Slide 1: Cautious optimism
Cautious optimism Liia Nõu, CFO and acting CEO Anders Berg, Head of IR Q2 2021 16 ▪ 07 ▪ 2021 Presentation PANDOX – EXCELLENCE IN HOTEL OWNERSHIP AND OPERATIONS Lobby @h27, Copenhagen
Slide 2: Pandox – Excellence in hotel ownership and operations
2 PANDOX – EXCELLENCE IN HOTEL OWNERSHIP AND OPERATIONS PANDOX – EXCELLENCE IN HOTEL OWNERSHIP & OPERATIONS
Slide 3: A well-diversified portfolio
Strategic position A well-diversified portfolio Pandox Group Property Management Operator Activities 156 35,180 136 29,393 20 5,787 Hotel properties Rooms Leased properties Rooms Operated properties Rooms SEK 60.7bn 84% 16% Property market value Property market value Property market value 3
Slide 4: 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. 4
Slide 5: Positive market signals
Q2 2021 in brief Positive market signals Gradually improving demand Growth in both revenue and earnings Strong financial position Attractive position in recovery phase -5% R12M +32% Apr-Jun 2021 +11% Apr-Jun 2021 MSEK 4,377 30 Jun 2021 Return on equity2) Growth in total LFL growth in NOI Liquid fund
Slide 6: Covid-19 effects on Pandox
Q2 2021 in brief Covid-19 effects on Pandox Gradual improvement in business conditions, from a low level Positive earnings growth Government support of MSEK 98 in Operator Activities (previous periods) Minimum and fixed rent main source of income Modest value changes Increase in trade account receiv
Slide 7: New products: h27 Copenhagen
New products h27 Copenhagen 200 rooms Operator Activities All guest rooms and public areas have been renovated 7
Slide 8: New products: Scandic Luleå
New products Scandic Luleå Luleå 276 rooms Property Management Extension with 119 rooms Renovation of public areas 8 8
Slide 9: 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 51 in Q2 2021 Revenues from Operat
Slide 10: Contract structure gives different revenue exposures
Impact on Pandox Contract structure gives different revenue exposures Full and immediate impact Operator Activities 16% from market recovery Full exposure 35% Revenue-based leases without minimum guaranteed rent 19% Revenue-based leases with Gradual impact minimum guaranteed rent 58% from market rec
Slide 11: Valuations based on established model
Property portfolio Valuations based on established model Value change Comments per 30 June, 2021 Valuations made according to same method and established cash-flow model used since the IPO 2015 Downward adjustments due to lower anticipated cash flow. Conclusive transaction evidence for yields still
Slide 12: Pandox's approach
Property portfolio Pandox’s approach Value change, MSEK Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2021 Property Management -611 -320 -315 -533 -351 -105 ▪ High correlation between restrictions and demand Operator Activities -347 -282 -284 -101 7 -4 Total -958 -1,560 -2,159 -2,793 -3,137 -3,246 ▪ St
Slide 13: 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 31,065 maximum of 10 percent of total 5,221 outstanding s
Slide 14: 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? 14 PANDOX – EXCELLENCE IN HOTEL OWNERSHIP AND OPERATIONS
Slide 15: …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 15 PANDOX – EXCELLENCE IN HOTEL
Slide 16: Gradual improvements in Q2
Hotel market development during Covid-19 Gradual improvements in Q2 Weak start due to restrictions In May/June restrictions started to ease in all hotel markets Immediate and tangible postive effect on hotel demand (from low levels) Domestic leisure main driver, but domestic business is also growing
Slide 17: Nordic regional: Monthly and weekly occupancy
