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99.1
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Final
Results dated 19 02 2019
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Reported
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Underlying4
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2018
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2017
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% Change
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2018
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2017
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% Change
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REPORTABLE SEGMENTS1
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Revenue2
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$1,933m
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$1,730m
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12%
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$1,828m
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$1,730m
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6%
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Revenue from fee business
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$1,486m
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$1,379m
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8%
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$1,469m
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$1,379m
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7%
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Operating profit2
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$816m
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$758m
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8%
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$805m
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$758m
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6%
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Fee margin3
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52.4%
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52.4%
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0.0%pts
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52.5%
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52.4%
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0.1%pts
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Adjusted EPS
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292.1¢
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244.6¢
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19%
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290.5¢
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244.6¢
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19%
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GROUP RESULTS5
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Total revenue
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$4,337m
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$4,075m
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6%
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KEY METRICS
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Operating profit
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$670m
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$724m
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(7)%
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●
$27.4bn total gross revenue (up 6.6%)
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Basic EPS
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184.7¢
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279.8¢
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(34)%
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●
2.5% global FY RevPAR (Q4 = 1.9%)
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Total dividend per share
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114.4¢
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104.0¢
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10%
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●
4.8% net system growth to 837k rooms
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Net debt
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$1,530m
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$1,851m
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(17)%
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●
99k signings; 271k pipeline rooms
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Keith Barr, Chief Executive Officer, IHG, said:
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"We
have made excellent progress in 2018 executing against the
strategic initiatives I set out a year ago to accelerate our
growth, whilst delivering a strong financial performance. The
investments we have made have had a significant impact, allowing us
to further evolve our established brands, move quickly to
strengthen our portfolio both organically and by acquisition, and
create real momentum in our business. We have made further progress
in 2019 with the acquisition of the top-tier luxury brand Six
Senses and the planned launch of a new all-suites upper midscale
brand.
Our
strategic focus on accelerating our net rooms growth helped drive a
net system size increase of 4.8%, and our best performance for both
openings and signings in a decade, leaving us well positioned for
future growth.
Global
RevPAR increased 2.5%, with underlying operating profit growing 6%.
This, combined with a 19% rise in underlying EPS, underpins our
decision to raise the total dividend for the year by 10% and
follows the payment of a $500m special dividend in January 2019,
taking total shareholder returns announced for the year to over
$700m.
The
investments we have made have been funded through our group
efficiency programme which is on track to deliver $125m of annual
savings by 2020. We have successfully implemented a more
efficient and agile organisational structure whilst building
resources and capabilities focused on the most attractive growth
opportunities.
We also
further strengthened our owner proposition and revenue delivery
enterprise, with the successful global roll-out of IHG Concerto,
featuring our innovative new Guest Reservation System. This gives
IHG the most sophisticated, cloud-based platform in the industry,
with further enhancements set to be deployed in 2019.
The
fundamentals of our business remain strong, and while there are
macro-economic and geopolitical uncertainties in some markets, we
are confident in the year ahead and that our strategy will deliver
industry-leading net rooms growth over the medium
term."
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Update on strategic initiatives
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We are making good progress working our strategic model harder to
deliver industry-leading net rooms growth
●
Build and leverage scale - Building a leading
position in the world's most attractive markets and highest
opportunity segments, where our scale and resources matter
most
- Net
system size up 4.8% to 837k rooms (5,603 hotels), up 4.3% excluding
the acquisition of Regent Hotels & Resorts and a UK portfolio
deal.
- Continued
to strengthen leading position in US Mainstream segment with 26%
share of signings in the year.
- Further
strengthened our penetration in Greater China with 77 hotel
openings and 142 hotel signings, taking the combined system and
pipeline to over 730 hotels, almost 200k rooms. Our share of
the branded pipeline stands at almost 3x our share of existing
branded supply.
- Successfully
embedded new organisational structure, which redeploys our
resources into our largest markets to leverage our scale and into
new brand initiatives to accelerate our growth.
- On
track to deliver ~$125m in annual savings by 2020, with savings
fully re-invested in growth initiatives.
●
Strengthen loyalty programme - Continuing to
innovate IHG Rewards Club to build stronger and deeper
relationships with our guests to drive high value revenue across
our hotel estate
- Loyalty
room revenue contribution up 4%pts in 4 years to 43%, including
~50% in the Americas.
- Loyalty
members 7x more likely to book direct, and deliver a 25% stay
premium.
- Testing
new features for 2019 roll-out, designed to increase member
engagement with variable point pricing.
●
Enhance revenue delivery - Driving a higher
share of revenues through IHG's low cost booking channels to
deliver better returns for our owners
- IHG
revenue delivery enterprise delivered 78% of room revenues (up
6%pts in 3 years).
- Digital
(web and mobile) revenue, our lowest cost booking channel, up 13%
in 2018 to $5.3bn.
-
Roll-out of IHG Concerto, including our new Guest
Reservation System (GRS), successfully completed. This gives
IHG the most sophisticated, cloud-based platform in the industry,
and provides a foundation to build out our technology architecture
over the coming years. Ongoing development of enhanced GRS
functionality to give guests the opportunity to customise their
stay based on features they find important - made possible by new
ways of classifying and selling room inventory.
●
Evolve owner proposition - Outstanding
operational support and optimised owner returns to unlock
growth
- Investment
in development resources has enabled 18% YoY growth in signings in
2018.
-
Continued strong traction for our innovative Franchise
Plus model in Greater China with 71 hotels signed for Holiday Inn
Express in the year, taking the total to 143 signed and 29 opened
to date. Building on this success, in 2018, we signed 7 franchise
deals for Holiday Inn and Crowne Plaza in the region.
- Investment
in enhanced owner support to facilitate faster hotel openings and
deeper owner relationships.
●
Optimise our portfolio of brands for owners and
guests - Maintaining a strong portfolio of distinct and preferred
brands, serving the highest growth segments in the largest
markets
- Mainstream
- ($115bn global segment with $65bn growth potential to
2025)
- Holiday
Inn Express: roll out of new guest room designs gathering
pace, with ~1,400 hotels in the US & Canada open or committed
to new Formula Blue format. Rapid deployment of new breakfast
offering in over 1,500 hotels in the US during 2018, driving 3pt
increase in guest breakfast satisfaction.
- Holiday
Inn: continued roll out of new "Open Lobby" public space
design with 80% of the Europe estate open or committed, and 50
hotels committed in the Americas.
- avid
hotels: Over 170 hotels (16k rooms) signed since launch (129
hotels (12k rooms) signed in 2018), with the first hotel open in
Oklahoma City and 27 more under construction or with planning
approved. Signed 10 hotels in Canada and Mexico and launched the
brand in Germany through a Multiple Development Agreement with one
owner to open 15 hotels over the next 5 years.
- Planned
launch of new all-suites upper
midscale brand in 2019 targeted at an $18bn industry
segment where strong guest and owner demand has driven a ~70%
increase in room supply in the last 4 years.
- Upscale
- ($40bn global segment with $20bn growth potential to
2025)
- Crowne
Plaza: $200m Accelerate programme delivering improvements in
guest satisfaction and strong owner engagement behind strengthening
the brand. ~6k rooms renovated across the Americas estate, with a
further 9k committed. Growing momentum behind Plaza Workspaces with
16 installed and 12 more expected in Q1 2019. In 2019, our new
modern design and dynamic meeting space will be launched in Paris,
London, Hamburg and Atlanta flagship hotels.
- Hotel
Indigo: Opened our 100th Hotel Indigo,
in Berlin, in 2018, with 33 signings in 2018 taking the total
pipeline to 92 hotels (13k) rooms.
- voco:
Launched brand in June, primarily for conversion
opportunities. Three hotels now open across the UK and
Australia. A further 13 hotels across 8 countries have been signed
to date (3k rooms in total) including flagship locations in Dubai
and in Egypt.
- Luxury
- ($60bn global segment with $35bn growth potential to
2025)
- InterContinental
Hotels & Resorts: Further cemented position as largest
global luxury hotel brand with the opening of its 200th hotel - the
InterContinental Shanghai Wonderland. Awarded World's Leading
Hotel Brand for the 12th time at the
World Travel Awards.
- Kimpton
Hotels & Restaurants: Global expansion gathering strong
momentum with doubling of signings and presence secured in 14
countries worldwide. Opened UK flagship, the Kimpton Fitzroy
London, with numerous other signings including Frankfurt, Shanghai,
Bangkok, Tokyo and Mexico City.
- Regent
Hotels & Resorts: Acquisition completed in July bringing
6 opened hotels to our system. Updated brand positioning, with
further signings in Kuala Lumpur, Chengdu and Bali, and several new
sites under discussion in key gateway cities around the world. On
track to grow to over 40 hotels over the long term.
- Six
Senses Hotels Resorts Spas: February 2019 acquisition of 16 hotels and
resorts, with 18 management contracts signed into its pipeline, and
more than 50 further deals under discussion. Expect to grow Six
Senses to more than 60 hotels over the next 10
years.
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Americas - Good US RevPAR performance; avid hotels' momentum
continues
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Comparable
RevPAR increased 1.9% (Q4: up 1.3%), driven by 1.7% rate growth. US
RevPAR was up 1.3% with 0.6% growth in the fourth quarter, despite
the drag from hurricane related demand in Q4 2017. Canada was up 5%
(Q4: up 4%), benefitting from continued strength in urban markets.
Latin America and the Caribbean were up 13% (Q4: up 11%), with
strong demand in a number of countries including Colombia, Brazil
and Argentina. Mexico RevPAR was up 2% in the year with the fourth
quarter up 3%.
Reported
revenue1 of $1,051m
increased 5% (CER 5%) and reported operating profit1 of $662m
increased 4% (CER 4%).
Underlying2 revenue
and operating profit were in line with reported growth rates, of
which fee business was up 4%. Growth in fee revenue from RevPAR,
net rooms growth and a non-recurring $4m benefit from a payroll tax
credit, were partly offset by $3m lower fees from the termination
of hotels and a $3m impact from the Crowne Plaza Accelerate owner
financial incentives.
We
opened 22k rooms (208 hotels) during the year, with more than half
coming from our Holiday Inn Brand Family. We also opened our first
Kimpton hotel in Canada and broadened distribution of
InterContinental Hotels across key cities with openings in San
Diego and Minneapolis. We continue to focus on a high-quality
estate and removed 10k rooms (76 hotels). Together, this drove a
2.5% increase in our net system size.
We
increased our share of overall industry signings in the region,
signing 416 hotels (43k rooms), including 12 for the Hotel Indigo
brand. Momentum continues to be strong for avid hotels; we signed
129 hotels (12k rooms), including 6 in Mexico and 4 in Canada. Our
first property opened in Oklahoma City, receiving positive feedback
from guests.
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EMEAA - New operating model embedded; highest signings and openings
in 10 years
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Comparable
RevPAR increased 2.7% (Q4: up 2.7%) driven by rate up 1.8%. UK
RevPAR grew 1% in the year with London up 3% and the Provinces
flat. Fourth quarter RevPAR in the UK was up 4% with strong leisure
demand driving RevPAR in London up 10%, whilst the Provinces were
up 1%.
Continental
Europe RevPAR was up 5.4% in the year (Q4: up 5.7%). In France,
RevPAR grew 6% benefitting from good leisure and corporate demand,
slowing to 3% in the fourth quarter due to social unrest in Paris.
Germany grew RevPAR 1% in the year and 3% in the fourth quarter
helped by a favourable trade fair calendar.
Trading
conditions in the Middle East remained challenging, with RevPAR
down 6% in the year due to increased supply, and political unrest
impacting demand in certain regions. Australia RevPAR was up 1% in
the year with good demand growth offset by supply growth in certain
cities. Japan RevPAR grew 3% in the year (Q4: up 3%) benefitting
from rate growth in key cities.
Total
RevPAR growth of 1.2% reflects the increasing mix of new rooms
opening in lower rate but fast growing developing
markets.
Reported
revenue1 of $569m
increased 25% (23% CER) and reported operating profit1 of $202m
increased 18% (18% CER), including $7m of individually significant
liquidated damages, as previously disclosed.
On an
underlying basis2, revenue and
operating profit increased 3% and 15% respectively, of which fee
business revenue was up 5% and operating profit was up 16%, driven
by RevPAR, net rooms growth and lower costs associated with the
group wide efficiency programme.
We
opened 15k rooms (77 hotels), driving 6% net rooms growth,
including 8% growth in both the UK and Germany.
We
signed 27k rooms (133 hotels) including 3k rooms in Australia, our
best ever performance. Through the UK portfolio transaction, we
launched our new upscale brand, voco, and gained scale for the
Kimpton brand in the UK.
_____________
1 Comprises the Group's fee business and owned, leased,
and managed lease hotels from reportable segments and excludes
exceptional items.
2 Excluding owned asset disposals, significant
liquidated damages, current year acquisitions, System Fund results,
hotel cost reimbursements and exceptional items at constant FY 2017
exchange rates (CER).
See the
Business Review for definition of non-GAAP measures and
reconciliation to GAAP measures.
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Greater China - Continued industry outperformance; record room
signings and openings
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Comparable
RevPAR increased 6.9% (Q4: up 3.4%, impacted by the strong
comparables which commenced in Q3 2017). In Mainland China, RevPAR
was up 6%, significantly outperforming the market in each quarter
of the year. Tier 1 and Tier 2 cities grew 7% (Q4: up 5%) driven by
strength in transient and meeting demand. Tier 3 and 4 cities grew
RevPAR by 1% in the year and were down 4% in the fourth quarter
with strength in resort destinations offset by the impact of new
supply in Sanya and difficult trading conditions in Changbaishan.
RevPAR in Hong Kong SAR and Macau SAR was up 9% and 8%
respectively.
Our
continued acceleration in net rooms growth in the region, and our
increasing penetration in higher growth, lower RevPAR cities,
resulted in FY 2018 total RevPAR growth of 2.0%.
Reported
revenue of $143m increased by 22% (CER 21%), and reported operating
profit of $69m increased by 33% (CER 31%), including $6m of
individually significant liquidated damages.
On an
underlying2 basis, revenue
increased by 15% and operating profit increased by 19%, driven by
strong trading across the region, 14% net rooms growth, and
continued benefits of leveraging the scale of the operational
platform we have built in Greater China.
We
opened a record 19k rooms (77 hotels), driving 14% net rooms
growth, and taking the total number of open rooms to over 115k (391
hotels). Signings totalled 29k rooms (142 hotels), our highest ever
for the region, including 5 hotels for the InterContinental brand
and 15 hotels for the Crowne Plaza brand. Owner demand for
our Holiday Inn Express Franchise Plus offering remains strong,
with 71 hotels signed in the year. This new model has
accelerated the expansion across China of the Holiday Inn Express
brand which now has over 300 open and pipeline hotels (60k
rooms).
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Highly cash generative business with disciplined approach to cost
control and capital allocation
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Driving fee margin through strategic cost management
●
Remain on track to deliver
~$125m in annual savings, including System Fund, by 2020 for
reinvestment in growth.
●
As planned, ~40% of annual
savings were realised in 2018 and were fully reinvested in growth
initiatives.
●
2018 fee margin was flat (up
10bps at CER), held back by investment in growth initiatives being
$5m above realised savings, and $9m of one-off on P&L marketing
assessments (and equivalent cost of investment). Excluding these
impacts, fee margin increased 70bps (up 80bps at CER).
●
Reported central overheads were
up $15m, ($14m CER); an increase in central revenues was offset by
investments in growth initiatives and $3m higher healthcare
costs. Central overheads now include the reinvestment of a
substantial proportion of growth investment funded by savings
elsewhere in the business.
●
Growth initiatives, and a
continuation of our disciplined cost management and strong
efficiency focus, expected to maintain future fee margin
progression broadly in line with the long-term
average.
Strong free cash flow generation fuelling investment
●
Free cash flow3 of $609m was up
$93m year on year, with $81m lower cash tax offset by $106m of
exceptional cash costs incurred in relation to the group wide
efficiency programme.
●
Net capital expenditure3 of $158m (FY 2017: $202m) with
$245m gross (FY 2017: $342m). This comprised: $108m maintenance
capex and key money; $38m gross recyclable investments; and $99m
system funded capital investments; offset by $42m net proceeds from
asset recycling and $45m System Fund depreciation and
amortisation. Capex guidance unchanged at up to $350m gross,
and $150m net, per annum into the medium term.
●
Exceptional cash costs of
$137m during the year, including $106m relating to the group wide
efficiency programme ($47m in relation to the System
Fund).
Efficient balance sheet provides flexibility
●
Financial position remains
robust, with an on-going commitment to an investment grade credit
rating.
●
Successfully raised €500m,
2.125% notes due May 2027.
●
Net debt of $1,530m (including
$235m finance lease on InterContinental Boston), down $321m on the
2017 close.
●
Since the year-end, a $500m
special dividend was paid in January 2019 and ~$300m was paid on
the acquisition of Six Senses.
