Pandox redovisning av affärsverksamheten 2010

o n e o f t h e l e a d i n g

h o t e l p r o p e r t y c o m pa n i e s i n e u r o p e

Pandox Report on business

operations2010

The Company

The Business model . . . . . . . . . . . . . . . . . . . 2

The Development . . . . . . . . . . . . . . . . . . . . . 4

Success factors . . . . . . . . . . . . . . . . . . . . . . 6

Strategy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8

Value-growth . . . . . . . . . . . . . . . . . . . . . . 10

Types of agreements . . . . . . . . . . . . . . . . 10

Business processes . . . . . . . . . . . . . . . . 11

Success stories . . . . . . . . . . . . . . . . . . . . . . 12

Operated by Pandox . . . . . . . . . . . . . . . . . . 14

Market communication . . . . . . . . . . . . . . . . 15

Hotel property market . . . . . . . . . . . . . . . . . 16

Pandox’ hotels and partners . . . . . . . . . . . . .18

Hotel properties

List of hotel properties . . . . . . . . . . . . . . . . . 40

Other information

CEO commentary 2010 and ahead . . . . . . . 44

Board of Directors and auditors . . . . . . . . . . 48

Senior managers and executives . . . . . . . . . 50

Team Pandox . . . . . . . . . . . . . . . . . . . . . . . . 52

Finances

Financial overview . . . . . . . . . . . . . . . . . . . . 58

Sensitivity analysis . . . . . . . . . . . . . . . . . . . . 62

Valuation and fiscal situation . . . . . . . . . . . . 64

Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . 65

Ten-year overview . . . . . . . . . . . . . . . . . . . . 66

Quarterly data 2009–2010 . . . . . . . . . . . . . . 68

Financial statements 2010

Report of the Board of Directors . . . . . . . . . 70

Income statement and comments . . . . . . . . 72

Balance sheet and comments . . . . . . . . . . . 74

Changes in equity . . . . . . . . . . . . . . . . . . . . 76

Cash flow statement . . . . . . . . . . . . . . . . . . 77

Accounting principles . . . . . . . . . . . . . . . . . . 78

Notes to the accounts . . . . . . . . . . . . . . . . . 79

Proposed disposition of earnings . . . . . . . . . 84

Auditors’ report . . . . . . . . . . . . . . . . . . . . . . 85

Pandox completed

the world’s largest hotel property transaction in 2010

with the acquisition of Norgani, a portfolio of 73 hotels .

Pandox thereby became

one of the leadinghotel property companies in Europe .

Pandox strengthened

its position on the Nordic market .

Pandox continued to expand in Brussels and

acquired one of the city’s largest and best- known hotels – now called The Hotel .

Pandox is also an international challenger present in ten countries, including

North America with two large hotels in the centre of Montreal .

Pandox has unique

collaboration with 19 brands, creating an extensive network .

4read more on page

Success factors

the business model is chosen with consideration to the local prerequisites in order to obtain a situationadapted strategy.

pandox has developed rapidly since starting in 1995. the success factors are a combination of the company’s strategy, expertise, flexible busi-ness model and industrial owners.

Developmentpandox has achieved constant progress in size, cash flow and value-growth – and consequently has a stronger market position. the portfolio value has increased from seK 800 million to more than seK 22 billion, while cash flow has improved by 45 times since the company was formed in 1995.

The business model

the procedure is based on a well-developed methodology with defined structures, known as the pandox model, which enables pandox’ skilful employees to focus on development and the creative process.

several models are used in Brussels. hotel Bloom! and the hotel are independent hotels operated by pandox, and the crowne plaza Brussels city centre is operated with a franchise agree-ment, while the hilton Brussels city is operated under a manage-ment agreement and the scandic grand place through a lease.

2 | PANDOx 2010

8read more on page

Knowledge, network and individual capital

Consistent strategy

one of pandox’ most important cornerstones is to constantly develop the company’s expertise and competences. in order to inspire our employees, an informal leadership style has been devel oped to give each individual considerable freedom and development opportunities. the corporate culture includes an interactive discussion with an extens-ive network, which provides valuable input in both large and small issues.

pandox has a well-defined strategy that is thoroughly embodied with the Board of directors, senior executives and banks – a strategy that has been consistently followed since the company was formed 15 years ago. the point of departure is to acquire under-performing large hotels in strong loca-tions, where the company’s specialist exper-tise can be used to develop the assets. this in turn creates prerequisites for long-term value development and a strong company.

6read more on page

PANDOx 2010 | 3

201814

2831

46*

*hot

ellu

s fö

rvär

vas

med

16

hote

llfas

tighe

ter.

46 44

267266

228

119

97

53

2112

Pandox’ development 1995–2010 Number of hotels

Cash flow SEK M

45

299

272

The DevelopmentFrom financial crisis to successful hotel property company

When Pandox started in 1995, the company consisted of 18 hotels with 3,000 rooms located in nine

swedish towns and cities. the business model was new and untried. the company had weak profita b-

ility and limited capital.

The road to success has since gone via transactions embracing 170 hotel properties to a total value

of seK 20 billion. With a consistent strategy, pandox has shown durable and profitable growth, along

with a greater geographic spread.

At the end of 2010, pandox had 120 hotels with a total of 24,800 rooms

located in 59 towns and cities in 10 different countries in the nordic region,

the rest of europe, and north america. pandox thereby is one of the

leading hotel property companies in the european market.

Acquisitions totalling SEK 20 billion .Founded in 1995. Pandox has its origins in the financial and property crisis

in the beginning of the 1990s . The Company was formed in 1995 by Secu-

rum and Skanska . The mission was to take over and restructure the hotel

portfolio, and prepare it for sale .

The original hotel property portfolio. In the beginning, Pandox consisted

of 18 hotel properties and three small operating units . All of the hotels were

in Sweden, and most of them were small with weak locations and in poor

condition .

Stock-exchange listing. Pandox was floated on the Stockholm Stock

Exchange in 1997 with a new and untried business concept . The Company’s

portfolio was valued at SEK 1 .3 billion and the market capitalisation was SEK

520 million . The listing gave 4,000 new shareholders .

Further to the listing, Pandox expanded substantially with acquisitions of

large hotels in strong locations, while smaller hotels were sold .

Internationalisation. In 2000, Pandox enlarged its geographical strategy to

northern Europe through the acquisition of Hotellus with 16 hotel properties .

Privatised again in 2004. Pandox is bought out from the stock market in

2004, with new industrial owners through Eiendomsspar AS and Sundt AS .

44

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 20101990 – Swedish financialand property crisis

1999/2000 IT and financial crisis

* acq

uisi

tion

of h

otel

lus

with

16

hote

ls.

4 | PANDOx 2010

120*

46

39

445 446

389

318

301

Average annual return

19%

Transactions covering 170 hotels .Stronger in Europe. The transaction tempo increased further to the privat-

isation, and several large hotels were acquired in Berlin, Brussels, Basel,

Copenhagen, Stockholm and Malmö – thus strengthening Pandox as one

of the leading hotel property players in Europe .

Expansion to North America. In 2007–2008, Pandox continued its inter-

national expansion with two acquisitions in Montreal .

Leading in Europe. In August 2010, Pandox announced the acquisition

of Norgani Hotels with a portfolio of 73 hotels in Sweden, Finland, Norway

and Denmark .

Further to the acquisition, Pandox became one of the leading pure hotel

property companies in Europe with regard to geographic spread and number

of hotels and brands . Since starting in 1995, Pandox has carried out acquisi-

tions for a total of SEK 20 billion representing transactions of 170 hotels .

The value of the Company’s hotel property portfolio amounts to approxi-

mately SEK 22 billion further to the acquisition of Norgani – which implies

that the value has increased about 20 times . This has been achieved

through a good hotel market, active ownership, sound expertise and

profitable acquisitions .

Key indicators 2010Pandox proforma including Norgani (before acquisition costs)

Mkr 2010

Number of hotels 120Number of hotel rooms 24,800Property revenues, SEK M 1,700Cash flow, SEK M 700

36*

44 45

700

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

2007/2008 Global finance crisis

* a

cqui

sitio

n of

nor

gani

with

73

hote

ls.

* sal

e of

12

hote

ls to

nor

gani

.

PANDOx 2010 | 5

Expertise and network

Success factors

pandox has a small management organisation, and all members are based at the office in stockholm. in addition, one of the company’s exec-utives is based in Brussels where the largest operational activities are located. the model provides major benefits with rapid decision-making paths, a high level of interactivity, and

considerable individual freedom. in order to maintain all business proc-esses in motion, the organisation is supplemented by a national and inter-national network composed of people with specialist expertise within mar-ket, management, hotel operations, property development, brand names, finance and taxes. pandox works

actively to attract people into the net-work, which is a precondition for the company’s rapid growth. the model places demands on both visionary and operative leadership, as well as an ability to create forms of collabora-tion with individuals with different backgrounds.

International network provides access to unique expertise

Depending on local prerequisites, Pan-dox is able to choose between four operational strategies: through leases with professional operators where Pan-dox remains as a strategic partner; man-

agement agreements where a partner runs the daily operations on behalf of Pandox; by managing one’s own opera-tions through a franchise agreement under a well-known brand or via an inde-

pendent distribution system . The busi-ness model provides excellent opportu-nities to create a situation-adapted strat-egy “asset by asset” .

Flexible business model

Pandox’ shareholders and Board of Directors possess industrial expertise in the Company’s three most important areas: hotel operations, properties and business development . Their knowledge and experience create confidence, which enables us to take rapid decisions within, for example, different acquisition questions . This is a competitive advantage in a significantly slower surrounding world .

Short and rapid decision-making paths

Well-defined and consistent strategyPandox has a well-defined strategy within geography, types of hotel and yield require-ments that have been consistently followed since the Company was formed .

clarion collection hotel Bastion, oslo

6 | PANDOx 2010

The hotel property portfolio is of very high quality . The hotels are located in international and dynamic markets such as London, Brussels, Berlin, Stockholm, Copenhagen and Montreal as well as locations with a high pro-portion of domestic demand, which creates balance in revenues . The hotels have strong locations and are the right size, which provides a critical mass as well as being marketed by the sector’s most prominent brand names . The agreement structure with a combination of leases, management agree-ments and own operations provides good potential with limited risk .

Choice of countries and locationsPandox is establishing in major hotel markets that have good potential and stable demand .

Pandox actively seeks strategic alliances with strong brand names that have an interest in forming a partnership that creates benefits for both par-ties . Pandox currently works with 11 partners under 19 brands .

Acquisition strategy

Portfolio of the highest quality

Strategic alliances

pandox primarily acquires hotels with a potential that can be brought out through active measures and where the compa-ny’s areas of expertise can be utilised.

hyatt regency, montreal

Corporate culture

Pandox Spiritpandox has established an informal leadership style where a high level of expertise is combined with minimum bureaucracy and effective monitoring methods. the catchwords are inspira-tion, simplicity, rapidity, expertise and visible leadership.

PANDOx 2010 | 7

Geographical spread, proportion of hotel rooms

Revenue-based lease, 34%

Franchise agreement, own operation, 4%

Own operation, 5%

Revenue-based lease with guarantee, 52%

Management agreements, own operation, 4%

Other, 1%

Sweden, 51%

International, 49%

Lease structure – Rental revenues

corner-stones in pandox’ strategy

Strategyconsistent strategy enables stability and the spreading of risk

One type of asset – hotel properties

A hotel property has distinctive features

and differs from other types of property,

which demands specialist expertise to be

able to maintain active and successful

ownership . Pandox therefore invests in

just one type of asset: hotel properties .

Business position: Pandox has

120 hotels with a total of 24,800 rooms .

Agreement structure

To maximise value-growth in each hotel

requires a flexible business model that creates

opportunities for a situation-adapted strategy .

Business position: Pandox has a structure

that embraces leases, management agree-

ments, franchise agreements, as well as agree-

ments with independent players . The largest

portion concerns leases, which cover 87

percent of revenues .

Geographical market

Focusing on one type of asset requires a

broad geographic market so as to create

growth prerequisites and be able to benefit

from changes in the hotel economic cycle .

Business position: Pandox is currently

located in ten countries, of which Sweden is

the largest market . Major markets outside the

domestic market are Brussels, Copenhagen,

Helsinki and Montreal . Pandox is represented

in 59 locations that have a mix of national and

international demand .

scandic Kramer, malmö

8 | PANDOx 2010

Pandox’ vision is to be one of the world’s leading hotel property companies with regard to special-ist expertise in both hotel and property opera-tions, and active ownership.

for the vision to become reality, the company must retain its

specialist expertise regarding the value-growth chain, and that

the balance between international and national revenues, brand

names and types of hotel are maintained. another important

aspect is to constantly develop the business model so as to

adapt to each situation and choose the best strategy in relation

to local conditions.

Business concept and strategy

pandox’ business concept, based on expertise within hotel

properties, hotel operations and business development, is to

actively own, develop and lease out hotel properties.

Overall goal

pandox’ overall goal, through specialist expertise within hotels,

hotel properties and business development, is to achieve optimal

yield and value-growth in the hotel property portfolio. specific

goals are set each year for the operating net, return on investment,

value-growth in the existing hotel property portfolio, and the

equity/assets ratio. the goals are then broken down to each indi-

vidual property and act as guidance upon investment decisions.

Location and size

Large hotels with strong locations increase

potential and reduce risks, and are attrac-

tive for both partners and guests . Such

hotels have higher liquidity and are easier

to finance .

Business position: All Pandox hotels

have strong locations with an average size

of 207 rooms, which is significantly larger

than the average hotel in Europe .

Type of hotel

The hotels shall belong to the upper-

medium and high-price segment .

Business position: The portfolio contains

a mix of upper medium and high-priced

hotels . Examples of upper medium-priced

hotels include many Scandic hotels as

well as the Hotel Berlin, Berlin . High-priced

hotels include InterContinental Montreal

and Hilton Stockholm Slussen .

Choice of brand names and partners

Each hotel shall have the best possible brand

name that strengthens the profile . This requires

that Pandox maintains a broad network with

national and international hotel companies .

Business position: Pandox currently works with

11 partners under 19 well-known brand names,

as well as a number of independent distribution

channels, thus providing a unique position and

extensive network .

hotel Berlin, Berlinradisson Blu hotel, Basel

PANDOx 2010 | 9

Value-growth

1. Macro economy

2. Hotel economic cycle

3. Location and size

4. Competition – new capacity – different market positions

5. Brand names

10. Financing and taxes

9. Agreement structure

6. Operation and management

8. Asset management

7. Investments

The value-growth chain in a hotel property forms the basis for Pandox’ vision, strategy and choice of agreement structure . Knowledge of the entire chain is a precondition for success .

The value of a hotel property is determined to a considerable degree by how the hotel agreement is formulated . Pandox endeavours to find agreements that create mutual incentives and driving forces for maximum development for both parties .

Types of agreement

Optimal agreement framework

Pandox’ active and situationadapted ownership

is reflected in the different types of agreement .

The design and formulation of agreements are

guided by factors such as anticipated market

trends, local competition, planned investments,

as well as choice of operator and distributor . A

mixture of different types of agreement provides

Pandox with a structure that increases cash flow

in good times and, with rental guarantees, pro-

tects in declining markets .

Revenue-based agreements

Revenue-based hotel leases are linked to the

sales generated by the hotel business . This form

of lease provides Pandox with a share of growth

in both the market as a whole and in the market

share . To limit the risk, these leases generally

include a minimum guaranteed rent .

Result-based agreements

A result-based lease implies that Pandox

receives a share of the hotel operator’s operat-

ing net . This type of lease requires that Pandox

be informed of and have insight to the operating

company’s finances and accounts . This form of

lease can also have a guaranteed rent .

Fixed-fee agreements

Fixed-fee hotel leases are used in mature markets

and in well-established hotel products . A fixed-fee

lease limits the risk but also the potential .

Management agreements

A management agreement can be perceived as

kind of agent contract, where Pandox owns the

hotel business . Through a management agree-

ment, a hotel company is assigned to operate

and manage the hotel on behalf of Pandox .

Franchise agreements

In Pandox own operation, franchise contracts

can be entered with a hotel company in order to

gain the benefits of a larger system that embraces

the hotel’s overall marketing and sales .

Revenue-based lease, 34%

Franchise agreement, own operation, 4%

Own operation, 5%

Revenue-based lease with guarantee, 52%

Management agreements, own operation, 4%

Other, 1%

Lease structure – Rental revenues

10 | PANDOx 2010

Business processes

Market analysisA market analysis is performed in order to assess a hotel’s prof-itability potential and subsequent ability to pay the agreed rent . The local market is identified and analysed with regard to demand, competition and the current and future supply .

Market strategyA strategic plan for each hotel property is established based on the respective hotel’s specific prerequisites, the local market, and its position in the hotel eco-nomic cycle . The property’s con-tinued area of use is uncondi-tionally evaluated while prepar-ing the strategic plan .

