InterContinental Hotels Group - Earnings Call - Q1 2025 TU

Transcript

Operator (participant)

Hello everyone and welcome to the IHG's First Quarter Trading Update Call. My name is Ezra and I will be your coordinator today. If you would like to ask a question, please press star followed by one on your telephone keypad, and if you change your mind, please press star followed by two. I will now hand over to Stuart Ford for the introduction.

Stuart Ford (Head of Investor Relations)

Many thanks and good morning everyone from me and welcome to IHG Hotels & Resorts Conference Call covering the 2025 first quarter trading update. I'm Stuart Ford, Senior Vice President and Head of Investor Relations at IHG, and I'm joined this morning by Elie Maalouf, our Chief Executive Officer, and Michael Glover, our Chief Financial Officer. Just to remind listeners on the call that in discussions today, the company may make certain forward-looking statements as defined under U.S. law. Please do refer to this morning's announcement and the company's SEC filings for factors that could lead actual results to differ materially from those expressed in or implied by any such forward-looking statements.

For those analysts or institutional investors who are listening via our website, may I remind you that in order to ask questions, you will need to dial in using the details on page three of this morning's R&S release. The release, together with the usual supplementary data pack for the first quarter, can be downloaded from the results and presentation section under the investors tab on ihgplc.com. Now over to Elie.

Elie Maalouf (CEO)

Thank you, Stuart, and good morning everyone. I'd like to start the day by thanking our teams for what has been a very busy and productive start to the year across our business and another period that has really demonstrated the attractiveness and strength of our globally diverse footprint despite heightened macro volatility. RevPAR continued to grow and on a global basis was up 3.3%. This was driven by both ADR, which was up 2.2%, and occupancy, which was up 0.6 percentage points. The growth was across all three drivers of stay occasions. Rooms revenue on a comparable hotels basis for leisure stays was up 2% globally. Business was up 3% and groups were strongest, up 5%. In terms of system growth, we opened 14,600 rooms across 86 hotels in the quarter, more than double the same period last year.

With increases delivered in each region, this produced 7.1% gross growth year on year and 4.3% net growth, or 5% excluding the Venetian removal. It is worth reminding that we typically experience seasonality in our system growth with relatively fewer openings and more removals in the first quarter of each calendar year. Year to date, net system growth was therefore flat, the same result as this time last year, but it was actually growth of 0.7% when excluding the Venetian removal. We expect that growth to ramp up through the rest of 2025, as is typical with our phasing. Turning to signings, we added nearly 26,000 rooms into our pipeline in the quarter, or over 20,000 when you exclude the Ruby acquisition.

This level of signings was also well ahead of last year and led to a closing pipeline of 334,000 rooms, which is 9% more than a year ago and 3% more than the start of this year. Around 40% of organic signings were quicker to market conversions, reflecting the breadth and attractiveness of our brands and the benefits to owners of joining IHG's powerful enterprise. To pull out a few highlights for you, Garner, which we only launched around 18 months ago, has already reached 35 hotels open and a further 91 in the pipeline. Combined, there were also 10 openings across both Vignette and Voco in the quarter, as well as another 18 signings for these two brands. These were part of our strong performance in conversions, which also saw more than 30 other conversion signings across the rest of our brand.

Once again, there was a strong development performance across our six luxury and lifestyle brands, with nearly 30 openings and signings combined. The InterContinental brand was seven of these. We opened in Indianapolis, US, and in Monterey, Mexico, and the five signings were in Nashville, two more in Greater China, and the two in EMEA were in Cambodia and India. This was another great quarter performance for this truly iconic global brand as we continue to penetrate established and new growth markets. On the point of growth markets, Saudi Arabia had five openings and signings in the total quarter, India had six, and Japan had seven. Great progress in each of these target markets. When I look at our powerhouse brands and essentials, there were 24 openings for Express and 30 signings.

This world-leading brand now is an estate over 3,200 hotels and a pipeline to add over 600 more. Holiday Inn itself has over 1,500 open and pipeline hotels, with another 11 openings and 22 signings achieved in the quarter. The final point I'd make on development is reminding you of our completion of the acquisition of the Ruby brand in the quarter, which added 30 hotels to our pipeline. We are very excited about the potential of this premium urban lifestyle brand, and we've actually achieved two more signings just since the acquisition. The year has gotten off to a strong start for development activity, as well as delivering a strong trading performance, even in a more volatile environment.

Let me now hand over to Michael, who will provide more color by region, and he will also detail for you that though we are at an early stage, we are on track to meet current full-year consensus profit expectations.

Michael Glover (CFO)

Thanks, Elie. Starting with the Americas, where RevPAR was up 3.5%, was also the growth rate for the US. Occupancy in the region was up 0.7 percentage points, and pricing remained robust, with rate growing by 2.4%. In terms of demand types, groups was the strongest, with comparable rooms revenue up year on year by 6%. Leisure revenue was also ahead by 2%, and business revenue was up by 4%. As with the global performance, there was growth in all three stay occasions. In Q1 of this year, there was the benefit to March from the timing of Easter pulling forward some business travel, and this reversed in April. This is the opposite of the timing impacts last year. When we take the last eight weeks in aggregate, RevPAR has been broadly flat.

We've also noted in today's statement that the latest position of on-the-books revenue for comparable hotels across the balance of Q2, i.e., for May and June, is also broadly flat. Our confidence remains for growth beyond Q2, particularly when economic uncertainty subsides and when the industry's fundamental tailwinds prevail. We already see on-the-books revenue ahead of last year for July and August. Going back to our performance for the first quarter compared to the U.S. industry, we are very satisfied when we look at it on a weighted chain scales basis. Taken together, this industry outperformance combined with growth across all demand drivers underlines our continued confidence of IHG's delivery in the region. In terms of system size in the Americas, we opened just over 4,000 rooms in Q1, a 30% increase on the same period last year.

Albeit, as we've noted, Q1 is a seasonally small quarter for openings. This included 12 hotels across the Holiday Inn brand family, and there were also 12 more signed in the quarter. In total, we signed 4,500 rooms across the Americas, broadly in line with the first quarter of 2024. Further signings for Garner took the brand to almost 60 open and pipeline hotels in the region. Moving on now to our Europe, Middle East, Asia, and Africa region, which had another strong quarter with RevPAR up 5%. As with the Americas, this too was driven by both pricing and demand, with rate up 4% and occupancy up 0.6 percentage points. Looking at RevPAR performance across this diverse region, the U.K. was broadly flat, with continental Europe, which was up 5.6%, the Middle East up 6.2%, and East Asia and Pacific was up 6.8%.

