenue
|
-
|
-
|
-
|
197
|
197
|
|
_____
|
_____
|
_____
|
_____
|
_____
|
Revenue
from fee business
|
691
|
149
|
116
|
197
|
1,153
|
Revenue
from owned, leased and managed lease hotels
|
83
|
154
|
-
|
-
|
237
|
|
_____
|
_____
|
_____
|
_____
|
_____
|
|
774
|
303
|
116
|
197
|
1,390
|
|
|
|
|
|
|
System
Fund revenues
|
|
|
|
|
928
|
Reimbursement
of costs
|
|
|
|
|
589
|
|
|
|
|
|
_____
|
Total revenue
|
|
|
|
|
2,907
|
|
|
|
|
|
_____
|
Year ended 31 December 2020
|
|
|
|
|
|
|
Americas
$m
|
EMEAA
$m
|
Greater China
$m
|
Central
$m
|
Total
$m
|
|
|
|
|
|
|
Franchise
and base management fees
|
452
|
93
|
61
|
-
|
606
|
Incentive
management fees
|
5
|
14
|
16
|
-
|
35
|
Central
revenue
|
-
|
-
|
-
|
182
|
182
|
|
_____
|
_____
|
_____
|
_____
|
_____
|
Revenue
from fee business
|
457
|
107
|
77
|
182
|
823
|
Revenue
from owned, leased and managed lease hotels
|
55
|
114
|
-
|
-
|
169
|
|
_____
|
_____
|
_____
|
_____
|
_____
|
|
512
|
221
|
77
|
182
|
992
|
|
_____
|
_____
|
_____
|
_____
|
|
System
Fund revenues
|
|
|
|
|
765
|
Reimbursement
of costs
|
|
|
|
|
637
|
|
|
|
|
|
_____
|
Total revenue
|
|
|
|
|
2,394
|
|
|
|
|
|
_____
|
|
At
31 December 2021, the maximum exposure remaining under performance
guarantees was $85m (2020: $72m).
|
5.
|
Exceptional items
|
|
|
2021
$m
|
2020
$m
|
|
Cost of sales:
|
|
|
|
|
Derecognition of right-of-use assets and lease
liabilities
|
-
|
22
|
|
|
Gain on lease termination
|
-
|
30
|
|
|
Provision for onerous contractual expenditure
|
-
|
(10)
|
|
|
Reorganisation costs
|
-
|
(8)
|
|
|
|
_____
|
_____
|
|
|
|
-
|
34
|
|
Administrative expenses:
|
|
|
|
|
Reorganisation costs
|
-
|
(19)
|
|
|
Acquisition and integration costs
|
-
|
(6)
|
|
|
Litigation and commercial disputes
|
(25)
|
(5)
|
|
|
|
_____
|
_____
|
|
|
|
(25)
|
(30)
|
|
|
|
|
|
|
Impairment loss on financial assets
|
-
|
(48)
|
|
|
|
|
|
|
Other impairment charges:
|
|
|
|
|
Management agreements
|
-
|
(48)
|
|
|
Property, plant and equipment
|
-
|
(90)
|
|
|
Right-of-use assets
|
-
|
(16)
|
|
|
Associates
|
(4)
|
(19)
|
|
|
Contract assets
|
-
|
(53)
|
|
|
|
_____
|
_____
|
|
|
|
(4)
|
(226)
|
|
|
|
_____
|
_____
|
|
Operating exceptional items
|
(29)
|
(270)
|
|
|
_____
|
_____
|
|
|
|
|
|
Financial expenses
|
-
|
(14)
|
|
|
_____
|
_____
|
|
|
|
|
|
Fair value gains on contingent purchase consideration
|
-
|
21
|
|
|
_____
|
_____
|
|
|
|
|
|
Exceptional items before tax
|
(29)
|
(263)
|
|
|
_____
|
_____
|
|
|
|
|
|
Tax on exceptional items
|
3
|
52
|
|
Exceptional tax
|
26
|
-
|
|
|
_____
|
_____
|
|
Tax (note 6)
|
29
|
52
|
|
|
_____
|
_____
|
|
|
|
|
|
Litigation and commercial disputes
In 2021, relates to the provisionally agreed costs to settle two
commercial disputes, $18m in the Americas region and $7m relating
to a leased property in the EMEAA region.
