[Strategic Report](index=6&type=section&id=Strategic%20Report) This report details IHG's 2019 performance, strategic advancements, corporate governance, and financial position, highlighting growth, brand expansion, and responsible business initiatives [2019 Key Highlights](index=6&type=section&id=2019%20key%20highlights) In 2019, IHG reported significant financial growth, including a **6.7%** revenue increase and **8.2%** operating profit growth, alongside **5.6%** net system size expansion, new brand additions, and notable progress in responsible business initiatives 2019 Financial Highlights | Metric | 2019 | 2018 | % Change | | :--- | :--- | :--- | :--- | | Revenue from reportable segments | $2,083 million | $1,933 million | +7.8% | | Operating profit | $630 million | $582 million | +8.2% | | Operating profit from reportable segments | $865 million | $832 million | +4.0% | | Total gross revenue in IHG's System | $27.9 billion | $27.4 billion | +1.8% | | Global RevPAR growth | (0.3)% | +2.5% | - | | Basic EPS | 210.4¢ | 183.7¢ | +15% | | Dividend per share | 125.8¢ | 114.4¢ | +10% | - Strategic progress in 2019 included a **5.6%** net system size growth, the launch of new prototypes for Holiday Inn and Extended Stay brands, and the addition of Atwell Suites and Six Senses Hotels Resorts Spas to the brand portfolio[17](index=17&type=chunk) - IHG advanced its responsible business initiatives by reducing its carbon footprint by **5.9%** and water use by **3.6%** in stressed areas. The company also became the first global hotel company to commit to removing miniature bathroom amenities in favor of bulk-size products[17](index=17&type=chunk) [Chair's Statement](index=8&type=section&id=Chair%27s%20statement) The Chair's statement emphasizes IHG's accelerated strategic execution in 2019, achieving record growth, new brand additions, strengthened responsible business, and a recommended **10%** dividend increase despite a challenging RevPAR environment - The Board is recommending a final dividend of **85.9 cents** per share, a **10%** increase, resulting in a full-year dividend of **125.8 cents** per share, also up **10%** from 2018[23](index=23&type=chunk)[43](index=43&type=chunk) - IHG's Total Shareholder Return (TSR) in 2019 was **25.1%**, outperforming the FTSE 100 Index at **17.3%**. Since March 2003, the Group has returned over **$11 billion** to shareholders[24](index=24&type=chunk) - The company's transformation over the past two years has focused on accelerating growth, strengthening the brand portfolio with additions like Six Senses and Atwell Suites, and refining its structure and ways of working[30](index=30&type=chunk) - Arthur de Haast was appointed as an Independent Non-Executive Director, effective January 1, 2020, bringing extensive experience in capital markets, hotels, and sustainability[42](index=42&type=chunk) [Chief Executive Officer's Review](index=10&type=section&id=Chief%20Executive%20Officer%27s%20review) The CEO reports a solid annual performance with a **6%** increase in underlying operating profit and record new openings, despite a slowdown in industry RevPAR growth. Key strategic initiatives included evolving the brand portfolio by acquiring Six Senses and launching Atwell Suites, investing in technology like the IHG Concerto reservation system and IHG Studio in-room entertainment, and strengthening the IHG Rewards Club loyalty program. The company also advanced its responsible business agenda, notably by committing to eliminate miniature plastic bathroom amenities - In less than two years, IHG has launched or acquired five new brands: avid (2017), Regent and voco (2018), and Six Senses and Atwell Suites (2019)[58](index=58&type=chunk) - The Holiday Inn Brand Family achieved its highest ever level of openings in 2019, fueled by modern designs like Open Lobby and Formula Blue[53](index=53&type=chunk) - IHG is investing heavily in technology, including the continued development of its cloud-based Guest Reservation System (IHG Concerto) and the launch of IHG Studio, a new digital in-room guest entertainment solution[62](index=62&type=chunk) - IHG became the first global hotel group to commit to switching all bathroom amenities to bulk-size products, a move aimed at significantly reducing plastic waste[70](index=70&type=chunk) [Industry Overview](index=12&type=section&id=Industry%20overview) The **$535 billion** hotel industry remained fragmented in 2019, with branded hotels increasing their market share. Despite a moderating global economy, the industry saw its **10th** consecutive year of RevPAR growth (**+1%**) and a **2%** increase in global room supply. Key trends shaping the industry include a growing focus on sustainability, the use of technology to enhance the digital guest experience, and rising consumer demand for unique, 'Instagrammable' boutique and lifestyle hotels Global Hotel Industry Performance (2019) | Metric | 2019 Performance | Driver/Indicator | | :--- | :--- | :--- | | Global Industry RevPAR | $79.9 (+1% YoY) | 10th consecutive year of growth, indicating solid lodging demand | | Global Rooms Supply | +2% YoY | Reflects the attractiveness of the hotel industry as an investment | - The hotel industry is driven by long-term fundamentals such as a **10-year CAGR** of **+3.1%** in Global GDP, **+3.0%** in Global household disposable income, and **+6.1%** in Global corporate profits[79](index=79&type=chunk) - Key trends shaping the industry are sustainability (reducing carbon footprint and plastic waste), technology (enriching digital guest experiences with apps and in-room tech), and consumer demand for unique experiences (driving growth in boutique brands like Hotel Indigo and Kimpton)[84](index=84&type=chunk)[89](index=89&type=chunk)[91](index=91&type=chunk) [Our Business Model](index=14&type=section&id=Our%20business%20model) IHG operates an asset-light business model, predominantly franchising its brands and managing hotels on behalf of third-party owners. This model focuses on growing fee revenues with limited capital, enabling high returns. Revenue is generated from fees on franchised and managed