InterContinental Hotels Group PLC InterContinental Hotels Group PLC - PowerPoint PPT Presentation

InterContinental Hotels Group PLC InterContinental Hotels Group PLC Results for the 6 months to 31 March 2003 Results for the 6 months to 31 March 2003 1

Richard North Richard North Chief Executive Officer Chief Executive Officer 2

Overview Overview � Extremely difficult trading environment � Our brands are performing well � Strong management actions will reposition the company and protect profits - organisation redesign - right people in the right jobs - reducing the cost base - asset review and disposals - capital expenditure reduction 3

Richard Solomons Richard Solomons Finance Director Finance Director 4

Change in Year End Change in Year End � New 31 December year end - better reflects annual corporate negotiations timing - brings us in line with other quoted hotel groups � Quarterly reporting for calendar 2003 � Supplementary information for calendar 2002 5

Results Results 6 months to 31 March 2003 6 months to 31 March 2003 Operating Profit £m m £ Hotels 79 Down 27.5% Hotels 79 Down 27.5% Soft Drinks 20 Up 25.0% Soft Drinks 20 Up 25.0% 6

Results Results 6 months to 31 March 2003 6 months to 31 March 2003 Pro forma Group Results Pro forma Group Results EBITDA Down 6.7% EBITDA Down 6.7% Profit Before Tax Down 31.3% Profit Before Tax Down 31.3% Earnings per share Down 32.6% Earnings per share Down 32.6% 7

Operating Profit Operating Profit 3 months to 31 December 2002 3 months to 31 December 2002 3 mths mths to to 3 mths mths to to 3 3 % % $m $m 31 Dec 02 31 Dec 01 31 Dec 02 31 Dec 01 Americas - Owned & Leased 4 3 33.3 - Managed & Upscale Franchised 9 11 (18.2) - Midscale Franchised 42 40 5.0 Total Americas 55 54 1.9 EMEA - Owned & Leased 22 33 (33.3) - Managed & Franchised 9 8 12.5 Total EMEA 31 41 (24.4) Asia Pacific 17 9 88.9 FelCor & Other 4 5 (20.0) Central Overheads and Marketing (32) (19) (68.4) Goodwill Amortisation (3) (3) - Total 72 87 (17.2) 8

Operating Profit Operating Profit 3 months to 31 March 2003 3 months to 31 March 2003 3 mths mths to to 3 mths mths to to 3 3 % % $m $m 31 Mar 03 31 Mar 02 31 Mar 03 31 Mar 02 Americas - Owned & Leased - 1 - - Managed & Upscale Franchised 7 9 (22.2) - Midscale Franchised 45 43 4.7 Total Americas 52 53 (1.9) EMEA - Owned & Leased 9 20 (55.0) - Managed & Franchised 10 11 (9.1) Total EMEA 19 31 (38.7) Asia Pacific 8 11 (27.3) FelCor & Other 1 3 (66.7) Central Overheads and Marketing (24) (26) 7.7 Goodwill Amortisation (3) (3) - Total 53 69 (23.2) 9

Operating Profit Operating Profit 6 months to 31 March 2003 6 months to 31 March 2003 6 mths mths to to 6 mths mths to to 6 6 $m % $m % 31 Mar 03 31 Mar 03 31 Mar 02 31 Mar 02 Americas Americas - - Owned & Leased Owned & Leased 4 4 4 4 - - - Managed & Upscale Franchised Managed & Upscale Franchised 16 20 (20.0) - 16 20 (20.0) - Midscale Franchised Midscale Franchised 87 83 4.8 - 87 83 4.8 Total Americas 107 107 - Total Americas 107 107 - EMEA EMEA - - Owned & Leased Owned & Leased 31 31 53 53 (41.5) (41.5) - Managed & Franchised Managed & Franchised 19 19 - - 19 19 - Total EMEA 50 72 (30.6) Total EMEA 50 72 (30.6) Asia Pacific Asia Pacific 25 25 20 20 25.0 25.0 FelCor & Other & Other 5 8 (37.5) FelCor 5 8 (37.5) Central Overheads and Marketing Central Overheads and Marketing (56) (56) (45) (45) ( 24.4) ( 24.4) Amortisation (6) (6) - Amortisation (6) (6) - Total 125 156 (19.9) Total 125 156 (19.9) Total £ £m m 79 109 (27.5) Total 79 109 (27.5) EBITDA £ EBITDA £m m 156 156 174 174 (10.3) (10.3) 10

Operating Profit Performance Operating Profit Performance � Hotels revenue up by 7.5% � Hotels operating profit down $31m � Key factors adversely affecting profit flowthrough: - Occupancy driven RevPAR - InterContinental marketing spend - Depreciation - InterContinental Le Grand Hotel Paris - Insurance - FelCor 11

Americas Owned & Leased Americas Owned & Leased RevPAR Outperformance RevPAR Outperformance InterContinental O&L Upper Upscale Segment 30.0% % growth RevPar 10.0% (10.0%) Oct-02 Nov-02 Dec-02 Jan-03 Feb-03 Mar-03 Source; IHG and Smith Travel data 12

Americas Owned & Leased Americas Owned & Leased 3 mths 3 mths to to 3 mths 3 mths to to 6 6 mths mths to to 31 Dec 02 31 Dec 02 31 Mar 03 31 Mar 03 31 Mar 03 31 Mar 03 RevPAR Growth RevPAR Growth - InterContinental InterContinental 20.8% 1.8% 11.3% - 20.8% 1.8% 11.3% Operating profit flat at $4m Operating profit flat at $4m 13

