Heather Wood: Good morning, everyone. I'm joined this morning by Keith Barr, Chief Executive Officer; and Paul Edgecliffe-Johnson, Chief Financial Officer. As you can see, we are holding today's interim results presentation by webcast, and we'll be taking you through some slides over the next 30 minutes or so. You can find the link on our corporate website and on our stock exchange announcement. So if you haven't already, please do log on, so you can follow the slides.

We won't be holding a separate call for U.S. investors today, but we will be making the replay of this presentation available on our website.Before I hand over to Keith and Paul, I need to remind you that in the discussion today the company may make certain forward-looking statements as defined under U.S. law. Please refer to this morning's announcement, and the company's SEC filings for factors that could lead the actual results to differ materially from those expressed in or implied by any such forward-looking statement.I will now turn the call over to Keith.

Keith Barr: Thanks, Heather.

Good morning, everyone and thank you for joining us today. In a moment, Paul will talk you through our financial performance. But first let me share some quick highlights from our half year results. 18 months ago, we set out our plan to deliver industry-leading net rooms growth over the medium term and we've made good progress in the first half with 5.7% net system size growth, our best performance in over a decade.Our flat RevPAR in the half as anticipated reflected a strong comparable from last year and a slower RevPAR growth environment where our hotels maintained near-record occupancies and rate. Overall, we performed in line with or ahead of the industry in key markets such as the U.S.

and China. The strength of our model meant that 5.7% net rooms growth combined with flat RevPAR delivered 2% underlying operating profit growth or 5% growth, before the seasonal impact of the U.K. portfolio deal and the benefit of cost phasing in the first half last year.Our high-quality fee streams and disciplined use of capital continued to generate good free cash flow allowing us to increase our ordinary interim dividend by 10%. We've made important progress during the first half of the year by strengthening our brand portfolio and investing in the enterprise that helps drive their success.We've continued to evolve our established brands like Holiday Inn, Staybridge Suites and Candlewood Suites with new prototype designs and announced the upcoming opening of six Crowne Plaza Hotels in key international markets that will be brand-defining flagships for the future. We've also taken other brands to important new destinations, growing our international footprint for Kimpton and driving demand for Hotel Indigo, which is set to enter a further 16 countries in the next few years.It's been equally busy, when it comes to our new brands.

We launched our all-suites brand Atwell Suites in May, and we've continued to see strong demand for avid and voco. In the luxury space, a refreshed Regent brand is attracting significant owner interest. And we've signed a number of great hotels for Six Senses since our acquisition in February.Paul will now spend a few minutes taking you through our results in more detail, and then I'll come back to take you through our growth strategy and outlook. We'll then have time for questions. Paul Edgecliffe-Johnson: Thank you, Keith and good morning everyone.

Before I get into the detail, I should highlight that there is a little more noise than usual in the numbers for this half, due to the accounting charges driven by IFRS 16 the impact of our recent acquisition and the efficiency program. I will therefore guide you to our underlying results where I can, which is the best way to understand our performance.First I must start with our headline reported results. Our reported revenue increased 12% to $1 billion and operating profit decreased 1% to $410 million. On an underlying basis, so excluding current year acquisitions $4 million of individually significant liquidated damages and at constant currency, we grew revenue by 13% and operating profit increased by 2%.The $7 million seasonal loss in the U.K. portfolio transaction and the $6 million cost-saving benefit in the prior year numbers have held us back.

Excluding these, operating profit grew by 5%. Underlying revenue from the fee business grew 3% and operating profit grew 4% driving our underlying fee margin up 30 basis points. I will come back to the drivers of this shortly.Interest including charges relating to the System Fund increased by $20 million year-on-year, due to higher net debt and finance charges on acquisitions. For the full year, I'm continuing to expect our underlying interest charge to be around $150 million with the increase on the prior year due to higher levels of average net debt following the special dividend payment at the start of this year, charges relating to the adoption of IFRS 16, and finance charges on acquisitions.In the first half, our reported tax rate was 21%, and I still expect this to be in the low to mid-20s for the full year. In aggregate, this performance enabled us to increase our underlying earnings per share by 2% and gave the Board the confidence to raise the interim dividend by 10%.Looking now at our levers of growth.

We added 30,000 new rooms to the system, which is the highest level of openings we've had in over a decade. At the same time, 10,000 rooms exited, as we continued to focus on the long-term health of our established brands.These additions and removals brought net system size growth to 5.7%. RevPAR was broadly flat across the half, due to the headwinds from the shift in the timing of Easter, the lapping of hurricane-related demand and the strong comparables in China.This RevPAR performance combined with 5.7% net system size growth, resulted in a 3% increase in underlying fee revenue. When looking at fee revenue, year-on-year rooms' growth and comparable RevPAR are good proxies to understand how growing our net system size and revenue per open room translates into incremental fee revenue over time.However, they do not reflect several factors that impact in the year

fee growth: the phasing of openings and removals; changes in relative brand and geographic mix; and the ramp-up of newly opened hotels.I have, therefore, also shown total RevPAR growth and total rooms available on an underlying basis, as these have a more linear relationship with fee revenue growth. The regional detail on this is in the appendix.I will now take you through the first half performance in each of our regions in more detail.

