Pandox AB (publ)

Thank you and good morning everyone on this beautiful summer's morning and to this presentation of Pandox Interim Report for the second quarter, 2026. As introduced, I'm on the Spare Head of IR at Pandox and I'm here together with Leono, our CEO, and Anneli Lindblom, our CFO. And today we also have the pleasure of having both Ifa Roche, Vice President at STR, and Henrik Karlsson from Benchmarking Alliance with us. and eFindHendrik will provide a shorter hotel market update on Europe and Nordics respectively after we have concluded the formal earnings presentation call. As you know, STR and Benchmarking Alliance are both leading independent research firms dedicated to the hotel market and the views they express are completely separate from Pandox. And we offer these presentations as a service to Pandox stakeholders. We start with Lia and Anneli's business update and financial highlights from the second quarter, followed by the Q&A session. So with that, I hand over to Lia. Please go ahead.

Thank you, Anders. And good morning and welcome, everyone. Despite significant geopolitical changes, the hotel market continued to grow during the second quarter and booking trends remain stable. For Tandox, total revenue and net operating income increased by 15% and 25% respectively, primarily driven by strong performance in the leases business segment, where the acquisition of Dalata contributed positively. At the same time, our hotel properties in Sweden, the UK and Germany outperformed their respective markets. Like for like, total revenues and total NOI grew with 3% respectively. Cash earnings per share increased by 15%, while EPRA-NRV per share with a dividend paid in April added back increased by 14% on an annual basis, demonstrating continued value creation for shareholders. The Dalata properties performed well during the quarter, generating a rental income of 312 million kronor with strong profitability. For the first half of the year, rental income from Dalata amounted to 533 million kronor. At the end of the second quarter, our loan-to-value ratio was 52.4% compared to 52.3% at the end of the first quarter. But adjusted for the dividend of 876 paid in April, the loan-to-value ratio was 51.4%. This reflects a well-positioned portfolio and strong cash flow generation, enabling us to reduce leverage relatively quickly. We are active in Europe, the world's largest hotel and tourism market with strong structural growth drivers. We only invest in hotel properties and create value through active and engaged ownership. We have long-term revenue-based leases with a vault of 13.4 years and good guaranteed minimum rent levels with skilled operators. Including the expected revenue-based leases with Scandic for the Dalato portfolio, the vault was 17.3 years. Our property portfolio has an average blended valuation yield of 6.36% and a yield spread of close to 240 basis points. We systematically invest in climate change projects in our portfolio with good returns based on SBTI validated targets. And we have a strong cash flow and a balanced financial position, which enables us to drive continuous profitable growth through acquisitions of new properties and investments in our existing portfolio over time. We have a strong and well-diversified hotel property portfolio consisting of 191 hotel properties with approximately 42,000 rooms in 11 countries and 90 cities, and with a property market value of approximately 95 billion krona. We are divided into two mutually supportive and reinforcing business segments, leases and own operations. Leases, where we own and lease out our hotel properties, stands for 84% of our property market value. And in our own operations, we transform and run hotels in the properties we own. And own operations make up for some 16% of our property market value. The focus of our portfolio is in strong locations, mainly upper mid-market hotels with mostly domestic demand, which is the backbone of the hotel market, regardless of which phase the hotel market cycle is in. We also have one of the strongest networks of brands and partners in the hotel property industry. and this ensures efficient operations and revenue management, which maximize cashflow and property values and a continuous flow of business opportunities. And also a relatively large part of the investment in leases is shared with the tenant, which lowers our risk. The Delata properties are performing well. In the second quarter, they generated a rental income of 312 million kronor with strong profitability. For the first half of the year, rental income from Dalata amounted to 533 million kronor. Assuming that the corresponding lease agreements had been in place during the comparative period, then the revenue growth for the Dalata portfolio in the second quarter is estimated at 4% in the UK and 3% in Ireland. And for the first half of the year, the equivalent growth is estimated at 2% in both markets. The performance is well in line with our expectations and confirms the quality of the acquired portfolio. The separation of Dalata's business into a property-owning business and a hotel operating business is progressing at full pace and is expected to be completed during the fourth quarter of 2026. Once the process is completed, Pandox will have an even stronger platform for long-term growth and value creation. In parallel, we are engaged in positive discussions with banks regarding the refinancing of the current acquisition financing for Dalata, replacing it with secured property financing. Indications are that this could be done at the substantially lower credit margin and that we most likely also can increase our liquidity reserve at that point. An important growth driver for us is the creation of new hotel rooms in existing Dalits. We have some 600 plus rooms coming out in 2026 and 2027, which will contribute to the organic growth for Pandox. Overall, the Darlata portfolio is young and strong. However, with the acquisition comes two large and exciting projects. Both are exciting plus 10% yield on cost projects. One is Clayton Cardiff Lane in Dublin city center, which is currently being extended with another 150 new rooms. And we estimate this project to be completed mid 27. Another exciting project is Clayton St. Andrew Square in city center Edinburgh. Here we are converting and extending a fantastic old office building into a new hotel with 172 new rooms. and we estimate this project to be finalized in the beginning of 2027 at the latest. Here we have a breakdown of the performance in the first six months of 2026 for a selection of countries, regions and cities versus the first six months of 2025. We show average daily rate on the vertical axis and occupancy on the horizontal axis. Thus, OREGO is the point corresponding to 2025 on both ADR, i.e. price and occupancy. In the boxes, we indicate how much higher or lower REVPAR is compared with the corresponding period 2025. And the circles here indicate the share of the property market values in each country that Poundox have. And please note that the market data is not available for June for countries and destinations outside the Nordics. So year-to-date January-June refers to the period January-May for these markets. Overall, we see stable performance across markets in terms of REVPAR. The best performing markets in the period were Denmark, Sweden and Ireland. Norway, which has been a very strong market in recent years, saw stable red part development at already high levels. The UK was slightly positive overall, driven by regional UK, while Germany had a slight negative red part development. Eva Roche from SCR and Henrik Karlsson from Benchmarking Alliance will shed more light on the underlying trends in the hotel market later in this call. Investments in our standing portfolio is an important part of our business model and, of course, capital allocation. At the moment, we have approximately 50 projects planned and ongoing in eight different countries. The total investment volume for these projects is approximately 4.2 billion, of which some 1.7 has already been spent. The stabilized target yield and cost on the total amount is approximately 9.5%. The estimated stabilized net operating income represents the additional or incremental annual NOI generated once these investments have reached their full potential, gradually and normally after two to four years. In 2026 and 2027, we have increased our planned investments mainly due to three large projects. the conversion of Clayton St Andrew Square in Edinburgh, and the extension of Clayton Cardiff Lane in Dublin mentioned before. And then of course, the extension of DoubleTree by Hilton in Brussels City. In these projects, we have already invested more than 900 million, basically with a zero return so far, since they have yet to be launched commercially. And as a final note, divestments are an important part in driving capital efficiency. And as we write in the report, we are opportunistically evaluating divestments in the Nordics. And with this, I hand over to Anna Liljendom, our CFO.