Dividend growth demonstrates confidence in future growth
prospects
●
$500m special dividend with
share consolidation announced in October 2018, paid January
2019.
●
Proposed 10.0% increase in the
final dividend to 78.1¢, taking the total dividend for the
year up 10.0%, reflecting IHG's confident outlook.
________
2 Excluding owned asset disposals, significant
liquidated damages, current year acquisitions, System Fund results,
hotel cost reimbursements and exceptional items at constant FY 2017
exchange rates (CER).
See the
Business Review for definition of non-GAAP measures and
reconciliation to GAAP measures.
3 For definition of non-GAAP measures and
reconciliation to GAAP measures see the Business
Review
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Foreign exchange
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The
impact of the movement in average USD exchange rates for FY 2018
against a number of currencies (particularly Sterling, Euro and
Renminbi) netted to a zero impact on reported profit4. Currency
markets remain volatile. If the average exchange rate during
January 2019 had existed throughout 2018, 2018 reported profit
would have decreased by $3m.
A full
breakdown of constant currency vs. actual currency RevPAR by region
is set out in Appendix 2.
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Other
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System Fund:
Under
IFRS 15, Fund revenues and costs are now recognised on a gross
basis with the in-year surplus or deficit recorded in the Group
income statement, but excluded from underlying results and adjusted
EPS, as the Fund is operated for the benefit of the hotels in the
IHG System such that the Group does not make a gain or loss from
operating the Fund.
The
Fund surplus of ~$160m, which had built up following the
introduction of the IHG Rewards Club expiry policy and the
renegotiation of long term partnership agreements, was derecognised
from the Group balance sheet at the start of the year on the
adoption of IFRS 15. In 2018, we spent the majority of the
surplus on marketing, loyalty and technology initiatives, and costs
associated with IHG's efficiency programme. This resulted in
the recording of a $146m System Fund income statement deficit for
FY 2018.
Interest:
Net
financial expenses of $81m includes interest income relating to the
System Fund of $19m (FY 2017 $13m). Excluding this, FY 2018
underlying5 interest
expense of $100m was higher than in FY 2017 ($85m), reflecting
higher US dollar interest rates payable on bank borrowings and
balances with the System Fund and finance charges related to
deferred and contingent consideration on acquisitions.
Full
year 2019 underlying5 interest
expense will be higher than 2018 including $20m interest on the
€500m bond issued in November 2018. In addition,
underlying5 interest
expense will include ~$30m of charges from IFRS 16 and non-cash
amortisation of deferred and contingent consideration, $15-$20m of
which has a corresponding benefit to operating profit and therefore
does not impact net income.
Tax:
Effective
rate6 for FY 2018 was
22% (FY 2017: 29%) with the reduction predominantly as a result of
a lower US tax rate following tax reform. We expect our full year
2019 effective tax rate will be in the mid to low 20s percentage
point range.
Exceptional operating items:
Before
tax exceptional items total $104m charge and comprise: $56m costs
incurred in relation to the group wide efficiency programme; $18m
relating to a material legal settlement and associated costs; $15m
of acquisition costs; and a $15m one-off cost relating to the
buy-out of the US pension liability. A further $47m of costs
related to the group wide efficiency programme were incurred by the
System Fund and are included within System Fund expenses in the
group income statement.
Impact of IFRS 16 accounting standards:
●
IFRS 16 will be adopted with
effect from 1st Jan 2019 using the retrospective method of
application.
●
This results in $431m of lease
liabilities being added to 2018 net debt under the new
standard.
●
We remain committed to
maintaining an investment grade credit rating; the best proxy for
which is now 2.5-3.0x net debt/EBITDA under IFRS 16; equivalent to
2.0-2.5x net debt/EBITDA under the previous accounting
standard.
●
No impact on cash, financial
capacity or banking covenants. Strategy for use of cash
remains unchanged.
●
If our 2018 results were
restated under IFRS 16, operating profit would have been $17m
higher, which is offset by a $19m increase in net financial
expenses. For 2019, we estimate adoption of IFRS 16 will increase
operating profit in the region of ~$12m and reduce net income in
the region of ~$5-7m after a full year impact of the UK portfolio
deal.
|
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2019 items
|
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|
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Americas:
●
$4m benefit from payroll tax
credit received in 2018 will not repeat in 2019.
●
$5m of joint venture income will
not repeat in 2019.
EMEAA: A previously disclosed $15m cash payment was
received in Q1 2018 in relation to the termination of a portfolio
of hotels. This has been / will be recognised as individually
significant liquidated damages as follows: $6.7m in 2018, $7.7m in
2019 and $1.0m in 2020.
Greater China: $6m of individually significant
liquidated damages received in 2018 will not repeat in
2019.
________________
4 Based on monthly average exchange rates each
year
5 For definition of non-GAAP measures and
reconciliation to GAAP measures see the Business
Review
6 Excludes exceptional items and System Fund
results
|
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|
|
Appendix 1: RevPAR Movement Summary
|
|
|||||||||||||||||||||
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|
|
Full Year 2018
|
Q4 2018
|
|
|||||||||||||||||||
|
|
RevPAR
|
Rate
|
Occ.
|
RevPAR
|
Rate
|
Occ.
|
|
||||||||||||||||
|
|
Group
|
2.5%
|
1.8%
|
0.5%pts
|
1.9%
|
1.3%
|
0.4%pts
|
|
|||||||||||||||
|
|
Americas
|
1.9%
|
1.7%
|
0.2%pts
|
1.3%
|
1.0%
|
0.2%pts
|
|
|||||||||||||||
|
|
EMEAA
|
2.7%
|
1.8%
|
0.6%pts
|
2.7%
|
1.4%
|
0.9%pts
|
|
|||||||||||||||
|
|
G.
China
|
6.9%
|
3.5%
|
2.1%pts
|
3.4%
|
2.9%
|
0.3%pts
|
|
|||||||||||||||
|
|
Appendix 2: Comparable RevPAR movement at constant exchange rates
(CER) vs. actual exchange rates (AER)
|
|
|||||||||||||||||||||
|
|
|
Full Year 2018
|
Q4 2018
|
|
|||||||||||||||||||
|
|
CER
|
AER
|
Difference
|
CER
|
AER
|
Difference
|
|
||||||||||||||||
|
|
Group
|
2.5%
|
2.8%
|
(0.3)%pts
|
1.9%
|
0.1%
|
1.8%pts
|
|
|||||||||||||||
|
|
Americas
|
1.9%
|
1.6%
|
0.3%pts
|
1.3%
|
0.4%
|
0.9%pts
|
|
|||||||||||||||
|
|
EMEAA
|
2.7%
|
4.1%
|
(1.4)%pts
|
2.7%
|
(0.6)%
|
3.3%pts
|
|
|||||||||||||||
|
|
G.
China
|
6.9%
|
8.5%
|
(1.6)%pts
|
3.4%
|
(0.3)%
|
3.7%pts
|
|
|||||||||||||||
|
|
Appendix 3: Full Year System & Pipeline Summary
(rooms)
|
|
|||||||||||||||||||||
|
|
System
|
Pipeline
|
|
||||||||||||||||||||
|
Openings
|
Removals
|
Net
|
Total
|
YoY%
|
Signings
|
Total
|
|
||||||||||||||||
|
Group
|
56,343
|
(17,877)
|
38,466
|
836,541
|
4.8%
|
98,814
|
270,948
|
|
|||||||||||||||
|
Americas
|
22,248
|
(9,579)
|
12,669
|
510,129
|
2.5%
|
42,766
|
120,282
|
|
|||||||||||||||
|
EMEAA
|
15,283
|
(3,260)
|
12,023
|
211,099
|
6.0%
|
26,918
|
72,743
|
|
|||||||||||||||
|
G.
China
|
18,812
|
(5,038)
|
13,774
|
115,313
|
13.6%
|
29,130
|
77,923
|
|
|||||||||||||||
|
|
Appendix 4: Full Year financial headlines
|
|
|||||||||||||||||||||
|
|
|
GROUP
|
REPORTABLE SEGMENTS
|
|
|||||||||||||||||||
|
|
|
Total
|
Americas
|
EMEAA
|
G. China
|
Central
|
|
||||||||||||||||
|
|
2018
|
2017
|
2018
|
2017
|
2018
|
2017
|
2018
|
2017
|
2018
|
2017
|
|
||||||||||||
|
|
Revenue ($m)
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
|
Revenue from reportable segments
|
1,933
|
1,730
|
1,051
|
999
|
569
|
457
|
143
|
117
|
170
|
157
|
|
|||||||||||
|
|
System
Fund result
|
1,233
|
1,242
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
|
|||||||||||
|
|
Hotel
Cost Reimbursements
|
1,171
|
1,103
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
|
|||||||||||
|
|
Group Revenue
|
4,337
|
4,075
|
1,051
|
999
|
569
|
457
|
143
|
117
|
170
|
157
|
|
|||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
|
Operating Profit ($m)
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
|
Fee
Business
|
902
|
825
|
633
|
608
|
200
|
165
|
69
|
52
|
-
|
-
|
|
|||||||||||
|
|
Owned,
leased & managed lease
|
31
|
35
|
29
|
29
|
2
|
6
|
-
|
-
|
-
|
-
|
|
|||||||||||
|
|
Central
overheads
|
(117)
|
(102)
|
-
|
-
|
-
|
-
|
-
|
-
|
(117)
|
(102)
|
|
|||||||||||
|
|
Operating profit from reportable segments before
exceptionals
|
816
|
758
|
662
|
637
|
202
|
171
|
69
|
52
|
(117)
|
(102)
|
|
|||||||||||
|
|
System
Fund result
|
(146)
|
(34)
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
|
|||||||||||
|
|
Operating profit before exceptionals
|
670
|
724
|
662
|
637
|
202
|
171
|
69
|
52
|
(117)
|
(102)
|
|
|||||||||||
|
|
Exceptional
items
|
(104)
|
4
|
(36)
|
37
|
(12)
|
(4)
|
(1)
|
-
|
(55)
|
(29)
|
|
|||||||||||
|
|
Operating Profit after exceptionals
|
566
|
728
|
626
|
674
|
190
|
167
|
68
|
52
|
(172)
|
(131)
|
|
|||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total***
|
Americas
|
EMEAA
|
G. China
|
||||
|
Reported
|
Actual*
|
CER**
|
Actual*
|
CER**
|
Actual*
|
CER**
|
Actual*
|
CER**
|
|
Growth
/ (decline)
|
8%
|
8%
|
4%
|
4%
|
18%
|
18%
|
33%
|
31%
|
|
|
Total***
|
Americas
|
EMEAA
|
G. China
|
|
Growth
/ (decline)
|
6%
|
4%
|
15%
|
19%
|
|
Exchange rates:
|
USD:GBP
|
USD:EUR
|
* US
dollar actual currency
|
|
FY 2018
|
0.75
|
0.85
|
**
Translated at constant FY 2017 exchange rates
|
|
FY 2017
|
0.78
|
0.89
|
***
After central overheads
|
|
|
|
|
**** At
CER and excluding: owned asset disposals, significant liquidated
damages, current year acquisitions, System Fund results and hotel
cost reimbursements
|
|
Appendix 7: Definitions
|
|
CER: constant exchange rates with FY 2017 exchange
rates applied to FY 2018.
Comparable RevPAR: revenue per available room for
hotels that have traded for all of 2017 and 2018, reported at
CER.
Fee revenue: group revenue from reportable segments
excluding owned, leased and managed lease hotels, and significant
liquidated damages.
Fee margin: adjusted to exclude owned, leased and
managed lease hotels, and significant liquidated
damages.
Reportable segments: group results excluding System
Fund results, hotel cost reimbursements and exceptional
items.
Significant liquidated damages: $13m in FY 2018 ($7m
EMEAA fee business, $6m Greater China fee business); $nil in FY
2017.
Total gross revenue: total rooms revenue from
franchised hotels and total hotel revenue from managed, owned,
leased and managed lease hotels. Other than owned, leased and
managed lease hotels, it is not revenue attributable to IHG, as it
is derived mainly from hotels owned by third parties.
Total RevPAR: Revenue per available room including
hotels that have opened or exited in either 2017 or 2018, reported
at CER.
Underlying Interest: excludes interest relating to the
System Fund.
|
|
Appendix 8: Investor information for 2018 Final
dividend
|
|||||||
|
Ex-dividend date:
|
28
March 2019
|
Record date:
|
29
March 2019
|
Payment date:
|
14 May
2019
|
||
|
Dividend payment:
|
ADRs:
78.1 cents per ADR; the corresponding amount in Pence Sterling per
ordinary share will be announced on 26April 2019, calculated
based on the average
of the market exchange rates for the three working days commencing
23 April. A DRIP is available, allowing shareholders of
ordinary shares to elect to reinvest their cash dividend by
purchasing additional ordinary shares.
|
||||||
|
For further information, please contact:
|
|
||||||
|
Investor
Relations (Heather Wood, Matthew Kay):
|
+44
(0)1895 512 176
|
+44
(0)7527 419 431
|
|
||||
|
Media
Relations (Yasmin Diamond; Mark Debenham):
|
+44
(0)1895 512 097
|
+44
(0)7527 424 046
|
|
||||
|
|
|
|
|
||||
|
Presentation for Analysts and Shareholders:
A
presentation of the results with Keith Barr, Chief Executive
Officer and Paul Edgecliffe-Johnson, Chief Financial Officer will
commence at 9.30am on 19 February 2019 at Goldman Sachs,
Rivercourt, 120 Fleet Street, London, EC4A 2BE. The reception team
will be issuing passes to pre-registered guests from 8:45am, and
after the presentation there will be an opportunity to put your
questions to the presenters.
There
will be a live audio webcast of the results presentation on the web
address:
https://www.investis-live.com/ihg/5c52ece5cad1ac0c003b213e/dlgf
The
archived webcast of the presentation is expected to be on this
website later on the day of the results and will remain on it
for
the
foreseeable future.
|
|
||||||
|
There
will also be a live listen only dial-in facility, details are
below:
UK:
+44 (0) 203 936 2999
US:
+1 845 709 8571
All
other locations:
+44 (0) 203 936 2999
Participant
Access Code:
57 06 48
A
replay will be available following the event, details are
below:
UK:
+44 (0) 203 936 3001
US:
+1 845 709 8569
All
other locations:
+44 (0) 203 936 3001
Replay
pin
20 14 68
|
|
|
|||||
|
|
|
||||||
|
Website:
The full release and supplementary data will be available on our
website from 7:00am (London time) on 19th February. The web address
is www.ihgplc.com/prelims18.
|
|
||||||
|
Notes to Editors:
IHG® (InterContinental
Hotels Group) [LON:IHG,
NYSE:IHG (ADRs)] is a global organisation with a broad portfolio of
hotel brands, including Regent Hotels &
Resorts, InterContinental® Hotels
& Resorts, Kimpton® Hotels
& Restaurants, Hotel Indigo®, EVEN® Hotels, HUALUXE® Hotels
and Resorts, Crowne Plaza® Hotels
& Resorts, voco™, Holiday Inn®, Holiday
Inn Express®, Holiday
Inn Club Vacations®, Holiday
Inn Resort®, avid™
hotels, Staybridge
Suites® and Candlewood
Suites®.
IHG franchises, leases, manages or owns more than 5,600 hotels and
approximately 837,000 guest rooms in more than 100 countries, with
almost 1,900 hotels in its development pipeline. IHG also
manages IHG® Rewards
Club, our global loyalty
programme, which has more than 100 million enrolled
members.
In February 2019, IHG acquired Six Senses Hotels Resorts
Spas, adding 16 hotels (1,347
rooms) to its system and 18 hotels to its development
pipeline.
InterContinental Hotels Group PLC is the Group's holding company and is
incorporated in Great Britain and registered in England and Wales.
More than 400,000 people work across IHG's hotels and corporate
offices globally.
Visit www.ihg.com for hotel information and reservations
and www.ihgrewardsclub.com for
more on IHG Rewards Club. For our latest news,
visit: www.ihgplc.com/media and
follow us on social media at: https://twitter.com/ihgcorporate, www.facebook.com/ihgcorporate and www.linkedin.com/company/intercontinental-hotels-group
|
|
||||||
|
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.
