Fixed Income Investor Presentation August 2016

Transcription

1 InterContinental O2, London Fixed Income Investor Presentation August 2016

2 Table of contents 1. Introduction to IHG p3 2. Our Strategy p7 3. Financial Performance p13 DISCLAIMER RECIPIENTS ATTENTION IS DRAWN TO THE DISCLAIMER ON SLIDE 19 OF THIS PRESENTATION 2

3 Holiday Inn, Sanya Bay, China Holiday Inn Express, Yancheng China Introduction to IHG 3

4 IHG has a significant scale operation One of the world s largest hotel companies by number of rooms 5,070 open hotels 749,721 open rooms 1,407 pipeline hotels 222,233 pipeline rooms 13% share of active industry pipeline, ~3x current supply share 10 priority markets represent 87% of the IHG system and 90% of the pipeline > 350,000 people Operating in ~100 countries globally $24bn gross revenues (2015) $1.6bn system funds (2015) 4 * Source: IHG website, numbers as at 30 June 2016 unless otherwise stated 4

5 Most pure play, asset light global hotel company - highest quality of earnings Highest quality revenue stream >95% of profits from fee business following disposal of InterContinental Hong Kong ~85% of IHG s fee revenues linked to hotel revenues ~15% linked to hotel profits IHG benefits from industry upside, but more resilient in a downturn Franchised Managed Owned & Leased 6% <1% <1% 24% 28% 51% 49% 69% 71% H Operating Profit* H Open Rooms H Pipeline Rooms * 2016 HY operating profit before regional and central overheads and excluding individually significant liquidated damages 5

6 Global business with a presence in nearly 100 countries; concentrated in the US and China June 2016 closing room count (k) June 2016 closing pipeline rooms (k) 482k (64%) 87k (12%) 73k (10%) 107k (14%) 99k (45%) 62k (28%) 37k (17%) 23k (11%) Greater China AMEA Europe Americas 6

7 InterContinental Hotel, Double Bay, Sydney Our Strategy 7

8 Clearly defined and consistently executed strategy has driven market out-performance Rooms growth % ( CAGR) Room revenue growth % ( CAGR) Industry 2 IHG Industry 2 IHG Fee revenues 1 ($bn) Return on Capital Employed 3 (%) +8% CAGR Group revenues excluding owned and leased hotels, managed leases, and significant liquidated damages. 2 Source: Smith Travel Research. 3 ROCE calculation = NOPAT / (total equity + net debt). 8

9 IHG s strategy for high quality growth Value creation: superior shareholder returns Value creation: Superior shareholder returns Winning Model Targeted Portfolio Attractive markets Highest opportunity segments Managed & franchised model Disciplined execution - Scale and efficiency of operations - Investment in developing great talent and technology platforms - Commitment to responsible business practices 9

10 We have created, and continue to evolve, our portfolio of leading brands InterContinental Hotels & Resorts World s largest luxury hotel brand Presence in 60+ countries 183 open hotels; 57 in the pipeline Largest global boutique business: Hotel Indigo Pipeline set to double brand s footprint Kimpton Hotels & Restaurants 2015: Record signings & openings 2016: 2 signings outside the Americas (Amsterdam and Paris) Holiday Inn Brand Family World s largest hotel brand 10%+ CAGR in signings since 2011 Platform for innovation and expansion New brand momentum HUALUXE Hotels & Resorts 3 openings in 2015, 1 signing in H with more planned in H2 21 pipeline hotels EVEN Hotels 4 th opening in July EVEN Brooklyn 7 further pipeline hotels all asset light 10

11 IHG is focused on the hotel markets where 80% of room revenue growth is forecast IHG s priority markets: forecast share of hotel industry rooms revenue growth to % Canada UK 4% 4% Germany+ 2 3% Russia / CIS United States 25% Middle East 7% Greater China 24% India 5% 3% Mexico 3% Indonesia IHG Priority markets = >$140bn forecast industry rooms revenue growth by 2025 = 80% of forecast global growth = 87% of IHG open rooms; 90% of IHG pipeline rooms 1 Sources: Smith Travel Research, Oxford Economics, McKinsey and IHG estimates. 2 Includes Germany, Austria and Switzerland. 11

12 IHG s focused approach has driven an acceleration in room openings and signings Material step up in openings and signings in the last two years Accelerating growth with a focus on quality (nearly 150k rooms removed in 6 years) 13% of active industry pipeline; ~3x current supply share IHG annual gross room openings (k) 1 IHG annual room signings (k) % CAGR % CAGR Excludes InterContinental Alliance Resorts (2010: 7k room signings, 2011: 7k room openings) and previously highlighted significant tranches of US Army base rooms (2011: 5k room signings, 4k room openings, 2013: 4k room signings, 4k room openings). 13