There was further benefit to the latter from inbound leisure travel from Greater China. This helped even stronger RevPAR performance within that sub-region, such as 11% in Thailand and 12% in Japan. Over 6,000 rooms were opened in the quarter, almost sixfold more than the same quarter a year earlier. Within the 30 hotels open, there were 13 that were part of last April's Novum Hospitality Agreement. Another notable opening was the voco Zeal Exeter Science Park, our first branded net-zero carbon hotel. 12,900 rooms were signed into the pipeline in the quarter, which included 5,700 rooms from the acquisition of the Ruby brand. Of those 30 Ruby hotels, 20 are open and will start to be added in the IHG system from the second quarter. While 10 were in the Ruby pipeline at the time of acquisition, 6 then and further two have already been signed, Copenhagen and Berlin.

Within other signings, there were three more Garners, including a flagship for the brand in Edinburgh Haymarket. Since the quarter end, we have also launched the brand in India, with the first two signings in that country. Q1 was also another strong development period in Saudi Arabia, with four signings: a Regent, Vignette, voco, and Holiday Inn. Finally, moving on to Greater China, where RevPAR was down 3.5%, which was similar to the previous quarter and an improvement on the 2024 overall RevPAR performance. From here, there is an easing in the strong comparatives from the prior resurgent return of post-COVID travel demand. Travel has been occurring in the same volumes as the prior year, which is reflected in the occupancy holding up, though rate is down year on year.

This included further impact from the increased outbound leisure travel, leading to Tier 2-4 cities being down 5.7%, whereas 10 Tier 1 cities were close to flat. Record-breaking momentum in development activity has continued. 4,400 rooms were opened in the quarter, more than double the previous year. With the milestone of 800 hotels open achieved, there were 8,500 rooms signed in the quarter, also well ahead of last year. There's now three Atwell Suites in the pipeline since launching the brand a few months ago, eight signings across luxury and lifestyle brands, and of course, Express, Holiday Inn, and Crowne Plaza, all powered ahead with 28 signings between those three brands. As we've noted in this morning's announcement, we remain encouraged of further improvement to come and of the continued attractiveness of the long-term drivers for the region, which are fueling development activity.

Last week, the Investor Relations team issued our eighth episode of IHG Checks In On. This one featured our Greater China CEO, Daniel Alleman, and Chief Development Officer for the region, Kim Sun, talking more about the huge strengths and further opportunities for IHG in Greater China. Now, to update you on the share buyback, we are currently 36% of the way through the $900 million program announced in February. To date, this has reduced our share count this year by a further 1.9%. Concluding with some comments on consensus, as we said in the statement, whilst we are in an early stage in the financial year, we are on track to meet our current full-year profit expectations. We publish details of consensus on our website based on the Visible Alpha data service. This currently sees consensus for operating profit from reportable segments as $1,251 million.

Whilst RevPAR expectations may well come down a little from the current consensus of 2.3% growth for the year, we remain comfortable with the profit consensus. One thing to remind is that in 2025, we have a step up in ancillary fee streams as previously described. The incremental profit from loyalty point sales and from the new U.S. co-brand credit card agreements should add around 130 basis points to our fee margin expansion. On top of that, there would be further margin progress from the positive operating leverage, given we expect fee revenues to be growing in excess of where we are controlling overhead growth. The profit consensus implies growth of 11% on 2024's results. The adjusted earnings per share consensus, which is $0.497, implies growth of 15%. This would result in another year of IHG delivering on our growth outlook.

With that, I'll hand back to Elie for closing comments.

Elie Maalouf (CEO)

Thank you, Michael. We included in today's statement a short section of additional comments regarding current trading conditions. Michael has covered that, although at an early stage, we are on track to meet full-year consensus. As we see it, our on-the-books revenue for comparable hotels is still ahead of Q2. Michael set out that it is looking broadly flat for Americas, whereas the EMEA region is still showing stronger levels of growth, and improvements are expected in Greater China as comparatives start to ease now that we are beyond the first quarter of the year. We are very clear that the attractive long-term structural growth drivers for both demand and supply are unaltered. We also set out reminders as to IHG's many points of continued strength.

In summary, we had a strong start to 2025, both in our trading performance and development activity, despite increased volatility, and we remain confident for more progress ahead. With that, I'll now pass it back to the operator to open up the call for your questions.

Operator (participant)

Thank you very much, Elie. If you would like to ask a question, please press star followed by one on your telephone keypad now. Please ensure your device is unmuted locally, and if you change your mind or your question has already been answered.

Stuart Ford (Head of Investor Relations)

All right, Elie, we're going to open the call up to questions, please. Call dead.

Operator (participant)

Thank you very much. If you would like to ask a question, please press star followed by one on your telephone keypad now. Please ensure your device is unmuted locally, and if you change your mind or your question has already been answered, please press star followed by two. Our first question comes from Jamie Rollo with Morgan Stanley.

Stuart Ford (Head of Investor Relations)

Morgan Stanley, yes.

The call is still live, but we can't hear the operator.

Operator (participant)

Hello. Can everyone hear me now?

Stuart Ford (Head of Investor Relations)

All right, can we try one more time? Can we hear you?

Operator (participant)

Thank you very much. If you would like to ask a question, please press star followed by one on your telephone keypad now. Please ensure your device is unmuted locally. If you change your mind or your question has already been answered, please press star followed by two. Please kindly ensure that your phone is unmuted. Our first question comes from Jamie Rollo with Morgan Stanley. Jamie, your line's now open. Please go ahead.

Jamie Rollo (Managing Director)

Thanks. Good morning. Can everyone hear me?

Stuart Ford (Head of Investor Relations)

Yeah, we can hear you, Jamie. Sorry for that. Still working here.

Jamie Rollo (Managing Director)

Great. No problem. Three questions, please. First, thanks for the commentary on the U.S. outlook. Could you please give us a little bit more flavor, maybe on government spending and also international visitors? What are you seeing in those two buckets? Also, what's your exposure to those two in the US? Secondly, very strong openings in Q1, as you note, particularly in EMEA. Is there any sort of phasing in there? I note that nearly half the new rooms were in the other brand bucket, so it does not appear to be Novum. What is behind that? How are you feeling about full-year consensus net unit growth in the sort of high 3% for the group? Finally, you have not mentioned currency, but it has been quite a big depreciation in the dollar.