Thank you, Lea. And good morning, everyone. In the second quarter, total revenue and group net operating income increased by 15% and 25% respectively, driven by the acquisition of the data and overall positive like-for-like growth. Leases reported growth of 34% in revenue and 37% in net operating income. Like-for-like growth was 4% and 4% respectively. Apart from Balata, a positive relative performance in Sweden, in UK and in Germany was the main growth driver. Own operation reported lower revenue and NOI, mainly due to the divestment of two hotel properties and some negative currency effects. Like for like, revenue and revpar were unchanged. Underlying, we had some negative effects in Brussels in the quarter due to more supply, weaker meetings demand and some unfavorable calendar effects. Cash earnings grew 15% in the second quarter, reflecting the improved result and a bit lower cost for central administration. The decrease in central administration mainly driven by reversal of provisions related to long-term incentive programs. Central administration cost fluctuates a bit depending on what projects we are working with and also due to holiday season. But our normal run rate is usually around 60 million per quarter. On this slide, we show the change in the main valuation parameters for the total property portfolio year-to-date. And remember that investment properties are recognized at fair value. According to IFRS, unrealized changes in value for operating properties are reported for information purpose, but it is included in our APRA NAV calculation. For the period, the total unrealized changes in value were negative 54 million. We had a positive effect from lower gains in leases and a negative effect from both cash flows and gains in own operations. Property values benefited from a deprecation of the Swedish krona. End of period, the average valuation yield for investment properties with some rounding effects were largely unchanged at 6.29%. For operating properties, it was also largely unchanged at 6.78%. The blended yield edged down one percentage point to 60.36%. Here we have the average yield, the average interest on debt and EBITDA per share quarterly. The average interest on debt end of period increased slightly to 4.01% from 3.85% in the first quarter. And the yield spread narrowed slightly to some 240 basis points. And in the end of the period, EPR NAV had reached 234.15 SEK per share with a solid 13.7% growth adjusted for the paid dividend in 2026. Our LTV at the end of the quarter amounted to 52.4%. Excluding the paid dividend in April, LTV was at 51.4%. and we are well within our financial policy range on both numbers. The ICR on rolling 12-month basis was 2.4 times. adjusted for preparatory financing cost of 59 million, the ICR was 2.5 times. Cash and credit facilities amounted to 3.1 billion. And on top of that, we have unencumbered assets with a value of some 890 million as a sort of untapped reserve. The trend with good demand from banks and lower credit margins remains intact. We were very active on new financing and refinancing in the quarter. New loans and refinance amounted to 14 billion for the period. And at the end of the period, we have 8 billion on debt maturing within one year, including the acquisition facility related to the lockdown. The average interest on debt increased by 16 basis points to 4.1% in the second quarter compared with the first quarter. This is explained by a contractual margin increase on the acquisitions facility for Dalata. We also had some expiration of some favorable hedge contracts and a higher base rate primarily in euros. So we have positive discussions ongoing with Nordic and international banks for the refinancing of the acquisition facility. We will sort of finance it with traditional property backed bank financing. And that will of course be with a bit lower credit margins. We also hope to be able to increase our liquidity reserve at that point too. Bank appetite to finance our hotel properties remains strong. At the moment, 59% of the net debt is hedged, which is an increase compared with 55% in the first quarter. And with that, I will hand back to Lia.

