InterContinental Hotels
Group PLC
Full Year Results to 31
December 2023
20 February
2024
|
2023
|
20221
|
% change
|
|
Underlying2 %
change
|
REPORTABLE SEGMENTS2:
|
|
|
|
|
|
Revenue2
|
$2,164m
|
$1,843m
|
+17%
|
|
+19%
|
Revenue from fee
business2
|
$1,672m
|
$1,434m
|
+17%
|
|
+17%
|
Operating profit2
|
$1,019m
|
$828m
|
+23%
|
|
+25%
|
Fee margin2
|
59.3%
|
55.9%
|
+3.4%pts
|
|
|
Adjusted EPS2
|
375.7¢
|
282.3¢
|
+33%
|
|
|
GROUP RESULTS:
|
|
|
|
|
|
Total revenue
|
$4,624m
|
$3,892m
|
+19%
|
|
|
Operating profit
|
$1,066m
|
$628m
|
+70%
|
|
|
Basic EPS
|
443.8¢
|
207.2¢
|
+114%
|
|
|
Total dividend per share
|
152.3¢
|
138.4¢
|
+10%
|
|
|
Net
debt2
|
$2,272m
|
$1,851m
|
+23%
|
|
|
1.
Re-presented for the adoption of IFRS 17
'Insurance Contracts' (see note 1 to the Financial
Statements).
2.
Definitions for non-GAAP measures can be found in
the 'Use of key performance measures and non-GAAP measures'
section, along with reconciliations of these measures to the most
directly comparable line items within the Financial
Statements.
Trading and revenue
· Strong trading: global RevPAR2 up +16.1% YoY (Q4
+7.6%); global RevPAR up +10.9% vs 2019 (Q4 +12.7%)
· Americas FY RevPAR up +7.0% YoY (Q4 +1.5%), EMEAA +23.7% (Q4
+7.0%) and Greater China +71.7% (Q4 +72.0%), reflecting the
differing levels of travel restrictions that were still in place in
2022
· Average daily rate up +5% vs 2022, +13% vs 2019; occupancy up
+6%pts vs 2022, just (1)%pt lower vs 2019
· Total gross revenue2 of $31.6bn, +23% vs 2022,
+13% vs 2019
System size and pipeline
· Gross system growth +5.3%; net system size growth of
+3.8%
· Opened 47.9k rooms (275 hotels),
+16% YoY (ex. Iberostar); global estate
946k rooms (6,363 hotels)
· Signed 79.2k rooms (556 hotels), +26% YoY (ex. Iberostar); global
pipeline 297k rooms (2,016 hotels), +5.5% YoY
· Q4
opened 19.2k rooms (117 hotels) and signed 28.3k rooms (194
hotels), one of the highest quarters on record
Margin and profit
· Fee
margin2 of 59.3%, up +3.4%pts driven by trading recovery
in EMEAA and Greater China
· Operating profit from reportable segments2 of
$1,019m, up +23%; this included $13m adverse currency
impact
· Reported operating profit of $1,066m, including a profit of
$19m from System Fund and reimbursables (2022: loss of $105m) and a
$28m exceptional profit (2022: $95m net exceptional
charges)
Cash flow and net debt
· Net
cash from operating activities of $893m (2022: $646m), with
adjusted free cash flow2 of $819m (2022: $565m), the
latter representing 129% conversion of adjusted
earnings2 (2022: 111%)
· Net
debt increase of $421m reflects the strong adjusted free cash flow,
$1.0bn of shareholder returns and a $105m net foreign exchange
adverse impact
· Adjusted EBITDA2 of $1,086m, +21% vs 2022; net
debt:adjusted EBITDA ratio of 2.1x
Shareholder returns
· Completion of 2023's $750m share buyback programme, and
payment of $245m in ordinary dividends
· Final dividend of 104.0¢ proposed, +10% vs 2022, resulting in
a total dividend for the year of 152.3¢
· New
$800m buyback programme launched, which together with ordinary
dividends is expected to return over $1bn to shareholders in
2024
Clear framework to drive future value creation over the
medium to long term
· High
single digit percentage growth in fee revenue, though combination
of RevPAR and system size growth, together with 100‑150bps fee
margin expansion, annually on average over the medium to long
term
· 100%
conversion of adjusted earnings into adjusted free cash flow,
supporting investment in the business to optimise growth,
sustainably growing the ordinary dividend and returning surplus
capital
· 12-15% adjusted EPS compound annual growth rate, including
the assumption of ongoing share buybacks
Elie Maalouf, Chief Executive Officer, IHG Hotels &
Resorts, said:
"I was honoured to take over as
IHG's group CEO in July and would like to thank our teams for
delivering an excellent set of results. Travel demand was strong
across all markets, with RevPAR up 16% on last year and 11% ahead
of the 2019 pre-pandemic peak. Combined with the power of our
enterprise and efficient operating model, profit from reportable
segments grew 23% and exceeded one billion dollars for the first
time, and adjusted EPS grew 33%. Today we are announcing a further
$800m share buyback programme, which together with ordinary
dividends is expected to return over $1bn to shareholders in
2024.
Alongside strong trading and
financial performances, we continued to grow our portfolio and the
global footprint of our brands. We opened 275 hotels in 2023 and
signed more than double that amount - 556 hotels - into our
pipeline. Adjusting for the effect of the Iberostar hotels joining
IHG's system, openings for the fourth quarter grew by 27%
year‑on‑year and signings were up by 50%, representing one of our
biggest ever quarters for development activity.
As we look ahead, our evolved
strategic priorities and clear plans will further reinforce IHG
Hotels & Resorts as the hotel company of choice for guests and
owners. The travel industry has attractive, long-term drivers of
demand, and the strength of our brand portfolio and enterprise
platform will continue to boost our RevPAR and system size growth.
Combined with our scale and cost base efficiencies, this will
further expand fee margin. IHG's strong cash generation supports
investment in growth initiatives, sustainably increasing our
ordinary dividend and the regular return of surplus capital such as
through buybacks. We look forward to an important next chapter of
growth for IHG that creates long-term sustainable value for our
shareholders and benefits our employees, hotel owners and
communities."
For further information,
please contact:
Investor
Relations: Stuart
Ford (+44 (0)7823 828 739); Aleksandar Milenkovic (+44 (0)7469 905
720);
Joe Simpson (+44 (0)7976 862 072)
Media Relations:
Neil
Maidment (+44 (0)7970 668 250); Mike Ward (+44 (0)7795 257
407)
Presentations for analysts and institutional
shareholders:
Covering IHG's 2023 results, a
pre-recorded webcast presented by Elie Maalouf, Chief Executive
Officer, and Michael Glover, Chief Financial Officer, will be
available from 7:00am (London time) today, 20 February 2024, and
can be accessed at www.ihgplc.com/en/investors/results-and-presentations.
Covering IHG's update on
strategic priorities, a live webcast, together with a Q&A
session, will be hosted later today at 1:30pm (London time). Elie
Maalouf and Michael Glover will present along with other senior
management colleagues, and the event can be accessed directly
on https://limecrane.com/reg/ihg/ir/
or via www.ihgplc.com/en/investors/results-and-presentations.
The content of this full year results announcement contains all
material background information to IHG's update on strategic
priorities, with no further announcement to be
released.
Analysts and institutional
investors wishing to ask questions should use the following dial-in
details for a Q&A facility:
UK toll-free: 0800 048 7798. US
toll-free: 800 579 2543. Other international: (+1) 785 424 1789.
Conference ID: IHG.
An archived replay of the update
on strategic priorities is expected to be available within 24 hours
and will remain available, accessed at www.ihgplc.com/en/investors/results-and-presentations.
Website:
The full release and supplementary
data will be available on our website from 7:00am (London time) on
20 February 2024. 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 19 hotel brands
and IHG One
Rewards, one of the world's
largest hotel loyalty programmes, IHG has over 6,300 open hotels in
more than 100 countries, and a development pipeline of over 2,000
properties.
- 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 Express,
Holiday
Inn Hotels & Resorts, Garner
hotels,
avid
hotels
-
Suites: Atwell
Suites,
Staybridge
Suites,
Holiday Inn Club Vacations, Candlewood
Suites
-
Exclusive Partners: Iberostar
Beachfront Resorts
InterContinental Hotels Group PLC
is the Group's holding company and is incorporated and registered
in England and Wales. Approximately 345,000 people work across
IHG's hotels and corporate offices globally.
Visit us online for more about
our hotels and reservations
and IHG One
Rewards. To download the IHG One Rewards app, visit the
Apple App or
Google Play stores.
For our latest news, visit
our Newsroom
and follow us on LinkedIn.
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.
Summary of system size and pipeline progress in
2023
Openings and signings progress in
2023 reflects IHG's strong portfolio of brands and the overall
enterprise platform that we provide to hotel owners, together with
the long-term attractiveness of the markets we operate
in:
·
Global system of 946k rooms (6,363 hotels) at 31
December 2023, weighted 66% across midscale segments and 34% across
upscale and luxury
·
Gross growth +5.3%, with 47.9k rooms (275 hotels)
opened which represents an increase of +16% on the prior year when
adjusting to exclude Iberostar hotels added to IHG's system; on the
same basis, Q4 was a +27% increase on the prior year with 19.2k
rooms (117 hotels) opened
·
Removal of 13.3k rooms (76 hotels), a removal
rate of -1.5%, in line with the historical underlying average
rate
·
Net system size growth +3.8%, or +3.2% excluding
Iberostar openings in 2023
·
Signed 79.2k rooms (556 hotels), +26% more than
prior year when excluding Iberostar; on the same basis, Q4 was a
+50% increase on the prior year with 28.3k rooms (194 hotels)
signed
·
Signings mix drives pipeline to be weighted 52%
across midscale segments and 48% across upscale and luxury, which
over the coming years will drive a more balanced system mix and fee
stream
·
Conversions growing strongly, representing 39% of
openings and 36% of signings (excluding Iberostar for both);
conversion signings rose to 191 hotels in 2023 (2022: 96) and
new-build signings rose to 359 (2022: 323)
·
Global pipeline of 297k rooms (2,016 hotels),
representing 31% of current system size and growth of
+5.5%
·
More than 40% of the global pipeline is under
construction, broadly in line with prior years
System and pipeline summary
of movements in 2023 and total closing position
(rooms):
|
System
|
Pipeline
|
Openings
|
Removals
|
Net
|
Total
|
YoY%
|
Signings
|
Total
|
Group
|
47,919
|
(13,343)
|
34,576
|
946,203
|
+3.8%
|
79,220
|
296,954
|
Americas
|
10,405
|
(6,307)
|
4,098
|
519,594
|
+0.8%
|
28,297
|
109,164
|
EMEAA
|
21,174
|
(3,571)
|
17,603
|
247,267
|
+7.7%
|
24,787
|
82,226
|
Greater
China
|
16,340
|
(3,465)
|
12,875
|
179,342
|
+7.7%
|
26,136
|
105,564
|
The regional performance reviews
provide further detail of the system and pipeline by region, and
further analysis by brand and by ownership type.
Update on strategic priorities
To further strengthen our ability
to drive future growth, in 2023 we evolved key elements of our
strategy, including our ambition, strategic pillars and growth
behaviours.
These changes build on the
investments we have made in recent years, where we have expanded
our portfolio from 11 to 19 brands and significantly
strengthened our enterprise. This includes the relaunched
IHG One Rewards loyalty
programme, refreshed masterbrand, new partnerships and an enhanced
web and mobile offer, as well as embarking on our Journey to Tomorrow to invest in our
people, deliver more sustainable hotels and bring positive change
in our communities.
Our purpose of True Hospitality
for Good remains at the heart of our brands and culture and is
therefore unchanged, but our ambition as an organisation has been
simplified to focus on what is central to accelerating growth:
being the hotel company of choice for guests and owners. We have
evolved the four pillars to execute against our
strategy:
· Relentless Focus on
Growth, instils a targeted approach
to expanding our brands in high-value and growth
markets;
· Brands Guests and
Owners Love, shows our explicit
intention to deliver for both groups, every time;
· Leading Commercial
Engine, recognises the importance
of investing in the technology and tools that drive commercial
success and make the biggest difference to guests, owners and hotel
teams; and
· Care for our People,
Communities and Planet, which
remains in step with our 2030 Journey to Tomorrow
targets.
Together, our strategic pillars
have been designed to push the limits of what we've built, driving
us further and faster towards realising our potential in a
sustainable and responsible way. Over the long term, with
disciplined execution, our strategy creates value for all our
stakeholders and delivers growth in cash flows and profits, which
can be reinvested in our business and returned to shareholders, and
reflects how IHG delivers on our growth algorithm and investment
case.
Strategic and operational highlights for
2023
Relentless focus on growth
·
New midscale
conversion brand launched. Our new
Garner brand became franchise-ready in the US in September 2023,
and rapidly achieved its first seven signings and two openings by
the end of the year. We have also quickly expanded the brand to
other markets, where it is ready for development in Mexico from
February 2024 and with initial agreements already reached for
conversions expected this year in Japan. IHG expects the growth
potential of Garner to reach more than 500 hotels over the next 10
years and 1,000 hotels over the next 20 years.
·
Other newer
brands progressing well. The seven
other brands launched or acquired over more recent years (Regent,
Six Senses, Kimpton, Vignette Collection, voco, avid and Atwell
Suites) are now 5% of the system size but 16% of the pipeline.
There were 141 hotels signed across these seven brands in 2023,
compared to 78 in the prior year. We continue to evaluate where
through the introduction of our existing brands to new markets and
the addition of new brands to our portfolio we could accelerate
IHG's growth.
·
Our established
brands continue to grow. Each of
InterContinental, Hotel Indigo, Hualuxe, Crowne Plaza, EVEN,
Holiday Inn, Holiday Inn Express, Staybridge Suites and Candlewood
Suites have pipelines representing at least 20% of current system
size. Our commitment to continuous investment to keep all our
brands modern and relevant was reflected in the year with
initiatives such as the launch of our global brand evolution for
InterContinental Hotels & Resorts, new marketing campaigns and
innovative format developments. For example, these include changes
to the build types for EVEN that significantly lower the cost per
key, and more flexible formats for our suites brands.
·
Conversions
reaching record levels. Hotel
signings in 2023 included nearly 200 in total that were conversions
to IHG brands, double the number in 2022, and there were more than
100 conversion properties opened in the year. Together, conversions
therefore represented 37% of combined signings and openings
activity in 2023.
·
Luxury &
Lifestyle growing particularly fast. The six IHG brands in this higher fee per key segment have
grown to represent 14% of IHG's system size (509 properties, 129k
rooms) and 22% of our pipeline (357 properties, 65k rooms) which is
around twice the size from five years earlier. Luxury &
Lifestyle accounted for 23% of signings in the year, and signings
grew by 33% year-on-year. One in two Luxury & Lifestyle
development deals now include a branded residences component, which
will further accelerate system growth and fee income.
·
Further
international expansion. We are
already present in over 100 countries and capitalising on that in
2023 there were 31 hotel openings that represented a debut in a new
country for a particular IHG brand. We are also expanding our
presence in some of the most rapidly growing markets such as India
with 46 open and 49 pipeline hotels, Saudi Arabia with 43 open and
39 pipeline hotels, and Greater China which recently celebrated the
achievement of exceeding 700 open hotels and with 500 more in the
pipeline. In the Americas region, having strengthened our
development capacity that serves Canada, Mexico, Latin America and
the Caribbean, there were 51 hotel signings across these markets
which represented 20% of the overall signings for the Americas
region and which was more than double the 21 signings in these
markets in the prior year (excluding Iberostar).
·
Capturing demand
across stay occasions. Reflecting
the different stages of recovery post-pandemic, by the fourth
quarter of 2023 our global revenue performance was ahead of 2019
levels for all three types of stay occasions. For the full year of
2023, Leisure revenue was ahead of 2019 by +33% (+13% room nights,
+17% rate); Business was ahead by +3% (-2% room nights, +5% rate)
and although Groups was still -5% lower (-7% room nights, +3% rate)
it turned positive for the final quarter and Groups revenue
on-the-books was +17% higher year-on-year. Supporting the outlook
for further RevPAR progress, total global revenue on‑the-books at 1
January 2024 was +16% higher than at the same point a year
earlier.
Brands guests and owners love
·
Driving overall
guest satisfaction. Global 'Guest
Love' scores trended up further in 2023, and Guest Satisfaction
Index (GSI), which measures our outperformance against peers,
continued to maintain a four-year high. Our support to strengthen
the quality and consistency of every stage and element of the guest
experience is paramount to succeeding in preferred customer choice
and strong owner returns.
·
Brand resonance
campaigns. Our masterbrand strategy
is putting IHG Hotels & Resorts in more places more often,
which is lifting awareness and brand favourability measures. The
'Guest How You Guest' global marketing campaign extended its reach
across markets, channels and events to increase IHG's appeal with
key demographics. We supported this with targeted regional
promotions and individual brand marketing campaigns, including new
global campaigns for Holiday Inn Express, InterContinental and our
largest ever for Hotel Indigo.
·
Further updates
to brands. These included rolling
out programmes for a vibrant new service culture for
InterContinental to drive its performance and growth, an upgraded
breakfast service for Holiday Inn in the US and Canada with
streamlined labour costs, and also an improved breakfast offering
and fresh design for Holiday Inn Express in Greater China to
further accelerate its growth in the region.
·
Constant pursuit
of owner cost savings across design & build, operate and
renovate. Latest format evolutions
in 2023 such as avid/Candlewood Suites dual branding have reduced
cost per key by a further 7‑9%. In-room design standardisation for
Holiday Inn and Holiday Inn Express in Greater China is achieving
savings of 13-18%. Our F&B purchasing programmes cover over
4,000 hotels with a further 323 joining in 2023, and have driven
savings of up to 15%. Our Group Purchasing Organization agreements
now cover over 100,000 items, and broader Hotel Purchasing Services
are in place in 6 markets. These provide end-to-end support to
speed up openings and renovations, and achieve savings of up to 30%
across various goods and services categories and continue to expand
into new areas such as freight and logistics.
Leading commercial engine
·
Growing the
enterprise contribution delivered for owners.
The percentage of room revenue booked through
IHG-managed channels and sources has reached almost 80%, up from
72% three years earlier. It is a key indicator of value-add, the
success of our commercial engine across technology platforms, and
of our sales and distribution channels. Providing our hotel owners
higher-value revenue at a lower cost of acquisition is of paramount
importance to the attractiveness and proven success of our
enterprise system.
·
Loyalty
participation going from strength to strength.
IHG One Rewards has grown to over 130 million
members. Following its transformation midway through the prior
year, 2023 was a record year for enrolments, up 50% YoY and up 24%
on 2019 levels. Reward Nights were also up by around 20% YoY and
40% on 2019 levels, demonstrating strong member engagement and
driving increased returns for owners particularly through Reward
Night dynamic pricing which helps increase demand in lower
occupancy periods. Loyalty penetration has increased with members
now responsible for over 55% of room nights globally in 2023.
Loyalty members spend approximately 20% more in hotels than
non-members, and are around ten times more likely to book direct.
IHG One Rewards received seven Freddie Awards in 2023, the most
prestigious member-generated awards in the travel loyalty industry,
reflecting an exceptional year of further progress.
·
Co-brand credit
cards driving further loyalty contribution and
revenue. Following the update of US
card products alongside the relaunch of the loyalty programme, new
account activations have continued to increase very strongly and in
2023 were up 60%+ year-on-year and 80%+ on 2019 levels. We have
also achieved continued double-digit percentage growth in average
card spend, both on a year-on-year basis and versus
2019.
·
Digital channels
leading the way. By the end of
2023, we had redesigned and relaunched brand websites covering 92%
of open hotels. The IHG mobile app and other mobile channels now
account for 58% of all digital bookings, and the rapid growth
across IHG's direct digital booking channels means these are now
generating 25% of total room revenue across the whole enterprise
system. The app saw the number of downloads increase 60% YoY and
revenue increase 38%. In Greater China, updates to the IHG WeChat
channel contributed to an 8% increase in conversion rates
year-on-year and the channel generated nearly twice as much
revenue.
·
IHG's Guest
Reservation System (GRS) maximising choice and value.
The up-sell of unique room attributes such as
room size and views was made available in over 6,000 hotels during
the year. Guests that select an up-sell in our digital booking
channels drive an average nightly room revenue increase of $18
across our Essentials and Suites brands and $40 for Luxury &
Lifestyle. Our GRS capabilities also enable more effective
cross-sell of guest‑stay extras such as F&B credits, lounge
access, additional in-room welcome amenities and parking, as part
of the redesigned booking flow. For hotels that have this live,
conversion rates are around 2% of eligible guests, with incremental
revenue per booking averaging $31 for Essentials and Suites brands
and $90 for Luxury & Lifestyle.
·
New Revenue
Management System (RMS) to drive further improvements in owner
returns. Continuing our focus on
providing best-in-class platforms, IHG's RMS employs a new
cloud-based platform that incorporates leading data science and
forecasting tools to deliver advanced insights and recommendations
to owners as part of our enhanced revenue management services.
Already in pilot, the rollout is targeting approximately 4,000
hotels in 2024 and the balance of hotels in 2025. In a further
important platform development, work will also begin this year on
our next‑generation Property Management System (PMS) to create even
greater value for owners, where a single cloud‑based view across
properties will enable the deployment of fast, efficient
enhancements.