Profitability optimisationIn view of that the value of a prop-erty is influenced by the profitabil-ity of the related hotel operations, the operator is Pandox’ most important partner . The hotel operator is constantly assessed in order to ensure positive devel-opments of the hotel’s operations and the value of the property .

Agreement optimisationThe optimal cash flow of each respective hotel property is divided between the operator, Pandox and other related parties . Each agreement is formulated in such a way that all parties involved are given an incentive to continuously improve the hotel property’s overall profitability .

The Pandox Model – and its four phases

Possibility to acquire a hotel property

Action plan with concrete measures

Evaluation of each respective hotel property and the portfolio

market analysis market strategy profitability optimisation

agreement optimisation

sales in accordance with the strategy

Pandox’ five business processes are implemented to describe the business position, the external and internal driving forces, and how these interact with each other .

Market survey

Gains knowledge of the market situation and change-pattern.

2The Pandox Model

the company’s working methodology increases cash flow and limits the risk

for each respective hotel.

Asset managementDaily management plus major invest-

ments with the objective of increasing the value of the properties in the long-term.

Economic and financial reporting

Operations are monitored through estab-lished goals, evaluations and valuations.

Market communication

Pandox regularly performs marketing activities towards target groups.

3

5

1

4

PANDOx 2010 | 11

Pandox has developed a large number of hotel properties and hotel operations during the years . A selection of the past years’ successful repositioning and ongoing projects are here presented .

Crowne Plaza Brussels City Centre was

acquired in 2003, and has for several years been

one of Brussels’ business and meeting hotels –

and indeed continues to strengthen its market

position year after year . The hotel, which has

received several international awards, has the

vision of becoming Brussels’ best meeting hotel

in the city centre .

Holiday Inn Brussels Airport

Vision – the best!Holiday Inn Brussels Airport was acquired in 2006 when the hotel required substantial

refurbishment and development . With the vision of creating the best upper-medium-

priced hotel in the area, the change process has been successfully implemented based

on the catchwords of full service, attractive design and high efficiency .

Crowne Plaza Brussels City Centre

Established in Brussels

Investment program: eur 8 millionAccomplished: completely new design for rooms and lobby, new meeting concept, upgrading of general facilities and major organisational development.

Investment program: cad 7.5 million Accomplished: modernisation and improvement of the banqueting hall and other meeting areas.

Investment program: eur 15 millionAccomplished: repositioning towards the meeting segment with new concept called “Balanced senses”. upgrading of all rooms, as well as new restaurant and bar concept in a classic environment.

Investments in developm ent and repositioning

12 | PANDOx 2010

Investments in developm ent and repositioning

Pandox acquired the InterContinental Mon-

treal in the summer of 2007 . Extensive devel-

opment work has since created a completely

new hotel concept – and reactions have been

nothing less than fantastic with several dis-

tinctions and awards . Work is now continuing

with the vision of becoming RevPAR-leader in

Montreal .

pandox acquired the hyatt regency montreal

in the summer of 2008, and is now investing

in the vision of creating montreal’s best

meeting and festival hotel. and the hotel is

well on the way to becoming outstanding!

the first stage is already completed with the

upgrading of the hotel’s large banqueting

hall and other meeting rooms. Work is now

continuing with the upgrading of the

reception and lobby.

Investment program: cad 14 million Accomplished: new management, new profile and design in all rooms and the lobby, new f&B offer.

SuCCESS STORIES

Pandox acquired the hotel in 2005, which at the

time was considered to be one of the city’s abso-

lutely poorest hotels . During more than two

years, the hotel was refurbished, upgraded and

developed, and a new concept was produced .

Hotel BLOOM! is a unique hotel with a completely

own concept based on art and design . It has

become a challenger in the Brussels hotel market

and now competes with the major hotels .

Hotel BLOOM!, Brussels

Talk of the town

Investment program: eur 13 millionAccomplished: repositioning, upgrading and development of the entire hotel. new management, new concept and new name.

Since acquiring the hotel in 2006, Pandox has

created the meeting place of the future in one of

the city’s largest hotels . Extensive re-profiling has

moved the Hotel Berlin, Berlin back to the top –

and is now established as one of the leading

meeting hotels, as well as one of Berlin’s most

creative meeting places .

Hotel Berlin, Berlin

Meeting place

Investment program: eur 10 million Accomplished: modernisation and improvement of all rooms and meeting product, as well as facade, entrance and lobby. new market profile and new management.

Hyatt Regency Montreal

Outstanding!

InterContinental Montreal

Business and pleasure

PANDOx 2010 | 13

Hotels operated by Pandox

City Hotel Brand name No. rooms Location

Berlin Hotel Berlin, Berlin Independent hotel 701 CentralMontreal Hyatt Regency Hyatt Regency 605 Central InterContinental Montreal InterContinental 357 City centreBrussels Crowne Plaza Brussels City Centre Crowne Plaza 354 City centre Hotel BLOOM! Independent hotel 305 Central Hilton Brussels City Hilton 283 City centre The Hotel Independent hotel 4334 City centre Holiday Inn Brussels Airport Holiday Inn 310 AirportAntwerp Crowne Plaza Antwerp Crowne Plaza 264 CentralBahamas Pelican Bay Independent hotel 184 Central

Operatedby Pandox

A natural part of Pandox’ active ownership is to operate its own hotels . Depending on the local prerequisites, the best strategy can be to develop operations oneself, and to choose another solution at a later stage . This creates a situation adapted strategy – hotel by hotel .

Another reason is that business cultures vary

among different geographical areas . In the

Nordic region, leases dominate while in North

America the most common form is manage-

ment and franchise agreements . Europe has a

mixture of both . It is therefore important to com-

mand different strategies in order to successfully

operate in an international hotel environment .

Having one’s own operational competence also

implies possessing specialist knowledge to

evaluate the hoteloperators, and be able to

carry out acquisitions that include both the

property and operating company .

Further to the growing industry trend of hotel

companies becoming management companies,

it is also natural for Pandox to integrate vertically

and take over operational responsibility .

At the end of 2010, Pandox’ operating com-

panies, including management agreements,

embraced ten hotels with total revenues of SEK

1 .2 billion – located in Berlin, Brussels, Antwerp,

Montreal and the Bahamas .

In recent years, four of the operations that had

been acquired as under-performers and there-

after redeveloped, were leased with long-term

agreements to well-known operators . In turn,

this created prerequisites for new acquisitions .

The philosophy behind Pandox’ operating

companies is to build up each hotel’s strategy

and competence locally . This implies that the main

part of decision-taking is delegated, and report-

ing is made to a board of directors with, normally,

external members who are elected for their spe-

cialist expertise . To be successful with the busi-

ness processes requires an ability to attract the

best management, and that such persons be

given substantial influence over operations .

crowne plaza Brussels city centre

holiday inn Brussels airport

hotel Bloom!, Brussels

hilton Brussels city

the hotel, Brussels

crowne plaza antwerp

hotel Berlin, Berlin

hyatt regency montreal

intercontinental montreal

pelican Bay, Bahamas

14 | PANDOx 2010

Marketcommunication

Pandox organises a Hotel Market Day each year, where current topics that affect the industry and sector are pre-sented and discussed . The event has been held every year since 1997 and interest is constantly growing . Recent years have seen a full house with around 300 people taking part, of which a large part is composed of international guests .

The Hotel Market Day is a dynamic meeting

place where hotel owners, operators, hotel

companies, banks, public opinion lobbyists,

construction companies, politicians and media

come together . They can listen to interesting

presentations that increase knowledge and

insight about the hotel sector’s conditions, and

are given the opportunity to network and obtain

a forecast and prognosis for next year . The

evening always closes with a dinner in a pleas-

ant and relaxed environment . The event is held

in November at the Hilton Stockholm Slussen,

which apart from being owned by Pandox is a

conference hotel of the highest class . In recent

years, themes taken up have included the effect

of low-price airlines on the hotel industry, the

significance of shopping tourism for a destina-

tion, as well as the signification of the term

“brand profitability” and the business models it

offers . The themes for 2010 were the economic

situation and its consequences for the hotel

industry, as well as social media and their effect

on the sector .

The speakers are top-quality . In November

2010, we had the honour of presenting Simon

Johnson, Director EMEA from CBRE Hotels,

Jan Tissera, CEO of TravelClick International,

and Hermine Coyet Ohlén, Chief Editor of

Swedish Elle . Staffan Olsson, well-known hand-

ball profile and Swedish national handball team

manager and Stefan Lövgren, handball icon and

expert commentator for TV4, were also there

and talked about the Handball World Champi-

onship 2011 – a mega event .

Regular information about market trends and acquisitionsWhen Pandox was formed in 1995, the

publication of a newsletter was started in

order to market the Company vis-à-vis the

capital market prior to being listed on the

stock exchange . The newsletter later was

replaced by the public reports distributed

by the Company . In spite of Pandox no

longer being listed on the Stockholm Stock

Exchange, the flow of information was

maintained to people interested in the hotel

sector and the hotel property market,

which is why Pandox upgrade is still

regularly issued . The newsletter contains

topics such as market trends and current

Swedish and international hotel market

questions .

Welcome as a subscriber

Pandox upgrade is free of charge and may

be ordered from Pandox either by tele-

phone at +46 (0)8-506 205 50 or by send-

ing an email to pandox@pandox .se

Pandox upgrade is also available on

www .pandox .com

PANDOx 2010 | 15

Development of the hotel property marketHistorically, hotel properties were perceived as part of the overall property market . Own-ership was often in the hands of institutions and large property companies that lacked hotel expertise and had few contact sur-faces with hotel operators . The relationship between tenant and landlord was in general based on long leases with solid guarantee components where the operator/hotel company took care of all development, maintenance and service of the properties .

The distinctive features of hotel properties

became clear

During the financial and property crisis in the begin-

ning of the 1990s, it became clear that the owners,

often institutions and large property companies,

lacked industrial competence . The economic

downturn hit the hotels, which suddenly could not

afford to pay their rent – which in turn caused far-

reaching problems for the property owners .

The property crisis led to the banks being

forced to take over a number of hotels, and

banks and other passive owners discovered

that hotels have distinctive features that distin-

guish them from, for example, housing and

office buildings . The value growth of a hotel

property is complex in view of that revenues and

results are affected by several factors that

demand extensive knowledge of the sector,

including knowledge of driving forces within the

hotel industry, effects of the choice of brand

name and type of agreement, as well as different

price and product segments, and much more .

Functional and geographical focus

Further to this baptism of fire, the capital market

increased its requirements regarding the strate-

gies of property companies . The companies

started to specialise, and two principal paths

crystallised: functional and geographical focus .

The majority of property companies chose the

latter and concentrated their portfolio around a

few locations, which also led to them selling

special properties such as hotels and shopping

centres . New structures arose from this situation

where companies with a functional strategy

were formed, and the first pure hotel property

companies were established .

At the same time, several of the large hotel

companies changed their strategies and chose

an “asset light” orientation, implying that they

started to sell their property portfolios .

These were the most important driving forces

behind greater liquidity in the hotel property mar-

ket . The new companies were active and in gen-

eral managed by people with considerable hotel

experience – which in turn led to greater dynam-

ics in the market with new contact surfaces and

the spreading of interest in the new players .

Scandinavia led the changes in Europe

Scandinavia was in the forefront of these develop-

ments . Pandox was the first hotel property com-

pany in Europe to be listed on the stock market .

The listing in 1997 in Stockholm led to a more

transparent hotel market further to the improved

availability of information, and the confidence

grew within the capital market . Capona was listed

intercontinental, montreal

Source: The information in the graph is an estimation based on public information and research . Deviations may occur .

10 largest hotel property owners in Europe

Starwood Capital Group

Foncière des Murs

OCPI

Pandox

Moor Park Capital Partners

Westmont Hospitality Group

The Blackstone Group

Prupim/Prudential

Quinland Private Capital

CapMan

0 200 400

No . of hotels

16 | PANDOx 2010

on the Stockholm stock exchange at the end of

the 1990s, and was also founded further to the

reorganisation and industrialisation of the sector .

Over the years that followed, interest in the

hotel industry grew and the number of players

increased . Private equity companies, institutional

owners, high net worth individuals and various

kinds of funds took positions in the market .

Only a few diversified hotel property portfolios

Even if the hotel property market is now estab-

lished and transactions with gigantic amounts are

carried out, ownership is still fragmented and

being restructured . If the point of departure is that

there have been, and still are, functional focus

towards one type of property, the situation should

have led to the market’s players owning hotel

properties in many countries managed by several

brand names, so as to be able to benefit from the

change in the hotel economic cycle and use their

specialist competence . But this is not the situa-

tion today . Few companies have any pronounced

global strategy, and only a minority has opera-

tions in several countries and continents .

At company level, there are only eight com-

panies that have a European property portfolio

with more than 50 hotels . The largest is Starwood

Capital Group that owns close to 1,000 hotel

properties across the world, and where Europe

represents just under 40 percent . Another large

player is Westmont Hospitality Group that owns

about 500 hotels in total, of which 16 percent are

in Europe . Pandox is also a significant player with

120 hotels in 10 countries together with 11 part-

ners under 19 brand names .

Buyers and sellers in 2010

2010 proved to be a year of surprises . The trans-

actions market in Europe touched bottom in

2009 and finished at close to 90 percent under

the peak year of 2007 . The backdrop to the

downturn was strong macro-economic factors,

which were expected to prevent a rapid recov-

ery . But after a cautious, albeit positive, start to

2010 both the underlying hotel market and

transactions within the sector accelerated .

By the end of the year one could see that the

trend of the hotel market showed a pattern of a

very sharp V, with a rapid and strong recovery .

The transaction market in Europe had increased

by 150 percent at the end of the year compared

with 2009 and reached a level of EuR 7 .8 billion .

The transactions completed during the year

were mainly domestic or within Europe, and the

banks’ continued stringent loan requirements

held down the size of the transactions . About 60

percent were less than EuR 35 million and only

17 percent were over EuR 70 million . The larg-

est transaction in Europe was Pandox’ acquisi-

tion of Norgani for just over EuR 1 billion .

The most active buyers in the hotel property

market in 2010 were high net worth individuals

and private equity or investment companies .

The largest sales group was composed of

receivers, companies assigned by banks to sell

distressed assets .

Transaction volume on the hotel property market, EMEA1)

EUR million

0

5,000

10,000

15,000

20,000

25,000

2010200920082007

Single acquisitions Portfolio acquisitions

1) Europe, Middle East, AfricaSource: Hotel Investment Outlook 2011, Jones Lang LaSalle

Buyer and seller net shift analysis, EMEA1) 2010

Other corporates

Developer/Property company

HNWI

Hotel operator

Institutional investor

Investment fund/Private equity

Receiver3)

REIT2)

Sovereign Wealth Fund 2.8

−13.7

−4.5

−5.3

−2.0

0.9

−0.1

9.1

12.8

1) Europe, Middle East, Africa2) Real Estate Investment Trust3) Companies assigned by banks to sell distressed assetsSource: Hotel Investment Outlook 2011, Jones Lang LaSalle

–15 0 15

comfort hotel Børsparken, oslo

%

PANDOx 2010 | 17

120hotels24,800hotel rooms

Pandox – 120 hotel prop erties, one congress centre and 19 well-known brand namesPandox currently works with 11 part-

ners under 19 hotel brand names that

are active within different price and

product segments. our partners are all

well-known, established and success-

ful. these partnerships strengthen

Pandox’ knowledge and network and

enable a unique position in the industry.

the hotels are spread over 10

countries and a total of 59 towns and

cities. Pandox’ most extensive partner-

ship is with scandic, who operate 57 of

the hotels in Pandox’ portfolio, followed

by Quality hotel with 12 hotels. Pandox

also works with international brands

such as hilton, hyatt, radisson BlU,

Crowne Plaza and InterContinental.

each hotel is handled and ana-

lysed based on its individual prerequi-

sites and surroundings. the business

model, form of partnership and agree-

ment are chosen depending on each

situation so as to create optimal pre-

conditions for maximum development

for both parties.

presented on pages 20–39

18 | Pandox 2010

10 CoUntrIes

59 CItIes19 Brandnames

Pandox – 120 hotel prop erties, one congress centre and 19 well-known brand names

Pandox 2010 | 19

strong hotels in good locationsscandic is the leading hotel chain in the nordic

region, and currently has 160 hotels in nine countr-

ies. Pandox and scandic have a long business

relationship and have collaborated closely ever

since Pandox was established. today, Pandox

has 57 hotels and one congress centre under the

scandic brand name, representing 49 percent of

revenues in the total Pandox portfolio.

scandic has two principal product segments:

city-centre hotels and highway hotels. of the

city-centre hotels, Pandox’ portfolio includes for

example scandic Park on Karlavägen and scan-

dic hasselbacken at djurgården in stockholm,

scandic Grand marina and scandic Continental

in helsinki as well as scandic Kna in oslo.