Thank you, Anneli. We are now in the middle of the seasonally strongest period of the year. Booking activity remains stable, event calendars are well filled across many of our markets, and demand for both business and leisure travel continues to be robust. The conflict in the Middle East has so far had a limited impact on travel activity in Europe. Europe continues to be one of the world's most attractive regions to travel to and within. International arrivals in Europe are growing, supported by more intra-regional travel, as more Europeans choose to holiday and travel within the region. At the same time, we continue to see stable demand from the US, contributing to a broad and resilient demand picture. Limited supply growth, increasing travel demand, and Europe's strong position as a destination create favorable conditions for growth. For Pandocs, a growing hotel market, the acquisition of the Lata and organic growth in the comparable portfolio provide a solid foundation for continued growth in cash earnings in the short term and continued value creation over the long term. We now move over to Q&A and operator, we are ready for questions.

If you wish to ask a question, please dial pound key 5 on your telephone keypad. To enter the queue, if you wish to withdraw your question, please dial pound key 6 on your telephone keypad. The next question comes from Keevan Shravanpour from SEB. Please go ahead.

Good morning. I have a couple of questions. The first is related to the higher cost of debt. in the quarter could you maybe say something about the impact of upcoming refining activities also given that you have a quite high share of debt in Euro and Pounds so any type of guidance on the cost of debt maybe in the coming quarters?

Yes, I'll try. In the quarter, as I said, there was a contractual uplift in the acquisition financing, which was mainly for the full quarter of mid-April and for the rest of the quarter of 25 basis points for acquisition financing. So that, of course, affected the financial cost. And then underlying Baytrade has a small drift as well. We have been refinancing quite a large part of our portfolio. So there's some offsetting forces, one could say. But then again, then you have the hedging portfolio, which we have also some shorter derivatives which have run out. So overall, I think we are going forward. It's in the line. You have base rates maybe increasing a little bit or being stable. And then you have margins actually offsetting that to some part. So pretty stable going forward for the next quarter or so. And then, of course, looking into the mirror when we do the refinancing of the whole Dallata portfolio, the acquisition portfolio at substantially lower margins. than we have as we have today.

Okay, good. I also have a question related to the mention of the divestments in the Nordics. Could you maybe say something about the potential volumes of the disposals and also if you are planning on being a net seller or net buyer in the near term and also how you weigh this against the possibility of share buybacks?