·
Further
technology enhancements leveraging IHG's scale and skills for both
guests and owners. Artificial
intelligence (AI) is providing a more intuitive guest experience
for our Digital Concierge 'chatbot' service. With the growth in AI
capabilities and IHG's scale investment, we have already increased
end-to-end AI‑led customer self‑service by 53% in 2023 compared to
a year earlier, with the potential for this to continue growing
which will drive additional cost efficiency and effectiveness for
our owners, as well as further increases in guest
satisfaction.
·
Leveraging our
commercial engine through partnerships. As we continue to integrate the Iberostar Beachfront Resorts
brand and properties into our systems, this is strengthening our
all-inclusive resort offer, as well as leveraging the scale of the
loyalty programme and IHG's leading technology platforms and
distribution channel management. In 2023, we achieved the important
milestones of Iberostar properties becoming fully bookable on IHG
direct channels, and IHG One Rewards loyalty points being both
earned and redeemable at these properties. The integration progress
and its benefits are also laying the foundations for future
exclusive partnerships demonstrating the value of IHG's commercial
engine.
Care for our people, communities and planet
We champion a diverse culture where everyone can
thrive. In 2023 we launched IHG
University, a new gateway to build skills, advance career
development and champion best practice, and which has already
received multiple digital learning awards. Globally, 35% of our
leaders working at VP level and above are female, and we were
delighted that Forbes recognised IHG as one of the world's top
companies for women and are proud to be officially certified in the
US as a Great Place to Work for parents, as well as featuring in
the 100 Best Places to Work for Women. 22% of our leaders are
racially/ethnically diverse and represent 16 nationalities,
and IHG has been rated 2nd out of 850 companies on the
Financial Times Europe's Diversity Leaders 2024. Our employee
resource groups (ERGs) have grown significantly and now have more
than 4,000 members and allies across 29 chapters that promote
different workplace diversities. Reflecting our continued progress,
overall employee engagement in our 2023 survey stood at 87%, a +1%
improvement on the prior year, which once again saw IHG accredited
as a Kincentric Global Best Employer, and from the Inclusion Index
measures, nine out of 10 employees consider IHG to have an
inclusive culture.
·
Improving the
lives of 30 million people in our communities around the
world. This goal is part of our
10-year responsible business plan, and we focus on making a
positive impact through three areas: skills training, disaster
relief and tackling food poverty. In 2023, through IHG Academy,
more than 30,000 participants all around the world gained valuable
employment and life skills, as the programme rapidly grows to give
young people the benefit of work experience, internships,
apprenticeships and free online learning. IHG supported 15 relief
efforts in 2023, working with a range of humanitarian aid partners
around the world to assist in their critical relief and recovery
efforts. We expanded our work with more local foodshare
partnerships, our support of The Global FoodBanking Network covered
nearly 50 countries in 2023, and more than 39,000 colleagues
volunteered over 121,000 hours to support their local
communities.
·
Reducing our
energy use and carbon emissions. Our 2030 science-based target is a 46% absolute reduction
from the 2019 baseline year in our Scope 1 and 2 Greenhouse Gas
(GHG) emissions and material Scope 3 emission sources from our
franchised hotels energy consumption and Fuel and Energy Related
Activities (FERA). Whilst there was an increase year-on-year in
2023 due to the recovery in occupancy and growth in the size of the
estate, we continued to drive energy efficiency with a 3.8%
reduction in carbon emissions per occupied room from 2019 and a
1.9% absolute reduction against the baseline. Updates to our brand
standards are integrating more Energy Conservation Measures (ECMs)
into hotel requirements, such as new lighting controls,
occupancy-sensing thermostats and heat pumps. We continued to
expand the availability of a renewable energy solution for hotels
in a number of states in the US. Throughout the year we also
continued to develop a low carbon hotel programme, focused
primarily on operational carbon of new build hotels, to support
delivery of our carbon and energy goals. We expect to launch this
programme in 2024.
Outlook: attractive long-term growth
drivers
Hotel industry demand characteristics exhibit both structural
growth and resiliency
·
Industry revenue has outpaced global economic
growth in 19 out of 24 years between 2000 and 2023, with a CAGR of
+4.4% (versus +2.9% CAGR for GDP). Prior to the pandemic, there
were 10 consecutive years of industry revenue growth outperforming
global economic growth.
·
The industry has previously demonstrated relative
resilience during economic downturns, particularly in essential
business travel and in chainscales such as upper midscale, which is
where IHG has substantial presence. Through the pandemic, a
sustained level of essential travel was also shown, followed by a
rapid recovery.
·
Whilst geopolitical risks and the economic
outlook in some geographies show challenges and uncertainties,
current conditions, including employment, consumer savings and
business activity levels, remain supportive of industry
growth.
·
Research and consumer surveys indicate relative
resilience and prioritisation of travel from discretionary spending
and the ongoing strength of real disposal income and household
savings metrics. Business surveys indicate expectations for
increasing corporate travel budgets and a continued return to
pre-pandemic levels of travel activity, as well as the potential
for greater hotel use to support hybrid and flexible working
arrangements.
·
Reflecting the strength of current demand
recovery, global hotel room nights consumed are estimated by
Oxford Economics to have already returned back above 2019
levels in 2023. They forecast long-term growth at a CAGR of +4.0%
through to 2033. The US market alone is expected to increase by a
2.7% CAGR from 2.3 billion to 3.0 billion room nights over this
time period, and China to be faster at a +4.2% CAGR.
·
Near-term growth is also expected to capture a
number of tailwinds, including: the last stages of a full
post-pandemic recovery in a number of countries; further recovery
in occupancy levels for business travel and for groups, meetings
and events; the full restoration of international flight capacity;
and further potential for room rate increases driven by the
increase in demand, constrained net new supply in the short term,
and any ongoing inflation.
The need for additional hotel supply remains an enduring
industry characteristic
·
Global hotel room net new supply growth has been
at a CAGR of 2.4% over the 10 years from 2013 to 2023, and was 1.1%
in the US, according to STR. STR's recent forecasts for US industry
net supply growth are for this to improve from 0.3% in 2023 to 0.8%
in 2024, followed by growth of between 1.4% and 1.9% a year through
to 2027.
·
In the most recent years, Covid restrictions
challenged the ability to complete and open new build hotels.
Development activity for the industry also saw an impact from the
costs and availability of construction crews and materials,
followed by the macro-economic outlook and interest rate increases
affecting the availability and cost of real estate
financing.
·
Longer-term, and in addition to the industry's
RevPAR growth, following the normalisation of financing and
construction costs, further new hotel supply will still be needed
to satisfy the demands of growing populations and rising middle
classes, to drive business and commerce, and to satisfy the
inherent desire to travel to physically interact and for new
experiences.
·
Global leading hotel brands are expected to
continue their long-term trend of taking market share. In periods
when developers are adding less new supply, RevPAR growth from
existing room inventory is expected to be stronger and leading
branded players can also accelerate conversion opportunities to
progress their unit growth performance.
Outlook: IHG strongly positioned to drive growth and
shareholder value
IHG sees a continuation of its strong track record of driving
growth and shareholder value through our:
·
Asset light, fee-based, predominantly franchised
model, which has high barriers to entry in an industry that
provides long-term structural growth characteristics in both demand
(RevPAR) and new supply (system growth). Reflecting IHG's success
in capturing growth, ahead of the temporary disruption caused by
Covid, in the decade to 2019 IHG delivered:
o +3.9% average annual growth in RevPAR, and
o +3.2% average annual growth in net system size.
·
Chainscale and geographic diversification, with
exposure to a mix of large, resilient and high growth market
segments.
·
Well-invested portfolio that includes market
leading brands, and an enterprise platform through which our hotel
owners leverage IHG's scale, distribution channels, leading
technology and loyalty programme.
·
Existing system of over 6,300 hotels that will
grow fee income through long term, sustainable RevPAR
expansion.
·
Growing pipeline of over 2,000 further hotels
that will deliver multi-year growth in system size.
·
Efficient cost base, with a proven track record
of leveraging this to increase margins whilst investing
appropriately to support future growth, and benefiting from a model
where fee income is largely linked to hotel revenues. Reflecting
this, over the decade to 2019 IHG delivered:
o ~130bps average annual improvement in fee margin,
and
o +11.4% CAGR in Adjusted EPS.
·
Strong cash generation, from which to further
invest in our brands and enterprise platform to optimise growth,
fund a sustainably growing dividend and return surplus funds to
shareholders. Reflecting this, IHG has delivered:
o >100% conversion of adjusted earnings into adjusted free
cash flow,
o +11.0% CAGR in ordinary dividends through to 2019, and, after
resuming dividend payments at the end of 2021, a +10% CAGR
thereafter, and
o 5-6% of shares bought back in each of the last two years
through surplus capital being returned to shareholders via share
buyback programmes.
Building on this track record, in 2023 IHG
achieved:
·
RevPAR back ahead of 2019 levels and
substantially ahead of 2022, which was a lower base from the
residual Covid impact on trading in that year;
·
Net system size growth of +3.8%, which is above
the historical long-run average;
·
Underlying fee revenue1 growth of
+17.5% and underlying fee operating profit1 of
+24.6%;
·
Fee business cost base increased by +8.5%,
reflecting around 5% underlying inflation, together with a step-up
in cost investment supporting growth initiatives, including
Iberostar integration costs and the launch of Garner;
·
Fee margin1 expansion of +340bps
year-on-year to 59.3% (for 2019 we reported 54.1% prior to adoption
of IFRS17);
·
Operating profit from reportable
segments1 growth of +23% and adjusted EPS1 of
+33% year-on-year, which at $1,019m and 375.7¢ are up +18% and +24%
ahead of 2019, respectively;
·
129% conversion of adjusted earnings into
adjusted free cash flow; and
·
The return of $1.0bn to shareholders during the
year through ordinary dividend payments and the share buyback
programme, equivalent to 10% of IHG's $10.0bn (£8.3bn) market
capitalisation at the start of 2023.
Looking ahead, IHG's growth ambitions and drivers for future
shareholder value creation include:
·
High-single digit percentage growth in fee
revenue annually on average over the medium to long term, driven by
the combination of RevPAR growth and net system size
growth;
·
100-150bps annual improvement in fee margin on
average over the medium to long term from operational
leverage;
·
~100% conversion of adjusted earnings into
adjusted free cash flow;
·
Sustainably growing the ordinary
dividend;
·
Returning additional capital to shareholders,
such as through regular share buyback programmes, further enhancing
EPS growth; and
·
The opportunity for compound growth in adjusted
EPS of +12-15% annually on average over the medium to long term,
driven by the combination of the above and including the assumption
of ongoing share buybacks.
IHG's total fee revenue growth is
driven by the combination of growth in RevPAR and growth in our net
system size. Total fee revenue growth is expected to grow faster
than the typical rate of increase in our fee business cost base,
and this positive operational leverage drives the potential for
100-150bps annual improvement in fee margin on average over the
medium to long term. Additional drivers of this include structural
shifts over time such as a growing proportion of franchising and
increasing scale efficiencies in markets such as Greater
China.
In addition to fee margin progress
from operational leverage, IHG is actively developing further
opportunities to drive fee margin over the longer term. These will
include ongoing cost base efficiency and effectiveness initiatives,
and the expansion of ancillary fee streams including driving
additional growth from our co-brand credit card
offerings.
1.
Definitions for non-GAAP measures can be found in
the 'Use of key performance measures and non-GAAP measures'
section, along with reconciliations of these measures to the most
directly comparable line items within the Financial
Statements.
Capital allocation: growing the ordinary dividend and
returning surplus capital through buybacks
IHG's asset-light business model
is highly cash-generative through the cycle and enables us to
invest in our brands and strengthen our enterprise platform. 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's perspectives on the uses of
cash generated by the business remain unchanged: ensuring we invest
in the business to optimise growth that will drive long-term
shareholder value creation, funding a sustainably growing dividend,
and then returning surplus capital to shareholders, whilst
targeting our leverage ratio within a range of 2.5-3.0x net
debt:adjusted EBITDA to maintain an investment grade credit
rating.
IHG typically pays dividends
weighted approximately one-third to the interim and two-thirds to
the final payment. The total dividend for 2022 was 138.4¢. The
interim dividend for 2023 was increased by 10% to 48.3¢. With a
proposed final dividend increase of 10% to 104.0¢, the total
dividend for 2023 of 152.3¢ will have increased by 10%. The
ex-dividend date is Thursday 4 April 2024 and the record date is
Friday 5 April 2024. Subject to shareholder approval at the AGM on
Friday 3 May 2024, the dividend will be paid on Tuesday 14 May
2024.
In 2022, a $500m share buyback
programme reduced the total number of voting rights in the Company
by 5.0%. In 2023, a $750m programme returned further surplus
capital, repurchasing 10.6 million shares at an average price of
£55.88 per share, and reduced the voting rights by a further 6.1%.
This programme, together with ordinary dividend payments, returned
$1.0bn to shareholders in 2023, equivalent to 10% of IHG's $10.0bn
(£8.3bn) market capitalisation at the start of 2023 and 6.1% of
IHG's most recent $16.4bn (£13.1bn) market capitalisation at 19
February 2024.
A new share buyback programme will
commence immediately, targeted to return $800m over the course of
2024. With the further improvement in profitability and strong cash
generation achieved in 2023, IHG's net debt:adjusted EBITDA ratio
reduced to 2.1x at 31 December 2023. With adjusted
EBITDA1 of $1,086m in 2023, this new buyback programme
to return a further $800m of surplus capital to shareholders would
increase pro forma leverage by 0.7x to 2.8x. On a prospective
basis, given analyst consensus expectations for growth in EBITDA
and cash generation in 2024, leverage would be expected at the end
of the year to be around the lower end of our target range of
2.5-3.0x.
The Board expects IHG's business
model to continue its strong track record of generating substantial
capacity to support our investment plans that drive growth, to fund
a sustainably growing ordinary dividend, and to routinely return
surplus capital to our shareholders.
1.
Definitions for non-GAAP measures can be found in
the 'Use of key performance measures and non-GAAP measures'
section, along with reconciliations of these measures to the most
directly comparable line items within the Financial
Statements.
Summary of financial performance
INCOME STATEMENT SUMMARY
|
12 months ended 31 December
|
|
2023
|
2022
|
%
|
|
$m
|
Re-presenteda
$m
|
change
|
Revenue
|
|
|
|
Americas
|
1,105
|
1,005
|
10.0
|
EMEAA
|
677
|
552
|
22.6
|
Greater China
|
161
|
87
|
85.1
|
Central
|
221
|
199
|
11.1
|
|
____
|
____
|
____
|
Revenue from reportable
segmentsb
|
2,164
|
1,843
|
17.4
|
|
|
|
|
System Fund and reimbursable
revenues
|
2,460
|
2,049
|
20.1
|
|
_____
|
_____
|
_____
|
Total revenue
|
4,624
|
3,892
|
18.8
|
|
|
|
|
Operating profit
|
|
|
|
Americas
|
815
|
761
|
7.1
|
EMEAA
|
215
|
152
|
41.4
|
Greater China
|
96
|
23
|
317.4
|
Central
|
(107)
|
(108)
|
(0.9)
|
|
_____
|
_____
|
_____
|
Operating profit from reportable
segmentsb
|
1,019
|
828
|
23.1
|
Analysed as:
|
|
|
|
Fee business
|
992
|
805
|
23.2
|
Owned, leased and managed lease
|
29
|
19
|
52.6
|
Insurance activities
|
(2)
|
4
|
NMc
|
|
|
|
|
System Fund and reimbursable
result
|
19
|
(105)
|
NMc
|
|
____
|
____
|
____
|
Operating profit before exceptional
items
|
1,038
|
723
|
43.6
|
Operating exceptional
items
|
28
|
(95)
|
NMc
|
|
____
|
____
|
____
|
Operating profit
|
1,066
|
628
|
69.7
|
|
|
|
|
Net financial expenses
|
(52)
|
(96)
|
(45.8)
|
Analysed as:
|
|
|
|
Adjusted interest expenseb
|
(131)
|
(122)
|
7.4
|
System Fund interest
|
44
|
16
|
175.0
|
Foreign exchange gains
|
35
|
10
|
250.0
|
|
|
|
|
Fair value (losses)/gains on
contingent purchase consideration
|
(4)
|
8
|
NMc
|
|
____
|
____
|
____
|
Profit before tax
|
1,010
|
540
|
87.0
|
|
|
|
|
Tax
|
(260)
|
(164)
|
58.5
|
Analysed as;
|
|
|
|
Adjusted taxb
|
(253)
|
(194)
|
30.4
|
Tax attributable to System Fund
|
(3)
|
-
|
NMc
|
Tax on foreign exchange gains
|
3
|
4
|
(25.0)
|
Tax on exceptional items
|
(7)
|
26
|
NMc
|
|
____
|
____
|
____
|
Profit for the year
|
750
|
376
|
99.5
|
|
|
|
|
Adjusted
earningsd
|
635
|
511
|
24.3
|
|
|
|
|
Basic weighted average number of
ordinary shares (millions)
|
169
|
181
|
(6.6)
|
|
____
|
____
|
____
|
Earnings per ordinary share
|
|
|
|
|
Basic
|
443.8¢
|
207.2¢
|
114.2
|
|
Adjustedb
|
375.7¢
|
282.3¢
|
33.1
|
|
|
|
|
|
Dividend per share
|
152.3¢
|
138.4¢
|
10.0
|
|
|
|
|
|
Average US dollar to sterling
exchange rate
|
$1: £0.80
|
$1:
£0.81
|
(1.2)
|
a. Re-presented for the adoption of IFRS 17 'Insurance
Contracts' and to combine System Fund and reimbursables (see 'New
accounting standards and other presentational changes').
b. Definitions for non-GAAP measures can be found in the 'Key
performance measures and non-GAAP measures' section along with
reconciliations of these measures to the most directly comparable
line items within the Financial Statements.
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.
d. Adjusted
earnings as used within adjusted earnings per share, a non-GAAP
measure.
Revenue
Trading improved significantly in
the first quarter of 2023, as travel in the comparative period of
2022 was impacted by the Omicron variant of Covid-19. From April,
the comparatives became subsequently tougher as government-mandated
travel restrictions eased in the prior year. Leisure demand in the
Americas and EMEAA saw continued strength, supported by improving
corporate and group bookings. Greater China rebounded
significantly, with RevPARa exceeding pre-pandemic
levels in the third quarter, which the Americas and Europe achieved
in 2022. By the fourth quarter, average daily rate was 15% above
pre-pandemic highs and occupancy had recovered to within 1%pt of
2019 levels.
Group comparable RevPAR improved
year-on-year by 33.0% in the first quarter, 17.1% in the second
quarter, 10.5% in the third quarter, 7.6% in the fourth quarter and
16.1% for the full year. When compared to the pre-pandemic levels
of 2019, Group comparable RevPAR increased 6.8% in the first
quarter and 9.9% in the second quarter, 12.8% in the third quarter
and 12.7% in the fourth quarter, with the full year 10.9% ahead of
2019.
Our other key driver of revenue,
net system size, increased by 3.8% year-on-year to 946,203
rooms.
Total revenue increased by $732m
(18.8%) to $4,624m, including a $411m increase in System Fund and
reimbursable revenues. Revenue from reportable segmentsa
increased by $321m (17.4%) to $2,164m, driven by the improved
trading conditions. Underlying revenuea increased by
$347m to $2,164m, with underlying fee revenuea
increasing by $249m. Owned, leased and managed lease revenue
increased by $77m.
Operating profit and margin
Operating profit improved by $438m
from $628m to $1,066m, including a $123m increase in operating
exceptional items, from a $95m charge in 2022 to a $28m income in
2023, and a $124m increase in the reported System Fund and
reimbursable result, from a $105m loss in 2022 to a $19m profit in
2023.
Operating profit from reportable
segmentsa increased by $191m (23.1%) to $1,019m, with
fee business operating profit increasing by $187m (23.2%) to $992m,
due to the improvement in trading which drove a $65m increase in
incentive management fees to $168m. Owned, leased and managed lease
operating profit improved from $19m to $29m. Underlying operating
profita increased by $201m (24.6%) to
$1,019m.
Fee margina increased
by 3.4%pts over the prior year to 59.3% benefitting from the
improvement in trading.
The impact of the movement in
average USD exchange rates for 2022 compared to 2023 netted to a
$2m impact on operating profit from reportable segmentsa
when calculated as restating 2022 figures at 2023 exchange rates,
but negatively impacted operating profit from reportable
segmentsa by $13m when applying 2022 rates to 2023
figures.
If the average exchange rate
during January 2024 had existed throughout 2023, the 2023 operating
profit from reportable segmentsa would have been $4m
lower.
System Fund and reimbursable result
The Group operates a System Fund
to collect and administer cash assessments from hotel owners for
specified purposes of use including marketing, reservations and the
Group's loyalty programme, IHG One Rewards. The System Fund also
benefits from proceeds from the sale of loyalty points under
third-party co-branding arrangements. The Fund is not managed to
generate a surplus or deficit for IHG over the longer term, but is
managed for the benefit of hotels in the IHG system with the
objective of driving revenues for the hotels in the
system.
