INTERCONTINENTAL HOTELS GROUP PLC /NEW/

Group Income Statement summary

a. Re-presented to present foreign exchange gains/(losses) on a separate line which was previously presented within ‘Net financial expenses’.

b. Americas and EMEAA include revenue and operating profit before exceptional items from both fee business and owned & leased hotels.

Greater China includes revenue and operating profit before exceptional items from fee business.

c. Definitions for Non-GAAP measures can be found in the ‘Key performance measures and Non-GAAP measures’ section on pages 107 to 112 along with

reconciliations of these measures to the most directly comparable line items within the Group Financial Statements which can be found on pages 250 to 256.

d. Percentage change considered not meaningful, such as where a positive balance in the latest period is comparable to a negative or zero balance

e. Adjusted earnings as used with adjusted earnings per share, a Non-GAAP measure. Excludes $1m profit attributable to non-controlling interest.

Highlights for the year

Trading varied across our global

footprint. The Americas saw growth in

the first quarter, with the rest of the year

impacted by economic uncertainties,

with the fourth quarter further affected

by tough prior year comparatives.

There was strong demand in EMEAA,

with RevPAR growth in all quarters

of 2025 for this varied region. Greater

China saw sequential quarterly

improvement through the year, with

RevPAR growth in the fourth quarter.

Revenue

RevPAR increased year-on-year by

3.3% in the first quarter,0.3% in the

second quarter,0.1% in the third quarter,

1.6% in the fourth quarter and 1.5%

in the full year. Compared to 2024,

average daily rate increased by 0.8%

and occupancy was 0.5%ptshigher.

Our other key driver of revenue,

net system size, increased by 4.0%

year-on-year to 1,026,177 rooms on a

reported basis, or 4.7% after adjusting

for the impact of removing 7,092 rooms

previously affiliated with The Venetian

Resort Las Vegas.

Total revenue increased by$266m

(5.4%) to$5,189m, including a$110m

increase in System Fund and reimbursable

revenue. Revenue from reportable

segmentsa increased by$156m (6.7%)

to$2,468m, driven by the combination

of system and RevPAR growth, together

with incremental fees from previous

changes in the arrangements related

to the US co-brand credit card

arrangements and from the sale of

certain loyalty points (together with

certain other ancillary revenues).

These revenue streams achieved the

expected ~$40m and ~$25m step-

changes within IHG’s results from

reportable segmentsa in 2025, along

with additional underlying growth.

Underlying revenuea increased

by$133m (5.7%) to$2,454m, with

underlying fee revenuea increasing

by$110m (6.2%) to$1,890m. Owned

& leased revenue increased by

$29m (5.6%) to$544m.

Operating profit and margin

Operating profit increased by$157m

from$1,041m to$1,198m, including$21m

operating exceptional costs in relation

to the global efficiency programme and

to commercial litigation and disputes,

compared to operating exceptional

items of$nil recorded in the prior

year. The reported System Fund and

reimbursable result improved by$37m

in the year, as the loss reduced from

$83m in 2024 to$46m in 2025.

Operating profit from reportable

segmentsa increased by$141m (12.5%)

to$1,265m. Fee business operating

profit increased by$146m (13.5%) to

$1,231m, due to RevPAR and system

growth which drove a$12m increase in

incentive management fees to$190m,

combined with incremental ancillary

fee revenue. Owned & leased operating

profit declined from$45m to$43m.

Underlying operating profita increased

by$135m (12.0%) to$1,264m.

Fee margina increased by 3.6%pts

over the prior year to 64.8%. Around

2.3%pts was driven by operational

leverage and cost efficiencies from the

global efficiency programme. A further

~1.3%pts was due to incremental fees

from the US co-brand credit card

agreements and from the sale of certain

loyalty points, together with certain

other ancillary revenues.