Americas Managed & Upscale Americas Managed & Upscale Franchise Franchise 3 mths mths to to 3 mths mths to to 6 mths mths to to 3 3 6 31 Dec 02 31 Mar 03 31 Mar 03 31 Dec 02 31 Mar 03 31 Mar 03 RevPAR Growth RevPAR Growth - InterContinental - InterContinental Managed Managed (11.5)% (11.5)% (24.1)% (24.1)% (18.1)% (18.1)% - Crowne Plaza Managed - Crowne Plaza Managed 5.6% 5.6% (3.0)% (3.0)% 1.4% 1.4% - Crowne Plaza Franchised - Crowne Plaza Franchised 4.3% 4.3% (1.3)% (1.3)% 1.3% 1.3% Operating profit down 20% at $16m Operating profit down 20% at $16m 14

Americas Midscale Midscale Franchise Franchise Americas RevPAR Outperformance RevPAR Outperformance 10.0% Express Brands Midscale without F&B Segment % growth RevPAR 0.0% (10.0%) Oct-02 Nov-02 Dec-02 Jan-03 Feb-03 Mar-03 Source; IHG and Smith Travel data 15

Americas Midscale Midscale Franchise Franchise Americas RevPAR Performance Performance RevPAR 10.0% Holiday Inn Brands Midscale with F&B Segment % growth RevPAR 0.0% (10.0%) Oct-02 Nov-02 Dec-02 Jan-03 Feb-03 Mar-03 Source; IHG and Smith Travel data 16

Americas Midscale Midscale Franchise Franchise Americas 3 mths mths to to 3 mths mths to to 6 mths mths to to 3 3 6 31 Dec 02 31 Mar 03 31 Mar 03 31 Dec 02 31 Mar 03 31 Mar 03 RevPAR Growth RevPAR Growth - Holiday Inn Holiday Inn 2.1% (2.0)% - - 2.1% (2.0)% - - Express - Express 3.3% 3.3% (0.6)% (0.6)% 1.3% 1.3% Holiday Inn Express Holiday Inn Express Increase in royalty rate Increase in royalty rate 0.05% pts 0.05% pts 0.01% pts 0.01% pts Change in number of Change in number of (1.7)% (1.7)% 7.4% 7.4% rooms available rooms available Operating profit up 4.8% at $87m Operating profit up 4.8% at $87m 17

EMEA EMEA Operating Profit Operating Profit 6 6 mths mths to to 6 mths 6 mths to to % % 31 Mar 03 31 Mar 02 31 Mar 03 31 Mar 02 US Dollar Analysis $m $m US Dollar Analysis $m $m Total Operating Profit Total Operating Profit 50 50 72 72 (30.6) (30.6) Sterling Analysis £m m £m m Sterling Analysis £ £ Owned & Leased 20 37 (45.9) Owned & Leased 20 37 (45.9) Managed & Franchised Managed & Franchised 12 12 13 13 (7.7) (7.7) Total Operating Profit 32 50 (36.0) Total Operating Profit 32 50 (36.0) 18

EMEA Owned & Leased EMEA Owned & Leased 3 mths mths to to 3 mths mths to to 6 mths mths to to 3 3 6 31 Dec 02 31 Dec 02 31 Mar 03 31 Mar 03 31 Mar 03 31 Mar 03 RevPAR Growth RevPAR Growth - InterContinental InterContinental 12.8% (6.1)% 3.3% - 12.8% (6.1)% 3.3% - - Crowne Crowne Plaza Plaza 2.0% 2.0% (1.6)% (1.6)% 0.3% 0.3% - Holiday Inn Holiday Inn 4.9% (1.0)% 2.0% - 4.9% (1.0)% 2.0% Operating profit down 45.9% at £20m Operating profit down 45.9% at £20m 19

EMEA Holiday Inn UK EMEA Holiday Inn UK RevPAR Outperformance RevPAR Outperformance 30.0% Regions Hotel Benchmark Segment London Hotel Benchmark Segment Regions Holiday Inn London Holiday Inn 20.0% 10.0% % growth 0.0% (10.0%) (20.0%) Oct-02 Nov-02 Dec-02 Jan-03 Feb-03 Mar-03 Source; IHG and Smith Travel data 20

EMEA Managed & Franchised EMEA Managed & Franchised 3 mths mths to to 3 mths mths to to 6 mths mths to to 3 3 6 31 Dec 02 31 Mar 03 31 Mar 03 31 Dec 02 31 Mar 03 31 Mar 03 RevPAR Growth RevPAR Growth - InterContinental Managed InterContinental Managed 33.3% (4.0)% 11.8% - 33.3% (4.0)% 11.8% - - Holiday Inn Franchised Holiday Inn Franchised 6.7% 6.7% 1.1% 1.1% 4.0% 4.0% - Express Franchised Express Franchised 6.3% (2.2)% 2.0% - 6.3% (2.2)% 2.0% Operating profit down 7.7% to £12m Operating profit down 7.7% to £12m 21

Asia Pacific Asia Pacific 3 mths mths to to 3 mths mths to to 6 mths mths to to 3 3 6 31 Dec 02 31 Mar 03 31 Mar 03 31 Dec 02 31 Mar 03 31 Mar 03 RevPAR Growth RevPAR Growth - IC Hong Kong IC Hong Kong 59.6% 2.7% 30.0% - 59.6% 2.7% 30.0% - Managed Managed 9.7% 3.4% 6.7% - 9.7% 3.4% 6.7% Operating profit up 25% to $25m Operating profit up 25% to $25m 22