In 2020, related to the agreed cost of settlement of $14m in
respect of a lawsuit in the EMEAA region, offset primarily by the
partial release of a 2019 provision related to a lawsuit in the
Americas region which was settled in 2020.
These costs are presented as exceptional reflecting (i) the nature
of the 2021 disputes which arose as a direct result of trading
performance during Covid-19; (ii) the quantum of the settlements;
and (iii) in respect of releases, consistency with the treatment
applied in prior years.
|
|
Other impairment charges: associates
Relates to the reversal of the $4m fair value gain recorded in 2020
on the put option over part of the Group's investment in the
InterContinental Barclay hotel. The classification as exceptional
is consistent with the presentation of the initial gain (included
within the net impairment charge in 2020).
|
|
|
|
|
|
|
|
Tax
An exceptional tax credit of $26m has been recorded as a result of
the enactment of a change to the UK rate of corporate income tax
from 19% to 25%, effective 1 April 2023. The change has
resulted in the re-measurement of those UK
deferred tax assets and liabilities which are forecast to be
utilised or to crystallise after this effective date, using the
higher tax rate. A further credit of $4m has been recorded
within the Group statement of comprehensive income in respect of
movements in deferred tax assets and liabilities originally
recorded there. The value attributable to unrecognised
deferred tax assets has increased by $34m as a result of the rate
change. This has no impact on the reported tax
charge.
|
|
|
2021
|
2020
|
|
|
Profit/(loss)
$m
|
Tax
$m
|
Tax
rate
|
Profit/(loss)
$m
|
Tax
$m
|
Taxrate
|
|
|
|
|
|
|
|
|
|
Before
exceptional items and System Fund
|
401
|
(125)
|
31%
|
85
|
(32)
|
38%
|
|
System
Fund
|
(11)
|
-
|
|
(102)
|
-
|
|
|
Exceptional
items (note 5)
|
(29)
|
29
|
|
(263)
|
52
|
|
|
|
_____
|
_____
|
|
_____
|
_____
|
|
|
|
361
|
(96)
|
|
(280)
|
20
|
|
|
|
_____
|
_____
|
|
_____
|
_____
|
|
|
|
|
|
|
|
|
|
|
Analysed as:
|
|
|
|
|
|
|
|
|
Current tax
|
|
(143)
|
|
|
(34)
|
|
|
|
Deferred
tax
|
|
47
|
|
|
54
|
|
|
|
|
_____
|
|
|
_____
|
|
|
|
|
(96)
|
|
|
20
|
|
|
|
|
_____
|
|
|
_____
|
|
|
|
|
|
|
|
|
|
|
Further analysed as:
|
|
|
|
|
|
|
|
|
UK
tax
|
|
28
|
|
|
36
|
|
|
|
Foreign
tax
|
|
(124)
|
|
|
(16)
|
|
|
|
|
_____
|
|
|
_____
|
|
|
|
|
(96)
|
|
|
20
|
|
|
|
|
_____
|
|
|
_____
|
|
|
|
|
The 2021 UK tax charge includes credits of $26m in respect of the
announced increase in the UK rate of corporate income tax (see note
5).