Starting with the Americas, where in the first half RevPAR grew 0.1%, as rate growth more than offset occupancy declines. RevPAR in the U.S. was flat with performance in line with the segments in which we compete. In the second quarter, the shift in the timing of Easter and the lapping of hurricane-related demand resulted in an occupancy-led RevPAR decline of 0.7%.Underlying fee business profits were up 4%, largely driven by growth in fee revenue from incremental rooms and higher levels of termination fees, which more than offset the net negative impact of previously disclosed items, including income relating to an equity investment, a payroll tax credit and legal costs.We opened 11,000 rooms during the first half of the year, more than two-thirds of which were in the Holiday Inn Brand Family. We signed a further 14,000 rooms into our pipeline, down on the prior year as we annualized against the boost of signings following the launch of avid.

Importantly, we continued to grow our share of branded industry signings, up 100 basis points over the last two years.Moving now to our Europe, Middle East, Asia and Africa region where RevPAR was up 0.2% for the first half of the year. In the UK, RevPAR was up 2% with 5% growth in London and 1% growth in the provinces. In the second quarter, we saw 4% RevPAR growth in the capital due to strong international inbound demand.Continental Europe was up almost 3% with a strong performance in Germany, helped by a favorable trade fair calendar. France was down 1% impacted by social unrest in Paris. High supply growth and political unrest continued to weigh on demand in the Middle East where RevPAR was down 5% in the first half.Japan saw RevPAR growth of 3% while Australia was down 2% due to continued supply growth and lapping the boost from the Commonwealth Games last year.

South Korea was down 13% in the half due to the lapping of the 2018 Winter Olympics in the first quarter.Coupled with strong net rooms growth, this translated into 3% growth in underlying fee revenue and operating profit. The first half includes the results from the UK portfolio transaction, which completed in July last year. This resulted in owned leased and managed lease revenue increasing by $91 million, whilst operating profit decreased by $7 million due to the seasonality of profits in these hotels.As previously guided, we still expect that the portfolio will make a small operating profit in the full year. In the half, we opened 6,000 rooms in the region and signed a further 11,000 into our pipeline. This strong momentum is a direct result of our increased focus on aligning our resources in the highest opportunity segment and market across the region.Finally, we have integrated China where we've continued to outperform the industry throughout the first half of the year.

RevPAR across the region was down 0.3% in the first half due to the lapping of strong comparables and a softer corporate and meetings business, offsets strong domestic leisure demand. Hong Kong RevPAR was down 0.4% in the first half impacted in the second quarter from the political disputes, whilst Macau was up 5%.Underlying revenue was up 8% and underlying profit was up 32%, benefiting from some phasing of costs between the first and second half. We opened 13,000 rooms and signed a further 22,000 rooms our best-ever performance for a half. We now have over 800 hotels open and in the pipeline.All together, this underlines the strength of our position and owner offer in Greater China. We are planning on holding an educational event on the 31st of October, which will explore our business in the region in more detail.Turning now to our group

efficiency program: We're making good progress and remain on track to deliver $125 million annualized savings by 2020, which are being reinvested behind our strategic initiative to drive industry-leading net room's growth over the medium term.

We continue to expect that on an annual basis, the delivery of these savings should match the ramp-up of spend on new initiatives. Underlying fee margin at the half was up 30 basis points.This time last year, margin benefited from $6 million of timing differences between the realization of savings related to our group efficiency program and the reinvestment back into group – back into growth initiatives. After taking this into account along with the acquisition of Six Senses, which made a small operating loss in the half, fee margin is up 130 basis points. We continue to expect medium-term fee margin progression to be broadly in line with our historic average.Moving on now to cash flow. Underlying free cash flow of $141 million was down $120 million year-on-year.

This was a result of movements in working capital much of which we expect to reverse in the second half and higher levels of cash tax as the prior year results benefited from the U.S. tax refund.Our gross CapEx was covered 1.8 times by our underlying operating cash flows, whilst our permanently invested maintenance capital and key money was covered nearly four times. The overall net cash movements resulted in an $882 million increase in net debt to $2.8 billion after the acquisition of Six Senses and payment of a $500 million special dividend.Looking at CapEx in more detail, we spent gross CapEx of $101 million, net CapEx of $71 million. Our medium-term guidance remains unchanged, at up to $350 million gross per annum. We expect our recyclable investment and System Fund capital investment to net to zero over the medium term resulting in net CapEx of $150 million per annum.As well as using cash to reinvest behind our long-term growth, we continue to generate sufficient funds to support growth in the ordinary dividend.