hotels, with a small portion from owned and leased properties. The company maintains a disciplined capital allocation strategy, prioritizing investment in growth, maintaining a progressive dividend, and returning surplus funds to shareholders, while aiming for a net debt to EBITDA ratio of **2.5-3.0x** - IHG's business is primarily asset-light, with **614,974** rooms (**69.6%**) franchised and **262,253** rooms (**29.7%**) managed as of Dec 31, 2019. Only **6,336** rooms (**0.7%**) are owned or leased[97](index=97&type=chunk)[113](index=113&type=chunk) - The company's capital allocation priorities are: 1) Invest in the business to drive growth, 2) Maintain sustainable growth in the ordinary dividend, and 3) Return surplus funds to shareholders[123](index=123&type=chunk)[124](index=124&type=chunk)[127](index=127&type=chunk)[125](index=125&type=chunk) - IHG aims to maintain an investment-grade credit rating, targeting a net debt to EBITDA ratio of **2.5-3.0x** (post-IFRS 16 adoption)[120](index=120&type=chunk) - The System Fund, managed on behalf of hotel owners for marketing, reservations, and loyalty, is run at no profit or loss to IHG over the long-term and recognized **$1.4 billion** in revenue in 2019[116](index=116&type=chunk)[117](index=117&type=chunk) [Our Brands](index=18&type=section&id=Our%20brands) IHG's portfolio consists of **16** brands across Luxury & Lifestyle, Premium, and Essentials segments, catering to diverse guest needs and owner preferences. The company's loyalty program, IHG® Rewards Club, is a key component for building valuable relationships with members, who are seven times more likely to book directly. In 2019, the program was enhanced through new global partnerships and trials of new redemption options - IHG's brand portfolio is structured into three main collections: Luxury & Lifestyle (e.g., Six Senses, Regent, InterContinental, Kimpton), Premium (e.g., HUALUXE, Crowne Plaza, voco), and Essentials (e.g., Holiday Inn, Holiday Inn Express, avid)[135](index=135&type=chunk)[137](index=137&type=chunk)[139](index=139&type=chunk) - The IHG® Rewards Club is a leading loyalty program that drives higher-value revenue, as members are **seven times** more likely to book directly with IHG[140](index=140&type=chunk) - In 2019, IHG Rewards Club was enhanced with new partnerships and trials, including an option for members to use loyalty points to pay for on-property amenities and services[142](index=142&type=chunk) [Our Strategy](index=22&type=section&id=Our%20strategy) IHG's strategy is centered on achieving industry-leading net rooms growth over the medium term through five key pillars: building and leveraging scale, strengthening the loyalty program, enhancing revenue delivery, evolving the owner proposition, and optimizing the brand portfolio. This strategy is executed with a strong commitment to responsible business practices. In 2019, this led to accelerated net system size growth of **5.6%** and increased market share of signings - The company's strategy is built on five pillars: 1) Build and leverage scale, 2) Strengthen loyalty programme, 3) Enhance revenue delivery, 4) Evolve owner proposition, and 5) Optimise our preferred portfolio of brands[146](index=146&type=chunk) - In 2019, IHG accelerated its net system size growth to **5.6%** and increased its market share of signings in key markets, demonstrating the effectiveness of its scale-building strategy[151](index=151&type=chunk) - To enhance revenue delivery, IHG is developing its proprietary cloud-based technology system, IHG Concerto, and piloting attribute-based pricing for its Guest Reservation System[163](index=163&type=chunk) - The brand portfolio was optimized by adding new brands in fast-growing segments, such as avid and Atwell Suites in mainstream, voco in upscale, and Regent and Six Senses in luxury[175](index=175&type=chunk) [Our Culture, Responsible Business and Stakeholders](index=28&type=section&id=Our%20culture%2C%20responsible%20business%20and%20stakeholders) IHG's culture is centered on its purpose of providing 'True Hospitality for everyone,' underpinned by strong values and ethical business practices. The company engages with a wide range of stakeholders, including employees, investors, suppliers, owners, and guests. Key focus areas in 2019 included enhancing diversity and inclusion, strengthening environmental commitments with a new science-based carbon target, supporting local communities, and ensuring robust governance and compliance across its operations - IHG's culture is driven by its purpose of 'True Hospitality for everyone' and is supported by values such as 'Do the right thing', 'Show we care', 'Aim higher', 'Celebrate difference', and 'Work better together'[177](index=177&type=chunk)[191](index=191&type=chunk)[192](index=192&type=chunk)[193](index=193&type=chunk)[194](index=194&type=chunk) - The company has a designated non-executive director, Luke Mayhew, responsible for workforce engagement ('Voice of the Employee') to ensure employee interests are considered in Board deliberations[253](index=253&type=chunk) - IHG has committed to setting a **2030** science-based target to reduce greenhouse gas emissions and will report in line with the Task Force on Climate-related Financial Disclosures (TCFD)[268](index=268&type=chunk)[271](index=271&type=chunk)[277](index=277&type=chunk) - In 2019, the 'Giving for Good' month saw a record **160,000** colleagues in **88** countries volunteer **188,000** hours of their time for charitable causes[285](index=285&type=chunk) [Our People](index=32&type=section&id=Our%20people) This section details IHG's commitment to its workforce, highlighting high employee engagement, the launch of an employee share plan, and progress in gender diversity across leadership levels - The bi-annual 'Colleague HeartBeat' employee engagement survey in 2019 had a **96%** response rate, with an overall employee engagement score of **87%**[218](index=218&type=chunk) - An employee share plan was launched in 2019 to encourage shared ownership and align the interests of employees with external stakeholders[219](index=219&type=chunk) Employee