Introducing IHG

As at 31 December 2019
Figures relate to 2019 full-year unless otherwise stated.
IHG is one of the world’s leading
hotel companies, with well-loved
brands, a world-class loyalty
programme, and a purpose to
provide True Hospitality for everyone.

Guided by a clear and proven

asset‑light strategy, we are focused
on delivering industry‑leading
net‑rooms growth over the
medium term.

This presentation may contain projections and forward looking statements. The words “believe”, “expect”,
“anticipate”, “intend” and “plan” and similar expressions identify forward-looking statements. All statements
other than statements of historical facts included in this presentation, including, without limitation, those
regarding the Company’s financial position, potential business strategy, potential plans and potential objectives,
are forward‑looking statements. Such forward-looking statements involve known and unknown risks, uncertainties
and other factors which may cause the Company’s actual results, performance or achievements to be materially
different from any future results, performance or achievements expressed or implied by such forward-looking
statements. For a description of the Company’s risk factors see IHG’s Annual Report for the year ended
31 December 2018 (www.ihgplc.com/investors/annual-report).

Such forward-looking statements are based on numerous assumptions regarding the Company’s present and
future business strategies and the environment in which the Company will operate in the future. Further, certain
forward-looking statements are based upon assumptions of future events which may not prove to be accurate.
The forward-looking statements in this document speak only as at the date of this presentation and the Company
assumes no obligation to update or provide any additional information in relation to such forward-looking statements.

This presentation is not an invitation to invest and the merits or suitability of investing in any securities previously
issued or issued in future by the Company for any investor’s particular situation should be independently
determined by such investor. Any such determination should involve, inter alia, an assessment of the risks
involved as well as the legal, tax, accounting, regulatory, financial, credit and other related aspects of the
transaction in question.

For more information on our business, visit

www.ihgplc.com

IHG | Introducing IHG 1
Overview

5,903 1,918
Pipeline hotels
Open hotels

883,563 283,043
Open rooms Pipeline rooms

Figures as at 31 Dec 2019

We are listed on the London Stock Exchange and are a member of the FTSE 100
index, with a secondary listing on the New York Stock Exchange, via an ADR
programme. Since becoming a standalone business in 2003, we have consistently
delivered ordinary dividend growth and returned $13.8bn to shareholders.

Our structure
We have hotels in more than 100 countries, split across three operating regions;
Americas; Europe, Middle East, Asia and Africa (EMEAA); and Greater China.

Group revenue 20191 2019 Group operating profit Number of rooms

($2,083m) before exceptional items as at 31 Dec 2019
and system fund2 (883,563)
($865m)

9% $700m 15%
6%
$217m

50% 25%
35% $73m
60%

-$125m

● Americas ● EMEAA ● Greater China ● Central

1,2
Excludes impact of System fund and hotel cost reimbursements

IHG | Introducing IHG 2
Brands

IHG | Introducing IHG 3
 Our industry
From growing consumer demand for branded hotels,
to an expanding middle class and greater disposable incomes,
we operate in an industry with high growth potential.

Compelling structural growth drivers

Cheaper and more Industry demand Ageing population Growing middle Greater disposable
efficient air travel growth closely linked with wealth and class within incomes
to GDP growth time to travel emerging markets

High barriers to entry

Brands Strong loyalty Size of marketing High capital cost Sophisticated

& heritage programmes fund to market entry technology required

IHG | Introducing IHG 4
 Growing our business
Our clear and successful strategy consistently delivers
strong shareholder returns and we have the right plans,
brands and structure in place to deliver future growth.

1 2 3 4
Consistent execution of We deliver margin We are highly cash We have experienced
our successful strategy growth through scale generative and take a leadership and a
delivers high‑quality investments and cost disciplined approach strong governance
revenue growth efficiencies to capital allocation structure

More details on page 6 More details on page 8 More details on page 8 More details on page 9

5
We have a long-term track record of strong shareholder returns

More details on page 9

IHG | Introducing IHG 5
1. Consistent execution of our successful strategy
delivers high‑quality revenue growth

Our successful strategy...

