Segmental information (Tables)

12 Months Ended

Dec. 31, 2019

Text block [abstract]

Summary of Information by Reportable Segment

The Group has four reportable segments reflecting its geographical regions and its Central functions:

• Americas;

• EMEAA;

• Greater China; and

• Central.

Central functions include technology, sales and marketing, finance, human resources and corporate services; Central revenue arises principally from technology fee income.

No operating segments have been aggregated to form these reportable segments.

Management monitors the operating results of these reportable segments for the purpose of making decisions about resource allocation and performance assessment. Each of the geographical regions is led by its own Chief Executive Officer who reports to the Group Chief Executive Officer.

The System Fund is not viewed as being part of the Group’s core operations as it is not managed to generate a profit or loss for IHG over the longer term. As such, its results are not regularly reviewed by the Chief Operating Decision Maker (CODM) and it does not constitute an operating segment under IFRS 8. Similarly, reimbursements of costs are not reported to the CODM and so are not included within the reportable segments.

Segmental performance is evaluated based on operating profit or loss and is measured consistently with operating profit or loss in the Group Financial Statements, excluding System Fund and exceptional items. Group financing activities, fair value gains/(losses) on contingent purchase consideration and income taxes are managed on a Group basis and are not allocated to reportable segments.

Revenue

Year ended 31 December	2019 $m		2018 $m		2017 $m
Americas		1,040		1,051		999
EMEAA		723		569		457
Greater China		135		143		117
Central		185		170		157
Revenue from reportable segments		2,083		1,933		1,730
System Fund revenues		1,373		1,233		1,242
Reimbursement of costs		1,171		1,171		1,103
Total revenue		4,627		4,337		4,075

Profit

Year ended 31 December	2019 $m			2018 Restated $m			2017 Restated $m
Americas (see below)		700			673			648
EMEAA		217			206			175
Greater China		73			70			53
Central		(125	)		(117	)		(102	)
Operating profit from reportable segments		865			832			774
System Fund		(49	)		(146	)		(34	)
Operating exceptional items (note 6)		(186	)		(104	)		4
Operating profit		630			582			744
Net finance costs		(115	)		(96	)		(91	)
Fair value gains/(losses) on contingent purchase consideration		27			(4	)		—
Profit before tax		542			482			653
Tax		(156	)		(132	)		(118	)
Profit for the year		386			350			535

All items above relate to continuing operations.

Operating profit from reportable segments includes business interruption insurance proceeds of $10m in 2019, relating to the Americas region, which is included in ‘other operating income’ in the Group income statement.

Assets

31 December	2019 $m		2018 Restated $m
Americas		1,784		1,656
EMEAAa		978		738
Greater China		136		110
Central		772		755
Segment assets		3,670		3,259
Unallocated assets:
Derivative financial instruments		1		8
Tax receivable		44		58
Deferred tax assets		66		63
Cash and cash equivalents		195		704
Total assets		3,976		4,092

a Includes assets classified as held for sale of $19m (2018: $nil).

Liabilities

31 December	2019 $m			2018 Restated $m
Americas		(971	)		(995	)
EMEAAa		(398	)		(386	)
Greater China		(80	)		(61	)
Central		(206	)		(225	)
Segment liabilities		(1,655	)		(1,667	)
Unallocated liabilities:
Loyalty and co-brand deferred revenue and other payables		(1,339	)		(1,291	)
Loans and other borrowings		(2,165	)		(2,014	)
Derivative financial instruments		(20	)		—
Tax payable		(50	)		(50	)
Deferred tax liabilities		(118	)		(124	)
Deferred and contingent purchase considerationb		(94	)		(77	)
Total liabilities		(5,441	)		(5,223	)

a Includes liabilities classified as held for sale of $22m (2018: $nil).    

b Excludes UK portfolio which is included in EMEAA. 2018 has been restated accordingly.    

