1、ANNUAL REVIEW AND SUMMARY FINANCIAL STATEMENT 2003WE WANT TO CREATE THE WORLDS LEADING PLACES TO MEET, RELAX AND HOTEL COMPANY THE WORLD OVER AND ENSURE THAT WE ARE SEEN AS THE2 CHAIRMANS STATEMENT3 CHIEF EXECUTIVES REVIEW6 AT A GLANCE8 DRIVING REVENUE10 BUSINESS REVIEWS17 CORPORATE AND SOCIAL RESPO
2、NSIBILITY18 SUMMARY FINANCIAL STATEMENT20 THE BOARD21 SUMMARY DIRECTORS REPORTAND CORPORATE GOVERNANCE22 SUMMARY REMUNERATION REPORT24 INVESTOR INFORMATION25 FINANCIAL CALENDAR AND CONTACTSCURRENT TRADINGWe have for some time been cautious whencommenting on current trading. However,trading over the
3、last six months now gives us some confidence to say that we believeconditions are improving steadily in both theAmericas and the UK. Furthermore trading in Asia Pacific has recovered substantiallysince the SARS scare. However, ContinentalEurope remains difficult and this is beingexacerbated by the w
4、eakness of the US dollar.FINANCIAL HIGHLIGHTS Hotels pro forma operating profit beforeexceptional items for the 12 months to 31 December 2003 down 16% to 200million (down 11% at constant currency). Total Hotels pro forma operating profitbefore exceptional items improved in thirdand fourth quarters w
5、ith fourth quarter up 11% to 49 million. Continued excellent performance for Soft Drinks with pro forma operating profitbefore exceptional items up 22% for the 12 months to 31 December 2003 againstprior year, to 83 million. Overhead cost reductions in 2003 of$76 million against 2003 budget; annualis
6、edsavings of $110 million exceeding target of $75 million. Significant disposals made in 2003 at or above net book value with proceeds of 254 million. Further disposals withproceeds of 20 million already in 2004. Continued strong cash and capital control. Net debt reduced to 569 million at 31 Decemb
7、er 2003. 250 million share repurchase programmeannounced. Disposal programme to involve further sale of assets with net book value ofbetween 800 million and 1 billion subject to no significant adverse changes in market conditions. Soft Drinks exclusive bottling agreementwith PepsiCo Inc. renewed. Op
8、portunity for an initial public offering from 2005.1DREAM. WE WANT TO BE THE MOST PREFERRED, ADMIRED AND SUCCESSFULPREFERRED PLACE TO WORK AND THE PREFERRED CHOICE OF OUR INVESTORSInterContinental Hotels Group is the worlds most global hotels group,operating in nearly 100 countries andterritories. W
9、ith over 3,500 hotelsand 535,000 rooms, our propertiesaccommodate the equivalent of theentire UK population every six months.The Group also has a controllinginterest in Britvic, the second largestsoft drinks manufacturer in the UK.David Webster Chairman2InterContinental Hotels Group 2003CHAIRMANS ST
10、ATEMENT OUR VISION AND GOALSFollowing the successful Separation of the Six Continents businesses in April 2003,InterContinental Hotels Group (IHG) has established itself as a powerful independent hotel company. We have achieved solid financial results to the end of December 2003,despite the well-doc
11、umented, extremely difficult market conditions, the level ofcorporate change, and the operational challenges the trading environment haspresented us with. We now have a clear vision for this business to become the mostpreferred, admired and successful hotel company in the world. We want our brandsto
12、 be the most sought after in the industry, our employees to feel there is no betterplace to work and develop new skills and our shareholders to benefit from increasedreturns faster than our competitors.OUR PERFORMANCE IN A DIFFICULT TRADING ENVIRONMENTIn the period, we have faced extremely difficult
13、 trading conditions, but our resultswere sound. Turnover for the 12 month period to December 2003, the time period to be used on an ongoing basis as a result of our new calendar financial year, rose 1% to 2.16 billion while pro forma operating profits were down 8% at 283 million.Adjusted pro forma e
14、arnings per share were 20.8p, down 5%. As promised at thetime of Separation, we are recommending a final dividend of 9.45p per share,making a total dividend for IHG for the 12 month period of 13.5p per share which will, subject to shareholder approval at the AGM, be paid on 7 June 2004.The results f
15、or Hotels were mixed. However, we managed to remain competitive in a generally depressed market. The Americas region saw relatively stable tradingparticularly from our franchise business. Recent political instability, exacerbated bythe war in Iraq, continues to depress international travel and this
16、was most acutely felt in Europe. However, Holiday Inn UK showed a strong performance against itsrelative market particularly in the fourth quarter. Growth in the first quarter of 2003 in our Asia Pacific business was reversed by the impact of the SARS virus; however,the region had shown some signifi