Value creation:
Delivering industry-leading medium term net rooms growth whilst doing business responsibly

Strategic model

5. Optimise
1. Build and 2. Strengthen 3. Enhance 4. Evolve portfolio of
leverage loyalty revenue owner brands for
scale programme delivery proposition owners &
guests

Targeted portfolio
• Attractive markets
• High‑growth segments
• Asset-light: Managed and franchised model

Disciplined execution
• Scale and efficiency of operations
• Capital discipline and commitment to sustainable growth in the ordinary dividend
and returning surplus funds to shareholders

...is based around three ...and delivers consistent

drivers of revenue... outperformance
Growth rate (2015–19 CAGR%)

2.1
RevPAR Rooms
4.4
+2.3%

Total gross revenue (2014–19 $bn)

2015 24.0
+16.3%
2019 27.9
Rooms
Industry
IHG

* Source: STR

Royalty rate

IHG | Introducing IHG 6
Exploring our strategic model

1 A scale business... ...with a resilient business model... ...delivering strong margin growth
Global open rooms: Highest quality revenue stream Fee margin
884k as at 31 Dec 2019
Build and leverage scale
60% 25% 15% >95% 53.3% 54.1%*

of 2019 profits from fee business

The size of our portfolio and our Global pipeline rooms:
presence in the world’s most attractive 283k as at 31 Dec 2019

markets delivers significant economies 41% 29% 30%

~80%
of IHG’s 2019 fee revenues linked
of scale, leading to higher margins and ● Americas to hotel revenues
greater operating leverage. ● EMEAA
2018 2019
● Greater China Benefits from industry upside, * At constant exchange rate.
but more resilient in a downturn

2
Loyalty room night contribution
Strengthen loyalty programme
>100m ~42% ~46%
Our innovative and industry‑leading enrolled members
loyalty programme helps to build
lifetime relationships with our guests,
and drives high value revenue across 2015 2019
our hotel estate.

Dream Plan Book Stay

3
Share
Enhance revenue delivery Continued investment in channels and guest innovation... ...drives direct channel delivery

78%
From industry-leading marketing that 79%
72%
supports brand awareness, to a rich IHG Connect
18% OTA
seamless log-on
mobile booking experience, we drive 13% GDS
demand to our hotels through our Utilising IHG Rewards
technology 15%
direct channels. This reduces platforms
Club Hotel Direct

distribution costs and delivers better Digital marketing

10% Call centre

returns for our owners. 23% IHG Digital

(web & digital)
2015 2019

Evolve owner proposition Leading brands System First-class

Preferred brands, effective operational
support and collaborative relationships
all play a vital role in making IHG the
No.1 choice for owners. We continue to
invest in initiatives that drive superior
returns for them.
and loyalty
• World class, differentiated
brand portfolio with
high awareness and
guest satisfaction
• Low financing costs for hotel
owners; scalable solutions
• Strong loyalty offer
fund
• Powerful fund supporting
marketing, reservations and
loyalty across IHG’s system
• Managed centrally and funded
by hotel contributions
• Not run at a profit or loss
for IHG
technology
• Cloud-based hotel technology
platform IHG ConcertoTM,
including industry-leading GRS
• Leading booking app and
mobile capability
• Focus on direct channel
delivery

Optimise portfolio of brands

for owners and guests

In a highly competitive industry, we are

focused on ensuring our brand portfolio
provides a differentiated offering for both
guests and owners. We do this by
strengthening our existing brands and
enhancing our portfolio with new brands.

IHG | Introducing IHG 7
2. We deliver margin growth through scale investments
and cost efficiencies
Building relevant scale around the world...
Strong organic growth prospects Signings pace (rooms)

98.8k 97.8k
10.8%
83.5k
$423m
$382m

4.5%

Share of Share of active 2017 2018 2019

industry industry pipeline
rooms room supply
Figures as at 31 Dec 2019

...delivers margin growth

Underlying fee revenue growth Fee margin growth

+1.6% +80bps

$1,486m $1,510m 54.1%

53.3%

2018 2019 2018 2019

3. We are highly cash generative and take a disciplined

approach to capital allocation
Improving operating profitability* Strong free cash flow
($m)
($m)
+6% CAGR
900
800
800 832 865
700 774
600 600
611
500 509
400 400
300
200 200
100
0 0
2017 2018 2019 2018 2019
* Operating profit before exceptional items from reportable segments. Restated for adoption of IFRS 16.
Restated for adoption of IFRS 16.