The growth in the IHG One Rewards
programme means that, although assessments are received from hotels
up front when a member earns points, more revenue is deferred each
year than is recognised in the System Fund. This can lead to
accounting losses in the System Fund each year as the deferred
revenue balance grows which do not necessarily reflect the Fund's
cash position and the Group's capacity to invest.
Reimbursable revenues represent
reimbursements of expenses incurred on behalf of managed and
franchised properties and relate, predominantly, to payroll costs
at managed properties where IHG is the employer. As IHG record
reimbursable expenses based upon costs incurred with no added mark
up, this revenue and related expenses have no impact on either
operating profit or net profit for the year.
In the year to 31 December 2023,
System Fund and reimbursable revenues increased $411m (20.1%) to
$2,460m, driven by the continued strength in travel demand, the
strong performance of the IHG One Rewards programme since the
relaunch in the first half of last year.
The reported System Fund and
reimbursable result improved to a $19m profit from a $105m loss,
primarily due to the continued strength in travel demand on
revenues, partially offset by increased investments in media as
well as revenue-driving channels and activities.
a. Definitions for non-GAAP measures can be found in the 'Key
performance measures and non-GAAP measures' section along with
reconciliations of these measures to the most directly comparable
line items within the Financial Statements.
Operating exceptional
items
Operating exceptional items of
$28m comprise the Group's $18m share of profits from the
InterContinental New York Barclay associate due to an increase in
the fair value of the hotel which resulted in the reversal of an
$18m liability recognised in 2022 and $10m other operating income
relating to amounts receivable from the Group's insurer under its
business interruption policy for certain owned, leased and managed
lease hotels due to Covid-19. Further information on exceptional
items can be found in note 5 to the Group Financial
Statements.
Net financial expenses
Net financial expenses decreased
to $52m from $96m, including $35m in foreign exchange gains.
Adjusted interesta, which excludes exceptional finance
expenses and foreign exchange gains/losses and adds back interest
attributable to the System Fund, increased by $9m to an expense of
$131m. The increase in adjusted interesta was primarily
driven by an increase in interest attributable to the System Fund
of $28m due to increased base rates, offset by an increase in
financial income of $17m.
Financial expenses include $78m
(2022: $82m) of total interest costs on public bonds, which are
fixed rate debt. Interest expense on lease liabilities was $29m
(2022: $29m).
Fair value gains and losses on contingent purchase
consideration
Contingent purchase consideration
arose on the acquisition of Regent. The net loss of $4m (2022: $8m
gain) is principally due to an unfavourable movement in observable
US corporate bond rates. The total contingent purchase
consideration liability at 31 December 2023 is $69m (31 December
2022: $65m).
Taxation
The adjusted taxa rate
for 2023 was 28% (2022: 27%). Taxation within exceptional items
totalled a charge of $7m (2022: credit of $26m) and relates to the
tax impacts of the operating exceptional items. Tax paid in
2023 totalled $243m (2022: $211m). Further information on tax
can be found in note 6 to the Group Financial
Statements.
Earnings per share
The Group's basic earnings per
ordinary share is 443.8¢ (2022: 207.2¢). Adjusted earnings per
ordinary sharea increased by 93.4¢ to 375.7¢.
Dividends and shareholder returns
The Board is proposing a final
dividend of 104.0¢ in respect of 2023, which is growth of 10% on
2022. With the interim dividend of 48.3¢ paid in October 2023, the
total dividend for the year would therefore be 152.3¢, representing
an increase of 10%. The ex-dividend date is Thursday 4 April 2024
and the record date is Friday 5 April 2024. The corresponding
dividend amount in Pence Sterling per ordinary share will be
announced on Thursday 25 April 2024, calculated based on the
average of the market exchange rates for the three working days
commencing 22 April 2024. Subject to shareholder approval at the
AGM on Friday 3 May 2024, the dividend will be paid on Tuesday 14
May 2024. A Dividend Reinvestment Plan ("DRIP") is provided by
Equiniti Financial Services Limited. The DRIP enables the Company's
shareholders to elect to have their cash dividend payments used to
purchase the Company's shares. More information can be found
at www.shareview.co.uk/info/drip.
Dividend payments in 2023 have
returned close to $250m to IHG's shareholders. Additional surplus
capital was returned to shareholders through a $750m share buyback
programme that concluded on 29 December 2023. This repurchased
10,643,334 shares at an average price of £55.88 per share and
reduced the total number of voting rights in the Company by
6.1%.
The Board has announced a further
share buyback programme to return an additional $800m to
shareholders in 2024.
a. Definitions for non-GAAP measures can be found in the 'Key
performance measures and non-GAAP measures' section along with
reconciliations of these measures to the most directly comparable
line items within the Financial Statements.
Summary of cash flow, working capital, net debt and
liquidity
Adjusted EBITDAa reconciliation
|
12 months ended 31
December
|
|
2023
|
2022
|
|
$m
|
$m
|
|
|
|
Cash flow from operations
|
1,219
|
961
|
Cash flows relating to exceptional
items
|
29
|
43
|
Impairment reversal/(loss) on
financial assets
|
1
|
(5)
|
Other non-cash adjustments to
operating profit
|
(60)
|
(61)
|
System Fund and reimbursable
result
|
(19)
|
105
|
System Fund depreciation and
amortisation
|
(83)
|
(86)
|
Other non-cash adjustments to System
Fund result
|
(23)
|
(24)
|
Working capital and other
adjustments
|
(79)
|
(101)
|
Capital expenditure: contract
acquisition costs (key money),
net of repayments
|
101
|
64
|
|
________
|
_____
|
Adjusted EBITDAa
|
1,086
|
896
|
|
____
|
___
|
|
|
|
|
CASH FLOW SUMMARY
|
12 months ended 31
December
|
|
2023
|
2022
|
$m
|
|
$m
|
$m
|
change
|
|
|
|
|
Adjusted EBITDAa
|
1,086
|
896
|
190
|
|
|
|
|
Working capital and other
adjustments
|
79
|
101
|
|
Impairment (reversal)/loss on
financial assets
|
(1)
|
5
|
|
Other non-cash adjustments to
operating profit
|
60
|
61
|
|
System Fund and reimbursable
result
|
19
|
(105)
|
|
Non-cash adjustments to System Fund
result
|
106
|
110
|
|
Capital expenditure: contract
acquisition costs (key money),
net of repayments
|
(101)
|
(64)
|
|
Capital expenditure:
maintenance
|
(38)
|
(44)
|
|
Cash flows relating to exceptional
items
|
(29)
|
(43)
|
|
Net interest paid
|
(83)
|
(104)
|
|
Tax paid
|
(243)
|
(211)
|
|
Principal element of lease
payments
|
(28)
|
(36)
|
|
Purchase of own shares by employee
share trusts
|
(8)
|
(1)
|
|
|
____
|
____
|
____
|
Adjusted free cash flowa
|
819
|
565
|
254
|
|
|
|
|
Capital expenditure: gross
recyclable investments
|
(61)
|
(15)
|
|
Capital expenditure: gross System
Fund capital investments
|
(46)
|
(35)
|
|
Disposals and repayments, including
other financial assets
|
8
|
16
|
|
Repurchase of shares, including
transaction costs
|
(790)
|
(482)
|
|
Dividends paid to
shareholders
|
(245)
|
(233)
|
|
Dividends paid to non-controlling
interest
|
(3)
|
-
|
|
|
____
|
____
|
____
|
Net
cash flow before other net debta
movements
|
(318)
|
(184)
|
(134)
|
|
|
|
|
Add back principal element of lease
repayments
|
28
|
36
|
|
Exchange and other non-cash
adjustments
|
(131)
|
178
|
|
|
____
|
____
|
____
|
(Increase)/decrease in net debta
|
(421)
|
30
|
(451)
|
Net debta at beginning of
the year
|
(1,851)
|
(1,881)
|
|
Net
debta at end of the year
|
(2,272)
|
(1,851)
|
(421)
|
|
______
|
______
|
____
|
a. Definitions for non-GAAP measures can be found in the 'Key
performance measures and non-GAAP measures' section.
Cash flow from operations
For the year ended 31 December
2023, cash flow from operations was $1,219m, an increase of $258m
on the previous year, primarily reflecting the increase in
operating profit.
Cash flow from operations is the
principal source of cash used to fund interest and tax payments,
capital expenditure, ordinary dividend payments and additional
returns of capital of the Group.
Adjusted free cash flowa
Adjusted free cash
flowa was an inflow of $819m, an increase of $254m on
the prior year. Adjusted EBITDAa increased by $190m and
the System Fund and reimbursable result improved by $124m due to
stronger trading. Net interest paid decreased by $21m primarily due
to an increase in interest received of $14m. These were partly
offset by a $22m lower working capital and other adjustments cash
inflow, an increase in contract acquisition (key money) costs net
of repayments of $37m, and $32m higher tax payments. Working
capital and other adjustments includes $123m of cash inflow related
to deferred revenue, driven primarily by the loyalty programme.
Exceptional cash costs in the year of $29m includes payments
relating to commercial litigation and disputes; in the prior year,
the cost of ceasing operations in Russia was also
included.
Net and gross capital expenditure
Net capital
expenditurea
was $157m (2022: $59m) and gross capital
expenditurea
was $253m (2022: $161m). Gross capital
expenditurea
comprised: $146m maintenance capex and key money;
$61m gross recyclable investments; and $46m System Fund capital
investments. Net capital expenditurea includes the offset from $8m
proceeds from other financial assets, $7m key money repayments and
$81m System Fund depreciation and amortisation.
Net debta
Net debta increased by
$421m from $1,851m at 31 December 2022 to $2,272m at 31 December
2023. There were $1,035m of payments related to ordinary dividends
and the share buyback programmes during the year. The change in net
debta includes adverse net foreign exchange impacts of
$105m driven by translation of the Group's sterling bond debt and
$26m of other non-cash adjustments.
Balance Sheet
|
2023
|
2022
|
|
|
$m
|
$m
|
|
Goodwill and other intangible
assets
|
1,099
|
1,144
|
|
Other non-current assets
|
1,585
|
1,394
|
|
Cash and cash equivalents
|
1,322
|
976
|
|
Other current assets
|
807
|
702
|
|
|
_______
|
______
|
Total assets
|
4,813
|
4,216
|
|
|
|
|
Loans and other
borrowings
|
(3,166)
|
(2,396)
|
|
Other current liabilities
|
(1,591)
|
(1,489)
|
|
Other non-current
liabilities
|
(2,002)
|
(1,939)
|
|
|
________
|
_________
|
Total liabilities
|
(6,759)
|
(5,824)
|
|
|
________
|
________
|
Net
liabilities
|
(1,946)
|
(1,608)
|
|
Net liabilities
The Group had net liabilities of
$1,946m at December 2023 ($1,608m at 31 December 2022). In
accordance with accounting standards, the Group's internally
developed brands are not recorded on the Group's balance sheet, and
its asset-light business model means that most properties from
which income is derived are not owned. This does not have an impact
on the ability of the Group to raise external funding or the
dividend capacity of the Group.
Goodwill and other intangible assets
Goodwill and other intangible
assets total $1,099m. This was a decrease of $45m compared to the
prior year driven by amortisation of software assets. Goodwill and
brands have a total net book value of $775m as at 31 December 2023
($774m as at 31 December 2022). Brands relate to the acquisitions
of Kimpton, Regent and Six Senses. They are each considered to have
an indefinite life given their strong brand awareness and
reputation, and management's commitment to continued investment in
their growth. Goodwill and brands are allocated to cash generating
units (CGUs) and they are tested annually for impairment, with no
impairment recognised in 2023 given the recoverable amounts of the
CGUs exceeded their carrying value. The movement in the year is due
to exchange rates.
The remaining balance of
intangible assets primarily relates to software ($297m).
a.
Definitions for non-GAAP measures can be found in
the 'Key performance measures and non-GAAP measures' section along
with reconciliations of these measures to the most directly
comparable line items within the Financial Statements.
Working capital
Trade receivables increased by
$87m, from $493m at 31 December 2022 to $580m, primarily due to
improved trading in the last quarter of 2023 compared to the last
quarter of 2022. Current trade and other payables increased by
$14m, primarily due to $13m deferred consideration moving from
non-current payables in 2023. Deferred revenue increased by $124m,
driven by an increase in the future redeemable points balance
related to the loyalty programme.
Sources of liquidity
As at 31 December 2023, the Group
had total liquidity of $2,572m (31 December 2022: $2,224m),
comprising $1,350m of undrawn bank facilities and $1,222m of cash
and cash equivalents (net of overdrafts and restricted cash).
The change in total liquidity from December 2022 of $348m is
primarily due to a new bond issuance of $657m, offset by other net
cash outflows of $318m.
In November 2023, the Group issued
a €600m 4.375% bond repayable in November 2029. Currency swaps were
transacted at the same time as the bond was issued in order to swap
the proceeds and interest flows to US Dollars. The currency swaps
fix the bond debt at $657m, with interest payable semi-annually at
5.97%.
The Group currently has $3,122m of
sterling and euro bonds outstanding. The bonds mature in October
2024 (€500m), August 2025 (£300m), August 2026 (£350m), May 2027
(€500m), October 2028 (£400m) and November 2029 (€600m). There are
currency swaps in place on the euro bonds, fixing the October 2024
bond at £454m, the May 2027 bond at £436m and the November 2029
bond at $657m. The Group currently has senior unsecured
long-term credit ratings of BBB from S&P and Baa2 from
Moody's.
The Group is further financed by a
$1.35bn syndicated bank revolving credit facility (RCF). A
one-year extension option was exercised during the year and the
facility now matures in 2028. There is a one-year extension option
remaining at the lender's discretion. There are two financial
covenants: interest cover and leverage ratio. Covenants are tested
at half year and full year on a trailing 12-month basis. The
interest cover covenant requires a ratio of Covenant EBITDA to
Covenant interest payable above 3.5:1 and the leverage ratio
requires Covenant net debt to Covenant EBITDA below 4.0:1. At 31
December 2023, the leverage ratio was 2.14 and the interest cover
ratio was 12.34. See note 10 to the Group Financial Statements for
further information. The RCF was undrawn at 31 December
2023.
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.
It is management's opinion that
the available facilities are sufficient for the Group's present
liquidity requirements.
Additional revenue, global system size and pipeline
analysis
Disaggregation of total gross revenue in IHG's
System
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 hotels and from 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
|
|
|
|
|
|
2023
|
2022
|
%
|
|
$bn
|
$bn
|
Changeb
|
Analysed by brand
|
|
|
|
InterContinental
|
5.1
|
4.0
|
26.6
|
Kimpton
|
1.3
|
1.2
|
10.0
|
Hotel Indigo
|
0.9
|
0.7
|
28.2
|
Crowne Plaza
|
3.7
|
3.0
|
23.9
|
Holiday Inn Express
|
9.2
|
8.3
|
11.5
|
Holiday Inn
|
6.0
|
5.1
|
16.9
|
Staybridge Suites
|
1.2
|
1.2
|
6.4
|
Candlewood Suites
|
0.9
|
0.8
|
3.7
|
Otherc
|
3.3
|
1.5
|
121.5
|
|
____
|
____
|
____
|
Total
|
31.6
|
25.8
|
22.6
|
|
____
|
____
|
____
|
|
|
|
|
Analysed by ownership
type
|
|
|
|
Franchisedd (revenue
not attributable to IHG)
|
20.0
|
16.7
|
19.6
|
Managed (revenue not attributable
to IHG)
|
11.1
|
8.7
|
28.4
|
Owned, leased and managed
lease
(revenue recognised in Group
income statement)
|
0.5
|
0.4
|
18.8
|
|
____
|
____
|
____
|
Total
|
31.6
|
25.8
|
22.6
|
|
____
|
____
|
____
|
|
|
|
|
|
Total gross revenue in
IHG's system increased by 22.6% (23.4% increase at constant
currency) to $31.6bn, driven by improved trading conditions and
growth in the number of hotels in our system.
a.
Definitions for the key performance measures can
be found in the 'Key performance measures and 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.
c.
Includes Holiday Inn Club Vacations.
d.
Includes exclusive partner hotels.
RevPARa movement summary at constant exchange
rates (CER)
|
Full Year 2023 vs
2022
|
Full Year 2023 vs
2019
|
|
RevPAR
|
ADR
|
Occupancy
|
RevPAR
|
ADR
|
Occupancy
|
Group
|
16.1%
|
5.1%
|
6.4%pts
|
10.9%
|
12.7%
|
(1.1)%pts
|
Americas
|
7.0%
|
4.6%
|
1.5%pts
|
13.0%
|
12.8%
|
0.1%pts
|
EMEAA
|
23.7%
|
9.8%
|
7.9%pts
|
15.4%
|
21.0%
|
(3.4)%pts
|
G.
China
|
71.7%
|
18.0%
|
19.1%pts
|
0.7%
|
0.6%
|
0.1%pts
|
|
Q4 2023 vs
2022
|
Q4 2023 vs
2019
|
|
RevPAR
|
ADR
|
Occupancy
|
RevPAR
|
ADR
|
Occupancy
|
Group
|
7.6%
|
2.4%
|
3.2%pts
|
12.7%
|
14.7%
|
(1.2)%pts
|
Americas
|
1.5%
|
3.1%
|
(1.0)%pts
|
14.0%
|
14.1%
|
(0.1)%pts
|
EMEAA
|
7.0%
|
3.7%
|
2.2%pts
|
18.5%
|
22.4%
|
(2.4)%pts
|
G.
China
|
72.0%
|
21.1%
|
17.6%pts
|
(0.6)%
|
3.3%
|
(2.4)%pts
|
RevPARa movement
at CER vs actual exchange rates (AER)
|
Full Year 2023 vs
2022
|
Full Year 2023 vs
2019
|
|
CER (as
above)
|
AER
|
Difference
|
CER (as
above)
|
AER
|
Difference
|
Group
|
16.1%
|
15.7%
|
(0.4)%pts
|
10.9%
|
8.1%
|
(2.8)%pts
|
Americas
|
7.0%
|
7.1%
|
0.1%pts
|
13.0%
|
12.5%
|
(0.5)%pts
|
EMEAA
|
23.7%
|
23.7%
|
0.0%pts
|
15.4%
|
7.6%
|
(7.8)%pts
|
G.
China
|
71.7%
|
63.9%
|
(7.8)%pts
|
0.7%
|
(1.5)%
|
(2.2)%pts
|
|
Q4 2023 vs
2022
|
Q4 2023 vs
2019
|
|
CER (as
above)
|
AER
|
Difference
|
CER (as
above)
|
AER
|
Difference
|
Group
|
7.6%
|
8.0%
|
0.4%pts
|
12.7%
|
9.1%
|
(3.6)%pts
|
Americas
|
1.5%
|
1.5%
|
0.0%pts
|
14.0%
|
13.3%
|
(0.7)%pts
|
EMEAA
|
7.0%
|
8.8%
|
1.8%pts
|
18.5%
|
9.3%
|
(9.2)%pts
|
G.
China
|
72.0%
|
69.7%
|
(2.3)%pts
|
(0.6)%
|
(2.9)%
|
(2.3)%pts
|
Monthly RevPARa
(CER)
2023 vs
2022
|
Jan
|
Feb
|
Mar
|
Apr
|
May
|
Jun
|
Jul
|
Aug
|
Sep
|
Oct
|
Nov
|
Dec
|
Group
|
40.8%
|
33.5%
|
27.2%
|
21.7%
|
17.0%
|
13.3%
|
9.5%
|
10.4%
|
11.6%
|
8.7%
|
7.2%
|
6.6%
|
Americas
|
24.5%
|
18.3%
|
13.8%
|
5.9%
|
6.9%
|
4.7%
|
2.8%
|
3.9%
|
5.7%
|
1.8%
|
2.4%
|
0.0%
|
EMEAA
|
84.0%
|
71.9%
|
44.5%
|
36.7%
|
24.2%
|
22.7%
|
16.1%
|
16.1%
|
15.7%
|
10.1%
|
5.9%
|
5.0%
|
G.
China
|
53.3%
|
54.2%
|
125.2%
|
171.4%
|
106.9%
|
68.4%
|
40.5%
|
38.5%
|
54.2%
|
80.8%
|
59.9%
|
75.7%
|
2023 vs
2019
|
Jan
|
Feb
|
Mar
|
Apr
|
May
|
Jun
|
Jul
|
Aug
|
Sep
|
Oct
|
Nov
|
Dec
|
Group
|
4.2%
|
6.7%
|
9.2%
|
9.5%
|
9.3%
|
10.9%
|
12.8%
|
11.1%
|
14.5%
|
11.0%
|
11.0%
|
16.6%
|
Americas
|
8.8%
|
11.0%
|
13.1%
|
11.5%
|
11.8%
|
13.0%
|
12.5%
|
10.9%
|
18.2%
|
13.1%
|
13.1%
|
16.1%
|
EMEAA
|
8.2%
|
7.7%
|
13.0%
|
12.6%
|
15.6%
|
16.7%
|
19.0%
|
17.0%
|
16.6%
|
16.8%
|
15.5%
|
23.7%
|
G.