As such, today we have announced an increase in our interim dividend of 10%. This takes the total amount returned to shareholders since 2003 to $13.6 billion.Thank you. And I'll now hand back to Keith.

Keith Barr: Thanks, Paul. In February last year, I talked about our strategy to deliver industry-leading net rooms growth over the medium term and we're already seeing the results.

It's worth noting that the acceleration in growth has come almost entirely from our portfolio of established brands and that's because of the constant innovation and investment we make to ensure they remain attractive to our guests and competitive for our owners.Examples of this include our new Formula Blue guest room designs for Holiday Inn Express, our Open Lobby and guest room designs for Holiday Inn and our Crowne Plaza Accelerate program which is driving notable improvements in guest satisfaction in the Americas. All of these are elevating the guest experience and enhancing owner returns.We've also expanded our brand portfolio launching or acquiring five new brands over the past two years. Combined these actions are fueling an acceleration in our signings pace, which bodes well for delivering sustained industry-leading growth in the future. All of this has been achieved by making our strategic model work harder, and we've made more progress in the first six months of this year.Thanks to the organizational changes we've made, we are successfully redeploying resource across our business to better leverage our scale and drive an acceleration in growth.Our IHG Rewards Club loyalty program is critical to driving more revenues into our hotels, and we are working to create a more personalized and differentiated offer. We've announced a partnership with the U.S.

Open Tennis Championships one of the most highly viewed sporting events globally, which provides fantastic exposure for all of our brands, and give our most important guests a once-in-a-lifetime experience.We also extended our InterContinental Alliance partnership with Las Vegas Sands to Macau, which gives us – which gives guests more opportunities to redeem points in some great locations. And there is lot's more to come. We are enriching the value proposition for our members by introducing variable pricing on Reward Night redemptions and increasing the number of opportunities guests have to pay with points during their stay think of things like food and beverage and spa sessions.We have continued to strengthened our enterprise and enhance revenue delivery. Through our cloud-based technology platform, IHG Concerto we are developing an updated arrivals platform, which will give our guests an improved arrivals experience through features like mobile pre-check-in. Through Concerto, our owners can also now use a proprietary price optimization software for groups business to help them drive better yields.

And we continue to iterate our new guest reservation system with the first phase of the rollout completed, the development behind attribute inventory and pricing is well underway and we expect to pilot this by the end of the year. The investments we are making in our development capabilities whether technology, engineering, or people are driving an increase in signings.Crucially, it is accelerating the pace at which we move our pipeline from signings to ground break to opening. The work we've done to help our owners drive better returns from their assets with more cost-efficient prototypes for Holiday Inn and across our extended stay brands will continue to underpin our accelerating growth. And we're creating more franchise opportunities too.In Greater China, for example, we have over 200 Holiday Inn Holiday Inn Express and Crowne Plaza properties signed up to this model with 43 already open, so a huge amount of progress. But today I'm going to focus my attention on the work we've done to strengthen our established brands and broaden our portfolio.Before I do that, I want to touch on something that is broader than any one brand or initiative and that is sustainability, a topic that is increasingly on the minds of our owner’s, guests and shareholders.

As a business operating in more than 100 countries, we have an opportunity to make a real difference to the important community projects and charity partnerships, but also to our day-to-day operations.At each stage of the hotel's life cycle, we've been looking for more sustainable solutions that can be replicated at scale. For our new brands, we've been able to embed sustainability elements from the start. For instance, our voco hotels use recycled materials for bedding and large-format bathroom amenity dispensing solutions, meaning, they were able to reduce the plastic consumption in each guest room significantly.Last week, we made another big step with the announcement that we will move our entire estate to bulk-sized bathroom amenities and we'll complete this transition during 2021. We use around 200 million miniature bathroom amenities in our hotels around the world every year and switching to larger formats will significantly reduce our plastic waste and reduce operating costs for owners.We are also on track to reach our three-year carbon reduction target, helped by our IHG Green Engage, our online sustainability platform which holds our hotels accountable to certain standards and offer solutions to reduce their waste and carbon footprint.Importantly, our colleagues are engaged by the direction we're taking the business in, reflected in our recognition early this year as the best global employer by AON, who ranked IHG in the top quartile of the world's most engaged companies. Moving now to look at the steps we are taking to strengthen our leading position in mainstream, accelerate growth in upscale and broaden our offer in distribution and luxury.Looking at our established brands, starting with mainstream.

At our owner conference in May, we launched the new prototype for Holiday Inn that will bring fresh and modern designs to our hotels across the Americas. The concept brings us successful Open Lobby public space and guest room designs together in a more efficient and flexible way with a 15% reduction in building size to create better returns for our owners.As you have heard me say before, Open Lobby is already having a great impact in Europe where it's been adopted in 100 properties. Those hotels are seeing a meaningful uplift in guest satisfaction and our owners are benefiting from the increased food and beverage revenue. Our Formula Blue hotel designs for Holiday Inn Express continue to evolve. We are on track to have it in two-thirds of the U.S.

estate by the end of 2020 and we've brought it to Europe too. These new designs are delivering strong results with hotels seeing a five-point premium in their guest satisfaction scores.Turning now to our extended stay brands, Candlewood Suites and Staybridge Suites. We have grown our system size by 6% a year for the last three years. Both of these brands are a leader in their category. In 2018, Candlewood Suites topped the Business Travel News ranking of midscale extended stay brands for the second consecutive year.