Your report hopefully gives the sensitivities, but it looks like there is probably something like a 5% profit boost, mark-to-market, that weakness for the rest of the year. Is that why you are happy with consensus EBIT despite talking down the RevPAR numbers? Thank you.

Elie Maalouf (CEO)

Thank you, Jamie. I'll take U.S. government, international, EMEA openings, and net system-size growth projections, and leave it for Michael to talk about foreign exchange. Okay. In the US, total government, including state, federal, local, as you know, in the US, there are many, many layers of government, is less than 5% of our revenues, and federal is 3.5% or less. That, along with everybody in any business in the US, saw a decline, federal beginning maybe in March and probably continuing into April as government cut spending and cut costs and travel. It is a small part of our business. Interestingly, state was up. State government travel was up. It is a small part of our business. It's been impacted in Q1, and we anticipate that that federal government impact will probably continue.

As you saw, we were able to perform quite well despite that impact, and our outlook is steady, including continued assumption of that impact for federal government. I'd also add on federal government, that is a pretty low-rated business. It's not your high-rated business, so the impact is mitigated by the fact that it's not high-rate. On international, international for us is 5% in the US, all international from any destination. Canada, Mexico is 1.5%. Starting in March and April, we saw some diminution of inbound from Canada. We probably picked some of that up in Mexico, within Canada itself, in Europe. There was diminution from Canada to Mexico to the US, and that's not new news from anybody. However, total international inbound into the U.S. was positive for every month of the quarter.

As Michael said, on the books for Q2 globally is still positive. If some of that international travel goes somewhere else, we're well-positioned to capture it, I believe. We feel good about our net system-size progress for the year. Consensus is at 4.3%, excluding the Venetian, which we signaled well early last year, a non-profitable property for us. We feel good about the 4.3%. I think we made actually good progress because if you look at historically, our year-to-date net system-size progress in the first quarter was almost flat. Last year was zero. Years before was pretty close to zero. This year, when you exclude the Venetian, it's 0.7%, with double the openings that we had in the previous year. Some of that, 1,500 rooms, came from Novum. We just had strong openings across the board.

It was 30% higher in the U.S. and the Americas. It was double in China with no particular property or transaction. In the Middle East, we did open a couple of large properties, but we're optimistic about good growth, signings, and openings in the Middle East for the rest of the year. I'm not saying we're going to double every quarter for the rest of the year, but I'm feeling very good about consensus.

Michael Glover (CFO)

I'll take the currency one now, Elie, if you don't mind. If you look at the currency profit expectations and us being comfortable with the currency profit expectations, that does not include any benefit from currency impact. In fact, I think at the full-year announcement, we said roughly we expected about a $12 million negative impact on currency. As we sat at the end of Q1, that was roughly an $8 million that had reduced to an $8 million impact. Now, it can move throughout the year. As we all know, the dollar has weakened a bit against some currencies, but remember, we're a very broad and largely distributed company. There will be some currencies where it hasn't done that. If you think about how it looks at the average of last year and then compares today's results against that average of last year.

As we sit right now, there's no currency positive impact expected in our full-year confidence in hitting consensus.

Stuart Ford (Head of Investor Relations)

Jamie, I think you've got a specific question about the other line in the EMEA system size. Just to clarify on that, given the high proportion of conversion openings, what occurs is if we have a hotel joining our system, but before it's formally transferred over to one of our brands, if it's in our system account and on our platform, then it gets included into other. What you end up seeing, and it comes through in the column of internal rebrand, is you'll see movements either between brands or out of other into one of those brands when it's officially lit with one of our brands. Hopefully, that makes sense.

Jamie Rollo (Managing Director)

Great. That's all very clear. Thank you very much.

Operator (participant)

Thank you very much. Our next question comes from Richard Clarke with Bernstein. Richard, your line is now open. Please go ahead.

Richard Clarke (Managing Director)

Thanks for taking my questions. Three if I may. I guess Hilton, one of your peers, sort of set out the framework for their guidance was U.S. effectively flat for the rest of this year and China back to flat. Just want to clarify is that roughly your assumptions on what you expect to get to the consensus number? If we did end up having a recession, that's not in there. You do refer to an agile cost base. How much could you offset to sort of preserve profitability? Second question, Holiday Inn Express had 3.2% RevPAR growth in the Americas. Hampton did 0.7%. I appreciate just in the US. I think that is by far the widest gap we've seen between those two brands.

Just anything you could call out as to why Holiday Inn Express is sort of leaving its peers in the dust a little bit there. Thirdly, we've had a few questions from investors on the Defending America's Job and Investment Act that would impose sort of staggered 5% tax rises on foreign companies operating in the U.S., if there are digital service taxes, which the U.K. does have. Is this anything you've looked at? Do you expect you would come under the remit of this? Does this push you towards that long-standing question of should you list in the U.S. instead of the U.K.?

Elie Maalouf (CEO)

Richard, thank you. I'll take a stab at all three, and then Michael will give you the detail on tax and our perspective. I'll talk a little bit about our engagement with the U.S. government in general. I am not going to comment on Hilton's guidance or directions. I'm sure you know people there. You can get all the information you want on that. I will tell you the way we're looking at it is the way Michael described it in his remarks and the SEA is, as we look into Q2, we're encouraged by the fact what we have on the books is positive globally, and it's flat in Q2 combined in the U.S. and the Americas. The pickup window is short, and 50% of our bookings come in the last seven days. There is room and time for that to improve or change.

Recent trends have been encouraging in that direction. As we look past May and June, we look into the summer, July, August, on the books is positive globally and positive in the Americas. We are seeing ourselves through in a steady, constructive way. I think you can, when you talk about China, you asked me about China. What we said last year consistently is we think China is bottoming out. I think the results affirm that. Our RevPAR in Q1 was roughly similar to our RevPAR in Q4, better than the RevPAR in Q1 of the year before. The demand is good. What I am pleased about in China is occupancy was slightly positive. Rate was impacted down, but the big part of that was very strong outbound to Asia-Pacific. We were double-digit up in most Asia-Pacific countries like Vietnam, Japan, South Korea, even Thailand again.

People traveling out of China, the higher-end traveler mostly left China, and that took some rate off. Demand was good. The latest results we got for the May holiday, their Labor Day holiday basically, was record travel, over 6% increase in travel from last year, over 8% increase in travel spending. Look, we know there is a lot of bearish narrative around China, and I am sure that is affecting a lot of industries. Things are steadying up in China. Could we be lavish in RevPAR this year there? I think we are in the game for that as the comps get better going into Q2, 3, and 4. We are not going to be very precise at this point, but I said last year we could be flat. I think we can be flat again.

