Intercontinental Hotels : Introduction to IHG

Intro to IHG

Investor Presentation

May 2024

Cautionary note regarding forward-looking statements

This presentation may contain projections and forward looking-statements. The words "believe", "expect", "anticipate", "intend" and "plan" and similar expressions identify forward-looking statements. All statements other than statements of historical facts included in this presentation, including, without limitation, those regarding the Company's financial position, potential business strategy, potential plans and potential objectives, are forward-looking statements. Such forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the Company's actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Such forward- looking statements are based on numerous assumptions regarding the Company's present and future business strategies and the environment in which the Company will operate in the future. Further, certain forward-looking statements are based upon assumptions of future events which may not prove to be accurate. The forward-looking statements in this document speak only as at the date of this presentation and the Company assumes no obligation to update or provide any additional information in relation to such forward-looking statements.

The merits or suitability of investing in any securities previously issued or issued in future by the Company for any investor's particular situation should be independently determined by such investor. Any such determination should involve, inter alia, an assessment of the legal, tax, accounting, regulatory, financial, credit and other related aspects of the transaction in question.

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IHG's strong business model: sustainable competitive advantage

A leading global hospitality company with 6,300+ open hotels in more than 100 countries and a further 2,000+ in the pipeline representing +31% rooms growth

Well-invested portfolio and enterprise platform

Proven ability to capture structural demand and supply growth

High-value geographic

and chain scale diversification

Efficient cost base,

increasing margins and

growing earnings

Asset-light,fee-based, mainly franchised

Strong cash conversion and capital allocation

Robust pipeline

delivering

multi-year growth

Built high barriers

to entry

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Underpinned by clear purpose, ambition and strategic priorities

OUR PURPOSE		OUR AMBITION
WHAT WE DO		WHY WE DO IT
Provide True	To be the hotel company of choice
Hospitality for Good		for guests and owners

OUR STRATEGIC PRIORITIES

HOW WE MAKE IT HAPPEN

RELENTLESS	BRANDS	LEADING	CARE FOR
FOCUS ON	GUESTS AND	COMMERCIAL	OUR PEOPLE,
GROWTH	OWNERS LOVE	ENGINE	COMMUNITIES

AND PLANET

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Asset light, mainly franchised, and geographically diverse

System size and pipeline
System size (rooms):			Luxury
2%	<1%	180k	520k		11%
27%	70%		19% 55%	Upscale/
				Upper
946k	247k 26%	946k	Upscale	946k
23%

Franchised	Exclusive Partners	Americas	EMEAA	Greater China
Managed	OLML

Pipeline (rooms):					Luxury
1%	<1%	111k		110k		11%
41%	58%		36% 36%	Upscale/
					Upper
305k		305k	Upscale	305k
	37%
			28%
Franchised	Exclusive Partners		85k	Americas	EMEAA Greater China
Managed	OLML

Note: data as at 31 March 2024

Strong competitive position in an industry where branded players are gaining market share

Midscale/	With a larger share
Upper	of the active pipeline
Midscale
66%

~2.5x	~10%
~4%

Midscale/	IHG share	IHG share
Upper	of global	of global
Midscale	room supply	active pipeline
52%	>40% of IHG pipeline

under construction

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Our asset light business model

FranchisedManaged

70%	27%
Fee revenue:	Fee revenue:
Royalty Fee:	Base Management Fee:
fixed percentage of	fixed percentage of
rooms revenue	total hotel revenue

Incentive Management Fee: based on hotel's profitability or cash flows

Note: data as at 31 March 2024

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Exclusive Partners

2%

Fee revenue:

We receive marketing, distribution, technology and other fees for providing access to our enterprise platform.

Owned, Leased & Managed Lease <1%

We record the entire revenue and profit of the hotel in our financial statements.

This 'asset heavy' element of IHG's estate has reduced from >180 hotels 20 years ago, to 17 hotels as of 31 March 2024.

Brand portfolio expansion since 2015

Nine brands added to our industry-leading portfolio through a combination of organic launches, acquisitions and commercial partnerships

LUXURY & LIFESTYLE

Legend

New Brand

PREMIUM

ESSENTIALS

SUITES

EXCLUSIVE PARTNERS

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Balanced portfolio mix of 19 preferred brands across segments

Luxury & Lifestyle and Premium now represent 29% of the system and 41% of the pipeline

LUXURY & LIFESTYLE

IHG SYSTEM

14%

IHG PIPELINE

22%

PREMIUM

IHG SYSTEM

15%

IHG PIPELINE

19%

ESSENTIALS

IHG SYSTEM

60%

IHG PIPELINE

46%

SUITES EXCLUSIVE PARTNERS

IHG SYSTEM	IHG SYSTEM
	9%
IHG PIPELINE	IHG PIPELINE

12%

2%

1%

Note: data as at 31 March 2024

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Our growth algorithm

Strong track record, recovery and potential for future growth compounding and sustainable shareholder value creation

RevPAR

Net system size growth

Fee margin expansion

Cash conversion

Ordinary dividends

Total capital returned to shareholders

Adjusted EPS growth

IHG's strong track record through to 2019

+3.9% p.a.

+3.2% p.a.

+130bps p.a.

>100%

+11.0% CAGR

$13.7bn

+11.4% CAGR

IHG's strong recovery 2023 vs 2019

+11% ahead

System size +7% larger

+520bps higher

>100%

+21% higher

Further $1.7bn returned

+24% higher

IHG's strong potential looking ahead

HSD % CAGR in fee revenue through combination of RevPAR and system growth

+100-150bps p.a. from operating leverage, plus potential for additional improvements

~100% adjusted earnings into adjusted free cash flow

Continue sustainably growing

Continue returning surplus capital,

whilst targeting financial leverage 2.5-3.0x

+12-15% CAGR

Notes: track record of REVPAR, NSSG and fee margin are the average annual improvements and Adjusted EPS is the CAGR each for the decade through to 2019; cash conversion is cumulative adjusted earnings conversion into adjusted free cash flow for 2015 to 2019 and 2019 to 2023; ordinary dividends CAGR is 2003 to 2019; ordinary dividend for 2023 vs 2019 is that proposed for each year; total capital returned is cumulative for 2003 to 2019 and 2020 to 2023. Definitions for non-GAAP measures can be found in the 'Use of key performance measures and non-GAAP measures' section of IHG's FY23 results, along with reconciliations of these measures to the most directly comparable line items within the Financial Statements.

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Continuing our capital allocation approach to routinely return surplus capital to shareholders: $500m 2022, $750m 2023, $800m 2024

#1: Invest in the business		#2: Sustainably grow the		#3: Return surplus funds
to drive growth		ordinary dividend		to shareholders

Objective of maintaining an investment grade credit rating

2.5x - 3.0x Net Debt:Adjusted EBITDA under normalised conditions As of 31 December 2023: Net debt1 $2,272m / EBITDA2 $1,086m = 2.1x

$750m buyback completed in 2023

10.6m shares repurchased at average price £55.88

6.1% reduction in share count to 165.2m at 31 December 2023

FY23: ~$250m ordinary dividends + $750m buyback = ~$1.0bn or 10% of opening market cap

1. Definitions for non-GAAP measures can be found in the 'Use of key performance measures and non-GAAP measures' section of IHG's FY23 results, along with reconciliations of these measures to the most directly comparable line items within the Financial Statements.

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