InterContinental Hotels Group PLC

Hello, everyone, and welcome to today's IHG Third Quarter Trading Update call. My name is Seb, and I'll be the operator for your call today. If you would like to ask a question during the Q&A session, please press star 1 on your telephone keypad. If you would like to withdraw from the queue, please press star 2. I will now hand the call over to Stuart Ford to begin the call. Please go ahead.

Thanks, Seb. Good morning, everyone, and welcome to IHG Hotel and Resorts conference call covering the 2025 third quarter trading update. I'm Stuart Ford, Senior Vice President and Head of Investor Relations at IHG, and I'm joined this morning by Ellie Maloof, our Chief Executive Officer, and Michael Glover, our Chief Financial Officer. Just to remind listeners on the call that in discussions today, the company may make certain forward-looking statements as defined under U.S. law. please refer to this morning's announcement and the company's SEC filings for factors that could lead actual results to differ materially from those expressed in or implied by any such forward-looking statements. For those analysts or institutional investors who are listening via our website, may I remind you that in order to ask questions, you will need to dial in using the details on page three of this morning's R&S release. The release, together with the usual supplementary data pack for the third quarter, can be downloaded from the Results and Presentations section under the Investors tab on ixgplc.com. Now over to Michael.

Thanks, Stuart, and good morning, everyone. I will start today by providing an update on trading and development activity, as well as covering off some other financial updates. I will then hand over to Ellie, who will give an overview of our new collection brand launch and his summary. We will then open up the call for Q&A. Global RepR grew 0.1% in Q3. As anticipated, this was similar to the performance seen in Q2 and was driven by strong trading in the EMEAA, along with further improvement in Greater China. Demand remained robust, with occupancy up 0.4 percentage points, while rate eased by 0.4%. For the year to date, global RepR grew 1.4%. In the Americas, red part for the region as a whole was down 0.9% in the quarter, with the U.S. 1.6% lower given the continuation of some slower trading conditions for the industry. This included government travel continuing to be around 20% lower than the prior year, lower international inbound travel, and there was also some small impact at the end of September from the timing of Jewish holidays. Whilst we've seen some softer demand in the U.S. for a couple of quarters now, we remain confident for the return to growth in due course when economic uncertainty further subsides and the travel industry's fundamental tailwinds prevail. It is encouraging to see the ongoing stability to the U.S. jobs market and the expectations for substantial infrastructure investment and continued economic growth. In EMEA A, we saw another strong quarter with Repar up 2.8%, taking year-to-date growth to 3.8% overall. Occupancy in the quarter was up 1.6 percentage points to 75.3%, and rate was up 0.6%. By major geographic markets within the region, Repar ranged from 0.1% growth in continental Europe where France and Germany in particular had tough comparatives. But this was offset by leisure-driven growth elsewhere, particularly in Southern Europe. There was growth of 2.8% in the UK and 3.3% in East Asia and Pacific. And there was a very strong 9.5% growth in the Middle East, driven by the UAE, supported by a favorable events calendar and infrastructure projects. In Greater China, Repar was 1.8% lower in Q3, a further sequential improvement on the 3% decline in Q2 and the 4.8% reduction in full year 2024. Occupancy was up 0.6 percentage points to 64.4%, while rate was down 2.7%. There was strong growth in Hong Kong, While on the mainland, Tier 1 cities also outperformed, down only 1.2%, compared to Tiers 2 to 4, which were down 3.9%, with further impact from increased international outbound leisure trips. We continue to remain encouraged by the breadth and strength of China's economic growth and the attractive long-term secular growth drivers, such as the increasing scale of the middle class, and how that triggers more demand to travel and experience. In terms of the overall demand drivers on a global basis, rooms revenue on a comparable hotel basis for business stays was up 4% globally, while leisure and groups were down by 2% and 4% respectively. As a reminder, all three drivers saw growth on a global basis in the first half of the year, while the headwinds seen by leisure and groups and the third quarter were predominantly due to the trading conditions and the year-over-year comps in the U.S. Moving now to system growth, we opened 14,500 rooms across 99 hotels globally in the quarter, up 17% year-on-year, excluding the no-go conversions. This produced 7.2% gross growth year-on-year and 5.2% net growth when excluding the Venetian removal. After the record levels of opening seen across the business in the first half, the strong pace has continued. The 46,000 rooms added year to date represents our strongest ever performance