Moving to the last positive thing I'll say about China is there's a lot of people that have belief there with our openings being double, our strong signings in Q1. I think we're headed towards another record year of signings and openings in China. So there's confidence locally with investors in our brands and in the hospitality market. Moving to your question about our U.S. RevPAR, Holiday Inn Express, other brands. Again, I won't comment on how other brands performed. We obviously, like you, compare ourselves to others, but won't comment on it. I'll tell you that, yes, I'm very pleased with how our teams performed. First, globally with our 3.3% RevPAR, then in the Americas and in the U.S.. at 3.5% despite some uncertainty and volatility. We saw positive RevPAR across every brand in the Americas and in EMEA.

Of course, not in China as things level off there, but in both regions, we saw positive RevPAR in every brand. Look, Holiday Inn Express, it's just a powerhouse. I mean, 3,200 hotels open, another 600 under development. I think it's just an all-team effort spread across many aspects of our enterprise. ISUE won awards now, delivering 60% globally, but over 70% in the U.S. That's a ramp-up of 10 percentage points in the last five years. I think that's helping us deliver for owners and for guests. Our new revenue management system that we deployed last year is in over 4,000 hotels now, almost all in the Americas and in the U.S., on our new AI-driven machine learning, best in the industry revenue management system that we know is delivering outperformance for our hotels. Our powerful cut-through marketing continues.

We have the best-in-class, I think, reservation system. I think it's not just one thing, Richard. It's a combination of factors that are starting to come together. That's just the beginning. We're moving ahead with our new property management system, our new CRM system. There's more ahead for our brands in the U.S. On tax, I'll just give you sort of a broad perspective that we engage very closely with the U.S. government, with the U.K. government, personally myself, Michael himself, advocating for things that are in the interest of our industry and of our company. We're encouraged by the news today that actually leaked yesterday that the U.S. and the U.K. are nearing an agreement on a trade deal or an agreement on a framework for a trade deal. The news flows are incrementally positive there.

We hope that within that outcome, there will be a constructive resolution of any tax uncertainties and disputes. Of course, we'll have to see what comes up. We're engaged in the process to advocate for our business.

Michael Glover (CFO)

I'd also just say it's really early in the process. It seems like the conversations have been very constructive. I think, to be honest, I feel like we were really early on this. Our tax teams and government affairs teams were really quite aware of what was happening, which allowed us to raise this and get this up to the appropriate people in both governments. We've been working very diligently and tirelessly on that. Our board has even engaged in that to making sure it's getting to the right folks. I think, look, it's early days, but it seems like there's a lot of positive momentum in the right way to make sure this doesn't become an issue in the future.

Elie Maalouf (CEO)

I mean, look, as you can see in the current sort of negotiations, a lot gets put on the table. Where things eventually settle in an end state can be very different than what's on the table. I think we just have to be patient, but we're heavily engaged, as Michael said. I myself have met with the U.S. government, with the Chairman of the House Ways and Means Committee that is working on the tax bill in the U.S. We've met with the leaders here in the U.K., and I think we're making some constructive progress.

Richard Clarke (Managing Director)

Thanks very much.

Operator (participant)

Our next question comes from Jaina Mistry with Jefferies. Jaina, your line is now open. Please go ahead.

Jaina Mistry (Analyst)

Hi. Thank you for taking my questions. I have two, if I may. First question is, are you seeing any changes to the development environment, particularly in the U.S. since Liberation Day? My second question is, and actually it relates to Richard's question earlier, if there is a downturn, do you see scope to drive further cost savings and cost efficiencies within the business? Thank you.

Elie Maalouf (CEO)

Jaina, let me try to address your questions, and Michael will support as always. Look, we're very close to our hotel investors, our owners, our partners in this business, not just in the U.S., but around the world. I mean, I probably spend nearly half my time engaged in activities with them or meeting with them personally. And so does our entire leadership team. We have a pretty good pulse, especially in the U.S., where I spend a fair amount of time. On the one hand, yes, there's been quite a bit of turbulence in the news flow beginning in March and into early April, although we're seeing that improving since then. I'd say that the news flow more recently has been more constructive. We've gone from more trade tensions to more trade negotiations, right? We've gone from policy that wasn't clear to a little more clarity on policy.

Financial markets that had reacted strongly in a negative way have mostly stabilized. In fact, the U.S. recovered most, if not all, of the drop at the top of the quarter. The dollar stabilized. Interest rates have stabilized. I mean, clearly there is still some uncertainty out there, but we are moving to more clarity and to more certainty and to a little less turbulence, which is encouraging. Just like we are, owners watch all this. They are an optimistic group by DNA. They always want to build and develop. If not, we would not have had the signings and openings that we did in this quarter that we did last year. Actually, if you exclude the Ruby acquisition from our pipeline, 60% of our signings were new builds, which take a little more courage than a conversion. Yet our owners are signing up to it.

On the one hand, I think they remain optimistic. They're obviously watching what's happening. We haven't detected a palpable, visible behavior change, but certainly everybody's watching to see the direction. I would say that if the direction that we've seen in the last two to three weeks continues, which is more resolution, more constructive, more negotiation, more clarity, less volatility, then I think their mood will continue to move in that direction. So far, they've voted with their pocketbook and signed up for hotels and opened hotels that they signed up to open.

Michael Glover (CFO)

I think from a cost growth perspective and what we would potentially do in a recessionary scenario, I think IHG has demonstrated over the years we have the ability to flex. Most recently in COVID and during that time period, you've seen us flex our cost base. In fact, we were widely cash positive during that period. Even in more recent times, even if you just look at last year, we grew fee revenue by 6% last year with overhead costs only growing at 1%. We constantly look at our costs and work diligently to make sure we're growing revenues faster than we're growing our costs. You heard in my statement today about the opportunity to continue to grow margin based on operating leverage and cost discipline. We will continue to do that and look at that.

Obviously, our biggest risk as a company is not capturing the growth in the future. We want to make sure that we're balanced and we're really going after and grabbing that growth. As we need to, we will obviously manage those costs. We take a very disciplined approach every single day. We look at ways to increase our efficiencies and effectiveness and build those into our day-to-day operations.