Gender Diversity (as of Dec 31, 2019) | Level | Male | Female | Total | | :--- | :--- | :--- | :--- | | Directors | 7 | 4 | 11 | | Executive Committee | 7 | 3 | 10 | | Executive Committee direct reports | 40 | 23 | 63 | | Senior managers | 102 | 34 | 136 | | All employees (Group/System Fund) | 6,498 | 7,938 | 14,436 | [Diversity and Inclusion (D&I)](index=34&type=section&id=Diversity%20and%20Inclusion%20%28D%26I%29) IHG's Diversity and Inclusion framework focuses on fostering an inclusive culture, increasing leadership diversity, and expanding Employee Resource Groups globally - IHG's D&I framework focuses on three pillars: strengthening a culture of inclusion, increasing the diversity of leadership talent, and ensuring proper decision-making through its Global D&I Board, led by the CEO[238](index=238&type=chunk)[240](index=240&type=chunk)[246](index=246&type=chunk)[249](index=249&type=chunk) - As of 2019, **37%** of senior leaders globally are female. The 'Rise' mentoring initiative for aspiring female General Managers has expanded globally, helping to increase the percentage of women in GM and Operations roles from **24%** to **26%**[247](index=247&type=chunk)[248](index=248&type=chunk) - The company expanded its Employee Resource Groups (ERGs) globally, which now have over **1,700** members across groups focused on LGBTQ+, Pan-Asians, disability and well-being, and other communities[241](index=241&type=chunk) [Environment](index=39&type=section&id=Environment) IHG's environmental efforts include committing to science-based carbon reduction targets, achieving significant carbon footprint reductions, and pioneering initiatives to reduce plastic and food waste - IHG has committed to setting a **2030** science-based target to reduce greenhouse gas emissions and will report in line with the Task Force on Climate-related Financial Disclosures (TCFD)[271](index=271&type=chunk)[277](index=277&type=chunk) - The company is on track to meet its **2018-2020** target of reducing its carbon footprint per occupied room by **6-7%**, having achieved a **5.9%** reduction from a 2017 baseline[271](index=271&type=chunk) - To tackle waste, IHG became the first global hotel group to commit to switching all bathroom amenities to bulk-size products. It is also piloting AI technology in **24** hotels to reduce food waste, achieving average reductions of **35%**[272](index=272&type=chunk)[273](index=273&type=chunk) [Community](index=40&type=section&id=Community) IHG's community engagement focuses on skills building, environmental sustainability, and disaster relief through its 'True Hospitality for Good' program and extensive employee volunteering - Through its 'True Hospitality for Good' program, IHG contributed over **$1.3 million** to projects in hospitality skills building, environmental sustainability, and disaster relief, supporting **25,000** people globally in 2019[282](index=282&type=chunk)[284](index=284&type=chunk) - The annual 'Giving for Good' month in September 2019 saw a record **160,000** colleagues participate, volunteering **188,000** hours[285](index=285&type=chunk) - IHG launched a new partnership with JA (Junior Achievement) Worldwide to provide work-experience events called 'IHG First Look' for young people, aiming to support over **750** participants in nine major markets[285](index=285&type=chunk)[286](index=286&type=chunk) [Key Performance Indicators (KPIs)](index=48&type=section&id=Key%20performance%20indicators%20%28KPIs%29) IHG uses a set of Key Performance Indicators (KPIs) to monitor the delivery of its strategy, organized around its strategic model and commitment to responsible business. These metrics track growth, owner and guest value, and stakeholder engagement. In 2019, net system size growth accelerated to **5.6%**, fee margin grew by **80bps**, and guest satisfaction scores improved, though RevPAR saw a slight decline in a weaker market Key Performance Indicators (2019 vs. Prior Years) | KPI | 2019 | 2018 | 2017 | | :--- | :--- | :--- | :--- | | Net System Size Growth | 5.6% | - | ~3% (2016) | | Underlying Fee Revenue Growth | 2% | - | - | | Total Gross Revenue | $27.9 billion | $27.4 billion | $25.7 billion | | System Contribution to Revenue | 79% | 78% | 76% | | Global RevPAR Growth | (0.3)% | 2.5% | 2.7% | | Guest Love (Satisfaction) | 82.4% | 81.7% | 80.9% | | Fee Margin | 54.1% | 53.3% | 53.4% | | Free Cash Flow | $509 million | $611 million | $516 million | - Responsible Business KPIs for 2019 include providing over **15,000** people with opportunities through the IHG Academy, achieving a **5.9%** reduction in carbon footprint per occupied room from a 2017 baseline, and maintaining an **87%** employee engagement score[363](index=363&type=chunk)[368](index=368&type=chunk)[369](index=369&type=chunk)[370](index=370&type=chunk) [Our Risk Management](index=52&type=section&id=Our%20risk%20management) IHG integrates risk management into its strategic planning and execution, with the Board holding ultimate accountability. The enterprise risk management framework focuses on identifying, mitigating, transferring, or accepting risks. In 2019, key areas of focus included cybersecurity, long-term industry and macroeconomic factors, and sustainability. The company's principal risks are categorized as dynamic or stable and include threats to cybersecurity, failure to deliver preferred brands, talent retention, regulatory compliance, and execution of growth initiatives - The Board and Executive Committee collaborate to integrate risk assessment into strategic initiatives, with a particular focus in 2019 on cybersecurity, sustainability, and emerging regulatory risks[371](index=371&type=chunk)[372](index=372&type=chunk)[373](index=373&type=chunk) - Principal risks are categorized by their trend (dynamic/stable) and speed of impact (rapid/gradual). Key dynamic/rapid risks include cybersecurity and information governance[390](index=390&type=chunk) - Other principal risks include failure to deliver preferred brands and loyalty, challenges in attracting and retaining talent, evolving legal and regulatory compliance, failure to capitalize