Slide 1: Patience is a virtue
Patience is a virtue Anders Nissen, CEO Liia Nõu, CFO Q1 2021 27 ▪ 04 ▪ 2021 Presentation PANDOX – EXCELLENCE IN HOTEL OWNERSHIP AND OPERATIONS Elevator lobby @Hotel Indigo Brussels - City
Slide 2: A well-diversified portfolio
Strategic position A well-diversified portfolio Pandox Group Property Management Operator Activities 156 35,061 136 29,274 20 5,787 Hotel properties Rooms Leased properties Rooms Operated properties Rooms SEK 61.2bn 84% 16% Property market value Property market value Property market value 2
Slide 3: A strong network of brands and partners
Strategic position A strong network of brands and partners Note: The logos are the property of the respective brand owners. 3
Slide 4: Another tough quarter
Q1 2021 in brief Another tough quarter The negative trend from Q4 2020 continued Profitable and strong financial position Positive development in hotel markets outside Europe Attractive position in recovery phase -9% R12M -34% Jan-Mar 2021 -14% Jan-Mar 2021 MSEK 4,689 31 Mar 2021 Return on equity2)
Slide 5: Covid-19 effects on Pandox
Q1 2021 in brief Covid-19 effects on Pandox Very difficult business conditions due to extended restrictions Minimum and fixed rent main source of income Stable earnings development, including some government support Cash flow impact from increase in trade account receivables, reflecting new and temp
Slide 6: Revenue model which limits fluctuations
Current revenue Revenue model which limits fluctuations Revenues from a mix of operational models and agreement types Minimum rent and fixed rent from Property Management main source of revenue • Slightly less than MSEK 500 per quarter • Revenue-based rents of MSEK 31 in Q1 2021 Revenues from Operat
Slide 7: Balanced revenue mix
Portfolio by operational models* Balanced revenue mix 32 properties 36% Revenue-based without 58% Fully variable minimum from first unit of Fully variable rent/revenue guaranteed above minimum rent, 19% guaranteed rent level Revenue-based with 20 properties Own operations, 17% minimum guaranteed 95
Slide 8: Protects downside, may limit early stage growth
Revenue-based leases with minimum guaranteed rent Protects downside, may limit early stage growth Rent is variable but cannot fall below a certain minimum level For variable rent to materialise, accumulated rent (i.e. hotel revenue) must exceed the accumulated minimum level Limits the downside when
Slide 9: Valuations based on established method
Property portfolio Valuations based on established method Value change Comments per 31 March, 2021 Valuations made according to same method and model used since the IPO 2015 Downward adjustments due to lower anticipated cash flows, mainly as a result of Covid-19 -0.7% Conclusive transaction evidence
Slide 10: Fact-based approach
Property portfolio Fact-based approach Value change, MSEK Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021 Property Management -611 -320 -315 -533 -351 ▪ High correlation between restrictions and demand Operator Activities -347 -282 -284 -101 7 ▪ Strong recovery in major markets outside Europe driven by dome
Slide 11: Financing and capital structure
Financial position Financing and capital structure Cash and cash equivalents and long-term unutilised EPRA NRV (MSEK) Loan to value (%) credit facilities (MSEK) 34,270 Renewed mandate from the AGM 2021 to issue new shares up to a 186.4 30,813 31,325 maximum of 10 percent of total 5,221 outstanding s
Slide 12: Three focus areas
Pandox and COVID-19 Three focus areas Respond – manage the acute phase of the crisis Restart – plan for the recovery Reinvent – what’s next? 12 PANDOX – EXCELLENCE IN HOTEL OWNERSHIP AND OPERATIONS