Elie Maalouf (CEO)

I mean, Jaina, if you go back to 2019 and compare our fee margin today, we're up 700 basis points. Yes, we went into the pandemic in 2020. We emerged very strongly, but we emerged a stronger, more profitable, more efficient business. We've maintained a lot of those gains while still growing the business. We do not feel at this time there is anything in particular we need to do other than maintain the strong discipline that we have brought that allowed us to have solid growth last year, but good cost containment. That is the approach we have taken going into this year that allows us to stay disciplined, but also capture the upside.

Operator (participant)

Thank you very much. Our next question comes from Alex Brignall with Redburn Atlantic. Alex, your line is now open. Please go ahead.

Alex Brignall (Analyst)

Thank you very much for taking the question. Just one on the full year guide, if it's possible. At the full year results, you kind of signposted EBIT at $1.25 billion-$1.3 billion. If we kind of think of the midpoint there, it's come down, I'd say, $25 million. The FX is about $12 million, which I think I understood your answer earlier to be that it was going to be a $12 million headwind, and now you're assuming no benefit. Please tell me if I'm wrong there. I think, again, at the full year results, you signposted RevPAR growth to be kind of 2%-4%, which was, you sort of said, like our peers, 2%-4%, and now 2%. Is that sensitivity about right? I would have thought that the sensitivity of EBIT would be slightly less than that.

You said it was about 11 or so million historically, but it feels like where you're sort of suggesting EBIT to today versus where it was suggested at the full year is slightly more of a reduction than what you're suggesting on RevPAR. If you could just, I'm sure I've got something wrong in my assumptions. If you could just kind of help me to water that, that'd be great. Thank you.

Michael Glover (CFO)

Okay. Let me start, and then we can, because there's a few things I just want to clear up there. I think first on FX, what we said at the full year results and that was we expected a $12 million headwind. As we sit today at the end of Q1, that was an $8 million headwind. And that we said, what I was saying is that within the 1251, there is no positive expectation from FX there. In fact, it would take into account the $8 million headwind that we have, as we said at the end of the first quarter. From a guide perspective, at the full year results of the, we don't guide, but you may remember consensus was around the 1250 mark at the time.

We had a few markers that were in the 1,270 range, and we said that was a good range for where we thought it could be. As we sit today, consensus sitting at 1,251, we still feel comfortable with that. I think the way when you look at that, I think as we think about it, I think at the time, right now, consensus RevPAR sits at about 2.3%. I think you've got some high markers in there that will likely come down. That is why we feel like consensus RevPAR may come down a little bit. We feel like because of the great cost control that we have and the benefit from the ancillary fees that we see coming in, there is no reason for consensus to go down any further from where it sits today. That is kind of how we would think about it.

Now, when you look at sensitivities, one point of RevPAR, and you can see this on our website, is roughly $11.5 million franchise and managed fees. You can see that in sensitivity. You are not really seeing a big drop there as we talked about with RevPAR coming down just a little bit. Hopefully, that helps and answers your question. There was a lot in your question, so hopefully that answers it.

Alex Brignall (Analyst)

That's really helpful. Just as a follow-up, it's kind of been interesting going through the reporting season for all the peers and looking at the changes in expectations. Clearly, there's a big dynamic from kind of when people reported. If you go back to Wyndham when they started, they cut by 300 basis points, their guide. You go to Marriott, this is on RevPAR. For Marriott, they kind of cut by 50 basis points. I guess my question to you would be, do you think that is really the question of the passage of time, the last couple of weeks have felt a little bit better? What a lot of the hotels have pointed to is that, particularly Marriott, is that kind of high-end demand has held up better than low-end demand.

If you're a high-end hotel, your trading hasn't been as much worse in the last few weeks, and therefore you're not cutting as much. If we look back to 2009, low-end hotels outperformed. It doesn't seem quite logical to expect high-end hotels to outperform persistently through if we did want to be a bit more cautious on the macro. If you could just kind of talk through both your expectations for how things happened over the last couple of weeks that might have affected that guidance, and then your views on how you would expect high-end versus low-end hotels to trade in maybe a more cautious macro environment. Thank you so much.

Elie Maalouf (CEO)

Yeah, Richard, it's very interesting. I think the hard thing is, while it'd be easier and nicer to consider all hotel companies to be homogeneous and therefore have a similar reaction to events, it's actually not the case. Yeah, we're all in the same sector, but the businesses can be very different. The distribution, the location, the geographic weighting, the chain scale weighting really makes a big difference. And then just your systems, how you operate, how you drive performance makes a big difference. Over probably a very long period of time, some similar companies will perform within a similar range. Over multiple quarters, it can vary for structural reasons. It doesn't make one business better or worse than another. Now, we think we're a great business, but I won't comment on the others and how they've guided or not guided.

I'm just saying that we follow all this data that you follow in great detail. We also recognize that there are structural differences between our businesses. We've designed a business model that we believe is powerful by geographic distribution, by chain scale distribution, by segmentation, and put behind it an enterprise that allows us to perform steadily throughout cycles, throughout regions, throughout volatility, and always make higher highs as we go forward. I'm certain that we will again. I don't think what we're saying today is different from what somebody said last week and somebody said two weeks ago. It comes down to the passage of time. I mean, you'd have to ask them. I don't know. For us, it's not really the passage of time as much as this is how our business has been performing. This is how it's indicating its performance will be.

A lot of our performance this year really comes down to structural factors that we have put in place over a long time that do not necessarily vary with a week or two. It rarely inflects that much that quickly. We are confident in EBIT outlook for the year. As Michael said, we are confident in system size outlook for the year. Recognize there has been some turbulence and volatility. We think we are moving into a period of better clarity. I cannot guarantee you that. I mean, things can change quickly, but that has kind of been the direction. If those conditions persist, we are cautiously optimistic for the rest of the year.

Alex Brignall (Analyst)

Could you just expand on the high-end versus low-end and how you'd expect them to change?

Elie Maalouf (CEO)

Yeah, the high-end looks, you know, I don't think we try to sort of stereotype how a segment will perform. Yes, I know historically there's been this stereotype that the mid-scale segment will always outperform in a downturn. At the same time, what's happened over the last 20 years is the upper class has become larger and more upper, has become richer and healthier and living longer and traveling longer. There's a segment there of the population that is just unaffected by downturns that continues to travel. We saw our luxury segment perform very well in Q1. We saw our luxury segment, where open, perform very well during the pandemic. The problem was that a lot of those hotels couldn't be open. Where they were open, they were jammed. If you could get there.

