IHG(US:IHG)2023-06-30 11:08Financial Performance - Total revenue for the first half of 2023 was $2,226 million, a 24% increase compared to $1,794 million in 2022[5] - Adjusted EPS rose by 50% to 182.7¢ from 121.7¢ in the previous year[5] - Operating profit improved by $223 million (61.8%) from $361 million to $584 million, with a significant increase in the System Fund result from $3 million to $87 million[62] - Adjusted earnings increased by $92 million (41.1%) to $316 million, with adjusted earnings per share rising to 182.7¢[58] - Total gross revenue in IHG's system rose by 29.0% to $15.2 billion, with a 31.0% increase at constant currency, driven by improved trading conditions and hotel growth[96] - Underlying revenue for the reportable segments increased by 27.1% to $1,031 million in 2023, compared to $811 million in 2022[194] - Underlying operating profit rose by 29.8% to $479 million in 2023, up from $369 million in 2022[194] Revenue Growth - Total revenue increased by $432 million (24.1%) to $2,226 million, driven by improved trading conditions[61] - Revenue from reportable segments increased by $191 million (22.7%) to $1,031 million, driven by improved trading conditions[61] - System Fund revenues increased by $195 million (35%) to $749 million, reflecting strong travel demand and performance of the IHG One Rewards program[68] - Cost reimbursement revenue rose by $46 million (11.5%) to $446 million, indicating improved trading conditions in the US[70] Room and Hotel Expansion - The company opened 21,000 rooms across 108 hotels in H1 2023, a 40% increase from H1 2022, bringing the total global estate to 925,000 rooms[8] - The company signed 34,200 rooms across 239 hotels in H1 2023, an 11% increase compared to the previous year, with a global pipeline now at 286,000 rooms[8] - IHG's global system reached 925,320 rooms across 6,227 hotels as of June 30, 2023, with a gross growth of 6.3% year-over-year, including 21,000 rooms opened in H1 2023, which is a 40% increase from the prior year[33] - The total number of hotels increased by 63 to 6,227, with total rooms rising by 13,693 to 925,320[101] Market Performance - RevPAR increased by 24% year-on-year in H1 2023, with Q2 RevPAR up 17% compared to the same period last year[8] - Group comparable RevPAR improved by 24.1% in the first half of 2023 compared to the previous year, and by 8.7% compared to pre-pandemic levels in 2019[60] - In the US market, leisure travel revenue was up 24% compared to 2019, while business travel was up 1%, and group travel was down 14%[32] - EMEAA region showed a RevPAR increase of 41.6% (CER) for the first half of 2023 compared to 2022[98] - G. China experienced a significant RevPAR increase of 93.7% (CER) for the first half of 2023 compared to 2022[98] Shareholder Returns - The interim dividend per share was raised by 10% to 48.3¢, with total dividend payments expected to return close to $250 million to shareholders in 2023[5][23] - The current $750 million share buyback program is 47% complete, with $349.5 million spent repurchasing shares[23] Debt and Liquidity - Net debt increased by 32% to $2,270 million from $1,718 million in 2022, influenced by share buybacks and dividends[5] - The Group's total liquidity as of June 30, 2023, was $1,970 million, down from $2,224 million at the end of 2022[89] - The Group's leverage ratio at June 30, 2023, was 2.30, indicating compliance with financial covenants[91] Digital and Loyalty Programs - IHG's loyalty program, IHG One Rewards, has over 115 million members, with enrolments up 60% year-over-year in H1 2023 and Reward Nights up over 40% compared to 2019[46] - IHG's digital-first approach has driven a higher percentage of direct bookings, enhancing revenue management and guest experience[48] - The number of IHG mobile app downloads, users, bookings, and revenue increased by 40-50% compared to 2022 levels[52] - IHG's digital direct channels now contribute approximately 25% of hotel revenue globally, with mobile channels accounting for over 50% of all digital bookings[52] Strategic Initiatives - A new midscale conversion brand is set to launch, targeting a market worth $14 billion in the US, with over 100 hotels already expressing interest[10] - The new midscale conversion brand aims to capture a significant share of the midscale market, targeting over 500 hotels in the next 10 years and 1,000 hotels in 20 years[38] - The integration of Iberostar Beachfront Resorts as an Exclusive Partner brand added 10 properties in H1 2023, bringing the total to 43, with further integration expected[45] - Holiday Inn Express opened 38 hotels and signed 77 more, reaching over 3,100 hotels open and a pipeline of 640, indicating a future system growth of 24%[43]