Slide 13: …to get back to full performance
Six development levels… …to get back to full performance Revenue 6 Groups return 5 International and meeting returns 4 Domestic business 3 returns Domestic leisure returns 2 Hotels open up for business 1 Cities and countries open up Restrictions easing gradually Time 13 PANDOX – EXCELLENCE IN HOTEL
Slide 14: Recap: market development during Covid-19
Hotel market development during Covid-19 Recap Covid-19 arrived in Northern Europe in March 2020 Societies locked down and economic activity decreased substantially With restrictions lifted in June/July, a recovery started across Europe with domestic leisure as main driver After the holiday period,
Slide 15: Nordic regional: Occupancy
Hotel market development 2021 Nordic regional: Occupancy 100% 75% 72% 57% 52% 53% 50% 47% 46% 41% 33% 32% 32% 28% 31% 27% 27% 25% 19% 0% Jan-20 Mar-20 May-20 Jul-20 Sep-20 Nov-20 Jan-21 Mar-21 Regional Nordic Occ Regional Nordic Occ 2019 Source: Benchmarking Alliance (open hotels only) 15 PANDOX – E
Slide 16: Nordic regional rolling 7 day trend: Occupancy
Hotel market development 2021 Nordic regional rolling 7 day trend: Occupancy 100% 75% 50% 35% 34% 33% 32% 30% 30% 30% 31% 32% 27% 27% 29% 29% 29% 28% 26% 25% 0% 07-12-2020 21-01-2021 04-02-2021 18-02-2021 04-03-2021 18-03-2021 01-04-2021 15-04-2021 Regional Nordic Occ Regional Nordic Occ 2019 Source
Slide 17: Stockholm: Occupancy
Hotel market development 2021 Stockholm: Occupancy 100% 75% 59% 55% 50% 37% 33% 29% 31% 28% 22% 23% 24% 25% 20% 21% 20% 16% 12% 0% Jan-20 Mar-20 May-20 Jul-20 Sep-20 Nov-20 Jan-21 Mar-21 Stockholm Occ Stockholm Occ 2019 Source: Benchmarking Alliance (open hotels only) 17 PANDOX – EXCELLENCE IN HOTEL
Slide 18: Germany: Occupancy
Hotel market development 2021 Germany: Occupancy 100% 75% 64% 58% 50% 43% 44% 38% 34% 24% 24% 25% 15% 15% 17% 12% 12% 12% 8% 0% Jan-20 Mar-20 May-20 Jul-20 Sep-20 Nov-20 Jan-21 Mar-21 Germay Occ Germany Occ 2019 Source: STR (open hotels only) 18 PANDOX – EXCELLENCE IN HOTEL OWNERSHIP AND OPERATIONS
Slide 19: UK Regional: Occupancy
Hotel market development 2021 UK Regional: Occupancy 100% 75% 71% 61% 53% 53% 50% 44% 38% 34% 30% 30% 31% 27% 25% 23% 24% 25% 21% 0% Jan-20 Mar-20 May-20 Jul-20 Sep-20 Nov-20 Jan-21 Mar-21 Regional UK Occ Regional UK Occ LY Source: STR (open hotels only) 19 PANDOX – EXCELLENCE IN HOTEL OWNERSHIP AND
Slide 20: UK Regional rolling 7 day trend: Occupancy
Hotel market development 2021 UK Regional rolling 7 day trend: Occupancy 100% 80% 60% 39% 40% 32% 33% 34% 35% 35% 29% 29% 29% 31% 31% 31% 26% 27% 24% 20% 0% 09-01-2021 23-01-2021 06-02-2021 20-02-2021 06-03-2021 20-03-2021 03-04-2021 17-04-2022 17-04-2021 Regional UK Occ Source: STR (open hotels onl
Slide 21: London: Occupancy
Hotel market development 2021 London: Occupancy 100% 76% 75% 71% 50% 33% 30% 29% 29% 26% 23% 24% 24% 22% 22% 24% 25% 20% 20% 0% Jan-20 Mar-20 May-20 Jul-20 Sep-20 Nov-20 Jan-21 Mar-21 London Occ London Occ LY Source: STR (reporting basis) 21 PANDOX – EXCELLENCE IN HOTEL OWNERSHIP AND OPERATIONS
Slide 22: Same pattern everywhere
Hotel markets ahead of Europe Same pattern everywhere Strong recovery Domestic demand Strong correlation between restrictions and demand 22 PANDOX – EXCELLENCE IN HOTEL OWNERSHIP AND OPERATIONS
Slide 23: China
Hotel markets ahead of Europe China Hotel market in China first out in the recovery phase The driver is domestic leisure followed by domestic business Meeting segment has improved significantly, large conventions are taking place Large cities like Shanghai and Beijing are improving Strong domestic d