Scandic Ferrum, Kiruna Scandic Hasselbacken, Stockholm

Scandic Grand Marina, Helsinki

Scandic Grand Marina, Helsinki

20 | Pandox 2010

Scandic Highway City centre Resort No. hotels

sweden 25 17 42norway 1 1 2Finland 1 6 2 9denmark 1 1Germany 1 1Belgium 1 1 2

TOTAL 57

scandic Kna, osloscandic rosendal,tammerfors

Scandic KNA, OsloScandic Star, Lund

Scandic Park, Stockholm

Scandic Malmen, Stockholm

CItY CentrehasselBaCKen sCandIC ParKGrand marInaContInentalsCandIC KnasKoGshÖJdFerrUmrosendalmalmenstar

and others

Pandox 2010 | 21

30 well-positioned highway hotelsthe original scandic hotels are classic highway

hotels that were opened so as to offer car-trav-

ellers overnight accommodation. this hotel

segment is now established over the whole in

the nordic region. Pandox’ portfolio contains

30 highway hotels, of which well-known and

popular examples include scandic Järva Krog,

located just by the e4 at stockholm’s northern

approach, scandic Backadal by the e6 at

Gothenburg’s western approach, and scandic

Klarälven at Karlstad’s e18 ring road.

scandic and Pandox have created a spe-

cific project with a vision of developing the new

generation of highway hotels – a process that

will start in 2011.

22 | Pandox 2010

Scandic Örebro Väst

Scandic Norrköping Nord

scandic Backadal, Gothenburg

scandic Bollnäs

scandic Järva Krog, solna

Scandic Linköping Väst

scandic Västerås

scandic Västerås

hIGhwaY hotels

ÖreBro VÄstJÄrVa KroGBaCKadalnorrKÖPInG nordlInKÖPInG VÄst

KlarÄlVenVÄsterÅs

and others

Pandox 2010 | 23

hilton hotels – high class in all locationshilton is a global hotel company, and is to be

found in most major cities across the world.

Pandox has seven hilton hotels in its portfolio.

the locations include london, Brussels,

helsinki and stockholm. Currently a joint refur-

bishment program is in progress at the hilton

stockholm slussen.

Hilton Hotels & Resorts Country City No. rooms

hilton london docklands UK london 365hilton stockholm slussen sweden stockholm 289hilton Brussels City Belgium Brussels 283hilton helsinki Kalastajatorppa Finland helsinki 238hilton helsinki strand Finland helsinki 192hilton Bremen Germany Bremen 235hilton dortmund Germany dortmund 190TOTAL 1,792

Hilton Stockholm Slussen

BrUsselsstoCKholm

londonhelsInKIBremendortmUnd

24 | Pandox 2010

Hilton, Bremen

Hilton Helsinki Kalastajatorppa

Hilton Helsinki Strand

Hilton, Dortmund

Hilton London Docklands

Hilton London Docklands

Pandox 2010 | 25

ClarIonhelsInGBorG

ÖstersUndKarlstadClarIon ColleCtIon CoPenhaGenharstad

osloClarion Collection Hotel Bastion, Oslo

nordic Choice hotels – the portfolio contains all five of the chain’s brandsnordic Choice hotels is the fastest growing hotel com-

pany in the nordic region and is one of Pandox’ larg-

est partners with a total of 22 hotels in the portfolio.

the hotels within the Choice family represent 19

percent of Pandox’ revenues. the hotel company

has several brands, and Pandox has all five in its

portfolio, where Quality is the largest with a total of

12 hotels located in norway and sweden.

26 | Pandox 2010

Nordic Choice Hotels Country No. hotels

Clarion sweden 3Clarion Collection norway, denmark 4Quality norway, sweden 9Quality resort norway 3Comfort norway, denmark 3TOTAL 22

ComFort

osloCoPenhaGen

BerGenQUalItY resortFaGernes

ØYerKrIstIansand

QUalItYmoldelInKÖPInGGothenBUrGstoCKholm KrIstIanstadsÖdertÄlJe

lUleÅsKÖVde

Quality Park Hotel, Södertälje

Clarion Hotel Grand, Helsingborg

Clarion Hotel Mayfair, Copenhagen

Comfort Hotel Børsparken, Oslo

Quality Hotel&Resort, Fagernes

Clarion Hotel Plaza, Karlstad

Pandox 2010 | 27

Centre of attention in the Canadian metropolisInterContinental hotels & resorts is one of the

world’s largest hotel companies, and owns the

InterContinental, Crowne Plaza and holiday Inn

brands. Pandox’ portfolio includes four hotels

located in antwerp, Brussels and montreal. the

InterContinental montreal was acquired in 2007

and has since then been developed and

repositioned. It was named montreal’s best

hotel last year and ranked as one of the 100

best hotels in the world.

BrUsselsantwerPmontreal

Holiday Inn, Brussels

28 | Pandox 2010

leading in BrusselsPandox owns two hotel properties operated

under the Crowne Plaza brand name – both

located in Belgium. Crowne Plaza Brussels City

Centre was acquired in 2003 and thereafter

underwent an important investment program.

the hotel has since become one of Brussels’

leading business and meeting hotels, and is

owned and operated by Pandox under a fran-

chise agreement.

the Crowne Plaza antwerp, acquired in 2007,

is also owned and operated by Pandox under a

franchise agreement. the hotel has 264 rooms

and is strategically located by antwerp’s ring

road just 10 minutes from the airport. It is cur-

rently undergoing an extensive refurbishment

program that will be completed in 2011.

successful change processthe holiday Inn Brussels airport was acquired

in 2006, and needed extensive refurbishment

and development. with the vision of creating

the best upper-medium-priced hotel in the

area, the change process has been

successfully carried out with the catchwords of

full service, attractive design and high efficiency.

today the hotel is runner-up in its market, and is

owned and operated by Pandox under a

franchise agreement.

InterContinental Hotels & Resorts Country City No. hotels

Crowne Plaza Belgium antwerp, Brussels 2holiday Inn Belgium Brussels 1InterContinental Canada montreal 1TOTAL 4

BrUssels

Crowne Plaza Brussels City Centre, Brussels

Crowne Plaza Brussels City Centre, Brussels

Pandox 2010 | 29

Hyatt is an American, stock-market-listed hotel

company with headquarters in Chicago. The

company has eight different brands. Pandox’

hotel in Montreal is operated under the Hyatt

Regency brand.

The Hyatt Regency has a strategically

important position in central Montreal within

walking distance to the Palais des Congrès –

Montreal’s exhibition and congress centre. The

hotel is undergoing refurbishment with the

objective of repositioning as one of Canada’s

best leisure and meeting hotels. The Hyatt

Regency Montreal has 605 rooms and exten-

sive meeting and conference facilities for 1,000

people.

On the way to something big

MONTREAL

Hotel Country City No. rooms

Hyatt Regency Montreal Canada Montreal 605

30 | PANdOx 2010

Rezidor is the fastest growing hotel company in Europe. With Scandi-

navian origins, the company is now listed on the stock market and is

head quartered in Brussels. Pandox has a long relationship with Rezidor

and currently owns six Radisson BLU hotels located in Sweden, Norway

and Switzerland. during 2010, the Radisson BLU hotels in Malmö and

Basel were developed jointly by Rezidor and Pandox with good results

and where the companies’ respective competences could be utilised.

Six hotels, three countries

LiLLEHAMMER

MALMöBOdØSTOCKHOLM

BASELLiNKöPiNg

Rezidor Country City No. rooms

Radisson BLU Arlandia Hotel Sweden Stockholm 335Radisson BLU Hotel, Malmö Sweden Malmö 229Radisson BLU Hotel, Linkoping Sweden Linköping 91Radisson BLU Lillehammer Hotel Norway Lillehammer 303Radisson BLU Hotel, Bodø Norway Bodø 191Radisson BLU Hotel, Basel Switzerland Basel 205TOTAL 1,354

Radisson BLU Lillehammer HotelRadisson BLU Lillehammer Hotel

Radisson BLU Hotel, Basel

Radisson BLU Arlandia Hotel, Arlanda

Radisson BLU Arlandia Hotel, Arlanda

PANdOx 2010 | 31

Elite Hotels is a privately owned hotel chain with 21 hotels, and has specialised in operating

classic hotels. The Pandox portfolio contains the Elite Park Avenue Hotel on gothenburg’s

most well-known avenue, and the Elite Stora Hotellet in Jönköping.

gOTHENBURgJöNKöPiNg

Well-known city profiles


Elite Park Avenue Hotel Sweden gothenburg 317Elite Stora Hotellet Jönköping Sweden Jönköping 135TOTAL 452

Elite Park Avenue Hotel, GothenburgElite Park Avenue Hotel, Gothenburg

Elite Park Avenue Hotel, Gothenburg

32 | PANdOx 2010

Rica Hotel Bodø

HAMARBOdØ

Rica Hotel Hamar

Rica Hotel Hamar

Rica Hotels has more than 80 hotels in Norway

and Sweden, and two of the Norwegian hotels

are included in Pandox’ portfolio.

The Rica Hotel Bodø is located within walk-

ing distance of the town centre, and has 113

rooms as well as conference facilities for 250

participants.

The Rica Hotel Hamar is a business and

conference hotel located centrally in Østlandet

with 176 rooms and conference facilities for

600 people.

Two Norwegians


Rica Hotel Bodø Norway Bodø 113Rica Hotel Hamar Norway Hamar 176TOTAL 289

PANdOx 2010 | 33

Central locations

MORAväxJövANTAA

Hotel, other brand names Country City No. rooms

Best Western Mora Hotell & Spa Sweden Mora 135Best Western Royal Corner Sweden växjö 158Best Western Hotel Pilotti Finland vantaa 112ibis Stockholm Hägersten Sweden Stockholm 190Omena Hotel Copenhagen denmark Copenhagen 228Rantasipi imatran valtionhotelli Finland imatra 135

Best Western Mora Hotel & Spa

First Hotels is represented with 46 hotels in Sweden, Norway and denmark. The Pandox portfolio

contains four hotels in Sweden under this brand name, located in älvsjö outside Stockholm and in

Borås, Linköping and Halmstad.

Four First hotels in Sweden

First Hotels Country City No. rooms

First Hotel Royal Star Sweden Stockholm 103First Hotel Linköping Sweden Linköping 133First Hotel grand Borås Sweden Borås 158First Hotel Mårtenson Sweden Halmstad 103TOTAL 497

HALMSTAdLiNKöPiNgSTOCKHOLM

BORÅS

First Hotel Royal Star, Stockholm

Best Western Royal Corner

First Hotel, Linköping

First Hotel Grand, Borås

Best Western Hotels is a global hotel chain with operations

in 80 countries. The hotels are owned and operated

privately but marketed under the joint name of Best

Western. The Pandox portfolio contains three hotels that

are members of Best Western Hotels, of which the Best

Western Mora Hotell & Spa and the Best Western Royal

Corner in växjö are two centrally located four-star hotels.

The Best Western Hotel Pilotti is located in vantaa, Finland.

34 | PANdOx 2010

COPENHAgEN

ibis – budget in southern StockholmAccor is one of the world’s largest hotel companies with operations in 90

countries and 15 different brands in all segments – including the ibis brand

name for low-priced hotels represented in 43 countries. The Pandox portfolio

includes the ibis Stockholm Hägersten, located in southern Stockholm, just

10 minutes from Stockholmsmässan and 15 minutes from central Stockholm.

The hotel has 190 rooms, a restaurant, and several conference rooms.

Centrally located in CopenhagenOmena Hotels has ten hotels, of which nine are in Finland and one in

denmark. The Pandox-owned Omena Hotel Copenhagen is centrally

located in Copenhagen with 228 rooms and a café.

iMATRA

Castle environment in Finland

STOCKHOLM

Rantasipi Imatran Valtionhotelli is a spa hotel in a castle environment close to the town of Imatra in Finland.

The hotel has 135 rooms, conference facilities for 250 people, and a complete spa centre.

PANdOx 2010 | 35

Independent hotels Country City No. rooms

Hotel Berlin, Berlin germany Berlin 701The Hotel Belgium Brussels 433Hotel BLOOM! Belgium Brussels 305

Pelican Bay Bahamasgrand Bahama

island 184Airport Hotel Bonus inn Finland vantaa 211vildmarkshotellet Kolmården Sweden Norrköping 213Mr Chip, Kista Sweden Stockholm 150Stadshotellet Princess Sandviken Sweden Sandviken 84Hotel Korpilampi Finland Espoo 150

A unique and own conceptPandox acquired Hotel BLOOM! in 2005, which

since September 2007 has been totally refur-

bished and has undergone a complete facelift.

Today, the Hotel BLOOM! is a unique hotel

product with its own concept based on art and

design. it is a distinct challenger in the Brussels

hotel market, with 305 rooms and large confer-

ence facilities, in the city centre that competes

with the major hotels. Hotel BLOOM! is both

owned and operated by Pandox.

BRUSSELS

independent hotels

36 | PANdOx 2010

Best location in the EU cityThe Hotel was acquired in 2010 and is one of

the largest and best-known hotels in Brussels.

The hotel property is located on Boulevard

Waterloo next to the city’s most prestigious

shopping street, Avenue Louise. The hotel,

which is a landmark, has 433 rooms on 26

floors with several conference areas, two res-

taurants, as well as a fitness and spa centre.

Pandox’ vision is to recreate the hotel’s histori-

cally strong position as one of the city’s leading

business and meeting hotels in the premium

segment.

BRUSSELS




PANdOx 2010 | 37

BERLiN

independent hotels, continued

Creative meeting place in BerlinSince the acquisition of the hotel in 2006, Pan-

dox has created the meeting place of the future

in one of Berlin’s largest hotels. A comprehensive

repositioning program has brought the Hotel

Berlin, Berlin back to the top. it is now estab-

lished as one of the leading meeting hotels and is

one of Berlin’s most creative meeting places. The

hotel has 701 guest rooms and 22 conference

rooms, as well as several restaurants and bars.

The hotel is owned and operated by Pandox.

38 | PANdOx 2010

KOLMÅRdEN

BAHAMAS

MR CHIp, KIsTA is strategically located in

central Kista, one of Stockholm’s most

expansive areas that is also the centre for

leading companies within the iT and telecom

sectors. The hotel has 150 rooms, conference

facilities, as well as bar and restaurant,

oriented towards business travellers.

Complete resort in the CaribbeanThe Pelican Bay Hotel is located in the beautiful

Bahamas, on grand Bahama island. The hotel has

been repositioned since Pandox took over the man-

agement agreement, and is now one of the leading

business and meeting hotels in the Bahamas.

THe AIRpORT HOTeL bONus INN has 211 rooms

and is located just 5 minutes’ drive from Helsinki-

vantaaa airport and 30 minutes from Helsinki railway

station. The hotel is next to the Leija Business Park –

a shopping and leisure centre.

THe sTAdsHOTeLLeT pRINCess,

sANdvIKeN is located right in the centre of

Sandviken with 84 rooms, conference room

with capacity for 80 people, and a restaurant.

The major family attraction in SwedenVildmarkshotellet is one of the best-known

resort and tourist complexes in Sweden. The

hotel is located outside Norrköping, about

150 kilometres from Stockholm, next to

Scandinavia’s largest wildlife park,

Kolmården. The complex has 213 rooms, of

which most are family-adapted, a large

conference area with capacity for 370 people

in the largest room, a large restaurant and a

lobby bar. A new family spa centre has

recently been completed with waterway,

relaxation areas and treatment room.