We are always looking at sound capital allocation and that has over time proven that we are net buyers of hotels definitely. We launched some divestment or looking at opportunistically looking at divesting A smaller portfolio or some hotels in the range of between 2-3 billion krona. It's a small portion, of course, with our portfolio of 95 billion in the Nordics. This has taken a slightly longer time than we would have wished, mainly due to geopolitical issues. worries, but it's ongoing and it's more of a sort of housekeeping. It's always good to have some rotation of assets. There may be some non-core assets and also looking at capital allocation. But we always, of course, compare different possibilities. with the last acquisition where we acquired this for 8.4% and realizing a gain of more than 3 billion in the end of the last year, then of course that is preferred. But again, we always look at every opportunity one by one.

Okay, so including also potential buybacks, if that would be the best alternative.

That is something that always would be considered.

Okay, thanks. Those are my questions.

The next question comes from Andres Tum from Green Street. Please go ahead.

Hi, good morning. I had a couple of questions. Firstly, could you just provide a bit of an update on Revo Hospitality and how do you see the market sort of absorbing that situation and adjusting in Germany.

Absolutely, yes, thank you. We are, as I said, it's an ongoing reconstruction process for Revo. Revo has some plus 250 hotels, out of which we have nine hotels. It's 4% of our room stock. It's an ongoing process and we are working together with Revo in order to see the best future for our hotels. We are confident that there will be good solutions for all hotels. Some will be leased out. There may be some which will be in our own operations until we lease them out at a later time. But it's sort of a planned ongoing process that is expected to continue in Q3.

Secondly, I was just looking through the balance sheet integrity and you have sort of caps on your LTV but at the same time also your interest coverage ratio keeps getting deteriorating and I was just wondering how much attention you paid to that and do you see that sort of turning around and start improving at one point?

Well, if we look at interest cover ratio, then of course that's influenced by the fact that we did the full Dalat acquisition and ongoing rolling when you take it into them. We will surely get back very quickly to the plus 2, 2.4 or whatever it has been before. So it's affected by the fact that we bought the whole chunk and the Dalat numbers are still yet to be rolled in gradually. When it comes to LTV, we are reporting LTV of 52.4%. It's actually 1% down, lower than Q1 if you compensate for the dividend being paid. So a strong sort of value creation cash earnings in the quarter. And together with the strong cash earnings we are expecting to have going forward as well as perhaps some smaller divestment we will pretty soon reach Thank you, that is from my side. Thank you. The next question comes from Fredrik Stensvid from ABG Sundahl Collier. Please go ahead.

Thank you, morning. I would like to start off with a couple of follow-ups on the financing side. When you talk about replacing the bridge facility for Dalata, with lower margins, etc. You also mentioned increased liquidity reserve. How should we sort of think about that comment? Because it sounds like you want to deleverage slightly. You have some divestments. Such liquidity increase, would that be for the sake of higher liquidity or or are you open to adding leverage at this point?

Well, again, being the sort of south of 50% is a good level to be when you look at new larger acquisitions. And getting a sort of a high liquidity reserve is, of course, always a good thing to be. And when we report LTV, it's sort of a net of cash. So, again, being below 50% should probably be a good sign before you would see any larger acquisitions.

Understood. And then just a detailed one on the refinancing of the Lata Bridge facility. Is that going to incur any, let's assume it happens in Q4 as you write, is that going to incur any sort of write downs of capitalized interest expenses or other non-recurring fees?

Well, what we reported already in Q1 was that we had some financial costs which we activated sort of on a 12-month basis versus 18-month basis originally. That was some part of the sort of increase in financial costs which we took ongoing from Q1. So it's planned to be solved for the rest of the year. And then, of course, you put the new financing in place.

which is sort of a longer lower margins you usually also have an arrangement fee and commitments fees and things but these are typically for three five plus year period yeah understood very good and then jumping to to central costs they were down year over year I do believe it's partly related to bonuses. I would, however, have expected it up given sort of the size of the company today. You have Dalata, etc. Is the Q2 number normalized in your view, or is there anything, you know?

To be honest, we are usually running around 60 million per quarter. So that would be like a normal rate. And of course, it depends on if we are driving big projects and also some of the holiday season, if people score is due effect. But I mean, the run rate is basically around 60 million per quarter. So for your forecasting, I would say that that's a good number. So around 200 on the full year.

Very good, thanks. Finally, red power growth in the leased operations was 6% in Q1, 4% in Q2, quite high, strong figures. Would you dare to put out your best guesses for the remainder of the year?