The impact of the movement in average

USD exchange rates for 2024 compared

to 2025 netted to a$nil impact

on operating profit from reportable

segmentsa when calculated as restating

2024 figures at 2025 exchange rates,

andbenefitted operating profit from

reportable segmentsa by$1m when

applying 2024 rates to 2025 figures.

If the average exchange rate during

January 2026 had existed throughout

2025, the 2025 operating profit from

reportable segmentsa would have

been $6m higher.

System Fund and

reimbursable result

The Group operates a System Fund

to collect and administer assessments

from hotel owners for specified

purposes of use, including marketing,

reservations, certain hotel services and

the Group’s loyalty programme, IHG

One Rewards. The System Fund also

benefits from certain proceeds from the

sale of loyalty points under third-party

co-branding arrangements and the sale

of points directly to members and other

third parties. The Fund is not managed

to generate a surplus or deficit for IHG

for the benefit of hotels in the IHG

system with the objective of driving

revenues for the hotels in the system.

The growth in the IHG One Rewards

programme means that, although

assessments are received from hotels

upfront when a member earns points,

more revenue is deferred each year

than is recognised in the System Fund.

This can lead to accounting losses in the

System Fund each year as the deferred

revenue balance grows which do not

necessarily reflect the Fund’s position

and the Group’s capacity to invest.

Reimbursable revenues represent

reimbursements of expenses incurred

on behalf of managed and franchised

properties and relate, predominantly,

to payroll costs at managed properties

where IHG is the employer. As IHG

records reimbursable expenses based

upon costs incurred with no added

mark-up, this revenue and related

expenses have no impact on either

operating profit or net profit for the year.

In the year to 31 December 2025,

increased $110m (4.2%) to$2,721m.

This was driven by the growth in System

Fund revenue driven by the continued

increase in net system size compounded

by year-over-year RevPAR growth.

The reported System Fund and

reimbursable result improved from aloss

of$83m to aloss of$46m, primarily

due to the System Fund revenue growth

mentioned above and the impact

of our global efficiency programme,

partially offset by increased investments

in marketing and loyalty.

Operating exceptional items

Exceptional items are identified by

virtue of their size, nature or incidence

and are excluded from the calculation

of adjusted earnings per ordinary sharea

as well as other Non-GAAP measures in

order to allow a better understanding of

the underlying trading performance and

trends of the Group and its reportable

segments. Examples of exceptional items

can include, but are not restricted to,

gains and losses on the disposal of assets,

impairment charges and reversals,

the costs of individually significant legal

cases or commercial disputes and

reorganisation costs.

Performance continued

Group continued

Operating exceptional items for

the year to 31 December 2025 were

$21m (2024:$nil), comprising costs

of$12m relating to a global efficiency

programme and$9m relating to

litigation and commercial disputes.

Further information on exceptional

items can be found in note 6 to the

Group Financial Statements.

Net financial expenses

Net financial expenses increased

to$153m from$115m. Net financial

expenses include total interest costs

on public bonds, which are fixed rate

debt, of $153m (2024: $123m) and

interest expense on lease liabilities

of$30m (2024:$30m). In 2025,

foreign exchange gains/(losses) have

been presented on a separate line of

the Group income statement. The 2024

and 2023 amounts were previously

presented within net financial expenses.

Adjusted interesta, which adds back

interest attributable to the System Fund,

increased by$35m to an expense

of$200m, driven by the increase in

net debt and average interest rates

on bond debt.

Foreign exchange gains and losses

Foreign exchange gains of$37m

(2024: losses of$25m) are predominantly

due to translation of intra-group US

dollar monetary assets and liabilities

held by subsidiaries with a sterling

functional currency.

Remeasurement losses on

Contingent purchase consideration arose

on the acquisition of Regent, and from

2025, the acquisition of the Ruby brand.

Theloss of$8m (2024:$4m loss) is

principally the unwind of the discount

due to the passage of time. The total

liability at 31 December 2025 is$98m

(2024:$73m).