PANdOx 2010 | 39

property Operator / brand nameType of agreement Country City Location

Number of rooms

Total area (sqm)

Of which hotels (sqm) property designation

Tax assesment value (seK M)

Scandic Antwerp Scandic O Belgium Antwerp Ring road 204 13,200 13,200 24th div, Borgerhout 1st div, Ar –Scandic grand Place, Brussels Scandic O Belgium Brussels City centre 100 4,500 4,500 –Scandic Copenhagen Scandic O denmark Copenhagen City centre 484 31,500 25,200 99943-2 –Scandic Continental, Helsinki Scandic Og Finland Helsinki City centre 512 30,000 91-14-468-3 178.4Scandic Espoo Scandic Og Finland Espoo Ring road 96 5,245 49-54-17-7 43Scandic grand Marina, Helsinki Scandic Og Finland Helsingfors City centre 462 23,660 91-8-187-8 147.3Scandic Marina Congress Center, Helsinki Scandic O Finland Helsingfors City centre 0 11,500 0 75.8Scandic Jyväskylä Scandic Og Finland Jyväskylä Central 150 7,360 179-3-52-23 78.9Scandic Kajanus, Kajaani Scandic Og Finland Kajaani Exhibition centre 191 10,468 205-14-7-5 77.7Scandic Kuopio Scandic Og Finland Kuopio Central 137 7,113 297-1-41-6-Li 60.6Scandic Luosto Scandic Og Finland Luosto Ski resort 59 4,230 758-893-103-1-L159, L37, L188, L189, L195, L212 11.8Scandic Rosendahl Scandic Og Finland Tampere Central 213 14,662 837-134-495-1-Li Scandic Tampere City Scandic Og Finland Tampere Central 263 14,457 837-112-187-35,837-112-187-37 131.3Scandic Bergen Airport Scandic O Norway Bergen Airport 197 9,654 gnr 114 Bnr 213 33.1Scandic KNA, Oslo Scandic O Norway Oslo City centre 189 11,218 gnr 209 Bnr 275 14.0Scandic Alvik, Stockholm Scandic Og Sweden Stockholm Ring road 325 12,075 Racketen 9 196Scandic Backadal, gothenburg Scandic Og Sweden gothenburg Ring road 232 9,397 Backa 105:1 53.6Scandic Billingen, Skövde Scandic O Sweden Skövde Central 107 7,743 6,844 Fjolner 7 27.6Scandic Bollnäs Scandic Og Sweden Bollnäs Central 111 5,150 Sundsbro 10 20.9Scandic Bromma, Stockholm Scandic Og Sweden Stockholm Ring road 144 6,800 3,970 Pundet 1 38.2Scandic Crown, gothenburg Scandic O Sweden gothenburg City centre 338 24,380 21,800 Stampen 5:5 170Scandic Elmia, Jönköping Scandic O Sweden Jönköping Exhibition centre 220 9,576 Åminne 1 52.2Scandic Ferrum, Kiruna Scandic Og Sweden Kiruna Central 170 11,100 Hovmästaren 1 19.2*Scandic grand, örebro Scandic O Sweden örebro Central 221 12,900 10,900 Mältaren 1 50.6Scandic gävle väst Scandic Og Sweden gävle Ring road 201 7,382 valbo-Backa 6:12 28.4Scandic Hallandia, Halmstad Scandic O Sweden Halmstad Central 154 7,617 6,813 Erik dahlberg 14 & 15 44.8Scandic Hasselbacken, Stockholm Scandic Og Sweden Stockholm City centre 112 10,025 Hasselbacken 1 102Scandic Helsingborg Nord Scandic Og Sweden Helsingborg Ring road 237 9,399 Floretten 1 41Scandic Järva Krog, Stockholm Scandic O Sweden Stockholm Ring road 215 11,300 11,300 Tanken 2 77.6Scandic Kalmar väst Scandic Og Sweden Kalmar Airport 148 5,485 Hammaren 4 24.6Scandic Klarälven, Karlstad Scandic Og Sweden Karlstad Ring road 143 5,694 Sandbäcken 1:3 26.3Scandic Kramer, Malmö Scandic O Sweden Malmö City centre 113 6,913 6,373 gripen 1 73.8Scandic Kungens Kurva, Stockholm Scandic Og Sweden Stockholm Ring road 257 11,581 9,456 Radien 112*Scandic Linköping väst Scandic Og Sweden Linköping Ring road 150 6,105 Osten 2 27.8Scandic Luleå Scandic Og Sweden Luleå Ring road 159 5,565 Mjölkudden 3:45 21Scandic Malmen, Stockholm Scandic Og Sweden Stockholm City centre 327 15,130 gråberget 190Scandic Mölndal, gothenburg Scandic O Sweden gothenburg City centre 208 11,000 11,000 Laken 1 55.2Scandic Norrköping Nord Scandic Og Sweden Norrköping Ring road 150 6,768 Blyet 8 24.2Scandic Park, Stockholm Scandic O Sweden Stockholm City centre 201 12,290 10,290 Lönnen 30 213Scandic Plaza, Borås Scandic Og Sweden Borås Central 135 10,592 7,961 Balder 6 62.8Scandic S:t Jörgen, Malmö Scandic Og Sweden Malmö City centre 288 21,485 14,655 S:t Jörgen 11 222Scandic Segevång, Malmö Scandic Og Sweden Malmö Ring road 161 6,284 Kriseberg 14:95 30.6Scandic Skogshöjd, Södertälje Scandic O Sweden Södertälje Central 225 14,115 14,115 Yxan 8 46.2Scandic Star Sollentuna Scandic Og Sweden Stockholm Ring road 269 18,573 Centrum 12 138*Scandic Star, Lund Scandic Og Sweden Lund Central 196 15,711 15,711 Porfyren 2 102.4Scandic Sundsvall Nord Scandic Og Sweden Sundsvall Ring road 159 4,948 värdshuset 1 23.6Scandic Swania, Trollhättan Scandic O Sweden Trollhättan Central 198 10,399 10,399 Svan 7 48.5Scandic Södertälje Scandic Og Sweden Södertälje Ring road 131 5,630 Reparatören 2 24.4Scandic Umeå Syd Scandic Og Sweden Umeå Ring road 162 5,955 Reparatören 4 26Scandic Uplandia, Uppsala Scandic Og Sweden Uppsala City centre 133 5,402 4,611 dragarbrunn 16:4 51.8Scandic Upplands väsby Scandic O Sweden Stockholm Ring road 150 6,955 6,955 vilunda 6:48 34.6Scandic Uppsala Nord Scandic Og Sweden Uppsala Ring road 184 7,518 6,486 Kvarngärdet 3:2 37Scandic Winn, Karlstad Scandic Og Sweden Karlstad Central 199 10,580 10,580 Negern 2 49Scandic västerås Scandic Og Sweden västerås Ring road 174 7,285 Sågen 1 26.1Scandic växjö Scandic Og Sweden växjö Ring road 123 3,982 Kocken 3 21.74Scandic örebro väst Scandic Og Sweden örebro Ring road 204 7,621 vindmotorn 2 35Scandic östersund Syd Scandic Og Sweden östersund Ring road 129 4,019 Särrimner 1 21.6Scandic Lübeck Scandic O germany Lübeck Ring road 158 9,700 8,800 grundbuch Lübeck, Blatt 54545 – Hilton Brussels City Pandox/Hilton M Belgium Brussels City centre 283 13,850 13,850 Saint-Josseten-Noode (1div) 032 –Hilton Helsinki Kalastajatorppa Scandic/Hilton Og Finland Helsinki Ring road 238 23,291 91-30-1-5,91-30-3-2-Li 164.2Hilton Helsinki Strand Scandic/Hilton Og Finland Helsinki Central 192 10,250 91-11-300-7 146.3Hilton London docklands Hilton O Storbritannien London Central 365 22,800 21,500 HM Land Registry: SgL465779 –Hilton Stockholm Slussen Hilton O Sweden Stockholm City centre 289 18,416 15,725 överkikaren 31 365.9Hilton Bremen Hilton O germany Bremen City centre 235 21,000 15,100 grundbuch Altstadt iv, Blatt 60 –Hilton dortmund Hilton O germany dortmund Exhibition centre 190 12,500 11,300 grundbuch dortmund, Blatt 897 –

* tax assesment value 2007

O = Revenue-based, Og = Revenue-based with guaranteed rent, OR = Revenue and result-based, R = Result-based,

F = Fixed, iO = internal revenue-based, M = Management agreement, FR = Franchise, AM = Asset management agreement

Operated by Pandox (Pandox own hotel operations)

Hotel properties

40 | PANdOx 2010

PANdOx 2009 | 41


Number of rooms

Total area (sqm)



Scandic Antwerp Scandic O Belgium Antwerp Ring road 204 13,200 13,200 24th div, Borgerhout 1st div, Ar –Scandic grand Place, Brussels Scandic O Belgium Brussels City centre 100 4,500 4,500 –Scandic Copenhagen Scandic O denmark Copenhagen City centre 484 31,500 25,200 99943-2 –Scandic Continental, Helsinki Scandic Og Finland Helsinki City centre 512 30,000 91-14-468-3 178.4Scandic Espoo Scandic Og Finland Espoo Ring road 96 5,245 49-54-17-7 43Scandic grand Marina, Helsinki Scandic Og Finland Helsingfors City centre 462 23,660 91-8-187-8 147.3Scandic Marina Congress Center, Helsinki Scandic O Finland Helsingfors City centre 0 11,500 0 75.8Scandic Jyväskylä Scandic Og Finland Jyväskylä Central 150 7,360 179-3-52-23 78.9Scandic Kajanus, Kajaani Scandic Og Finland Kajaani Exhibition centre 191 10,468 205-14-7-5 77.7Scandic Kuopio Scandic Og Finland Kuopio Central 137 7,113 297-1-41-6-Li 60.6Scandic Luosto Scandic Og Finland Luosto Ski resort 59 4,230 758-893-103-1-L159, L37, L188, L189, L195, L212 11.8Scandic Rosendahl Scandic Og Finland Tampere Central 213 14,662 837-134-495-1-Li Scandic Tampere City Scandic Og Finland Tampere Central 263 14,457 837-112-187-35,837-112-187-37 131.3Scandic Bergen Airport Scandic O Norway Bergen Airport 197 9,654 gnr 114 Bnr 213 33.1Scandic KNA, Oslo Scandic O Norway Oslo City centre 189 11,218 gnr 209 Bnr 275 14.0Scandic Alvik, Stockholm Scandic Og Sweden Stockholm Ring road 325 12,075 Racketen 9 196Scandic Backadal, gothenburg Scandic Og Sweden gothenburg Ring road 232 9,397 Backa 105:1 53.6Scandic Billingen, Skövde Scandic O Sweden Skövde Central 107 7,743 6,844 Fjolner 7 27.6Scandic Bollnäs Scandic Og Sweden Bollnäs Central 111 5,150 Sundsbro 10 20.9Scandic Bromma, Stockholm Scandic Og Sweden Stockholm Ring road 144 6,800 3,970 Pundet 1 38.2Scandic Crown, gothenburg Scandic O Sweden gothenburg City centre 338 24,380 21,800 Stampen 5:5 170Scandic Elmia, Jönköping Scandic O Sweden Jönköping Exhibition centre 220 9,576 Åminne 1 52.2Scandic Ferrum, Kiruna Scandic Og Sweden Kiruna Central 170 11,100 Hovmästaren 1 19.2*Scandic grand, örebro Scandic O Sweden örebro Central 221 12,900 10,900 Mältaren 1 50.6Scandic gävle väst Scandic Og Sweden gävle Ring road 201 7,382 valbo-Backa 6:12 28.4Scandic Hallandia, Halmstad Scandic O Sweden Halmstad Central 154 7,617 6,813 Erik dahlberg 14 & 15 44.8Scandic Hasselbacken, Stockholm Scandic Og Sweden Stockholm City centre 112 10,025 Hasselbacken 1 102Scandic Helsingborg Nord Scandic Og Sweden Helsingborg Ring road 237 9,399 Floretten 1 41Scandic Järva Krog, Stockholm Scandic O Sweden Stockholm Ring road 215 11,300 11,300 Tanken 2 77.6Scandic Kalmar väst Scandic Og Sweden Kalmar Airport 148 5,485 Hammaren 4 24.6Scandic Klarälven, Karlstad Scandic Og Sweden Karlstad Ring road 143 5,694 Sandbäcken 1:3 26.3Scandic Kramer, Malmö Scandic O Sweden Malmö City centre 113 6,913 6,373 gripen 1 73.8Scandic Kungens Kurva, Stockholm Scandic Og Sweden Stockholm Ring road 257 11,581 9,456 Radien 112*Scandic Linköping väst Scandic Og Sweden Linköping Ring road 150 6,105 Osten 2 27.8Scandic Luleå Scandic Og Sweden Luleå Ring road 159 5,565 Mjölkudden 3:45 21Scandic Malmen, Stockholm Scandic Og Sweden Stockholm City centre 327 15,130 gråberget 190Scandic Mölndal, gothenburg Scandic O Sweden gothenburg City centre 208 11,000 11,000 Laken 1 55.2Scandic Norrköping Nord Scandic Og Sweden Norrköping Ring road 150 6,768 Blyet 8 24.2Scandic Park, Stockholm Scandic O Sweden Stockholm City centre 201 12,290 10,290 Lönnen 30 213Scandic Plaza, Borås Scandic Og Sweden Borås Central 135 10,592 7,961 Balder 6 62.8Scandic S:t Jörgen, Malmö Scandic Og Sweden Malmö City centre 288 21,485 14,655 S:t Jörgen 11 222Scandic Segevång, Malmö Scandic Og Sweden Malmö Ring road 161 6,284 Kriseberg 14:95 30.6Scandic Skogshöjd, Södertälje Scandic O Sweden Södertälje Central 225 14,115 14,115 Yxan 8 46.2Scandic Star Sollentuna Scandic Og Sweden Stockholm Ring road 269 18,573 Centrum 12 138*Scandic Star, Lund Scandic Og Sweden Lund Central 196 15,711 15,711 Porfyren 2 102.4Scandic Sundsvall Nord Scandic Og Sweden Sundsvall Ring road 159 4,948 värdshuset 1 23.6Scandic Swania, Trollhättan Scandic O Sweden Trollhättan Central 198 10,399 10,399 Svan 7 48.5Scandic Södertälje Scandic Og Sweden Södertälje Ring road 131 5,630 Reparatören 2 24.4Scandic Umeå Syd Scandic Og Sweden Umeå Ring road 162 5,955 Reparatören 4 26Scandic Uplandia, Uppsala Scandic Og Sweden Uppsala City centre 133 5,402 4,611 dragarbrunn 16:4 51.8Scandic Upplands väsby Scandic O Sweden Stockholm Ring road 150 6,955 6,955 vilunda 6:48 34.6Scandic Uppsala Nord Scandic Og Sweden Uppsala Ring road 184 7,518 6,486 Kvarngärdet 3:2 37Scandic Winn, Karlstad Scandic Og Sweden Karlstad Central 199 10,580 10,580 Negern 2 49Scandic västerås Scandic Og Sweden västerås Ring road 174 7,285 Sågen 1 26.1Scandic växjö Scandic Og Sweden växjö Ring road 123 3,982 Kocken 3 21.74Scandic örebro väst Scandic Og Sweden örebro Ring road 204 7,621 vindmotorn 2 35Scandic östersund Syd Scandic Og Sweden östersund Ring road 129 4,019 Särrimner 1 21.6Scandic Lübeck Scandic O germany Lübeck Ring road 158 9,700 8,800 grundbuch Lübeck, Blatt 54545 – Hilton Brussels City Pandox/Hilton M Belgium Brussels City centre 283 13,850 13,850 Saint-Josseten-Noode (1div) 032 –Hilton Helsinki Kalastajatorppa Scandic/Hilton Og Finland Helsinki Ring road 238 23,291 91-30-1-5,91-30-3-2-Li 164.2Hilton Helsinki Strand Scandic/Hilton Og Finland Helsinki Central 192 10,250 91-11-300-7 146.3Hilton London docklands Hilton O Storbritannien London Central 365 22,800 21,500 HM Land Registry: SgL465779 –Hilton Stockholm Slussen Hilton O Sweden Stockholm City centre 289 18,416 15,725 överkikaren 31 365.9Hilton Bremen Hilton O germany Bremen City centre 235 21,000 15,100 grundbuch Altstadt iv, Blatt 60 –Hilton dortmund Hilton O germany dortmund Exhibition centre 190 12,500 11,300 grundbuch dortmund, Blatt 897 –

* tax assesment value 2007

O = Revenue-based, Og = Revenue-based with guaranteed rent, OR = Revenue and result-based, R = Result-based,

F = Fixed, iO = internal revenue-based, M = Management agreement, FR = Franchise, AM = Asset management agreement


PANdOx 2009 | 41

Pandox market segments

SwedenNumber of hotels 69Number of rooms 12,455Property revenues, SEK M 893

Rest of Nordic RegionNumber of hotels 34Number of rooms 6,641Property revenues, SEK M 476

EuropeNumber of hotels 14Number of rooms 4,107Property revenues, SEK M 296

InternationalNumber of hotels 3Number of rooms 1,146Property revenues, SEK M 44

Pandox own hotel operationsNumber of hotels 10Number of rooms 3,796Property revenues, SEK M 1,209Operating net, SEK M 220

Proportion of totalnumber of rooms

51%


17%


27%


16%


5%

PANdOx 2010 | 41


Number of rooms

Total area (sqm)



Clarion Hotel grand, Helsingborg Choice Hotels/Clarion Hotel Og Sweden Helsingborg Central 164 8,555 7,325 Högvakten 8 59.4Clarion Hotel grand, östersund Choice Hotels/Clarion Hotel Og Sweden östersund Central 176 8,766 8,766 Borgens 6 33.8Clarion Hotel Plaza, Karlstad Choice Hotels/Plaza Hotell & Rest Karlstad AB Og Sweden Karlstad Central 131 5,907 5,907 Höken 1 39.6

