IHG

Business Context and Reporting Period

Company: InterContinental Hotels Group PLC (IHG)
Filing Type: Form 6-K (Report of Foreign Private Issuer)
Reporting Period: Full year ended 31 December 2025
Filing Date: 17 February 2026
Overview: IHG reported strong full-year performance driven by record hotel openings, expansion of ancillary fee streams, and operational leverage. The company operates an asset-light model with a global estate of 1,026,000 rooms across 6,963 hotels.

Key Financial Metrics

Material Changes vs. Prior Period

• Revenue Growth: Total revenue increased 5% to $5.19bn. Revenue from reportable segments grew 7% to $2.47bn, driven by a 1.5% increase in Global RevPAR and a 4.0% increase in net system size.
• Margin Expansion: Fee margin expanded by 360 basis points to 64.8%. This was driven by 230 bps of operational leverage (cost base reduced by 3% while fee revenue grew 7%) and 130 bps from incremental ancillary fees (US co-brand credit cards and loyalty point sales).
• Profitability: Operating profit from reportable segments rose 13% to $1.265bn. Adjusted EPS grew 16% to 501.3¢, aided by a 4.2% reduction in share count due to buybacks.
• System Growth: IHG opened a record 443 hotels (65.1k rooms). Net system growth was 4.0% (4.7% adjusted for the removal of The Venetian Resort Las Vegas rooms). The pipeline stands at 340k rooms (2,292 hotels), representing 33% of current system size.
• Regional Performance:
  • EMEAA: RevPAR +4.6%, Revenue +8.4%, Operating Profit +12.2%.
  • Americas: RevPAR +0.3%, Revenue -1.1%, Operating Profit +1.0% (impacted by US market turbulence and currency).
  • Greater China: RevPAR -1.6%, Revenue +2.5%, Operating Profit +1.0% (rate pressure offset by system growth).

Guidance, Outlook, and Management Commentary

• Shareholder Returns:
  • Dividends: Proposed final dividend of 125.9¢ (+10%), bringing total 2025 dividend to 184.5¢.
  • Buybacks: Completed $900m buyback in 2025. Launched a new $950m buyback programme for 2026. Cumulative returns over 5 years (2022-2026) expected to exceed $5bn.
• Strategic Initiatives:
  • Brand Expansion: Launched new premium brand "Noted Collection" and integrated the acquired "Ruby" brand (urban lifestyle).
  • Technology: Full rollout of new Revenue Management System (RMS) and expansion of cloud-based Property Management Systems (PMS).
  • Ancillary Fees: Continued growth from US co-brand credit card agreements and loyalty point sales.
• Outlook: Management targets compound growth in adjusted EPS of 12-15% annually over the medium to long term. They anticipate less turbulent trading conditions in the US for 2026 and robust growth in EMEAA and Greater China.
• Risks & Contingencies:
  • Exceptional Items: $21m operating exceptional costs incurred in 2025 ($12m for global efficiency programme, $9m for litigation/disputes).
  • System Fund: Reported a $46m loss (improved from $83m loss in 2024) due to accounting treatment of deferred loyalty revenue; not indicative of cash flow.
  • Geopolitical/Economic: Short-term uncertainties in some markets, though long-term structural drivers remain positive.

Investor Verification Checklist

• Fee Margin Sustainability: Verify the durability of the 360 bps margin expansion, specifically the contribution from one-off ancillary fee step-ups versus organic operational leverage.
• US Market Recovery: Assess the trajectory of US RevPAR, which declined in Q3 and Q4 2025, and the impact of the "turbulent trading conditions" cited by management.
• Net Debt Trajectory: Confirm that the increase in net debt to $3.33bn (driven by $1.1bn+ in shareholder returns) remains within the target leverage range of 2.5x-3.0x as EBITDA grows in 2026.
• System Fund Accounting: Understand the non-cash nature of the System Fund loss and its impact on IFRS operating profit versus underlying cash generation.
• Buyback Execution: Monitor the execution of the new $950m buyback programme and its impact on share count reduction and EPS accretion in 2026.