Taxation

The adjusted tax ratea for 2025 was

27.2% (2024: 27.3%). The total tax charge

includes a net exceptional charge of

$16m(2024: $nil), comprising a charge

of $21m following the completion of

an intra-group restructuring transaction

offset by the tax impacts of the operating

exceptional items.

Tax paid in 2025 totalled $307m

(2024 $309m), including exceptional tax

paid of $34m related to the settlement

of a tax liability which originally arose

as a result of the acquisition of Holiday

Inn in 1990.

IHG pursues an approach to tax that is

consistent with its business strategy and

its overall business conduct principles.

The approach seeks to ensure full

compliance with all tax filing, payment

and reporting obligations on the basis

of communicative and transparent

relationships with tax authorities.

The IHG Audit Committee reviews

IHG’s approach to tax annually, including

consideration of the Group’s current

tax profile. Further information on tax

can be found in note 8 to the Group

Earnings per ordinary share

The Group’s basic earnings per ordinary

share is 490.9¢ (2024:389.6¢). Adjusted

earnings per ordinary sharea increased

by 68.9¢ (15.9%) to 501.3¢.

Dividends and returns

The Board is proposing a final dividend

of 125.9¢ in respect of 2025, an increase

of 10% on 2024. With the interim

dividend of 58.6¢ paid in October 2025,

the total dividend for the year would

therefore be 184.5¢, representing an

increase of 10% on 2024. The ex-

dividend date for ordinary shares is

Thursday 9 April 2026 and the record

date is Friday 10 April 2026. The

corresponding dividend amount in

pence sterling per ordinary share will be

announced on Monday 27 April 2026,

calculated based on the average of the

market exchange rates for the three

working days commencing 22 April

2026. Subject to shareholder approval at

the AGM on Thursday 7 May 2026, the

dividend will be paid on Thursday 14

May 2026.

The dividend payments in 2025 have

returned$270m to IHG’s shareholders.

An additional $892m of surplus capital

was returned to shareholders through

a share buyback programme that

concluded in December 2025. This

repurchased 7,585,264 shares at an

average price of £88.50 per share

and reduced the total number of

voting rights in the Company by 4.8%.

The Board has approved a further

share buyback programme to return

an additional $950m to shareholders

in 2026.

Share price and market capitalisation

The IHG share price closed at £104.60

on Wednesday 31 December 2025,

up 5.1% from £99.54 on 31 December

2024. The market capitalisation of the

Group at the year-end was £15.9bn.

For a discussion of 2024 results, and the changes compared to 2023, refer to the 2024 Annual Report and Form 20-F.

Accounting principlesThe Group results are prepared under International Financial Reporting Standards (IFRS) as described on page 183 of the Group Financial Statements. The application of IFRS requires management to make judgement, estimates and assumptions, and those considered critical to the preparation of the Group results are set out on page 184.The Group discloses certain financial information both including and excluding exceptional items. For comparability of the periods presented, some of the performance indicators in this performance review are calculated after eliminating these exceptional items. An analysis of exceptional items is included in note 6.

Adjusted EBITDAa reconciliation

Group Cash Flow summary

a. Definitions for Non-GAAP measures can be found in the ‘Key performance measures and Non-GAAP measures’ section on pages 107 to 112.

Reconciliations of these measures to the most directly comparable line items within the Group Financial Statements can be found on pages 250 to 256.

b. In 2025 ‘Tax paid’ excludes, and ‘Cash flows relating to exceptional items’ includes,$34m of exceptional tax paid.

Performance continued

Group continued

Cash flow from operations

For the year ended 31 December 2025,

cash flow from operations was$1,361m,

anincrease of$212m on the previous

year. This was predominantly due to the

higher operating profit from reportable

segmentsa, lower contract acquisition

costs and an improvement in the

System Fund and reimbursable result.

Cash flow from operations is the

principal source of cash used to fund

interest and tax payments, capital

expenditure, ordinary dividend

payments and additional returns

of capital to shareholders.