Clarion Collection Hotel Mayfair, Copenhagen Choice Hotels/Clarion Collection Hotel O denmark Copenhagen City centre 105 3,805 Matr.nr 214 Clarion Collection Hotel Twentyseven, Copenhagen Choice Hotels/Clarion Collection Hotel Og denmark Copenhagen City centre 200 7,568 7,568 169 vester Kvarter København –Clarion Collection Hotel Arcticus, Harstad Choice Hotels/Clarion Collection Hotel O Norway Harstad Ring road 75 3,540 gnr 61 Bnr 331, Snr 12–22 27.2Clarion Collection Hotel Bastion, Oslo Choice Hotels/Clarion Collection Hotel O Norway Oslo City centre 99 4,688 grnr 207 Bnr 262 og 265 28.5

Comfort Hotel Excelsior, Copenhagen Choice Hotels/Comfort Hotel Og denmark Copenhagen City centre 99 3,600 Matr.nr 212-213 seksjon 1–2 Comfort Hotel Børsparken, Oslo Choice Hotels/Comfort Hotel O Norway Oslo City centre 198 7,900 gnr 207 Bnr 343 og 344 101.9Comfort Hotel Holberg, Bergen Choice Hotels/Comfort Hotel O Norway Bergen Central 140 5,720 gnr 165 Bnr 1083 Snr 1 og 2 47.2

Quality Hotel & Resort, Fagernes Choice Hotels/Quality Hotel & Resort O Norway Fagernes Ring road 138 10,310 gnr22 Bnr 177, gnr 25 Bnr 4, 96, 97, 259, gnr 26 Bnr 5 49.8Quality Hotel & Resort Hafjel, Øyer Choice Hotels/Quality Hotel & Resort O Norway Øyer Central 210 9,540 gnr 17 Bnr 25 57.7Quality Hotel & Resort Kristiansand Choice Hotels/Quality Hotel & Resort O Norway Kristiansand Ring road 210 9,940 7,075 gnr 63 Bnr 760, 822 og 823 59.9 Quality Hotel Alexandra, Molde Choice Hotels/Quality Hotel O Norway Molde Central 163 17,033 gnr 24 Bnr 812, 815 og 1312 69.2Quality Hotel Ekoxen, Linköping Choice Hotels/Quality Hotel Og Sweden Linköping Central 190 14,671 12,221 Ekoxen 9 & 11 53.7Quality Hotel grand Kristianstad Choice Hotels/Quality Hotel Og Sweden Kristianstad Central 149 7,524 Hovrätten 41 39.4Quality Hotel Luleå Choice Hotels/Quality Hotel Og Sweden Luleå Central 209 12,166 Tjädern 19 61.4Quality Hotel Park, Södertälje Choice Hotels/Quality Hotel FR Sweden Södertälje City centre 157 10,292 10,110 Herkules 13 35.6Quality Hotel Prince Phillip, Stockholm Choice Hotels/Quality Hotel Og Sweden Stockholm Ring road 201 7,400 Måsholmen 25 57.4Quality Hotel Prisma, Skövde Choice Hotels/Quality Hotel Og Sweden Skövde Central 107 3,687 Liljekonvaljen 14 16.3Quality Hotel Winn, gothenburg Choice Hotels/Quality Hotel Og Sweden gothenburg Ring road 121 5,800 Backa 149:l & 866:39 32.8Quality Hotel, Nacka Choice Hotels/Quality Hotel Og Sweden Stockholm Ring road 164 10,830 8,090 Sicklaön 363:2 84.8 interContinental Montreal Pandox/interContinental M Canada Montreal City centre 357 31,091 31,091 Crowne Plaza Antwerp Pandox/Crowne Plaza FR Belgium Antwerp Central 264 18,340 16,780 Crowne Plaza Brussels City Centre Pandox/Crowne Plaza FR Belgium Brussels City centre 354 28,095 28,095 – Holiday inn Brussels Airport Pandox/Holiday inn FR Belgium Brussels Airport 310 21,072 21,072 Hyatt Regency, Montreal Pandox/Hyatt Hotels M Canada Montreal City centre 605 44,148 29,000 – –

Radisson BLU Hotel, Bodø Rezidor/Radisson BLU O Norway Bodø Central 191 15,546 gnr 138 Bnr 3502 52Radisson BLU Lillehammer Hotel Private O Norway Lillehammer Central 303 18,000 gnr 59 Bnr 103, 104, 138, 275, 432, 434 , 468 118.9Radisson BLU Hotel, Basel Rezidor/Radisson BLU Og Switzerland Basel Central 205 17,800 17,000 Radisson BLU Arlandia Hotel, Arlanda Rezidor/Radisson BLU Og Sweden Stockholm Airport 335 15,260 15,260 Benstocken 1:5 132.7Radisson BLU Hotel, Linköping Rezidor/Radisson BLU Og Sweden Linköping Central 91 6,354 4,543 Bolaget 1 50.8Radisson BLU Hotel, Malmö Rezidor/Radisson BLU Og Sweden Malmö City centre 229 18,969 18,969 Carolus 33 123

First Hotel grand, Borås Private/First Hotels Og Sweden Borås Central 158 9,593 9,365 Prometeus 3 31.9First Hotel Linköping First Hotels F Sweden Linköping Central 133 6,540 6,195 Elden 9 & 10 34.1First Hotel Mårtenson, Halmstad First Hotels Og Sweden Halmstad Central 103 6,657 6,350 gillestugan 1 41.8First Hotel Royal Star, Stockholm Private/First Hotels Og Sweden Stockholm Exhibition centre 103 4,900 Herrgården 2 26

Elite Park Avenue Hotel, gothenburg Elite Hotels Og Sweden gothenburg City centre 317 21,998 21,998 Lorensberg 28:4 208Elite Stora Hotellet, Jönköping Elite Hotels Og Sweden Jönköping Central 135 11,378 9,379 Alhambra 1 60.6

Rica Hotel Bodø Rica O Norway Bodø Central 113 7,981 gnr.138 Bnr 2189 og 2247 31.3Rica Hotel Hamar Rica O Norway Hamar Central 176 9,250 gnr 790 Bnr 228 Snr 2 71.7

Rantasipi imatran valtionhotelli Restel Og Finland imatra Central 135 10,097 153-12-1-1 88.2

Best Western Mora Hotell & Spa Private Og Sweden Mora Central 135 9,161 7,670 Stranden 37:3 24.1Best Western Royal Corner, växjö Private Og Sweden växjö Central 158 7,112 Elden Södra 17 37.6Best Western Hotel Pilotti, vantaa Private Og Finland vantaa Airport 112 3,068 92-51-317-1 29.5

ibis Stockholm Hägersten Accor/ibis Og Sweden Stockholm Ring road 190 8,339 5,700 Fotsäcken 1 55.4

Omena Hotel Copenhagen Omena Hotels F denmark Copenhagen City centre 230 8,000 Matr.nr 89 , Hotel BLOOM!, Brussels Pandox iO Belgium Brussels City centre 305 23,445 23,445 The Hotel Pandox iO Belgium Brussels City centre 433 33,000 Hotel Berlin, Berlin Pandox iO germany Berlin City centre 701 41,093 41,093

Pelican Bay, grand Bahama island Sundt gB Management/Pandox AM Bahamasgrand Bahama island Resort 184 7,983 7,983

vildmarkshotellet, Kolmården Parks & Resorts Scandinavia O Sweden Norrköping Resort 213 10,300 10300 Marmorbrottet 1:18 37.2Mr Chip Hotel, Kista Kista Hotell AB Og Sweden Stockholm Ring road 150 5,517 5,517 Knarrarnäs 7 50.2Stadshotellet Princess, Sandviken Private Og Sweden Sandviken Central 84 7,003 4,890 grillen 8 28.527Airport Hotel Bonus inn, vantaa Private Og Finland vantaa Airport 211 8,414 92-51-203-4 68.6Hotel Korpilampi, Espoo Under construction – Finland Espoo Ring road 150 9,777 49-429-3-216 47.5

O = Revenue-based, Og = Revenue-based with guaranteed rent, OR = Revenue and result-based, R = Result-based,F = Fixed, iO = internal revenue-based, M = Management agreement, FR = Franchise, AM = Asset management agreement


Hotel properties, continued

42 | PANdOx 2010


Number of rooms

Total area (sqm)



Clarion Hotel grand, Helsingborg Choice Hotels/Clarion Hotel Og Sweden Helsingborg Central 164 8,555 7,325 Högvakten 8 59.4Clarion Hotel grand, östersund Choice Hotels/Clarion Hotel Og Sweden östersund Central 176 8,766 8,766 Borgens 6 33.8Clarion Hotel Plaza, Karlstad Choice Hotels/Plaza Hotell & Rest Karlstad AB Og Sweden Karlstad Central 131 5,907 5,907 Höken 1 39.6

Clarion Collection Hotel Mayfair, Copenhagen Choice Hotels/Clarion Collection Hotel O denmark Copenhagen City centre 105 3,805 Matr.nr 214 Clarion Collection Hotel Twentyseven, Copenhagen Choice Hotels/Clarion Collection Hotel Og denmark Copenhagen City centre 200 7,568 7,568 169 vester Kvarter København –Clarion Collection Hotel Arcticus, Harstad Choice Hotels/Clarion Collection Hotel O Norway Harstad Ring road 75 3,540 gnr 61 Bnr 331, Snr 12–22 27.2Clarion Collection Hotel Bastion, Oslo Choice Hotels/Clarion Collection Hotel O Norway Oslo City centre 99 4,688 grnr 207 Bnr 262 og 265 28.5

Comfort Hotel Excelsior, Copenhagen Choice Hotels/Comfort Hotel Og denmark Copenhagen City centre 99 3,600 Matr.nr 212-213 seksjon 1–2 Comfort Hotel Børsparken, Oslo Choice Hotels/Comfort Hotel O Norway Oslo City centre 198 7,900 gnr 207 Bnr 343 og 344 101.9Comfort Hotel Holberg, Bergen Choice Hotels/Comfort Hotel O Norway Bergen Central 140 5,720 gnr 165 Bnr 1083 Snr 1 og 2 47.2

Quality Hotel & Resort, Fagernes Choice Hotels/Quality Hotel & Resort O Norway Fagernes Ring road 138 10,310 gnr22 Bnr 177, gnr 25 Bnr 4, 96, 97, 259, gnr 26 Bnr 5 49.8Quality Hotel & Resort Hafjel, Øyer Choice Hotels/Quality Hotel & Resort O Norway Øyer Central 210 9,540 gnr 17 Bnr 25 57.7Quality Hotel & Resort Kristiansand Choice Hotels/Quality Hotel & Resort O Norway Kristiansand Ring road 210 9,940 7,075 gnr 63 Bnr 760, 822 og 823 59.9 Quality Hotel Alexandra, Molde Choice Hotels/Quality Hotel O Norway Molde Central 163 17,033 gnr 24 Bnr 812, 815 og 1312 69.2Quality Hotel Ekoxen, Linköping Choice Hotels/Quality Hotel Og Sweden Linköping Central 190 14,671 12,221 Ekoxen 9 & 11 53.7Quality Hotel grand Kristianstad Choice Hotels/Quality Hotel Og Sweden Kristianstad Central 149 7,524 Hovrätten 41 39.4Quality Hotel Luleå Choice Hotels/Quality Hotel Og Sweden Luleå Central 209 12,166 Tjädern 19 61.4Quality Hotel Park, Södertälje Choice Hotels/Quality Hotel FR Sweden Södertälje City centre 157 10,292 10,110 Herkules 13 35.6Quality Hotel Prince Phillip, Stockholm Choice Hotels/Quality Hotel Og Sweden Stockholm Ring road 201 7,400 Måsholmen 25 57.4Quality Hotel Prisma, Skövde Choice Hotels/Quality Hotel Og Sweden Skövde Central 107 3,687 Liljekonvaljen 14 16.3Quality Hotel Winn, gothenburg Choice Hotels/Quality Hotel Og Sweden gothenburg Ring road 121 5,800 Backa 149:l & 866:39 32.8Quality Hotel, Nacka Choice Hotels/Quality Hotel Og Sweden Stockholm Ring road 164 10,830 8,090 Sicklaön 363:2 84.8 interContinental Montreal Pandox/interContinental M Canada Montreal City centre 357 31,091 31,091 Crowne Plaza Antwerp Pandox/Crowne Plaza FR Belgium Antwerp Central 264 18,340 16,780 Crowne Plaza Brussels City Centre Pandox/Crowne Plaza FR Belgium Brussels City centre 354 28,095 28,095 – Holiday inn Brussels Airport Pandox/Holiday inn FR Belgium Brussels Airport 310 21,072 21,072 Hyatt Regency, Montreal Pandox/Hyatt Hotels M Canada Montreal City centre 605 44,148 29,000 – –

Radisson BLU Hotel, Bodø Rezidor/Radisson BLU O Norway Bodø Central 191 15,546 gnr 138 Bnr 3502 52Radisson BLU Lillehammer Hotel Private O Norway Lillehammer Central 303 18,000 gnr 59 Bnr 103, 104, 138, 275, 432, 434 , 468 118.9Radisson BLU Hotel, Basel Rezidor/Radisson BLU Og Switzerland Basel Central 205 17,800 17,000 Radisson BLU Arlandia Hotel, Arlanda Rezidor/Radisson BLU Og Sweden Stockholm Airport 335 15,260 15,260 Benstocken 1:5 132.7Radisson BLU Hotel, Linköping Rezidor/Radisson BLU Og Sweden Linköping Central 91 6,354 4,543 Bolaget 1 50.8Radisson BLU Hotel, Malmö Rezidor/Radisson BLU Og Sweden Malmö City centre 229 18,969 18,969 Carolus 33 123

First Hotel grand, Borås Private/First Hotels Og Sweden Borås Central 158 9,593 9,365 Prometeus 3 31.9First Hotel Linköping First Hotels F Sweden Linköping Central 133 6,540 6,195 Elden 9 & 10 34.1First Hotel Mårtenson, Halmstad First Hotels Og Sweden Halmstad Central 103 6,657 6,350 gillestugan 1 41.8First Hotel Royal Star, Stockholm Private/First Hotels Og Sweden Stockholm Exhibition centre 103 4,900 Herrgården 2 26

Elite Park Avenue Hotel, gothenburg Elite Hotels Og Sweden gothenburg City centre 317 21,998 21,998 Lorensberg 28:4 208Elite Stora Hotellet, Jönköping Elite Hotels Og Sweden Jönköping Central 135 11,378 9,379 Alhambra 1 60.6

Rica Hotel Bodø Rica O Norway Bodø Central 113 7,981 gnr.138 Bnr 2189 og 2247 31.3Rica Hotel Hamar Rica O Norway Hamar Central 176 9,250 gnr 790 Bnr 228 Snr 2 71.7

Rantasipi imatran valtionhotelli Restel Og Finland imatra Central 135 10,097 153-12-1-1 88.2

Best Western Mora Hotell & Spa Private Og Sweden Mora Central 135 9,161 7,670 Stranden 37:3 24.1Best Western Royal Corner, växjö Private Og Sweden växjö Central 158 7,112 Elden Södra 17 37.6Best Western Hotel Pilotti, vantaa Private Og Finland vantaa Airport 112 3,068 92-51-317-1 29.5

ibis Stockholm Hägersten Accor/ibis Og Sweden Stockholm Ring road 190 8,339 5,700 Fotsäcken 1 55.4

Omena Hotel Copenhagen Omena Hotels F denmark Copenhagen City centre 230 8,000 Matr.nr 89 , Hotel BLOOM!, Brussels Pandox iO Belgium Brussels City centre 305 23,445 23,445 The Hotel Pandox iO Belgium Brussels City centre 433 33,000 Hotel Berlin, Berlin Pandox iO germany Berlin City centre 701 41,093 41,093

Pelican Bay, grand Bahama island Sundt gB Management/Pandox AM Bahamasgrand Bahama island Resort 184 7,983 7,983

vildmarkshotellet, Kolmården Parks & Resorts Scandinavia O Sweden Norrköping Resort 213 10,300 10300 Marmorbrottet 1:18 37.2Mr Chip Hotel, Kista Kista Hotell AB Og Sweden Stockholm Ring road 150 5,517 5,517 Knarrarnäs 7 50.2Stadshotellet Princess, Sandviken Private Og Sweden Sandviken Central 84 7,003 4,890 grillen 8 28.527Airport Hotel Bonus inn, vantaa Private Og Finland vantaa Airport 211 8,414 92-51-203-4 68.6Hotel Korpilampi, Espoo Under construction – Finland Espoo Ring road 150 9,777 49-429-3-216 47.5

O = Revenue-based, Og = Revenue-based with guaranteed rent, OR = Revenue and result-based, R = Result-based,F = Fixed, iO = internal revenue-based, M = Management agreement, FR = Franchise, AM = Asset management agreement


PANdOx 2010 | 43



Crowne Plaza, Antwerp

PANdOx 2010 | 43

2010 was a new successful year for Pandox with high volume growth – particularly through the acquisitions made during the year. The potential in the Company also increased through the acquisi-tions, simultaneously as risks declined through having a greater proportion of agreements with large and stable hotel companies.