China
|
(16.6)%
|
(3.8)%
|
(6.6)%
|
5.0%
|
(6.4)%
|
(0.1)%
|
14.0%
|
9.3%
|
3.3%
|
(4.5)%
|
(3.3)%
|
6.9%
|
a. RevPAR (revenue per available room), ADR (average daily rate)
and occupancy are on a comparable basis, based on comparability as
at 31 December 2023 and include hotels that have traded in all
months in both the current and the prior year. This same group of
hotels is also used to compare RevPAR performance for 2023 vs 2019.
The principle exclusions in deriving these measures are new
openings, properties under major refurbishments and removals. See
'Key performance measures and non-GAAP measures' section for
further information on the definition of RevPAR.
|
Hotels
|
|
Rooms
|
|
Global hotel and room count
|
|
Change
over
|
|
|
Change
over
|
|
2023
|
2022
|
|
2023
|
2022
|
|
31
December
|
31
December
|
|
31
December
|
31
December
|
Analysed by brand
|
|
|
|
|
|
|
Six Senses
|
25
|
6
|
|
1,761
|
395
|
Regent
|
10
|
1
|
|
3,087
|
59
|
|
InterContinental
|
222
|
15
|
|
73,500
|
3,694
|
|
Vignette Collection
|
11
|
8
|
|
2,283
|
1,704
|
|
Kimpton
|
78
|
2
|
|
13,721
|
413
|
|
Hotel Indigo
|
153
|
10
|
|
20,218
|
1,764
|
|
voco
|
62
|
17
|
|
15,507
|
5,083
|
|
HUALUXE
|
20
|
(1)
|
|
5,529
|
(454)
|
|
Crowne Plaza
|
408
|
5
|
|
112,232
|
1,813
|
|
EVEN Hotels
|
26
|
4
|
|
3,931
|
751
|
|
Holiday Inn Express
|
3,171
|
80
|
|
336,317
|
9,415
|
|
Holiday Inn
|
1,202
|
4
|
|
215,910
|
351
|
Garner
|
2
|
2
|
|
158
|
158
|
avid hotels
|
67
|
8
|
|
6,027
|
674
|
|
Atwell Suites
|
2
|
-
|
|
186
|
-
|
|
Staybridge Suites
|
325
|
11
|
|
35,320
|
1,359
|
|
Holiday Inn Club
Vacations
|
30
|
2
|
|
9,526
|
704
|
|
Candlewood Suites
|
376
|
8
|
|
33,497
|
744
|
|
Iberostar Beachfront
Resorts
|
49
|
16
|
|
17,600
|
5,198
|
|
Othera
|
124
|
1
|
|
39,893
|
751
|
|
|
_____
|
_____
|
|
_______
|
_______
|
Total
|
6,363
|
199
|
|
946,203
|
34,576
|
|
|
_____
|
_____
|
|
_______
|
_______
|
Analysed by ownership
type
|
|
|
|
|
|
|
Franchisedb
|
5,356
|
154
|
|
680,601
|
24,170
|
|
Managed
|
990
|
44
|
|
261,371
|
10,394
|
|
Owned, leased and managed
lease
|
17
|
1
|
|
4,231
|
12
|
|
|
_____
|
_____
|
|
_______
|
______
|
Total
|
6,363
|
199
|
|
946,203
|
34,576
|
|
|
_____
|
____
|
|
_______
|
______
|
|
|
|
|
|
|
|
a.
Includes eight open hotels that will be
re-branded to voco and five open hotels that will be re-branded to
Vignette Collection.
b.
Includes exclusive partner hotels.
|
Hotels
|
|
Rooms
|
|
Global Pipeline
|
|
Change
over
|
|
|
Change
over
|
|
2023
|
2022
|
|
2023
|
2022
|
|
31
December
|
31
December
|
|
31
December
|
31
December
|
Analysed by brand
|
|
|
|
|
|
|
Six Senses
|
42
|
4
|
|
3,057
|
426
|
Regent
|
11
|
1
|
|
2,442
|
132
|
|
InterContinental
|
100
|
10
|
|
25,271
|
2,690
|
|
Vignette Collection
|
18
|
11
|
|
2,056
|
1,456
|
|
Kimpton
|
54
|
13
|
|
10,761
|
2,318
|
|
Hotel Indigo
|
132
|
13
|
|
20,939
|
1,088
|
|
voco
|
74
|
35
|
|
12,741
|
2,512
|
|
HUALUXE
|
25
|
4
|
|
6,343
|
993
|
|
Crowne Plaza
|
126
|
15
|
|
32,442
|
3,492
|
|
EVEN Hotels
|
33
|
2
|
|
5,383
|
104
|
|
Holiday Inn Express
|
632
|
15
|
|
78,019
|
1,284
|
|
Holiday Inn
|
246
|
17
|
|
45,901
|
1,811
|
Garner
|
5
|
5
|
|
332
|
332
|
avid hotels
|
141
|
(4)
|
|
11,577
|
(808)
|
|
Atwell Suites
|
41
|
11
|
|
4,124
|
1,123
|
|
Staybridge Suites
|
164
|
2
|
|
18,185
|
190
|
|
Holiday Inn Club
Vacations
|
2
|
1
|
|
832
|
680
|
|
Candlewood Suites
|
151
|
27
|
|
11,957
|
1,689
|
|
Iberostar Beachfront
Resorts
|
5
|
(10)
|
|
2,240
|
(3,825)
|
|
Other
|
14
|
(15)
|
|
2,352
|
(2,201)
|
|
|
_____
|
_____
|
|
_______
|
______
|
Total
|
2,016
|
157
|
|
296,954
|
15,486
|
|
|
_____
|
_____
|
|
_______
|
______
|
Analysed by ownership
type
|
|
|
|
|
|
|
Franchiseda
|
1,426
|
113
|
|
174,084
|
10,773
|
|
Managed
|
589
|
44
|
|
122,715
|
4,713
|
Owned, leased and managed
lease
|
1
|
-
|
|
155
|
-
|
|
|
_____
|
_____
|
|
_______
|
______
|
Total
|
2,016
|
157
|
|
296,954
|
15,486
|
|
|
_____
|
_____
|
|
_______
|
______
|
a. Includes exclusive partner hotels.
Net system size increased by 3.8%
year-on year to 946.2k rooms. During the year, 47.9k rooms (275
hotels) opened, compared to 49.4k rooms (269 hotels) in the prior
year which included 12.4k rooms (33 hotels) under the Iberostar
Beachfront Resorts brand. In 2023, 13.3k rooms (76 hotels) left the
IHG system, compared to 18.1k rooms (96 hotels) in 2022 which
included 6.5k rooms (28 hotels) as part of ceasing operations in
Russia. The removals rate of 1.5% was in line with our historical
underlying average.
At the end of 2023, the global
pipeline totalled 297.0k rooms (2,016 hotels), an increase of 15.5k
rooms (157 hotels), as signings outpaced openings and terminations.
The IHG pipeline represents hotels where a contract has been signed
and the appropriate fees paid.
During the year, 79.2k rooms (556
hotels) were signed, compared to 80.3k rooms (467 hotels) in the
prior year which included 18.5k rooms (48 hotels) under the
Iberostar Beachfront Resorts brand. Signings in 2023 included 30.1k
rooms (220 hotels) for the Holiday Inn Brand Family, 0.8k rooms (13
hotels) under the Six Senses brand and 0.5k rooms (seven hotels) as
part of our newly launched brand, Garner. Conversions (excluding
Iberostar) represented 36% of signings in 2023.
Regional performance reviews, system size and pipeline
analysis
AMERICAS
|
12 months ended 31 December
|
|
Americas results
|
|
|
|
|
|
2023
|
2022
|
%
|
|
|
$m
|
$m
|
change
|
|
Revenue from the reportable
segmenta
|
|
|
|
|
|
Fee business
|
957
|
879
|
8.9
|
|
|
Owned, leased and managed
lease
|
148
|
126
|
17.5
|
|
|
____
|
____
|
____
|
|
|
|
1,105
|
1,005
|
10.0
|
|
|
____
|
____
|
____
|
|
Operating profit from the reportable
segmenta
|
|
|
|
|
|
Fee business
|
787
|
741
|
6.2
|
|
|
Owned, leased and managed
lease
|
28
|
20
|
40.0
|
|
|
____
|
____
|
____
|
|
|
|
815
|
761
|
7.1
|
|
Operating exceptional
items
|
|
27
|
(46)
|
NMb
|
|
|
____
|
____
|
____
|
|
Operating profit
|
842
|
715
|
17.8
|
|
|
____
|
____
|
____
|
|
Americas Comparable RevPARa movement on previous
year
|
12 months
ended
31 December
2023
|
Fee business
|
|
|
InterContinental
|
12.0%
|
|
Kimpton
|
8.9%
|
|
Hotel Indigo
|
4.9%
|
|
Crowne Plaza
|
11.2%
|
|
EVEN Hotels
|
8.5%
|
|
Holiday Inn Express
|
6.4%
|
|
Holiday Inn
|
7.2%
|
|
avid hotels
|
8.6%
|
|
Staybridge Suites
|
6.1%
|
|
Candlewood Suites
|
2.4%
|
|
All brands
|
7.0%
|
Owned, leased and managed
lease
|
|
|
All brands
|
16.8%
|
|
|
|
|
|
|
|
|
|
Comparable RevPARa was
up +7.0% vs 2022 (up +13.0% vs 2019) with occupancy of 68.2% up
+1.5%pts and rate +4.6% higher. Trading in the first quarter of
2022 saw travel volumes impacted as a result of the Omicron variant
of Covid-19, with comparatives becoming subsequently tougher from
April onwards. Q4 RevPARa was up +1.5% vs 2022 (up
+14.0% vs 2019), with occupancy of 63.9% down -1.0%pts but rate
+3.1% higher. US Q4 RevPARa was up +0.1% and for the
full year was up +5.4% (up +11.2% and +11.1%, respectively, vs
2019). Leisure demand had another strong year, and there was
further return of groups activity and more business travel, the
latter achieving revenues ahead of pre-Covid levels. This also led
to urban locations being back above 2019 levels by the end of the
year.
Revenue from the reportable
segmenta increased by $100m (+10%) to $1,105m. Operating
profit increased by $127m to $842m, driven by the increase in
revenue, together with a $73m favourable change in exceptional
income (further information on exceptional items can be found in
note 5 to the Group Financial Statements). Operating profit from
the reportable segmenta increased by $54m (+7%) to $815m
(an increase of $115m or +16% vs 2019).
Fee business revenuea
increased by $78m (+9%) to $957m, with comparable
RevPARa up +7.0%. Fee business operating
profita increased by $46m (+6%) to $787m, driven by the
improvement in trading. Fee margina was 82.2%, compared
to 84.3% in 2022 and 77.7% in 2019; the year-on-year reduction
predominantly reflects cost investment in growth initiatives,
including the launch of Garner. There were $21m of incentive
management fees earned (2022: $18m; 2019: $13m).
Owned, leased and managed lease
revenue increased by $22m to $148m, with comparable
RevPARa up +16.8%, leading to an owned, leased and
managed leased operating profit of $28m compared to $20m in the
prior year.
a. Definitions for non-GAAP measures can be found in the 'Key
performance measures and 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.
|
Hotels
|
|
Rooms
|
|
Americas hotel and room count
|
|
Change
over
|
|
|
Change
over
|
|
2023
|
2022
|
|
2023
|
2022
|
|
31
December
|
31
December
|
|
31
December
|
31
December
|
Analysed by brand
|
|
|
|
|
|
|
Six Senses
|
1
|
1
|
|
10
|
10
|
|
InterContinental
|
43
|
1
|
|
15,674
|
133
|
|
Vignette Collection
|
1
|
1
|
|
355
|
355
|
|
Kimpton
|
63
|
1
|
|
10,895
|
291
|
|
Hotel Indigo
|
72
|
(1)
|
|
9,578
|
(169)
|
|
voco
|
12
|
4
|
|
1,299
|
376
|
|
Crowne Plaza
|
106
|
(4)
|
|
27,142
|
(1,192)
|
|
EVEN Hotels
|
19
|
-
|
|
2,744
|
1
|
|
Holiday Inn Express
|
2,509
|
37
|
|
228,753
|
3,669
|
|
Holiday Inn
|
688
|
(8)
|
|
111,754
|
(1,613)
|
Garner
|
2
|
2
|
|
158
|
158
|
avid hotels
|
67
|
8
|
|
6,027
|
674
|
|
Atwell Suites
|
2
|
-
|
|
186
|
-
|
|
Staybridge Suites
|
303
|
7
|
|
31,675
|
646
|
|
Holiday Inn Club
Vacations
|
30
|
2
|
|
9,526
|
704
|
|
Candlewood Suites
|
376
|
8
|
|
33,497
|
744
|
|
Iberostar Beachfront
Resorts
|
23
|
-
|
|
9,027
|
-
|
|
Othera
|
97
|
(1)
|
|
21,294
|
(689)
|
|
|
_____
|
____
|
|
_______
|
_____
|
Total
|
4,414
|
58
|
|
519,594
|
4,098
|
|
|
_____
|
____
|
|
_______
|
_____
|
Analysed by ownership
type
|
|
|
|
|
|
|
Franchisedb
|
4,242
|
57
|
|
482,948
|
4,500
|
|
Managed
|
168
|
-
|
|
35,309
|
(412)
|
Owned, leased and managed
lease
|
4
|
1
|
|
1,337
|
10
|
|
|
_____
|
____
|
|
_______
|
______
|
Total
|
4,414
|
58
|
|
519,594
|
4,098
|
|
|
_____
|
____
|
|
_______
|
______
|
a. Includes four open hotels that will be re-branded to
voco.
b. Includes exclusive partner hotels.
|
|
|
|
|
|
|
Hotels
|
|
Rooms
|
|
|
|
Americas Pipeline
|
|
Change
over
|
|
|
Change
over
|
|
|
2023
|
2022
|
|
2023
|
2022
|
|
|
31
December
|
31
December
|
|
31
December
|
31
December
|
|
Analysed by brand
|
|
|
|
|
|
|
|
Six Senses
|
8
|
2
|
|
474
|
151
|
|
|
Regent
|
1
|
1
|
|
167
|
167
|
|
|
InterContinental
|
12
|
2
|
|
2,708
|
305
|
|
|
Vignette Collection
|
3
|
1
|
|
261
|
86
|
|
|
Kimpton
|
28
|
4
|
|
5,518
|
935
|
|
|
Hotel Indigo
|
31
|
5
|
|
4,337
|
690
|
|
|
voco
|
12
|
8
|
|
1,383
|
636
|
|
|
Crowne Plaza
|
9
|
2
|
|
2,210
|
892
|
|
|
EVEN Hotels
|
11
|
1
|
|
1,239
|
68
|
|
|
Holiday Inn Express
|
349
|
9
|
|
33,463
|
571
|
|
|
Holiday Inn
|
72
|
7
|
|
8,639
|
669
|
|
|
Garner
|
5
|
5
|
|
332
|
332
|
|
|
avid hotels
|
141
|
(4)
|
|
11,577
|
(808)
|
|
|
Atwell Suites
|
41
|
11
|
|
4,124
|
1,123
|
|
|
Staybridge Suites
|
145
|
3
|
|
15,351
|
428
|
|
|
Holiday Inn Club
Vacations
|
2
|
1
|
|
832
|
680
|
|
|
Candlewood Suites
|
151
|
27
|
|
11,957
|
1,689
|
|
|
Iberostar Beachfront
Resorts
|
5
|
-
|
|
2,240
|
(151)
|
|
|
Other
|
14
|
1
|
|
2,352
|
382
|
|
|
|
_____
|
____
|
|
______
|
_____
|
|
Total
|
1,040
|
86
|
|
109,164
|
8,845
|
|
|
|
______
|
_____
|
|
_______
|
______
|
|
Analysed by ownership
type
|
|
|
|
|
|
|
|
Franchiseda
|
994
|
78
|
|
101,989
|
7,731
|
|
|
Managed
|
46
|
8
|
|
7,175
|
1,114
|
|
|
|
_____
|
____
|
|
______
|
______
|
|
Total
|
1,040
|
86
|
|
109,164
|
8,845
|
|
|
|
_____
|
____
|
|
______
|
______
|
|
|
|
|
|
|
|
|
|
|
|
a. Includes exclusive partner hotels.
Gross system size growth was +2.0%
year-on-year with the opening of 10.4k rooms (101 hotels) in the
Americas region, of which 4.2k rooms (40 hotels) opened in Q4.
Openings for the year included 57 hotels across the Holiday Inn
Brand Family and a further 20 properties across the Staybridge
Suites and Candlewood Suites brands. The first two Garner
conversions were achieved by the end of the year, having become
franchise-ready in the US in September 2023. The pace of openings
for avid hotels also accelerated with eight added, and there are a
further 18 currently under construction. The voco brand is rolling
out further in the region, with four openings, to now have a
portfolio of 12 properties, while new openings for Crowne Plaza
included Saint John Harbour View, one of nine openings in Canada in
2023 as presence across our brands builds in that market. There
were eight openings across our Luxury & Lifestyle brands
including the first Vignette Collection property for the region,
InterContinental Dominica Cabrits Resort & Spa, and three
Kimpton properties (The Forum in Charlottesville, Grand Roatan
Resort & Spa in the Bay Islands, Honduras, and Kimpton Hotel
Theta in New York). There were 6.3k rooms (43 hotels) removed in
the year, taking the removal rate to 1.2% and closer to the
historical underlying average of 1.5%.
Net system size grew +0.8%
year-on-year. There was no impact from Iberostar Beachfront Resorts
on net system growth in 2023, as all 23 properties in the region
had already joined the IHG system by the end of 2022.
There were 28.3k rooms (271
hotels) signed during the year, including 9.9k rooms (90 hotels)
during Q4. During the year there were 100 signings across Holiday
Inn and Holiday Inn Express, and a conversion portfolio including
three beachfront resorts in Mexico added by Holiday Inn Club
Vacations which marked the first for the brand outside of the US.
There were 88 signings across our other Suites brands, including 16
for Atwell Suites as this brand accelerates development pace. 23
signings for avid hotels included further examples of dual-branded
properties with Candlewood Suites. Across our Luxury &
Lifestyle brands, 29 properties were signed, which was 58% more
rooms than the prior year. These included Six Senses Napa and Six
Senses Xala in Mexico, the first destination in the Americas for
the Regent brand at Santa Monica Beach, three for InterContinental
(in Ecuador, Mexico and the Turks & Caicos Islands) and a very
strong year for Kimpton with eight properties added to its pipeline
(five in the US and three resort locations in the wider region).
51, or nearly 20% of signings for the region, were outside of the
US, as we strengthen our development activity in Canada, Mexico,
Latin America and the Caribbean.
The pipeline stands at 109.2k
rooms (1,040 hotels), which represents 21% of the current system
size in the region.
EMEAA
|
12 months ended 31
December
|
EMEAA results
|
|
|
|
|
2023
|
2022
|
%
|
|
$m
|
$m
|
change
|
Revenue from the reportable
segmenta
|
|
|
|
|
Fee business
|
354
|
284
|
24.6
|
|
Owned, leased and managed
lease
|
323
|
268
|
20.5
|
|
____
|
____
|
____
|
|
|
677
|
552
|
22.6
|
|
____
|
____
|
____
|
Operating profit/(loss) from the reportable
segmenta
|
|
|
|
|
Fee business
|
214
|
153
|
39.9
|
|
Owned, leased and managed
lease
|
1
|
(1)
|
NMb
|
|
____
|
____
|
____
|
|
|
215
|
152
|
41.4
|
Operating exceptional
items
|
|
1
|
(49)
|
NMb
|
|
|
____
|
____
|
____
|
Operating profit
|
216
|
103
|
109.7
|
|
____
|
____
|
____
|
|
|
|
|
|
|
EMEAA comparable RevPARa movement on previous
year
|
12 months
ended
31 December
2023
|
Fee business
|
|
|
Six Senses
|
17.7%
|
|
InterContinental
|
26.0%
|
|
Kimpton
|
47.1%
|
|
Hotel Indigo
|
24.5%
|
|
voco
|
10.5%
|
|
Crowne Plaza
|
23.7%
|
|
Holiday Inn Express
|
21.9%
|
|
Holiday Inn
|
23.4%
|
|
Staybridge Suites
|
12.5%
|
|
All brands
|
23.5%
|
|
|
|
Owned, leased and managed
lease
|
|
|
All brands
|
31.8%
|
Comparable RevPARa was
up +23.7% vs 2022 (up +15.4% vs 2019) with occupancy of 70.4% up
+7.9%pts and rate +9.8% higher. Leisure had another very strong
year and business travel along with groups activity picked up pace
as the post Covid-19 recovery continued. Q4 RevPARa was
up +7.0% vs 2022 (up +18.5% vs 2019), with occupancy of 71.5% up
+2.2%pts and rate +3.7% higher. The UK, which saw one of the
earlier easings of restrictions, saw RevPARa up +14% for
the year (up +17% vs 2019) and up +5% in Q4 (up +20% vs 2019).
Elsewhere, the variances in performance largely reflected timing of
recovery following the easing of travel restrictions, with
RevPARa for Q4 in Continental Europe up +8% (up +19% vs
2019), Australia up +7% (up +16% vs 2019), South East Asia &
Korea up +8% (+13% vs 2019) and Japan up +20% (+2% vs 2019).