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
12 months ended 31 December
|
|||
|
Group results
|
|
2017
|
|
|
|
|
2018
|
Restated
|
%
|
|
|
|
$m
|
$m
|
change
|
|
|
Revenuea
|
|
|
|
|
|
Americas
|
1,051
|
999
|
5.2
|
|
|
EMEAA
|
569
|
457
|
24.5
|
|
|
Greater
China
|
143
|
117
|
22.2
|
|
|
Central
|
170
|
157
|
8.3
|
|
|
|
____
|
____
|
____
|
|
|
Revenue
from reportable segments
|
1,933
|
1,730
|
11.7
|
|
|
|
|
|
|
|
|
System
Fund revenues
|
1,233
|
1,242
|
(0.7)
|
|
|
Reimbursement
of costs
|
1,171
|
1,103
|
6.2
|
|
|
|
____
|
____
|
____
|
|
|
Total
revenue
|
4,337
|
4,075
|
6.4
|
|
|
|
____
|
____
|
____
|
|
|
Operating profita
|
|
|
|
|
|
Americas
|
662
|
637
|
3.9
|
|
|
EMEAA
|
202
|
171
|
18.1
|
|
|
Greater
China
|
69
|
52
|
32.7
|
|
|
Central
|
(117)
|
(102)
|
(14.7)
|
|
|
|
____
|
____
|
____
|
|
|
Operating
profit from reportable segments
|
816
|
758
|
7.7
|
|
|
System
Fund result
|
(146)
|
(34)
|
(329.4)
|
|
|
|
____
|
____
|
____
|
|
|
Operating
profit before exceptional items
|
670
|
724
|
(7.5)
|
|
|
Exceptional
items
|
(104)
|
4
|
(2,700.0)
|
|
|
|
____
|
____
|
____
|
|
|
Operating
profit
|
566
|
728
|
(22.3)
|
|
|
Net
financial expenses
|
(81)
|
(72)
|
(12.5)
|
|
|
|
____
|
____
|
____
|
|
|
Profit
before tax
|
485
|
656
|
(26.1)
|
|
|
|
____
|
____
|
____
|
|
|
Earnings
per ordinary share
|
|
|
|
|
|
|
Basic
|
184.7¢
|
279.8¢
|
(34.0)
|
|
|
Adjusted
|
292.1¢
|
244.6¢
|
19.4
|
|
|
|
|
|
|
|
Average
US dollar to sterling exchange rate
|
$1 : £0.75
|
$1 :
£0.78
|
(3.8)
|
|
|
|
|
|
|
|
|
|
12 months ended 31 December
|
||
|
|
2018
|
2017
|
%
|
|
Group total gross revenuea
|
$bn
|
$bn
|
change
|
|
|
|
|
|
|
InterContinental
|
5.1
|
4.8
|
6.3
|
|
Kimpton
|
1.3
|
1.1
|
18.2
|
|
Crowne
Plaza
|
4.5
|
4.3
|
4.7
|
|
Hotel
Indigo
EVEN
Hotel
|
0.5
0.1
|
0.4
0.1
|
25.0
-
|
|
Holiday
Inn
|
6.5
|
6.3
|
3.2
|
|
Holiday
Inn Express
|
7.1
|
6.7
|
6.0
|
|
Staybridge
Suites
|
0.9
|
0.9
|
-
|
|
Candlewood
Suites
|
0.8
|
0.8
|
-
|
|
Other
|
0.6
|
0.3
|
100.0
|
|
|
____
|
____
|
____
|
|
Total
|
27.4
|
25.7
|
6.6
|
|
|
____
|
____
|
____
|
|
|
Hotels
|
Rooms
|
|||
|
Global hotel and room count
at 31 December
|
2018
|
Change
over
2017
|
2018
|
Change
over
2017
|
|
|
|
|
|
|
|
|
|
Analysed
by brand
|
|
|
|
|
|
|
|
Regent
InterContinental
|
6
204
|
6
10
|
2,005
69,281
|
2,005
3,283
|
|
|
Kimpton
|
66
|
-
|
12,915
|
399
|
|
|
HUALUXE
|
8
|
1
|
2,335
|
246
|
|
|
Crowne
Plaza
voco
|
429
2
|
15
2
|
120,168
531
|
5,368
531
|
|
|
Hotel
Indigo
|
102
|
17
|
12,749
|
2,104
|
|
|
EVEN
Hotels
|
10
|
2
|
1,551
|
313
|
|
|
Holiday
Inn1
|
1,251
|
9
|
233,852
|
1,159
|
|
|
Holiday
Inn Express
avid
hotels
|
2,726
1
|
126
1
|
279,516
87
|
17,118
87
|
|
|
Staybridge
Suites
|
276
|
21
|
30,217
|
2,472
|
|
|
Candlewood
Suites
|
396
|
20
|
37,210
|
1,786
|
|
|
Other
|
126
|
25
|
34,124
|
1,595
|
|
|
|
____
|
____
|
______
|
_____
|
|
Total
|
5,603
|
255
|
836,541
|
38,466
|
|
|
|
|
____
|
____
|
______
|
_____
|
|
Analysed
by ownership type
|
|
|
|
|
|
|
|
Franchised
|
4,615
|
182
|
576,979
|
24,145
|
|
|
Managed
Owned,
leased and managed lease
|
965
23
|
62
11
|
253,566
5,996
|
12,196
2,125
|
|
|
|
____
|
____
|
______
|
_____
|
|
Total
|
5,603
|
255
|
836,541
|
38,466
|
|
|
|
|
____
|
____
|
______
|
_____
|
|
|
Hotels
|
Rooms
|
|||
|
Global pipeline
at 31 December
|
2018
|
Change
over
2017
|
2018
|
Change
over
2017
|
|
|
|
|
|
|
|
|
|
Analysed
by brand
|
|
|
|
|
|
|
|
Regent
InterContinental
|
3
60
|
3
(3)
|
514
15,795
|
514
(1,558)
|
|
|
Kimpton
|
27
|
9
|
4,474
|
1,678
|
|
|
HUALUXE
|
21
|
-
|
6,099
|
(190)
|
|
|
Crowne
Plaza
voco
|
79
8
|
(7)
8
|
22,134
1,510
|
(913)
1,510
|
|
|
Hotel
Indigo
|
92
|
10
|
13,078
|
1,777
|
|
|
EVEN
Hotels
|
18
|
6
|
3,184
|
1,074
|
|
|
Holiday
Inn1
|
288
|
11
|
55,651
|
2,095
|
|
|
Holiday
Inn Express
|
784
|
18
|
98,424
|
5,064
|
|
|
avid
hotels
|
171
|
127
|
15,811
|
11,768
|
|
|
Staybridge
Suites
|
182
|
22
|
20,849
|
2,908
|
|
|
Candlewood
Suites
|
102
|
(10)
|
9,121
|
(888)
|
|
|
Other
|
24
|
10
|
4,304
|
1,963
|
|
|
|
____
|
____
|
______
|
_____
|
|
Total
|
1,859
|
204
|
270,948
|
26,802
|
|
|
|
|
____
|
____
|
______
|
_____
|
|
Analysed
by ownership type
|
|
|
|
|
|
|
|
Franchised
|
1,398
|
175
|
161,343
|
21,995
|
|
|
Managed
|
460
|
28
|
109,450
|
4,652
|
|
|
Owned,
leased and managed lease
|
1
|
1
|
155
|
155
|
|
|
|
____
|
____
|
______
|
_____
|
|
Total
|
1,859
|
204
|
270,948
|
26,802
|
|
|
|
|
____
|
____
|
______
|
_____
|
|
AMERICAS
|
12 months ended 31 December
|
||||
|
Americas Results
|
|
2017
|
|
||
|
|
2018
|
Restated
|
%
|
||
|
|
$m
|
$m
|
change
|
||
|
Revenue from
the reportable segment
|
|
|
|
||
|
|
Fee
business
|
853
|
811
|
5.2
|
|
|
|
Owned,
leased and managed lease
|
198
|
188
|
5.3
|
|
|
|
____
|
____
|
____
|
||
|
Total
|
|
1,051
|
999
|
5.2
|
|
|
|
____
|
____
|
____
|
||
|
Operating profit from the reportable segment
|
|
|
|
||
|
|
Fee
business
|
633
|
608
|
4.1
|
|
|
|
Owned,
leased and managed lease
|
29
|
29
|
-
|
|
|
|
____
|
____
|
____
|
||
|
|
|
662
|
637
|
3.9
|
|
|
Exceptional
items
|
|
(36)
|
37
|
(197.3)
|
|
|
|
____
|
____
|
____
|
||
|
Operating
profit
|
626
|
674
|
(7.1)
|
||
|
|
____
|
____
|
____
|
||
|
|
|
|
|
||
|
|
|
|
|
|
|
|
Americas Comparable RevPAR movement on previous year
|
12 months ended
31 December
2018
|
|
||
|
Fee
business
|
|
|||
|
|
InterContinental
|
4.6%
|
||
|
|
Kimpton
|
1.2%
|
||
|
|
Crowne
Plaza
|
0.3%
|
||
|
|
Hotel
Indigo
|
4.7%
|
||
|
|
EVEN
Hotels
|
9.5%
|
||
|
|
Holiday
Inn
|
1.8%
|
||
|
|
Holiday
Inn Express
|
1.6%
|
||
|
|
Staybridge
Suites
|
3.3%
|
||
|
|
Candlewood
Suites
|
1.7%
|
||
|
|
All
brands
|
1.9%
|
||
|
Owned,
leased and managed lease
|
|
|||
|
|
InterContinental
|
1.1%
|
||
|
|
EVEN
Hotels
|
5.6%
|
||
|
|
Holiday
Inn
|
11.5%
|
||
|
|
All
brands
|
5.2%
|
||
|
|
|
|
|
|
|
|
Hotels
|
Rooms
|
|||
|
Americas hotel and room count
at 31 December
|
2018
|
Change
over
2017
|
2018
|
Change
over
2017
|
|
|
Analysed
by brand
|
|
|
|
|
|
|
|
InterContinental
|
51
|
1
|
17,753
|
175
|
|
|
Kimpton
|
64
|
(1)
|
12,307
|
65
|
|
|
Crowne
Plaza
|
156
|
-
|
41,499
|
221
|
|
|
Hotel
Indigo
|
57
|
6
|
7,495
|
667
|
|
|
EVEN
Hotels
|
10
|
2
|
1,551
|
313
|
|
|
Holiday
Inn1
|
774
|
1
|
134,492
|
(1,112)
|
|
|
Holiday
Inn Express
avid
hotels
|
2,289
1
|
72
1
|
206,620
87
|
7,210
87
|
|
|
Staybridge
Suites
|
261
|
17
|
28,032
|
1,876
|
|
|
Candlewood
Suites
|
396
|
20
|
37,210
|
1,786
|
|
|
Other
|
102
|
13
|
23,083
|
1,381
|
|
|
|
____
|
____
|
______
|
_____
|
|
Total
|
4,161
|
132
|
510,129
|
12,669
|
|
|
|
|
____
|
____
|
______
|
_____
|
|
Analysed
by ownership type
|
|
|
|
|
|
|
|
Franchised
|
3,853
|
126
|
450,102
|
12,810
|
|
|
Managed
|
301
|
6
|
57,804
|
(141)
|
|
|
Owned,
leased and managed leases
|
7
|
-
|
2,223
|
-
|
|
|
|
____
|
____
|
______
|
_____
|
|
Total
|
4,161
|
132
|
510,129
|
12,669
|
|
|
|
|
____
|
____
|
______
|
_____
|
|
|
|
|
|||
|
Americas pipeline
at 31 December
|
2018
|
Hotels
Change
over
2017
|
2018
|
Rooms
Change
over
2017
|
|
|
|
|
|
|
|
|
|
Analysed
by brand
|
|
|
|
|
|
|
|
InterContinental
|
6
|
(1)
|
1,477
|
(416)
|
|
|
Kimpton
|
16
|
2
|
2,335
|
97
|
|
|
Crowne
Plaza
|
6
|
(8)
|
1,263
|
(1,456)
|
|
|
Hotel
Indigo
|
35
|
2
|
4,523
|
497
|
|
|
EVEN
Hotels
|
10
|
2
|
1,296
|
182
|
|
|
Holiday
Inn1
|
126
|
(2)
|
16,052
|
(323)
|
|
|
Holiday
Inn Express
|
499
|
(25)
|
47,620
|
(1,987)
|
|
|
avid
hotels
|
171
|
127
|
15,811
|
11,768
|
|
|
Staybridge
Suites
|
163
|
17
|
16,902
|
1,470
|
|
|
Candlewood
Suites
|
102
|
(10)
|
9,121
|
(888)
|
|
|
Other
|
22
|
10
|
3,882
|
2,234
|
|
|
|
____
|
____
|
______
|
_____
|
|
Total
|
1,156
|
114
|
120,282
|
11,178
|
|
|
|
|
____
|
____
|
______
|
_____
|
|
Analysed
by ownership type
|
|
|
|
|
|
|
|
Franchised
|
1,115
|
113
|
113,657
|
10,813
|
|
|
Managed
|
41
|
1
|
6,625
|
365
|
|
|
|
||||
|
|
|
____
|
____
|
______
|
_____
|
|
Total
|
1,156
|
114
|
120,282
|
11,178
|
|
|
|
|
____
|
____
|
______
|
_____
|
|
|
|
||||
|
|
12 months ended 31
December
|
||||
|
EMEAA results
|
|
2017
|
|
||
|
|
2018
|
Restated
|
%
|
||
|
|
$m
|
$m
|
change
|
||
|
Revenue from reportable segment
|
|
|
|
||
|
|
Fee
business
|
320
|
294
|
8.8
|
|
|
|
Owned,
leased and managed lease
|
249
|
163
|
52.8
|
|
|
|
____
|
____
|
____
|
||
|
Total
|
|
569
|
457
|
24.5
|
|
|
|
____
|
____
|
____
|
||
|
Operating profit from reportable segment
|
|
|
|
||
|
|
Fee
business
|
200
|
165
|
21.2
|
|
|
|
Owned,
leased and managed lease
|
2
|
6
|
(66.7)
|
|
|
|
____
|
____
|
____
|
||
|
|
|
202
|
171
|
18.1
|
|
|
Exceptional
items
|
|
(12)
|
(4)
|
(200.0)
|
|
|
|
|
____
|
____
|
____
|
|
|
Operating
profit
|
190
|
167
|
13.8
|
||
|
|
____
|
____
|
____
|
||
|
|
|
|
|
|
|
|
EMEAA comparable RevPAR movement on previous year
|
12 months ended
31 December
2018
|
|||
|
|
|
|||
|
Fee
business
|
|
|||
|
|
InterContinental
|
2.6%
|
||
|
|
Crowne
Plaza
|
3.4%
|
||
|
|
Hotel
Indigo
|
4.7%
|
||
|
|
Holiday
Inn
|
3.0%
|
||
|
|
Holiday
Inn Express
|
2.0%
|
||
|
|
Staybridge
Suites
|
1.1%
|
||
|
|
All
brands
|
2.8%
|
||
|
|
|
|
||
|
Owned,
leased and managed leases
|
|
|||
|
|
InterContinental
|
(1.6%)
|
||
|
|
Holiday
Inn
|
6.9%
|
||
|
|
All
brands
|
(0.7%)
|
||
|
|
|
|
||
|
|
|
|
|
|
|
EMEAA hotel and room count
at 31 December
|
Hotels
2018
|
Change
over
2017
|
Rooms
2018
|
Change
over
2017
|
||
|
|
|
|
|
|
||
|
Analysed
by brand
|
|
|
|
|
||
|
|
Regent
InterContinental
|
3
106
|
3
2
|
769
32,299
|
769
508
|
|
|
|
Kimpton
|
2
|
1
|
608
|
334
|
|
|
|
Crowne
Plaza
voco
|
182
2
|
6
2
|
46,259
531
|
1,685
531
|
|
|
|
Hotel
Indigo
|
35
|
8
|
3,748
|
954
|
|
|
|
Holiday
Inn1
|
385
|
2
|
71,353
|
923
|
|
|
|
Holiday
Inn Express
|
304
|
22
|
43,732
|
4,557
|
|
|
|
Staybridge
Suites
|
15
|
4
|
2,185
|
596
|
|
|
|
Other
|
17
|
10
|
9,615
|
1,166
|
|
|
|
|
____
|
____
|
______
|
_____
|
|
|
Total
|
1,051
|
60
|
211,099
|
12,023
|
||
|
|
|
____
|
____
|
______
|
_____
|
|
|
Analysed
by ownership type
|
|
|
|
|
||
|
|
Franchised
|
726
|
31
|
118,122
|
6,344
|
|
|
|
Managed
|
309
|
18
|
89,204
|
3,554
|
|
|
|
Owned,
leased and managed lease
|
16
|
11
|
3,773
|
2,125
|
|
|
|
|
____
|
____
|
______
|
_____
|
|
|
Total
|
1,051
|
60
|
211,099
|
12,023
|
||
|
|
|
____
|
____
|
______
|
_____
|
|
|
|
|
|
|
|
|
|
|
|
Hotels
|
Rooms
|
|||
|
EMEAA pipeline
at 31 December
|
2018
|
Change
over
2017
|
2018
|
Change
over
2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Analysed
by brand
|
|
|
|
|
|
|
|
Regent
InterContinental
|
3
29
|
3
1
|
514
6,919
|
514
439
|
|
|
Kimpton
|
7
|
5
|
1,240
|
1,041
|
|
|
Crowne
Plaza
voco
|
34
8
|
(2)
8
|
9,016
1,510
|
361
1,510
|
|
|
Hotel
Indigo
|
40
|
6
|
5,761
|
1,021
|
|
|
EVEN
Hotels
|
1
|
-
|
200
|
-
|
|
|
Holiday
Inn1
|
106
|
11
|
24,339
|
2,274
|
|
|
Holiday
Inn Express
|
114
|
6
|
19,154
|
1,058
|
|
|
Staybridge
Suites
|
19
|
5
|
3,947
|
1,438
|
|
|
Other
|
1
|
-
|
143
|
(271)
|
|
|
|
____
|
____
|
______
|
_____
|
|
Total
|
362
|
43
|
72,743
|
9,385
|
|
|
|
|
____
|
____
|
______
|
_____
|
|
Analysed
by ownership type
|
|
|
|
|
|
|
|
Franchised
|
159
|
6
|
25,681
|
853
|
|
|
Managed
|
202
|
36
|
46,907
|
8,377
|
|
|
Owned,
leased and managed lease
|
1
|
1
|
155
|
155
|
|
|
|
____
|
____
|
______
|
_____
|
|
Total
|
362
|
43
|
72,743
|
9,385
|
|
|
|
|
____
|
____
|
______
|
_____
|
|
|
12 months ended 31 December
|
||||
|
|
|
|
|
||
|