17、cant signs of recovery by December. Britvic,our soft drinks business, has continued to perform exceptionally well, against abackdrop of favourable summer trading conditions, registering record pro formaoperating profits for the 12 months to December 2003 of 83 million, up 22%,on sales of 674 million
18、, also a record high.A TALENTED AND MOTIVATED TEAMThis is my first statement since my appointment as Chairman of InterContinentalHotels Group on 1 January 2004 and indeed the first period end accounts for the Group as a stand alone business. I am delighted and excited to be part ofan organisation wi
19、th such a formidable portfolio of brands and an unmatchedpresence in world markets. The success of this business depends on the work of nearly 30,000 employees worldwide and the commitment of our franchisors.I have been hugely impressed by their energy and am confident that the Group is well positio
20、ned to grow, once more stable economic conditions return.We are confident we have the right strategy in place to achieve these goals. As trading improves, we expectthe Company to be strongly cash-generative, and we are committed to returning funds to shareholders at the appropriate time.TRIBUTE TO S
21、IR IAN PROSSERSir Ian Prosser retired as our Chairman at the end of December 2003, afterdedicating nearly 35 distinguished yearsto the Group. He led us through severalphases of development including theacquisition of Holiday Inn in 1988 andInterContinental Hotels ten years later.He oversaw the dives
22、tment of BassBrewers and, with the Separation of theSix Continents businesses, the creation of two powerful independent companies InterContinental Hotels Group andMitchells & Butlers. As Chairman ofthe World Travel and Tourism Council,Sir Ian was a persuasive advocate for our industry. His contribut
23、ion and visionwill be greatly missed. We wish him well for the future.3CHIEF EXECUTIVES REVIEWProgress in difficult conditions.Following the announcement in October 2002 of the Separation of Six Continents we initiated action in four key areas in order to improve radically our operating performance:
24、 redesigning the organisation to align it behind the strategic priorities and speed up decision making; changing the management to ensure the right people are in the right jobs; reducing the cost base through eliminating unnecessary work andstreamlining processes; and optimising capital deployment t
25、hrough a rigorous hotel by hotel review to determine appropriate levels of ownership and capital expenditure.This change programme coincided with probably the most difficult periodexperienced by the hotel industry in living memory. Sluggish economies around the world, the threat of war in Iraq follo
26、wed by war, the advent of Severe Acute Respiratory Syndrome (SARS) and the reluctance ofAmericans to travel, particularly to France, all combined to make it so.Despite these difficult trading conditions, I am delighted to report that we have made real progress on all fronts. As a result, we have bui
27、lt thefoundation of a solid and sustainable recovery.ORGANISATION REDESIGNThe redesign of the organisation was completed by the end of January 2003and has now been substantially implemented. What remains to be done will be completed, as planned, by the end of 2004.DRIVEREVENUEREDUCEOVERHEADCOSTSLOWE
28、RCAPITALINTENSITYIMPROVED RETURNON CAPITAL EMPLOYEDAND FREE CASH FLOW4InterContinental Hotels Group 2003CHIEF EXECUTIVES REVIEWDec 2002Dec 2003TOTAL MEMBERSHIP OFPRIORITY CLUB REWARDS(Millions)15.619.2STRENGTHENING MANAGEMENTOnce the new organisation structure was identified we immediately began tos
29、trengthen the management team throughout the world. The most senior newappointments were Richard Hartman (Europe, Middle East and Africa), PatrickImbardelli (Asia Pacific), Peter Gowers (Global Brand Services) and Jim Claunch(Central Shared Services).Steve Porter (the Americas), Richard Hartman and
30、Patrick Imbardelli, our threeregional presidents, have some 80 years of experience in the hotel industry. Each of them has built a team around them with the right mix of ability and experience to match the particular challenges of their regions. We now have equally strong teams within each of the ce
31、ntral functions.REDUCING COSTSIn February last year we announced a radical cost reduction programme with a targetversus our original budget for 2003 of reducing costs by at least $100 million, withactual savings for 2003 of $40 million and an annualised run rate by the end of theyear of $75 million.