Well, we're, of course, also meeting strong quarters. And it's a lot. We are in 11 countries, 19 destinations. But I think the expected increase in real power, when you look at the other sources, is between 2% and 3% blended over our markets. That's everything from, of course, including Germany, Finland, Norway, to Sweden, Denmark, and Ireland, which have performed even better. So 2%, 3% as a quarter, I think, is sort of the official forecast going forward. Then, of course, we have our hotel and there are renovation effects in the fact that we have renovated some... So it doesn't mean that our hotels will hopefully do slightly better, but they're 2-3%.

On that theme, is there anything that sort of indicates that this outperformance, if you will, is related to Q2 alone or should this... It sounds like, based on the wording, we outperform the markets based on renovations, etc., that that those year-over-year effects should be able to last also in the coming quarters.

Well, of course, as I mentioned in the presentation, we have a sort of active investment portfolio. So there is parts coming out all the time, basically, which is sort of the outcome of our investment. So we do expect to perform as good as we can in these markets. Then there are variations, but second of all.

Understood. Thank you very much.

Thank you. As a reminder, if you wish to ask a question, please dial pound key five on your telephone keypad. The next question comes from Artem Prokopets from UBS. Please go ahead.

Good morning. Thank you for taking my questions. I have three. Firstly, I think you mentioned robust demand in both corporate and leisure segments. I guess given the weakness in Brussels, how do you assess the relative performance of corporate and leisure demand? Is leisure tracking stronger than corporate?

Leisure is tracking stronger than corporate, even though corporate is sort of picking up pace. We do see that patents are very much event-driven, and in Brussels especially, you see that there's a lot of sort of comparable events. So it's very much conference, meeting, event-driven. And also there's some calendar effects, depending on when the corporates sort of put their bigger events. But underlying, leisure is driving even though business is performing also pretty well.

Understood, thank you. Secondly, on outlook, could you please elaborate by market, where you see stronger market and where you expect to see perhaps some weakness going forward?

Well, the Nordic, we are very proud of being in the Nordic and especially Sweden and Denmark. We have been very strong in the first half in the second quarter, and we do see that going forward as well. UK, we also see positively on Ireland as well, despite a lot of new capacity coming in in Dublin. We are actually positive also on Germany, but it's coming from low levels. It's of course a question mark, but it's always been slightly slower coming out from the recession, et cetera, et cetera. But we are positive on the German outlook. When it comes to Finland, which is, of course, it's taken a lot longer time than expected. It's pretty volatile. And Norway also being an interesting market before. It has been coming from higher levels. It's more stable or unchanged for the time being.

Thank you. And just to follow up, what do you think about Brussels going forward?

Brussels going forward, you do see that there's a quite strong booking calendar when it comes to the summer. So I would say it's more stable.

Okay, thank you. And lastly, do you still expect revenue from Dalata in 2026 at the same level as before? I think it was $1,130 million.

It's in line with that. That's, of course, with sort of the currency effects. But we are in line with the expectation we had at the beginning of the year. And that's proven again with the quarter that we had 4% increase in UK and 3% in Ireland. So it's well in line with our full year expectations.

Perfect. Thanks a lot.

Thank you.

There are no more phone questions at this time, so I hand the conference back to the speakers for any written questions.

Well, we have one question from Staffan Buelow from SB1 Markets, and it's, have your view on REMPAR growth for 2026 changed in Q2 compared to the last quarter?

And I think the view hasn't really changed. It's actually been confirmed. It's stable and always even more stable despite the fact that there is the geopolitical uncertainty continues. But people tend to, it tends unfortunately to be a normalized state with more and more uncertainty and people do travel still.

Those were the questions, written ones. So now we turn over to the market presentations and we will start with Aoife Roche from STR.