Greater China results
|
2018
|
2017
Restated
|
%
|
||
|
|
$m
|
$m
|
Change
|
||
|
|
|
|
|
||
|
Revenue from the reportable segment
|
|
|
|
||
|
|
Fee
business
|
143
|
117
|
22.2
|
|
|
|
|
____
|
____
|
____
|
|
|
Total
|
|
143
|
117
|
22.2
|
|
|
|
____
|
____
|
____
|
||
|
Operating profit from the reportable segment
|
|
|
|
||
|
|
Fee
business
|
69
|
52
|
32.7
|
|
|
|
____
|
____
|
____
|
||
|
Exceptional
items
Operating
profit
|
|
(1)
68
|
-
52
|
-
30.8
|
|
|
|
____
|
____
|
____
|
||
|
|
|
|
|
|
|
|
Greater China comparable RevPAR movement on previous
year
|
12 months ended
31 December
2018
|
|
|
|
|
|
|
Fee
business
|
|
|
|
|
InterContinental
|
6.2%
|
|
|
HUALUXE
|
21.5%
|
|
|
Crowne
Plaza
|
8.2%
|
|
|
Hotel
Indigo
|
9.3%
|
|
|
Holiday
Inn
|
4.8%
|
|
|
Holiday
Inn Express
|
6.9%
|
|
|
All
brands
|
6.9%
|
|
|
Hotels
|
Rooms
|
|||
|
Greater China hotel and room count
at 31 December
|
2018
|
Change
over
2017
|
2018
|
Change
over
2017
|
|
|
|
|
|
|
|
|
|
Analysed
by brand
|
|
|
|
|
|
|
|
Regent
InterContinental
|
3
47
|
3
7
|
1,236
19,229
|
1,236
2,600
|
|
|
HUALUXE
|
8
|
1
|
2,335
|
246
|
|
|
Crowne
Plaza
|
91
|
9
|
32,410
|
3,462
|
|
|
Hotel
Indigo
|
10
|
3
|
1,506
|
483
|
|
|
Holiday
Inn1
|
92
|
6
|
28,007
|
1,348
|
|
|
Holiday
Inn Express
|
133
|
32
|
29,164
|
5,351
|
|
|
Other
|
7
|
2
|
1,426
|
(952)
|
|
|
|
____
|
____
|
______
|
_____
|
|
Total
|
391
|
63
|
115,313
|
13,774
|
|
|
|
|
____
|
____
|
______
|
_____
|
|
Analysed
by ownership type
|
|
|
|
|
|
|
|
Franchised
|
36
|
25
|
8,755
|
4,991
|
|
|
Managed
|
355
|
38
|
106,558
|
8,783
|
|
|
|
____
|
____
|
______
|
_____
|
|
Total
|
391
|
63
|
115,313
|
13,774
|
|
|
|
|
____
|
____
|
______
|
_____
|
|
|
Hotels
|
Rooms
|
|||
|
Greater China pipeline
at 31 December
|
2018
|
Change
over
2017
|
2018
|
Change
over
2017
|
|
|
|
|
|
|
|
|
|
Analysed
by brand
|
|
|
|
|
|
|
|
InterContinental
|
25
|
(3)
|
7,399
|
(1,581)
|
|
|
Kimpton
|
4
|
2
|
899
|
540
|
|
|
HUALUXE
|
21
|
-
|
6,099
|
(190)
|
|
|
Crowne
Plaza
|
39
|
3
|
11,855
|
182
|
|
|
Hotel
Indigo
|
17
|
2
|
2,794
|
259
|
|
|
EVEN
Hotels
|
7
|
4
|
1,688
|
892
|
|
|
Holiday
Inn1
|
56
|
2
|
15,260
|
144
|
|
|
Holiday
Inn Express
|
171
|
37
|
31,650
|
5,993
|
|
|
Other
|
1
|
-
|
279
|
-
|
|
|
|
____
|
____
|
______
|
_____
|
|
Total
|
341
|
47
|
77,923
|
6,239
|
|
|
|
|
____
|
____
|
______
|
_____
|
|
Analysed
by ownership type
|
|
|
|
|
|
|
|
Franchised
|
124
|
56
|
22,005
|
10,329
|
|
|
Managed
|
217
|
(9)
|
55,918
|
(4,090)
|
|
|
|
____
|
____
|
______
|
_____
|
|
Total
|
341
|
47
|
77,923
|
6,239
|
|
|
|
|
____
|
____
|
______
|
_____
|
|
|
12 months ended 31 December
|
|||
|
|
|
2017
|
|
|
|
|
2018
|
Restated
|
%
|
|
|
Central results
|
$m
|
$m
|
change
|
|
|
|
|
|
|
|
|
Revenue
|
170
|
157
|
8.3
|
|
|
Gross
costs
|
(287)
|
(259)
|
(10.8)
|
|
|
|
____
|
____
|
____
|
|
|
|
|
(117)
|
(102)
|
(14.7)
|
|
Exceptional
items
|
|
(55)
|
(29)
|
(89.7)
|
|
|
____
|
____
|
____
|
|
|
Operating
loss
|
(172)
|
(131)
|
(31.3)
|
|
|
|
____
|
____
|
____
|
|
|
|
2018
|
2017
|
|
|
|
$m
|
$m
|
|
|
|
|
|
|
|
Borrowings
|
|
|
|
|
|
Sterling*
|
1,895
|
1,416
|
|
|
US
dollar
|
329
|
601
|
|
|
Euros
|
8
|
2
|
|
|
Other
|
2
|
-
|
|
Cash
and cash equivalents
|
|
|
|
|
|
Sterling
|
(479)
|
(13)
|
|
|
US
dollar
|
(91)
|
(75)
|
|
|
Euros
|
(23)
|
(13)
|
|
|
Canadian
dollar
|
(12)
|
(13)
|
|
|
Chinese
renminbi
|
(58)
|
(12)
|
|
|
Other
|
(41)
|
(42)
|
|
|
|
____
|
____
|
|
Net
debt
|
1,530
|
1,851
|
|
|
|
____
|
____
|
|
|
|
|
|
|
|
Average
debt levels
|
1,755
|
1,810
|
|
|
* 2018
includes the impact of currency swaps.
|
____
|
____
|
|
|
|
Revenue
|
Operating profit
|
|
||||
|
|
|
2017
|
|
|
2017
|
|
|
|
|
2018
|
Restated
|
%
|
2018
|
Restated
|
%
|
|
|
At actual exchange rates
|
$m
|
$m
|
change
|
$m
|
$m
|
change
|
|
|
|
|
|
|
|
|
|
|
|
Per
Group income statement
|
4,337
|
4,075
|
6.4
|
566
|
728
|
(22.3)
|
|
|
Significant
liquidated damages
|
(13)
|
-
|
-
|
(13)
|
-
|
-
|
|
|
Exceptional
items
|
-
|
-
|
-
|
104
|
(4)
|
2,700.0
|
|
|
Acquisition
of businesses
|
(85)
|
-
|
-
|
1
|
-
|
-
|
|
|
System
Fund
|
(1,233)
|
(1,242)
|
0.7
|
146
|
34
|
329.4
|
|
|
Reimbursement
of costs
|
(1,171)
|
(1,103)
|
(6.2)
|
-
|
-
|
-
|
|
|
|
_____
|
_____
|
_____
|
_____
|
_____
|
_____
|
|
|
Underlying
at actual exchange
|
1,835
|
1,730
|
6.1
|
804
|
758
|
6.1
|
|
|
rates
|
_____
|
_____
|
_____
|
_____
|
_____
|
_____
|
|
|
|
At actual exchange rates
|
At constant currency
|
||||
|
|
|
2017
|
|
|
2017
|
|
|
|
2018
|
Restated
|
%
|
2018
|
Restated
|
%
|
|
|
$m
|
$m
|
change
|
$m
|
$m
|
change
|
|
Underlying revenue
|
|
|
|
|
|
|
|
Americas
|
1,051
|
999
|
5.2
|
1,053
|
999
|
5.4
|
|
EMEAA
|
478
|
457
|
4.6
|
471
|
457
|
3.1
|
|
Greater
China
|
136
|
117
|
16.2
|
135
|
117
|
15.4
|
|
Central
|
170
|
157
|
8.3
|
169
|
157
|
7.6
|
|
|
_____
|
_____
|
_____
|
_____
|
_____
|
_____
|
|
Underlying
Group revenue
|
1,835
|
1,730
|
6.1
|
1,828
|
1,730
|
5.7
|
|
Owned,
leased and managed lease revenue included above
|
(363)
|
(351)
|
(3.4)
|
(359)
|
(351)
|
(2.3)
|
|
|
_____
|
_____
|
_____
|
_____
|
_____
|
_____
|
|
Underlying
Group fee revenue
|
1,472
|
1,379
|
6.7
|
1,469
|
1,379
|
6.5
|
|
|
_____
|
_____
|
_____
|
_____
|
_____
|
_____
|
|
|
At actual exchange rates
|
At constant currency
|
||||
|
|
|
2017
|
|
|
2017
|
|
|
|
2018
|
Restated
|
%
|
2018
|
Restated
|
%
|
|
|
$m
|
$m
|
change
|
$m
|
$m
|
change
|
|
|
|
|
|
|
|
|
|
Underlying operating profit
|
|
|
|
|
|
|
|
Americas
|
662
|
637
|
3.9
|
663
|
637
|
4.1
|
|
EMEAA
|
197
|
171
|
15.2
|
196
|
171
|
14.6
|
|
Greater
China
|
62
|
52
|
19.2
|
62
|
52
|
19.2
|
|
Central
|
(117)
|
(102)
|
(14.7)
|
(116)
|
(102)
|
(13.7)
|
|
|
_____
|
_____
|
_____
|
_____
|
_____
|
_____
|
|
Underlying
Group operating profit
|
804
|
758
|
6.1
|
805
|
758
|
6.2
|
|
Owned,
leased and managed lease operating profit included
|
|
|
|
|
|
|
|
above
|
(33)
|
(35)
|
5.7
|
(34)
|
(35)
|
2.9
|
|
|
_____
|
_____
|
_____
|
_____
|
_____
|
_____
|
|
Underlying
Group fee profit
|
771
|
723
|
6.6
|
771
|
723
|
6.6
|
|
|
_____
|
_____
|
_____
|
_____
|
_____
|
_____
|
|
Group
fee margin
|
52.4%
|
52.4%
|
0.0ppts
|
52.5%
|
52.4%
|
0.1ppts
|
|
|
_____
|
_____
|
_____
|
_____
|
_____
|
_____
|
|
|
|
|
||||
|
|
12 months ended 31 December
|
|
|
|
|
2017
|
|
|
2018
|
Restated
|
|
|
12 months ended 31 December
|
|
|
|
|
2017
|
|
|
2018
|
Restated
|
|
|
$m
|
$m
|
|
Basic earnings per ordinary share
|
|
|
|
|
|
|
|
Profit
available for equity holders
|
351
|
540
|
|
Basic
weighted average number of ordinary shares (millions)
|
190
|
193
|
|
|
|
|
|
Basic
earnings per ordinary share (cents)
|
184.7
|
279.8
|
|
|
_____
|
_____
|
|
Underlying
earnings per ordinary share
|
|
|
|
Profit
available for equity holders
|
351
|
540
|
|
Adjusted
for:
|
|
|
|
Significant liquidated damages
|
(13)
|
-
|
|
Tax on significant liquidated damages
|
3
|
-
|
|
Acquisition of businesses
|
1
|
-
|
|
Interest relating to deferred and contingent purchase consideration
on
current
year acquisitions
|
5
|
-
|
|
System Fund revenue and expenses
|
146
|
34
|
|
Interest attributable to the System Fund
|
(19)
|
(13)
|
|
Tax attributable to the System Fund
|
-
|
3
|
|
Exceptional items before tax
|
104
|
(4)
|
|
Tax on exceptional items
|
(22)
|
2
|
|
Exceptional tax
|
(5)
|
(90)
|
|
Currency effect
|
1
|
-
|
|
|
_____
|
_____
|
|
Underlying
profit available for equity holders
|
552
|
472
|
|
|
_____
|
_____
|
|
|
|
|
|
Underlying
earnings per ordinary share (cents)
|
290.5
|
244.6
|
|
|
_____
|
_____
|
|
|
12 months ended 31 December
|
|
|
|
|
2017
|
|
|
2018
|
Restated
|
|
|
$m
|
$m
|
|
|
|
|
|
Net cash from investing activities
|
(189)
|
(206)
|
|
Adjusted
for:
|
|
|
|
Contract acquisition costs, net of repayments
|
(54)
|
(57)
|
|
Tax paid on disposals
|
2
|
25
|
|
System Fund depreciation and
amortisation
|
45
|
36
|
|
Acquisition of businesses, net of cash
acquired
|
38
|
-
|
|
|
_____
|
_____
|
|
Net
capital expenditure
|
(158)
|
(202)
|
|
Add
back:
|
|
|
|
Disposal receipts
|
(10)
|
(104)
|
|
Distributions from associates and joint ventures
|
(32)
|
-
|
|
System Fund depreciation and
amortisation
|
(45)
|
(36)
|
|
|
_____
|
_____
|
|
Gross
capital expenditure
|
(245)
|
(342)
|
|
|
_____
|
_____
|
|
Analysed
as:
|
|
|
|
Capital expenditure: maintenance and key money
|
(108)
|
(115)
|
|
Capital expenditure: recyclable investments
|
(38)
|
(85)
|
|
Capital expenditure: System Fund investments
|
(99)
|
(142)
|
|
|
_____
|
_____
|
|
Gross
capital expenditure
|
(245)
|
(342)
|
|
|
_____
|
_____
|
|
|
12 months ended 31 December
|
|
|
|
|
2017
|
|
|
2018
|
Restated
|
|
|
$m
|
$m
|
|
|
|
|
|
Net cash from operating activities
|
666
|
577
|
|
Adjusted
for:
|
|
|
|
Contract acquisition costs, net of repayments
|
54
|
57
|
|
|
|
|
|
Less:
|
|
|
|
Purchase of shares by employee share trusts
|
(3)
|
(3)
|
|
Capital expenditure: maintenance and key money
|
(108)
|
(115)
|
|
|
_____
|
_____
|
|
Free
cash flow
|
609
|
516
|
|
|
_____
|
_____
|
|
|
12 months ended 31 December
|
|
|
|
2017
|
|
|
|
2018
|
Restated
|
|
|
$m
|
$m
|
|
Net financial expenses
|
|
|
|
|
|
|
|
Financial
income
|
5
|
4
|
|
Financial
expenses
|
(86)
|
(76)
|
|
|
_____
|
_____
|
|
|
(81)
|
(72)
|
|
Adjusted
for:
|
|
|
|
Interest payable on
balances with the System Fund
|
(14)
|
(7)
|
|
Capitalised
interest relating to System Fund assets
|
(5)
|
(6)
|
|
|
_____
|
_____
|
|
Underlying
interest
|
(100)
|
(85)
|
|
|
_____
|
_____
|
|
|
2018
Year ended 31
December
|
2017
Year ended 31 December
Restated*
|
|
|
|
|
$m
|
$m
|
||
|
|
|
|
||
|
Revenue
from fee business
|
1,486
|
1,379
|
||
|
Revenue
from owned, leased and managed lease hotels
|
447
|
351
|
||
|
System
Fund revenues
|
1,233
|
1,242
|
||
|
Reimbursement
of costs
|
1,171
|
1,103
|
||
|
|
_____
|
_____
|
||
|
Total revenue (notes 5 and 6)
|
4,337
|
4,075
|
||
|
|
|
|
||
|
Cost of
sales
|
(706)
|
(571)
|
||
|
System
Fund expenses
|
(1,379)
|
(1,276)
|
||
|
Reimbursed
costs
|
(1,171)
|
(1,103)
|
||
|
Administrative
expenses before exceptional items
|
(344)
|
(337)
|
||
|
Share
of (losses)/gains of associates and joint ventures
|
(1)
|
3
|
||
|
Other
operating income
|
14
|
11
|
||
|
Depreciation
and amortisation
|
(80)
|
(78)
|
||
|
|
_____
|
_____
|
||
|
Operating
profit before exceptional items (note 5)
|
670
|
724
|
||
|
Impairment
charges (note 7)
|
-
|
(18)
|
||
|
Other
exceptional items (note 7)
|
(104)
|
22
|
||
|
|
_____
|
_____
|
||
|
Operating profit (note 5)
|
566
|
728
|
||
|
Financial
income
|
5
|
4
|
||
|
Financial
expenses
|
(86)
|
(76)
|
||
|
|
_____
|
_____
|
||
|
Profit before tax
|
485
|
656
|
||
|
|
|
|
||
|
Tax
(note 8)
|
(133)
|
(115)
|
||
|
|
_____
|
_____
|
||
|
Profit for the year from continuing operations
|
352
|
541
|
||
|
|
_____
|
_____
|
||
|
Attributable
to:
|
|
|
||
|
Equity holders of the parent
|
351
|
540
|
||
|
Non-controlling interest
|
1
|
1
|
||
|
|
_____
|
_____
|
||
|
|
352
|
541
|
||
|
|
_____
|
_____
|
||
|
|
|
|
||
|
Earnings per ordinary share (note 9)
|
|
|
||
|
Continuing
and total operations:
|
|
|
||
|
|
Basic
|
184.7¢
|
279.8¢
|
|
|
|
Diluted
|
182.8¢
|
278.4¢
|
|
|
|
Adjusted
|
292.1¢
|
244.6¢
|
|
|
|
Adjusted
diluted
|
289.1¢
|
243.3¢
|
|
|
|
|
|
||
|
|
|
|
||
|
*
Restated for the adoption of IFRS 15 and other presentational
changes (see notes 2 and 3).