Best year so far

Property management revenues rose to SEK

923 million, representing an improvement of

3.1 percent. For comparable units and

exchange rates, the increase was 5.1 percent.

The operating net rose to SEK 783 million, and

the profit before tax and capital gains amounted

to SEK 313 million, representing a growth of

24 percent. The Company’s most important

key performance data, cash flow, exceeded

half a billion SEK for the first time and

amounted to SEK 519 million. All in all, 2010

was Pandox’ best year ever despite market

conditions being marked by considerable

uncertainty in the beginning of the year.

The good growth is due to several factors.

The strategy of owning large full-service hotels in

central locations, which has been fundamental

since Pandox was established, has been very

successful. Another important reason is the high

standard of the hotel products. Continuous

maintenance and product-development pro-

grams have created modern hotels with strong

market positions. Furthermore, the hotels are

among those that are profitable in the upper-

medium and high-price segments. Another

significant contributory factor to last year’s

increased profitability is lower financing costs.

Pandox has been able to benefit from lower

interest rates by consciously choosing a strat-

egy with short fixed terms. The flexible business

model has also had a positive effect. The model

enables us to choose the best operational form

with consideration to the prevailing conditions in

local markets and make us able to maximise,

asset by asset, each hotel’s individual strategy.

Pandox signed an agreement on August

23rd to acquire the industry-colleague

Norgani. The purchase price was SEK 9.7

billion and was the largest transactions on

the international hotel market in 2010, and

thereby creating one of Europe’s largest

and leading companies within the hotel

property market.

An exciting growth journey

The last 15 years have been an instructive,

incredibly exciting and relatively short journey.

Pandox was a minor company with 18 small

hotels – all located in Sweden with weak loca-

tions and outdated products. The Company

was initially vulnerable because the business

concept was new and untried. Moreover, cash

flow was negative when the Company was

formed and access to expansion capital was

limited. The growth journey has led to the devel-

opment of the Company’s size today, which

embraces 120 hotel properties with 25,000

hotel rooms and operations in ten countries.

The portfolio has been restructured several

times over the years. All in all, completed

transactions have covered 170 hotels with a

total value of SEK 20 billion. The most impor-

tant com ponent is and always has been –

expansion shall be achieved with increased

profitability. Our acquisitions have therefore

been concentrated on under-performing

hotels that need active ownership. In other

words, products with high initial risk but also

best potential.

Our acquisition strategy has functioned

well. Cash flow has increased during the Com-

pany’s all 15 years and the average annual

return over the period is 19 percent. Yes!

In addition to the Norgani acquisition, two

individual acquisitions were completed in the

autumn. The first was The Hotel with 433 rooms

located in the prestigious Boulevard Waterloo

and a landmark in the city, which needs radical

refurbishment and modernisation of both prod-

uct and organisation. The second was the well-

run Park Inn Solna, north of Stockholm, with

247 rooms, with entry in January 2011.

There are three underlying reasons for

these acquisitions. Right timing, good poten-

tial and right type of hotel.

CEO commentary on the past year and the future

A completely new ballgame

44 | PANdOx 2010

Right timing. demand in the hotel indus-

try quickly developed in the summer, and the

recovery was at an early stage when we

started to work with the acquisitions. This

positive trend has since strengthened.

Good potential. Most of the acquired

hotels are in need of investment and product

development. We believe that the operators

have the same interest. This implies that there

are good prerequisites to find incentives for

joint investments and preconditions for improved

profitability and higher cash flow – to the bene-

fit of both Pandox and our partners.

Right type of hotel. A large part of Norga-

ni’s hotels are located in places where Pandox

already has operations and where market con-

ditions are well-known. The agreement structure

is similar to the one applied in Pandox. All hotels

have revenue-based agreements and joint

responsibility for maintenance issues. The hotels

are mainly full-service products and belong to

Pandox’ prioritised segment in the upper-

medium and high-price classes. The operators

are well-known companies with whom Pandox

already has good business relationships. There

are subsequently major similarities between

the companies, which hopefully will facilitate the

process of merging the portfolios. The same

applies to the acquisition of The Hotel. Pandox

currently owns and operates six hotels with a

total of 1,750 rooms in Brussels. The properties

are in similar product segments and we are

well aware of the challenges that await us.

We have considerable experience of taking over

under-performing units – and in Brussels alone

we have completed five similar projects in

recent years.

Situation-adapted operations

Pandox currently operates ten hotels with a

total of 3,800 rooms located in Brussels,

Antwerp, Berlin, Montreal and the Bahamas.

To operate hotels is a natural part of Pandox’

active ownership. Sometimes it is important to

be able to control all aspects when major

development programs are to be carried out.

And sometimes the hotels are in such a loca-

tion that no qualified operators are available for

contractual partnership.

The agreement structure varies between

different geographical areas. In the Nordic region,

leases dominate while in North America fran-

chise agreements are most common. Northern

Europe has a mixture of the two. It is therefore

important for an international hotel property

company to command all operational forms.

Our own operations, by Nordic standards,

are relatively big. Revenues in 2010 of SEK

1,209 million corresponded to a growth of

12 percent for comparable units. The gross

operation profit (GOP) developed well and

improved with SEK 40 million, further to

stronger demand and higher productivity.

Best developments were achieved by the

InterContinental Montreal. The hotel was repo-

sitioned in 2009 from a traditional business

hotel to a more modern and attractive city

hotel – elegant, with a dose of boutique feeling

and a touch of Europe. The hotel has been

well-received and Bernard Chênevert, the

hotel’s CEO, is currently establishing it as one

of the leading full-service hotels in the city.

Another success story is the Holiday Inn

Brussels Airport. All of the hotel’s 310 rooms

have been upgraded and the conference offer

developed under a concept called “skoj”. The

concept is based on that one shall have fun at

the hotel – easy to like and easy to remember.

Short downturn with quick recovery

The pattern of demand in 2010 had few histori-

cal equals. despite the downturn being dramatic

in most markets and deeper than previous econ-

omic slumps, the overall downturn phase was

short and the recovery was quick. A very sharp

V-shaped graph. The downturn in the market

started in the autumn of 2008. New York’s vol-

umes started to decline in September and prices

fell sharply the month after. The RevPAR down-

turn continued for 8 months before the fall

weakened. From top to bottom took 1½ years.

Similar patterns were experienced in most

major hotel markets in Europe, while negative

effects on London were comparatively marginal.

There is normally a time delay between vari-

ous geographic markets being affected, and a

certain time difference between volumes declin-

ing and prices starting to fall. This time, several

major markets fell in just one four-month period.

Clarion Collection Hotel 27, CopenhagenInterContinental, Montreal

PANdOx 2010 | 45

Volume and prices basically fell simultaneously.

More dynamics and higher dramatics. The

Nordic market also behaved like a roller coaster.

The normal pattern with relatively stable

demand was not present this time. Helsinki was

hit hard and RevPAR fell by more than 30 per-

cent during less than 2 years, despite no new

capacity coming onto the market. Another diffi-

cult market was and is Copenhagen, which

combines an economic downturn with a high

proportion of new capacity. To top it all, a price

war has broken out despite volumes appearing

to stabilise again. Oslo has managed well in

a period with a high proportion of new hotels,

while Stockholm should be considered as

being best in class. Prices have been defended

with an impressive revenue-management

process.

For 2011, risks are primarily associated

with possible greater financial anxiety in

Europe. However, 2011 will nonetheless be an

even better hotel year than 2010. Growth in

demand is in a phase where the increase is

subsiding, but the improvement will be com-

posed to a higher degree of better average

rates – which in turn will increase the efficiency,

profitability and value of the properties.

Portfolio with high quality and potential

Pandox’ hotel property portfolio is constantly

being developed, and is of the highest quality.

The total product offer consists of 120 hotel

properties, of which 10 are own operations,

spread over 10 countries and 59 locations.

Sweden is the largest sub-market and repre-

sents 51 percent of revenues. Finland is second

largest with 12 percent. All in all, the Nordic

region dominates the portfolio. Of the interna-

tional markets, Belgium is the most important

(7 percent), followed by Germany (6 percent)

and Canada (3 percent).

The portfolio can be divided into locations

that have national and international profiles.

Together, the domestic demand, principally

from Nordic regional towns and cities, repre-

sents 44 percent of revenues. These markets

are characterised by stable demand, while

more international dynamics are present in

large markets such as London, Brussels,

Montreal, Berlin and Stockholm. The revenue

mix is therefore in balance with good potential

and limited risk. The agreement structure is

composed of 87 percent leases, while 13

percent comes from own operations.

The portfolio contains many development

projects that currently include the upgrading of

the Scandic Copenhagen with 484 rooms for a

total of dKK 150 million, where Pandox has a

50-percent share. The Hyatt Montreal is being

repositioned towards more of a leisure con-

cept, and the Crowne Plaza Antwerp has

recently opened a new lobby and developed

its meeting and F&B operations.

The newly acquired Norgani hotels are

generally in need of refurbishment and product

development. Pandox estimates that a joint

investment is required among the operators

and the Company of about SEK 1.5 billion to

enable the hotels to reach a requisite standard

to address the needs of tomorrow’s guests.

We are currently evaluating the prerequisites to

start this process.

Success requires passion with heart and soul

The hotel industry is a fantastic arena in which

to work. Hotels are to be found across the

world from exciting and exotic cities such as

New York, Hong Kong and Rio to family hotels

in small towns. Hotels are important work-

places – they are an active part of a city’s des-

tination development. Large hotels become

meeting places for expansive locations where

relations are created and future plans realised.

Exclusive hotels in classical buildings are part

of a city’s image, and a hotel lobby can give

visitors and guests the feeling of being special

and among celebrities. But hotels can also

imply hard work with focus on details and

investment projects. And above all, a hotel

never sleeps, and is always open 24/7.

Irrespective of whether one owns, operates

or works with the marketing of hotels, success

is only achieved through passion with both heart

and soul. To choose our sector is to choose a

lifestyle. For me who have been active within

hotels for close to 30 years, my stimulation is

mainly about the people I have met and still

meet each day. Individuals who have chosen a

service industry as their career and who live

every day in a team. Individuals with talent who

make other people feel well, and who take

care of guests’ questions and needs. The real

Pandox is looking for a new, adaptable, creative and well-trained Corporate dog with a pleasant bark and the capacity to lead and inspire.

Enzo moves on in life

46 | PANdOx 2010

professional who can and wishes to take

responsibility in the best possible way.

For Pandox, the individual has always been

more important than the system, which has a

strong influence on our philosophy. We call this

the Pandox Spirit. One characteristic is there-

fore that the Company does not have a large

office full of people who manage the business

by giving instructions and orders. It is not our

style. What we need is the best and real

“doers” with a strong driving force. To give

them a place requires delegated leadership

where one relies on the employees. We conse-

quently have fewer and shorter reporting meet-

ings, with focus instead on what we call the hot

pile – the most decisive and crucial issues. We

rather aim for the evaluation and improvement

of our results from people in our broad interna-

tional network than through figures that mostly

describe what has happened. Strong people

who give us an outside-in perspective. People

who can be questioned. This creates a com-

pany that constantly develop and look for new

ideals. Where driving forces and decisions are

at a local level as close to operations as possi-

ble, and where each individual understands the

signification of the term “to deliver”.

Another important component is the ability

to give young people responsibility, people who

perhaps are not quite “ready” – but our point of

departure is that will beats talent. The focused

strategy follows thereafter, along with the sys-

tematic methodology known as the Pandox

Model. The peak is an open atmosphere that

inspires rather than controls, and where it is

important to have fun at work. To be able to

laugh and be together without organisational

obstacles.

Competence and development

are fundamental

Pandox’ profile is characterised by five catch-

words. Competence is the most important, fol-

lowed by development, team spirit, passion

and creativity. We try to show this through vari-

ous activities. The best known is our Hotel

Market day that we have arranged for 15 years

now, always in November and by tradition at

the Hilton Stockholm Slussen. The day has

become an important sector event, and we are

very proud of and grateful for the substantial

attendance and support.

Another activity is our support of the

Swedish National Handball Team and Svenska

Handbollsförbundet (SHF). In collaboration

with SHF and the Swedish Olympic Commit-

tee, Pandox has recruited Staffan Olsson,

who is one of the team managers of the

national team – thus enabling a handball

icon to remain in Sweden and develop

Swedish talents in addition to his national

assignment. It is a privilege to actively endorse

and be associated with supporting young

people and positive sport. We believe that

both examples correspond well with our

catchwords, and we have no special

thoughts as to what we might gain in return.

More heart than brains.

Pandox is growing and new employees are

being recruited, the Company’s management

system is being introduced and implemented.

Underlying data for business plans for the new

hotels are being prepared. The Company is

bubbling with life, and new contact surfaces

are being formed. Banks and partners are

striving for attention. Telephones never stop

ringing. A dream existence for all those who are

hungry for challenges and demanding tasks.

I am extremely impressed and proud of

belonging to this new-old gang. Nobody com-

plains despite long working hours. The attitude

is striking. Nothing is impossible. If we were a

car, the model would be a cross-country vehi-

cle with four-wheel drive. The same thing in

Brussels. The head office in the form of one

person, Aldert Schaaphok, is in the process of

accelerating the tempo of activities and opera-

tions. New product, new organisation, new

management team, new brand name.

I would like to take this opportunity to raise

my hat to you all. You are really quite fantastic!

Thank you all for your commitment, your

energy, knowledge and open minds. If you had

been handball players, you would all have

played in the World Championship!

And thank you also to Pandox’ owners and

Board of directors. Just think that you gave us

the opportunity to be leaders in Europe.

Yours sincerely,

Anders

“Woof”

PANdOx 2010 | 47

Board of Directors and Auditors

Industrial competence and experience creates confidence and ability to take actionIn an international hotel property company

such as Pandox, competence and experience

within the following areas are important:

• hotel operations and hotel market

• financing

• properties and the property sector

• business development

• brand strategies

• development of international companies

The Board of directors of Pandox possesses

broad experience and knowledge from

these areas.

CHRISTIAN RINGNESChairman. CEO of Eiendomsspar AS. Member of the Board of Pandox since 2004.

Other appointments: Chairman of NSV-Invest AS, Sundt AS, dermanor AS and Mini Bottle Gallery AS. Board member of Schibsted ASA, Thor Corporation AS and Oslo By’s Råd for Byarkitektur.

BENGT KJELLCEO of AB Handel och Industri. Member of the Board of Pandox since 1996.

Other appointments: Chairman of Indutrade AB and Hemfosa Fastigheter AB. Board member of Höganäs AB, Helsingborgs dagblad AB and Skånska Byggvaror AB.

LEIV ASKVIGMember of the Board of Pandox since 2004.

Other appointments: Chairman of Oslo Børs VPS Holding ASA, Oslo Børs ASA and Alfarveg AS. Board member of Eiendomsspar AS, Verdipairsentralen VPS ASA, Skips AS Tudor, Astrup Fearnley AS and Agder OPS Vegselskap AS.

OLAF GAUSLÅCFO of Eiendomsspar AS.Member of the Board of Pandox since 2004.

48 | PANdOx 2010

Board of Directors and Auditors

AUdITORS The task of the auditors is to examine the Company’s accounts, administration and financial information. The audit leads to an Audit Report where the auditors give an opinion as to whether the annual accounts and financial statements have been pre-pared in accordance with the Swedish Annual Accounts Act and generally accepted accounting principles.

Per GustafssonAuthorised Public AccountantKPMG

Willard MöllerAuthorised Public AccountantSET Revisionsbyrå AB

Work Procedure

The Board of directors has adopted Rules of

Procedure for its work, directives to the Chief

Executive Officer, as well as management

instructions with regard to reporting. Pandox’

Board of directors establishes and docu-

ments the objectives and strategy of the

Company each year. The Board has also

adopted a finance policy, an approval policy

and guidelines for decision-making, as well as

a particular strategy regarding acquisitions.

The Board of directors of Pandox holds

four ordinary meetings each year. The meet-

ings follow an established annual agenda with

different topics and decisions issues. The

meetings review and discuss the external and

internal reporting of operating results, the

Company’s financial position, as well as vari-

ous business matters. Other topics that are

reviewed annually include marketing, strategy

and budget issues. Related material and doc-

umentation is sent to the Board members

approximately one week in advance. The

Company’s auditors attend at least one meet-

ing each year to present a report of their audit

and their review of the Company’s internal

control systems.

In addition to their ongoing audit, the

Company’s auditors were also commissioned

by the Board to carry out special reviews of

major lease agreements during the year.

CHRISTIAN SUNdTBoard member of Sundt AS.Member of the Board of Pandox since 2008.

Other appointments: Owner and Chairman of CGS Holding AS. Board member of Sundt Air Holding AS, Sundt Sepa AS, Sundt Helene AS, Sundt Air AS, Sundt Eiendom II AS and Sundt Eiendom I AS.

MATS WÄPPLINGPresident and CEO of SWECO AB.Member of the Board of Pandox since 2003.