on technology innovation, and risks associated with accelerating growth[393](index=393&type=chunk)[394](index=394&type=chunk)[397](index=397&type=chunk)[400](index=400&type=chunk) [Viability Statement](index=60&type=section&id=Viability%20statement) The Board has assessed the Group's viability over a three-year period to December 31, 2022, considering principal risks and various stress-test scenarios, including a widespread cybersecurity breach, a prolonged RevPAR decrease, and a downturn similar to the **2008-2009** financial crisis. Based on this assessment, the Directors have a reasonable expectation that the Group can continue operations and meet its liabilities as they fall due over this period - The Directors have assessed the Group's viability over a three-year period to December 31, 2022, concluding they have a reasonable expectation that the Group will be able to continue in operation and meet its liabilities[413](index=413&type=chunk) - The assessment included modeling several downside scenarios, such as a widespread cybersecurity breach, a prolonged decrease in RevPAR, and a repeat of the **2008-2009** financial crisis[410](index=410&type=chunk) - Potential mitigating actions considered in the scenarios include reducing capital expenditure, freezing salaries, and suspending bonus plans and the ordinary dividend[411](index=411&type=chunk) [Performance](index=61&type=section&id=Performance) In 2019, IHG's total revenue grew **6.7%** to **$4,627 million**, with operating profit up **8.2%** to **$630 million**. This performance was driven by a **5.6%** growth in system size, which offset a slight **0.3%** decline in comparable RevPAR amid a weaker macroeconomic environment. The Americas region saw flat RevPAR, while EMEAA grew slightly and Greater China declined, heavily impacted by unrest in Hong Kong. The company's asset-light, fee-based model continued to deliver strong results, with fee margin increasing by **0.8** percentage points to **54.1%** [Key Performance Measures (including Non-GAAP measures) used by management](index=61&type=section&id=Key%20performance%20measures%20%28including%20Non-GAAP%20measures%29%20used%20by%20management) This section explains the Non-GAAP financial measures used by management to assess performance, detailing their definitions and the impact of IFRS 16 adoption on prior period comparatives - The report uses several Non-GAAP measures such as RevPAR, Total Gross Revenue, Underlying Revenue/Operating Profit, and Fee Margin to provide an enhanced understanding of operating performance, as these are key metrics used internally by management[415](index=415&type=chunk) - For 2019 reporting, several Non-GAAP definitions were amended, and prior year comparatives were restated to reflect the adoption of IFRS 16 'Leases', changes in constant currency application, and adjustments to measures like Fee Margin and Adjusted EPS for better comparability[422](index=422&type=chunk) [Group Performance](index=66&type=section&id=Group) IHG's group performance in 2019 saw significant increases in total revenue and operating profit, driven by robust net system size growth and an expanding global pipeline Group Results (Year ended Dec 31) | Metric ($m) | 2019 | 2018 (Restated) | % Change | | :--- | :--- | :--- | :--- | | Total Revenue | 4,627 | 4,337 | 6.7% | | Revenue from reportable segments | 2,083 | 1,933 | 7.8% | | Operating Profit | 630 | 582 | 8.2% | | Operating profit from reportable segments | 865 | 832 | 4.0% | | Profit Before Tax | 542 | 482 | 12.4% | - The global IHG System increased by **47,022** rooms (net) to a total of **883,563** rooms across **5,903** hotels, representing a **5.6%** net system size growth[435](index=435&type=chunk) - The global pipeline increased by **12,095** rooms to a total of **283,043** rooms across **1,918** hotels[438](index=438&type=chunk) [Americas Performance](index=69&type=section&id=Americas) The Americas region experienced a slight RevPAR decline but achieved its highest number of new hotel openings in eight years, contributing to significant system size growth Americas Results (Year ended Dec 31, $m) | Metric | 2019 | 2018 (Restated) | % Change | | :--- | :--- | :--- | :--- | | Revenue from reportable segment | 1,040 | 1,051 | (1.0)% | | Operating profit from reportable segment | 700 | 673 | 4.0% | - Comparable RevPAR in the Americas declined by **0.1%**, with the US market down **0.2%** due to increased supply in the upper midscale segment[451](index=451&type=chunk) - The Americas region achieved its highest number of new hotel openings in eight years. The system size grew by **14,518** rooms to a total of **524,647** rooms[446](index=446&type=chunk)[462](index=462&type=chunk) [EMEAA Performance](index=72&type=section&id=Europe%2C%20Middle%20East%2C%20Asia%20and%20Africa%20%28EMEAA%29) The EMEAA region reported strong revenue growth and set new records for hotel openings and signings, leading to a substantial increase in net system size despite varied RevPAR performance EMEAA Results (Year ended Dec 31, $m) | Metric | 2019 | 2018 (Restated) | % Change | | :--- | :--- | :--- | :--- | | Revenue from reportable segment | 723 | 569 | 27.1% | | Operating profit from reportable segment | 217 | 206 | 5.3% | - Comparable RevPAR in EMEAA grew by **0.3%**, driven by a **0.7ppt** increase in occupancy. The UK saw **0.6%** RevPAR growth, while the Middle East declined **2.8%** due to increased supply[472](index=472&type=chunk) - The EMEAA region set new records for hotel openings and signings, with net system size increasing by **5.8%** (**12,271** rooms) to **223,370** rooms[474](index=474&type=chunk)[485](index=485&type=chunk) [Greater China Performance](index=75&type=section&id=Greater%20China) Greater China's performance was impacted by political unrest in Hong Kong, yet the region achieved record new hotel signings and openings, driving significant net system size growth Greater China Results (Year ended Dec 31, $m) | Metric | 2019 | 2018 (Restated) | % Change | | :--- | :--- | :--- | :--- | | Revenue from reportable segment | 135 | 143 | (5.6)% | | Operating profit from reportable