|
|
|
|
2018
Year ended
31 December
$m
|
2017
Year ended
31 December
Restated*
$m
|
|
|
|
|
|
|
|
Profit for the year
|
352
|
541
|
|
|
|
|
|
|
|
Other comprehensive income
|
|
|
|
|
|
|
|
|
|
Items
that may be subsequently reclassified to profit or
loss:
|
|
|
|
|
Gains
on valuation of available-for-sale financial assets**, net of
related tax charge of $nil (2017 $3m)
|
-
|
41
|
|
|
Fair
value gains reclassified to profit on disposal of
available-for-sale financial assets**
|
-
|
(73)
|
|
|
Gains
on cash flow hedges, including related tax credit of $1m (2017
$nil)
|
5
|
-
|
|
|
Costs
of hedging
|
(1)
|
-
|
|
|
Hedging
gains reclassified to financial expenses
|
(8)
|
-
|
|
|
Exchange
gains/(losses) on retranslation of foreign operations, including
related tax credit of $2m (2017 net of related tax credit of
$1m)
|
43
|
(88)
|
|
|
|
_____
|
_____
|
|
|
|
39
|
(120)
|
|
|
Items
that will not be reclassified to profit or loss:
|
|
|
|
|
Losses on equity instruments classified as fair value through other
comprehensive income, including
related tax charge of $2m (2017 $nil)
|
(14)
|
-
|
|
|
Re-measurement
gains/(losses) on defined benefit plans, net of related tax charge
of $4m (2017 $nil)
|
8
|
(4)
|
|
|
Deferred tax charge
on defined benefit plans arising from significant US
tax
reform
|
-
|
(11)
|
|
|
|
_____
|
_____
|
|
|
|
(6)
|
(15)
|
|
|
|
_____
|
_____
|
|
|
Total other comprehensive income/(loss) for the year
|
33
|
(135)
|
|
|
|
_____
|
_____
|
|
|
Total comprehensive income for the year
|
385
|
406
|
|
|
|
_____
|
_____
|
|
|
|
|
|
|
|
Attributable
to:
|
|
|
|
|
|
Equity
holders of the parent
|
383
|
404
|
|
|
Non-controlling
interest
|
2
|
2
|
|
|
_____
|
_____
|
|
|
|
385
|
406
|
|
|
|
_____
|
_____
|
|
|
*
Restated for the adoption of IFRS 15 (see note 2)
** IFRS
9 has been applied from 1 January 2018. Under the transition
method chosen, comparative information has not been
restated.
|
|
|
Year ended 31 December 2018
|
||||
|
|
Equity share capital
|
Other reserves*
|
Retained earnings
|
Non-controlling interest
|
Total equity
|
|
|
$m
|
$m
|
$m
|
$m
|
$m
|
|
|
|
|
|
|
|
|
At
beginning of the year (restated for IFRS 15)
|
154
|
(2,413)
|
951
|
7
|
(1,301)
|
|
Impact
of adopting IFRS 9 (note 2)
|
-
|
(18)
|
18
|
-
|
-
|
|
|
_____
|
_____
|
_____
|
_____
|
_____
|
|
At the
beginning of the year (restated for IFRS 15 and IFRS
9)
|
154
|
(2,431)
|
969
|
7
|
(1,301)
|
|
Total
comprehensive income for the year
|
-
|
24
|
359
|
2
|
385
|
|
Transfer
of treasury shares to employee share trusts
|
-
|
(19)
|
19
|
-
|
-
|
|
Purchase
of own shares by employee share trusts
|
-
|
(3)
|
-
|
-
|
(3)
|
|
Release
of own shares by employee share trusts
|
-
|
24
|
(24)
|
-
|
-
|
|
Equity-settled
share-based cost
|
-
|
-
|
39
|
-
|
39
|
|
Tax
related to share schemes
|
-
|
-
|
3
|
-
|
3
|
|
Equity
dividends paid
|
-
|
-
|
(199)
|
(1)
|
(200)
|
|
Exchange
adjustments
|
(8)
|
8
|
-
|
-
|
-
|
|
|
_____
|
_____
|
_____
|
_____
|
_____
|
|
At end of the year
|
146
|
(2,397)
|
1,166
|
8
|
(1,077)
|
|
|
_____
|
_____
|
_____
|
_____
|
_____
|
|
|
Year ended 31 December 2017
|
||||
|
|
Equity share capital
|
Other reserves*
|
Retained earnings
|
Non-controlling interest
|
Total equity
|
|
|
$m
|
$m
|
$m
|
$m
|
$m
|
|
|
|
|
|
|
|
|
At
beginning of the year (as previously reported)
|
141
|
(2,300)
|
1,392
|
8
|
(759)
|
|
Impact
of adopting IFRS 15 (note 2)
|
-
|
15
|
(402)
|
-
|
(387)
|
|
|
_____
|
_____
|
_____
|
_____
|
_____
|
|
At
beginning of the year (restated for IFRS 15)
|
141
|
(2,285)
|
990
|
8
|
(1,146)
|
|
|
|
|
|
|
|
|
Total
comprehensive income for the year
|
-
|
(121)
|
525
|
2
|
406
|
|
Transfer
of treasury shares to employee share trusts
|
-
|
(20)
|
20
|
-
|
-
|
|
Purchase
of own shares by employee share trusts
|
-
|
(3)
|
-
|
-
|
(3)
|
|
Release
of own shares by employee share trusts
|
-
|
29
|
(29)
|
-
|
-
|
|
Equity-settled
share-based cost
|
-
|
-
|
29
|
-
|
29
|
|
Tax
related to share schemes
|
-
|
-
|
9
|
-
|
9
|
|
Equity
dividends paid
|
-
|
-
|
(593)
|
(3)
|
(596)
|
|
Exchange
adjustments
|
13
|
(13)
|
-
|
-
|
-
|
|
|
_____
|
_____
|
_____
|
_____
|
_____
|
|
At end of the year
|
154
|
(2,413)
|
951
|
7
|
(1,301)
|
|
|
_____
|
_____
|
_____
|
_____
|
_____
|
|
*
|
Other
reserves comprise the capital redemption reserve, shares held by
employee share trusts, other reserves, fair value reserve, cash
flow hedging reserve and currency translation reserve.
|
|
All
items above are shown net of tax.
|
|
|
2018
31 December
|
2017
31 December
Restated*
|
|
|
$m
|
$m
|
|
ASSETS
|
|
|
|
Property,
plant and equipment
|
447
|
425
|
|
Goodwill
and other intangible assets
|
1,143
|
967
|
|
Investment
in associates and joint ventures
|
104
|
141
|
|
Retirement
benefit assets
|
-
|
3
|
|
Other
financial assets
|
260
|
228
|
|
Derivative
financial instruments
|
7
|
-
|
|
Non-current
tax receivable
|
31
|
16
|
|
Deferred
tax assets
|
60
|
75
|
|
Contract
costs
|
55
|
51
|
|
Contract
assets
|
270
|
241
|
|
|
_______
|
_______
|
|
Total non-current assets
|
2,377
|
2,147
|
|
|
_______
|
_______
|
|
Inventories
|
5
|
3
|
|
Trade
and other receivables
|
613
|
551
|
|
Current
tax receivable
|
27
|
101
|
|
Other
financial assets
|
1
|
16
|
|
Derivative
financial instruments
|
1
|
-
|
|
Cash
and cash equivalents
|
704
|
168
|
|
Contract
costs
|
5
|
7
|
|
Contract
assets
|
20
|
17
|
|
|
_______
|
_______
|
|
Total current assets
|
1,376
|
863
|
|
|
_______
|
_______
|
|
Total assets (note 5)
|
3,753
|
3,010
|
|
|
__
___
|
__
___
|
|
LIABILITIES
|
|
|
|
Loans
and other borrowings
|
(120)
|
(126)
|
|
Trade
and other payables
|
(618)
|
(597)
|
|
Deferred
revenue
|
(572)
|
(490)
|
|
Provisions
|
(10)
|
(3)
|
|
Current
tax payable
|
(50)
|
(64)
|
|
|
_______
|
_______
|
|
Total current liabilities
|
(1,370)
|
(1,280)
|
|
|
_______
|
_______
|
|
Loans
and other borrowings
|
(2,129)
|
(1,893)
|
|
Retirement
benefit obligations
|
(91)
|
(104)
|
|
Trade
and other payables
|
(158)
|
(36)
|
|
Deferred
revenue
|
(934)
|
(867)
|
|
Provisions
|
(17)
|
(5)
|
|
Non-current
tax payable
|
-
|
(25)
|
|
Deferred
tax liabilities
|
(131)
|
(101)
|
|
|
_______
|
______
|
|
Total non-current liabilities
|
(3,460)
|
(3,031)
|
|
|
_______
|
_______
|
|
Total liabilities
|
(4,830)
|
(4,311)
|
|
|
_______
|
_______
|
|
Net liabilities
|
(1,077)
|
(1,301)
|
|
|
________
|
________
|
|
EQUITY
|
|
|
|
Equity
share capital
|
146
|
154
|
|
Capital
redemption reserve
|
10
|
10
|
|
Shares
held by employee share trusts
|
(4)
|
(5)
|
|
Other
reserves
|
(2,865)
|
(2,874)
|
|
Fair
value reserve
|
47
|
79
|
|
Cash
flow hedging reserve
|
(4)
|
-
|
|
Currency
translation reserve
|
419
|
377
|
|
Retained
earnings
|
1,166
|
951
|
|
|
______
|
______
|
|
IHG shareholders' equity
|
(1,085)
|
(1,308)
|
|
Non-controlling
interest
|
8
|
7
|
|
|
_______
|
_______
|
|
Total equity
|
(1,077)
|
(1,301)
|
|
|
________
|
________
|
|
*Restated
for the adoption of IFRS 15 (see note 2)
|
|
|
|
|
2018
Year ended
31 December
|
2017
Year ended
31 December
Restated*
|
|
|
$m
|
$m
|
|
|
|
|
|
Profit for the year
|
352
|
541
|
|
Adjustments
reconciling profit for the year to cash flow from operations before
contract acquisition costs (note 12)
|
502
|
308
|
|
|
_____
|
_____
|
|
Cash
flow from operations before contract acquisition costs
|
854
|
849
|
|
Contract
acquisition costs, net of repayments
|
(54)
|
(57)
|
|
|
_____
|
_____
|
|
Cash flow from operations
|
800
|
792
|
|
Interest
paid
|
(70)
|
(69)
|
|
Interest
received
|
2
|
1
|
|
Tax
paid on operating activities
|
(66)
|
(147)
|
|
|
_____
|
_____
|
|
Net cash from operating activities
|
666
|
577
|
|
|
_____
|
_____
|
|
Cash flow from investing activities
|
|
|
|
Purchase
of property, plant and equipment
|
(46)
|
(44)
|
|
Purchase
of intangible assets
|
(112)
|
(172)
|
|
Investment
in associates and joint ventures
|
(1)
|
(47)
|
|
Investment
in other financial assets
|
(33)
|
(30)
|
|
Acquisition
of businesses, net of cash acquired (note 11)
|
(38)
|
-
|
|
Capitalised
interest paid
|
(5)
|
(6)
|
|
Landlord
contributions to property, plant and equipment
|
8
|
14
|
|
Loan
repayments by associates and joint ventures
|
-
|
9
|
|
Distributions
from associates and joint ventures
|
32
|
-
|
|
Repayments
of other financial assets
|
8
|
20
|
|
Disposal
of equity securities
|
-
|
75
|
|
Tax
paid on disposals
|
(2)
|
(25)
|
|
|
_____
|
_____
|
|
Net cash from investing activities
|
(189)
|
(206)
|
|
|
_____
|
_____
|
|
Cash flow from financing activities
|
|
|
|
Purchase
of own shares by employee share trusts
|
(3)
|
(3)
|
|
Dividends
paid to shareholders
|
(199)
|
(593)
|
|
Dividend
paid to non-controlling interest
|
(1)
|
(3)
|
|
Issue
of long-term bonds, including effect of currency swaps
|
554
|
-
|
|
(Decrease)/increase
in other borrowings
|
(268)
|
153
|
|
Proceeds
from currency swaps
|
3
|
-
|
|
|
_____
|
_____
|
|
Net cash from financing activities
|
86
|
(446)
|
|
|
_____
|
_____
|
|
Net movement in cash and cash equivalents, net of overdrafts, in
the year
|
563
|
(75)
|
|
Cash
and cash equivalents, net of overdrafts, at beginning of the
year
|
58
|
117
|
|
Exchange
rate effects
|
(21)
|
16
|
|
|
_____
|
_____
|
|
Cash and cash equivalents, net of overdrafts, at end of the
year
|
600
|
58
|
|
|
_____
|
_____
|
|
*Restated
for the adoption of IFRS 15 (see note 2)
|
|
1.
|
Basis of preparation
|
|
|
The audited consolidated financial statements of InterContinental
Hotels Group PLC (the Group or IHG) for the year ended 31 December
2018 have been prepared in accordance with International Financial
Reporting Standards (IFRSs) as adopted by the European Union and as
applied in accordance with the provisions of the Companies Act
2006. Other than the changes arising from the adoption
of new accounting standards set out below, they have been prepared
on a consistent basis using the accounting policies set out in the
InterContinental Hotels Group PLC Annual Report and Financial
Statements for the year ended 31 December 2017.
|
|
|
The Group will adopt IFRS 16 'Leases' with effect from 1 January
2019. IFRS 16 eliminates the classification of leases
as either operating or finance leases and introduces a single
accounting model which requires the recognition of a 'right of use'
asset and corresponding lease liability. Management's
assessment of the impact of this standard is substantially
complete. If the results for the year ended 31 December 2018
had been reported under IFRS 16, the Group would have reported an
increase in leased assets of $323m and an increase in lease
liabilities of $431m, with an immaterial impact on profit after
tax. These estimates are subject to further refinement
as the implementation project is completed.
Further details on the adoption of this standard will be included
in the InterContinental Hotels Group PLC Annual Report and
Financial Statements for the year ended 31 December
2018.
|
|
2.
|
Adoption of new accounting standards
|
|
|
IFRS 15
With
effect from 1 January 2018, the Group has adopted IFRS 15 'Revenue
from Contracts with Customers' which introduces a new five-step
approach to measuring and recognising revenue from contracts with
customers. Under IFRS 15, revenue is recognised at an amount
that reflects the consideration to which an entity expects to be
entitled in exchange for transferring goods or services to a
customer.
The
Group has elected to apply the full retrospective method in
adopting IFRS 15.
Prior
to adoption of IFRS 15, the Group's revenue was primarily comprised
of fee-based revenue from franchise and management contracts, and
hotel revenue in owned, leased and managed lease properties.
The recognition of these revenue streams is largely unchanged
by IFRS 15:
●
Franchise and base
management fees are typically charged as a percentage of underlying
revenues in the hotels and are treated as variable consideration.