RevPARa in the Middle East was down -1% in Q4 (up +24%
vs 2019) as the prior comparable period benefitted from the FIFA
World Cup held in Qatar, but there was strong growth elsewhere
particularly Saudi Arabia and the UAE.
Revenue from the reportable
segmenta increased by $125m (+23%) to $677m. Operating
profit increased by $113m to $216m, driven by the improved trading,
together with the non-recurrence of the $49m of operating
exceptional charges in the prior year (further information on
exceptional items can be found in note 5 to the Group Financial
Statements). Operating profit from the reportable
segmenta increased by $63m (+41%) to $215m (a decrease
of $2m vs 2019).
Fee business revenuea
increased by $70m (+25%) to $354m, with comparable
RevPARa up +23.5%. Fee business operating
profita increased by $61m (+40%) to $214m, driven by the
improvement in trading. Fee margina was 60.5%, compared
to 52.7% in 2022 and 58.6% in 2019. There were $101m of incentive
management fees earned (2022: $69m; 2019: $90m).
Owned, leased and managed lease
revenue increased by $55m to $323m, with comparable RevPAR up
+31.8%. As the trading challenges on this largely urban-centred
portfolio have eased, a return to a $1m operating profit was
achieved compared to the $1m loss in 2022 (or a $3m loss in the
comparable period when excluding the results of three UK portfolio
hotels and one InterContinental hotel which were disposed of during
2022).
a.
Definitions for non-GAAP measures can be found in
the 'Key performance measures and non-GAAP measures' section along
with reconciliations of these measures to the most directly
comparable line items within the Financial Statements.
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.
|
Hotels
|
|
Rooms
|
|
EMEAA hotel and room count
|
|
Change
over
|
|
|
Change
over
|
|
2023
|
2022
|
|
2023
|
2022
|
|
31
December
|
31
December
|
|
31
December
|
31
December
|
Analysed by brand
|
|
|
|
|
|
|
Six Senses
|
23
|
5
|
|
1,621
|
385
|
Regent
|
4
|
-
|
|
1,036
|
(77)
|
|
InterContinental
|
119
|
8
|
|
34,443
|
1,582
|
|
Vignette Collection
|
7
|
4
|
|
1,206
|
627
|
|
Kimpton
|
12
|
-
|
|
2,376
|
(21)
|
|
Hotel Indigo
|
58
|
7
|
|
7,029
|
1,296
|
|
voco
|
38
|
9
|
|
11,791
|
3,865
|
|
Crowne Plaza
|
178
|
(4)
|
|
43,285
|
(657)
|
|
Holiday Inn Express
|
349
|
8
|
|
51,488
|
1,613
|
|
Holiday Inn
|
382
|
8
|
|
69,330
|
1,463
|
|
Staybridge Suites
|
22
|
4
|
|
3,645
|
713
|
|
Iberostar Beachfront
Resorts
|
26
|
16
|
|
8,573
|
5,198
|
|
Othera
|
19
|
3
|
|
11,444
|
1,616
|
|
|
_____
|
____
|
|
_______
|
______
|
Total
|
1,237
|
68
|
|
247,267
|
17,603
|
|
|
_____
|
____
|
|
_______
|
______
|
Analysed by ownership
type
|
|
|
|
|
|
|
Franchisedb
|
839
|
37
|
|
140,830
|
8,914
|
|
Managed
|
385
|
31
|
|
103,543
|
8,687
|
Owned, leased and managed
lease
|
13
|
-
|
|
2,894
|
2
|
|
|
_____
|
____
|
|
_______
|
______
|
Total
|
1,237
|
68
|
|
247,267
|
17,603
|
|
|
_____
|
____
|
|
_______
|
______
|
a. Includes three open hotels that will be re-branded to
voco and five open hotels that will be
re-branded to Vignette Collection.
b. Includes exclusive partner hotels.
|
Hotels
|
|
Rooms
|
|
EMEAA Pipeline
|
|
Change
over
|
|
|
Change
over
|
|
2023
|
2022
|
|
2023
|
2022
|
|
31
December
|
31
December
|
|
31
December
|
31
December
|
Analysed by
brand
|
|
|
|
|
|
|
Six Senses
|
30
|
2
|
|
2,350
|
275
|
|
Regent
|
7
|
1
|
|
1,468
|
100
|
|
InterContinental
|
56
|
5
|
|
13,510
|
1,714
|
|
Vignette Collection
|
14
|
9
|
|
1,523
|
1,098
|
|
Kimpton
|
15
|
7
|
|
2,365
|
831
|
|
Hotel Indigo
|
53
|
7
|
|
8,309
|
265
|
|
voco
|
51
|
19
|
|
8,907
|
80
|
|
Crowne Plaza
|
49
|
9
|
|
11,529
|
1,152
|
|
Holiday Inn Express
|
89
|
1
|
|
13,309
|
110
|
|
Holiday Inn
|
86
|
2
|
|
16,122
|
(314)
|
|
Staybridge Suites
|
19
|
(1)
|
|
2,834
|
(238)
|
|
Iberostar Beachfront
Resorts
|
-
|
(10)
|
|
-
|
(3,674)
|
|
Other
|
-
|
(16)
|
|
-
|
(2,583)
|
|
|
____
|
____
|
|
______
|
______
|
Total
|
469
|
35
|
|
82,226
|
(1,184)
|
|
|
____
|
____
|
|
______
|
______
|
Analysed by ownership
type
|
|
|
|
|
|
|
Franchiseda
|
174
|
10
|
|
24,516
|
(2,172)
|
|
Managed
|
294
|
25
|
|
57,555
|
988
|
|
Owned, leased and managed
lease
|
1
|
-
|
|
155
|
-
|
|
|
____
|
____
|
|
______
|
______
|
Total
|
469
|
35
|
|
82,226
|
(1,184)
|
|
|
____
|
____
|
|
______
|
______
|
a. Includes exclusive partner hotels.
Gross system size growth was +9.2%
year-on-year with the opening of 21.2k rooms (87 hotels) in the
EMEAA region, of which 6.8k rooms (36 hotels) opened in Q4.
Openings for the year included 16 further Iberostar Beachfront
Resorts that were added as part of the long-term commercial
agreement established in November 2022, and 26 openings across the
Holiday Inn Brand Family. There were nine voco properties added,
and in a particularly strong period of openings for the
InterContinental brand there were eight opened that included
Jaipur, Bucharest, Durrat Al Riyadh and the InterContinental Rome
Ambasciatori Palace in Rome. Six Senses Rome also opened in the
year, as did further properties for the brand in the Maldives,
Saudi Arabia and Switzerland. The Vignette Collection brand
launched in new countries with four openings, and there were five
Crowne Plaza and seven Hotel Indigo properties added (with notable
openings including Crowne Plaza Kuala Lumpur City Centre and Hotel
Indigo Kuala Lumpur on the Park, marking the 150th
globally for that brand, and Hotel Indigo Bordeaux Centre
Chartrons), while the opening of Staybridge Suites Cannes marked
its debut in France. There were 3.6k rooms (19 hotels) removed in
the year, resulting in a removal rate of 1.6%.
Net system size grew +7.7%
year-on-year. Excluding the further 16 Iberostar Beachfront Resorts
properties that were added to the system in 2023 (after the first
10 that were added in 2022), net growth would have been
+5.4%.
There were 24.8k rooms (151
hotels) signed during the year, including 10.0k rooms (63 hotels)
during Q4. During the year there were 42 signings across the
Holiday Inn Brand Family. As we continue to rapidly expand in Saudi
Arabia, there were 14 signings in the country including Regent
Riyadh King Abdullah Financial District and Regent Jeddah Corniche
which will be an important first for the brand in the Middle East
region and follows the flagship 2023 opening for the brand with the
Regent Carlton Cannes, France. Across our Luxury & Lifestyle
brands, there were 55 properties signed or 9.5k rooms, representing
38% of all signings for the year in the region. Within this there
were 12 for Vignette Collection, and in a further reflection of the
strength of the brand and our ability to attract conversion
properties, there were 27 signings for voco.
The pipeline stands at 82.2k rooms
(469 hotels), which represents 33% of the current system size in
the region.
GREATER CHINA
|
12 months ended 31
December
|
|
|
|
|
Greater China results
|
2023
|
2022
|
%
|
|
$m
|
$m
|
change
|
|
|
|
|
Revenue from the reportable
segmenta
|
|
|
|
|
Fee business
|
161
|
87
|
85.1
|
|
|
____
|
____
|
____
|
|
|
161
|
87
|
85.1
|
|
____
|
____
|
____
|
Operating profit from the reportable
segmenta
|
|
|
|
|
Fee business
|
96
|
23
|
317.4
|
|
|
____
|
____
|
____
|
Operating profit
|
96
|
23
|
317.4
|
|
____
|
____
|
____
|
|
|
|
|
|
|
Greater China comparable RevPARa movement on
previous year
|
12 months
ended
31 December
2023
|
|
|
Fee business
|
|
|
Regent
|
110.8%
|
|
InterContinental
|
82.4%
|
|
Hotel Indigo
|
70.3%
|
|
HUALUXE
|
75.6%
|
|
Crowne Plaza
|
69.7%
|
|
Holiday Inn Express
|
60.3%
|
|
Holiday Inn
|
63.8%
|
|
All brands
|
71.7%
|
Comparable RevPARa was
up +71.7% vs 2022 (up +0.7% vs 2019) with occupancy of 61.1% up
+19.1%pts and rate +18.0% higher. This reflected the excellent
rebound in demand since the lifting of travel restrictions in
December 2022. Q3 RevPARa, which was particularly
strongly driven by domestic leisure trips, was up +43.2% vs 2022
(up +9.3% vs 2019). Q4 RevPARa was up +72.0% vs 2022 due
to a comparable period in which the industry was substantially
impacted by localised travel restrictions in late 2022; when
compared with 2019, Q4 RevPARa slipped back down to
‑0.6%, as in comparison to Q3 the final quarter of the year is more
weighted to business demand and this is still experiencing a lag
from the more gradual return of international inbound travel. Q4
occupancy was 59.5%, up +17.6%pts on 2022 but down ‑2.4%pts on 2019
levels, whilst rate was +21.1% higher than the prior year and +3.3%
higher than 2019. For the year, Tier 1 cities which are more
weighted to international travel saw RevPARa still down
-11% vs 2019, whilst Tier 2‑4 cities which are more weighted to
domestic and leisure demand were up +7%.
Revenue from the reportable
segmenta increased by $74m (+85%) to $161m. Driven by
the improvement in trading, operating profit increased by $73m
(+317%) to $96m (an increase of $23m or +32% vs 2019). Fee
margina was 59.6%, compared to 26.4% in 2022 and 54.1%
in 2019. There were $46m of incentive management fees earned (2022:
$16m; 2019: $48m).
a. Definitions for non-GAAP measures can be found in the 'Key
performance measures and non-GAAP measures' section along with
reconciliations of these measures to the most directly comparable
line items within the Financial Statements.
|
Hotels
|
|
Rooms
|
|
Greater China hotel and room count
|
|
Change
over
|
|
|
Change
over
|
|
2023
|
2022
|
|
2023
|
2022
|
|
31
December
|
31
December
|
|
31
December
|
31
December
|
Analysed by brand
|
|
|
|
|
|
|
Six Senses
|
1
|
-
|
|
130
|
-
|
|
Regent
|
6
|
1
|
|
2,051
|
136
|
|
InterContinental
|
60
|
6
|
|
23,383
|
1,979
|
|
Vignette Collection
|
3
|
3
|
|
722
|
722
|
|
Kimpton
|
3
|
1
|
|
450
|
143
|
|
Hotel Indigo
|
23
|
4
|
|
3,611
|
637
|
|
voco
|
12
|
4
|
|
2,417
|
842
|
|
HUALUXE
|
20
|
(1)
|
|
5,529
|
(454)
|
|
Crowne Plaza
|
124
|
13
|
|
41,805
|
3,662
|
|
EVEN Hotels
|
7
|
4
|
|
1,187
|
750
|
|
Holiday Inn Express
|
313
|
35
|
|
56,076
|
4,133
|
|
Holiday Inn
|
132
|
4
|
|
34,826
|
501
|
|
Othera
|
8
|
(1)
|
|
7,155
|
(176)
|
|
|
____
|
____
|
|
______
|
______
|
Total
|
712
|
73
|
|
179,342
|
12,875
|
|
|
____
|
____
|
|
______
|
______
|
Analysed by ownership
type
|
|
|
|
|
|
|
Franchised
|
275
|
60
|
|
56,823
|
10,756
|
|
Managed
|
437
|
13
|
|
122,519
|
2,119
|
|
|
____
|
____
|
|
_______
|
______
|
Total
|
712
|
73
|
|
179,342
|
12,875
|
|
|
____
|
____
|
|
_______
|
______
|
a. Includes one open hotel that will be re-branded to
voco.
|
Hotels
|
|
Rooms
|
|
Greater China Pipeline
|
|
Change
over
|
|
|
Change
over
|
|
2023
|
2022
|
|
2023
|
2022
|
|
31
December
|
31
December
|
|
31
December
|
31
December
|
Analysed by brand
|
|
|
|
|
|
|
Six Senses
|
4
|
-
|
|
233
|
-
|
|
Regent
|
3
|
(1)
|
|
807
|
(135)
|
|
InterContinental
|
32
|
3
|
|
9,053
|
671
|
|
Vignette Collection
|
1
|
1
|
|
272
|
272
|
|
Kimpton
|
11
|
2
|
|
2,878
|
552
|
|
Hotel Indigo
|
48
|
1
|
|
8,293
|
133
|
|
voco
|
11
|
8
|
|
2,451
|
1,796
|
|
HUALUXE
|
25
|
4
|
|
6,343
|
993
|
|
Crowne Plaza
|
68
|
4
|
|
18,703
|
1,448
|
|
EVEN Hotels
|
22
|
1
|
|
4,144
|
36
|
|
Holiday Inn Express
|
194
|
5
|
|
31,247
|
603
|
|
Holiday Inn
|
88
|
8
|
|
21,140
|
1,456
|
|
|
____
|
____
|
|
______
|
____
|
Total
|
507
|
36
|
|
105,564
|
7,825
|
|
|
____
|
____
|
|
______
|
____
|
Analysed by ownership
type
|
|
|
|
|
|
|
Franchised
|
258
|
25
|
|
47,579
|
5,214
|
|
Managed
|
249
|
11
|
|
57,985
|
2,611
|
|
|
____
|
____
|
|
_______
|
______
|
Total
|
507
|
36
|
|
105,564
|
7,825
|
|
|
____
|
____
|
|
_______
|
______
|
Gross system size growth was +9.8%
year-on-year with the opening of 16.3k rooms (87 hotels) in the
Greater China region, of which 8.2k (41 hotels) opened in a
particularly busy final quarter of the year which also saw the
milestone of over 700 open hotels reached. Openings over the course
of 2023 included 51 for the Holiday Inn Brand Family, including
Holiday Inn Chengdu East and Holiday Inn Express Shanghai NECC, and
14 Crowne Plaza properties, including Chengdu Tianfu New Area which
took the Crowne Plaza brand's category leading position in the
region to 124 hotels. There were four openings for voco and the
first three for Vignette Collection (Hangzhou Huaxia Center Hotel,
WM Hotel Hong Kong and The Xanadu Guangzhou, each opened within two
months of signing) as these brands expand in the region, and which
contributed to conversions accounting for 32% of all openings in
the year. Across Luxury & Lifestyle brands there were 15
openings, including a further flagship for Regent with Shanghai On
The Bund, and six openings for InterContinental including Shenzhen
World Exhibition & Convention Center, Changzhou and Wuxi Taihu
New City. Other notable openings included EVEN Hotel Zhongshan City
Center, which is a new flagship for this brand that now has 7 open
in the region and a pipeline for a further 22. There were 3.5k
rooms (14 hotels) removed in the year, representing a removal rate
of 2.1%. Net system size growth was +7.7% year-on-year.
There were 26.1k rooms (134
hotels) signed during the year, including 8.4k rooms (41 hotels)
during Q4. During the year there were 59 signings for Holiday Inn
Express and 16 for Holiday Inn, growing their pipelines to 194 and
88, respectively. Crowne Plaza had 17 signings, whilst voco
achieved a further 12. There were 20 signings across our Luxury
& Lifestyle brands; of these, there were seven for
InterContinental, including Hangzhou Wulin, Zhengzhou Zhengdong and
Haikou West Coast. Our six Luxury & Lifestyle brands grew to
represent 20% of both the existing system size and the pipeline in
the region.
The pipeline stands at 105.6k
rooms (507 hotels), which represents 59% of the current system size
in the region.
Central
|
12 months ended 31
December
|
|
|
|
|
|
2023
|
2022
|
%
|
Central results
|
$m
|
$m
|
change
|
|
|
|
|
Revenue
|
221
|
199
|
11.1
|
Gross costs
|
(328)
|
(307)
|
6.8
|
|
____
|
____
|
____
|
Operating loss
|
(107)
|
(108)
|
(0.9)
|
|
____
|
____
|
____
|
Central revenue, which is mainly
comprised of technology fee income and revenue from insurance
activities, increased by $22m (+11.1%) to $221m in 2023, primarily
driven by the growth of IHG system size and insurance
programme.
Gross costs increased by $21m
(+6.8%) year-on-year, driven by $12m increase in the insurance
programme which was matched by associated revenues and by
investment spend to support growth initiatives, including the
integration of Iberostar Beachfront Resorts.
The resulting $107m operating loss
was a decrease of $1m (-0.9%) year-on-year.
Key performance measures and non-GAAP
measures
In addition to performance
measures directly observable in the Financial Statements (IFRS
measures), certain financial measures are presented 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 each other. As these measures exclude
certain items (for example impairment and the costs of individually
significant legal cases or commercial disputes) they 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 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.
RevPAR and ADR are quoted at a
constant US$ exchange rate, in order to allow a better
understanding of the comparable year-on-year trading performance
excluding distortions created by fluctuations in currency
movements.
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
and exclusive partner hotels including food and beverage, meetings
and other revenues, reflecting the value driven by IHG and the base
upon which fees are typically earned; 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 revenue is
not revenue attributable to IHG as these managed, franchised and
exclusive partner hotels are owned by third parties.
Total gross revenue is used to
describe this measure as it aligns with terms used in the Group's
management, franchise and exclusive partner agreements and
therefore is well understood by owners and other
stakeholders.
Revenue and operating profit measures
Revenue and operating profit from
(1) fee business, (2) owned, leased and managed lease hotels, and
(3) insurance activities are described as 'revenue from reportable
segments' and 'operating profit from reportable segments',
respectively, within note 3 to the Group Financial Statements.
These measures are presented insofar as they relate to each of the
Group's regions and its Central functions. Management believes
revenue and operating profit from reportable segments are
meaningful to investors and other stakeholders as they exclude the
following elements and reflect how management monitors the
business:
●
|
System Fund and reimbursables -
the System Fund is not managed to generate a surplus or deficit for
IHG over the longer term; it 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
specific purposes of use including marketing, the Guest Reservation
System and loyalty programme. There is a cost equal to reimbursable
revenues so there is no profit impact. Cost reimbursements are not
applicable to all hotels, and growth in these revenues is not
reflective of growth in the performance of the Group. As such,
management does not include these revenues in their analysis of
results.
|
●
|
Exceptional items - these are
identified by virtue of their size, nature or incidence with
consideration given to consistency of treatment with prior years
and between gains and losses. Exceptional items 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 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. The Group's reported
operating profit additionally excludes fair value changes in
contingent purchase consideration, which relates to financing of
acquisitions. 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 and to exclude revenue and
operating profit from insurance activities, which are not a core
part of the Group's trading operations.
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 revenue from reportable segments and operating
profit from reportable segments, as defined above, adjusted to
exclude revenue and operating profit from the Group's owned, leased
and managed lease hotels as well as from insurance activities and
significant liquidated damages.
Management believes fee margin is
meaningful to investors and other stakeholders as an indicator of
the sustainable long-term growth in the profitability of IHG's core
fee-based business, as the scale of IHG's operations increases with
growth in IHG's system size.
Adjusted interest
Adjusted interest is presented
before exceptional items and excludes foreign exchange gains/losses
primarily related to the Group's internal funding structure and the
following items of interest which are recorded within the System
Fund:
●
|
Interest income is recorded in the
System Fund on the outstanding cash balance relating to the IHG
loyalty programme. These interest payments are recognised as
interest expense for IHG.
|
●
|
Other components of System Fund
interest income and expense, including capitalised interest, lease
interest expense and interest income on overdue
receivables.
|
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).
The exclusion of foreign exchange
gains/losses provides greater comparability with covenant interest
as calculated under the terms of the Group's revolving credit
facility.
Management believes adjusted
interest is a meaningful measure for investors and other
stakeholders as it provides an indication of the comparable
year-on-year expense associated with financing the business
including the interest on any balance held on behalf of the System
Fund.
Adjusted tax
Adjusted tax excludes the impact
of foreign exchange gains/losses, exceptional items, System Fund
and fair value gains/losses on contingent consideration.