segment | 73 | 70 | 4.3% | - Comparable RevPAR in Greater China decreased by **4.5%**, significantly impacted by political unrest in Hong Kong SAR where RevPAR declined **27.1%**. Mainland China RevPAR decreased by only **0.6%**, outperforming the industry[496](index=496&type=chunk) - Despite market challenges, the region achieved record new hotel signings and openings, with net system size growing by **17.5%** (**20,233** rooms) to **135,546** rooms[495](index=495&type=chunk)[500](index=500&type=chunk)[506](index=506&type=chunk) [Governance](index=76&type=section&id=Governance) This section outlines IHG's corporate governance framework, including Board oversight, committee reports, and the Directors' Remuneration Report, emphasizing compliance and accountability [Corporate Governance](index=79&type=section&id=Corporate%20Governance) IHG is committed to high standards of corporate governance, led by the Board which delegates certain responsibilities to its Audit, Corporate Responsibility, Nomination, and Remuneration Committees. In 2019, the Board focused on strategic growth, cybersecurity, culture, and stakeholder engagement, including appointing a designated non-executive director for workforce engagement. An external evaluation concluded the Board is well-functioning and effective. The company confirms compliance in all material respects with the **2018** UK Corporate Governance Code - The Board's key focus areas in 2019 included progress against strategic growth objectives, cybersecurity risk management, company culture and talent development, and stakeholder engagement[562](index=562&type=chunk)[563](index=563&type=chunk)[564](index=564&type=chunk) - An external Board evaluation conducted in 2019 concluded that the Board is well-led and operates effectively to high standards of professionalism[636](index=636&type=chunk)[641](index=641&type=chunk) - The company has complied in all material respects with the principles and provisions of the **2018** UK Corporate Governance Code for the year ended December 31, 2019[736](index=736&type=chunk) [Audit Committee Report](index=88&type=section&id=Audit%20Committee%20Report) The Audit Committee's report details its oversight of financial reporting, internal controls, risk management, and the external auditor relationship, including the 2019 audit tender process - The Audit Committee's key activities included reviewing financial reporting, overseeing internal controls and risk management, and managing the relationship with the external auditor, Ernst & Young LLP (EY)[657](index=657&type=chunk) - Significant matters reviewed in the 2019 Financial Statements included accounting for the IHG Rewards Club, the System Fund, impairment testing (Kimpton and UK portfolio), litigation provisions, and the acquisition of Six Senses[669](index=669&type=chunk) - In 2019, the Group conducted a mandatory audit tender process and recommended the appointment of PricewaterhouseCoopers LLP (PwC) as the statutory auditor for the financial year ending December 31, 2021[692](index=692&type=chunk)[694](index=694&type=chunk) [Corporate Responsibility Committee Report](index=92&type=section&id=Corporate%20Responsibility%20Committee%20Report) The Corporate Responsibility Committee reviewed progress on sustainability targets, human rights, and approved new commitments, with its remit expanding to include workforce engagement and D&I - The Committee reviewed progress against the **2018-2020** Responsible Business targets and endorsed new sustainability commitments, including setting science-based carbon reduction targets and aligning with TCFD recommendations[706](index=706&type=chunk)[707](index=707&type=chunk) - The Committee reviewed the Group's human rights program, approving an updated Human Rights policy and endorsing a focus on human trafficking training[710](index=710&type=chunk) - From March 2020, the Committee will be renamed the 'Responsible Business Committee' and its remit will expand to include overseeing workforce engagement and the Group's diversity and inclusion agenda[702](index=702&type=chunk)[712](index=712&type=chunk) [Nomination Committee Report](index=93&type=section&id=Nomination%20Committee%20Report) The Nomination Committee focused on Board composition, appointing a new Non-Executive Director, establishing workforce engagement, and advancing Board diversity - The Committee reviewed Board composition and recommended the appointment of Arthur de Haast as a Non-Executive Director to add expertise in the hotels and hospitality sectors[720](index=720&type=chunk) - The Committee oversaw the establishment of the 'Voice of the Employee' approach, appointing Non-Executive Director Luke Mayhew to lead Board engagement with the workforce[722](index=722&type=chunk) - As of December 31, 2019, **36%** of the Board were female, and two of the Principal Committees were chaired by women, reflecting a continued commitment to diversity[725](index=725&type=chunk) [Directors' Remuneration Report](index=96&type=section&id=Directors%27%20Remuneration%20Report) The report details the implementation of the remuneration policy in 2019 and proposes a revised policy for 2020 onwards. In 2019, executive incentive payouts reflected resilient performance, with the Annual Performance Plan (APP) paying out at **58.7%** of maximum and the **2017-19** Long-Term Incentive Plan (LTIP) vesting at **78.9%** of maximum. The proposed new policy includes an increased maximum LTIP opportunity to address talent retention risks, higher shareholding requirements, and alignment of new executive director pension benefits with the wider workforce - The 2019 Annual Performance Plan (APP) paid out at **58.7%** of maximum, while the **2017-19** Long Term Incentive Plan (LTIP) vested at **78.9%** of maximum, reflecting strong performance against targets[759](index=759&type=chunk) - The proposed 2020 Remuneration Policy includes an increase in the maximum potential LTIP quantum to **350%** of salary for the CEO and **275%** for other Executive Directors to address recruitment and retention challenges, particularly against US-based