Good morning. Thank you very much. So I'm going to provide a high level or macro overview of European performance, diving into some country level performance too. So thank you for your time. So first up, globally demand has grown by 1.3% year to date, which is slightly down on last year. This growth has been softening month on month with most of the growth in the APAC region. May was a leisure-dominated month, of course, so Germany did lose its top five position. It was replaced by Spain after an excellent performance in Spain during the month of May. So year to date, demand growth for Europe is showing just 0.1%. Like I said, softening a little in May itself. However, UK picked back up with demand growing by 0.8% year to date. With demand softening, it is abated somewhat by softer growth in supply. Supply growth has been sitting below the 2% mark through 2025 and 2026, and that actually dropped to 1% growth in May. So this results in positive occupancy growth for most regions, with, of course, the exception of the Middle East, which is down 19% on prior year. So if we look to the Middle East, because it does give some context for future European performance. In April, REVPAR was down by 64% on prior year, whereas May has shown great resilience with just a marginal decline of 7.6%. And as you can see from the slide, ADR has actually grown year on year. Occupancy has been the primary issue for the GCC countries. with ADR holding for the most part. And of course, luxury has taken the biggest hit, understandably, as international demand was negative. So in terms of luxury, REVPAR is down by 25%. Most of that is occupancy-driven, with ADR only declining by 1.3%. On the flip side, the economy class is the least impacted, with an 18% lift in REVPAR, And again, this is due to a strong domestic demand. So this is where the turning point has been, where domestic demand has grown across all classes, but in particular, the economy and mid-scale segments. So looking forward to the Middle East, we do expect those declines to continue through 2026, but going into 2027, that positivity returns. And like I said, we're already starting to see some of that. So with occupancy gains for most of the world, ADR does have a platform to expand, albeit, as you can see, very muted growth for most regions with Europe growing by 3%. In Europe itself, we have seen Revpar grow in six out of 10 sub markets that we report on. So we do report on 550 sub markets across the region. So 60% of those have seen positive growth. And as you have seen and will see in future slides, that most of that is due to ADR growth. So despite that softer demand, it is still outstripped supply growth overall in Europe, which has resulted in positive gains. As you can see, every month up until the month of May, occupancy has grown and rate has grown substantially. May probably felt that impact of a very soft demand growth. I mentioned earlier 0.1% growth in demand. And this, as you can see, is quickly reflected in the occupancy change. So year to date, occupancy 0.5% up for Europe and ADR growing by 1%, 1.7% year on year. So going back to occupancy at a more macro level, most countries are seeing some growth, albeit limited. The Nordics lead as it is a late recovery market, but it's really Sweden and Denmark that are driving that, as Leah mentioned too. For our sample, Sweden is going by 7% and Denmark going by 6.5% respectively. Growth does tend to be reserved for countries with lower occupancy levels or emerging markets, and you can see that here across the board, particularly for Nordics and Germany, which is still a recovery market. And then on the other side, you can see the UK with a very high occupancy, 73%, so little occupancy growth available to that region. In terms of ADR, so leisure destinations and resorts are really underpinning this performance and they continue to benefit from international leisure demand, which supports that strong rate growth. Of course, we still have Italy right up there with a 12.4% growth on ADR due to the Olympics, but closely followed by Greece, Spain and Ireland, again, attracting that international demand. Germany and Austria on the other side are sacrificing some rate in return for occupancy, whereas the Netherlands is seeing a combination of occupancy and rate declines owed primarily to the recent changes in VAT and tourism levies, some of which are being passed on to the customer, but also to the property itself. The UK, like I said, had a tough start to the year when compared to the average European performance. But a stronger May has pushed year-to-date performance to growing rather than stable, which I would have reported last month. So year-to-date occupancy up 0.2% and year-to-date