The deferred tax asset has increased from $113m to $147m in the
year and comprises $127m (31 December 2020: $103m) in the UK
and $20m (31 December 2020: $10m) in respect of other
territories. The deferred tax asset has been recognised based
upon forecasts consistent with those used in the going concern
assessment.
|
7.
|
Earnings/(loss) per ordinary share
|
|
|
2021
|
2020
|
|
Basic earnings/(loss) per ordinary share
|
|
|
|
Profit/(loss) available for equity holders ($m)
|
266
|
(260)
|
|
Basic weighted average number of ordinary shares
(millions)
|
183
|
182
|
|
Basic earnings/(loss) per ordinary share (cents)
|
145.4
|
(142.9)
|
|
|
_____
|
_____
|
|
|
|
|
|
Diluted earnings/(loss) per ordinary share
|
|
|
|
Profit/(loss) available for equity holders ($m)
|
266
|
(260)
|
|
Diluted weighted average number of ordinary shares
(millions)
|
184
|
182
|
|
Diluted earnings/(loss) per ordinary share (cents)
|
144.6
|
(142.9)
|
|
|
_____
|
_____
|
|
|
|
|
|
|
|
|
|
Diluted weighted average number of ordinary shares is calculated
as:
|
|
|
2021
millions
|
2020
millions
|
|
Basic weighted average number of ordinary shares
|
183
|
182
|
|
Dilutive potential ordinary shares
|
1
|
-
|
|
|
______
|
______
|
|
|
184
|
182
|
|
|
_____
|
_____
|
|
|
8.
|
Dividends
|
|
The final dividend of 85.9¢ per ordinary share (amounting to
$157m) is proposed for approval at the AGM on 6 May 2022. No
dividends were paid in 2021 or 2020.
|
9.
|
Reconciliation of profit/(loss) for the year to cash flow from
operations
|
|
2021
|
2020
|
|
$m
|
$m
|
|
|
|
Profit/(loss) for the year
|
265
|
(260)
|
Adjustments
for:
|
|
|
|
|
|
|
Net
financial expenses
|
139
|
140
|
|
Fair
value gains on contingent purchase consideration
|
(6)
|
(13)
|
|
Income
tax charge/(credit)
|
96
|
(20)
|
|
|
|
|
|
Operating
profit adjustments:
|
|
|
|
Impairment
loss on financial assets
|
-
|
88
|
|
Other
impairment charges
|
4
|
226
|
|
Other
operating exceptional items
|
25
|
(4)
|
|
Depreciation
and amortisation
|
98
|
110
|
|
|
_____
|
_____
|
|
|
127
|
420
|
|
|
|
|
|
Contract
assets deduction in revenue
|
35
|
25
|
|
Share-based
payments cost
|
28
|
21
|
|
Share
of losses of associates and joint ventures
|
8
|
14
|
|
|
_____
|
_____
|
|
|
71
|
60
|
|
|
|
|
|
System
Fund adjustments:
|
|
|
|
Depreciation
and amortisation
|
94
|
62
|
|
Impairment
(reversal)/loss on financial assets
|
(6)
|
24
|
|
Other
impairment (reversals)/charges
|
(3)
|
41
|
|
Other
operating exceptional items
|
-
|
20
|
|
Share-based
payments cost
|
13
|
11
|
|
Share
of losses of associates
|
2
|
1
|
|
|
_____
|
_____
|
|
|
100
|
159
|
|
|
|
|
|
Working
capital and other adjustments:
|
|
|
|
Increase
in deferred revenue
|
39
|
1
|
|
Changes
in working capital
|
79
|
(30)
|
|
Other
adjustments
|
(8)
|
2
|
|
|
_____
|
_____
|
|
|
110
|
(27)
|
|
|
|
|
|
Cash
flows relating to exceptional items
|
(12)
|
(87)
|
|
Contract
acquisition costs, net of repayments
|
(42)
|
(64)
|
|
|
_____
|
_____
|
Total
adjustments
|
583
|
568
|
|
_____
|
_____
|
Cash flow from operations
|
848
|
308
|
|
_____
|
_____
|
10.
|
Net debt
|
|
|
2021
|
2020
|
|
|
$m
|
$m
|
|
|
|
|
|
Cash and cash equivalents
|
1,450
|
1,675
|
|
Loans and other borrowings - current
|
(292)
|
(869)
|
|
Loans and other borrowings - non-current
|
(2,553)
|
(2,898)
|
|
Lease liabilities - current
|
(35)
|
(34)
|
|
Lease liabilities - non-current
|
(384)
|
(416)
|
|
Derivative financial instruments hedging debt values
|
(67)
|
13
|
|
|
_____
|
_____
|
|
Net debt*
|
(1,881)
|
(2,529)
|
|
|
_____
|
_____
|
|
* See the
Use of Non-GAAP measures section.
|
|
In the Group statement of cash flows, cash and cash equivalents is
presented net of $59m bank overdrafts (31 December 2020:
$51m).
|
|
Cash and cash equivalents includes $9m (31 December 2020: $5m)
restricted for use on capital expenditure under hotel lease
agreements and therefore not available for wider use by the Group.