I think that what has been common received wisdom 10, 15, 20 years ago probably does change with time. We believe that the upper luxury segment is pretty resilient due to the insensitivity or lack of sensitivity of people to that wealth bracket, and that our mid-scale segment is resilient because of essential travel. We saw during the pandemic, Holiday Inn Express did not go down below 50% occupancy when theoretically people were not allowed to leave their homes. Our extended stay brands did not go below 60% because there is a level of travel that is essential. Each segment can do well for different reasons, and they are not affected the same way as people tried to stereotype them years ago.

Alex Brignall (Analyst)

That's a really helpful explanation. Thank you.

Jaina Mistry (Analyst)

Our next question comes from Leo Carrington with Citi. Leo, your line is now open. Please go ahead.

Leo Carrington (Analyst)

Thank you. Morning. Could I ask two questions, please? Firstly, on the ancillaries and the new credit card agreement, why has not the slowdown in the RevPAR and your expectations since last year changed the potential fee income for FY25? I am thinking actually both credit card agreement and the point sales. And secondly, I think it is interesting that between your acquisition of Ruby and Marriott acquiring Sis and Em, the Urban Micro Hotel concept seems very popular and very valuable. Is there space elsewhere in your portfolio and your group of brands for another similar concept but perhaps pitched at a different price point? Thank you.

Elie Maalouf (CEO)

I'll try to take both questions. Michael, please jump in as you see. On the ancillaries, we're pleased with the performance year to date on points and credit card. We think the outlook is steady, is robust. Can things change? Of course, anything can change. Based on what we see today, we're confident in meeting the expectations that we set out last year for doubling in 2025 what our credit card P&L revenue would be from 2023. For the additional $25 million in point sales, we look to be quite on track for that. I just think travel has continued. As long as people are traveling, they're engaging more with our brands and engaging more with IHG and feeling a level of affinity. Therefore, they want to participate in our credit card and earn more points.

I mean, keep in mind that we're just really relaunching our partnership with Chase and with MasterCard. That's giving us a boost because we're moving to a whole new level of marketing, of engagement, of promotion of our cards. They're doing very well. The feedback we're getting from our credit card partners is that they're very pleased with the performance they're seeing. We're very pleased with the performance we're seeing. For now, the trajectory is good, and we're pleased with it.

Michael Glover (CFO)

I think also there may be a misconception that the credit card performance is tied to RevPAR. It is not. The way we are compensated on that is tied to really usage of the credit card and acquisitions of the credit card. And our credit card is performing very well. In fact, we have heard from our partners, they are very impressed with what our relaunch has done and what we have offered. There are multiple components to that, and it is not just hotel spends in which we earn profit from that. I think just to be clear on that. The point sale is actually performing extremely well and in line or ahead of expectations as guests look for maybe different ways to purchase their rooms.

Elie Maalouf (CEO)

On your question about Ruby and could there be other similar brands in our portfolio, look, we're very pleased with Ruby just since the acquisition. The interest from owners, from customers has been very, very pleasing. I'm confident the brand will be a great success in our portfolio, not just in Europe, but globally. I won't predict whether there's room for something similar there, but we really like the lifestyle space. We've been leaders in lifestyle. I mean, I joined the company in 2015, which was right when we were acquiring Kimpton. That really broke us into lifestyle and then growing Indigo and adding voco and Vignette and purchasing Six Senses and Regent. Now Ruby, I think we've been early pioneers in differentiating ourselves in lifestyle, luxury lifestyle. This is more accessible luxury.

They call it sort of the urban premium, urban micro, accessible, a sense of luxury and accessible price. Here in London, you got three hotels that are just amazing that do very well. We think there's room for Ruby to grow a lot and that there's something that is similar but not the same. We're always looking.

Richard Clarke (Managing Director)

Thank you, Eddie. Thanks, Michael.

Jaina Mistry (Analyst)

Our next question comes from Estelle Weingrod with J.P. Morgan. Estelle, your line is now open. Please go ahead.

Estelle Weingrod (Executive Director)

Good morning. I have two questions, please. I mean, the first one, just to come back on the quarters ahead. I mean, simplistically, you seem to be still relatively optimistic on the Americas in two, three onwards after a slightly softer period from, say, March to May. My question is, what are the key elements driving your confidence given the still limited visibility ahead? The second one is on the U.K. market. You mentioned broadly flat RevPAR in the U.K. in the release. I mean, could you just provide some color on what we see there in terms of demand trends, potential, I don't know, consumer weakness, or are you just seeing a continuation of the trends we saw last year? Thank you.

Elie Maalouf (CEO)

I'll talk about Americas, and Michael can pick up the U.K. market. Look, in the Americas, we had a very good first quarter. We've talked about that. We're pleased. We know that our brands, our commercial systems, our enterprise performs. There was the Easter effect that washes out between March and April to flat, which is similar to last year, actually. Our on-the-books is also roughly flat. With maybe seven weeks to go, seven, eight weeks to go in the quarter, keep in mind that 50% of our bookings come in the last seven days. There's a lot of room if the environment remains constructive for more pickup to come. We're not saying it's any more today. As we look to July and August, our on-the-books business is positive. We're getting our confidence not from a mood, but from the data.

We are very data-driven at IHG, and we focus just on the figures, exactly what they say. Right now, we recognize there has been some sentiment impact from the volatility and turbulence in March and April. As I said earlier, we believe the news flow is more constructive today. Things are a bit better. The data still do not show, the economic data still do not show a downturn in the U.S.. You have the jobs report for February and for March were pretty strong, better than expectations. Unemployment is still pretty low. Yes, the GDP report for March was down, but that really all came to forwarding and front-loading imports ahead of potential tariffs while consumer spending was up and private investment was up. With hiring still strong, consumer spending still good, investment still good, maybe the data will reflect something different at some point. So far, it has not.

Combined with what we see in, while limited, but actual visibility going forward, still to the positive. If you look into the summer, flat for the rest of the quarter, that gives us the perspective that we have today. Cautiously optimistic for the rest of the year and confident in consensus even.

Michael Glover (CFO)

Yeah. As we look at the U.K., the U.K. was broadly flat. London within that was a small negative. I think outside of London, we were slightly positive. In London, if you look at London, roughly was down low single digits year over year. That was really driven by the number of events that were in London in the first quarter relative to last year. I just say we have really a quite broad portfolio across all kinds of chain scale segments within the U.K. We saw some really strong performance. I think London is really the reason we were dragged down in the U.K. a little bit. That is mainly driven from events that were held last year versus this year.

