Slide 1: Interim Report January-September 2019: A balanced earnings development
INTERIM REPORT JANUARY-SEPTEMBER 2019 A balanced earnings development Interim presentation 24 October, 2019 Anders Nissen, CEO Liia Nõu, CFO
Slide 2: A balanced earnings development
A balanced earnings development 1 Value-adding acquisitions 19% R12M 2 Positive rental growth in several markets Return on equity2) 3 Good development in Brussels 10% 11% 1.7% 1.6% -1.2% 10.1% Jul-Sep 2019 Jan-Sep 2019 Jul-Sep 2019 Jan-Sep 2019 Jul-Sep 2019 Jan-Sep 2019 Growth in total LFL growth in
Slide 3: Tangible increase in total net operating income
Tangible increase in total net operating income Based on a combination of factors + Value-adding acquisitions + Good rental growth in Finland and Sweden + Good development in Brussels 1) + Positive currency effects Net +81m Q3 2019 Net +250m2) - Increased hotel supply in some markets Jan-Sep 2019 -
Slide 4: Focus on profitable growth (R12M)
Focus on profitable growth (R12M) Continuously high business tempo reflected in earnings OUTCOME (R12M) 3 500 3,307 3 000 2 500 +2.2x 1,988 2 000 1,505 1 500 +2.2x 1 000 894 500 Total net operating income Total cash earnings 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 2015 2016 2017 2
Slide 5: Portfolio overview
Portfolio overview Well-diversified portfolio dominated by revenue-based leases Pandox Property Operator Group Management Activities 146 130 16 Hotel properties Leased properties Operated properties 32,732 27,773 4,959 Rooms Rooms Rooms 85% 15% Property market value Property market value SEK 59.7bn
Slide 6: Acquisition of two hotels in the Hague and Hannover
Acquisition of two hotels in the Hague and Hannover Full-service hotels in growing congress and event destinations Operator Activities Purchase price of MEUR 83 Initial yield of approximately 6.5 percent Managed by Grape Hospitality through a management agreement with Pandox under the Novotel brand
Slide 7: Two full-service hotels in strategic locations
Two full-service hotels in strategic locations Well-positioned in their markets and with growth potential Novotel Den Haag – 216 rooms – full-service Novotel Hannover – 205 rooms – full-service
Slide 8: The world of Pandox including announced acquisition
The world of Pandox including announced acquisition 2% 148 hotels 33,153 rooms 43% 15 countries 20% 85 destinations +20 brands 35% The circles illustrate market value by region as of 30 September 2019 (rounded percentages), including the two hotel properties in Germany & the Netherlands fo
Slide 9: A broad selection of operators and brands
A broad selection of operators and brands All brands and logos are the property of their respective owner PANDOX – EXCELLENCE IN HOTEL OWNERSHIP & OPERATIONS
Slide 10: Demand remained positive (RevPAR Q3 y/y)
Demand remained positive (RevPAR Q3 y/y) Europe (RevPAR) Selected countries (RevPAR) 8% 10% 9% 7% 7% 8% 6% 6% 6% 5% 4% 5% 4% 4% 4% 2% 1% 1% 3% 0% 2% 2% -2% -1% -2% 1% 1% -4% -4% 0% -6% UK Austria Denmark Norway Sweden Germany Ireland Finland Q2 2019 Q1 2019 Q3 2018 Q3 2019 Q4 2018 Source: STR Global
Slide 11: Diversification limits portfolio fluctuations (RevPAR Q3 y/y)
Diversification limits portfolio fluctuations (RevPAR Q3 y/y) Key markets (RevPAR) Stockholm (RevPAR) 15% 5% 12% 4% 4% 4% 10% 9% 3% 3% 3% 5% 2% 5% 3% 1% 0% 0% -1% -2% -1% -5% -4% -5% -2% -2% -8% -3% -10% Q1 2019 Q2 2019 Q3 2018 Q3 2019 Q4 2018 Copenhagen Berlin Helsinki Frankfurt Montreal Oslo UK Re
Slide 12: Financial highlights
Financial highlights Positive rental growth Key figures Comments on the quarter Q3 Q3 chg FY Property Management: LFL1 increase in (MSEK) 2019 2018 % 2018 revenue and net operating income of Revenue 2.6 and 1.7 percent respectively 851 810 5 2,971 Property Management (Note 1) Net operating income Op
Slide 13: Positive effects from diversification
Positive effects from diversification Property Management Net operating income Rental income Jul – Sep 2019 in % Q3 Q3 FY (MSEK) 2019 2018 2018 1%5% Rental income 820 766 2,809 Sweden 8% Other property income 31 44 162 UK and Ireland 30% Germany 8% Costs* -100 -112 -454 Finland Net operating income
Slide 14: Renovation and start-up cost weighed on earnings
Renovation and start-up cost weighed on earnings Operator Activities Net operating income Revenues Jul – Sep 2019 in % Q3 Q3 FY (MSEK) 2019 2018 2018 2% Revenue 600 531 2,153 11% Belgium Costs -491 -429 -1,776 Canada 40% Gross Profit 110 102 377 Germany 22% Add: Depreciation included in costs 50 40
Slide 15: Property portfolio
Property portfolio Strong value increase in the quarter Change in value (MSEK) Comments per 30 September, 2019 Total property portfolio market value Change in value Investment Properties amounted to MSEK 59,661 (55,197) Figures in MSEK Investment Properties, opening balance (January 1, 2019) 47,139
Slide 16: Financing and capital structure
Financing and capital structure Sustained growth in EPRA NAV and maintained financial flexibility Liquid funds and long-term unutilised EPRA Net Asset Value (MSEK) Loan to value (%) credit facilities (MSEK) EPRA NAV per share, SEK Renewed mandate from the AGM 2019 to issue new shares up to a maximum
Slide 17: The main drivers for growth
The main drivers for growth Opportunistic acquisitions Operations Growth investments Diversified portfolio Market growth PANDOX – EXCELLENCE IN HOTEL OWNERSHIP & OPERATIONS 17
Slide 18: Q&A
Vildmarkshotellet Q&A 18
Slide 19: Head office and forward-looking statements
Head office Pandox AB (publ) Box 15 SE-101 20 Stockholm Sweden Visiting address Vasagatan 11 Stockholm Sweden Tel: +46 8 506 205 www.pandox.se Org.nr. 556030-7885 Forward-looking statements. This presentation contains forward- looking statements. Such statements are subject to risks and uncertaintie