Adjusted free cash flowa

Adjusted free cash flowa was an inflow

of$893m, anincrease of$238m on the

prior year. Adjusted EBITDAa increased

by$143m due to the improvement

in trading and growth in ancillary

fee streams. The System Fund and

reimbursable result improved by$37m,

reflecting System Fund revenue growth

and the impact of the global efficiency

programme, partly offset by increased

investments in marketing and loyalty.

Key money contract acquisition costs

net of repayments reduced by$29m,

and tax payments (excluding exceptional

items) were$36m lower due to US tax

reforms. These movements were partly

offset by a$43m increase innet interest

paid reflecting the increasein average

net debt. Working capital andother

adjustments of$36m includes$107m of

cash inflow related to deferred revenue,

driven primarily by$74m related to the

loyalty programme and$37m of upfront

cash flows associated with the new

US co-brand credit card agreements.

Net and gross capital

expenditurea

Net capital expenditurea was$185m

(2024:$253m) and gross capital

expenditurea was$269m (2024:$350m).

Gross capital expenditurea comprised:

$179m of key money contract acquisition

costs;$31m of maintenance;$16m

gross recyclable investments; and

$43m System Fund capital investments.

Net capital expenditurea includes

key money repayments of$2m and

offsets from other disposals and

repayments of$4m, and$78m System

Fund depreciation and amortisation.

Net debta

Net debta increased by$551m

from$2,782m at 31 December 2024

to$3,333m at 31 December 2025.

During the year, the Group invested

$120m to purchase the Ruby brand

and there were$1,167m of payments

related to ordinary dividends and the

share buyback programmes, including

transaction costs. The change in

net debta includes adverse net foreign

exchange impacts of$69m and$19m

of other non-cash adjustments.

Cash and borrowings

Net debta of$3,333m (2024:$2,782m)

is analysed by currency as follows:

c.*Including the impact of derivative

financial instruments.

Cash and cash equivalents includes

$4m (2024:$2m) that is not available for

use by the Group due to local exchange

controls,$17m (2024:$15m) which is

restricted for use on capital expenditure

under hotel lease agreements and$6m

(2024:$5m) subject to contractual and

regulatory restrictions.

Borrowings included bank overdrafts

of$3m (2024:$17m), which were

matched by an equivalent amount of

cash and cash equivalents under the

Group’s cash pooling arrangements.

Under these arrangements, each pool

contains a number of bank accounts

with the same financial institution, and

the Group pays interest on net overdraft

balances within each pool.

Overseas subsidiaries are typically in a

cash-positive position, and the matching

overdrafts are held by the Group’s

central treasury company in the UK.

Sources of liquidity

As at 31 December 2025, the Group had

total liquidity of$2,599m (31 December

2024:$2,319m), comprising$1,500m

of undrawn bank facilities and$1,099m

of cash and cash equivalents (net of

overdrafts and restricted cash). The

increase in total liquidity from December

2024 of$280m is primarily due tonet

additional bond funding of$587m and

$150m from the increase in the new

bank revolving credit facility, offset

by net cash outflowsof$493mb.

The Group currently has$4,198m of

sterling and euro bonds outstanding.

The bonds mature in August 2026

(£350m), May 2027 (€500m), October

2028 (£400m), November 2029

(€600m), September 2030 (€850m)

and September 2031 (€750m). There

are currency swaps in place on the

euro bonds, fixing the May 2027 bond

at £436m, the November 2029 bond

at $657m, the September 2030 bond

at $990m and the September 2031

bond at $834m. The Group currently

has senior unsecured long-term credit

ratings of BBB from S&P and Baa2

from Moody’s.

In December 2025, the Group entered

into a new $1,500m syndicated

bank revolving credit facility (RCF),

and the previous $1,350m facility

was cancelled on the same day.

The new five-year RCF matures in

December 2030. There are two

one-year extension options that are

at the lenders’ discretion. There are

no financial covenants in the RCF.