Slide 24: China: Occupancy
Hotel markets ahead of Europe China: Occupancy 100% 75% 64% 65% 62% 62% 58% 59% 57% 50% 47% 47% 44% 42% 35% 35% 23% 25% 14% 0% Jan-20 Feb-20 Mar-20 Apr-20 May-20 Jun-20 Jul-20 Aug-20 Sep-20 Oct-20 Nov-20 Dec-20 Jan-21 Feb-21 Mar-21 China Occ China Occ 2019 Source: STR (open hotels only) 24 PANDOX –
Slide 25: USA
Hotel markets ahead of Europe USA Successful vaccination rollout has led to eased restrictions and travel confidence Also here, demand is driven by domestic leisure and local businesses Early signs of meeting and event demand, however, still low levels Current occupancy at around 80 percent of 2019
Slide 26: USA: Occupancy
Hotel markets outside Europe USA: Occupancy 100% 75% 62% 55% 55% 47% 49% 48% 48% 50% 45% 42% 40% 39% 39% 37% 33% 25% 25% 0% Jan-20 Feb-20 Mar-20 Apr-20 May-20 Jun-20 Jul-20 Aug-20 Sep-20 Oct-20 Nov-20 Dec-20 Jan-21 Feb-21 Mar-21 USA Occ USA Occ 2019 Source: STR (open hotels only) 26 PANDOX – EXCELLE
Slide 27: …to get back to full performance
Six development levels… …to get back to full performance Revenue 6 Groups return 5 International and meeting returns 4 Domestic business 3 returns Domestic leisure returns 2 Hotels open up for business 1 Cities and countries open up Restrictions easing gradually Time 27 PANDOX – EXCELLENCE IN HOTEL
Slide 28: It all depends on the restrictions
Outlook It all depends on the restrictions Assuming Europe is a quarter behind the USA and the restrictions will decrease at the same rate... ...the recovery will start in Q2 2021 and the holiday period will be strong During autumn, the market will establish itself at level 4, supported by domestic
Slide 29: Contract structure gives different revenue exposures
Impact on Pandox Contract structure gives different revenue exposures Operator Activities 17% Full and immediate impact from market recovery 36% Revenue-based leases without minimum guaranteed rent 19% Revenue-based leases with minimum guaranteed rent 58% Gradual impact from market recovery 64% Fixe
Slide 30: High prices – no distress
Transaction market High prices – no distress The transaction market is gradually opening – since the Hotel No. of rooms Price per room (KEUR) outbreak of Covid-19 approx. 15 major single acquisitions have been completed, which Pandox deems relevant Clarion Hotel Amaranten, Stockholm 461 Approx. 320
Slide 31: Q&A
Clarion Collection Arcticus, Harstad 31 Q&A 31
Slide 32: Appendix
Appendix PANDOX – EXCELLENCE IN HOTEL OWNERSHIP AND OPERATIONS 32
Slide 33: Property Management
Based on 2019 actual revenue and RevPAR Property Management Approximate occupancy level for variable rent Rental income, MSEK Occupancy, % in leases with minimum guaranteed rent Country Approx. occupancy Hotels Rooms Switzerland 40-45% 1 206 Sweden 40-45% 28 5,823 3,129 71 Finland Norway Belgium 45-
Slide 34: Property Management
Based on 2019 actual revenue and RevPAR Property Management Approximate occupancy level for variable rent in leases with minimum guaranteed rent Fully variable leases Total Country Approx. occupancy Hotels Rooms Country Hotels Rooms Hotels Rooms Switzerland 40-45% 1 206 Switzerland - - 1 206 Sweden
Slide 35: Operator Activities
Based on 2019 actual revenue and RevPAR Operator Activities 85 Revenue, MSEK Occupancy, % 2,424 73 Full exposure from the first unit of revenue and cost Belgium Germany Canada UK Denmark Netherlands Finland Total hotels and rooms 7 5 2 2 2 1 1 20 1,955 1,490 952 611 403 216 160 5,787 PANDOX – EXCELL
Slide 36: Head office
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