ADR up 1.6%. Now, regional hotels have fared far better than London itself. Revpar is flat. at 0.1% growth year on year. The weaker dollar is definitely impacting this for the London market, and it's particularly noticeable in the luxury class, as you can see on the left-hand side of this graph. This, of course, is compounded by reduced travel from the Middle East. We know that the Middle East is a relatively small source market, but it can have a huge impact on luxury and premium properties, particularly in markets like London, Paris, Of course, we have a more value-driven consumer as well, whether that is for leisure or business, and that has influenced shoulder night occupancies, which is noticeable, particularly in the select service hotels, and which may point to shorter city breaks or a reduction in city breaks from the international and domestic traveler. So London, 0.2% up on occupancy and no change on ADR overall. So going back to the regions, although they had a slower start than we initially expected, occupancy, it has changed our occupancy forecast. So our full year forecast for 2026 for the regions was 0.5%. but we reforecasted just at the end of May there and we expect occupancy to grow by just 0.1%, so a slight reduction there. That relatively low supply growth of 1.5% coupled with a demand growth of 1.7% is allowing for that positive yet muted occupancy growth. However, in the regions, rates are generally very good, unlike London. So it was positive up until the end of April, I'm showing here. Like I said, a lower growth in supply coupled with some markets showing a very strong performance. And those markets, I can name three, would be Cardiff, Glasgow and Edinburgh. And you will see this in the next slide when we look at our forecast. So these are our forecasted markets for full year 2026, as at the end of May. 2026. So rev power forecasts for 2026 are low with the exception of Glasgow, which is expecting to grow rev power by 7.7%. Demand expanded in Glasgow by 9% in Q1 and 2026 overall, it will grow by 4.5%, whereas supply is only growing by 1.4%. So that magic demand as dripping supply is what is generating that overall forecast. In addition, there are major events, major concerts and sporting events, including the Commonwealth Games, which is supporting Glasgow's booming year. Edinburgh, on the other hand, will see flat to negative occupancy growth alongside a 0.7% rate change due to significant supply changes there too. So looking ahead, this is a slide from Tourism Economics, our partner for our forecasts. The Tourism Economics expect the Mediterranean to benefit from displacement caused by the conflict. So that is why I presented the Middle East numbers. And this is based on their experience and data from prior destination substitution during similar conflicts. And we are seeing that in business on the books already. But it is certainly a tale of two halves in 2026, yet again, not so different to 2025. On the left-hand side, Milan tops the charts with the Olympics driving that strong growth in the first quarter. I mentioned Glasgow, which is a story of demand outweighing supply growth. which is driving those occupancy gains and subsequent rate gains. In the middle, you've got Dublin, which posted a fantastic first half to the year continuing to attract strong international demand, and of course underpinned by domestic strength. The market success will be somewhat diluted in September due to the non-repeat NFL games, but overall there is a positive sentiment for Dublin. And at the bottom of the pile, I mentioned Amsterdam with taxes rising to 21% from 9%. It does mean that many hotels are absorbing this fact on behalf of the consumer. So overall for Europe, Q3 will see a positive return with potential demand substitution for Europe, leisure demand for the most part. Despite the strong start to the year, however, in occupancy and ADR terms, we have a Q4 forecast that is a little bit softer due to the economic volatility, the unknowns, and, of course, that consumer caution that we are seeing filtered through the numbers. So, overall, I would say that demand momentum is decelerating, not necessarily declining, so demand remains positive, with cautious consumer sentiment driving shorter booking windows and uneven performance, as you have seen in the previous slides. Supply discipline is sustaining occupancy, while ADR, particularly in luxury and southern European leisure markets, is carrying much of the growth. Occupancy gains were front-loaded in H1, so we do remain cautiously optimistic for the remainder of the year, but we do expect a slightly softer, more demand-sensitive second half to the year. Thank you very much, and I will pass back to the team there.