Other appointments: Board member of SWECO AB and Vasakronan AB.

HELENE SUNdTBoard member of Sundt AS.Member of the Board of Pandox since 2008.

Other appointments: Owner and chairman of Sundt Helene AS. Chairman of dronningen Eiendom AS and Lanternen Eiendom AS. Board member of Sundt Sepa AS, Sundt Christian Gruner AS and Sundt Air Holding AS.

PANdOx 2010 | 49

Senior managers and executives

LIIA NÕUSenior Vice President, CFO. Employed since 2007.

ANdERS NISSENCEO. Employed since 1995.

NILS LINdBERGSenior Advisor Finance & Insurance. Employed since 1995.

LARS HÄGGSTRÖMSenior Vice President Asset Management. Employed since 2000.

MIKAEL PLANELLVice President Business Area other Europe, denmark, Finland and southern Sweden. Employed since 2005.

50 | PANdOx 2010

Senior managers and executives

JOSEFIN BERGQVISTSenior Analyst Acquisition & Investment. Employed since 2006.

ALdERT SCHAAPHOKVice PresidentOperations Belgium and Canada. Employed since 2004.

ERIK HVESSERVice President Business Area Stockholm, northern and eastern Sweden. Employed since 2006.

MAGNE RAMLOVice President Property Manager Norway, denmark and part of Sweden. Employed since 2010.

LEIF KRISTEN OLSENVice President Business Area Norway, Gothenburg and western Sweden. Employed since 2010.

JONAS TÖRNERHead of Business Control & Intelligence. Employed since 2005.

PANdOx 2010 | 51

TeamPeople who work at Pandox are

passionate and committed.

Together, we have created a winning team.

52 | PANdOx 2010

2011

PANdOx 2010 | 53

•

Cre

ativ

ity •

teamwork • Network •

passioN • kNowledge

Pandox – on

e of

the

lea

ding hotel ProPerty comPanies in euroPe # 1

PandoxSpirit

1. Josefin Bergqvist Senior Analyst, Acquisition and Investment

2. Nils Lindberg Senior Advisor, Finance & Insurance

3. Ann-Sophie Forsmark Property Accountant

4. Jonas Törner Head of Business Control & Intelligence

5. Anette Paulsson Analyst, PR & Marketing

6. Anders Nissen CEO

7. Annelie Sundström Aguilar Executive Assistant

8. Mikael Planell Vice President, Business Area other Europe, denmark, Finland and southern Sweden.

9. Monica Forsén Property Accountant

10. Josefin Nilsson Receptionist

11. Liia NõuSenior Vice President, CFO

12. Ulrika Norrbrink, Property Accountant

13. Erik Hvesser, Vice President, Business Area Stockholm, northern and eastern Sweden.

14. Aldert Schaaphok, Vice President, Operations Belgium and Canada.

15. Louise Ceder, Property Support

16. Frédéric Sturbois, Property Manager, Belgium

17. Magne Ramlo, Vice President, Property Manager, Norway, denmark and part of Sweden

07

09

The organisation is growing

54 | PANdOx 2010

1418

28 05

06

20

21

29

32 31 30

19

16

15

17

03

13 01

10 23

22 08 24

25

26 27

33 34 02 12

11

18. Petter Kristensen,Property Manager, Sweden and Norway

19. Stefan Kornhammar,Property Manager, southern and middle Sweden

20. Christer Juujärvi,Facility Manager

21. Petri Jaarto,Facility Manager

22. Lars Häggström,Senior Vice President, Asset Management

23. Leif Kristen Olsen,Vice President, Business Area Norway, Gothenburg and western Sweden.

24. Jan Van Loock,Senior Advisor, Property development, Belgium

25. Taina Koskelo,Vice President, Property Manager, Finland

26. Göran Jedlöv,Property Manager, northern and western Sweden, Stockholm

27. Marjut Mikkola,Property Support

28. Thérèse Blomqvist,Property Support

29. Susanne Jusslin, Property Accountant

30. Tomas Skeppstrand, Property Accountant

31. Anja Sydner, Property Accountant

32. Torbjørn Stensen, Property Accountant

33. Enzo, Corporate dog

34. Staffan Olsson, director of Health, Sports & Coaching

04

PANdOx 2010 | 57

financial overview

Financesfinancial overview . . . . . . . . . . . . . . . . . . . 60

Sensitivity analysis . . . . . . . . . . . . . . . . . . . 62

valuation and tax situation . . . . . . . . . . . . . 64

Definitions . . . . . . . . . . . . . . . . . . . . . . . . . 65

Ten-year overview . . . . . . . . . . . . . . . . . . . 66

Quarterly data 2009–2010 . . . . . . . . . . . . . 68

financial statements 2010 . . . . . . . . . . . . . 69

report of the Board of Directors . . . . . . . . 70

income statement and comments . . . . . . . 72

Balance sheet and comments . . . . . . . . . . 74

changes in equity . . . . . . . . . . . . . . . . . . . 76

cash flow statement . . . . . . . . . . . . . . . . . 77

accounting principles . . . . . . . . . . . . . . . . 78

notes to the accounts . . . . . . . . . . . . . . . . 79

Proposed disposition of earnings . . . . . . . 84

auditor’s report . . . . . . . . . . . . . . . . . . . . . 85

Hotel BlooM!, Brussels

60 | Pandox 2010

financial overview

Well-weighted risk profile

Financial policy

The basic objective of Pandox’ financial opera-

tions is to achieve the lowest possible financing

costs while simultaneously limiting the risks

related to interest rates, foreign currencies and

borrowings. The interest rate risk is the risk that

changes in interest rate levels which could nega-

tively affect the Group’s results. Currency risk is

the risk that the Group’s balance sheet and income

statement which could be negatively affected by

changes in the value of the Swedish krona. Finally,

the borrowing risk is the risk that external financing

may become more difficult to find.

Interest rate risk/interest rate strategy

Pandox’ basic objective is that interest rate expo-

sure shall be adapted so that increased costs as a

result of reasonable changes in interest rates shall

be compensated by higher revenue. The interest

rate risk must therefore be limited through con-

tracting periods of varying lengths with the aim of

creating an optimal due date structure and fixed

interest periods. The long term objective is that

the average fixed interest period be matched with

the average point in time when rental revenues,

based on underlying leases, are estimated to be

affected by a change in interest rates. Interest

swaps are mainly used for extension of fixed inter-

est rate periods.

Currency risk/currency risk strategy

Pandox is exposed to currency risks due to certain

of the Group’s assets being denominated in foreign

currencies. Pandox’ policy is to hedge the majority

part of its exposure by raising loans in the local cur-

rency of each respective country and by hedging

with appropriate currency hedging instruments.

Methodology and systems

Pandox has developed and implemented systems

and procedures to enable the continuous monitor-

ing and reporting of interest rate risk trends.

Financing strategy

In order to gain flexibility and administrative bene-

fits, Pandox has centralised when possible all

borrowing in the Parent Company. The objective

is to work with long-term framework agreements

that provide scope for borrowing with varying

maturities and fixed margins. derivative instru-

ments such as swaps are preferably used for

the extension of fixed interest rate periods.

Capital structure

The objective for the Group’s capital structure is

that the equity/asset ratio long term should meet

internal and external financial strength require-

ments in order to enable continued expansion.

Financing

as of 31 december, the Pandox Group’s interest

bearing liabilities amounted to SEK 7,025.8 M

(6,850.5). The loan portfolio has a spread due-

date structure with an average fixed-capital period

clarion Hotel Grand, Helsingborg

Pandox 2010 | 61

inTereST STrUcTUre1), SeK M

Year due SEK DKK EUR GBP CHF CAD Total Share,% Interest, %2)

2011 687.8 232.3 754.2 270.0 58.6 258.5 2,261.4 32.2 3.02012 225.0 – – – 65.1 – 290.1 4.1 4.22013 75.0 – 180.0 – – – 255.0 3.6 4.42014 350.0 – 360.1 – – – 710.1 10.1 3.22015 100.0 120.8 351.1 – 130.2 – 702.1 10.0 3.72016 and later 1,250.0 289.8 1,017.2 – – 250.1 2,807.1 40.0 3.2Total 2,687.8 642.9 2,662.6 270.0 253.9 508.6 7,025.8 100.0 3.3Share, % 38 9 38 4 4 7 100 average interest rate, % 3.6 2.8 3.0 2.0 3.1 3.7 3.3 average interest rate period, years 4.9 5.4 4.7 0.2 2.4 3.4 4.5 1) Converted to SEK.2) average interest rate in percent.

of 6.7 years is without financial covenants and has

an average fixed-interest period of 4.5 years (2.3).

The average interest rate on loans at 31 decem-

ber was 3.3 percent (2.6). The financing of hotel

properties is raised in each respective local cur-

rency in accordance with the financial policy. The

Group’s liquid funds amounted to SEK 385.1 M

(326.4). In addition, there was an unutilised credit

facility of SEK 964 M.

Equity capital

The Group’s equity capital as per the balance

sheet at 31 december 2010 amounted to SEK

2,977.5 M of which SEK 1,367.2 M was restricted

equity and SEK 1,610.3 M unrestricted equity.

The Pandox Group’s cash flow, including 50

percent of norgani’s cash flow for the two months

Pandox has owned the company, amounted to

SEK 518.9 M.

Working capital

Pandox receives rental revenue in advance and

pays most of its operating costs and interest

expense in arrears while hotel operations normally

receive revenues in arrears. altogether the Group

normally has a relatively small working capital to

finance.

62 | Pandox 2010

Pandox’ operations and profitability are affected by a number of factors, of which the most important are described below.

The hotel market

The development of Pandox’ earnings and the

value of its hotel properties are dependent upon

trends within the hotel market, which in turn

closely follow general economic developments.

Business travel and conference activities nor-

mally increase during periods of high economic

activity, while there is a corresponding decrease

during periods of low economic activity. There is

thus a strong connection between economic

trends (GdP) and trends within the hotel market.

developments of GdP can be closely monitored,

whereas factors that influence local hotel markets

are significantly more complex. The most impor-

tant influential factors are local economic condi-

tions, the proportion of new hotel capacity in the

market, how well developed a market is concern-

ing brand names and segments, currency fluctua-

tions, aswell as extraordinary events.

New capacity

new capacity introduced to the market implies an

increased risk for local players. depending upon

existing demand, additional hotel rooms through

the construction of a new hotel can lead to a rapid

negative influence on occupancy rates and aver-

age prices. To deal with this risk, Pandox has

developed an information system that continually

monitors planned new constructions within its

market areas, and thus enabling Pandox to be

prepared and proactive.

Agreement structure

Pandox has a large proportion of variable leases,

which represented 94 percent of total rental reve-

nue in 2010 for Pandox wholly owned properties.

about 32 percent of variable leases contained

a guaranteed rent, meaning that 62 percent of

rental revenues were fully variable downwards.

a change in the occupancy rate and the average

room revenue consequently affects Pandox very

differently, depending on the direction of change.

The choice of agreement is based on optimal

distribution of cash flow between Pandox and the

operator so that both parties are motivated to

continuously increase the hotel property’s overall

profitability. Factors that may influence risks asso-

ciated with variable leases are the hotel property’s

location, market segment and brand name/opera-

tor. Pandox’ strategy is to operate in a selected

market segment, which in combination with its

hotels market expertise and systems, limits

Pandox’ agreement risk.

Partners

Pandox’ agreement structure, with a large propor-

tion of variable leases, means that the Company is

more dependent on the individual tenant/opera-

tor’s business than other property companies. The

Company’s strategy to actively cooperate with the

market’s most competitive and powerful opera-

tors with well established brand names, reduces

both the related operative and financial risks.

Pandox’ largest tenants in terms of revenue are

Scandic, Hilton, Rezidor, Elite Hotels, InterConti-

nental Hotels Group, Choice Hotels and First

Hotels, which together accounted for 84 percent

of all rental revenue in 2010.

Leasing level

The leasing level in Pandox’ wholly owned port-

folio as of 31 december was 99.8 percent. Vacant

space amounting to 1,430 sqm consisted entirely

of store and office premises.

If for any reason a hotel operator should

choose to terminate its lease agreement, Pandox

may either select a new suitable operator as ten-

ant or operate the hotel under its own manage-

ment. With Pandox’ specialist expertise in the

hotel sector, the risk of vacant hotel space is seen

as being extremely low.

For other commercial space, which represents

approximately 8.1 percent of total space in the

Company’s properties, Pandox is exposed to the

same fluctuations in supply and demand for prem-

ises experienced by other property owners.

Changed risk potential

Historically, the hotel industry and hotel property

sector have always been associated with high

risk. The market has however changed signifi-

cantly in recent years. owners have become more

professional with restructured companies and

focused strategies, with a greater holistic view and

specialised expertise. Reports from public com-

panies have substantially improved information

about the transparency of the market. The pro-

portion of established strong brand names with

efficient operations has increased. For streamlined

companies with own expertise in hotel operations,

hotel properties and business development, and

who are active owners, the potential risk is consid-

erably lower than it has been in historic terms.

Decisions by public authorities

The hotel market can be affected by decisions

made by public authorities. Two examples of such

decisions are changes in taxation related to claims

for travel expenses or rules concerning value

added tax both in general and for the hotel and

restaurant industry in particular.

Property tax

Property tax on Pandox’ Swedish properties

amounts to 1.0 percent of the tax assessment

value. Changes in the tax rate or in the tax assess-

ment value affect Pandox’ earnings. However, an

increase only has a limited impact on the earnings

because many lease agreements are formulated

so that the property tax be passed on to the ten-

ant. Property tax on properties outside Sweden is

generally less than one per cent of the book value.

about 55 percent of the property tax was debited

to tenants in 2010, which means that the net effect

on Pandox’ earnings amounted to SEK 21.4 M.

Site leasehold rents

In the wholly owned portfolio as of 31 december

2010, Pandox held seven properties via site lease-

hold rights. Rents on these properties are currently

calculated in such a manner that a municipality

that normally owns the land receives what is

deemed to be a reasonable real rate of interest on

the estimated market value of the land in question.

Site leasehold rents generally run for periods of 10

to 20 years.

Interest rates

Interest expense is Pandox’ largest single cost

item. Fluctuations in interest rates will therefore

have an impact on Pandox’ earnings. In order to

limit its financial risk, the Company’s average fixed

interest period is 4.5 years. The full effect of a

change in interest rates is accordingly not felt by

Pandox until after this period.

Currency risk

Pandox’ policy is to hedge the major part of its

currency exposure, including shareholders’ equity,

Factors that affect Pandox

SenSiTiviTy analySiS

Pandox 2010 | 63

by financing properties in local currencies and by

hedging through means of appropriate currency

instruments. Transaction exposure is limited as

revenue and costs are usually in the same currency.

Sensitivity analysis

The table to the right illustrates how Pandox’

earnings are affected by changes in certain

key factors.

Earnings impact 2010, SEK

Change in rental revenue occupancy rate +5 percentage points +49.3occupancy rate –5 percentage points –48.7average room rate SEK +50 +34.1average room rate SEK –50 –34.2other commercial premises +/–5 %1) +/–1.6 Change in other variablesInterest expense during the year +/–1 percentage point +/–22.6average interest expense +/–1 percentage point1) +/–70.3Exchange rate fluctuation +/–5 % +/–3.0operating and maintenance costs +/–5 % +/–3.91) The figures in the table are standardised so that the effects of changes in rental revenue and interest rates are immediate, although such

changes do not have full impact in reality until leases and loan agreements are renegotiated.

crowne Plaza, antwerp

crowne Plaza, antwerp

64 | Pandox 2010

valUaTion anD Tax SiTUaTion

The valuation of hotel properties with their specific characteristics demands extensive know ledge and expertise of the hotel market and hotel operations.

Cash flow valuation

Pandox continuously evaluates all of its hotel

properties in accordance with a valuation model

based on the properties’ cash flow, and which is

adapted to the characteristics specific to the

hotel industry.

The cash flow calculation is built up from

underneath, with the property operator’s income

statement as the point of departure. This in turn is

based on assumptions as to how the underlying

hotel market will develop in terms of occupancy

and average rates, as well as how each specific

operator’s respective key ratios and figures

develop in this market. The operator company’s

results and forecasts, together with the formula-

tion of the agreement, provide underlying data to

estimate revenues, which subsequently constitute

the basis of the cash flow calculation. The value

calculated is the present value of the next ten

years’ cash flow, with a supplement for the pres-

ent value of the hotel properties’ residual value

after ten years.

The valuation model is based on the following

assumptions:

• Changes in rental revenue during the calcula-

tion period are based on the formulation of indi-

vidual agreements and on underlying factors.

• Inflation is assumed to amount to an average

of 2.0 percent annually during the calculation

period.

• operating costs are assumed to increase in

line with inflation.