Foreign
exchange gains/losses vary year-on-year depending on the movement
in exchange rates, and fair value gains/losses on contingent
consideration and exceptional items also vary year-on-year. These
can impact the current year's tax charge. The System Fund
(including interest and tax) is not managed to a surplus or deficit
for IHG over the longer term and is, in general, not subject to
tax. Management believes removing these from both profit and tax
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. .
The adjusted tax definition has
been amended from 2023 to align to the adjustments made to adjusted
earnings per share and ensure consistency between measures. The
measure has been re-presented for prior years to show consistent
presentation.
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 the System Fund
and reimbursable result, interest attributable to the System Fund
and foreign exchange gains/losses as excluded in adjusted interest
(above), change in fair value of contingent purchase consideration,
exceptional items, and the related tax impacts of such adjustments
and exceptional tax.
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 principal amounts payable and
receivable on maturity of derivatives swapping debt values, less
cash and cash equivalents. A summary of the composition of net debt
is included in note 10 to the 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 targeting this ratio at 2.5-3.0x. Adjusted EBITDA is
defined as cash flow from operations, excluding cash flows relating
to exceptional items, cash flows arising from the System Fund and
reimbursable result, other non-cash adjustments to operating profit
or loss, working capital and other adjustments, and contract
acquisition costs (key money).
Adjusted EBITDA is useful to
investors as an approximation of operational cash flow generation
and is also relevant to the Group's banking covenants, which use
Covenant EBITDA in calculating the leverage ratio. Details of
covenant levels and performance against these are provided in
note to the Group Financial Statements.
Gross capital expenditure, net capital expenditure, adjusted
free cash flow
These measures have limitations as
they omit certain components of the overall cash flow statement.
They are not intended to represent IHG's residual cash flow
available for discretionary expenditures, nor do they reflect the
Group's future capital commitments. These measures are used by many
companies, but there can be differences in how each company defines
the terms, limiting their usefulness as a comparative measure.
Therefore, it is important to view these measures only as a
complement to the Group statement of cash flows.
Gross capital expenditure
Gross capital expenditure
represents the consolidated capital expenditure of IHG inclusive of
System Fund capital investments. Gross capital expenditure is
defined as net cash from investing activities, adjusted to include
contract acquisition costs (key money). In order to demonstrate the
capital outflow of the Group, cash flows arising from any disposals
or distributions from associates and joint ventures are excluded.
The measure also excludes any material investments made in
acquiring businesses, including any subsequent payments of deferred
or contingent purchase consideration included within investing
activities, which represent ongoing payments for
acquisitions.
Gross capital expenditure is reported as either maintenance,
recyclable or System Fund. This disaggregation provides useful
information as it enables users to distinguish between:
●
|
System Fund capital investments
which are strategic investments to drive growth at hotel
level;
|
●
|
Recyclable investments (such as
investments in associates and joint ventures and loans to
facilitate third-party ownership of hotel assets), 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 and loan
repayment receipts, or distributions from associates and joint
ventures.
In addition, System Fund
depreciation and amortisation relating to property, plant and
equipment and intangible assets, respectively, is added back,
reducing the overall cash outflow. This reflects the way in which
System Funded capital investments are recovered from the System
Fund, over the life of the asset.
Management believes net capital
expenditure is a useful measure as it illustrates the net capital
investment by IHG, after taking into account capital recycling
through asset disposal and the funding of strategic investments by
the System Fund. It provides investors and other stakeholders with
visibility of the cash flows which are allocated to long-term
investments to drive the Group's strategy.
Adjusted free cash flow
Adjusted free cash flow is net
cash from operating activities adjusted for: (1) the inclusion of
the cash outflow arising from the purchase of shares by employee
share trusts reflecting the requirement to satisfy incentive
schemes which are linked to operating performance; (2) the
inclusion of maintenance capital expenditure (excluding contract
acquisition costs); (3) the inclusion of the principal element of
lease payments; and (4) the exclusion of payments of deferred or
contingent purchase consideration included within net cash from
operating activities.
Management believes adjusted free
cash flow is a useful measure for investors and other stakeholders
as it represents the cash available to invest back into the
business to drive future growth and pay the ordinary dividend, with
any surplus being available for additional returns to
shareholders.
Changes in definitions to the 2022 Annual Report and
Accounts
The following definitions have
been amended:
●
|
The definition and calculation of
Total Gross Revenue has been amended to include revenue from
exclusive partner hotels, as this revenue reflects the value that
IHG generates for its exclusive partner hotels. The value of Total
Gross Revenue is unchanged in comparative years.
|
●
|
Underlying fee revenue and
operating profit measures have been amended to separate revenue and
related costs from insurance activities from fee business revenue
and costs. This change is due to the adoption of IFRS 17 'Insurance
Contracts', which requires insurance related revenue and costs to
be disclosed separately from fee revenues. Underlying fee revenue
and operating profit measures have also been amended. Comparative
periods have been restated for this change.
|
●
|
The definition and reconciliation
of fee margin has been amended to remove the exclusion of insurance
revenues and costs, as insurance related revenues and costs are no
longer included as part of fee business (see above). Where
information is available, comparative periods have been restated
for this change.
|
●
|
The adjusted tax definition has
been amended to align to the adjustments made to adjusted earnings
per share to ensure consistency between measures. Fair value
gains/losses on contingent consideration and System Fund interest
are therefore now excluded from the calculation of adjusted tax.
The measure has been re-presented for prior years to show
consistent presentation.
|
|
|
Revenue and operating profit
non-GAAP reconciliations
Highlights for the 12 months ended 31
December
Reportable segments
|
Revenue
|
|
Operating
profit
|
|
|
|
|
|
|
|
|
|
2023
|
2022
Re-presenteda
|
%
|
|
2023
|
2022
Re-presenteda
|
%
|
|
$m
|
$m
|
change
|
|
$m
|
$m
|
change
|
|
|
|
|
|
|
|
|
Per Group income
statement
|
4,624
|
3,892
|
18.8
|
|
1,066
|
628
|
69.7
|
System Fund and
reimbursables
|
(2,460)
|
(2,049)
|
20.1
|
|
(19)
|
105
|
NMb
|
Operating exceptional
items
|
-
|
-
|
-
|
|
(28)
|
95
|
NMb
|
|
_____
|
_____
|
_____
|
|
_____
|
_____
|
_____
|
Reportable segments
|
2,164
|
1,843
|
17.4
|
|
1,019
|
828
|
23.1
|
|
|
|
|
|
|
|
|
Reportable segments analysed
as:
|
|
|
|
|
|
|
|
Fee business
|
1,672
|
1,434
|
16.6
|
|
992
|
805
|
23.2
|
Owned, leased and managed
lease
|
471
|
394
|
19.5
|
|
29
|
19
|
52.6
|
Insurance activities
|
21
|
15
|
40.0
|
|
(2)
|
4
|
NMb
|
|
_____
|
_____
|
_____
|
|
_____
|
_____
|
_____
|
Reportable segments
|
2,164
|
1,843
|
17.4
|
|
1,019
|
828
|
23.1
|
a. Re-presented for the adoption of IFRS 17 'Insurance
Contracts' and to combine System Fund and reimbursables (see 'New
accounting standards and other presentational changes' in 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.
Underlying revenue and underlying operating
profit
|
Revenue
|
|
Operating
profit
|
|
|
|
|
|
2023
|
2022
|
%
|
|
2023
|
2022
|
%
|
|
$m
|
$m
|
change
|
|
$m
|
$m
|
Change
|
|
|
|
|
|
|
|
|
Reportable segments (see
above)
|
2,164
|
1,843
|
17.4
|
|
1,019
|
828
|
23.1
|
Significant liquidated
damagesb
|
-
|
(7)
|
NMa
|
|
-
|
(7)
|
NMa
|
Owned and leased asset
disposalsc
|
-
|
(19)
|
NMa
|
|
-
|
(2)
|
NMa
|
Currency impact
|
-
|
-
|
-
|
|
-
|
(1)
|
NMa
|
|
____
|
____
|
_____
|
|
_____
|
_____
|
_____
|
Underlying revenue and underlying
operating profit
|
2,164
|
1,817
|
19.1
|
|
1,019
|
818
|
24.6
|
a. Percentage change considered not meaningful, such as where a
positive balance in the latest period is comparable to a negative
or zero balance in the prior period.
b. $7m
recognised in 2022 reflects the significant liquidated damages
related to one hotel in EMEAA.
c. The
results of three UK portfolio hotels and one InterContinental Hotel
have been removed in 2022 (being the year of disposal) to determine
underlying growth.
Underlying fee revenue and underlying fee operating
profit
|
Revenue
|
Operating
profit
|
|
|
|
|
2023
|
2022
Re-presentedb
|
%
|
|
2023
|
2022
Re-presentedb
|
%
|
|
$m
|
$m
|
change
|
|
$m
|
$m
|
change
|
|
|
|
|
|
|
|
|
Reportable segments fee business
(see above)
|
1,672
|
1,434
|
16.6
|
|
992
|
805
|
23.2
|
Significant liquidated
damagesc
|
-
|
(7)
|
NMa
|
|
-
|
(7)
|
NMa
|
Currency impact
|
-
|
(4)
|
NMa
|
|
-
|
(2)
|
NMa
|
|
_____
|
_____
|
_____
|
|
_____
|
_____
|
_____
|
Underlying fee revenue and
underlying fee operating profit
|
1,672
|
1,423
|
17.5
|
|
992
|
796
|
24.6
|
a. Percentage change considered not meaningful, such as where a
positive balance in the latest period is comparable to a negative
or zero balance in the prior period.
b. Re-presented for the adoption of IFRS 17 'Insurance
Contracts'.
c. $7m
recognised in 2022 reflects the significant liquidated damages
related to one hotel in EMEAA.
Americas
|
Revenue
|
|
Operating
profita
|
|
|
|
|
|
|
|
|
|
2023
|
2022
|
%
|
|
2023
|
2022
|
%
|
|
$m
|
$m
|
change
|
|
$m
|
$m
|
change
|
|
|
|
|
|
|
|
|
Per financial statements
|
1,105
|
1,005
|
10.0
|
|
815
|
761
|
7.1
|
|
|
|
|
|
|
|
|
Reportable segments analysed
as:
|
|
|
|
|
|
|
|
Fee business
|
957
|
879
|
8.9
|
|
787
|
741
|
6.2
|
Owned, leased and managed
lease
|
148
|
126
|
17.5
|
|
28
|
20
|
40.0
|
|
_____
|
_____
|
_____
|
|
_____
|
_____
|
_____
|
|
1,105
|
1,005
|
10.0
|
|
815
|
761
|
7.1
|
|
|
|
|
|
|
|
|
Reportable segments (see
above)
|
1,105
|
1,005
|
10.0
|
|
815
|
761
|
7.1
|
Currency Impact
|
-
|
2
|
NMb
|
|
-
|
-
|
-
|
|
_____
|
_____
|
_____
|
|
_____
|
_____
|
_____
|
Underlying revenue and underlying
operating profit
|
1,105
|
1,007
|
9.7
|
|
815
|
761
|
7.1
|
|
|
|
|
|
|
|
|
Owned, leased and managed lease
included in the above
|
(148)
|
(126)
|
17.5
|
|
(28)
|
(20)
|
40.0
|
|
_____
|
_____
|
_____
|
|
_____
|
_____
|
_____
|
Underlying fee business
|
957
|
881
|
8.6
|
|
787
|
741
|
6.2
|
a.
Before exceptional items.
b.
Percentage change considered not meaningful, such
as where a positive balance in the latest period is comparable to a
negative or zero balance in the prior period.
EMEAA
|
Revenue
|
|
Operating
profita
|
|
|
|
|
|
|
|
|
|
2023
|
2022
|
%
|
|
2023
|
2022
|
%
|
|
$m
|
$m
|
change
|
|
$m
|
$m
|
change
|
|
|
|
|
|
|
|
|
Per financial statements
|
677
|
552
|
22.6
|
|
215
|
152
|
41.4
|
|
|
|
|
|
|
|
|
Reportable segments analysed
as:
|
|
|
|
|
|
|
|
Fee business
|
354
|
284
|
24.6
|
|
214
|
153
|
39.9
|
Owned, leased and managed
lease
|
323
|
268
|
20.5
|
|
1
|
(1)
|
NMb
|
|
_____
|
_____
|
_____
|
|
_____
|
_____
|
_____
|
|
677
|
552
|
22.6
|
|
215
|
152
|
41.4
|
|
|
|
|
|
|
|
|
Reportable segments (see
above)
|
677
|
552
|
22.6
|
|
215
|
152
|
41.4
|
Significant liquidated
damagesc
|
-
|
(7)
|
NMb
|
|
-
|
(7)
|
NMb
|
Owned and leased asset
disposalsd
|
-
|
(19)
|
NMb
|
|
-
|
(2)
|
NMb
|
Currency impact
|
-
|
3
|
NMb
|
|
-
|
1
|
NMb
|
|
_____
|
_____
|
_____
|
|
_____
|
_____
|
_____
|
Underlying revenue and underlying
operating profit
|
677
|
529
|
28.0
|
|
215
|
144
|
49.3
|
|
|
|
|
|
|
|
|
Owned, leased and managed lease
included in the above
|
(323)
|
(253)
|
27.7
|
|
(1)
|
2
|
(150.0)
|
|
_____
|
_____
|
_____
|
|
_____
|
_____
|
_____
|
Underlying fee business
|
354
|
276
|
28.3
|
|
214
|
146
|
46.6
|
a. Before exceptional items.
b. Percentage change considered not meaningful, such as where a
positive balance in the latest period is comparable to a negative
or zero balance in the prior period.
c. $7m
recognised in 2022 reflects the significant liquidated damages
related to one hotel in EMEAA.
d. The
results of three UK portfolio hotels and one InterContinental Hotel
have been removed in 2022 (being the year of disposal) to determine
underlying growth.
Greater China
|
Revenue
|
|
Operating
profita
|
|
|
|
|
|
|
|
|
|
2023
|
2022
|
%
|
|
2023
|
2022
|
%
|
|
$m
|
$m
|
change
|
|
$m
|
$m
|
change
|
Per financial statements
|
|
|
|
|
|
|
|
Reportable segments analysed
as:
|
161
|
87
|
85.1
|
|
96
|
23
|
317.4
|
|
____
|
_____
|
_____
|
|
_____
|
_____
|
_____
|
Fee business
|
161
|
87
|
85.1
|
|
96
|
23
|
317.4
|
|
|
|
|
|
|
|
|
Reportable segments (see
above)
|
161
|
87
|
85.1
|
|
96
|
23
|
317.4
|
Currency impact
|
-
|
(5)
|
NMb
|
|
-
|
(1)
|
NMb
|
|
_____
|
_____
|
____
|
|
_____
|
_____
|
_____
|
Underlying revenue and underlying
operating profit
|
161
|
82
|
96.3
|
|
96
|
22
|
336.4
|
a.
Before exceptional items.
b.
Percentage change considered not meaningful, such
as where a positive balance in the latest period is comparable to a
negative or zero balance in the prior period.
Fee margin reconciliation
|
12 months ended 31 December
2023
|
|
|
|
Americas
|
EMEAA
|
Greater
China
|
Central
|
Total
|
Revenue $m
|
|
|
|
|
|
Reportable segments analysed as fee
business (see above)
|
957
|
354
|
161
|
200
|
1,672
|
|
_____
|
_____
|
_____
|
_____
|
_____
|
|
957
|
354
|
161
|
200
|
1,672
|
|
|
|
|
|
|
Operating profit $m
|
|
|
|
|
|
Reportable segments analysed as fee
business (see above)
|
787
|
214
|
96
|
(105)
|
992
|
|
_____
|
_____
|
_____
|
_____
|
_____
|
|
787
|
214
|
96
|
(105)
|
992
|
|
|
|
|
|
|
Fee
margin %
|
82.2%
|
60.5%
|
59.6%
|
(52.5)%
|
59.3%
|
|
12 months ended 31 December
2022 (Re-presenteda)
|
|
|
|
|
|
|
|
Americas
|
EMEAA
|
Greater
China
|
Central
|
Total
|
Revenue $m
|
|
|
|
|
|
Reportable segments analysed as fee
business (see above)
|
879
|
284
|
87
|
184
|
1,434
|
Significant liquidated
damages
|
-
|
(7)
|
-
|
-
|
(7)
|
|
_____
|
_____
|
_____
|
_____
|
_____
|
|
879
|
277
|
87
|
184
|
1,427
|
|
|
|
|
|
|
Operating profit $m
|
|
|
|
|
|
Reportable segments analysed as fee
business (see above)
|
741
|
153
|
23
|
(112)
|
805
|
Significant liquidated
damages
|
-
|
(7)
|
-
|
-
|
(7)
|
|
_____
|
_____
|
_____
|
_____
|
_____
|
|
741
|
146
|
23
|
(112)
|
798
|
|
|
|
|
|
|
Fee
margin %
|
84.3%
|
52.7%
|
26.4%
|
(60.9)%
|
55.9%
|
a. Re-presented to reflect the adoption of IFRS 17 'Insurance
Contracts'.
|
12 months ended 31 December
2021 (Re-presenteda)
|
|
|
|
|
|
|
|
Americas
|
EMEAA
|
Greater
China
|
Central
|
Total
|
Revenue $m
|
|
|
|
|
|
Reportable segments analysed as fee
business (see above)
|
691
|
149
|
116
|
188
|
1,144
|
Significant liquidated
damages
|
-
|
-
|
(6)
|
-
|
(6)
|
|
_____
|
_____
|
_____
|
_____
|
_____
|
|
691
|
149
|
110
|
188
|
1,138
|
|
|
|
|
|
|
Operating profit $m
|
|
|
|
|
|
Reportable segments analysed as fee
business (see above)
|
568
|
32
|
58
|
(89)
|
569
|
Significant liquidated
damages
|
-
|
-
|
(6)
|
-
|
(6)
|
|
_____
|
_____
|
_____
|
_____
|
_____
|
|
568
|
32
|
52
|
(89)
|
563
|
|
|
|
|
|
|
Fee
margin %
|
82.2%
|
21.5%
|
47.3%
|
(47.3)%
|
49.5%
|
a. Re-presented to reflect the adoption of IFRS 17 'Insurance
Contracts'.
Net capital expenditure reconciliation
|
12 months
ended
31
December
|
|
|
|
|
2023
|
2022
|
|
$m
|
$m
|
|
|
|
Net
cash from investing activities
|
(137)
|
(78)
|
Adjusted for:
|
|
|
Contract
acquisition costs, net of repayments
|
(101)
|
(64)
|
System
Fund depreciation and amortisationa
|
81
|
83
|
|
_____
|
_____
|
Net capital expenditure
|
(157)
|
(59)
|
|
_____
|
_____
|
Analysed as:
|
|
|
Capital expenditure: maintenance
(including contract acquisition costs, net of repayments, of $101m
(2022: $64m))
|
(139)
|
(108)
|
Capital expenditure: recyclable
investments
|
(53)
|
1
|
Capital expenditure: System Fund
capital investments
|
35
|
48
|
|
_____
|
_____
|
Net capital expenditure
|
(157)
|
(59)
|
|
_____
|
_____
|
a. Excludes depreciation of right-of-use assets.
Gross capital expenditure reconciliation
|
12 months
ended
31
December
|
|
|
|
|
2023
|
2022
|
|
$m
|
$m
|
|
|
|
Net
capital expenditure
|
(157)
|
(59)
|
Add back:
|
|
|
Disposal
receipts
|
(8)
|
(16)
|
Repayments of
contract acquisition costs
|
(7)
|
(3)
|
System
Fund depreciation and amortisationa
|
(81)
|
(83)
|
|
_____
|
_____
|
Gross capital expenditure
|
(253)
|
(161)
|
|
_____
|
_____
|
Analysed as:
|
|
|
Capital expenditure: maintenance
(including contract
acquisition costs of $108m (2022:
$67m))
|
(146)
|
(111)
|
Capital expenditure: recyclable
investments
|
(61)
|
(15)
|
Capital expenditure: System Fund
capital investments
|
(46)
|
(35)
|
|
_____
|
_____
|
Gross capital expenditure
|
(253)
|
(161)
|
|
_____
|
_____
|
a. Excludes depreciation of right-of-use assets.