Hotel market development Nordic regional: Monthly and weekly occupancy 100% 100% 75% 72% 75% 65% 57% 56% 53% 50% 51% 52% 50% 46% 47% 46% 50% 43% 50% 40% 41% 41% 38% 33% 33% 34% 34% 31% 33% 33% 32% 32% 31% 32% 28% 27% 28% 27% 25% 25% 19% 0% 0% Nordic Regional Occ Nordic Regional Occ 2019 Regional Nor
Slide 18: Stockholm: Monthly occupancy
Hotel market development Stockholm: Monthly occupancy 100% 75% 59% 55% 50% 37% 34% 31% 29% 28% 31% 27% 25% 22% 21% 20% 23% 24% 24% 20% 16% 12% 0% Occ in Stockholm approx. Stockholm Occ Stockhom Occ 2019 40% in the first week of July Source: Benchmarking Alliance (open hotels only) PANDOX – EXCELLENC
Slide 19: Germany: Monthly and weekly occupancy
Hotel market development Germany: Monthly and weekly occupancy 100% 100% 75% 75% 64% 58% 50% 50% 43% 44% 41% 38% Estimated* 35% 37% 34% 32% 30% 24% 25% 27% 24% 22% 21% 25% 25% 19% 18% 18% 19% 15% 15% 17% 15% 17% 14% 14% 15% 12% 12% 12% 8% 0% 0% Germany Occ Germany Occ 2019 Germany Occ Germany Occ 20
Slide 20: UK Regional: Monthly and weekly occupancy
Hotel market development UK Regional: Monthly and weekly occupancy 100% 100% 75% 71% Estimated* 65% 75% 71% 61% 66% 67% 68% 62% 61% 61% 53% 53% 56% 50% 47% 44% 50% 38% 42% 41% 39% 40% 39% 34% 34% 30% 30% 27% 31% 31% 31% 23% 24% 25% 25% 21% 25% 0% 0% UK Regional Occ UK Regional Occ 2019 Regional UK O
Slide 21: London: Monthly occupancy
Hotel market development London: Monthly occupancy 100% 90% 80% 76% 71% 70% 60% Estimated* 50% 41% 40% 33% 30% 29% 29% 31% 28% 30% 23% 24% 24% 20% 22% 22% 20% 24% 26% 20% 10% 0% Occ in London approx. 48% London Occ London Occ 2019 in the first week of July *Based on unweighted weekly average Source:
Slide 22: Same pattern everywhere
Hotel markets ahead of Europe Same pattern everywhere Strong correlation between restrictions and demand When restrictions are eased recovery follows Domestic leisure main driver Domestic business demand follows PANDOX – EXCELLENCE IN HOTEL OWNERSHIP AND OPERATIONS 22
Slide 23: Companies are preparing to start travelling again
Business travel Companies are preparing to start travelling again Own analysis of corporate clients in Operator Activities Cautious transition to white collar travel in September/October Infection rates, vaccination rates and restrictions are key Travel policies to be revised during the summer/early
Slide 24: Strong signals from USA
Hotel markets ahead of Europe Strong signals from USA Leisure demand is strong and business travel is increasing Total market occupancy of approximately 70 percent (last week of June) Bigger meetings and events some 50 percent below 2019 levels Larger corporates are still having travel restrictions
Slide 25: USA: Monthly occupancy
Hotel markets outside Europe USA: Monthly occupancy 100% 75% Estimated* 62% 64% 58% 59% 55% 55% 47% 49% 48% 48% 50% 45% 42% 40% 39% 39% 37% 33% 25% 25% 0% USA Occ USA Occ 2019 *Based on unweighted weekly average Source: STR (open hotels only) PANDOX – EXCELLENCE IN HOTEL OWNERSHIP AND OPERATIONS 25
Slide 26: …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 PANDOX – EXCELLENCE IN HOTEL OWN
Slide 27: Promising underlying growth conditions
Market outlook Promising underlying growth conditions Solid economic recovery and increasing vaccination rates Pent-up demand and immediate recovery when restrictions are eased Domestic leisure demand is the strongest driver short term Domestic business demand should start to improve in September (o
Slide 28: Q&A
Clarion Collection Arcticus, Harstad 28 Q&A 28
Slide 29: Appendix
Appendix PANDOX – EXCELLENCE IN HOTEL OWNERSHIP AND OPERATIONS 29
Slide 30: 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 31: 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 32: 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 33: Head office and contact
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