Intercontinental Hotels Group EBITDA surged on 15.3% and EBITDA Margin increased slightly on 1.2 pp from 14.9% to 16.1%

18 Feb 2020 • About Intercontinental Hotels Group ($IHG) • By InTwits

Intercontinental Hotels Group reported FY2019 financial results today. Overall the company's long term financial model is characterised by the following facts:

• Intercontinental Hotels Group is a growth stock: FY2019 revenue growth was 6.7%, 5 year revenue CAGR was 20.0% at FY2019 ROIC
• EBITDA Margin is quite volatile: 16.1% in FY2019, 14.9% in FY2018, 19.7% in FY2017, 20.2% in FY2016, 88.6% in FY2015

Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.

Revenue and profitability

The company's Revenue increased on 6.7%. Revenue growth happened at the same time with EBITDA margin expansion. EBITDA Margin increased slightly on 1.2 pp from 14.9% to 16.1% in FY2019. During the last 5 years EBITDA Margin bottomed in FY2018 at 14.9%.

Gross Margin decreased slightly on 0.80 pp from 83.7% to 82.9% in FY2019. During the last 5 years Gross Margin topped in FY2016 at 86.0% and was declining since that time.

Net Income margin showed almost no change in FY2019.

Management team

The company's CEO is Keith Barr. Keith Barr is a founder and has 2 years tenure with the company. Paul Edgecliffe Johnson is a Intercontinental Hotels Group's CFO. Paul Edgecliffe Johnson has spent 6 years at the company.

Financial and operational results

FY ended 30 Nov -0001

Intercontinental Hotels Group ($IHG) key annual financial indicators

mln.	2015	2016	2017	2018	2019	2019/2018
P&L
Revenue	1,803	3,912	4,075	4,337	4,627	6.7%
Gross Profit	1,163	3,364	3,504	3,631	3,837	5.7%
SG&A	370	291	284	283
EBITDA	1,598	789	803	647	746	15.3%
Net Income	1,222	456	540	351	385	9.7%
Balance Sheet
Cash	1,137	206	168	704
Short Term Debt	427	106	126	159
Long Term Debt	1,239	1,606	1,893	2,525
Cash flow
Capex	42	37	30	38
Ratios
Revenue growth	-3.0%	117.0%	4.2%	6.4%	6.7%
EBITDA growth	104.9%	-50.6%	1.8%	-19.4%	15.3%
Gross Margin	64.5%	86.0%	86.0%	83.7%	82.9%	-0.8%
EBITDA Margin	88.6%	20.2%	19.7%	14.9%	16.1%	1.2%
SG&A, % of revenue	20.5%	7.4%	7.0%	6.5%
Net Income Margin	67.8%	11.7%	13.3%	8.1%	8.3%	0.2%
CAPEX, % of revenue	2.3%	0.9%	0.7%	0.9%
ROIC	96.6%	51.2%	92.2%	45.0%
Net Debt/EBITDA	0.3x	1.9x	2.3x	3.1x	0.0x

Peers in Travel & Leisure

Below you can find Intercontinental Hotels Group benchmarking vs. other companies in Travel & Leisure industry. It's shown for the period of 5 years for the key financial metrics. Each table has median value for all the companies in the industry together with individual financial data of the top-5 companies in the industry by particular financial metric.

Top companies by Revenue growth, %

Top 5	FY2015	FY2016	FY2017	FY2018	FY2019
Nektan ($NKTN)		995.3%	129.1%	50.1%	13.5%
Easyhotel ($EZH)		8.7%	39.7%	33.7%	56.0%
Webis Holdings ($WEB)	29.7%	45.3%	65.8%	24.0%
Hanatour Service Inc ($TOUR)		29.6%	14.6%	21.4%	-8.0%
Meikles Ltd ($MIK)	7.6%	9.7%	0.9%	16.9%
Median (17 companies)	7.7%	8.3%	7.9%	7.8%	6.4%
Intercontinental Hotels Group ($IHG)		117.0%	4.2%	6.4%	6.7%