competitors[765](index=765&type=chunk)[783](index=783&type=chunk) - Other proposed policy changes include increasing the minimum shareholding requirement to **500%** of salary for the CEO (from **300%**) and **300%** for other Executive Directors (from **200%**), and aligning pension contributions for new UK Executive Directors with the wider workforce[768](index=768&type=chunk)[769](index=769&type=chunk)[783](index=783&type=chunk) [Group Financial Statements](index=119&type=section&id=Group%20Financial%20Statements) This section presents the Group Financial Statements, including the independent auditor's report, key financial figures, critical accounting policies, and detailed notes on financial performance and position [Independent Auditor's US Report](index=128&type=section&id=Independent%20Auditor%27s%20US%20Report) The Independent Auditor's Report provides an unqualified opinion on IHG's financial statements and internal controls, highlighting critical audit matters such as loyalty program accounting and impairment assessments - The auditor, Ernst & Young LLP, issued an unqualified opinion on both the Group Financial Statements and the Group's internal control over financial reporting as of December 31, 2019[972](index=972&type=chunk)[973](index=973&type=chunk) - Critical Audit Matters highlighted included: 1) Accounting for revenue related to the IHG Rewards Club loyalty programme, 2) Allocation of revenues and expenses to the System Fund, 3) Impairment assessments of Kimpton management contracts and the UK portfolio, and 4) Accounting for the acquisition of Six Senses[977](index=977&type=chunk)[978](index=978&type=chunk)[980](index=980&type=chunk)[990](index=990&type=chunk)[992](index=992&type=chunk) [Group Financial Statements](index=132&type=section&id=Group%20Financial%20Statements) The Group Financial Statements for the year ended December 31, 2019, show total revenue of **$4,627 million**, an increase from **$4,337 million** in 2018. Operating profit rose to **$630 million** from **$582 million**, and profit for the year attributable to equity holders was **$385 million**, up from **$349 million**. Total assets stood at **$3,976 million**, while total liabilities were **$5,441 million**, resulting in net liabilities of **$1,465 million**. Net cash from operating activities was **$653 million** Key Financial Statement Figures (Year ended Dec 31, $m) | Item | 2019 | 2018 (Restated) | | :--- | :--- | :--- | | **Income Statement** | | | | Total Revenue | 4,627 | 4,337 | | Operating Profit | 630 | 582 | | Profit for the year | 386 | 350 | | **Financial Position** | | | | Total Assets | 3,976 | 4,092 | | Total Liabilities | 5,441 | 5,223 | | Total Equity | (1,465) | (1,131) | | **Cash Flow** | | | | Net cash from operating activities | 653 | 709 | [Accounting Policies](index=139&type=section&id=Accounting%20policies) This section details the Group's accounting policies, emphasizing critical judgments and estimates related to the System Fund, IHG Rewards Club, and impairment testing under IFRS - The financial statements are prepared in accordance with IFRS as issued by the IASB and adopted by the EU, using the US dollar as the presentational currency[1032](index=1032&type=chunk)[1034](index=1034&type=chunk) - A critical judgement is the accounting for the System Fund, where assessment fees are recognized as revenue as they occur, and no liability is recognized for the balance of unspent funds[1038](index=1038&type=chunk)[1040](index=1040&type=chunk) - Critical estimates include the valuation of the IHG Rewards Club deferred revenue, which is sensitive to the 'breakage' rate (points not expected to be redeemed), and impairment testing of goodwill and intangible assets, which relies on cash flow forecasts and discount rates[1042](index=1042&type=chunk)[1043](index=1043&type=chunk)[1045](index=1045&type=chunk) [New Accounting Standards and Presentational Changes](index=146&type=section&id=New%20accounting%20standards%20and%20presentational%20changes) This section outlines the adoption of IFRS 16 'Leases' effective January 1, 2019, detailing its retrospective application and significant impact on the Group's financial statements - The Group adopted IFRS 16 'Leases' effective January 1, 2019, using the full retrospective method, requiring the restatement of comparative financial information for 2018 and 2017[1142](index=1142&type=chunk)[1143](index=1143&type=chunk) Impact of IFRS 16 Adoption on 2018 Financials ($m) | Financial Statement Item | Impact | | :--- | :--- | | **Income Statement** | | | Operating Profit | +$16m | | Financial Expenses | +$19m | | Profit Before Tax | -$3m | | **Statement of Financial Position** | | | Right-of-use assets | +$513m | | Lease liabilities | +$670m | | Net Liabilities | +$54m | [Notes to the Group Financial Statements](index=150&type=section&id=Notes%20to%20the%20Group%20Financial%20Statements) The notes provide detailed disclosures supporting the main financial statements. Key items include segmental information, revenue disaggregation, details on acquisitions like Six Senses, impairment charges totaling **$131 million** for the UK portfolio and Kimpton agreements, and financial risk management policies. The notes also detail the Group's debt structure, including **$2,165 million** in loans and borrowings and **$660 million** in lease liabilities, and provide reconciliations for various financial metrics - Operating exceptional items in 2019 totaled a charge of **$186 million**, primarily driven by impairment charges of **$131 million** related to the UK portfolio (**$81 million**) and Kimpton management agreements (**$50 million**)[1195](index=1195&type=chunk) - The Group acquired Six Senses Hotels Resorts Spas for a total consideration of **$304 million**, recognizing **$189 million** for the brand and **$58 million** in goodwill[1239](index=1239&type=chunk)[1241](index=1241&type=chunk) - As of December 31, 2019, the Group's net debt was **$2,665 million**, an increase from **$1,965 million** in 2018, primarily comprising loans, bonds, and lease liabilities[1334](index=1334&type=chunk) [Additional