Year ended 31 December 2019	Americas $m		EMEAA $m			Greater China $m		Central $m		Group $m
Capital expenditure (page 153)		57		71			—		137		265
Non-cash items:
Depreciation and amortisationa		44		25			5		42		116
Share-based payments cost		9		4			2		13		28
Share of losses/(gains) of associates and joint ventures		9		(6	)		—		—		3
Impairment charges		50		81			—		—		131
Year ended 31 December 2018	Americas Restated $m		EMEAA Restated $m			Greater China Restated $m		Central Restated $m		Group Restated $m
Capital expenditure (page 153)		74		33			2		142		251
Non-cash items:
Depreciation and amortisationa		46		17			7		45		115
Share-based payments cost		8		4			3		12		27
Share of losses/(gains) of associates and joint ventures		6		(5	)		—		—		1

Year ended 31 December 2017	Americas Restated $m		EMEAA Restated $m			Greater China Restated $m		Central Restated $m		Group Restated $m
Capital expenditure		120		26			2		202		350
Non-cash items:
Depreciation and amortisationa		42		15			5		50		112
Share-based payments cost		6		4			3		8		21
Share of losses/(gains) of associates and joint ventures		1		(4	)		—		—		(3	)
Impairment charge		18		—			—		—		18

a  Included in the $116m (2018: $115m, 2017: $112m) of depreciation and amortisation is $82m (2018: $86m, 2017: $78m) relating to administrative expenses and $34m (2018: $29m, 2017: $34m) relating to cost of sales. A further $54m (2018: $49m, 2017: $41m) of depreciation and amortisation was recorded within System Fund expenses.

Reconciliation of capital expenditure

Year ended 31 December 2019	Americas $m			EMEAA $m			Greater China $m		Central $m			Group $m
Capital expenditure per management reporting		57			71			—		137			265
Goodwill		—			4			—		—			4
Contract acquisition costs		(27	)		(35	)		—		—			(62	)
Timing differences and other adjustments		4			1			—		(4	)		1
Additions per the Group Financial Statements		34			41			—		133			208
Comprising additions to:
Goodwill and other intangible assets		—			4			—		104			108
Property, plant and equipment		19			29			—		29			77
Investment in associates and joint ventures		14			—			—		—			14
Other financial assets		1			8			—		—			9
		34			41			—		133			208
Year ended 31 December 2018	Americas Restated $m			EMEAA Restated $m			Greater China Restated $m		Central Restated $m			Group Restated $m
Capital expenditure per management reporting		74			33			2		142			251
Contract acquisition costs		(32	)		(26	)		—		—			(58	)
Timing differences and other adjustments		1			—			—		—			1
Additions per the Group Financial Statements		43			7			2		142			194
Comprising additions to:
Intangible assets		—			—			—		112			112
Property, plant and equipment		13			2			2		30			47
Investment in associates and joint ventures		3			—			—		—			3
Other financial assets		27			5			—		—			32
		43			7			2		142			194

Summary of Geographical Information

Geographical information

Year ended 31 December	2019 $m		2018 $m		2017 $m
Revenue
United Kingdom		265		151		74
United States		1,957		1,950		1,845
China		214		222		201
Rest of World		818		781		713
		3,254		3,104		2,833
System Fund (note 33)		1,373		1,233		1,242
		4,627		4,337		4,075

For the purposes of the above table, hotel and reimbursable revenues are determined according to the location of the hotel and other revenue is attributed to the country of origin. In addition to the United Kingdom, revenue relating to an individual country is separately disclosed when it represents 10% or more of total revenue. System Fund revenues are not included in the geographical analysis as the Group does not monitor the Fund’s revenue by location of the hotel, or in the case of the loyalty programme, according to the location where members consume their rewards.

31 December	2019 $m		2018 Restated $m
Non-current assets
United Kingdom		184		205
United States		1,632		1,643
Rest of World		847		510
		2,663		2,358