These fees are recognised as the underlying hotel revenues
occur.
●
Incentive management
fees are generally based on the hotel's profitability or cash
flows, and are recognised over time when it is considered highly
probable that the related performance criteria will be met,
provided there is no expectation of a subsequent reversal of the
revenue.
●
Hotel revenue in owned,
leased and managed lease properties includes rooms revenue and food
and beverage sales, which is recognised when the rooms are occupied
and food and beverages are sold.
The
key changes resulting from the adoption of IFRS 15 are as
follows:
a) Managed and franchised hotel cost
reimbursements
Under
IFRS 15, the provision of employees to managed hotels is not
considered to be a service that is distinct from the general hotel
management service. Reimbursements for the cost of IHG employees
working in managed hotels are therefore shown as revenue with an
equal matching cost, with no profit impact. Certain other costs
relating to both managed and franchised hotels are also
contractually reimbursable to IHG and where IHG is deemed to be
acting as principal in the provision of the related services, the
revenue and cost are shown on a gross basis under IFRS 15 in the
lines 'Reimbursement of costs' and 'Reimbursed costs'. Under
previous accounting policies, no revenue or matching cost was
recognised. This change increased 2017 revenue and expense by
$1,103m with no profit impact.
b) Initial application and re-licensing
fees
Under
previous accounting, application and re-licensing fees were
recognised as revenue when billed as the monies received are not
refundable and IHG has no further obligations to satisfy. Under
IFRS 15, there is a requirement to consider whether the payment of
these fees transfers a distinct good or service to the customer
that is separate from the promise to provide franchise services. As
this is not the case, IFRS 15 requires initial application and
re-licensing fees to be recognised as services are provided, over
the life of the related contract. The spreading of these fees
results in an initial reduction to revenue and operating profit,
and the recognition of deferred revenue on the statement of
financial position, reflecting the profile of increased amounts
received in recent years. This change reduced 2017 revenue
from fee business by $14m and increased 2017 deferred revenue by
$163m, comprising $24m current and $139m non-current. There
was also a $40m decrease in deferred tax liabilities related to
this adjustment.
c) Contract costs
Contract
costs related to securing management and franchise contracts were
previously charged to the income statement as incurred. Under IFRS
15, certain costs qualify to be capitalised as the cost of
obtaining a contract and are amortised over the initial term of the
related contract. This change increased 2017 operating profit by
$5m and the capitalisation of contract costs on the statement of
financial position at 31 December 2017 by $58m, comprising $7m
current and $51m non-current. There was also a $15m increase
in deferred tax liabilities related to this
adjustment.
d) Amortisation of amounts paid to hotel owners to
secure management contracts and franchise agreements ('key
money')
Under
previous accounting, key money payments were capitalised as
intangible assets and amortised over the life of the related
contracts. Under IFRS 15, these payments are treated as
'consideration payable to a customer' and therefore recorded as a
contract asset and recognised as a deduction to revenue over the
contract term. This change results in a reduction to revenue and
depreciation and amortisation for the year ended 31 December 2017
of $17m, with no change to operating profit, and the
reclassification of key money on the statement of financial
position from intangible assets to contract assets at 31 December
2017 of $257m, of which $17m was classified as current and $240m
was classified as non-current.
In
the Group statement of cash flows, these contract acquisition costs
are reclassified from investing activities to cash flow from
operations.
e) Owned hotel disposals subject to a management
contract
Under
previous accounting, when hotels were sold and the Group retained
management of the hotel, the consideration recognised included both
the cash received and the fair value of the management contract
which was capitalised as an intangible asset and subsequently
amortised to the income statement. This accounting was governed by
the 'exchange of assets' criteria included in IAS 16 'Property,
Plant and Equipment' and IAS 38 'Intangible Assets'. IFRS 15
specifically includes property sales in its scope and results in
the sales consideration being recorded at the fair value of the
encumbered hotel, which generally will be equivalent to the cash
received. This change resulted in the derecognition of historic
intangible asset balances at 31 December 2017 of $243m and a lower
amortisation charge in the income statement for the year ended 31
December 2017 of $8m. This change also resulted in an
increase in deferred tax assets and reduction in deferred tax
liabilities of $19m and $32m respectively at 31 December
2017.
|
|
|
|
|
|
f) Other adjustments
Other
adjustments, which are immaterial, include re-assessments of IHG's
role as principal in other revenue transactions and the treatment
of payments under performance guarantees as a reduction to the
transaction price within management contracts.
g) System Fund adjustments
The
Group operates a System Fund (the Fund) to collect and administer
cash assessments from hotel owners for the specific purpose of use
in marketing, the guest reservation systems and hotel loyalty
programme. The Fund also receives proceeds from the sale of loyalty
points under third-party co-branding arrangements. The Fund is not
managed to generate a profit or loss for IHG, but is managed for
the benefit of hotels in the System with the objective of driving
revenues for the hotels. Consequently, under previous accounting
these revenues and expenses were not recorded in the Group income
statement.
Under
IFRS 15, an entity is regarded as a principal if it controls a
service prior to transfer to the customer. As marketing and
reservations expenses primarily comprise payroll and marketing
expenses under contracts entered into by the Group, management has
determined that the Group controls these services. Fund revenues
and expenses are therefore recognised on a gross basis in the Group
income statement. Assessment fees from hotel owners are generally
levied as a percentage of hotel revenues and are recognised as
those hotel revenues occur.
In
respect of the loyalty programme (IHG Rewards Club), the Group has
determined that the related performance obligation is not satisfied
in full until the member has consumed the points at a participating
hotel. Accordingly, revenue related to loyalty points earned by
members or sold under co-branding arrangements is deferred in an
amount that reflects the stand-alone selling price of the future
benefit to the member. As materially all of the points will be
consumed at IHG managed or franchised hotels owned by third
parties, IHG is deemed to be acting as agent on redemption and
therefore recognises the related revenue net of the cost of
reimbursing the hotel that is providing the hotel stay. The
deferred revenue balance under IFRS 15 (31 December 2017 $1,057m)
is higher than the points redemption cost liability that was
recognised under previous accounting (31 December 2017 $760m)
resulting in an increase in the Group's net
liabilities.
Management
has also determined that in addition to the performance obligation
for the redemption of points, co-branding arrangements contain
other performance obligations including marketing services and the
right to access the loyalty programme. Revenue attributable to the
stand-alone selling price of these additional services is
recognised as the Group performs its obligations over the term of
the co-branding arrangement. Certain travel agency commission
revenues within the Fund will be recognised on a net basis, where
it has been determined that IHG acts as agent under IFRS
15.
Under
previous accounting, any short-term timing surplus or deficit in
the Fund was carried in the Group statement of financial position
within working capital. Under IFRS 15, the in-year Fund surplus or
deficit is recognised in the Group income statement. Both the
previous accounting treatment and the change on applying IFRS 15
(and the equivalent US GAAP standard) are consistent with other
companies in the hotel industry. The Fund surplus of $158m at 31
December 2017 was derecognised resulting in a reduction in the
Group's net liabilities.
IHG
also records an interest charge on the accumulated balance of cash
in advance of the consumption of IHG Rewards Club points. In 2017
these interest payments totalled $7m and were recognised as
interest income for the Fund and interest expense for IHG. The
System Fund also benefits from the capitalisation of interest
related to the development of the next-generation Guest Reservation
System, which totalled $6m in 2017. As the Fund is now
included on the Group income statement, these amounts are included
in the reported net Group financial expenses.
The
System Fund accounting changes result in an increase in recorded
revenue and expenses for the year ended 31 December 2017 of $1,217m
and $1,251m respectively. However, since the Group has an agreement
with the IHG Owners Association that the Fund is not managed to a
gain or loss for IHG, any in-year profit or loss resulting from
Fund activity is excluded from the calculation of underlying
operating profit and adjusted earnings per share as the agreement
is to spend the funds for the benefit of hotels in the
System.
Opening
total equity at 1 January 2017 decreases from $(759)m to
$(1,146)m.
The
impact of adopting IFRS 15 and other presentational changes (see
note 3) on previously reported line items in the Group financial
statements is set out on the following pages.
|
|
|
As
previously reported
|
IFRS 15 - Core IHG
|
IFRS 15 - System Fund
|
Other changes (note 3)
|
As restated
|
|
|
$m
|
$m
|
$m
|
$m
|
$m
|
|
|
|
|
|
|
|
|
Revenue
from fee business
|
1,600
|
(33)
|
-
|
(188)
|
1,379
|
|
Revenue
from owned, leased and managed leases hotels
|
184
|
4
|
-
|
163
|
351
|
|
System
Fund revenues
|
-
|
-
|
1,217
|
25
|
1,242
|
|
Reimbursement
of costs
|
-
|
1,103
|
-
|
-
|
1,103
|
|
|
_____
|
_____
|
_____
|
_____
|
_____
|
|
Total revenues
|
1,784
|
1,074
|
1,217
|
-
|
4,075
|
|
|
|
|
|
|
|
|
Cost
of sales
|
(608)
|
12
|
-
|
25
|
(571)
|
|
System
Fund expenses
|
-
|
-
|
(1,251)
|
(25)
|
(1,276)
|
|
Reimbursed
costs
|
-
|
(1,103)
|
-
|
-
|
(1,103)
|
|
Administrative
expenses
|
(328)
|
(9)
|
-
|
-
|
(337)
|
|
Share
of gains/(losses) of associates and joint ventures
|
3
|
-
|
-
|
-
|
3
|
|
Other
operating income
|
11
|
-
|
-
|
-
|
11
|
|
Depreciation
and amortisation
|
(103)
|
25
|
-
|
-
|
(78)
|
|
|
_____
|
_____
|
_____
|
_____
|
_____
|
|
Operating
profit before exceptional items
|
759
|
(1)
|
(34)
|
-
|
724
|
|
Impairment
charges
|
(18)
|
-
|
-
|
-
|
(18)
|
|
Other
exceptional items
|
22
|
-
|
-
|
-
|
22
|
|
|
_____
|
_____
|
_____
|
_____
|
_____
|
|
Operating profit
|
763
|
(1)
|
(34)
|
-
|
728
|
|
Financial
income
|
4
|
-
|
-
|
-
|
4
|
|
Financial
expenses
|
(89)
|
-
|
13
|
-
|
(76)
|
|
Tax
|
(85)
|
(28)
|
(2)
|
-
|
(115)
|
|
|
_____
|
_____
|
_____
|
_____
|
_____
|
|
Profit after tax
|
593
|
(29)
|
(23)
|
-
|
541
|
|
|
_____
|
_____
|
_____
|
_____
|
_____
|
|
|
As previously reported
$m
|
IFRS 15 adoption
$m
|
As restated
$m
|
|
|
|
|
|
|
Profit
for the year
|
593
|
(52)
|
541
|
|
Exchange
losses on retranslation of foreign operations, net of related tax
credit of $1m
|
(77)
|
(11)
|
(88)
|
|
Other
items
|
(47)
|
-
|
(47)
|
|
|
____
|
____
|
____
|
|
Total comprehensive income for the year
|
469
|
(63)
|
406
|
|
|
_____
|
_____
|
_____
|
|
|
As previously
reported
$m
|
IFRS 15 adoption $m
|
As restated
$m
|
|
|
|
|
|
|
Goodwill
and other intangible assets
|
1,467
|
(500)
|
967
|
|
Deferred
tax assets
|
56
|
19
|
75
|
|
Contract
costs
|
-
|
51
|
51
|
|
Contract
assets
|
-
|
241
|
241
|
|
Other
non-current assets
|
813
|
-
|
813
|
|
|
________
|
_______
|
________
|
|
Total non-current assets
|
2,336
|
(189)
|
2,147
|
|
|
________
|
_______
|
________
|
|
Contract
costs
|
-
|
7
|
7
|
|
Contract
assets
|
-
|
17
|
17
|
|
Other
current assets
|
839
|
-
|
839
|
|
|
________
|
_______
|
________
|
|
Total current assets
|
839
|
24
|
863
|
|
|
________
|
_______
|
________
|
|
Total assets
|
3,175
|
(165)
|
3,010
|
|
|
________
|
_______
|
________
|
|
Loyalty
programme liability
|
(343)
|
343
|
-
|
|
Trade
and other payables
|
(768)
|
171
|
(597)
|
|
Deferred
revenue
|
-
|
(490)
|
(490)
|
|
Other
current liabilities
|
(193)
|
-
|
(193)
|
|
|
________
|
_______
|
________
|
|
Total current liabilities
|
(1,304)
|
24
|
(1,280)
|
|
|
________
|
_______
|
________
|
|
Loyalty
programme liability
|
(417)
|
417
|
-
|
|
Trade
and other payables
|
(121)
|
85
|
(36)
|
|
Deferred
revenue
|
-
|
(867)
|
(867)
|
|
Deferred
tax liabilities
|
(157)
|
56
|
(101)
|
|
Other
non-current liabilities
|
(2,027)
|
-
|
(2,027)
|
|
|
________
|
_______
|
________
|
|
Total non-current liabilities
|
(2,722)
|
(309)
|
(3,031)
|
|
|
________
|
_______
|
________
|
|
Total liabilities
|
(4,026)
|
(285)
|
(4,311)
|
|
|
________
|
_______
|
________
|
|
Net liabilities
|
(851)
|
(450)
|
(1,301)
|
|
|
________
|
_______
|
________
|
|
Equity
share capital
|
154
|
-
|
154
|
|
Capital
redemption reserve
|
10
|
-
|
10
|
|
Shares
held by employee share trusts
|
(5)
|
-
|
(5)
|
|
Other
reserves
|
(2,874)
|
-
|
(2,874)
|
|
Fair
value reserve
|
79
|
-
|
79
|
|
Currency
translation reserve
|
373
|
4
|
377
|
|
Retained
earnings
|
1,405
|
(454)
|
951
|
|
|
_______
|
______
|
_______
|
|
IHG shareholders' equity
|
(858)
|
(450)
|
(1,308)
|
|
|
|
|
|
|
Non-controlling
interest
|
7
|
-
|
7
|
|
|
_______
|
______
|
_______
|
|
Total equity
|
(851)
|
(450)
|
(1,301)
|
|
|
_______
|
______
|
_______
|
|
|
|
|
|
|
|
As previously
reported
$m
|
IFRS 15 adoption
$m
|
As restated $m
|
|
|
|
|
|
|
Profit for the year
|
593
|
(52)
|
541
|
|
Adjustments
reconciling profit for the year to cash flow from operations before
contract acquisition costs
|
263
|
45
|
308
|
|
|
_____
|
_____
|
_____
|
|
Cash
flow from operations before contract acquisition costs
|
856
|
(7)
|
849
|
|
Contract
acquisition costs, net of repayments
|
-
|
(57)
|
(57)
|
|
|
_____
|
_____
|
_____
|
|
Cash flow from operations
|
856
|
(64)
|
792
|
|
Interest
paid
|
(76)
|
7
|
(69)
|
|
Interest
received
|
1
|
-
|
1
|
|
Tax
paid on operating activities
|
(147)
|
-
|
(147)
|
|
|
_____
|
_____
|
_____
|
|
Net cash from operating activities
|
634
|
(57)
|
577
|
|
|
_____
|
_____
|
_____
|
|
|
|
|
|
|
Purchase
of intangible assets
|
(229)
|
57
|
(172)
|
|
Other
cash flows from investing activities
|
(34)
|
-
|
(34)
|
|
|
_____
|
_____
|
_____
|
|
Net cash from investing activities
|
(263)
|
57
|
(206)
|
|
|
_____
|
_____
|
_____
|
|
|
|
|
|
|
Net cash from financing activities
|
(446)
|
-
|
(446)
|
|
|
_____
|
_____
|
_____
|
|
|
|
|
|
|
Net movement in cash and cash equivalents, net of overdrafts, in
the year
|
(75)
|
-
|
(75)
|
|
|
_____
|
_____
|
_____
|
|
|
|
|
|
|
Cash
and cash equivalents, net of overdrafts, at beginning of the
year
|
117
|
-
|
117
|
|
Exchange
rate effects
|
16
|
-
|
16
|
|
|
_____
|
_____
|
_____
|
|
Cash and cash equivalents, net of overdrafts, at end of the
year
|
58
|
-
|
58
|
|
|
_____
|
_____
|
_____
|
|
|
As previously reported
|
IFRS 15 adoption
|
As restated
|
|
|
|
|
|
|
Basic
earnings per ordinary share
|
306.7ȼ
|
(26.9)ȼ
|
279.8ȼ
|
|
Diluted
earnings per ordinary share
|
305.2ȼ
|
(26.8)ȼ
|
278.4ȼ
|
|
|
IFRS 9
With effect from 1 January 2018, the Group has adopted IFRS 9
'Financial Instruments'. IFRS 9 introduces new requirements for
classification and measurement of financial assets and financial
liabilities, impairment and hedge accounting.