13 Hotel Monaco, a Kimpton Hotel, Philadelphia Financial Performance 13

14 Resilient fee-based business model RevPAR X Rooms X Royalty Rate H fee revenue 1 $673m up 5% 2 H Group RevPAR growth H system growth (%YoY) 1.4% 2.0% 6.3% 3.6% 0.4%pts ADR Occupancy RevPAR Gross Net H1 2016: 1.1% Total RevPAR growth H1 2016: 17k rooms opened, 12k rooms removed 1 Fee revenue excludes revenue from owned and leased hotels, managed lease hotels, and significant liquidated damages receipts ² Growth stated at CER. 14

15 H1 trading update confident in the outlook for 2016 Solid H1 performance 2.0% RevPAR growth globally with Q2 growth at 2.5% 17k rooms opened; 3.6% net system growth year on year 35k rooms signed, taking pipeline to 222k rooms Enhancing portfolio of preferred brands 9 new signings for InterContinental Hotels & Resorts Over 100 Holiday Inn Brand Family signings in US alone First European Kimpton signings in Amsterdam & Paris Driving direct revenues Rolling out Your Rate by IHG Rewards Club globally New Guest Reservation System on target for 2017 roll-out 15

16 Scale drives strong, sustained margin progression Fee margin growth (125bps p.a. since 2004) Scale and efficiency benefits balanced with investment High marginal profit with each new opening Fee-based margin (%) Fee-based EBIT ($M) +14%pts 46.3% +10% CAGR % $6m 205 $3m $1m bps fee-based margin growth in H

17 Highly cash generative business driven by fee-based operating model Consistently strong cash flows driving shareholder returns 1/3 from FCF & leverage 11% CAGR in ordinary dividend Interim dividend of 30.0, up 9.1% Shareholder returns ($m) 12,055 7,844 4,211 Asset disposals FCF and leverage Total Ordinary dividend progression ( ) Efficient balance sheet with investment grade credit rating 2.0 to 2.5x net debt / EBITDA Towards top end in favourable economic conditions 2.3x at 30 June 2016 Final Interim %

18 InterContinental O2, London Fixed Income Investor Presentation August 2016

19 Disclaimer This presentation has been prepared by InterContinental Hotels Group PLC (the Company ) solely for information purposes. No reliance may be placed for any purposes whatsoever on the information contained in this presentation or on its completeness, accuracy or fairness. No representation or warranty, expressed or implied, is given by or on behalf of the Company or any of its directors, officers or employees or any other person as to the accuracy of the information or opinions contained in this presentation and no liability whatsoever is accepted by the Company or any of its directors, officers or employees or any other person for any loss howsoever arising, directly or indirectly, from any use of such information or opinions or otherwise arising in connection therewith. This presentation does not constitute or form part of and should not be construed as an offer or recommendation to buy or acquire or otherwise deal in any securities of the Company in any jurisdiction or an inducement to enter into investment activity in any jurisdiction. Neither this presentation nor any part thereof, shall form the basis of or be relied upon in connection with any contract or commitment or investment decision whatsoever. Investors and prospective investors in securities issued by the Company are required to make their own independent investigation and appraisal of the business and financial condition of the Company and its subsidiaries and to seek independent financial, tax and legal advice. This presentation is being directed in the United Kingdom only to persons who have professional experience in matters relating to investments falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 and to persons to whom it may otherwise be lawful to communicate it to (all such persons being referred to as relevant persons ). This presentation is only directed at relevant persons and any investment or investment activity to which the presentation relates is only available to relevant persons or will be engaged in only with relevant persons. Solicitations resulting from this presentation will only be responded to if the person concerned is a relevant person. Other persons including without limitation any retail clients should not rely or act upon this presentation or any of its contents. This presentation is not directed to, or intended for distribution to or use by, any person or entity that is a citizen or resident or located in any locality, state, country or other jurisdiction where such distribution or use would be contrary to law or regulation or which would require any registration or licensing within such jurisdiction. In particular, this presentation does not constitute and should not be construed as an offer to sell or the solicitation of an offer to buy securities in the United States or to any U.S. person, as defined in Regulation S under the U.S. Securities Act of 1933, as amended (the Securities Act ). No securities of the Company have been or will be registered under the Securities Act or the securities laws of any state of the United States or Australia, Canada or Japan. The Company is not registered under the U.S. Investment Company Act of This presentation may contain projections and forward looking statements. The words believe, expect, anticipate, intend and plan and similar expressions identify forward-looking statements. All statements other than statements of historical facts included in this presentation, including, without limitation, those regarding the Company s financial position, potential business strategy, potential plans and potential objectives, are forward-looking statements. Such forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the Company s actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Such forward-looking statements are based on numerous assumptions regarding the Company s present and future business strategies and the environment in which the Company will operate in the future. Further, certain forward-looking statements are based upon assumptions of future events which may not prove to be accurate. The forward-looking statements in this document speak only as at the date of this presentation and the Company assumes no obligation to update or provide any additional information in relation to such forward-looking statements. 19