An additional $77m (31 December 2020: $44m) is held within
countries from which funds are not currently able to be repatriated
to the Group's central treasury company.
|
|
Syndicated and Bilateral Facilities
The Group's $1,275m revolving syndicated bank facility and $75m
revolving bilateral facility were both undrawn at 31 December 2021
and 31 December 2020.
The following table details performance against the Group's
covenant tests, which were waived until 31 December 2021 and have
been relaxed for test dates in 2022. The measures used in these
tests are calculated on a frozen GAAP basis and do not align to the
values reported by the Group as Non-GAAP measures:
|
|
|
2021
|
2020
|
|
|
|
|
|
Covenant EBITDA ($m)
|
601
|
272
|
|
Covenant net debt ($m)
|
1,801
|
2,375
|
|
Covenant interest payable ($m)
|
133
|
111
|
|
Leverage
|
3.00
|
8.73
|
|
Interest cover
|
4.52
|
2.45
|
|
Liquidity ($m)
|
2,655
|
2,925
|
11.
|
Movement in net debt
|
|
|
2021
|
2020
|
|
|
$m
|
$m
|
|
|
|
|
|
Net (decrease)/increase in cash and cash equivalents, net of
overdrafts
|
(236)
|
1,430
|
|
Add back financing cash flows in respect of other components of net
debt:
|
|
|
|
|
Principal element of lease payments
|
32
|
65
|
|
|
Issue of long-term bonds, including effect of currency
swaps
|
-
|
(1,093)
|
|
|
Repayment/(issue) of commercial paper
|
828
|
(738)
|
|
|
Repayment of long-term bonds
|
-
|
290
|
|
|
Decrease in other borrowings
|
-
|
125
|
|
|
|
_____
|
_____
|
|
|
|
860
|
(1,351)
|
|
|
_____
|
_____
|
|
Decrease in net debt arising from cash flows
|
624
|
79
|
|
|
|
|
|
Other movements:
|
|
|
|
|
Lease liabilities
|
(7)
|
144
|
|
|
Increase in accrued interest
|
(1)
|
(5)
|
|
|
Disposals
|
3
|
19
|
|
|
Exchange and other adjustments
|
29
|
(101)
|
|
|
_____
|
_____
|
|
|
24
|
57
|
|
|
_____
|
_____
|
|
Decrease in net debt
|
648
|
136
|
|
|
|
|
|
Net debt at beginning of the year
|
(2,529)
|
(2,665)
|
|
|
_____
|
_____
|
|
Net debt at end of the year
|
(1,881)
|
(2,529)
|
|
|
_____
|
_____
|
12.
|
Assets and liabilities sold
|
|
Three hotels in the Americas region have been sold in 2021. Total
cash consideration of $46m was received with no gain or loss
arising after charging disposal costs. Net assets of $44m disposed
comprised $45m property, plant and equipment and $2m right-of-use
assets, less $3m lease liabilities. The net cash inflow arising was
$44m.
In 2020, the Group sold one hotel in EMEAA, the Holiday Inn
Melbourne Airport. Total consideration of $2m was received with a
total gain, net of disposal costs, of $3m. The gain was included in
other operating income in the Group income statement.
|
|
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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.
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InterContinental Hotels Group PLC
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(Registrant)
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By:
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/s/ F. Cuttell
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Name:
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F.
CUTTELL
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Title:
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ASSISTANT
COMPANY SECRETARY
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Date:
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22 February
2022
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