Pandox : ABGSC Nordic Opportunities Virtual Seminar

Two steps forward one step back

Anders Nissen, CEO

Liia Nõu, CFO

ABG Nordic
Opportunities		19 ▪ 11 ▪ 2020
Seminar 2020

Exterior @Hilton Garden Inn London

Heathrow

Strategic position

A well-diversified portfolio

Pandox Group	Property Management	Operator Activities

	156	35,059	136	29,272	20	5,787
	Hotel properties	Rooms	Leased properties	Rooms	Operated properties	Rooms
	SEK 62.0bn	84%	16%
	Property market value	Property market value	Property market value

2	PANDOX - EXCELLENCE IN HOTEL OWNERSHIP AND OPERATIONS

Strategic position

A strong network of brands and partners

Note: The logos are the property of the respective brand owners.

3	PANDOX - EXCELLENCE IN HOTEL OWNERSHIP AND OPERATIONS

Q3 2020 in brief

Recovery in line with expectations

Strong summer period driven by domestic leisure demand

Initial demand from domestic business

Continued strong financial and liquidity position

Government restrictions biggest threat

-5%	-47%	-37%	MSEK 5,348
R12M	Jul-Sep 2020	Jul-Sep 2020	30 Sep 2020
Return on equity2)	Growth in total	LFL growth in NOI	Liquid funds and unutilised
	net operating income1)	Property Management3)	credit facilities

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. For comparable units adjusted for currency effects

4	PANDOX - EXCELLENCE IN HOTEL OWNERSHIP AND OPERATIONS

Q3 2020 in brief

COVID-19 effects on Pandox

Low demand due to COVID-19 related restrictions

Minimum and fixed rent main source of income, also expected in Q4

Strong increase in domestic leisure demand when restrictions lifted

Unrealised value changes explained by lower cash flows 2020, 2021 and 2022 Increase in trade account receivables reflecting new and temporary payment terms

5	PANDOX - EXCELLENCE IN HOTEL OWNERSHIP AND OPERATIONS

Current revenue

Diversified revenue base

Revenues from different operational models and geographies Minimum rent and fixed rent main source of revenue Approximately MSEK 500 per quarter

Revenue-based rents of MSEK 69 in Q3

Revenues from Operator Activities of MSEK 169 in Q3

Rent collection progressing in line with temporary payment terms No reductions in hotel rents given

6	PANDOX - EXCELLENCE IN HOTEL OWNERSHIP AND OPERATIONS

Property portfolio

Valuations based on established method

Value change

-2.3%

YTD

-9.3%

YTD

Comments per 30 September, 2020

Total property portfolio market value amounted to MSEK 62,022 (63,469)

Average valuation yield for Investment Properties was

5.42 (5.41) percent and for Operating Properties 6.38

(6.41) percent

Valuations made according to same method and model used since the IPO 2015

Downward adjustments due to lower cash flows 2020, 2021 and 2022 as a direct result of COVID-19

Conclusive transaction evidence still missing

Only a few external valuations made in the third quarter

2020 due to practical limitations due to COVID-19

Yield and cash flow expected to be estimated with greater precision in the coming quarters

7	-4.0% YTD

PANDOX - EXCELLENCE IN HOTEL OWNERSHIP AND OPERATIONS

Financial position

Financing and capital structure

EPRA Net Asset Value (MSEK)

EPRA NAV per share, SEK

34,270

32,234

186.4

27,476175.33

24,211

164.0

19,883

Loan to value (%)

Renewed mandate from the AGM 2020 to issue new

shares up to a maximum of 10 percent of total

outstanding shares

50.8

49.7

48.5

47.9

Liquid funds and long-term unutilised credit facilities (MSEK)

5,348

4,215

3,319

144.5

126.2

46.0

2,232

2,500

2016	2017	2018	2019	Q3 2020	2016	2017	2018	2019	Q3 2020	2016	2017	2018	2019	Q3 2020

	8	PANDOX - EXCELLENCE IN HOTEL OWNERSHIP AND OPERATIONS
For definitions, see page 26 in Interim report January-September 2020

Pandox and COVID-19

Three focus areas

Respond - manage the acute phase of the crisis Restart - plan for the recovery

Reinvent - what's next?

9	PANDOX - EXCELLENCE IN HOTEL OWNERSHIP AND OPERATIONS

Market outlook 3.0

Third update since start of pandemic

Six development levels

Several development phases

10	PANDOX - EXCELLENCE IN HOTEL OWNERSHIP AND OPERATIONS

Six development levels…

…to get back to full performance

Revenue				6	Groups return
					5
					International and
				4		meeting returns
				Domestic business
		3	Domestic leisure	returns
2			returns
Hotels open up for
1			business
	Cities and countries
	open up
	Restrictions easing
	gradually						Time

11	PANDOX - EXCELLENCE IN HOTEL OWNERSHIP AND OPERATIONS

Phase 1

The past

COVID-19 virus arrived to Northern Europe in March

Societies closed down and travel restrictions were implemented Occupancy 5-25 percent

Market bottom in late April/early May

12	PANDOX - EXCELLENCE IN HOTEL OWNERSHIP AND OPERATIONS

Phase 2

Summer holidays

Late May, restrictions were gradually eased and domestic travel allowed Domestic leisure demand returned quite immediately