Elie Maalouf (CEO)

Just to put in perspective, while I love here being in London, it's a great place. The U.K. in total is 5% of our rooms globally. So it's unlikely anything happening in the U.K. is a big swinger to our results in either direction.

Estelle Weingrod (Executive Director)

Very clear. Thank you. Our next question comes from Jared Castle with UBS. Jared, your line is now open. Please go ahead.

Jared Castle (Analyst)

Thank you. Morning. Three as well. Firstly, just on tariffs and the cost of build, are you seeing any pressure? I mean, Elie, you spoke about more imports coming in, I guess, into the U.S. How much of, I guess, goods made in China actually end up in our hotels? Linen, beds, etc., furniture. Secondly, the financing markets, any commentary around that? It seems like they're pretty open given the signings of new builds. Lastly, just on outbound international traffic, how buoyant is it at the moment? I was surprised to see U.S. travel into Europe looks up. In general, international traffic globally is, I know it's not anywhere near a majority of your travel, but it is material. How are you seeing the outbound international travel markets? Thanks.

Elie Maalouf (CEO)

Yeah. Thank you, Jared. Let me try to cover these here. The first thing to say on tariffs is we just need to be a little more patient to see what the end state here is. Clearly, there has been a lot put out there on what they could be, what they might be, where they might go, whom they might be imposed on. We also see significant changes to carve-outs, to special deals, to negotiations. I mean, right now, you have U.K. and U.S. talking about coming to an agreement, EU and U.S. in negotiations. Now, China and the U.S. are back in discussions. There is a different end state than what has been put out there. We just do not know what it is. The impact, therefore, on especially hotel development in the U.S. is undetermined. It is uncertain. I will concede that.

I think to conclude what the impact is, is undetermined. To bring it to you to some quantitative perspective of the cost of a hotel, I mean, we just got to go build a hotel, everything included. Excluding land, only 10% of that construction cost in the U.S., roughly 10%, is sort of FF&E, materials, linens, this, that, the other, OS&E, which are sort of those consumable items. The vast majority of it, 90%, is going to be construction costs: bricks, sticks, roofing, contractors, labor, plumbing, excavation, concrete. The vast majority of that is local. To really extrapolate how much of that 10% is either directly from China or has some China component starts to get a little complicated.

I would say that during the pandemic, what we did in our procurement practice, which is an extensive support that we bring to owners to buy everything we can possibly buy and contract for them for around the globe at the highest quality, the best prices, at high service and reliability, we did start transitioning much of our supply chain from China to other countries only to diversify. Not saying we will not continue to purchase in China, of course, for everything that we do in China for our fast China business. A lot of it comes from there. We are still going to continue to source from there, especially when this uncertainty clears up. We had already begun to diversify. I actually do not think that it is a material exposure per product, especially if you can substitute in some cases due to China-US trade tensions.

Now, if there is general inflation, I think the bigger risk, and I do not want to lead you down some other thought of worry, but I think the bigger risk is not some particular element costing more because of its origin. I think it would be more the general inflation. If there is general inflation as we had in 2022, 2023, and mitigating in 2024, that would probably be something to watch out more for than what goes into hotel. Because almost everything is either locally sourced or can be substituted or from a different point of origin. We are waiting to see. I think let us just take a deep breath. I think there will be more clarity when we talk again at the end of the summer and towards the end of the year. I think a lot of this will reach an end state that is clearer.

On the financing market, it's just this, I would call this grind forward. It did not, and I always say, it's not going to be a V-shape improvement in the new construction financing market. It's just been getting gradually better. Probably took a pause in March, early April, as you had increased market volatility. Probably ameliorating right now. Yeah, our owners are able to finance the quality projects to sign with IHG. It just takes a little bit longer. They might need to put up a little more equity. It's sort of grinding forward. As the general context of policy becomes clearer, I hope that it will continue to improve. Meanwhile, we're doing very well with conversions, and our owners are able to find financing for conversions that continues our growth, not just in the U.S., but around the world.

Your last question on outbound international, I assume you mean from any destination to any other destination, not just outbound from the U.S. to Europe or Europe to the U.S.

Jared Castle (Analyst)

That's correct. Oh, international travel. Thank you.

Elie Maalouf (CEO)

I mean, look, I sit on the executive committee of the World Travel Tourism Council. We just had a meeting recently, looked at the latest update. It was a record of international travel last year. They still expect it to be a record this year, not as much growth, but still growing. The thing to remember about IHG, though, is we intentionally designed a business model that, yes, is global on one hand, but it's also focused on being a very large domestic player in very large domestic markets. In the U.S., we're 95% domestic. In China, we're over 80% domestic. In Europe, we're mostly domestic. In EMEA, it's mostly domestic within that travel. Yes, we have some exposure, of course, to international intercontinental travel. By strategy, by design, we're large domestic players in large domestic either countries or affiliated regions.

However, you are correct that outbound from country to country, while some country pairs may have changed their travel figures, Canada, U.S. is one we said, yeah, that country pair figure is down, no question. Those Canadians are going somewhere else. We are seeing them more in Mexico. We are seeing them more in Europe. We are seeing them here in London, interestingly. China to Asia-Pacific is again up double-digit from last year. Inbound into Europe from Asia is up again. Middle East is strong. It is a resilient factor, and we are pleased by it. I do not think that I think our fundamental thesis, Jared, that over the mid to long term, the growth in GDP and growth in middle class is a structural tailwind to travel. The industry is cyclical and makes highs and lows, but makes higher highs and higher lows.

I think this is a time where it is further reinforced. That thesis is further reinforced.

Jared Castle (Analyst)

Thanks very much.

Jaina Mistry (Analyst)

Our next question comes from Jafar Mestari with BNP Paribas. Jafar, your line is now open. Please go ahead.

Jafar Mestari (Analyst)

I have two questions, please. Just on forward bookings in the Americas, the flat for Q2 and then growth in July and August, I am just curious if there is some color you could share on price versus occupancy in those figures. On industry pricing in the U.S., obviously, the industry has shown a great amount of price discipline in the last five years, much more discipline than expected, I guess, at the time. As you alluded to, Elie, during lockdown, people were physically prevented from traveling. You could not just entice them with a discount and see if it worked. Right now, if people are just uncomfortable traveling because of the noise and the uncertainty, someone could try a discount and see if it works. My question is, are you seeing competitors in the U.S. selectively use more promotions?

