Presentation material 5 December 2015

Pandox acquires 18 hotels in Germany
A good match both in terms of strategy and business model
Stockholm, 5 December 2015
Anders Nissen, CEO
Liia Nõu, CFO
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.
PANDOX – EXCELLENCE IN HOTEL OWNERSHIP & OPERATIONS
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Pandox acquires 18 hotels in Germany
A good match both in terms of strategy and business model
18 hotel properties in 12 German cities with a total of 3,415 rooms.
Total consideration of MEUR 400, corresponding to c. MSEK 3,7001 on a debt free basis
including minority share.
Stable markets with a mix of international and domestic demand.
The hotels are positioned as full service products in the upper mid-market segment. The hotels
will be marketed and operated by Leonardo Hotels.
The business model is lease contracts, and new 25-year revenue-based lease agreements with
good guarantees have been entered into with Fattal Hotels.
The portfolio is expected to increase Pandox’s rental revenues by c. MSEK 2501 and cash
earnings by c. MSEK 1501 in 2016, provided the acquisition is completed before year-end 2015.
Sellers are the Leopard Group and Fattal Hotels.
The acquisition is made together with Eiendomsspar AS as a minority shareholder with 5.1
percent.
1) At current exchange rate
PANDOX – EXCELLENCE IN HOTEL OWNERSHIP & OPERATIONS
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Portfolio overview including Leonardo Hotels
Based on market value per 30 September 2015 and current exchange rate
Focused strategy on large hotel properties in the uppermedium to high-end segments in strategic locations
Active ownership model combining a large, attractive
portfolio with excellent operational skills
~10%
~8%
~42%
Pandox Group
Property
Management
Operator
Activities
121
1032,3
183
Hotel Properties
Leased Out
Operated
SEK 31.3bn
80%
20%
Portfolio Market
Value2
Portfolio Market
Value
Portfolio Market
Value
25,182
19,745
5,437
Rooms
Rooms
Rooms
1) International which includes Belgium, Germany, Switzerland and Canada.
2) Excluding Scandic Antwerp divested 1 December 2015.
3) Hotel Prince Philip was reclassified to Operator Activities 1 October 2015.
~8%
~32%1
Portfolio market value overview including Leonardo
Hotels, based on portfolio market value per 30
September 2015, excluding the previously
communicated divestment of Scandic Antwerp which
was closed 1 December 2015, and current exchange rate
PANDOX – EXCELLENCE IN HOTEL OWNERSHIP & OPERATIONS
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Strategic drivers for the acquisition
Fulfils all Pandox’s strategic criteria
1
Increases cash earnings and creates
opportunities for value growth
6
2
Further potential in cooperation with
Fattal Hotels
Germany is a prioritised market where
Pandox already has exposure
3
5
Prioritised segment with full service
hotels in upper mid-market with a wellbalanced demand
Increases the share of Property
Management
4
Lease model with long agreements
where the operator has the main
responsibility for investments
PANDOX – EXCELLENCE IN HOTEL OWNERSHIP & OPERATIONS
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Portfolio of quality hotels
Positioned in a stable and profitable market segment
Leonardo Royal Hotel Düsseldorf Königsallee (253 rooms)
Leonardo Hotel Mönchengladbach (128 rooms)
Leonardo Hotel Hannover Airport (213 rooms)
Leonardo Royal Hotel Frankfurt (449 rooms)
Leonardo Hotel Mannheim City Centre (148 rooms)
Leonardo Hamburg City Nord (182 rooms)
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Portfolio overview
18 hotels in 12 cities with a total of 3,415 rooms
Hotel
City
Number of rooms
Location
Leonardo Royal Frankfurt
Frankfurt
449
City centre
Holiday Inn Frankfurt Airport North
Frankfurt
295
Airport
Leonardo Royal Düsseldorf Königsallee
Düsseldorf
253
City centre
Leonardo Hannover Airport
Hannover
213
Airport
Leonardo Wolfsburg City Center
Wolfsburg
212
City centre
Holiday Inn Düsseldorf Airport
Düsseldorf/Ratingen
199
Airport
Leonardo Hamburg City Nord
Hamburg
182
Ring road
Leonardo Hannover
