InterContinental Hotels Group PLC (IHG) Q2 2022 Earnings Call Transcript

For the period ending June 30, 2022

August 9, 2022 4:30 a.m. ET

Prepared Remarks

Questions and Answers

Call Participants

Prepared Remarks:

Operator

Stuart Ford

Welcome, everyone, from me. Just to refer to our stock exchange announcement on Page 2. It's the usual cautionary note regarding forward-looking statements in regards to anything that may be said on this morning's call. That statement as well as the presentation and our supplementary information can be downloaded from the Investor Relations section of IHG PLC website.

And with that, let me hand over to Keith.

Keith Barr

Thanks, Stuart, and good morning, everyone. In a moment, Paul will talk you through our financial performance for the half. But first, let me share some key highlights.

We are well on a path to recovery and are edging ever closer to 2019 overall performance levels. We saw continued strong trading in the first half of 2022 with an increased demand in most of our markets. Global RevPAR for the half was up 51% versus 2021, and we saw strong momentum build in Q2 with RevPAR just 4.5% behind pre-pandemic levels.

Looking around the world. The Americas region has already surpassed 2019 performance with RevPAR up 3.5% in the second quarter. Our EMEAA region saw excellent sequential improvement as travel restrictions have been lifted and leisure business came through strongly. By contrast, Greater China had a challenging period due to COVID-19 restrictions, although we have seen a strong recovery in recent trading as those restrictions have lifted.

In terms of growth, our adjusted year-on-year net system size growth was 3% with gross growth of 4.8%. In total, 15,000 rooms were opened across nearly 100 hotels, and we passed the 6,000-hotel milestone globally. 31,000 rooms were added to our pipeline across 210 hotels.

Our operating profit more than doubled versus last year, which puts it just 8% behind 2019 levels. And with net debt coming down further, together with the confidence we have in the strength and positioning of our business, we are pleased to be reinstating an interim dividend 10% higher than the interim payment in 2019, alongside launching a share buyback program that will additionally return $500 million of capital to our shareholders.

Our performance reflects the continued focus on our strategy to build a stronger business for our guests and owners around the world while we continue to strengthen the foundations for future growth.

I will come back and talk more about these areas later in the presentation. Let me first hand over to Paul to take you through more of our details of our financial results.