And Staybridge had the highest ranking among upper extended stay hotel chains from J.D. Power for the second year in a row. But there is more we can do to drive further improvements in the guest experience and deliver better returns for our owners.We have done a full refresh of the Candlewood Suites Hotel design with the new brand prototype and an updated renovation solution for the existing estate. Similarly, with Staybridge Suites, we have launched the new prototype that redesigns the public space areas by creating multiple zones for different social interactions. These are proving popular with owners as smaller area requirement and a flexible design approach will drive better returns.In the upscale segment, guests and owner appetite for reliable, yet individual boutique hotels continues to increase and our Hotel Indigo brand is ideally positioned to take advantage.

This brand has a successful mix of locally inspired design-led approach and the reassurance of a consistent upscale experience, a combination that resonates with the market.During the half, we signed 18 Hotel Indigo properties with two-thirds coming from outside the Americas. Over the next few years, we will triple our footprint in Greater China, securing a presence in key cities such as Beijing, Chongqing and Shenzhen, whilst we're opening hotels across EMEAA in key locations such as Madrid, Vienna and Brussels.With over 100 hotels in the pipeline, we are set to double our global footprint within the next five years. It's also been a busy first half for InterContinental with a number of flagship openings including InterContinental Hayman Island, which you can see here and the stunning Intercontinental Lyon. And our owners continue to invest in the existing estate with significant capital being deployed to refurbish a number of properties over the next couple of years.Turning now to Kimpton, where we are seeing excellent growth and the emergence of a really impressive international portfolio. We now have three hotels open in the UK; in London, Glasgow and Edinburgh and our first Kimpton in Asia in Greater China in Taipei.

We're also delighted to have signed two hotels in Beijing and Hong Kong during the half; and to that locations like Bali, Bangkok, Barcelona and Paris. And you can see the brand has an exciting future ahead.When it comes to our new brands, we've talked before about the strategic approach we take when assessing the opportunities out there. In short, we focus on

two things: high-value markets where we can tap into deep pools of unmet consumer demand to create scale positions; and developing a differentiated guest-owner offer. This is how we target rigorous insights-driven approach has guided our decision-making for the recent launches of avid, Atwell Suites and voco and the acquisition of Regent and Six Senses. And we're seeing strong momentum across all these brands.Let me start with our new all-suites brand, Atwell Suites which we launched in May.

The all-suites segment of the Americas upper midscale market has grown its scale by 70% over the last four years and represents an $18 billion pool of guests.Atwell Suites is designed to tap into this opportunity. The brand is targeted at guests who we call opportunity seekers, people who are looking for design-led authentic experience and what are typically longer stays than your local normal transient guests. This is primarily a new build opportunity for owners where we can use our scale to procure materials at low costs to drive better returns. Since the launch, we've had over 50 written expressions of owner interest and we expect the first hotels to break ground next year and open in 2021.Turning to avid. We've now signed almost 200 hotels since the launch just over two years ago and we continue to see strong interest from owners.

There are three avid hotels now open, which are already proving a hit with guests, with great reviews across the hotel's website and other media. And with planning approval obtained or ground broken on over 60 hotels, we expect to have around 10 properties open by the end of 2019.Initial demand for voco hotels has exceeded our expectations with six hotels open across the UK, Australia and the Middle East since launching a year ago. Guest reviews are great and our owners are seeing a mid single-digit uplift in guest satisfaction from our recently converted hotels. We have signed a further 15 properties to-date in high-quality locations including a 4,000 room hotel in Makkah. With the strong pipeline of deals under discussion we're confident in reaching around 30 hotels signed by the end of this year.Turning now to our recent acquisition of Six Senses, which strengthens our guest and owner offer at the very top end of the luxury segment.

As one of the world's leading operators of luxury hotels, resorts and spas there is a real buzz around this fantastic addition to our brand portfolio. Since completing the acquisition, we have signed five new resorts including a property in Loire Valley in France. And two resorts have opened in Bhutan and Cambodia. We now have more than 50 deals under active discussion and see us growing to more than 60 hotels over the next decade.So to sum it up. We are executing against the strategic initiatives, which we outlined 18 months ago all of which are being funded by a group-wide efficiency program, which remains on track to deliver $125 million of savings by 2020.