32、 I am pleased to say that we have exceeded each of these targets.Actual savings against budget for 2003 were $76 million and the run rate by the endof the year was $110 million. Our new target is a saving of $120 million against the2003 budget by the end of 2004. We currently expect total overheads
33、in 2004 to bemarginally down year-on-year at constant exchange rates.REDUCING CAPITAL INTENSITYWe said in the Listing Particulars that we are committed to optimising capitaldeployment. Assets will only be owned if they have strategic value or generatesuperior returns. We have now developed plans for
34、 each of our assets, taking intoaccount a wide range of different criteria, including, where relevant, the state ofthe local market and readiness of the asset to be sold. We have consequently begun a major disposal programme.Over the past year we have sold 20 hotels, raising net proceeds of over 250
35、 million.These have included the sale of the InterContinental London May Fair, and 16Staybridge Suites.We currently estimate that the disposal programme will involve the further sale ofassets with a net book value of between 800 million and 1 billion. The sheer scaleand complexity of the programme m
36、eans that it will take some considerable time to complete and is subject to no significant adverse changes in market conditions.At the same time as disposing of assets, we have reduced hotels capital expenditureto less than 300 million in 2003, half that expended in 2001.DRIVING REVENUESAnother key
37、area of focus during the year has been driving revenues. We have had a number of significant successes.We have increased membership of our loyalty programme by 23% to over 19 millionmembers; our call centre revenues are up 5% on 6% fewer calls; and our internetrevenues are up 80% and now account for
38、 10% of sales.5Richard North Chief ExecutiveDec 2002Dec 2003PERCENTAGE OF TOTAL BOOKINGS VIA IHG WEBSITES4.57.0Other successes include the acquisition of the Candlewood Suites brand for $15 million; rapid growth of the Staybridge Suites brand, which is now on course to reach 100 properties; growth i
39、n market share of the Holiday Inn brand in the UK;and securing an outstanding InterContinental hotel in Bangkok.BRITVICI am delighted that we have signed a new bottling agreement with PepsiCo Inc.for a further 15 years on broadly the same terms as the previous agreement. This is a huge vote of confi
40、dence in both the Britvic management team and our ownportfolio of brands.I am even more delighted that we have signed a separate agreement with Britvicsother shareholders which allows us, subject to certain conditions, to proceed with an Initial Public Offering (IPO) of the business between 1 Januar
41、y 2005 and 31 December 2008. The decision to proceed will depend on market conditions at the time and the agreement of the other two major shareholders, Whitbread and Allied Domecq.OPERATING RESULTSThe combination of the actions we have taken, together with a small improvement in trading conditions
42、in some markets for the second half of 2003, has led to someimprovement in operating performance in the latter half of 2003. Hotel pro formaoperating profits were up 6% in the third quarter and a further 11% in the fourthquarter of the year. In addition, Britvic has had another stunning year, delive
43、ringrecord profits for the fourth year in a row.RETURN OF CAPITALThe success of our asset disposal programme, the reduced level of capitalexpenditure and the tight control over working capital has meant that we havegenerated substantial amounts of cash. Net debt at 31 December 2003 was 569 million a
44、s compared with 1,200 million at Separation. We are therefore initiating a return of 250 million of capital to shareholders by way of a sharerepurchase programme whilst at the same time seeking to maintain our investmentgrade rating.COMMITMENT TO SERVICE AND STAFF DEVELOPMENTOur commitment to delive
45、ring excellent service to our guests remains constant.Each brand offers a clearly differentiated experience to our guests, wherever they are. Our ability to do this depends on the dedication and hard work of ouremployees. They have responded magnificently this year in exceedingly difficultmarket con
46、ditions and at a time of huge change. I offer them my sincere thanks and a continued promise to strive to provide them with the right environment,motivation and support to develop their skills and abilities.6InterContinental Hotels Group 2003We are the worldsmost global hotelbrand owner. Ourbrands a
47、re among the best known and most popular.GUATEMALA HONDURAS HUNGARY ITALY KAZAKHSTAN MALTA NETHERLANDSINTERCONTINENTAL A prestigious and truly global brand in 60 countries with 135hotels in key gatewaycities and resorts,offering high levels of comfort and excellent service.CROWNE PLAZAAn upscale bra
48、ndlocated in major cities with over 200hotels worldwideoffering a comfortableenvironment andexcellent meetingfacilities for businesstravellers.AT A GLANCE ARGENTINA AUSTRALIA AUSTRIA BRAZIL CANADA CHILE46InterContinental106Crowne Plaza1,109Holiday Inn1,321Holiday Inn Express71Staybridge Suites109Can
49、dlewood Suites6Other brands2,768totalAMERICASStevan PorterpresidentAqua LibraBritvicPepsiRobinsons Fruit ShootTango BRITVICPaul Moodymanaging director7SCOTLAND SLOVAK REPUBLIC SPAIN SWITZERLAND TURKEY USA VENEZUELAHOLIDAY INN www.holiday-The worlds best knownhotel brand, with 1,529hotels in more tha
50、n 70 countries offeringexceptional service,comfort and value.HOLIDAY INN EXPRESS The fast growing,value for money brandproviding fresh, cleanand uncomplicatedaccommodation in1,455 hotels in the US,Europe and now China.STAYBRIDGE SUITES An innovative upscalebrand serving the US extended staymarket, w