The RCF was undrawn at 31 December

It is management’s opinion that the

current working capital levels and

available facilities are sufficient for the

Group’s present liquidity requirements.

b. As shown in the Cash Flow summary on page 89.

Off-balance sheet

arrangements

At 31 December 2025, the Group had

no off-balance sheet arrangements that

have, or are reasonably likely to have,

a current or future material effect on

the Group’s financial condition, revenues

or expenses, results of operations,

liquidity, capital expenditures or

capital resources.

Contingent liabilities and

financial guarantees

The Group has given financial guarantees

over loans made to facilitate third-party

ownership of hotels of up to$26m. The

carrying amount of these guarantees

was $nil. See note 18 to the Group

Financial Statements for further details.

The Group may be exposed to additional

liabilities resulting from litigation. See

note 29 to the Group Financial Statements

for further details.

Future cash requirements

from contractual obligations

The Group’s future cash flows arising

from contractual commitments relating

to long‑term debt obligations (including

interest payable), derivatives, lease

liabilities and other financial liabilities

are analysed in note 23 to the Group

Other cash requirements relate to future

pension scheme contributions (see note

26 to the Group Financial Statements)

and capital commitments (see note 29

to the Group Financial Statements).

The Group also has future commitments

for key money payments which are

contingent upon future events and

may reverse.

Disaggregation of total gross revenue in IHG’s system

Total gross revenue provides a measure of the overall strength of the Group’s brands. It comprises total rooms revenue from

franchised hotels and total hotel revenue from managed, exclusive partner and owned & leased hotels and excludes revenue

from the System Fund and reimbursement of costs. Other than owned & leased hotels, total gross revenue is not revenue

attributable to IHG as it is derived from hotels owned by third parties. The definition of this key performance measure can

be found on page 107.

Total gross revenue in IHG’s system increased by 5.3% (4.7% increase at constant currency) to$35.2bn, driven by the

combination of RevPAR growth and theincrease in the number of hotels in our system.

a. Year-on-year percentage movement calculated from unrounded source figures to provide more precise growth indicators for these figures which are

presented in billions of dollars.

b. Includes exclusive partner hotels.

Performance continued

Group continued

Group hotel and room count

During the year, a record 443 hotels

(65,078 rooms) opened, representing

a 72 hotels (5,961 rooms)increase

from 2024.

Openings included the first 2,952 rooms

(17 hotels) as part of the initial Ruby

agreement. Other openings included

20,338 rooms (133 hotels) in the

Holiday Inn Brand Family, the debut

of Atwell in Greater China andthe

continued international momentum

of Garner. Conversions represented

around half of all openings.

In 2025,26,026 rooms (109 hotels)

left the IHG system, reflecting

ourcontinued focus on the quality

of ourestate.

Net system size increased by 4.0%

year-on-year to 1,026,177.

After adjusting for the impact of

removing 7,092 rooms previously

affiliated with The Venetian Resort

Las Vegas, removals increased by

739 rooms (two hotels) compared

to 2024, with a removals rate of

1.9%, and net system size increased

by 4.7%.

Total number of hotels6,9632024: 6,629

Total number of rooms1,026,1772024: 987,125

Group pipeline

The global pipeline totalled 339,526

rooms (2,292 hotels) at the end of 2025,

anincrease of 14,274 rooms (82 hotels)

from the prior year, as signings

outpaced openings and terminations.

Group signings of 102,054 rooms

(694 hotels) included 6,741 Ruby rooms

(36 hotels),5,718 rooms (30 hotels)

as part of the initial agreement.

Signings in 2025 represented a

4,188 rooms (20 hotels)decrease

from the prior year, which included

17,703 rooms (119 hotels) as part of the

initial NOVUM Hospitality agreement.

Total number of hotels in the pipeline2,2922024: 2,210

Total number of rooms in the pipeline339,5262024: 325,252

Performance continued

Americas