Hannover
178
Central residential
Leonardo Köln-Bonn Airport
Cologne
177
Airport
Leonardo Heidelberg
Heidelberg
169
Ring road
Leonardo Heidelberg-Walldorf
Heidelberg/Walldorf
161
Central
Leonardo Royal Köln am Stadtwald
Cologne
150
Central residential
Leonardo Mannheim City Center
Mannheim
148
City centre
Leonardo Karlsruhe
Karlsruhe
147
City centre
Leonardo Düsseldorf City Center
Düsseldorf
134
City centre
Leonardo Mönchengladbach
Mönchengladbach
128
City centre
Leonardo Royal Baden-Baden
Baden-Baden
121
City centre
Leonardo Aachen
Aachen
99
City centre
Total
3,415
Average room size
190
PANDOX – EXCELLENCE IN HOTEL OWNERSHIP & OPERATIONS
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Financial effects: earnings and business
At full consolidation and at current exchange rate
The portfolio is expected to increase Pandox’s rental revenues by c. MSEK 2501 and cash
earnings by c. MSEK 1501 in 2016, provided the acquisition is completed before year-end
2015.
Fattal Hotels remains as a long-term lessee in all of the hotel properties with new 25-year
revenue-based lease agreements with good rental guarantee levels.
Pandox’s responsibility for future investments is limited to major technical investments
and building structure, which means property costs are lower compared with Pandox’s
Nordic hotel property portfolio.
Pandox sees good potential to, in close cooperation with Fattal Hotels, make future cash
flow enhancing investments in the acquired hotel property portfolio.
1) At current exchange rates
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Financial effects: portfolio and business mix
At full consolidation and at current exchange rate
Based on the market value of the hotel property portfolio per
30 September 2015:
• The portfolio value increases from c. SEK 27.7bn to c. SEK 31.4bn. Excluding the previously
communicated divestment of Scandic Antwerp, which was closed 1 December 2015, the
portfolio value increases to c. SEK 31.3bn.
• Investment properties’ share of the total property value increases from c. 77 percent to
c. 80 percent.
• Pandox’s loan-to-value ratio (net) increases from c. 44 percent to c. 51 percent, which
should be compared with the company’s financial target of a loan-to-value ratio of 45-60
percent (gross) with normalised liquidity.
1) At current exchange rates
PANDOX – EXCELLENCE IN HOTEL OWNERSHIP & OPERATIONS
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Other information
The acquisition price amounts to MEUR 400, corresponding to c. MSEK 3,700 at the
current exchange rate, on a debt free basis including minority interest.
Pandox AB’s ownership share amounts to 94.9 percent and Eiendomsspar AS’s ownership
share amounts to 5.1 percent. This structure is considered the most efficient solution for all
Pandox’s shareholders.
The acquisition is financed by a new and agreed five year bank loan, existing bank loans and
existing liquid funds.
The seller is the Leopard Group, which is a holding company with property interests in the
UK and Germany, and the Fattal Hotels of Israel.
The acquisition is expected to be completed by the end of 2015, and is conditional upon
having received necessary approvals by German authorities, and the fulfillment of the terms
in the share transfer agreement.
Pandox will consolidate the acquired hotels to 100 percent and report these under the
business segment Property Management, and report minority interest at the consolidated
group level, from the first quarter 2016.
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Thank you! Time for questions!
PANDOX – EXCELLENCE IN HOTEL OWNERSHIP & OPERATIONS
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Pandox AB (publ)
Financial calendar:
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Box 15
SE-101 20 Stockholm
Sweden
Feb 18, 2016 – Year-end report for the period Jan–Dec 2015
Visiting address:
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Sweden
May 4, 2016 - Interim report for the period Jan-Mar 2016
www.pandox.se
May 3, 2016 – Annual general meeting 2016
August 18, 2016 – Interim report for the period Apr-Jun 2016