Thank you, IFA. Henrik, the floor is yours, as we say in Swedish.

Thank you very much, and good morning. My name is Henrik, and at Benchmarking Alliance, we provide benchmarking for hotels and other companies in the hospitality industry. We focus at the moment in the Nordics and the Baltics, and over the next few minutes, I will walk you through the latest market data from that region. So let's start with the big picture, how the first two quarters of 2026 have played out. And all the data that I will show now include June numbers as well. So it's full Q2 year to date numbers. So looking at the countrywide averages, the positive trend from Q1 carries straight into Q2 2026. The red part increasing across nearly every country in the region. The blue boxes show Q2 year to date red part development versus last year and the orange boxes show Q1. Finland stands out as the exception here, one of the exceptions, where growth has been slower, mainly due to weaker demand in Helsinki. Meanwhile, the recovery story in the Baltics continues. After years of lost Russian demand and the broader impact of the war in Ukraine, travelers are generally returning to the region. And then keep an eye on Iceland as well. After many consecutive years of growth, year to date shows a drop in both rates and occupancy. It's a notable shift in the trend. So what's behind these movements? Let's look at the capitals. In Helsinki, it comes down to fewer congresses compared to May and June last year. Oslo's REVPAR growth in the first half of 2026 is notably more modest, but remember 2025 was an exceptionally strong year, driven by major events like the Nord shipping conference, which is simply difficult to replace. Stockholm IS A DIFFERENT STORY. THE ECHO CONGRESS IN FEBRUARY, THE EHA CONGRESS NOW IN JUNE, AND GENERALLY STRONGER DEMAND IN MAY AND JUNE ARE ALL LIFTING THE CITY'S YEAR-TO-DATE REB PAR. AND IN COOPERNHAGEN, UNDERLYING DEMAND HAS BEEN HIGH FOR YEARS. IN Q1, SEVERAL MAJOR MEDICAL CONGRESSES SHAPED BOTH DEMAND AND PRICING. Q2 WAS SOMEWHAT SLOWER, BUT THE YEAR-TO-DATE DEVELOPMENT STILL LOOKS VERY HEALTHY. Now let's zoom in on the capitals a little bit and see the development in demand and rates. The red bar increase of around 10% in both Stockholm and Copenhagen, as you can see, is evenly balanced between demand and rates. Even though slightly higher supply in both cities eats a little into the occupancy gains, it still looks really good in both Stockholm and Copenhagen. In Helsinki, the lost Congress demand appears to have been replaced in volume, but at a much lower rate, which drags REV part down. The decline in Reykjavik shows up in both occupancy and rates. In Tallinn, new rooms entering the market have been absorbed well, with only small deviations in rates versus last year. And in Riga, new supply doesn't seem to be holding rates back at all. They're up more than 5%. And then looking at Trevpar as well, total revenue per available room. If we broaden the lens a little bit here and look at Stockholm and Copenhagen, they follow the same trend as Revpar. In Oslo, that's more interesting. Other revenue sources have compensated so that Trevpar is actually increasing even though Revpar isn't. We see the same kind of compensation in Helsinki and Reykjavik, although both are still down versus last year. Tallinnan Riga sits slightly above last year. The takeaway here is that it's worth looking beyond the rooms department. Total revenue, including food and beverage, meeting and events, and other outlets, doesn't always move in step with rooms performance. And that's exactly why we captured this data as well, to give you the full picture of the hotel performance. So let's now go one level deeper and look at how the different segments are performing. Startinging with Stockholm, new supply in the luxury segment is being absorbed well and rates continue to climb at the same time. In fact, the growth in Stockholm can be seen across all segments, though rates are rising a bit faster in mid-scale and budget segments. Copenhagen, the luxury segment has slowed down somewhat, but across the board, both occupancy and rates are up in every segment, with upscale and mid-scale showing the strongest growth. Moving on to Oslo, the luxury segment has seen stronger demand and higher occupancy, but rates are holding at last year's level. Upscale saw less demand in Q1 compared to last year, while mid-scale is up across the board. Budget hotels in Oslo, however, are struggling to keep their rates up. Helsinki segments, the lost Congress demand is mainly hitting rates in the upscale and midscale segments. Luxury is the only segment showing a rev power increase, actually. And notably, its rates have remained stable versus last year. Moving on to weekday weekend patterns for our Scandinavian capitals. We see that weekends are growing in all Scandinavian capitals. Weekdays are also up in Stockholm and Copenhagen. But in Oslo, the business travel that Norrköping brought last year has hardly been replaced. In the last slides here, let's look at the future and the on-the-book situation in the different capitals. In Stockholm, the EHA Hematology Congress in June was already on the books at this time last year. On the positive side, Bad Bunny had two concerts here in Strawberry Arena in Stockholm last weekend on July 10th and 11th, followed by The Weeknd in August. Beyond that, no major events are driving hotel demand in 2026, but looking further ahead, we have an ESC MID Congress in April, and it's already visible here in the booking data. In Copenhagen, summer bookings are more or less in line with last year, but then things pick up. The World Athletic Road Running Championships in September, we can see in the numbers, and then also the IBA annual conference in October. And already stronger bookings over the winter months add up to the on-the-books demand that is actually 10% ahead of last year. Looking at Oslo, it faces a tougher comparison. At this time last year, the Ed Sheeran concert and the European Handball Championships in January were already on the books, which has been somewhat difficult to replace. And this year, there is nothing of that scale actually on the books. As a result, bookings for the next 365 days are down 3.6% compared to last year. Last but not least, Helsinki. The data shows a strong summer and a solid rest of 2026. And looking further out, we also have CYTO Congress in June next year that we can already see in the numbers. That concludes my presentation for today. If you have any questions about hotel market data in general in the Nordics, feel free to reach out. Thank you very much.

Thank you, Aoife and Henrik, for your hotel market updates. And thank you all for participating in this call. We really appreciate your time and interest in Pandox. And our interim report for January, September 2026 will be published on the 22nd of October. Finally, we would like to wish you the best of summers. Enjoy it and ideally in our hotels. So safe travels and goodbye.