Two steps forward one step back
Anders Nissen, CEO
Liia Nõu, CFO
Q3 2020 | 23 ▪ 10 ▪ 2020 | |
presentation | ||
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 |
- Measured as net operating income Property Management and gross profit plus depreciation Operating Activities
- Measured as growth in EPRA NAV, including dividend and excluding proceeds from directed share issue, at annual rate
- For comparable units adjusted for currency effects
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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
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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
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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?
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Market outlook 3.0
Third update since start of pandemic
Six development levels
Several development phases
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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 | |||||||
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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
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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
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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
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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
Current market trends
Strong comeback for domestic travel
The largest segment in the hotel market - domestic travel - has made a comeback. Slower recovery for international travel
First signs of smaller meetings
Resort and midscale/economy hotels in domestic markets with "drive/train-to-distance" are the winners so far
People who are not allowed to travel for business, travel privately at weekends When restrictions go down, demand goes up and vice versa
Indications of restrictions beginning to affect the market unevenly
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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 | 19 |
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 | 20 |
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 | 21 |
PANDOX - EXCELLENCE IN HOTEL OWNERSHIP AND OPERATIONS
Phase 4
Year-end 2020
Our assessment is that new restrictions will have mixed impact in Q4 2020 Marginal impact in Sweden, Norway and Finland
Negative impact trend in Germany
Larger negative impact in the UK, Belgium, the Netherlands and Denmark
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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:
- Portfolio dominated by domestic and regional hotels (84% of total)
- Strong focus on the Nordics
- Lease model with minimum guaranteed rent
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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 | |||||||
24 | PANDOX - EXCELLENCE IN HOTEL OWNERSHIP AND OPERATIONS |
Q&A
Hotel Mayfair, Copenhagen | 25 | 25 |
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 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 | 26 |
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Pandox AB published this content on 23 October 2020 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 23 October 2020 09:14:08 UTC