Acquisition of Kimpton

Transcription

1 Ink48, New York Acquisition of Kimpton 16 December 2014

2 Disclaimer This presentation is for information purposes only and does not constitute a prospectus or offering memorandum or an offer or an invitation to acquire or invest in or take any action in respect of any securities and is not intended to provide the basis for any credit or any other third party evaluation of the InterContinental Hotels Group PLC (the Company ), any securities previously issued by it or its affiliates, any securities which may be issued by it or its affiliates in future or any related transactions and should not be considered as a recommendation that any investor should subscribe for or purchase or invest in any such securities. Neither the Company nor any other person has independently verified any of the information in this presentation. The Company makes no representation or warranty of any sort as to the accuracy or completeness of the information contained in this presentation or in any other document made available in connection with this presentation and no person shall have any right of action against the Company, any of its affiliates, their respective directors, officers or employees or any other person in relation to the accuracy or completeness of any such information. The information contained in this presentation is subject to amendment and/or completion without notice and such amendments may be material. The merits or suitability of investing in any securities previously issued or issued in future by the Company or any of its affiliates for any investor s particular situation should be independently determined by such investor. Any such determination should involve, inter alia, an assessment of the legal, tax, accounting, regulatory, financial, credit and other related aspects of the transaction in question. This presentation and any related materials are not intended for distribution to, or use by any person or entity in any jurisdiction or country where such distribution or use would be contrary to local law or regulation. Nothing in this presentation shall constitute a financial promotion, whether for the purposes of Section 21 of the Financial Services and Markets Act 2000 or otherwise. This presentation may contain projections and forward looking statements. The words believe, expect, anticipate, intend and plan and similar expressions identify forward-looking statements. All statements other than statements of historical facts included in this presentation, including, without limitation, those regarding the Company s financial position, potential business strategy, potential plans and potential objectives, are forward-looking statements. Such forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the Company s actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Such forward-looking statements are based on numerous assumptions regarding the Company s present and future business strategies and the environment in which the Company will operate in the future. Further, certain forward-looking statements are based upon assumptions of future events which may not prove to be accurate. The forward-looking statements in this document speak only as at the date of this presentation and the Company assumes no obligation to update or provide any additional information in relation to such forward-looking statements. 2

3 Acquisition of Kimpton - creating the world s largest boutique hotel business IHG has agreed to acquire Kimpton Hotels & Restaurants ( Kimpton ) for $430 million Expected to close early 2015 subject to customary transaction conditions Kimpton is the world s largest boutique hotel operator Operates a fully asset light model in the fastest growing industry segment Portfolio of distinctive hotels in high quality locations with strong trading performance Leading boutique and lifestyle hotel business with over 200 open and pipeline hotels Kimpton is highly complementary to Hotel Indigo and EVEN Hotels Accelerates IHG s future growth Leverage and build on both companies skills and strengths Launch globally using IHG s scale, distribution channels, and owner networks Compelling financial rationale Expected doubling of EBITDA to $39m for FY2017 Earnings enhancing year one; returns in excess of cost of capital in year three 3

4 Kimpton is the largest operator of boutique hotels in the US Kimpton enchants its guests through a mix of boutique destinations bound together by warm, genuine service, superlative style, distinctive perks, and addictive industry irreverence Largest boutique hotel operator in the United States Asset-light model 62 existing hotels (11.3k rooms) 16 pipeline hotels (3.0k rooms) 71 hotel-based restaurants and bars 1.6m Kimpton Karma loyalty members, 25% of room nights Highly respected operating team 100% hotel management contracts Strong owner relationships Award winning J. D. Power #1 Guest Satisfaction for North American Upper Upscale Hotel Brands (2013 & 2014) #1 World-wide Guest Satisfaction Upper Upscale Brands (2013) 100 Best Company to Work For (2009, 2011, 2012, 2013, 2014) #3 Business Travel and Hotel Brand; #2 Customer Service (2014) 4

5 The boutique hotel segment is the fastest growing in the industry High growth in demand for boutique hotels Low level of existing supply US Demand Growth (last 5 years) 7.5% Share of US market supply 18.0% 4.2% 4.3% 11.0% 1.8% Industry Upper Upscale Boutique Upper Midscale Upper Upscale Boutique Strong growth in rooms and RevPAR US Rooms Growth (last 5 years) 3.4% US RevPAR Growth (last 5 years) 9.4% 6.8% 0.8% Industry Boutique Upper Upscale Industry Boutique Upper Upscale Source: Smith Travel Research 5

6 Kimpton s hotels are unique and distinctive Hotel Monaco, Washington D.C. Grand Hotel, Minneapolis Hotel La Jolla, San Diego California Amara Resort & Spa, Sedona, Arizona Sir Francis Drake Hotel, San Francisco Hotel Palomar, San Francisco Donovan House, Washington D.C. Grand Hotel, Minneapolis 6

7 Kimpton is an innovator in F&B and design Sable Kitchen & Bar, Chicago Lilt Restaurant, Miami Dirty Habit, San Francisco Pacci Restaurant, Savannah, Georgia 7

8 Kimpton provides a personalised guest experience Yoga mat and amenity Kimpton public bike Higgins, Director of Pet Relations Morning Coffee & Tea Service Evening wine hour 8

9 Kimpton s hotels are located in the most attractive markets in the United States Seattle & Portland (7 Hotels) San Francisco Bay Area (10 Hotels) Southern California (11 Hotels) Chicago (5 Hotels) Florida (5 Hotels) New York & Boston (7 Hotels) Washington DC (8 Hotels) Existing Properties Pipeline Projects Over 80% of management fee income generated from leading US markets 1 Kimpton markets have grown RevPAR above the overall US industry in 8 of the last 10 years Grown RevPAR faster than competitor set in each of the last 5 years 1. Leading markets are as indicated on map 9