Are you seeing some of your franchises in the U.S. being a bit more open to use promotions? In your managed hotels where you have pricing sovereignty, are you tactically using or exploring more promotions? Maybe not lowering headline prices, but allocating a bit more to discount channels. What has been the feedback from any of those explorations, please?

Elie Maalouf (CEO)

Yeah. Thank you, Jafar. I mean, year to date, last year, even the year before, our rest of our growth has been driven a little bit by occupancy growth, mostly by rate. It is generally similar on the books globally and in the U.S. There is no change in that, which actually helps answer your second question, which is we're not seeing yet any price resistance or any people generally ask us if we're seeing any downshifting, any trading down from brands to brands. We're not seeing that in any discernible way. We're not seeing any price resistance. Occupancy continues to be good. What's on the books is either flat or up, as we said, which isn't showing a decline or resistance to travel. Look, supply has been low in the US. Supply has been low.

That may not be a tailwind for unit growth, although we're getting there with taking share and with conversions, which is another form of taking share. It is also a tailwind for RevPAR. You just do not have that many options in many cities and many destinations, many resorts. They are undersupplied today, given the level of demand that comes. I do not think, I know, we are not seeing any behavior, any excessive or new promotional behavior in the industry. We are continuing steady as we were before.

Michael Glover (CFO)

I think, Elie, also, I mean, you mentioned it earlier, some of the new systems we've rolled out using AI, large language models, pulling in data takes a lot of the emotion out of pricing now. I think that being rolled out to our hotels in the Americas has really helped our performance. I think it will continue to help owners make the right decisions on where to set rates. I think the environment has changed significantly from where we were post the financial crisis, where, yeah, historically in the industry, rate declined and occupancy came back, and then rate came up. I think we're just in a much different situation now.

Doesn't mean there couldn't be a situation where that happens, but the technology and advancements are helping take the emotion out of those decisions for owners and helping them make the right kind of pricing decisions.

Elie Maalouf (CEO)

That's a great point because usually when you get irrational discounting, it's because humans are making decisions with fear. The nice thing about machines, they don't have fear. They're perfectly rational. It sounds humorous, but it's true. The fear factor, as you reach the date of arrival, and you start.

Operator (participant)

This meeting is no longer being recorded.

Elie Maalouf (CEO)

Driving rational behavior, even when having some unsold inventory is actually the best decision for your long-term revenue, profit, and price integrity. Humans do not process that the same way as a machine does. The more we are moving to high-quality, AI-driven, machine-learning-driven trusted systems that our franchisees are using, I think the better rate integrity and stronger performance we are going to have for them and for us.

Jafar Mestari (Analyst)

Thanks. On the occupancy versus pricing, I'm sorry, I'm not super clear what this means for when numbers are zero. So when numbers are 2 or 3%, I take your comments to mean one-third of that is occupancy, two-thirds of that is pricing. On the zero flat for Q2 in the Americas, on the books, is that zero and zero? Is it slightly down and still up a bit in pricing?

Elie Maalouf (CEO)

We're not commenting specifically. I mean, as you know, we don't give guidance. This is a deeper level of specificity than we've given before. We're only talking about the future months, given the recent volatility and wanting to give our investors a little more color and clarity on the current context. It's broadly flat and following similar patterns to the past.

Jafar Mestari (Analyst)

Yes, sir. Thank you.

Operator (participant)

Thank you very much. Just as a reminder, if you would like to ask a question, please press star followed by one on your telephone keypad now. Please ensure your device is unmuted locally. If you change your mind or your question has already been answered, please press star followed by two. Our next question comes from André Juillard with Deutsche Bank. André, your line is now open. Please go ahead.

André Juillard (Analyst)

Yes, good morning. Thank you for taking my question. Most of them were already answered, but just wanted to come back on the demand in general. You mentioned that public sector was down, which was not a surprise, but could you give us some more granularity about the split between corporates, leisure parts, and if you've seen.

Operator (participant)

This meeting is being recorded.

André Juillard (Analyst)

Any significant change during the past few weeks, months, in terms of booking and the way people are booking? Thank you very much.

Elie Maalouf (CEO)

What we've seen is that federal government travel has declined, not a surprise to anybody. Now that federal government travel is less than 3.5% of our U.S. business, so less than 2% of our global business. It's declined in the 10% range. State travel has been higher. It's a smaller piece of the business. State travel has been up even more than that on a percentage basis.

Michael Glover (CFO)

It's about 20%. And it's about 1.5% U.S. business.

Elie Maalouf (CEO)

The net of all government travel has been down, but we've made it up in other segments. Groups have been strong. Leisure has been steady. Business transit has been steady. We made it up in other segments. We expect federal government to continue to be down for a period of time, obviously. What we do is we look forward from there. We just go ahead and say, in total, we're pleased that the second quarter is looking flattish, but still seven-eight weeks of pickup available, given a short booking window. Beyond that, in the summer, it's positive. That's the extent of the data that we're sharing today, where our group on the books, to give you one, our group business on the books, to give you one point, is about 7% over last year.

There are other segments that are helping make up for when government's down. As I said earlier, the government business, while it used to be steady business, is actually a pretty low-rated business. We do not need an equal amount of leisure or business or group to make up for an amount, a specific unit of government, because that is capped. Usually low rates. There is very little extra spend. It is not in your luxury properties or any upgrades. Yes, the government's going through an efficiency program, but per trip, I'll tell you, they were also very efficient already.

André Juillard (Analyst)

Okay. When you talk about the groups, you include the MICE segment in it, I guess.

Elie Maalouf (CEO)

It's corporate MICE, anything that's group business. So it's probably for us, it's 50/50 between corporate group and the rest.

André Juillard (Analyst)

Okay. Okay. And no slowdown on the MICE segment.

Elie Maalouf (CEO)

We haven't detected anything different, really. I mean, it's all part of group, and it's not a very big segment in and of itself. You don't hear that from also big conference destinations like Las Vegas or Orlando. Conferences are still very popular at this point. That's the data we have. That's the view we have.

André Juillard (Analyst)

Okay. Thank you very much.

Operator (participant)

Thank you very much. We currently have no further questions, so I will hand back over to Elie for any closing remarks.

Elie Maalouf (CEO)

Welcome to all of you on the call today. Just want to remind you that our second quarter updated financial results for the first half of 2025 will be announced on Thursday, the 7th of August. Look forward to speaking to you then. Goodbye.

Operator (participant)

Thank you very much, Elie, and thank you, Stuart and Mark, for being our speakers on today's call. That concludes today's conference call. Thank you, everyone, for joining. You may now disconnect your lines.