Information](index=212&type=section&id=Additional%20Information) This section provides supplementary financial data, the Directors' Report, key group information including risk factors and legal proceedings, and essential shareholder information [Other Financial Information](index=214&type=section&id=Other%20financial%20information) This section provides detailed reconciliations for the Non-GAAP financial measures used throughout the report, such as underlying revenue, underlying operating profit, fee margin, and free cash flow. It breaks down these metrics by geographical segment (Americas, EMEAA, Greater China) and offers year-over-year comparisons, adjusting for factors like currency impacts, acquisitions, and significant liquidated damages to present a clearer view of the underlying business performance - Provides reconciliations for Non-GAAP measures to their most directly comparable IFRS figures, explaining adjustments for items like the System Fund, exceptional items, acquisitions, and currency impacts[1466](index=1466&type=chunk)[1468](index=1468&type=chunk)[1469](index=1469&type=chunk) - Includes detailed tables breaking down revenue and operating profit performance by region (Americas, EMEAA, Greater China) on both a reported and underlying basis[1473](index=1473&type=chunk)[1475](index=1475&type=chunk)[1477](index=1477&type=chunk) - Contains reconciliations for capital expenditure and free cash flow, clarifying the components of maintenance vs. recyclable capital and adjustments made to net cash from operating activities[1485](index=1485&type=chunk)[1486](index=1486&type=chunk) [Directors' Report](index=221&type=section&id=Directors%27%20Report) The Directors' Report covers statutory disclosures, including information on share capital, major shareholders, employee policies, and greenhouse gas emissions. As of February 2020, significant shareholders included Boron Investments B.V. (**6.01%**), Fiera Capital Corporation (**6.06%**), and BlackRock, Inc. (**5.46%**). The report details the Group's GHG emissions, showing a total of **5.3 million tCO2e** for 2019 and confirms the adoption of the going concern basis for preparing financial statements - As of February 17, 2020, major shareholders included Boron Investments B.V. (**6.01%**), Fiera Capital Corporation (**6.06%**), Cedar Rock Capital Limited (**5.07%**), Fundsmith LLP (**5.18%**), and BlackRock, Inc. (**5.46%**)[1504](index=1504&type=chunk) Greenhouse Gas (GHG) Emissions (Global Estate) | Measure (tCO2e) | 2019 | 2018 (Restated) | | :--- | :--- | :--- | | Scope 1 (Direct) | 529,093 | 508,617 | | Scope 2 (Indirect) | 2,008,037 | 1,949,694 | | Scope 3 (Indirect) | 2,758,518 | 2,734,980 | | **Total GHG Emissions** | **5,295,648** | **5,193,291** | - The Directors confirm the adoption of the going concern basis in preparing the financial statements, having a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future[1537](index=1537&type=chunk) [Group Information](index=225&type=section&id=Group%20information) This section details the company's history, from its origins as Bass PLC to its current form as a standalone global hotel business. It outlines key risk factors that could materially affect the Group, including political/economic developments, the hotel industry cycle, competition from online travel agents, cybersecurity threats, and regulatory changes. It also summarizes material contracts, such as its syndicated bank facility and bond programmes, and discloses ongoing legal proceedings - Key risk factors include exposure to political and economic developments (especially in the US and Greater China), the cyclical nature of the hotel industry, increasing competition from online travel agents, and cybersecurity and data privacy threats[1548](index=1548&type=chunk)[1551](index=1551&type=chunk)[1556](index=1556&type=chunk)[1573](index=1573&type=chunk) - Material contracts include a **$1.275 billion** syndicated bank facility maturing in March 2022 and a **£2 billion** Euro Medium Term Note programme under which several series of bonds are outstanding[1638](index=1638&type=chunk)[1639](index=1639&type=chunk) - The Group is involved in several legal proceedings, including class action lawsuits related to data security breaches and antitrust allegations concerning keyword search advertising[1651](index=1651&type=chunk)[1653](index=1653&type=chunk)[1654](index=1654&type=chunk)[1656](index=1656&type=chunk) [Shareholder Information](index=237&type=section&id=Shareholder%20information) This section provides essential information for shareholders, including a summary of material US and UK tax consequences of owning shares or ADSs, details on disclosure controls, and a comparison of IHG's UK corporate governance practices with NYSE standards. It also includes a five-year summary of financial data, a history of returns of funds to shareholders, and a profile of the shareholder base by type, size, and geography - Since March 2003, the Group has returned over **£6.6 billion** to shareholders through special dividends, capital returns, and share buybacks. A **$500 million** special dividend was paid in January 2019[1707](index=1707&type=chunk) Shareholder Profile by Geography (as of Dec 31, 2019) | Region | % of Issued Share Capital | | :--- | :--- | | UK | 47.3% | | Rest of Europe | 19.8% | | US (including ADRs) | 31.1% | | Rest of World | 1.8% | - The report discloses significant differences between its UK corporate governance practices and those required for US companies under NYSE listing standards, particularly regarding director independence standards and committee composition[1693](index=1693&type=chunk)

InterContinental Hotels Group PLC (NYSE:IHG) Q4 2019 Earnings Conference Call February 18, 2020 4:30 AM ET Company Participants Heather Wood - Group Financial Controller Keith Barr - Chief Executive Officer Paul Edgecliffe-Johnson - Chief Financial Officer Conference Call Participants Richard Clarke - AB Bernstein Vicki Stern - Barclays Jamie Rollo - Morgan Stanley. Jaafar Mestari - BNP Paribas Alex Brignall - Redburn Monique Pollard - Citi Stuart Gordon - Berenberg Julian Easthope - RBC Ben Andrews - Goldm ...