10 White space in IHG s existing brand portfolio at the upper upscale price point Luxury Price Point Midscale Wellbeing Family Time Romantic Getaway Short Break Experience Rest & Go Mixing Business with Pleasure Business Productivity Building Business Interactions Social Identity 10

11 Kimpton fills a white space in IHG s brand portfolio - complements Hotel Indigo and EVEN Hotels Luxury Price Point Midscale Wellbeing Family Time Romantic Getaway Short Break Experience Rest & Go Mixing Business with Pleasure Business Productivity Building Business Interactions Social Identity 11

12 Acquisition of Kimpton creates the world s largest boutique hotel business Market leading boutique hotel platform Number of open and pipeline hotels Pipeline Existing Combined Hotel Indigo Kimpton Commune Morgans Andaz Malmaison Denihan EDITION Hotels André Balasz Firmdale Ace Hotels Source: Smith Travel Research, Company websites 12

13 IHG has a proven track record of developing a global boutique brand Hotel Indigo strong international roll-out from established US business Key: Open hotels Pipeline hotels 16 Europe Q Americas Greater China Q Q AMEA Q

14 Significant opportunity to accelerate growth Growth opportunities Accelerate US expansion Launch Kimpton internationally Complementary attributes Asset light strategy Complementary owner networks Strong alignment in culture and values Significant synergies Leverage IHG s digital marketing capabilities, revenue management tools, and corporate sales support Attract international IHG guests to Kimpton hotels Leverage Kimpton s industry leading F&B and design skills Back office cost opportunities and technology integration 14

15 Kimpton EBITDA expected to double in 2017 following the opening of pipeline hotels and cost savings Strong historical comparable RevPAR growth 1 Excellent 5-year track record 1 Expect EBITDA to double for 2017 financial year 7.7% 9.0% 6.8% 12.4% 12.4% $39m 4.0% 5 year average Q Q1-Q System size System revenues Management fees $20m Robust pipeline 16 hotel pipeline scheduled to open within 3 years 10 hotels under construction 5 owned by Kimpton Funds 27% of existing system 2014E 2017E 1. Q3 and Q1-Q3 metrics show comparable year on year data; 5-year track record shows compound annual growth rate 15

16 Transaction overview Purchase price of $430m payable in cash at completion Earnings enhancing in first full year Multiple of 10.9x expected 2017 EBITDA of $39m Returns in excess of IHG s cost of capital in 2017 For US tax purposes the transaction constitutes an asset sale for vendor and purchaser - the associated relief is anticipated to reduce future taxes by ~$160m Closing expected early 2015 subject to customary conditions including Hart-Scott- Rodino clearance and Kimpton shareholder consent 16

17 Summary Creates world s largest boutique hotel business Fastest growing industry segment Excellent fit with existing IHG brand portfolio Strengthen IHG s position in US upper upscale Significant opportunities for IHG to accelerate growth Compelling financial rationale 17

18 Appendix 18

19 Kimpton open hotels Name City State Rooms Morrison House Alexandria VA 45 Hotel Monaco Alexandria VA 241 Lorien Hotel Alexandria VA 107 Sky Hotel Aspen CO 90 Hotel Monaco Baltimore MD 202 Nine Zero Boston MA 190 Onyx Hotel Boston MA 112 Hotel Marlowe Cambridge MA 236 Hotel Palomar Chicago IL 261 Hotel Allegro Chicago IL 483 Hotel Burnham Chicago IL 122 Hotel Monaco Chicago IL 191 Hotel Lumen Dallas TX 93 Hotel Monaco Denver CO 189 The Goodland Goleta CA 158 Hotel La Jolla La Jolla CA 110 Hotel Wilshire Los Angeles CA 74 Palomar Westwood Los Angeles CA 264 Epic Hotel Miami FL 411 Surfcomber Miami FL 186 Angler's Resort Miami FL 45 Grand Hotel Minneapolis MN Park Ave Hotel New York NY 205 The Muse New York NY 200 Ink48 New York NY 222 Eventi Hotel New York NY 292 Omphoy Ocean Resort Palm Beach FL 134 Hotel Palomar Philadelphia PA 230 Hotel Monaco Philadelphia PA 268 Hotel Palomar Phoenix AZ 242 Hotel Monaco Portland OR 221 Name City State Rooms RiverPlace Portland OR 84 Hotel Vintage Plaza Portland OR 117 Hotel Monaco Salt Lake City UT 225 Hotel Palomar San Diego Area CA 183 Hotel Solamar San Diego Area CA 235 Harbor Court Hotel San Francisco CA 131 Hotel Triton San Francisco CA 140 Hotel Argonaut San Francisco CA 252 Tuscan Inn San Francisco CA 221 Hotel Monaco San Francisco CA 201 Hotel Palomar San Francisco CA 197 Hotel Tomo San Francisco CA 130 Sir Francis Drake San Francisco CA 416 Prescott Hotel San Francisco CA 164 Canary Santa Barbara CA 97 Brice Hotel Savannah GA 145 FireSky Resort and Spa Scottsdale AZ 204 Hotel Vintage Seattle WA 125 Alexis Hotel Seattle GA 121 Hotel Monaco Seattle WA 189 Amara Resort & Spa Sedona AZ 100 Cypress Hotel Silicon Valley CA 224 Vero Beach Hotel & Club Vero Beach FL 110 Hotel Monaco Washington, DC DC 183 Hotel George Washington, DC DC 139 Hotel Helix Washington, DC DC 178 Hotel Madera Washington, DC DC 82 Topaz Hotel Washington, DC DC 99 Hotel Rouge Washington, DC DC 137 Hotel Palomar Washington, DC DC 335 Donovan House Washington, DC DC