Adjusted free cash flow reconciliation
|
12 months
ended
31
December
|
|
|
|
2023
|
2022
|
|
$m
|
$m
|
|
|
|
Net
cash from operating activities
|
893
|
646
|
Adjusted for:
|
|
|
Principal element of lease
payments
|
(28)
|
(36)
|
Purchase of shares by employee
share trusts
|
(8)
|
(1)
|
Capital expenditure: maintenance
(excluding contract acquisition costs)
|
(38)
|
(44)
|
|
_____
|
_____
|
Adjusted free cash flow
|
819
|
565
|
|
_____
|
_____
|
Adjusted interest reconciliation
|
12 months
ended
31
December
|
|
|
|
2023
|
2022
|
|
$m
|
$m
|
Net
financial expenses
|
|
|
Financial income
|
39
|
22
|
Financial expenses
|
(91)
|
(118)
|
|
_____
|
_____
|
|
(52)
|
(96)
|
Adjusted for:
|
|
|
Interest attributable to the System
Fund
|
(44)
|
(16)
|
Foreign exchange gains
|
(35)
|
(10)
|
|
_____
|
_____
|
|
(79)
|
(26)
|
|
_____
|
_____
|
Adjusted interest
|
(131)
|
(122)
|
|
_____
|
_____
|
|
|
|
|
Adjusted tax and tax rate reconciliation
|
|
2023
|
2022
(Re-presenteda)
|
|
|
Profit before
tax
$m
|
Tax
$m
|
Tax
rate
|
Profit
before tax
$m
|
Tax
$m
|
Tax
rate
|
|
|
|
|
|
|
|
|
|
|
|
Group income statement
|
1,010
|
(260)
|
25.7%
|
540
|
(164)
|
30.4%
|
|
|
Adjust for:
|
|
|
|
|
|
|
|
|
Exceptional items
|
(28)
|
7
|
|
95
|
(26)
|
|
|
|
Foreign exchange gains
|
(35)
|
(3)
|
|
(10)
|
(4)
|
|
|
|
System Fund
|
(19)
|
3
|
|
105
|
-
|
|
|
|
System Fund interest
|
(44)
|
-
|
|
(16)
|
-
|
|
|
|
Fair value losses/(gains) on
contingent purchase consideration
|
4
|
-
|
|
(8)
|
-
|
|
|
|
|
_____
|
_____
|
|
_____
|
_____
|
|
|
|
Adjusted tax and tax
rate
|
888
|
(253)
|
28.5%
|
706
|
(194)
|
27.5%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
a. The
definition of Adjusted tax measures has been amended in 2023, see
the 'Use of key performance measures and non-GAAP measures'
section. Prior year measures have been re-represented
accordingly.
Adjusted earnings per ordinary share
reconciliation
|
12 months
ended
31 December
|
|
|
|
|
2023
|
2022
|
|
$m
|
$m
|
Profit available for equity
holders
|
750
|
375
|
Adjusting items:
|
|
|
System Fund and
reimbursable result
|
(19)
|
105
|
Interest attributable
to the System Fund
|
(44)
|
(16)
|
Operating exceptional
items
|
(28)
|
95
|
Fair value
losses/(gains) on contingent purchase consideration
|
4
|
(8)
|
Foreign exchange
gains
|
(35)
|
(10)
|
Tax attributable to the
System Fund
|
3
|
-
|
Tax on foreign exchange
gains
|
(3)
|
(4)
|
Tax on exceptional
items
|
7
|
(26)
|
|
_____
|
_____
|
Adjusted earnings
|
635
|
511
|
|
|
|
Basic weighted average number of
ordinary shares (millions)
|
169
|
181
|
Adjusted earnings per ordinary share
(cents)
|
375.7
|
282.3
|
|
|
|
Highlights for the 12 months ended 31 December 2023 vs 31
December 2019
Reportable segments
|
Revenue
|
|
Operating
profit
|
|
|
|
|
|
|
|
|
|
2023
|
2019
Re-presentedb
|
%
|
|
2023
|
2019
Re-presentedb
|
%
|
|
$m
|
$m
|
change
|
|
$m
|
$m
|
change
|
|
|
|
|
|
|
|
|
Per Group income
statement
|
4,624
|
4,627
|
(0.1)
|
|
1,066
|
630
|
69.2
|
System Fund and
reimbursables
|
(2,460)
|
(2,544)
|
(3.3)
|
|
(19)
|
49
|
NMa
|
Operating exceptional
items
|
-
|
-
|
-
|
|
(28)
|
186
|
NMa
|
|
_____
|
_____
|
_____
|
|
_____
|
_____
|
_____
|
Reportable segments
|
2,164
|
2,083
|
3.9
|
|
1,019
|
865
|
17.8
|
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. Re-presented for the adoption of IFRS 17 'Insurance
Contracts' and to combine System Fund and reimbursables (see 'New
accounting standards and other presentational changes' in the Group
Financial Statements).
Americas
|
Revenue
|
|
Operating
profita
|
|
|
|
|
|
|
|
|
|
2023
|
2019
|
%
|
|
2023
|
2019
|
%
|
|
$m
|
$m
|
change
|
|
$m
|
$m
|
change
|
|
|
|
|
|
|
|
|
Per financial statements
|
1,105
|
1,040
|
6.3
|
|
815
|
700
|
16.4
|
|
|
|
|
|
|
|
|
Reportable segments analysed
as:
|
|
|
|
|
|
|
|
Fee business
|
957
|
853
|
12.2
|
|
787
|
663
|
18.7
|
Owned, leased and managed
lease
|
148
|
187
|
(20.9)
|
|
28
|
37
|
(24.3)
|
|
_____
|
_____
|
_____
|
|
_____
|
_____
|
_____
|
|
1,105
|
1,040
|
6.3
|
|
815
|
700
|
16.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
a. Before exceptional items.
EMEAA
|
Revenue
|
|
Operating
profita
|
|
|
|
|
|
|
|
|
|
2023
|
2019
|
%
|
|
2023
|
2019
|
%
|
|
$m
|
$m
|
change
|
|
$m
|
$m
|
change
|
|
|
|
|
|
|
|
|
Per financial statements
|
677
|
723
|
(6.4)
|
|
215
|
217
|
(0.9)
|
|
|
|
|
|
|
|
|
Reportable segments analysed
as:
|
|
|
|
|
|
|
|
Fee business
|
354
|
337
|
5.0
|
|
214
|
202
|
5.9
|
Owned, leased and managed
lease
|
323
|
386
|
(16.3)
|
|
1
|
15
|
(93.3)
|
|
_____
|
_____
|
_____
|
|
_____
|
_____
|
_____
|
|
677
|
723
|
(6.4)
|
|
215
|
217
|
(0.9)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
a. Before exceptional items.
Greater China
|
Revenue
|
|
Operating
profita
|
|
|
|
|
|
|
|
|
|
2023
|
2019
|
%
|
|
2023
|
2019
|
%
|
|
$m
|
$m
|
change
|
|
$m
|
$m
|
change
|
|
|
|
|
|
|
|
|
Per financial statements
|
161
|
135
|
19.3
|
|
96
|
73
|
31.5
|
|
|
|
|
|
|
|
|
Reportable segments analysed
as:
|
|
|
|
|
|
|
|
Fee business
|
161
|
135
|
19.3
|
|
96
|
73
|
31.5
|
a. Before exceptional items.
Fee margin reconciliation
|
12 months ended 31 December
2019
|
|
Americas
|
EMEAA
|
Greater
China
|
Revenue $m
|
|
|
|
Reportable segments analysed as fee
business (see above)
|
853
|
337
|
135
|
Significant liquidated
damages
|
-
|
(11)
|
-
|
|
_____
|
_____
|
_____
|
|
853
|
326
|
135
|
|
|
|
|
Operating profit $m
|
|
|
|
Reportable segments analysed as fee
business (see above)
|
663
|
202
|
73
|
Significant liquidated
damages
|
-
|
(11)
|
-
|
|
_____
|
_____
|
_____
|
|
663
|
191
|
73
|
|
|
|
|
Fee
margin %
|
77.7%
|
58.6%
|
54.1%
|
InterContinental Hotels Group PLC
GROUP INCOME STATEMENT
For
the year ended 31 December 2023
|
2023
Year ended
31
December
$m
|
2022
Year ended
31 December
Re-presented*
$m
|
|
|
|
Revenue from fee business
|
1,672
|
1,434
|
Revenue from owned, leased and
managed lease hotels
|
471
|
394
|
Revenue from insurance
activities
|
21
|
15
|
System Fund and reimbursable
revenues
|
2,460
|
2,049
|
|
_____
|
_____
|
Total revenue (notes 3 and 4)
|
4,624
|
3,892
|
|
|
|
Cost of sales
|
(742)
|
(648)
|
System Fund and reimbursable
expenses
|
(2,441)
|
(2,154)
|
Administrative expenses
|
(338)
|
(353)
|
Insurance expenses
|
(23)
|
(11)
|
Share of profits/(losses) of
associates and joint ventures
|
31
|
(59)
|
Other operating income
|
21
|
29
|
Depreciation and
amortisation
|
(67)
|
(68)
|
Impairment reversal/(loss) on
financial assets
|
1
|
(5)
|
Other net impairment reversals (note
5)
|
-
|
5
|
|
_____
|
_____
|
Operating profit (note 3)
|
1,066
|
628
|
|
|
|
Operating profit analysed
as:
|
|
|
Operating profit before
System Fund, reimbursables and exceptional items
|
1,019
|
828
|
System Fund and reimbursable
result
|
19
|
(105)
|
Operating exceptional items
(note 5)
|
28
|
(95)
|
|
_____
|
_____
|
|
1,066
|
628
|
|
|
|
Financial income
|
39
|
22
|
Financial expenses
|
(91)
|
(118)
|
Fair value (losses)/gains on
contingent purchase consideration
|
(4)
|
8
|
|
_____
|
_____
|
Profit before tax
|
1,010
|
540
|
|
|
|
Tax (note 6)
|
(260)
|
(164)
|
|
_____
|
_____
|
Profit for the year from continuing
operations
|
750
|
376
|
|
_____
|
_____
|
|
|
|
Attributable to:
|
|
|
Equity holders of
the parent
|
750
|
375
|
Non-controlling
interest
|
-
|
1
|
|
_____
|
_____
|
|
750
|
376
|
|
_____
|
_____
|
|
|
|
Earnings per ordinary share (note 8)
|
|
|
Basic
|
443.8¢
|
207.2¢
|
Diluted
|
441.2¢
|
206.0¢
|
* Re-presented for the adoption of IFRS 17 'Insurance
Contracts' and to combine System Fund and reimbursables (see note
1).
InterContinental Hotels Group PLC
GROUP STATEMENT OF COMPREHENSIVE INCOME
For
the year ended 31 December 2023
|
2023
Year ended
31
December
$m
|
2022
Year ended
31
December
Re-presented*
$m
|
|
|
|
Profit for the year
|
750
|
376
|
|
|
|
Other comprehensive (loss)/income
|
|
|
|
|
|
Items that may be subsequently
reclassified to profit or loss:
|
|
|
(Losses)/gains on
cash flow hedges, including related tax
of $nil (2022: $2m credit)
|
(30)
|
35
|
Gains/(losses) on
net investment hedges
|
15
|
(6)
|
Costs of
hedging
|
-
|
3
|
Hedging
losses/(gains) reclassified to financial expenses
|
28
|
(43)
|
Exchange
(losses)/gains on retranslation of foreign operations,
including related tax charge of $4m (2022: $5m
credit)
|
(137)
|
187
|
|
_____
|
_____
|
|
(124)
|
176
|
Items that will not be reclassified
to profit or loss:
|
|
|
(Losses)/gains on equity
instruments classified as fair value through other comprehensive
income, including related tax charge of $1m (2022: $2m
credit)
|
(3)
|
1
|
Re-measurement
(losses)/gains on defined benefit plans,
including related tax of $nil (2022: $6m
charge)
|
(2)
|
15
|
|
|
|
|
_____
|
_____
|
|
(5)
|
16
|
|
_____
|
_____
|
Total other comprehensive (loss)/income for the
year
|
(129)
|
192
|
|
_____
|
_____
|
Total comprehensive income for the year
|
621
|
568
|
|
_____
|
_____
|
|
|
|
Attributable to:
|
|
|
Equity holders of
the parent
|
621
|
568
|
Non-controlling
interest
|
-
|
-
|
|
_____
|
_____
|
|
621
|
568
|
|
_____
|
_____
|
|
|
|
* In 2023, gains/(losses) on
net investment hedges have been presented on a separate line. The
2022 amount was previously presented within 'Exchange
(losses)/gains on retranslation of foreign operations'.
InterContinental Hotels Group PLC
GROUP STATEMENT OF CHANGES IN EQUITY
For
the year ended 31 December 2023
|
Year ended 31 December
2023
|
|
Equity share
capital
|
Other
reserves*
|
Retained
earnings
|
Non-controlling
interest
|
Total
equity
|
|
$m
|
$m
|
$m
|
$m
|
$m
|
|
|
|
|
|
|
|
At beginning of the year
|
137
|
(2,359)
|
607
|
7
|
(1,608)
|
|
|
|
|
|
|
Total comprehensive income for the
year
|
-
|
(127)
|
748
|
-
|
621
|
Repurchase of shares, including
transaction costs
|
(3)
|
3
|
(765)
|
-
|
(765)
|
Purchase of own shares by employee
share trusts
|
-
|
(8)
|
-
|
-
|
(8)
|
Transfer of treasury shares to
employee share trusts
|
-
|
(21)
|
21
|
-
|
-
|
Release of own shares by employee
share trusts
|
-
|
32
|
(32)
|
-
|
-
|
Equity-settled share-based
cost
|
-
|
-
|
51
|
-
|
51
|
Tax related to share
schemes
|
-
|
-
|
11
|
-
|
11
|
Equity dividends paid
|
-
|
-
|
(245)
|
(3)
|
(248)
|
Exchange adjustments
|
7
|
(7)
|
-
|
-
|
-
|
|
_____
|
_____
|
_____
|
_____
|
_____
|
At
end of the year
|
141
|
(2,487)
|
396
|
4
|
(1,946)
|
|
_____
|
_____
|
_____
|
_____
|
_____
|
|
|
|
|
|
|
|
|
Year ended 31 December
2022
|
|
Equity share
capital
|
Other
reserves*
|
Retained
earnings
|
Non-controlling
interest
|
Total
equity
|
|
$m
|
$m
|
$m
|
$m
|
$m
|
|
|
|
|
|
|
At beginning of the year
|
154
|
(2,539)
|
904
|
7
|
(1,474)
|
|
|
|
|
|
|
Total comprehensive income for the
year
|
-
|
178
|
390
|
-
|
568
|
Repurchase of shares, including
transaction costs
|
(1)
|
1
|
(513)
|
-
|
(513)
|
Purchase of own shares by employee
share trusts
|
-
|
(1)
|
-
|
-
|
(1)
|
Transfer of treasury shares to
employee share trusts
|
-
|
(26)
|
26
|
-
|
-
|
Release of own shares by employee
share trusts
|
-
|
12
|
(12)
|
-
|
-
|
Equity-settled share-based
cost
|
-
|
-
|
44
|
-
|
44
|
Tax related to share
schemes
|
-
|
-
|
1
|
-
|
1
|
Equity dividends paid
|
-
|
-
|
(233)
|
-
|
(233)
|
Exchange adjustments
|
(16)
|
16
|
-
|
-
|
-
|
|
_____
|
_____
|
_____
|
_____
|
_____
|
At
end of the year
|
137
|
(2,359)
|
607
|
7
|
(1,608)
|
|
_____
|
_____
|
_____
|
_____
|
_____
|
* Other reserves
comprise the capital redemption reserve, shares held by employee
share trusts, other reserves, fair value reserve, cash flow hedge
reserves and currency translation reserve.
|
Total comprehensive income is shown
net of tax.
|
InterContinental Hotels Group PLC
GROUP STATEMENT OF FINANCIAL POSITION
31
December 2023
|
2023
31
December
|
2022
31
December
Re-presented*
|
|
$m
|
$m
|
ASSETS
|
|
|
Goodwill and other intangible
assets
|
1,099
|
1,144
|
Property, plant and
equipment
|
153
|
157
|
Right-of-use assets
|
273
|
280
|
Investment in associates and joint
ventures
|
48
|
36
|
Retirement benefit assets
|
3
|
2
|
Other financial assets
|
185
|
156
|
Derivative financial
instruments
|
20
|
7
|
Deferred compensation plan
investments
|
250
|
216
|
Non-current other
receivables
|
13
|
3
|
Deferred tax assets
|
134
|
126
|
Contract costs
|
82
|
75
|
Contract assets
|
424
|
336
|
|
______
|
______
|
Total non-current assets
|
2,684
|
2,538
|
|
______
|
______
|
Inventories
|
5
|
4
|
Trade and other
receivables
|
740
|
646
|
Current tax receivable
|
15
|
16
|
Other financial assets
|
7
|
-
|
Cash and cash equivalents
|
1,322
|
976
|
Contract costs
|
5
|
5
|
Contract assets
|
35
|
31
|
|
______
|
______
|
Total current assets
|
2,129
|
1,678
|
|
______
|
______
|
Total assets
|
4,813
|
4,216
|
|
_____
|
_____
|
LIABILITIES
|
|
|
Loans and other
borrowings
|
(599)
|
(55)
|
Lease liabilities
|
(30)
|
(26)
|
Derivative financial
instruments
|
(25)
|
-
|
Trade and other payables
|
(711)
|
(697)
|
Deferred revenue
|
(752)
|
(681)
|
Provisions
|
(10)
|
(44)
|
Insurance liabilities
|
(12)
|
(9)
|
Current tax payable
|
(51)
|
(32)
|
|
______
|
______
|
Total current liabilities
|
(2,190)
|
(1,544)
|
|
______
|
______
|
Loans and other
borrowings
|
(2,567)
|
(2,341)
|
Lease liabilities
|
(396)
|
(401)
|
Derivative financial
instruments
|
-
|
(11)
|
Retirement benefit
obligations
|
(66)
|
(66)
|
Deferred compensation plan
liabilities
|
(250)
|
(216)
|
Trade and other payables
|
(75)
|
(81)
|
Deferred revenue
|
(1,096)
|
(1,043)
|
Provisions
|
(26)
|
(20)
|
Insurance liabilities
|
(25)
|
(23)
|
Deferred tax liabilities
|
(68)
|
(78)
|
|
______
|
______
|
Total non-current liabilities
|
(4,569)
|
(4,280)
|
|
______
|
______
|
Total liabilities
|
(6,759)
|
(5,824)
|
|
_____
|
_____
|
Net
liabilities
|
(1,946)
|
(1,608)
|
|
_____
|
_____
|
EQUITY
|
|
|
IHG shareholders' equity
|
(1,950)
|
(1,615)
|
Non-controlling interest
|
4
|
7
|
|
______
|
______
|
Total equity
|
(1,946)
|
(1,608)
|
|
_____
|
_____
|
|
|
|
* Re-presented for the adoption of IFRS 17 'Insurance
Contracts' (see note 1).
|
|
InterContinental Hotels Group PLC
GROUP STATEMENT OF CASH FLOWS
For
the year ended 31 December 2023
|
2023
Year ended
31
December
|
2022
Year ended
31
December
|
|
$m
|
$m
|
|
|
|
Profit for the year
|
750
|
376
|
Adjustments reconciling profit for
the year to cash flow from operations (note 9)
|
469
|
585
|
|
_____
|
_____
|
Cash
flow from operations
|
1,219
|
961
|
Interest paid
|
(119)
|
(126)
|
Interest received
|
36
|
22
|
Tax paid
|
(243)
|
(211)
|
|
_____
|
_____
|
Net
cash from operating activities
|
893
|
646
|
|
_____
|
_____
|
Cash
flow from investing activities
|
|
|
Purchase of property, plant and
equipment
|
(28)
|
(54)
|
Purchase of intangible
assets
|
(54)
|
(45)
|
Investment in associates
|
(3)
|
(1)
|
Investment in other financial
assets
|
(60)
|
-
|
Lease incentives received
|
-
|
6
|
Disposal of property, plant and
equipment
|
-
|
3
|
Repayments of other financial
assets
|
8
|
13
|
|
|
|
|
_____
|
_____
|
Net
cash from investing activities
|
(137)
|
(78)
|
|
_____
|
_____
|
Cash
flow from financing activities
|
|
|
Repurchase of shares, including
transaction costs
|
(790)
|
(482)
|
Purchase of own shares by employee
share trusts
|
(8)
|
(1)
|
Dividends paid to shareholders (note
7)
|
(245)
|
(233)
|
Dividend paid to non-controlling
interest
|
(3)
|
-
|
Issue of long-term bonds, including
effect of currency swaps
|
657
|
-
|
Repayment of long-term
bonds
|
-
|
(209)
|
Principal element of lease
payments
|
(28)
|
(36)
|
|
_____
|
_____
|
Net
cash from financing activities
|
(417)
|
(961)
|
|
_____
|
_____
|
Net
movement in cash and cash equivalents, net of overdrafts, in the
year
|
339
|
(393)
|
|
|
|
Cash and cash equivalents, net of
overdrafts, at beginning of the year
|
921
|
1,391
|
Exchange rate effects
|
18
|
(77)
|
|
_____
|
_____
|
Cash
and cash equivalents, net of overdrafts, at end of the
year
|
1,278
|
921
|
|
_____
|
_____
|
|
|
|
|
|
|
interContinental Hotels Group plc
NOTES TO THE FINANCIAL STATEMENTS
|
The preliminary consolidated
financial statements of InterContinental Hotels Group PLC (the
'Group' or 'IHG') for the year ended 31 December 2023 have been
prepared in accordance with UK-adopted international accounting
standards and with applicable law and regulations, including the
Companies Act 2006, and with International Financial Reporting
Standards ('IFRSs') as issued by the IASB. 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 2023 were approved by the Board on 19
February 2024. 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 2023 will be delivered to the
Registrar of Companies in due course.