We have invested in our business to make our strategic model work harder, strengthening our established brands to drive an acceleration in our net rooms growth and adding new brands to target high-value opportunities to support future growth. Importantly, our owners are noticing the work we're doing too responding to investment in existing hotels and new signings and through exploring opportunities with new brands within our expanded portfolio.Ensuring we are best enough to drive net rooms growth in a slower RevPAR environment is an effective strategy that will support our resilient e-business model and drive high-quality sustainable free cash flow. And whilst there are always macroeconomic and geopolitical uncertainties in some markets, we have confidence in the outlook for the rest of 2019.With that Paul and I are happy to take your questions.

Operator: [Operator Instructions] Our first question comes from Jamie Rollo from Morgan Stanley. Jamie, your line is now open.

Jamie Rollo: Thanks. Good morning, everyone. Three questions please. First, can we just stick into some of the margin movements in the regions please? In the Americas up 200 basis points and you mentioned high termination fees. And China up 1,000 basis points, you mentioned cost phasing.

Are there any, sort of one-offs, there or any margin benefits that could reverse in the second half?And secondly on, -- I mean, I know you didn't give formal guidance. But I think your component consensus is about $870 million of EBIT which needs about 10% growth in the second half. Your cost competitors just cut their guidance for the second half.So if you could talk a bit about, why you might see that sort of step-up in the second half that would be helpful. And then finally on the dividend, obviously a good number up 10% but a bit of a disconnect against the EPS. Could you remind us of the dividend policy, please?

Paul Edgecliffe: Thanks, Jamie.

Yeah. Look, so we have called out, so particularly in China, that there is some cost phasing between the first and second half. And so, with a very strong growth in the EBIT that we saw that was benefited from that.And although, then where is the costs will come through in the second half. But -- and if you look at the -- your question about the U.S. and whether there is sort of other fees coming through there, that will impact that.We always call out things like liquidated damages.

If they're of material size and things like the signing-on fees and pit fees et cetera. They're now actually disclosed quite handily on the IFRS 15 in the annual accounts.So, it's a little easier to see those than it used to be. It's not a very significant number. It doesn't vary a lot year-on-year. So there's no major one-off other than timing in China, which I've called out.In terms of the RevPAR and what's going on around the world in that.

The first half was against some tough comparables both in the U.S. and in China. So, we are going to have an easier comparable in the second half, as you look at the, U.S. last year.Then the first half is up considerably more than the second half, which was pretty much flat. And there is, two in change for the first half.

And then, the first half in China was up RevPAR was 10% and then lighter in the second half. So, that will certainly be a benefit for us.In terms of the dividend, yes, I mean, over the -- over many years, we've grown in line with earnings per share growth, 10% for this year, for the interim. Perhaps a little ahead of where we are at the half year on that.But if we continue to be progressive and this dividend cover is very strong. So we will continue to keep that under review. It's not paint if you like to earnings per share growth.

We'll look, at all the factors coming into play.

Jamie Rollo: So can I just follow-up, on those? Could you please quantify the China, cost-phasing number? And also, on the Americas, your costs must have gone down, despite the one-off gains last year. So it's not just a revenue issue. You had very good profit growth there, in excess of revenue growth?
Paul Edgecliffe-Johnson: Yeah. Look we'll never call out the exact cost transfer versus the second half in China.

The problem with reporting numbers there frequently and in a relatively smaller region, is that, a few million dollars here and there.If you start calling that out every half, there's going to be so much information that we have to provide to you, which is just going to get a little bit confusing, I think. And similarly with the Americas, I mean these aren't big numbers. So it will all reverse out in the full year.

Jamie Rollo: Okay. And so back on the second half then, so if you get 10% growth in the second half, you're happy with that?

Keith Barr: 10%, growth in?

Jamie Rollo: EBIT to hit the, consensus of $870 million.

Paul Edgecliffe-Johnson: Got you, thanks Jim. Yeah. Look, we're happy overall with the consensus forecasts. So I suspect that, if we're looking at the net system size growth that we performed to the first half of 5.7%, that's a little higher than people's expectation. But I wouldn't think that would materially move up, anybody's EBIT expectations for the full year.

Jamie Rollo: Okay. Thanks. Paul Edgecliffe-Johnson: Thanks, Jamie.

Operator: Our next question comes from Vicki Stern from Barclays. Vicki, your line is now open.

Vicki Stern: Thanks morning. Firstly, just following up on, RevPAR and then, a few on system growth. So aside from the easier comps point in North America in particular, is there anything else that you can talk to what's giving you then comfort about that section in the back half or anything around, bookings that you're seeing currently, anything on sort of business mix between leisure or business group versus transit?Just a little bit more color as to what we expect to the comp line, while when we expect the inflection. And net unit growth, I think Marriott last night, was suggesting, they're seeing slightly softer net unit growth so, blaming construction delays in U.S., the Middle East and Africa.Obviously, it doesn't appear in your figures, if you're seeing anything like that. But just any comments there on any delays, anywhere in your portfolio or any sort of slowdown in development activity.And then, just finally, on net unit growth just stripping back the Macau and the Six Senses opening, so I guess you're running around 5% or so.