The Group has applied the requirements of IFRS 9 retrospectively,
except for hedge accounting.
The new rules for hedge accounting will be applied prospectively in
line with the requirements of the standard. The Group has not
applied any practical expedients available under IFRS 9. The
Group has not restated prior periods as allowed by the transition
provisions of IFRS 9 as restatement is impracticable without the
use of hindsight. Accordingly, the information presented for
2017 reflects the classification of assets under IAS 39, not IFRS
9.
The only impact of IFRS 9 on the Group financial statements is to
reclassify the impact of historic impairments on equity instruments
measured at fair value through other comprehensive income
('FVOCI'). These impairments were originally recorded in the
Group income statement, but under IFRS 9 they would have been
recorded in the fair value reserve and only transferred to retained
earnings when the equity investments are derecognised. An
adjustment of $18m has been made to the Group statement of changes
in equity at 1 January 2018 to reflect this
reclassification.
|
|
3.
|
Presentational changes
|
|
|
In addition to the adoption of IFRS 15 and IFRS 9, these
preliminary financial statements have been restated to reflect
several other changes to the presentation of the Group's financial
results.
Exceptional items
Exceptional items, which were previously shown in a separate column
of the Group income statement, are now presented as a separate line
item, with detailed disclosure in note 7.
New operating segments
See note 5.
Reporting of fee business results
Revenue and operating profit from management and franchise
agreements, together with regional and Central overheads, have been
combined into one category, 'fee business', to more closely reflect
the way the business is now reported as a result of the ongoing
reorganisation (see note 7).
|
|
|
Reporting of managed lease hotels
The revenue and operating profit of managed lease hotels,
previously reported as part of the Group's managed operations, are
now reported with owned and leased hotels. As the full
results of these hotels are consolidated into IHG's income
statement, this gives a clearer view of the reported fee business
revenues and profits.
Overhead allocations
Minor changes have been made to the basis for allocating overheads
to the regional and Central operating segments.
|
|
|
InterContinental reservation fees and costs
Reservation fees and costs associated with the InterContinental
brand have previously been recognised in IHG's income statement.
These fees and costs have now been moved to the System Fund to
align with the treatment of IHG's other brand programmes. As this
programme is not managed to make a profit or loss for IHG, there is
no operating profit impact.
Prior year comparatives have been restated to reflect these
presentational changes and the impact on the Group income statement
for the year ended 31 December 2017 is as follows:
|
|
|
Managed leases
$m
|
InterContinental reservations
$m
|
Total
$m
|
|
|
|
|
|
|
|
|
Revenue
from fee business
|
(163)
|
(25)
|
(188)
|
|
|
Revenue
from owned, leased and managed lease hotels
|
163
|
-
|
163
|
|
|
System
Fund revenues
|
-
|
25
|
25
|
|
|
|
_____
|
_____
|
______
|
|
|
Total revenues
|
-
|
-
|
-
|
|
|
|
_____
|
_____
|
_____
|
|
|
|
|
|
|
|
|
Cost
of sales
|
-
|
25
|
25
|
|
|
System
Fund expenses
|
-
|
(25)
|
(25)
|
|
|
|
_____
|
_____
|
_____
|
|
|
Operating profit
|
-
|
-
|
-
|
|
|
|
_____
|
_____
|
_____
|
|
|
|
||||
|
|
||||
|
4.
|
Exchange
rates
|
|
|
The
results of operations have been translated into US dollars at the
average rates of exchange for the year. In the case of sterling,
the translation rate is $1 = £0.75 (2017 $1 = £0.78). In
the case of the euro, the translation rate is $1 = €0.85
(2017 $1 = €0.89).
Assets
and liabilities have been translated into US dollars at the rates
of exchange on the last day of the year. In the case of sterling,
the translation rate is $1 = £0.78 (2017 $1 = £0.74). In
the case of the euro, the translation rate is $1 = €0.87
(2017 $1 = €0.83).
|
|
5.
|
Segmental information
|
|
|
|
|
With effect from 1 January 2018, an internal reorganisation
resulted in the formation of a new operating segment, Europe,
Middle East, Asia and Africa (EMEAA), bringing together the former
segments of Europe and Asia, Middle East and Africa (AMEA). By
bringing together two strong, established regions, there will be an
increased focus on growth through increased agility and
effectiveness.
Following this reorganisation, the management of the Group's
operations, excluding Central functions, is organised within three
geographical regions:
●
Americas;
●
EMEAA; and
●
Greater China.
These, together with Central functions, comprise the Group's four
reportable segments. Each of the geographical regions is led by its
own Chief Executive Officer, who reports to the Group Chief
Executive Officer. No operating segments have been
aggregated to form these reportable segments.
Central functions include costs of global functions including
technology, sales and marketing, finance, human resources and
corporate services; Central revenue arises principally from
technology fee income.
Management monitors the operating results of the geographical
regions and Central functions separately for the purpose of making
decisions about resource allocation and performance assessment. The
System Fund is not viewed as being part of the Group's core
operations as IHG is unable to profit from its activities. As such,
its results are not regularly reviewed by the Chief Operating
Decision Maker (CODM) and it does not constitute an operating
segment under IFRS 8. Similarly, reimbursement of costs are
not reported to the CODM and so are not included within the
reportable segments.
Segmental performance is evaluated based on operating profit or
loss and is measured consistently with operating profit or loss in
the Consolidated Financial Statements, excluding System Fund and
exceptional items. Group financing activities and income taxes are
managed on a group basis and are not allocated to reportable
segments.
Comparatives have been restated for IFRS 15 (note 2) and
presentational changes (note 3) to show segmental information on a
consistent basis.
|
||
|
|
|
|
|
|
|
Revenue
|
|
|
|
|
|
2018
|
2017
Restated
|
|
|
|
$m
|
$m
|
|
|
|
|
|
|
|
Americas
|
1,051
|
999
|
|
|
EMEAA
|
569
|
457
|
|
|
Greater
China
|
143
|
117
|
|
|
Central
|
170
|
157
|
|
|
|
_____
|
_____
|
|
|
Revenue from reportable segments
|
1,933
|
1,730
|
|
|
System
Fund revenues
|
1,233
|
1,242
|
|
|
Reimbursement
of costs
|
1,171
|
1,103
|
|
|
|
_____
|
_____
|
|
|
Total revenue
|
4,337
|
4,075
|
|
|
|
_____
|
_____
|
|
|
|
|
|
|
|
All
items above relate to continuing operations.
|
||
|
|
Profit
|
2018
$m
|
2017
Restated
$m
|
|
|
|
|
|
|
|
Americas
|
662
|
637
|
|
|
EMEAA
|
202
|
171
|
|
|
Greater
China
|
69
|
52
|
|
|
Central
|
(117)
|
(102)
|
|
|
|
_____
|
_____
|
|
|
Operating profit from reportable segments
|
816
|
758
|
|
|
System
Fund
|
(146)
|
(34)
|
|
|
Exceptional
items (note 7)
|
(104)
|
4
|
|
|
|
_____
|
_____
|
|
|
Operating profit
|
566
|
728
|
|
|
|
|
|
|
|
Net
finance costs
|
(81)
|
(72)
|
|
|
|
_____
|
_____
|
|
|
Profit before tax
|
485
|
656
|
|
|
|
_____
|
_____
|
|
|
|
|
|
|
|
All
items above relate to continuing operations.
|
||
|
|
|
||
|
|
Assets
|
2018
$m
|
2017
Restated
$m
|
|
|
|
|
|
|
|
Americas
|
1,568
|
1,500
|
|
|
EMEAA
|
666
|
504
|
|
|
Greater
China
|
110
|
105
|
|
|
Central
|
579
|
541
|
|
|
|
_____
|
_____
|
|
|
Segment assets
|
2,923
|
2,650
|
|
|
|
|
|
|
|
Unallocated
assets:
|
|
|
|
|
Derivative
financial instruments
|
8
|
-
|
|
|
Tax
receivable
|
58
|
117
|
|
|
Deferred tax
assets
|
60
|
75
|
|
|
Cash
and cash equivalents
|
704
|
168
|
|
|
|
_____
|
_____
|
|
|
Total assets
|
3,753
|
3,010
|
|
|
|
_____
|
_____
|
|
Year ended 31 December 2018
|
|
|
|
|
|
|||
|
|
Americas
$m
|
EMEAA
$m
|
Greater China
$m
|
Central
$m
|
Total
$m
|
|||
|
|
|
|
|
|
|
|||
|
Franchise
and base management fees
|
835
|
227
|
94
|
-
|
1,156
|
|||
|
Incentive
management fees
|
18
|
93
|
49
|
-
|
160
|
|||
|
Central
revenues
|
-
|
-
|
-
|
170
|
170
|
|||
|
|
_____
|
_____
|
_____
|
_____
|
_____
|
|||
|
Revenue
from fee business
|
853
|
320
|
143
|
170
|
1,486
|
|||
|
Revenue
from owned, leased and managed lease hotels
|
198
|
249
|
-
|
-
|
447
|
|||
|
|
_____
|
_____
|
_____
|
_____
|
_____
|
|||
|
|
1,051
|
569
|
143
|
170
|
1,933
|
|||
|
|
_____
|
_____
|
_____
|
_____
|
|
|||
|
System
Fund revenues
|
|
|
|
|
1,233
|
|||
|
Reimbursement
of costs
|
|
|
|
|
1,171
|
|||
|
|
|
|
|
|
_____
|
|||
|
Total revenue
|
|
|
|
|
4,337
|
|||
|
|
|
|
|
|
_____
|
|||
|
|
|
|
|
|
|
|
|
|
|
Year ended 31 December 2017
|
|
|
|
|
|
|
|||||
|
|
Americas
$m
|
EMEAA
$m
|
Greater China
$m
|
Central
$m
|
Total
$m
|
||||||
|
|
|
|
|
|
|
||||||
|
Franchise
and base management fees
|
795
|
204
|
73
|
-
|
1,072
|
||||||
|
Incentive
management fees
|
16
|
90
|
44
|
-
|
150
|
||||||
|
Central
revenues
|
-
|
-
|
-
|
157
|
157
|
||||||
|
|
_____
|
_____
|
_____
|
_____
|
_____
|
||||||
|
Revenue
from fee business
|
811
|
294
|
117
|
157
|
1,379
|
||||||
|
Revenue
from owned, leased and managed lease hotels
|
188
|
163
|
-
|
-
|
351
|
||||||
|
|
_____
|
_____
|
_____
|
_____
|
_____
|
||||||
|
|
999
|
457
|
117
|
157
|
1,730
|
||||||
|
|
_____
|
_____
|
_____
|
_____
|
|
||||||
|
System
Fund revenues
|
|
|
|
|
1,242
|
||||||
|
Reimbursement
of costs
|
|
|
|
|
1,103
|
||||||
|
|
|
|
|
|
_____
|
||||||
|
Total revenue
|
|
|
|
|
4,075
|
||||||
|
|
|
|
|
|
_____
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
7.
|
Exceptional items
|
||||
|
|
|
2018
$m
|
2017
Restated
$m
|
||
|
|
Exceptional items before tax
|
|
|
||
|
|
|
Administrative
expenses:
|
|
|
|
|
|
|
Acquisition
and integration costs (a)
|
(15)
|
(15)
|
|
|
|
|
Litigation
(b)
|
(18)
|
-
|
|
|
|
|
Reorganisation
costs (c)
|
(56)
|
(36)
|
|
|
|
|
Pension
settlement cost (d)
|
(15)
|
-
|
|
|
|
|
|
_______
|
_______
|
|
|
|
|
|
(104)
|
(51)
|
|
|
|
|
Other
operating income and expenses:
|
|
|
|
|
|
|
Gain on
disposal of equity securities measured at fair value
(e)
|
-
|
73
|
|
|
|
|
|
|
||
|
|
Impairment charges:
|
|
|
||
|
|
|
Associates
(f)
|
-
|
(18)
|
|
|
|
|
_____
|
_____
|
||
|
|
|
(104)
|
4
|
||
|
|
|
_____
|
_____
|
||
|
|
Tax
|
|
|
||
|
|
|
Tax on
exceptional items (g)
|
22
|
(2)
|
|
|
|
|
Exceptional
tax (h)
|
5
|
90
|
|
|
|
|
|
_____
|
_____
|
|
|
|
|
|
27
|
88
|
|
|
|
|
|
_____
|
_____
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
All
items above relate to continuing operations. These items are
treated as exceptional by reason of their size or
nature.
|
|
|
|
a)
|
In
2018, relates to the acquisitions of Regent (see note 11), the UK
portfolio (see note 11) and Six Senses (see note 17) and, in 2017,
related to the cost of integrating Kimpton into the operations of
the Group. Kimpton was acquired on 16 January 2015 and
the integration programme was completed in 2017.
|
|
|
b)
|
Primarily
relates to a material settlement agreed in respect of a lawsuit
filed against the Group in the Americas region, together with
associated legal fees.
|
|
|
c)
|
In
September 2017, the Group launched a comprehensive efficiency
programme funding a series of new strategic initiatives to drive an
acceleration in IHG's future growth. The programme is centred
around strengthening the Group's organisational structure to
redeploy resources to leverage scale in the highest opportunity
markets and segments. The programme is expected to be
completed in 2019. The cost includes consultancy fees of $25m
(2017 $24m) and severance costs of $18m (2017 $8m). An
additional $47m (2017 $9m) has been charged to the System
Fund.
|
|
|
d)
|
Arises
from the termination of the US funded Inter-Continental Hotels
Pension Plan which involved certain qualifying members receiving
lump-sum cash-out payments with the remaining pension obligations
subject to a buy-out by an insurance provider through the purchase
of a group annuity contract.
|
|
|
e)
|
In
December 2017, the sale of Avendra, LLC (Avendra) to Aramark
Services, Inc., resulted in the Group receiving cash proceeds of
$75m from its 6.29% interest in Avendra and the recording of a $73m
exceptional gain. Avendra is a North American hospitality
procurement services provider.
|
|
|
f)
|
Related
to an associate investment in the Americas region and resulted from
the depressed trading outlook for the New York hotel
market.
|
|
|
g)
|
In
2018, comprises a current tax credit of $11m on reorganisation
costs (2017: $13m), a $5m current tax credit in respect of
litigation costs, a $6m tax credit ($5m current tax and $1m
deferred tax) arising from the US pension settlement, a $2m current
tax credit in respect of acquisition costs and a $2m prior year
current tax charge on the sale of a minority investment in 2017
(2017: $28m). In 2017 there was also a $7m deferred tax
credit in respect of the impairment charge relating to an associate
investment, and a $6m deferred tax credit on Kimpton integration
costs.
|
|
|
h)
|
In
2018, $5m (2017 $32m current tax charge) relates to a prior year
current tax credit in respect of the "transition tax" introduced in
December 2017 as a result of significant US tax reform. 2017
has been restated to reflect the re-measurement arising from the
significant US tax reform on the deferred taxes created or
eliminated by IFRS 15. The 2017 restated amounts include a
$112m deferred tax credit as a result of the US tax reform and a
$10m deferred tax credit representing a reduction in the Group's
unremitted earnings provision.
|
|
8.
|
Tax
|
|
|
The tax
charge on profit from continuing operations, excluding the impact
of exceptional items (note 7) and System Fund*, has been calculated
using a tax rate of 22% (2017 29%) analysed as
follows:
|
|
|
Year ended 31 December
|
2018
|
2018
|
2018
|
2017
|
2017
|
2017
|
|
|
|
|
Profit
$m
|
Tax
$m
|
Tax rate
|
Profit
Restated
$m
|
Tax
Restated
$m
|
Tax rate Restated
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Before
exceptional items and System Fund
|
735
|
(160)
|
22%
|
686
|
(200)
|
29%
|
|
|
|
System
Fund
|
(146)
|
-
|
|
(34)
|
(3)
|
|
|
|
|
Exceptional
items (note 7)
|
(104)
|
27
|
|
4
|
88
|
|
|
|
|
|
_____
|
_____
|
|
_____
|
_____
|
|
|
|
|
|
485
|
(133)
|
|
656
|
(115)
|
|
|
|
|
|
_____
|
_____
|
|
_____
|
_____
|
|
|
|
|
Analysed
as:
|
|
|
|
|
|
|
|
|
|
|
UK
tax
|
|
(21)
|
|
|
7
|
|
|
|
|
Foreign
tax
|
|
(112)
|
|
|
(122)
|
|
|
|
|
|
_____
|
|
|
_____
|
|
|
|
|
|
|
(133)
|
|
|
(115)
|
|
|
|
|
|
|
_____
|
|
|
_____
|
|
|
|
|
* See
the Use of Non-GAAP measures section in the Business
Review.
|
|||||||
|
9.
|
Earnings per ordinary share
|
|
|
Basic
earnings per ordinary share is calculated by dividing the profit
for the year available for IHG equity holders by the weighted
average number of ordinary shares, excluding investment in own
shares, in issue during the year.