Financial information for the year
ended 31 December 2022 has been extracted from the Group's
published financial statements for that year and re-presented for
the following:
- The adoption of IFRS 17
using the full retrospective method with the date of initial
application being 1 January 2023. The adoption of IFRS 17 had no
impact on operating profit, profit before or after tax, net
liabilities or cash flows. The Group's current and non-current
insurance reserves relating to managed hotels of $9m and $23m,
respectively, (previously included within provisions) are now
included in the Group statement of financial position as insurance
liabilities. Insurance revenue of $15m (previously presented within
revenue from fee business) and insurance expenses of $11m
(previously presented within administrative expenses) are now
presented separately within the Group income statement;
and
- Revenues and expenses from
the System Fund are presented together with reimbursable revenue
and expenses in the Group income statement for clarity of
presentation, consistency with industry practice and to
reflect the fact that neither of these are reported to the Chief
Operating Decision Maker (CODM) and do not generate a profit or
loss for the Group over the longer term.
The auditor's report on those
financial statements was unqualified with no reference to matters
to which the auditor drew attention by way of emphasis and no
statement under s498(2) or s498(3) of the Companies Act
2006.
Going concern
A period of 18 months has been
used, from 1 January 2024 to 30 June 2025, to complete the going
concern assessment. In adopting the going concern basis for
preparing the Group financial statements, the Directors have
considered a 'Base Case' scenario which assumes continued growth in
RevPAR in 2024 and 2025 in line with market expectations. The
assumptions applied in the Base Case scenario are consistent with
those used for Group planning purposes, for impairment testing
(impairment tests adjusted for factors specific to individual
properties or portfolios) and for assessing recoverability of
deferred tax assets.
The Directors have also reviewed a
'Severe Downside Case' which is based on a severe but plausible
scenario equivalent to the market conditions experienced through
the 2008/09 global financial crisis. This assumes that the
performance during 2024 starts to worsen and then RevPAR decreases
significantly by 17% in 2025.
A large number of the Group's
principal risks would result in an impact on RevPAR, which is one
of the sensitivities assessed against the headroom available in the
Base Case and Severe Downside Case scenarios. 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.
A one-year extension to the
Group's revolving credit facility of $1,350m was exercised in 2023
and the facility now matures in 2028. The Group's key covenant
requires net debt:EBITDA below 4.0x. See note 10 for additional
information. In November 2023 the Group issued a six-year €600m
bond. The only debt maturity in the period under consideration is
the €500m October 2024 bond which is assumed to be repaid with cash
on maturity.
Under the Base Case and Severe
Downside Case, bank covenants are not breached and there is
significant headroom to the covenants to absorb multiple additional
risks and uncertainties. Additional funding is not required in the
period under consideration. The Directors also reviewed a number of
actions that could be taken if required to reduce discretionary
spend, creating substantial additional headroom to the
covenants.
The Directors reviewed a reverse
stress test scenario to determine what decrease in RevPAR would
create a breach of the covenants. The Directors concluded that it
was very unlikely that a single risk or combination of the risks
considered could create the sustained RevPAR impact required,
except for a significant global event.
The leverage and interest cover
covenant tests up to 30 June 2025 (the last day of the assessment
period) have been considered as part of the Base Case and Severe
Downside Case scenarios. Neither of these scenarios indicate that a
covenant amendment would be required but, in the event that it was,
the Directors believe it is reasonable to expect that such an
amendment could be obtained based on experience of negotiating the
waivers and amendments in 2020, however the going concern
conclusion is not dependent on this expectation. 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
2025. Accordingly, they continue to adopt the going concern basis
in preparing the financial statements.
|
|
|
2.
|
Exchange rates
|
|
|
2023
|
2022
|
|
|
Average
|
Closing
|
Average
|
Closing
|
|
$1
equivalent
|
|
|
|
|
|
Sterling
|
£0.80
|
£0.78
|
£0.81
|
£0.83
|
|
Euro
|
€0.92
|
€0.90
|
€0.95
|
€0.94
|
3.
|
Segmental information
|
|
|
|
Revenue
|
2023
|
2022
|
|
|
|
Re-presented*
|
|
|
$m
|
$m
|
|
|
|
|
|
Americas
|
1,105
|
1,005
|
|
EMEAA
|
677
|
552
|
|
Greater China
|
161
|
87
|
|
Central
|
221
|
199
|
|
|
_____
|
_____
|
|
Revenue from reportable segments
|
2,164
|
1,843
|
|
System Fund and reimbursable
revenues
|
2,460
|
2,049
|
|
|
_____
|
_____
|
|
Total revenue
|
4,624
|
3,892
|
|
|
_____
|
_____
|
*
Re-presented to combine System Fund and
reimbursable revenues (see note 1).
|
Profit
|
2023
|
2022
|
|
|
$m
|
$m
|
|
|
|
|
|
Americas
|
815
|
761
|
|
EMEAA
|
215
|
152
|
|
Greater China
|
96
|
23
|
|
Central
|
(107)
|
(108)
|
|
|
_____
|
_____
|
|
Operating profit from reportable segments
|
1,019
|
828
|
|
System Fund and reimbursable
result
|
19
|
(105)
|
|
Operating exceptional items (note
5)
|
28
|
(95)
|
|
|
_____
|
_____
|
|
Operating profit
|
1,066
|
628
|
|
Net financial expenses
|
(52)
|
(96)
|
|
Fair value (losses)/gains on
contingent purchase consideration
|
(4)
|
8
|
|
|
_____
|
_____
|
|
Profit before tax
|
1,010
|
540
|
|
|
_____
|
_____
|
|
|
4.
|
Revenue
|
|
Year ended 31 December 2023
|
|
|
Americas
$m
|
EMEAA
$m
|
Greater
China
$m
|
Central
$m
|
Group
$m
|
|
|
|
|
|
|
|
|
Franchise and base management
fees
|
936
|
253
|
115
|
-
|
1,304
|
|
Incentive management
fees
|
21
|
101
|
46
|
-
|
168
|
|
Central revenue
|
-
|
-
|
-
|
200
|
200
|
|
|
_____
|
_____
|
_____
|
_____
|
_____
|
|
Revenue from fee
business
|
957
|
354
|
161
|
200
|
1,672
|
|
|
|
|
|
|
|
|
Revenue from owned, leased and
managed lease hotels
|
148
|
323
|
-
|
-
|
471
|
|
Revenue from insurance
activities
|
-
|
-
|
-
|
21
|
21
|
|
|
_____
|
_____
|
_____
|
_____
|
_____
|
|
|
1,105
|
677
|
161
|
221
|
2,164
|
|
|
|
|
|
|
|
|
System Fund revenues
|
|
|
|
|
1,564
|
|
Reimbursable revenues
|
|
|
|
|
896
|
|
|
|
|
|
|
_____
|
|
Total revenue
|
|
|
|
|
4,624
|
|
|
|
|
|
|
_____
|
|
|
|
|
|
|
|
|
|
|
|
|
Year ended 31 December 2022
|
|
|
|
|
|
|
|
Americas
|
EMEAA
|
Greater
China
|
Central
|
Group
|
|
|
|
|
|
Re-presented*
|
Re-presented*
|
|
|
$m
|
$m
|
$m
|
$m
|
$m
|
|
|
|
|
|
|
|
|
Franchise and base management
fees
|
861
|
215
|
71
|
-
|
1,147
|
|
Incentive management
fees
|
18
|
69
|
16
|
-
|
103
|
|
Central revenue
|
-
|
-
|
-
|
184
|
184
|
|
|
_____
|
_____
|
_____
|
_____
|
_____
|
|
Revenue from fee
business
|
879
|
284
|
87
|
184
|
1,434
|
|
Revenue from owned, leased and
managed lease hotels
|
126
|
268
|
-
|
-
|
394
|
|
Revenue from insurance
activities
|
-
|
-
|
-
|
15
|
15
|
|
|
_____
|
_____
|
_____
|
_____
|
_____
|
|
|
1,005
|
552
|
87
|
199
|
1,843
|
|
|
|
|
|
|
|
|
System Fund revenues
|
|
|
|
|
1,217
|
|
Reimbursable revenues
|
|
|
|
|
832
|
|
|
|
|
|
|
_____
|
|
Total revenue
|
|
|
|
|
3,892
|
|
|
|
|
|
|
_____
|
|
|
|
|
|
|
|
*
Re-presented for the adoption of IFRS 17
'Insurance Contracts' (see note 1).
5.
|
Exceptional items
|
|
|
2023
$m
|
2022
$m
|
|
Administrative expenses:
|
|
|
|
Costs of
ceasing operations in Russia
|
-
|
(12)
|
|
Commercial
litigation and disputes
|
-
|
(28)
|
|
|
_____
|
_____
|
|
|
-
|
(40)
|
|
|
|
|
|
Share of profits/(losses) of
associate
|
18
|
(60)
|
|
|
|
|
|
Other operating income
|
10
|
-
|
|
|
|
|
|
Other net impairment
reversals/(charges):
|
|
|
|
Management
agreements - reversal
|
-
|
12
|
|
Property,
plant and equipment - charge
|
-
|
(10)
|
|
Property,
plant and equipment - reversal
|
-
|
3
|
|
Right-of-use assets - charge
|
-
|
(2)
|
|
Right-of-use assets - reversal
|
-
|
2
|
|
Associates
- reversal
|
-
|
2
|
|
Contract
assets - charge
|
-
|
(5)
|
|
Contract
assets - reversal
|
-
|
3
|
|
|
_____
|
_____
|
|
|
-
|
5
|
|
|
_____
|
_____
|
|
Operating exceptional items
|
28
|
(95)
|
|
|
_____
|
_____
|
|
|
|
|
|
Tax on exceptional items
|
(7)
|
26
|
|
|
_____
|
_____
|
|
Tax
|
(7)
|
26
|
|
|
_____
|
_____
|
|
Costs of ceasing operations in Russia
On 27 June 2022, the Group
announced it was in the process of ceasing all operations in Russia
consistent with evolving UK, US and EU sanction regimes and the
ongoing and increasing challenges of operating there. The costs
associated with the cessation of corporate operations in Moscow and
long-term management and franchise contracts were presented as
exceptional due to the nature of the war in Ukraine which drove the
Group's response.
Commercial litigation and disputes
From time to time, the Group is
subject to legal proceedings, the ultimate outcome of each is
always subject to many uncertainties inherent in litigation. The
2022 provision for commercial litigation and disputes principally
related to the EMEAA region and was utilised in full in 2023
following settlement of the disputed matters.
These costs were presented as
exceptional reflecting the quantum of the costs and nature of the
disputes.
Share of profits/losses of associate
As part of an agreed settlement of
the 2021 Americas commercial dispute in relation to the
InterContinental New York Barclay associate, in 2022 the Group was
allocated expenses in excess of its actual percentage share which
directly reduced the Group's current interest in the associate.
This resulted in $60m of additional expenses being allocated to the
Group in 2022, with a current tax benefit of $15m and, applying
equity accounting to this additional share of expenses, reduced the
Group's investment to $nil. In addition, a liability of $18m was
recognised, reflecting an unavoidable obligation to repay this
amount in certain circumstances. The value of the liability is
linked to the value of the hotel; increases in the property value
are attributed first to the Group and are reflected as a reduction
of the liability until it is reduced to $nil.
In 2023, the increase in fair
value of the hotel (according to pricing opinions provided by a
professional external valuer) resulted in a full reversal of the
liability but no further trigger for reversal of previous
impairment charges.
The gain is presented as
exceptional by reason of its size, the nature of the agreement and
for consistency with the associated charges in 2022 and
2021.
Other operating income
Relates to amounts receivable from
the Group's insurer under its business interruption policy for
certain owned, leased and managed lease hotels due to
Covid-19.
The income is presented as
exceptional due to its size.
Impairment reversals and charges
2022 impairment reversals related
to charges recorded in 2020 and were presented as exceptional for
consistency with those charges. The management agreement impairment
reversal of $12m related to the Kimpton management agreement
portfolio in the Americas region. Other reversals related to assets
in the Americas ($2m) and EMEAA ($8m) regions.
$10m charge on property, plant and
equipment and $2m impairment of right-of-use assets were recognised
in relation to one hotel in the EMEAA region and arose largely as a
result of cost and rent inflation. The charges were presented as
exceptional due to size and the nature of inflation rates in
2022.
$5m contract asset impairment
related to key money pertaining to managed and franchised hotels in
Russia. The impairment was treated as exceptional for consistency
with the costs of ceasing operations described above.
|
6.
|
Tax
|
|
|
|
2023
$m
|
|
|
2022
$m
|
|
|
Current
tax
|
|
273
|
|
|
176
|
|
|
Deferred
tax
|
|
(13)
|
|
|
(12)
|
|
|
|
|
_____
|
|
|
_____
|
|
|
Tax
charge
|
|
260
|
|
|
164
|
|
|
|
|
_____
|
|
|
_____
|
|
|
|
|
|
|
|
|
|
|
Further analysed as:
|
|
|
|
|
|
|
|
UK tax
|
|
18
|
|
|
3
|
|
|
Foreign
tax
|
|
242
|
|
|
161
|
|
|
|
|
_____
|
|
|
_____
|
|
|
|
|
260
|
|
|
164
|
|
|
|
|
_____
|
|
|
_____
|
|
|
The deferred tax asset has increased from $126m to $134m in the
year and comprises $113m (31 December 2022: $109m) in the UK
and $21m (31 December 2022: $17m) 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.
|
Dividends
|
|
|
2023
|
2022
|
|
|
cents per
share
|
$m
|
cents per
share
|
$m
|
|
Paid during the year:
|
|
|
|
|
|
Final (declared
for previous year)
|
94.5
|
166
|
85.9
|
154
|
|
Interim
|
48.3
|
79
|
43.9
|
79
|
|
|
_____
|
_____
|
_____
|
_____
|
|
|
142.8
|
245
|
129.8
|
233
|
|
|
_____
|
_____
|
_____
|
_____
|
|
|
|
|
|
|
|
The final dividend in respect of
2023 of 104.0¢ per ordinary share (amounting to $171m) is proposed
for approval at the AGM on 3 May 2024.
|
8.
|
Earnings per ordinary share
|
|
|
2023
|
2022
|
|
Basic earnings per ordinary share
|
|
|
|
Profit available for equity
holders ($m)
|
750
|
375
|
|
Basic weighted average number of
ordinary shares (millions)
|
169
|
181
|
|
Basic earnings per ordinary share
(cents)
|
443.8
|
207.2
|
|
|
_____
|
_____
|
|
|
|
|
|
Diluted earnings per ordinary share
|
|
|
|
Profit available for equity
holders ($m)
|
750
|
375
|
|
Diluted weighted average number of
ordinary shares (millions)
|
170
|
182
|
|
Diluted earnings per ordinary
share (cents)
|
441.2
|
206.0
|
|
|
_____
|
_____
|
|
|
|
|
|
Diluted weighted average number of
ordinary shares is calculated as:
|
|
|
2023
millions
|
2022
millions
|
|
Basic weighted average number of
ordinary shares
|
169
|
181
|
|
Dilutive potential ordinary
shares
|
1
|
1
|
|
|
______
|
______
|
|
|
170
|
182
|
|
|
_____
|
_____
|
9.
|
Reconciliation of profit for the year to cash flow from
operations
|
|
|
2023
|
2022
|
|
|
$m
|
$m
|
|
|
|
|
|
Profit for the year
|
750
|
376
|
|
Adjustments for:
|
|
|
|
|
|
|
|
Net financial expenses
|
52
|
96
|
|
Fair value losses/(gains) on
contingent purchase consideration
|
4
|
(8)
|
|
Income tax charge
|
260
|
164
|
|
|
|
|
|
Operating profit
adjustments:
|
|
|
|
Impairment (reversal)/loss on
financial assets
|
(1)
|
5
|
|
Other net impairment
reversals
|
-
|
(5)
|
|
Other operating exceptional
items
|
(28)
|
100
|
|
Depreciation and
amortisation
|
67
|
68
|
|
|
_____
|
_____
|
|
|
38
|
168
|
|
|
|
|
|
Contract assets deduction in
revenue
|
37
|
32
|
|
Share-based payments
cost
|
36
|
30
|
|
Share of profits of associates and
joint ventures (before exceptional
items)
|
(13)
|
(1)
|
|
|
_____
|
_____
|
|
|
60
|
61
|
|
|
|
|
|
System Fund
adjustments:
|
|
|
|
Depreciation and
amortisation
|
83
|
86
|
|
Impairment loss on financial
assets
|
-
|
7
|
|
Share-based payments
cost
|
20
|
16
|
|
Share of losses of
associates
|
3
|
1
|
|
|
_____
|
_____
|
|
|
106
|
110
|
|
|
|
|
|
Working capital and other
adjustments:
|
|
|
|
Increase in deferred
revenue
|
123
|
108
|
|
Changes in working
capital
|
(39)
|
(11)
|
|
Other adjustments
|
(5)
|
4
|
|
|
_____
|
_____
|
|
|
79
|
101
|
|
|
|
|
|
Cash flows relating to exceptional
items
|
(29)
|
(43)
|
|
Contract acquisition costs, net of
repayments
|
(101)
|
(64)
|
|
|
_____
|
_____
|
|
Total adjustments
|
469
|
585
|
|
|
_____
|
_____
|
|
Cash flow from operations
|
1,219
|
961
|
|
|
_____
|
_____
|
10.
|
Net
debt
|
|
|
2023
|
2022
|
|
|
$m
|
$m
|
|
|
|
|
|
Cash and cash equivalents
|
1,322
|
976
|
|
Loans and other borrowings -
current
|
(599)
|
(55)
|
|
Loans and other borrowings -
non-current
|
(2,567)
|
(2,341)
|
|
Lease liabilities -
current
|
(30)
|
(26)
|
|
Lease liabilities -
non-current
|
(396)
|
(401)
|
|
Principal amounts payable/receivable
on maturity of derivative financial instruments
|
(2)
|
(4)
|
|
|
_____
|
_____
|
|
Net
debt*
|
(2,272)
|
(1,851)
|
|
|
_____
|
_____
|
|
* See 'Use
of key performance measures and Non-GAAP measures'.
|
|
In the Group statement of cash
flows, cash and cash equivalents is presented net of $44m bank
overdrafts (31 December 2022: $55m). Cash and cash equivalents
includes $56m (31 December 2022: $47m) with restrictions on
use.
|
|
Revolving Credit Facility
In April 2023, the maturity date
of the Group's $1,350m revolving syndicated bank facility ('RCF')
was extended to April 2028. The facility was undrawn at 31 December
2023.
The RCF contains two financial
covenants: interest cover (Covenant EBITDA: Covenant interest
payable) and a leverage ratio (Covenant net debt: Covenant EBITDA).
These are tested at half year and full year on a trailing 12-month
basis.
|
|
|
2023
|
2022
|
|
|
|
|
|
Covenant EBITDA ($m)
|
1,086
|
896
|
|
Covenant net debt ($m)
|
2,328
|
1,898
|
|
Covenant interest payable
($m)
|
88
|
109
|
|
Leverage
|
2.14
|
2.12
|
|
Interest cover
|
12.34
|
8.22
|
|
|
|
|
|
|
11.
|
Movement in net debt
|
|
|
2023
|
2022
|
|
|
$m
|
$m
|
|
|
|
|
|
Net increase/(decrease) in cash and
cash equivalents, net of overdrafts
|
339
|
(393)
|
|
Add back financing cash flows in
respect of other components of net debt:
|
|
|
|
|
|
|
|
Principal
element of lease payments
|
28
|
36
|
|
(Issue)/repayment of long-term bonds
|
(657)
|
209
|
|
|
_____
|
_____
|
|
|
(629)
|
245
|
|
|
_____
|
_____
|
|
Increase in net debt arising from
cash flows
|
(290)
|
(148)
|
|
|
|
|
|
Other movements:
|
|
|
|
Lease
liabilities
|
(25)
|
(48)
|
|
Increase in
accrued interest
|
(2)
|
(1)
|
|
Exchange
and other adjustments
|
(104)
|
227
|
|
|
_____
|
_____
|
|
|
(131)
|
178
|
|
|
_____
|
_____
|
|
(Increase)/decrease in net debt
|
(421)
|
30
|
|
|
|
|
|
Net debt at beginning of the
year
|
(1,851)
|
(1,881)
|
|
|
_____
|
_____
|
|
Net
debt at end of the year
|
(2,272)
|
(1,851)
|
|
|
_____
|
_____
|
|
|
12.
|
Equity
|
|
In August 2022 the Board approved
a $500m share buyback programme that commenced on 9 August 2022 and
completed on 31 January 2023. In February 2023 the Board approved a
further $750m share buyback programme which completed on 29
December 2023.
In the year ended 31 December
2023, 10.9m shares were repurchased for total consideration of
$790m (including $28m transaction costs) and subsequently
cancelled. Of the total consideration, $38m relates to the
completion of the 2022 programme and $752m relates to the 2023
programme.
In the year ended 31 December
2022, 9.1m shares were repurchased for total consideration of $482m
(including $2m transaction costs), of which 4.5m were held as
treasury shares and 4.6m were cancelled. The cost of treasury
shares and related transaction costs have been deducted from
retained earnings.
In February 2024, the Board
approved a further $800m share buyback programme. A resolution to
renew the authority to repurchase shares will be put to
shareholders at the AGM on 3 May 2024.
|