CORPORATE PRESENTATION A leading European hotel property company DNB Nordic Real Estate & Construction Conference 20 September, 2018 Ticker: PNDXB SS Market cap: MSEK 27,555 Listed: Nasdaq Stockholm Anders Berg, Head of Communications and IR
Unique business model BUSINESS CONCEPT 1 Pandox s core business is to own hotel properties and lease them to strong hotel operators under long-term revenue-based lease agreements 2 If the conditions are not in place for a profitable lease, Pandox can choose to operate the hotel itself STRATEGY Hotel properties only Large hotel properties in strategic locations in major markets Long revenue-based lease agreements with the best operators High-quality property portfolio with a sustainable footprint Geographical diversification to reduce fluctuations Ability to be active across the value-chain reduces risks and creates opportunities EXCELLENCE IN HOTEL OWNERSHP AND OPERATIONS
An organisation for active ownership Key competence areas Hotel market and cycle Financing Brand and concepts Acquisitions and transactions Hotel operations Value-driving investments EXCELLENCE IN HOTEL OWNERSHIP AND OPERATIONS
Strong track record Pandox 22 years (*) 53 15 83 0.6 87x 1 15x 15 6x PORTFOLIO MARKET VALUE (SEKbn) NUMBER OF COUNTRIES NUMBER OF DESTINATIONS Market position: Pan-European in size and recognition Business partners: Strong portfolio with well-known operators and brands Specialist expertise: Market, operations, business development and acquisitions Property portfolio: Large, high quality and well diversified (*) From inception in 1995 until Q2 2018
A large and dynamic market Good underlying growth in the global travel and tourism market 10% 4.0% 2x +1BN OF GLOBAL GDP EXPECTED GLOBAL TRAVEL & TOURISM CAGR 2017-2027 GLOBAL MIDDLE CLASS NEXT 20 YEARS INCREMENTAL ANNUAL TRIPS NEXT 20 YEARS Economic growth Source: World Travel & Tourism Council (WTTC), Global Travel & Tourism GDP growth as CAGR, Brookings Institution and IATA
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Property Management dominates Operator Activities creates additional opportunities Pandox Group 143 Hotel properties Property Management 128 Leased properties Operator Activities 15 Operated properties MSEK, R12M 3 000 2 500 Strong growth since listing 2,699 31,656 Rooms SEK 53.1bn Property market value All values per 30 June 2018 29,946 Rooms 86% Property market value 5.57% Valuation yield 4,710 Rooms 14% Property market value 7.27% Valuation yield 2 000 1 500 1 000 500 0 1,505 +1.8x 1,816 +2.0x 894 Total net operating income Total cash earnings Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 2015 2016 2017 2018 EXCELLENCE IN HOTEL OWNERSHIP AND OPERATIONS 7
The world of Pandox 2% 143 hotels 31,656 rooms 15 countries 83 destinations 48% +20 brands 18% 32% Circles represent market value by region (rounde percentages. All values per 30 June 2018. Trademarks, service marks and trade names of others are the property of their respective owners and have been collected from their respective web pages.
Destinations A mix of international, regional and domestic demand London Basel Cardiff Vienna Amsterdam Stockholm Hamburg Sheffield Leeds International Regional Domestic Berlin Dublin Frankfurt Munich Tammerfors Jönköping Brussels Montreal Cologne Copenhagen Wolfsburg Dortmund 9
Flagship hotels in selected international destinations Well positioned to benefit from market growth and market share gains Hilton London Heathrow Airport 398 rooms NH Vienna Airport 499 rooms Park Hotel Amsterdam 189 rooms Hotel Berlin, Berlin 701 rooms Hyatt Regency Montreal 607 rooms The Hotel, Brussels 421 rooms
Flagship hotels in selected regional destinations Well positioned to benefit from market growth and market share gains Hilton Stockholm Slussen 421 rooms Scandic Copenhagen 486 rooms Radisson Blu Cologne 393 rooms NH Collection Hamburg City 129 rooms Jurys Inn Manchester 265 rooms Leonardo Royal Hotel Frankfurt 449 rooms
Flagship hotels in strong domestic destinations Well positioned to benefit from market growth and market share gains Radisson Blu Dortmund 190 rooms Elite Stora Hotellet Jönköping 163 rooms Jurys Inn Sheffield 259 rooms Leonardo Hotel Wolfsburg City Centre 212 rooms Scandic Tampere City 263 rooms
A stable earnings development Second quarter 2018 20% Return on equity 2 1 2 3 Profitable acquisitions in new large markets Continued strong development in Brussels Good underlying demand in the hotel market 33% Growth in total net operating income 1-0.6% LFL growth in NOI Property Management 3 15% LFL growth in NOI Operator Activities 3 1) Measured as net operating income Property Management and gross profit plus depreciation Operating Activities. 2) Measured as growth in EPRA NAV, including dividend and excluding proceeds from directed share issue, at annual rate. 3) Adjusted for currency effects and comparable units. 13
Solid increase in total net operating income Second quarter 2018 Net +207m + Strong performance in the UK and Ireland + Good development in Brussels + Seasonally strong quarter + Favourable market conditions - Fewer business days in Europe (Germany) - Weaker trade fair calendar in Germany - Some renovation effects EXCELLENCE IN HOTEL OWNERSHIP AND OPERATIONS
Austria UK Germany Finland Denmark Sweden Norway Ireland Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Good growth in Europe (RevPAR Q2 y/y) Europe (RevPAR) Selected countries (RevPAR) 8% 7% 6% 5% 7% 7% 6% 5% 10% 8% 6% 5% 7% 9% 4% 3% 2% 4% 2% 1% 2% 3% 4% 1% 0% 0% 0% -2% -1% Source: STR Global Source: STR Global, Benchmarking Alliance EXCELLENCE IN HOTEL OWNERSHIP AND OPERATIONS
Montreal Helsinki Berlin UK Regional Frankfurt Copenhagen Frankfurt Oslo Brussels Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Stable underlying demand in key markets (RevPAR Q2 y/y) Key markets (RevPAR) Stockholm (RevPAR) 20% 15% 15% 12% 10% 8% 11% 10% 5% 3% 4% 5% 5% 6% 8% 6% 4% 2% 0% 5% 0% -5% -4% -1% -2% -4% -6% -4% -3% -3% Source: STR Global, Benchmarking Alliance Source: Benchmarking Alliance EXCELLENCE IN HOTEL OWNERSHIP AND OPERATIONS
Financing and capital structure Solid growth in EPRA NAV and maintained financial flexibility EPRA Net Asset Value (MSEK) Loan to value (%) Liquid funds and long-term unutilised credit facilities (MSEK) EPRA NAV per share, SEK 25,789 24,428 154.0 Renewed mandate from the AGM 2018 to issue new shares up to a maximum of 10 percent of total outstanding shares 50.8 50.6 3,319 3,071 19,883 16,156 107.7 126.2 144.5 48.9 47.9 1,561 2,232 2015 2016 2017 Q2 2018 2015 2016 2017 Q2 2018 2015 2016 2017 Q2 2018 EXCELLENCE IN HOTEL OWNERSHIP AND OPERATIONS
Q&A
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 forwardlooking statements. Such statements are subject to risks and uncertainties as various factors, many of which are beyond the control of Pandox AB (publ), may cause actual developments and results to differ materially from the expectations expressed in this presentation.