Low capital intensity model Efficient balance sheet with commitment

focused on growth to investment grade credit rating
($m)
Leverage target: 2.5x to 3.0x net debt/EBITDA*
250 * Range represents best proxy for investment grade credit rating under
211 accounting standard IFRS 16 – equivalent to 2.0 – 2.5x net debt: EBITDA
200 under the previous standard
166 147
150 114 Maintenance capex,
key money and Current S&P rating: BBB (Stable)
100
selective investment
50 Recyclable investments
54 49
System fund capital
0 -2 15 investments

-50 IHG | Introducing IHG 8

2018 2019
Restated for adoption of IFRS 16.
4. We have experienced leadership and a strong governance structure
Board Leadership team

Diverse composition; 33% female CEO 25+ years industry experience

Broad expertise (finance, brands & marketing, digital, hospitality) CFO 15+ years at IHG

Strong Executive Committee with balance of industry

Annual strategy reviews
experience and innovation

Governance Reputation for doing business responsibly

Commitment to highest standards Leaders in sustainability Value a diverse and

of corporate governance inclusive culture

• D&I Board chaired by CEO

Strong company culture and values, supported • Focus on inclusive colleague
by Code of Conduct and training groups and workshops
• International external recognition
Risk management at core of company strategy, culture,
processes and controls

For more information, visit

www.ihgplc.com/responsible-business

5. We have a long-term track record of strong shareholder returns

Consistent ordinary dividend growth (¢ per share) Returning $13.8bn to shareholders (2003-19) ($bn)

•• Final
Interim
114
126
86 13.8

104 78
11% CAGR
94 71 5.9

85 64
77 58
70 52
64 47 7.9
55 43
48 39
41 41 41 35
36
29 29 29 40
27 27 26 36
24 33
19 19 28 30
17 25
21 23
16
12 12 12 13
8 8 10
7
Assets Operational Total
’03 ’04 ’05 ’06 ’07 ’08 ’09 ’10 ’11 ’12 ’13 ’14 ’15 ’16 ’17 ’18 ’19 disposals cash flows

Past performance cannot be relied on as a guide to future performance.

IHG | Introducing IHG 9
 Our brand portfolio
We have a family of 16 hotel brands, including the world’s largest
luxury hotel brand, InterContinental Hotels & Resorts, and our
Holiday Inn Brand Family, the world’s biggest mainstream brand.

Mainstream Open hotels | rooms Pipeline hotels | rooms Upscale Open hotels | rooms Pipeline hotels | rooms

*
1,256  | 231,302 274  | 52,799  118  | 14,574 101 | 15,148

2,875  | 299,234 754  | 95,874 13  | 1,949 26 | 4,342

28  | 8,592 1  | 110 9  | 2,710 22 | 6,180

7  | 635 207  | 19,068 431  | 120,582 88 | 24,506

**
300  | 32,633 182  | 20,734 12  | 4,293 17 | 6,220

0  | 0 10  | 1,000 Luxury Open hotels | rooms Pipeline hotels | rooms

410  | 38,332 91  | 8,186  18 | 1,448 25 | 1,770

6 | 2,003 5 | 944

212 | 70,981 65 | 17,018

66 | 13,046 33 | 6,203

Total*** 5,903 | 883,563 1,918 | 283,043

* Holiday Inn figures include Holiday Inn Resort properties. ** Numbers do not
include 3 open and 1 pipeline hotel that will be re-branded to voco. *** Figures
include IHG’s 142 unbranded, PAL and InterContinental Alliance Hotels (41,249
rooms) and 17 hotels in the pipeline.

IHG | Introducing IHG 10
InterContinental Hotels Group PLC
Broadwater Park, Denham
Buckinghamshire UB9 5HR
United Kingdom
Tel +44 (0) 1895 512 000
Fax +44 (0) 1895 512 101
Web www.ihgplc.com
Make a booking at www.ihg.com

Investor relations team

T: +44 (0) 1895 512 176
E: investors@ihg.com