Financial Performance - IHG's total revenue increased to $4627 million in 2019 from $4337 million in 2018[19] - Total operating profit increased to $816 million in 2019 from $686 million in 2018[19] - Free cash flow was $509 million for the 12 months ending December 31, 2019, compared to $611 million for the same period in 2018[21] RevPAR Performance (3 Months to December 31, 2019) - Total IHG comparable RevPAR decreased by 18% with ADR decreasing by 15%[7] - Americas comparable RevPAR decreased by 16% with ADR decreasing by 06%[7] - EMEAA comparable RevPAR increased by 02% with ADR decreasing by 04%[7] - Greater China comparable RevPAR decreased by 105% with ADR decreasing by 115%[7] RevPAR Performance (12 Months to December 31, 2019) - Total IHG comparable RevPAR decreased by 03% with ADR decreasing by 04%[10] - Americas comparable RevPAR decreased by 01% with ADR increasing by 02%[10] - EMEAA comparable RevPAR increased by 03% with ADR decreasing by 06%[10] - Greater China comparable RevPAR decreased by 45% with ADR decreasing by 47%[10] Hotel and Room Count (as of December 31, 2019) - Total system size comprised 5903 hotels with 883563 rooms[12] - Americas had 4307 hotels with 524647 rooms[12] - EMEAA had 1126 hotels with 223370 rooms[12] - Greater China had 470 hotels with 135546 rooms[12]

InterContinental Hotels Group PLC (NYSE:IHG) Q2 2019 Earnings Conference Call August 6, 2019 4:30 AM ET Company Participants Heather Wood - Head of Investor Relations Keith Barr - Chief Executive Officer Paul Edgecliffe-Johnson - Chief Financial Officer Conference Call Participants Jamie Rollo - Morgan Stanley. Vicki Stern - Barclays Monique Pollard - Citi Tim Barrett - Numis Securities Sophie Aldrich - Aberdeen Standard Investments Jaafar Mestari - Exane BNP Paribas Heather Wood Good morning, everyone. I'm ...

Hotel Indigo Venice - Sant'Elena, Italy Interim Results presentation 6th August 2019 IHG' © 2019 All Rights Reserved Proprietary and confidential – further reproduction or distribution is prohibited Cautionary note regarding forward-looking statements This presentation may contain projections and forward looking statements. The words "believe", "expect", "anticipate", "intend" and "plan" and similar expressions identify forward-looking statements. All statements other than statements of historical facts inc ...

InterContinental Hotels Group PLC (NYSE:IHG) Q1 2019 Earnings Conference Call May 2, 2019 4:00 AM ET Company Participants Heather Wood - Head of Investor Relations Paul Edgecliffe-Johnson - Chief Financial Officer Conference Call Participants Jamie Rollo - Morgan Stanley Jarrod Castle - UBS Vicki Stern - Barclays Richard Clarke - Bernstein Jaafar Mestari - Exane BNP Paribas Operator Ladies and gentlemen, welcome to the IHG Q1 Results Call. My name is Braka and I will be coordinating your call today. [Operat ...

Table of Contents SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 20-F (Mark One) ☐ REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934 or ☑ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2018 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 or ☐ SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT O ...

Financial Data and Key Metrics Changes - Reported revenue increased by 12% to $1.9 billion and operating profit increased by 8% to $816 million [10] - Underlying earnings per share grew by 19%, driven by strong financial performance [11] - Underlying revenue and operating profit from the fee business grew by 7%, resulting in a fee margin increase of 10 basis points year-on-year at constant currency [10][11] Business Line Data and Key Metrics Changes - The company added 56,000 new rooms, the highest level of openings since 2009, while removing 18,000 rooms, resulting in a net system size growth of 4.8% [12] - Underlying profit in the Americas grew by 4%, with fee business profit also up by 4% [16] - In Europe, Middle East, Asia, and Africa, RevPAR increased by 2.7%, with fee revenue growth of 5% [17] - Greater China saw RevPAR growth of 7% and underlying revenue growth of 15% [18] Market Data and Key Metrics Changes - U.S. industry demand remains at record levels, with hotels in the Americas driving record occupancies of nearly 70% [15] - In the UK, RevPAR was up 1%, with nearly 3% growth in London [17] - In Greater China, RevPAR in Tier 1 and Tier 2 cities benefited from strong transient meetings and corporate demand [18] Company Strategy and Development Direction - The company is focused on long-term sustainable growth through strategic initiatives, including enhancing its brand portfolio and entering underserved market segments [5] - The acquisition of Six Senses and the launch of new brands like Avid and VOCO are part of the strategy to strengthen the luxury and upscale segments [5][44] - A new organizational structure has been implemented to improve focus and efficiency [6] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's strong performance and outlook, despite macroeconomic and geopolitical uncertainties [53] - The company anticipates continued growth in net rooms and fee revenue, with expectations for a 5% to 6% growth range in the medium term [60][61] Other Important Information - The company announced a 10% increase in total annual ordinary dividend, alongside a $500 million special dividend [4] - The adoption of IFRS 16 is expected to impact EBIT positively while increasing net debt [25][26] Q&A Session Summary Question: What is happening in China regarding signings and removals? - Management noted that the signings fell in Q4 due to timing and that there is no underlying drop in interest for signing brands [59] Question: What is the expected run rate for the Avid brand? - Management indicated that a run rate of 20 to 25 signings per quarter is expected moving forward, which is considered satisfactory [60] Question: Why did underlying margin increase only 80 basis points this year? - Management explained that the margin was impacted by one-off items and ongoing transformation efforts, with expectations for stronger growth in the future [63] Question: How does the acquisition of Six Senses compare to Regent in terms of return? - Management clarified that Six Senses has a significant pipeline and is expected to generate over $50 million in fee income over time, making it a different investment compared to Regent [64]

2018 Full year results presentation 19th February 2019 IHG 19 February 2019 © 2019 All Rights Reserved Proprietary and confidential – further reproduction or distribution is prohibited © 2019 All Rights Reserved Proprietary and confidential – further reproduction or distribution is prohibited Cautionary note regarding forward-looking statements This presentation may contain projections and forward looking statements. The words "believe", "expect", "anticipate", "intend" and "plan" and similar expressions id ...