Diluted
earnings per ordinary share is calculated by adjusting basic
earnings per ordinary share to reflect the notional exercise of the
weighted average number of dilutive ordinary share awards
outstanding during the year.
Adjusted
earnings per ordinary share* is disclosed in order to show
performance undistorted by exceptional items, to give a more
meaningful comparison of the Group's
performance.
Additionally,
following the adoption of IFRS 15, earnings attributable to the
System Fund are excluded from the calculation of adjusted earnings
per ordinary share, as IHG has an agreement with the IHG Owners
Association to spend Fund income for the benefit of hotels in the
IHG System such that the Group does not make a gain or loss from
operating the Fund.
IHG
also records an interest charge on the outstanding cash balance
relating to the IHG Rewards Club programme. These interest
payments are recognised as interest income for the Fund and
interest expense for IHG. The System Fund also benefits from
the capitalisation of interest related to the development of the
next-generation Guest Reservation System. As the Fund is
included on the Group income statement, these amounts are included
in the reported Group net financial expenses. Given that all
results related to the System Fund are excluded from the
calculation of adjusted earnings per ordinary share, these interest
amounts are deducted from profit available for equity
holders.
|
|
|
Continuing and total operations
|
2018
|
2017
Restated
|
|
|
|
Basic earnings per ordinary share
|
|
|
|
|
|
Profit
available for equity holders ($m)
|
351
|
540
|
|
|
|
Basic
weighted average number of ordinary shares (millions)
|
190
|
193
|
|
|
|
Basic
earnings per ordinary share (cents)
|
184.7
|
279.8
|
|
|
|
|
_____
|
_____
|
|
|
|
Diluted earnings per ordinary share
|
|
|
|
|
|
Profit
available for equity holders ($m)
|
351
|
540
|
|
|
|
Diluted
weighted average number of ordinary shares (millions)
|
192
|
194
|
|
|
|
Diluted
earnings per ordinary share (cents)
|
182.8
|
278.4
|
|
|
|
|
_____
|
_____
|
|
|
|
* See
the Use of Non-GAAP measures section in the Business
Review.
|
|
|
|
|
|
|
|
|
|
|
|
|
2018
|
2017
Restated
|
|
|
|
Adjusted earnings per ordinary share
|
|
|
|
|
|
Profit
available for equity holders ($m)
|
351
|
540
|
|
|
|
Adjusting
items ($m):
|
|
|
|
|
|
|
System
Fund revenues and expenses
|
146
|
34
|
|
|
|
Interest
attributable to the System Fund
|
(19)
|
(13)
|
|
|
|
Tax
attributable to the System Fund
|
-
|
3
|
|
|
|
Exceptional
items before tax (note 7)
|
104
|
(4)
|
|
|
|
Tax on
exceptional items (note 7)
|
(22)
|
2
|
|
|
|
Exceptional
tax (note 7)
|
(5)
|
(90)
|
|
|
|
_____
|
_____
|
|
|
|
Adjusted
earnings ($m)
|
555
|
472
|
|
|
|
Basic
weighted average number of ordinary shares (millions)
|
190
|
193
|
|
|
|
Adjusted
earnings per ordinary share (cents)
|
292.1
|
244.6
|
|
|
|
|
_____
|
_____
|
|
|
|
Adjusted diluted earnings per ordinary share
|
|
|
|
|
|
Diluted
weighted average number of ordinary shares (millions)
|
192
|
194
|
|
|
|
Adjusted
diluted earnings per ordinary share (cents)
|
289.1
|
243.3
|
|
|
|
|
_____
|
_____
|
|
|
|
The
diluted weighted average number of ordinary shares is calculated
as:
|
||
|
|
|
2018
millions
|
2017
millions
|
|
|
Basic
weighted average number of ordinary shares
|
190
|
193
|
|
|
Dilutive
potential ordinary shares
|
2
|
1
|
|
|
|
_____
|
_____
|
|
|
|
192
|
194
|
|
|
|
_____
|
_____
|
|
10.
|
Dividends and shareholder returns
|
||||||
|
|
|
2018
cents per share
|
2017
cents per share
|
2018
$m
|
2017
$m
|
||
|
|
Paid
during the year:
|
|
|
|
|
||
|
|
|
Final
(declared for previous year)
|
71.0
|
64.0
|
130
|
127
|
|
|
|
|
Interim
|
36.3
|
33.0
|
69
|
62
|
|
|
|
|
Special
|
-
|
202.5
|
-
|
404
|
|
|
|
|
_____
|
_____
|
_____
|
_____
|
||
|
|
|
107.3
|
299.5
|
199
|
593
|
||
|
|
|
_____
|
_____
|
_____
|
_____
|
||
|
|
|
|
|
|
|
||
|
|
Proposed
for approval at the Annual GeneralMeeting (not recognised as a
liability at31 December):
|
||||||
|
|
|
Final
|
78.1
|
71.0
|
141
|
135
|
|
|
|
|
_____
|
_____
|
_____
|
_____
|
||
|
|
In
October 2018, the Board announced a $500m return of funds to
shareholders by way of a special dividend of $2.621 per ordinary
share, together with a share consolidation. On 11 January
2019, shareholders approved the share consolidation on the basis of
19 new ordinary shares of 20 340/399p per share for
every 20 existing ordinary shares of 19 17/21p, which became
effective on 14 January 2019 and resulted in the consolidation of
10m shares. The special dividend was paid on 29 January 2019
at a cost of $510m. The dividend and share consolidation had the
same economic effect as a share repurchase at fair value, therefore
reported earnings per share has not been restated.
The
total number of shares held as treasury shares at 31 December 2018
was 6.8m.
|
||||||
|
|
|
|
|
|
|
|
|
|
11.
|
Acquisition of businesses
On 1
July 2018, the Group completed the acquisition of a 51% controlling
interest in a joint venture with Formosa International Hotels
Corporation to acquire the Regent Hotels and Resorts brand and
associated management contracts ('Regent'). Regent is a
leading luxury brand which adds to IHG's brand portfolio at the top
end of the luxury segment.
On 25
July 2018, the Group completed a deal to operate nine hotels under
long-term leases from Covivio (formerly Foncière des
Régions) which operated under the Principal and De Vere Hotel
brands. An additional leased hotel was added to the portfolio
on 13 November 2018, bringing the total to ten at 31 December 2018
('UK portfolio'). Two further leased hotels were added on 14
February 2019. The deal establishes IHG as the leading luxury
hotel operator in the UK. Over the next one to two
years, the hotels will be rebranded to other brands in IHG's luxury
and upscale portfolio.
The
fair values of the identifiable assets and liabilities acquired,
and the purchase consideration, are as follows:
|
|
|
|
$m
|
|
|
Identifiable
intangible assets:
|
|
|
|
Brands
|
58
|
|
|
Management contracts
|
6
|
|
|
Property,
plant and equipment
|
26
|
|
|
Inventories
|
1
|
|
|
Trade
and other receivables
|
11
|
|
|
Cash
and cash equivalents
|
2
|
|
|
Trade
and other payables
|
(18)
|
|
|
Deferred
revenue
|
(8)
|
|
|
Stamp
duty liability
|
(14)
|
|
|
Deferred
tax assets
|
14
|
|
|
Deferred
tax liabilities
|
(11)
|
|
|
|
_____
|
|
|
Net identifiable assets acquired
|
67
|
|
|
Goodwill
|
83
|
|
|
|
_____
|
|
|
Total purchase consideration
|
150
|
|
|
|
_____
|
|
|
Comprising:
|
|
|
|
Cash
paid on acquisition
|
22
|
|
|
Working
capital settlement due
|
(3)
|
|
|
Deferred
consideration
|
22
|
|
|
Contingent
consideration
|
109
|
|
|
|
_____
|
|
|
|
150
|
|
|
|
_____
|
|
|
|
|
|
|
|
$m
|
|
|
Cash flows arising on acquisition:
|
|
|
|
Cash
paid on acquisition
|
22
|
|
|
Settlement
of stamp duty liability
|
14
|
|
|
Contingent
consideration paid
|
4
|
|
|
Less:
cash and cash equivalents acquired
|
(2)
|
|
|
|
_____
|
|
|
|
38
|
|
|
|
_____
|
|
|
|
|
|
12.
|
Reconciliation of profit for the year to cash flow from
operations
|
||
|
|
before contract acquisition costs
|
2018
|
2017
Restated
|
|
|
|
$m
|
$m
|
|
|
|
|
|
|
|
Profit
for the year
|
352
|
541
|
|
|
Adjustments
for:
|
|
|
|
|
Net
financial expenses
|
81
|
72
|
|
|
Income
tax charge
|
133
|
115
|
|
|
Depreciation and
amortisation
|
80
|
78
|
|
|
System
Fund depreciation and amortisation
|
45
|
36
|
|
|
Impairment
|
-
|
18
|
|
|
Other
exceptional items (including System Fund)
|
151
|
(13)
|
|
|
Equity-settled
share-based cost
|
38
|
27
|
|
|
Dividends from
associates and joint ventures
|
5
|
4
|
|
|
Increase in
contract costs
|
(3)
|
(5)
|
|
|
Increase in
deferred revenue
|
141
|
43
|
|
|
Utilisation of
provisions, net of charge
|
(6)
|
-
|
|
|
Retirement benefit
contributions, net of costs
|
(12)
|
(1)
|
|
|
Other
changes in net working capital
|
(37)
|
(36)
|
|
|
Cash
flows relating to exceptional items
|
(137)
|
(44)
|
|
|
Contract assets
deduction to revenue
|
19
|
17
|
|
|
Other
items
|
4
|
(3)
|
|
|
|
_____
|
_____
|
|
|
Total
adjustments
|
502
|
308
|
|
|
|
_____
|
_____
|
|
|
Cash flow from operations before contract acquisition
costs
|
854
|
849
|
|
|
|
_____
|
_____
|
|
13.
|
Net debt
|
||
|
|
|
2018
|
2017
|
|
|
|
$m
|
$m
|
|
|
|
|
|
|
|
Cash
and cash equivalents
|
704
|
168
|
|
|
Loans
and other borrowings - current
|
(120)
|
(126)
|
|
|
Loans
and other borrowings - non-current
|
(2,129)
|
(1,893)
|
|
|
Derivatives
hedging debt values
|
15
|
-
|
|
|
|
_____
|
_____
|
|
|
Net debt*
|
(1,530)
|
(1,851)
|
|
|
|
_____
|
_____
|
|
|
Finance
lease obligations included above
|
(235)
|
(231)
|
|
|
|
_____
|
_____
|
|
|
|
|
|
|
|
* See
the Use of Non-GAAP measures section in the Business
Review.
|
|
|
|
14.
|
Movement in net debt
|
|||
|
|
|
2018
|
2017
|
|
|
|
|
$m
|
$m
|
|
|
|
|
|
|
|
|
|
Net
increase/(decrease) in cash and cash equivalents, net of
overdrafts
|
563
|
(75)
|
|
|
|
Add
back cash flows in respect of other components of net
debt:
|
|
|
|
|
|
Issue
of long-term bonds, including effect of currency swaps
|
(554)
|
-
|
|
|
|
Decrease/(increase)
in other borrowings
|
268
|
(153)
|
|
|
|
|
_____
|
_____
|
|
|
|
Decrease/(increase)
in net debt arising from cash flows
|
277
|
(228)
|
|
|
|
|
|
|
|
|
|
Non-cash
movements:
|
|
|
|
|
|
|
Finance
lease obligations
|
(4)
|
(4)
|
|
|
|
(Increase)/decrease
in accrued interest
|
(3)
|
1
|
|
|
|
Exchange
and other adjustments
|
51
|
(114)
|
|
|
|
_____
|
_____
|
|
|
|
Decrease/(increase) in net debt
|
321
|
(345)
|
|
|
|
|
|
|
|
|
|
Net
debt at beginning of the year
|
(1,851)
|
(1,506)
|
|
|
|
|
_____
|
_____
|
|
|
|
Net debt at end of the year
|
(1,530)
|
(1,851)
|
|
|
|
|
_____
|
_____
|
|
|
15.
|
Commitments and guarantees
|
|
|
At 31
December 2018, the amount contracted for but not provided for in
the financial statements for expenditure on property, plant and
equipment, intangible assets and key money was $136m (2017 $104m),
including a commitment to spend $33m on the acquired UK portfolio
(see note 11) within two and a half years of the acquisition
date. A loan facility of $5m (2017 $5m) has also been made
available to a hotel owner; this was undrawn at 31 December
2018. There were no commitments to invest in associates at 31
December 2018 (2017 $33m).
In
limited cases, the Group may provide performance guarantees to
third-party hotel owners to secure management contracts. At
31 December 2018, the amount provided in the financial statements
was $3m (2017 $6m) and the maximum unprovided exposure under such
guarantees was $42m (2017 $31m).
The
Group may guarantee bank loans made to facilitate third-party
ownership of hotels under IHG management or franchise
contracts. At 31 December 2018, there were guarantees of $43m
in place (2017 $54m).
|
|
16.
|
Contingencies
Security incidents
|
|
|
In
2016, the Group was notified of (a) a security incident at a number
of Kimpton hotels that resulted in unauthorised access to guest
payment card data, and (b) security incidents at a number of IHG
branded hotels including the installation of malware on servers
that processed payment cards used at restaurants and bars of 12 IHG
managed properties, together the Security Incidents. A
provision of $5m was made at 31 December 2016 to cover the
estimated cost of reimbursing the impacted card networks for
counterfeit fraud losses and related expenses. During the
year, the Group has reached agreement with the card networks on the
assessments payable, $3m in total, the vast majority of which have
been settled under the Group's insurance programme, with the
balance expected to be similarly recovered. As a consequence,
a provision is no longer required at 31 December 2018.
The
Group may also be exposed to investigations regarding compliance
with applicable State and Federal data security standards, and
legal action from individuals and organisations impacted by the
Security Incidents. Due to the general nature of the
regulatory enquiries received and class action filings to date,
other than mentioned below, it is not practicable to make a
reliable estimate of the possible financial effects of any such
claims on the Group at this time. These contingent
liabilities are potentially recoverable under the Group's insurance
programmes, although specific agreement will need to be reached
with the relevant insurance providers at the time any claim is
made.
To
date, four lawsuits have been filed against IHG entities relating
to the Security Incidents. One of these has been withdrawn
and a preliminary settlement, expected to be not more than $2m, has
been agreed in respect of another lawsuit, although this is
expected to be recovered from insurance.
Tax
Tax
related developments during 2018 have confirmed that the Group no
longer considers itself at risk of exposure to the outcome of the
EU's State Aid investigation into the UK's Controlled Foreign
Company rules.
Other
From
time to time, the Group is subject to legal proceedings the
ultimate outcome of each being always subject to many uncertainties
inherent in litigation. The Group has also given warranties
in respect of the disposal of certain of its former subsidiaries.
It is the view of the Directors that, other than to the
extent that liabilities have been provided for in these Financial
Statements, it is not possible to quantify any loss to which these
proceedings or claims under these warranties may give rise,
however, as at the date of reporting, the Group does not believe
that the outcome of these matters will have a material effect on
the Group's financial position.
At 31
December 2018, the Group had no other contingent liabilities (2017
$nil).
|
|
17.
|
Events after the reporting period
|
|
|
On 12
February 2019, the Group completed the acquisition of Six Senses
Hotels Resorts Spas ('Six Senses') for $300m paid in cash.
Six Senses is a leading operator of top-tier luxury hotels, resorts
and spas with a world-renowned reputation for wellness and
sustainability. Six Senses will sit at the top of IHG's
luxury portfolio.
The
assets and liabilities acquired largely comprise intangible assets,
being the Six Senses' brands, management contracts and
goodwill. Due to the close proximity of the acquisition date
to the date of these preliminary financial statements, the initial
accounting for the business combination is incomplete and the Group
is unable to provide a quantification of the fair values of the
assets and liabilities acquired. The Group will include a
provisional acquisition balance sheet with its interim results for
2019.
|
|
18.
|
Group financial statements
|
|
|
The
preliminary statement of results was approved by the Board on 18
February 2019. 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. Full Group financial statements for
the year ended 31 December 2018 will be delivered to the Registrar
of Companies in due course. Financial information for the year
ended 31 December 2017 has been extracted from the Group's
financial statements for that year as filed with the Registrar of
Companies.
|
|
|
Auditor's review
|
|
|
The
auditor, Ernst & Young LLP, has given an unqualified report in
respect of the Group's financial statements for the year ended 31
December 2018 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.
|
|
|
|
InterContinental Hotels Group PLC
|
|
|
|
(Registrant)
|
|
|
|
|
|
|
By:
|
/s/ F. Cuttell
|
|
|
Name:
|
F.
CUTTELL
|
|
|
Title:
|
ASSISTANT
COMPANY SECRETARY
|
|
|
|
|
|
|
Date:
|
19 02 2019
|
|
|
|
|