Obviously quite nice acceleration on where you've been.As you look out given the signings, the pipeline et cetera are you sort of expecting that to accelerate further by perhaps 0.5% next year and again the same the following year, so leaving you at 6% or so within the next few years? Thanks.

Keith Barr: Thanks, Vicki. This is Keith. I'll pick up the growth conversation and then I'll let Paul pick up the RevPAR one. In terms of net unit growth, I guess it was about two years ago when we focused on kind of retooling the organization.

And we were very focused on how do we accelerate our growth of our existing brands and that was investments in development, that was investing in our new hotel openings processes, that was beginning to take out costs to build making our -- a number of our brands procurement ready with turnkey prototypes.So we're very, very focused on in a rising cost environment for construction and a more challenging build environment, how do you tool your organization to be able to continue to open up and accelerate. I think that's what you're seeing here now. So it is a more challenging build environment, but we're not seeing any material impacts on our pace of openings, paces of ground breaks. And we are continuing to accelerate growth in the U.S. and also in Greater China as well too.So, I guess unlike our peers, we're not seeing that impact happen in a negative basis.

It is a challenging signings environment. We are increasing our share of signings as we've done this year and last year because of the stronger development organization and the increase in brands as well too.Then being there in the 5%, it's a great number to post in the first half net of the Macau and Six Senses rooms. So, I think that overall, we're very, very confident that the core of our business today is growing at that 5% level with the industry leading was somewhere between 5% and 6%. As the new brands begin to come online, you will continue to see us accelerating into that 5% to 6% range. We're not going to give specific guidance on the exact number for 2020.

But again, if you think about acceleration in signings, accelerations in ground breaks and openings everything we've done, it's logical to assume that you're going to see our net system size numbers continue to grow. Paul Edgecliffe-Johnson: And just coming on to the RevPAR again Vicki, I mean look there were a few factors in the -- between first and second half that come into play. The first is, if you look at Easter and the impact of Easter, you would expect that across quarter one and quarter two, they sort of balance out, so again a little bit more into the first quarter and then moves in the second.Actually the way that it fell, it was a net drag across the half as a whole, so we don't have that drag into the second half. And then of course, there was the hurricanes which in the first half drove -- of 2018 drove up demand. So, now if you look at the shape of our RevPAR, we saw a rate growth and a bit of occupancy declines.

And the occupancy declined down to Easter and to the hurricane headwinds there if you like. We don't have as much group business as you know as some of our peers. So, looking at some group paces, it's a little harder for us. And booking demand is quite short at the moment, but it's hard to look through to business on the books and say exactly what that will give us in the second half.But the factors that I've called out are encouraging for a stronger second half performance. There are a few areas around the world that we're watching closely.

Hong Kong for example, where -- which is about 15% of the revenues of our China business, so it's still relatively small in the context of the group as a whole. But we're a big business and it will -- should all average out overall for the second half.

Vicki Stern: Okay. Thanks very much. Paul Edgecliffe-Johnson: Thanks, Vicki.

Operator: Our next question comes from Monique Pollard from Citi. Monique, your line is now open.

Monique Pollard: Hi, good morning everyone. Three questions from me as well if I can. The first one, just following up Paul on your point about the Easter impacts in the first half.

If you think that's sort of dragging on the occupancy, I can see the Americas occupancy was down 50 basis points in the first half. Is that roughly the scale of the Easter impact it will be drag that it had in the first half in terms of what we could potentially expect to reverse through the second half of the year?And then secondly in terms of China as you flagged in Tier one and Tier two cities flat; and Tier three and four cities the RevPAR is weaker, what's driving the particular weakness in the Tier three and four cities? And should we expect any material improvement in that going through particularly saying sort of corporate confidence is weaker, but leisure demand isn't resilient?And then finally, perhaps you could give some details of your Master Development Agreement in Africa with Valor Hospitality and sort of your plans for the region there over the next few years?
Paul Edgecliffe-Johnson: Absolutely. So look, I mean in terms of the Easter impact, as I said we think it is a drag. I don't want to get into a laundry list of well 20 basis points from this, 30 basis points from that there's some that's impacting performance because it's so hard to track that year-on-year. But we think that and the hurricane lapping is what drove the occupancy probably a little bit more from Easter, so -- but hard to be absolutely precise.In terms of China, we've continued to outperform the market there which is important.

If you look at the Tier 3 and the Tier 4 cities, those have been strong for some time, but there is more supply coming in there.And as you get the balance of demand growth, which is still there and supply growth and you got a lot of new hotels opening up, which will perhaps start with slightly lower rates, it can cause some volatility in the RevPAR you see there. So that's really what's driving the performance there.And in terms of the Master Development Agreement with Valor who's a company that we know well, we're looking at what we can do in Africa and using our partners. And this is a good way for us to get in with our brands, which are very well known in Africa and they've been there for a very long time and expand our reach there.