In the Nordics occupancy rose rapidly from 20 to 60 percent during the summer period (R7 days)

Similar pattern in domestic markets across Europe

Drivers were to travel, to meet friends and to experience life outside lockdown

As expected, larger cities like London and Stockholm experienced weak demand (25-30%), due to high dependency on international travel and attractions

13	PANDOX - EXCELLENCE IN HOTEL OWNERSHIP AND OPERATIONS

Phase 3

After summer holidays

After the summer holidays the leisure segment decreased during weekdays but remained stable over weekends

Domestic corporate returned gradually as small and medium sized companies began to travel. Low demand from larger companies due to result of travel restrictions

Domestic markets in the UK, Germany and the Nordics established at 40-55 percent occupancy

International markets saw a certain increase from low levels Overall, a stronger market development than many expected

14	PANDOX - EXCELLENCE IN HOTEL OWNERSHIP AND OPERATIONS

Germany

Occupancy January-September 2020

100%

90%

80%

70%

60%

50%

40%

30%

20%

10%

0%

Germany (open hotels)

64%

58%

								43%	44%
							38%
		24%			24%
				8%	12%
Jan	Feb	Mar	Apr	May	Jun	Jul	Aug	Sep
			Germany Occ		Germany Occ LY

Source: STR	15

PANDOX - EXCELLENCE IN HOTEL OWNERSHIP AND OPERATIONS

Regional UK

Occupancy January-September 2020

Regional UK (open hotels)

100%

90%

80%

		71%
70%
61%
60%								53%	53%
50%
40%			38%
						30%
30%
			21%	23%	24%
20%
10%
0%
Jan	Feb	Mar	Apr	May	Jun	Jul	Aug	Sep

Regional UK Occ		Regional UK Occ LY

Source: STR	16

PANDOX - EXCELLENCE IN HOTEL OWNERSHIP AND OPERATIONS

Nordic regional

Occupancy January-September 2020

Regional Nordic (open hotels)

100%

90%
80%
									72%
70%
60%		57%							53%
52%
50%											47%
								41%
40%				33%
30%						27%
20%					19%
10%
0%
Jan	Feb	Mar	Apr	May	Jun	Jul	Aug	Sep
			Regional Nordic Occ			Regional Nordic Occ LY

Source: Benchmarking Alliance and aggregated by Pandox	17

PANDOX - EXCELLENCE IN HOTEL OWNERSHIP AND OPERATIONS

Regional UK

Occupancy effect from new restrictions

Regional UK (open hotels)

100%

90%

80%

70%

60%	56%
	53%
50%	46%	45%	44%
40%

30%

20%

10%

0%

19-09-2020	26-09-2020	03-10-2020	10-10-2020	17-10-2021
		Regional UK Occ			Regional UK Occ LY

Source: STR	18

PANDOX - EXCELLENCE IN HOTEL OWNERSHIP AND OPERATIONS

Germany

Occupancy effect from new restrictions

Germany (open hotels)

100%

90%

80%

70%

60%

50%	44%
	42%		40%
		39%
40%
			33%
30%

20%

10%

0%

19-09-2020	26-09-2020	03-10-2020	10-10-2020	17-10-2021
		Germany Occ			Germany Occ LY

Source: Fairmas	19

PANDOX - EXCELLENCE IN HOTEL OWNERSHIP AND OPERATIONS

Nordic regional

Occupancy effect from new restrictions

100%

90%

80%

70%

60%

50%

40%

30%

20%

10%

0%

Regional Nordic (open hotels)

48%	47%	47%	49%
46%

19-09-2020	26-09-2020	03-10-2020	10-10-2020	17-10-2021
		Regional Nordic Occ			Regional Nordic Occ LY

Source: Benchmarking Alliance and aggregated by Pandox	20

PANDOX - EXCELLENCE IN HOTEL OWNERSHIP AND OPERATIONS

Outlook for Q4 vs Q3

Stable development

We expect stable revenues in Property Management

We expect Operator Activities to be slightly weaker (Brussels and the Hague)

New restrictions are pushing the recovery a bit further out, but the effects are limited for Pandox:

1. Portfolio dominated by domestic and regional hotels (84% of total)
2. Strong focus on the Nordics
3. Lease model with minimum guaranteed rent

21	PANDOX - EXCELLENCE IN HOTEL OWNERSHIP AND OPERATIONS

Six development levels…

…to get back to full performance

Revenue				6	Group returns
					5
					International and
				4		meeting returns
				Domestic business
		3	Domestic leisure	returns
2			returns
Hotels open up for
1			business
	Cities and countries
	open up
	Restrictions easing
	gradually						Time

22	PANDOX - EXCELLENCE IN HOTEL OWNERSHIP AND OPERATIONS

Q&A

Hotel Mayfair, Copenhagen	25	23

Head office

Pandox AB (publ)

Box 15

SE-101 20 Stockholm

Sweden

Visiting address

Vasagatan 11

Stockholm

Sweden

Tel: [phone]

www.pandox.se

Org.nr. 556030-7885

Forward-looking statements. This presentation contains forward- looking 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.

Hotel Twentyseven, Copenhagen	26	24