Top companies by Gross margin, %

Top 5	FY2015	FY2016	FY2017	FY2018	FY2019
Eclectic Bar Grp ($BAR)	79.4%	80.7%	82.3%	82.9%
Air Partner ($AIP)	11.5%	12.9%	14.7%	74.4%
Nektan ($NKTN)	42.6%	67.9%	64.1%	62.2%	56.9%
Easyhotel ($EZH)	68.8%	64.3%	61.3%	53.5%	48.1%
Carnival ($CCL)	39.9%	42.7%	40.0%	41.3%	38.0%
Median (9 companies)	40.1%	39.3%	36.2%	41.3%	43.0%
Intercontinental Hotels Group ($IHG)	64.5%	86.0%	86.0%	83.7%	82.9%

Top companies by EBITDA margin, %

Top 5	FY2015	FY2016	FY2017	FY2018	FY2019
Ryanair Hldgs ($RYA)	25.1%	28.9%	30.6%	31.2%
Celtic ($CCP)	-1.3%	14.6%	18.5%	28.4%
Carnival ($CCL)	26.7%	29.3%	26.6%	28.3%	26.1%
Heavitree Brewery ($HVT)	23.7%	25.0%	27.8%	24.5%	27.4%
Young & Co'S Brewery ($YNGN)	22.9%	22.6%	23.5%	23.4%
Median (16 companies)	12.5%	15.9%	16.7%	15.7%	13.5%
Intercontinental Hotels Group ($IHG)	88.6%	20.2%	19.7%	14.9%	16.1%

Top companies by CAPEX/Revenue, %

Top 5	FY2015	FY2016	FY2017	FY2018	FY2019
Easyhotel ($EZH)	46.8%	153.2%	269.8%	412.1%	142.5%
Ryanair Hldgs ($RYA)	13.9%	18.6%	21.8%	20.6%
Carnival ($CCL)	14.6%	18.7%	16.8%	19.9%	26.1%
Marston'S ($MARS)	16.2%	15.3%	19.4%	14.3%
Ana Hldgs Inc ($ANA)	14.1%	14.1%	12.7%	13.5%
Median (16 companies)	7.2%	14.1%	7.4%	8.5%	6.7%
Intercontinental Hotels Group ($IHG)	2.3%	0.9%	0.7%	0.9%

Top companies by ROIC, %

Top 5	FY2015	FY2016	FY2017	FY2018	FY2019
Air Partner ($AIP)	20.0%	20.4%	24.6%	34.6%
Celtic ($CCP)	-14.7%	1.5%	11.6%	23.7%
Ryanair Hldgs ($RYA)	13.3%	17.2%	17.7%	18.4%
Meikles Ltd ($MIK)	-3.5%	1.0%	6.1%	12.2%
Tui Ag ($TUI)	15.0%	15.5%	14.4%	12.1%	6.2%
Median (20 companies)	5.9%	5.3%	6.5%	8.1%	7.7%
Intercontinental Hotels Group ($IHG)	96.6%	51.2%	92.2%	45.0%

Top companies by Net Debt / EBITDA

Top 5	FY2015	FY2016	FY2017	FY2018	FY2019
Marston'S ($MARS)	8.2x	6.2x	6.9x	8.7x
Peel Hotels ($PHO)	4.4x	3.9x	0.4x	4.3x
Heavitree Brewery ($HVT)	4.6x	4.1x	3.7x	3.7x	2.9x
Eclectic Bar Grp ($BAR)	1.5x	6.8x	2.1x	3.4x
Fuller Smith & Turner ($BA80)	2.8x	3.2x	3.1x	3.0x
Median (15 companies)	1.5x	2.3x	1.9x	1.7x	2.2x
Intercontinental Hotels Group ($IHG)	0.3x	1.9x	2.3x	3.1x	0.0x

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