InterContinental Hotels Group (IHG) H2 2025 earnings summary

Executive summary

• Achieved excellent financial performance in 2025, with EBIT up 13%, Adjusted EPS up 16%, and record 443 hotel openings, expanding the estate to over 6,900 hotels and 1 million rooms.

• Over $1.1 billion returned to shareholders through dividends and a $900 million share buyback, with a new $950 million buyback announced for 2026.

• Gross system growth reached 6.6% and net system growth 4.7%, marking the fourth consecutive year of accelerating growth.

• Strategic priorities advanced across brand expansion, technology, geographic reach, and ancillary fee streams.

• Launched Noted Collection premium brand and completed Ruby acquisition to strengthen the premium segment.

Financial highlights

• Revenue grew 7% to $2.5 billion; EBIT increased 13% to $1.265 billion year-over-year.

• Fee margin expanded by 360 basis points to 64.8%, driving operating profit and EPS growth.

• Adjusted EPS rose 16% to 501.3¢, supported by share buybacks and strong margin progression.

• Adjusted Free Cash Flow was $893 million, up $238 million year-over-year, with free cash conversion at 115% of adjusted earnings.

• Total dividend proposed to increase by 10%, consistent with the past three years.

Outlook and guidance

• Confident in continuing the growth algorithm, targeting high single-digit fee revenue growth and 100-150 basis points of margin expansion per year.

• Interest expense expected to rise to $230-$250 million in 2026; tax rate to remain at 27%.

• CapEx guidance unchanged at $200-$250 million for key money and maintenance, with gross CapEx up to $350 million annually.

• Medium to long-term ambition: 12%-15% adjusted EPS CAGR, sustainable dividend growth, and leverage between 2.5-3x.

• Ordinary dividends and share buybacks to continue, with $1.2 billion+ returns planned for 2026.