Monique Pollard: Right. Thank you.

Paul Edgecliffe-Johnson: Thanks,

Monique
Operator: Our next question comes from Tim Barrett from Numis Securities. Tim, your line is now open.

Tim Barrett: Good morning, both of you. I think I just got two things left please. In relation to the first question, I didn't catch it but did you say what the termination fees were in the U.S.

in the half? Are they material enough to call out?And then a very big picture question around supply and demand in the U.S. Do you see -- have you picked up any changes in the outlook for supply growth in 2020? And how do you feel about that at this stage of the year?

Keith Barr: Sure. Why we pick up on the supply and demand in the U.S. too. Clearly, you know, you're seeing a long-term trend being sub-2% in terms of supply growth and we're pushing up against that right now.

And then you have to kind of look at by segments where we compete. And there are certain segments where we are seeing an acceleration of supply growth overall disproportionately, but it's being driven by IHG being one of the biggest ones as we're signing more hotels and taking more share which is driving revenue too.And so while you may see some muted RevPAR growth from quarter-to-quarter overall, we're seeing an increased revenue growth coming out of the U.S. because of our disproportionate focus on mainstream and growth in that segment overall too. So we're not seeing a massive supply-demand imbalance in the U.S. overall.

There are certain cities and certain segments we're seeing a bit more, but again we're fairly positive overall.As long as there's GDP growth in the U.S., you're going to see the RevPAR growth. And we will continue to take more than our fair share in signings and openings which will drive the revenue, the profit generation and the cash generation out of the U.S. business. And that's kind of -- the great thing about our model is when we're in 5% and 6% RevPAR market it's great. But also when we're in a more muted growth we can still generate the revenues and the cash.I'll let Paul talk about the fees.

Paul Edgecliffe-Johnson: So in terms of the termination fees Tim, we do always pull them out if there's anything that's significant as you remember we did with the termination fee we got in Germany, which can be every few years – again we liquidated damages. The point I was making is that under IFRS 16, if you look at deferred revenues in the accounts, it's actually quite a good way to look at how those fees are being generated. And it's not going to vary much year-on-year. And it also tends to be fairly consistent half-to-half. So it's an easier way for you to unpack what's coming through from the non-room fees if you like and then we'll call out any significant liquidated damages half-by-half.

Tim Barrett: Okay. So just going back to what Keith said which are the segments that are accelerating? Is that extended stay?

Keith Barr: You're seeing a growth in the number of the mainstream segments across extended stay upper midscale, midscale so that whole segment you're seeing it because of the launch of new brands the acceleration of existing brands. So supply growth numbers are looking at – sorry, I'm just reaching across the table, so full year supply growth for upper midscale is at 3.2% so again above the industry average. So that's going to have -- clearly have a bit of impact on some markets and on some brands. But again we're taking more than our fair share from the revenue side.

Tim Barrett: Okay. Thanks, both of you.

Operator: Our next question comes from Sophie Aldrich from Aberdeen Standard Investments. Sophie, your line is now open.

Sophie Aldrich: Good morning.

Thank you very much for the results today and the presentation. I just have two questions from me. And the first one, I just wanted to get just a slightly more color on whether you'll be primarily focusing on internal growth and development of current brands or what you might be looking at currently for opportunities and whether or not you're consistently larger?And then the second question would be relating to your balance sheet and where you are with leverage at present and whether you could give some color on whether your intention is to delever from here or stay stable?

Keith Barr: Sure. So as we mapped out I think it was 18 months ago, we've talked about how we'd go about accelerating growth for the company and we've talked first about strengthening our existing brands so taking the existing brands, making them higher returns for owners, better products for customers and so forth. And so that's when we've reduced kind of the GFA for a number of the brands and the site plans and procurement really.

So that was one of the core pieces, which is driving the growth today because again, whilst all the new brands we've launched acquired are excellent future growth drivers for us, the bulk is coming from our existing brands.We then -- we launched the new brands in the segments where we have whitespace and we had identified those as we'll be in the all-suites segment in midscale, voco being in the upscale conversion and avid sitting below Express. That kind of filled out the portfolio. And then we had identified the two gaps in luxury really where Regent and Six Senses have filled in too. And so, really we think we have -- now have a very robust brand portfolio that we'll need to continue to launch Atwell Suites later on this year and begin selling that and continue to driving this. And we will continue to look at white spaces where we think we could launch a brand that we can use our consumer insights that we can scale.