through the first three quarters. Our signings performance has been just as strong with nearly 23,000 rooms added to the pipeline in the quarter. an increase of 18% on the same period last year. Excluding last year's November signings, both our EMEAA and Greater China Reasons are tracking at record pace through the first three quarters of the year, and the Americas also saw strong signings growth in the quarter. Roughly half of all our signings globally were quicker-to-market conversions, reflecting the continued breadth and attractiveness of our brands and the benefits to owners of joining ISG's enterprise. Looking now at each region in more detail, the Americas' gross system growth was 3.6% year-on-year, with a further 2,700 rooms opened in Q3. Net system growth was 1.5% year-on-year, adjusting for the impact of removing the 7,000 Venetian resort rooms. 7,600 rooms were signed to the America's Pipeline in the quarter, an increase of 14% on last year. These included 33 hotels signed across the Holiday Inn brand family, 16 across our Extended Stay brand, and eight VOCO conversions. Garner, our mid-scale conversion brand, also saw good progress in the quarter with another nine signings. And the brand now has 25 open, and 49 in the pipeline in the region. Conversions represented over half of all rooms opened and signed in the quarter. In the EMEAA region, growth system growth was 10.4% year-on-year, with 4,200 rooms opened in the quarter, an increase of 25% versus the same period last year when excluding the November portfolio. Net system growth was 9.1% year-on-year and 5.2% year-to-date, which puts 2025 on track for record levels of system growth in the region. 7,100 rooms were added to the EMEAA pipeline in the quarter, which was growth of 22% on last year. There were 12 hotels signed across luxury and lifestyle brands, including two incredible properties for regions nine Crown Plaza, and eight Holiday Inn signings, as well as five further Garner properties as it developed across the region. Conversions represented 60% of all room openings and approaching 40% of room signings in the quarter. Our Greater China region remains on track for a consecutive year of record development performance. 7,600 rooms opened in the quarter gross system growth to 12.8% year-on-year. These openings were up nearly 40% versus last year and have contributed to year-on-year net system growth of 9.8%. Highlights include the opening of the Atwell Suites Shanghai Wooning, marking the debut of this brand in the region, as well as the Kempton SimShaw Sui, which represents the first for the brand in Hong Kong and is a truly incredible location steps from Victoria Harbors. Signings of 7,900 rooms in the quarter were up nearly 20% on last year. These included 17 Holiday Inn Express and 16 Holiday Inn properties, along with six mocos and three luxury and lifestyle signings, further demonstrating our strength across chain scales in the regions. Conversions represented around 40% of all rooms opened and signed in the quarter. Moving next to update you on the share buyback, we are currently 78% of the way through this year's $900 million program. To date, this has reduced our share count by a further 3.9%. Today's statement also notes for you that we completed another bond issuance in the quarter. We have a total of $4.1 billion of bonds outstanding with very evenly spread maturities and a blended borrowing cost of around 4.3%. The view of leverage at the end of 2025 remains around the middle of our target range of 2.5 to three times net debt to even it off. One thing that is new news in today's statement at the top of page three is that IHG intends to change the currency of which our ordinary shares are traded on the London Stock Exchange from British pounds to U.S. dollars, with the change planned from the start of January 2026. This change has recently became possible whilst maintaining FTSE index inclusion following updates to the index rules administered by the FTSE Russell Group. IHG has reported its financial results in U.S. dollars for the past 17 years, Changing our share price currency to match our reporting currency will help reduce the translational impact of exchange rate fluctuations on the share price, therefore better aligning the share price to financial performance and simplifying the investment appraisal of IHG. The change will not impact IHG's lending listing in any other way, and the change will have no impact on IHG's ADR listing in New York. The change is simply to the currency of our share price and should not be perceived as a precursor to any other changes. To wrap up, touching briefly on our outlook, as we've said in today's statement, we remain on track to meet current full-year profit and earnings expectations. We publish details of consensus on our website based on the Visible Alpha data service. This currently sees consensus average for operating profit from reportable segments as $1,259,000,000. The profit consensus implies growth of 12% on 2024's results. And the adjusted earnings per share consensus, which is $0.499, implies growth of 15%. This would result in another year of strong delivery on our growth algorithm. And with that, I'll hand over to Ellie.