But we've addressed the -- kind of the key areas that we highlighted 18 months ago.We will always begin to look at other options out there, but we're very focused on the cash-generative nature of the model return on capital and strategic markets, so we want to be -- do what we've historically done. We want to grow quickly but intelligently and really leverage our scale, and we think that we have a strong business model to do that today. Paul Edgecliffe-Johnson: And then just on the leverage, I mean no change to what we've been talking about for a long time. After the $500 million special dividend we paid earlier this year and the $300 million acquisition of Six Senses, we are towards the top end of our 2.5 times to 3 times net debt-to-EBITDA range under IFRS 16. We've said that we're happy, and I'm happy to be at the top end of that in current economic conditions.Obviously the business does generate significant free cash flow, so we will delever it out naturally.

And then in due course the Board will look at whether they want to make another return on capital and when to do that. I wouldn't expect that that would be during the 2019 year though having already paid out $500 million this year.

Sophie Aldrich: Thank you very much. Paul Edgecliffe-Johnson: Thanks, Sophie.

Operator: Our next question comes from Jaafar Mestari from Exane BNP Paribas.

Jaafar, your line is now open.

Jaafar Mestari: Just a clarification for me and then a couple of questions, if I may. So just to clarify on the phasing of cost savings to be completely clear for China specifically there was a positive in H1, but the group overall cost phasing was actually a headwind and will be a positive in the H2. Am I correct?
Paul Edgecliffe-Johnson: Yes. So we saw some benefit in China, which probably -- when you're looking at relatively small numbers, it just becomes quite pronounced but there's nothing significant.

And in the full year, it will work through. From what we saw last year, you'll remember is that we had $6 million of the savings that we generated from the efficiency program that we had then reinvested back into business, and we did that in the second half.At this point in the year, we now are tracking to spend pretty much in line with the savings that we're making. So if you normalize for that, and then you look at the margins then you look at the impact of the UK portfolio, then that's what gives you the underlying margin growth that we talked about. So, there's a few factors that are moving around in the group as a whole year-on-year, but there is nothing particularly significant when you look at it in the round for the half.

Jaafar Mestari: Super, thank you very much clarifying, and then just two questions.

One on U.S. RevPAR, I appreciate the industry data is never perfect. But even if I try looking at subcategories, I'm struggling to find a dataset that would show minus 1% or minus 0.7% RevPAR in Q2. I think upper midscale, for example, was almost flat. So, what is it that's IHG specific, is it regional exposure, is it business versus leisure, particular events that you'd like to point out?And then on Holiday Inn Express, could you take us through the Formula Blue rollout in just a bit more detail? Because rolling it out to two-thirds at this stage by 2020, that almost sounds like a scale re-launch.

So, obviously you always have good evidence, that it's good for guest satisfaction in the long-term. But what sort of investment is that to the average Express owner?And what makes you confident, that they're fully on board. And you're not going to end up getting slightly higher removals, like in some of the relaunches in the past?

Keith Barr: Sure. I'll pick up the Holiday Inn Express. So we started the Holiday Inn Express Formula Blue initiative, 3, 4, years ago.

So we developed the new renovation design and the new prototype design, in collaboration with the owners, multiple iterations.It's the first truly end-to-end standardized design, we've done for Express in decades. So, it is completely specified, procurement ready, turnkey, lower cost to build than the previous designs.So all new hotels are being built, to that design, and then the renovation programs, as they come up will be in that design as well, too. And so, we've seen great adoption, great uplift for both in terms of guest satisfaction and RevPAR. And it had no material pushback from the owners on it because they helped co-create it.Additionally, if you remember, we start to signing, 20-year license agreements a number of years ago versus 10 years. And so, many of these renovations are coming up during the natural course of renovations mid license and so, that they're not even eligible to exit the system.

And it's not something that they would choose to do.And candidly, the Express is one of the most highly valued, if not highly valued brand in the industry being the scale, that it has and the significant premium it has so, no concerns at all of this driving any increase in removals whatsoever.

Jaafar Mestari: Superb Thanks. Paul Edgecliffe-Johnson: And then, just on the RevPAR, if you look at the half then you'll see that -- and you weighted according to where our rooms are in the segment then you'll see the phasing we're bang on the weighted segment.If you look at it by quarter, we're a little ahead in the first quarter and a little behind in the weighted segment, in the second quarter. The key different factors -- and again, these are all really small.And you're talking tens of basis points and one of which is, that the Holiday Inn Hotels have more group business than the segment, that full service. But they're in a category that has many more limited service hotels, that which don't have group facilities and group is little weaker that, so that's one aspect of it.The greater proportion of hotels that we have in hurricane markets against the industry, a few renovations of, a few large Holiday Inns, so these are each maybe 20 basis points the difference.

But it all averages out, over the half just to say.

Jaafar Mestari: All right, thanks very much. Paul Edgecliffe-Johnson: Thank, Jaafar.

Operator: [Operator Instructions] We currently have no further questions. I will hand back to you.

Keith Barr: Great, well, thank you operator. And on behalf of the team here, Paul and I want to say thank you very much for attending today. I look forward to catching up with you all, in the future. And hope that you have a wonderful remainder of the summer. Enjoy a bit of time away and a bit of a break.So thank you very much.

This concludes the call.