• The rate of interest used in the calculation is

based on the real interest rate plus a risk pre-

mium based on location, lease, and form of

ownership.

an internal valuation of Pandox’ wholly owned

hotel properties in accordance with this method

resulted in a total value as of december 2010 that

substantially exceeds the book value. In accor-

dance with current accounting principles, each

individual property’s recovery value was recon-

ciled with its book value, further to which it was

noted that no write downs were necessary.

The Pandox Group’s property holdings are reported for accounting purposes as fixed assets. The consolidated book value as of 31 december 2010 amounted to SEK 8,613.4 M excluding equipment, of which the consolidated surplus values amounted to SEK 1,725.2 M.

Accounting of deferred tax

Pandox applies the Swedish accounting Stan-

dards Board’s general recommendation on

income tax accounting (BFnaR 2001:1). In short,

the recommendation implies that both deferred

tax liabilities and tax claims are to be included in

the financial statements and that any changes will

affect the income statement as deferred tax.

Pandox’ consolidated balance sheet as of 31

december 2010 includes a deferred tax liability in

the net amount of SEK 203.4 M corresponding to

the difference between a deferred tax liability of

SEK 389.1 M and a deferred tax claim of SEK

185.7 M. The deferred tax liability refers mainly to

the estimated deferred tax based on the differ-

ence between the properties’ consolidated book

value and the fiscal residual value of each respec-

tive legal unit. The difference in value has arisen as

an effect of surplus value upon acquisitions of

property in companies, known as pure intrinsic

acquisitions, as well as fiscal depreciation that

exceeds book depreciation. Tax deduction for

annual depreciation of properties has normally

been made at the rate of 3 to 5 percent of a prop-

erty’s acquisition cost. as a result, the amount of

fiscal depreciation exceeds that of book deprecia-

tion, and the difference between the book value

and the fiscal value of a property increases year on

year. The deferred tax liability generated by asset

acquisitions has been calculated using the pres-

ent value method based on the shortest period of

ownership estimated for each property, and corre-

sponds to an average tax rate of approximately 10

percent. This is based on regulation for assessing

deferred tax upon pure intrinsic acquisitions,

where the tax effect is taken into consideration

when calculating the acquisition price. The

deferred tax relating to the difference between

book depreciation and fiscal depreciation is calcu-

lated based on the applicable tax rate.

The deferred tax claim pertains mainly to defi-

cit deductions. at the end of 2010, there were

remaining deficit deductions totalling SEK 513 M

in the Swedish companies. The valuation of

deferred tax claims is based on their potential utili-

sation against future taxable profits, and is calcu-

lated according to the applicable tax rate. Conse-

quently, minor deficit deductions in non-Swedish

companies were reported at the end of 2010.

Hotel property portfolio value

The Company’s tax situation


Pandox 2010 | 65

DefiniTionS

definitions of key data

Property related key figures

Direct yield

operating net as a percentage of the average

book value of properties and hotel equipment

during the year.

Operating net

Hotel property revenue less operating and mainte-

nance costs, property tax, ground rent and other

property costs.

Property related administration

The portion of total administration costs that is

directly related to the management and develop-

ment of a property. other administration costs

include central administration and costs for

administration of non-Swedish entities.

Total property revenue

The sum of rental revenue and other property

revenue.

Financial key figures

Return on equity

Profit after net financial items and paid tax as a

percentage of average equity.

Return on total assets

Profit after net financial items, plus financial costs

as a percentage of average total assets.

Interest coverage ratio

Profit before tax less depreciation and net financial

items (EBITda) in relation to net financial items.

Equity/asset ratio

Equity at the end of the year as a percentage of

total assets.

Hotel market related key figures

Occupied rooms

number of sold room nights during a given period

of time – normally one year.

Available rooms

available room capacity during a given period of

time – normally one year.

Occupancy rate

number of occupied rooms as a percentage of

the number of available rooms.

Average room rate

Total revenue from sold rooms divided by the

number of occupied rooms.

RevPAR

(Revenue Per Available Room)

Total revenue from sold rooms divided by the

number of available rooms.

Market penetration

The performance of an individual hotel in relation

to the average of the market.

GOP (Gross Operating Profit)

net profit in hotel operator companies before

depreciation, rent, net financial items and taxes.


66 | Pandox 2010

Ten-year overview

Condensed consolidated income statement

SEK M 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

Property operationsRental revenue 551.1 536.2 535.1 562.7 548.8 605.0 747.5 872.3 850.6 884.2other property revenue 24.0 26.0 26.5 30.2 25.2 29.9 34.7 43.2 44.6 39.1Total property revenue 575.1 562.2 561.6 592.9 574.0 634.9 782.2 915.5 895.2 923.3

operating and maintenance costs –96.7 –93.2 –100.1 –118.7 –103.8 –111.5 –126.3 –132.8 –117.0 –140.6Operating net 478.4 469.0 461.5 474.2 470.2 523.4 655.9 782.7 778.2 782.7

depreciation –56.2 –63.2 –64.3 –70.3 –78.2 –91.3 –129.3 –163.8 –193.6 –194.3Income from property operations 422.2 405.8 397.2 403.9 392.0 432.1 526.6 618.9 584.6 588.4

Hotel operationsoperating revenue 39.7 60.1 81.3 216.8 250.2 420.0 788.8 1,105.3 1,095.0 1,208.6operating costs –39.3 –58.2 –75.7 –204.4 –239.4 –407.7 –768.2 –1,084.5 –1,129.0 –1,202.8operating income hotel operations 0.4 1.9 5.6 12.4 10.8 12.3 20.6 20.8 –34.0 5.8Gross income 422.6 407.7 402.8 416.3 402.8 444.4 547.2 639.7 550.6 594.2

administrative costs –33.9 –34.5 –35.5 –39.3 –42.5 –51.9 –55.4 –64.6 –68.3 –72.4other revenue/realisation results 8.6 28.8 7.4 – 444.4 39.9 3.4 6.9 – –Operating income 397.3 402.0 374.7 377 804.7 432.4 495.2 582.0 482.3 521.8

non-recurring financial income & costs – – – –56.1 – – – – 79.5 431.2Profit from associate companies – – – – – – – – – 5.7net financial items for current operations –178.1 –171.0 –159.2 –148.4 –137.4 –166.4 –232.4 –294.7 –229.8 –214.0Income after financial items 219.2 231.0 215.5 172.5 667.3 266 262.8 287.3 332.0 222.9

deferred tax –28.3 –44.2 –50.3 –47.6 36.8 –33.0 –23.5 34.2 –10.1 –65.7Tax –0.2 –0.1 11.4 –0.2 –15.8 –31.4 –9.3 –22.2 –20.4 –111.2Income/loss for the year 190.7 186.7 176.6 124.7 688.3 201.6 230.0 299.3 301.5 567.8

Pandox 2010 | 67

Condensed consolidated balance sheet

SEK M, as of 31 December 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

AssetsProperties including hotel equipment 5,036.8 4,961.4 5,276.7 5,262.8 5,477.5 6,907.5 8,223.8 9,212.5 9,348.0 9,200.5other fixed assets 5.4 6.9 7.2 6.9 113.7 172.8 139.0 794.6 843.3 1,170.3Current assets 37.1 29.5 34.6 58.6 201.7 174.4 223.1 241.2 158.4 276.0Cash and bank 86.7 213.2 137.5 58.0 236.4 174.1 272.8 347.7 326.4 385.1Total assets 5,166.0 5,211.0 5,456.0 5,386.3 6,029.3 7,428.8 8,858.7 10,596.0 10,676.1 11,031.9

Equity and liabilitiesShareholders’ equity 1,772.1 1,853.9 1,919.2 1,923.0 2,307.7 2,272.3 2,407.7 2,729.2 2,996.7 2,977.5deferred tax liability 37.0 83.5 135.9 184.3 208.5 279.7 352.5 335.2 363.0 389.1Interest bearing liabilities 3,178.5 3,070.6 3,211.9 3,080.4 3,165.3 4,398.5 5,516.8 6,808.6 6,850.5 7,025.8non-interest bearing liabilities 178.4 203.0 189.0 198.5 347.8 478.3 581.7 723.0 465.9 639.5Total equity and liabilities 5,166.0 5,211.0 5,456.0 5,386.3 6,029.3 7,428.8 8,858.7 10,596.0 10,676.1 11,031.9

Key dataProperty related key dataBook value of properties including hotel equipment, SEK M 5,036.8 4,961.4 5,276.7 5,262.8 5,477.5 6,907.5 8,223.8 9,212.5 9,348.0 9,200.5Total property revenue, SEK M 575.1 562.2 561.6 592.9 574.0 634.9 782.2 915.5 895.2 923.3operating net, SEK M 478.4 469.0 461.5 474.2 470.2 523.4 655.9 782.7 778.2 782.7direct yield, % 9.6 9.5 9.3 9.1 8.5 8.1 8.6 9.2 8.4 8.6

Financial key dataInterest coverage ratio, multiple 2.6 2.6 2.7 2.2 3.2 2.9 2.7 2.5 4.5 3.5Return on total assets, % 8.0 7.8 7.1 7.0 14.2 5.9 6.1 6.2 5.5 8.9Return on equity, % 11.0 12.6 12.0 12.0 30.8 10.4 11.0 10.8 11.2 22.9Equity/assets ratio, % 34.3 35.6 35.2 35.7 38.3 30.6 27.2 25.8 28.1 27.0Cash flow from current operations, SEK M 267.2 265.8 272.4 298.9 301.4 317.6 389.0 444.5 446.4 518.9Investments excluding acquisitions, SEK M 149.1 67.3 60.8 70.5 165.1 282.6 274.9 269.3 312.5 197.7Property acquisitions, SEK M 141.9 – 370.7 – 661.3 1,327.8 1,063.4 370.9 163.3 332.0

68 | Pandox 2010

QUarTerly DaTa

Quarterly data

conDenSeD incoMe STaTeMenTS

2009 2010SEK M Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

Total property revenue 203.0 230.8 218.1 243.3 201.2 234.4 241.2 246.5operating net 171.0 201.9 188.9 216.4 167.7 199.8 210.4 204.8Income from property operations 125.1 155.3 139.8 164.4 119.9 149.6 161.5 157.4Income from hotel operations –30.7 0.9 –1.6 –2.6 –24.1 14.5 3.9 11.5

operating income 77.5 138.6 123.3 142.9 78.7 145.6 148.3 149.2net financial items –74.6 –57.4 6.9 –25.2 –12.0 –50.4 341.3 –56.0Income after financial items 2.9 81.2 130.2 117.7 66.7 95.2 489.6 93.2Income after tax 0.7 57.0 114.5 129.3 55.0 73.6 353.0 86.2

conDenSeD conSoliDaTeD Balance SHeeTS

2009 2010SEK M 31 Mar 30 Jun 30 Sep 31 Dec 31 Mar 30 Jun 30 Sep 31 Dec

Assets Properties including hotel equipment 9,309.9 9,319.1 9,228.8 9,348.0 9,138.8 9,128.7 9,130.2 9,200.5other fixed assets 1,214.2 1,180.6 869.4 843.3 737.4 724.3 230.7 1,170.3Current assets 166.0 202.6 181.9 158.4 144.0 190.9 197.2 276.0Cash and bank 244.4 313.0 371.4 326.4 472.2 659.2 1,351.1 385.1Total assets 10,934.5 11,015.3 10,651.5 10,676.1 10,492.4 10,703.1 10,909.2 11,031.9

Equity and liabilities Shareholders’ equity 2,700.0 2,771.9 2,798.5 2,996.7 2,906.7 2,715.8 3,045.0 2,977.5deferred tax liability 336.0 352.4 363.2 363.0 376.4 394.9 403.6 389.1Interest bearing liabilities 7,171.8 7,333.2 6,952.6 6,850.5 6,711.1 7,086.5 6,920.6 7,025.8non-interest bearing liabilities 726.7 557.8 537.2 465.9 498.2 505.9 540.0 639.5Total equity and liabilities 10,934.5 11,015.3 10,651.5 10,676.1 10,492.4 10,703.1 10,909.2 11,031.9

ProPerTy relaTeD Key DaTa

2009 2010 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

direct yield, % 7.3 8.7 8.2 9.3 7.3 8.8 9.3 8.9

financial Key DaTa

2009 2010 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

Interest coverage ratio, multiple 1.7 3.7 2.8 6.1 2.5 3.9 3.4 4.2Return on total assets, % 2.9 5.2 7.2 6.4 4.3 5.4 20.2 5.5Return on equity, % 0.2 10.8 18.5 15.2 9.5 13.4 50.7 18.3Equity/assets ratio, % 24.7 25.2 26.3 28.1 27.7 25.4 27.9 27.0Cash flow from current operations, SEK M 48.9 124.0 110.6 162.9 76.1 146.1 139.6 157.1Investments excluding acquisitions, SEK M 86.3 76.8 78.1 71.3 41.3 53.8 45.5 57.1Property acquisitions, SEK M – – 163.3 – – – 332.0 –

Pandox 2010 | 69

Financial statements 2010Property revenues and total revenuesPandox’ property revenues for 2010 amounted to SEK 923.3 M (895.2), which for comparable units, including adjustment for currency effects, represented an increase of 5.1 percent against 2009. The Group’s total revenue amounted to SEK 1,917.9 M (1,778.5).

Cash flowCash flow from ongoing operations, excluding share of profits from associate companies and capital gains, amounted to SEK 502.5 M (446.4). When including 50 percent of the cash flow from norgani for the two months that Pandox has owned the company, total cash flow amounted to SEK 518.9 M.

acquisitions during the yearon 6 September, Pandox acquired the Brussels Hilton, name changed to The Hotel. The acquisition price was EUR 29 M, and covers the hotel property and its operating activities.

on 4 november, Pandox acquired norgani Hotels aS in close cooperation with its owners. The acquisition price was SEK 9.7 billion. norgani’s portfolio is composed of 73 hotel properties in the nordic region. Pandox’ proportion of ownership amounts to 50 percent, but the Company will manage the whole property portfolio.

ProfitsThe pre-tax profit for 2010, excluding capital gains, amounted to SEK 313.5 M (252.5). Profit after tax amounted to SEK 567.8 M (301.5).

70 | Pandox 2010

Financial StatementS

Report of the Board of directors

The Board of directors and Chief Execu-tive officer of Pandox aB, Swedish corpo-rate registration number 556030-7885, hereby submit the annual report and consolidated accounts of the Company for the financial year 2010.

Operations and strategy

Pandox is one of Europe’s leading hotel prop-

erty companies. The Company has built up

specialist expertise within the key areas of hotel

markets, hotel operations, hotel properties and

business development. active ownership, with

well developed strategic plans for each hotel,

enables the creation of good prerequisites for

stable and improved cash flows, and thereby

growth in value for the shareholders.

Pandox’ strategy is to own one type of

property – hotel properties. Its focus is

strengthened by a prioritised market segment.

Pandox is to own large hotel properties in

Sweden, major locations in Europe, as well as

developing regions in Eastern Europe and

north america.

The hotels should be in central and strong

locations such as city centres, airports and

exhibition centres. The hotels should be in the

upper medium to high price range and focus on

the business and leisure segments.The hotels

owned by Pandox are operated and marketed

by the most powerful players in the hotel mar-

ket, who with well known brands and dynamic

independent distribution channels create strong

market positions and thereby stable revenues.

Revenues are created by flexible agree-

ments related to the operator’s turnover and

results or through management agreements

where Pandox assigns a third party to manage

operations, or alternatively through its own man-

agement. Irrespective of the form of operation,

Pandox contributes via its active ownership to

increasing total cash flows and reducing risks.

at the end of the year, the Company’s

portfolio contained 120 hotel properties of

which 46 in the Pandox portfolio and 74 in

the norgani portfolio including one conference

center. Pandox operates ten hotels of which

one via an asset management assignment.

Pandox owns and develops assets in Sweden,

denmark, Finland, norway, Belgium, Germany,

Switzerland, the United Kingdom, Canada and

the Bahamas.

Accounting principles

Pandox does not apply IFRS. as an unlisted

company, Pandox is not subjected to IFRS

reporting requirements. Pandox applies the

Swedish annual Reports act and generally

accepted accounting principles, as well as the

recommendations of the Swedish accounting

Standards Board unless otherwise stated. The

Group’s properties are reported in the balance

sheet at their acquisition cost less accumulated

depreciation.

Ownership situation

Pandox is since the beginning of 2004 owned

by the norwegian companies Eiendomsspar

aS and Sundt aS through their wholly owned

Swedish company aPES Holding aB.

The hotel market

The global recovery further to the finance crisis

continues and surprised positively in the sec-

ond half-year 2010w both in the United States

and in Europe. However, the american econ-

omy still has problems with high unemploy-

ment, falling house prices and a budget deficit.

Like in the US, several European countries

are wrestling with large deficits in their public

finances, which could restrain growth in the

region. However, Europe is showing consider-

able variations in growth preconditions whereby

Germany and Sweden are breathing optimism

while certain countries, particularly in southern

Europe, see a tougher future ahead of them. The

current trend is that the general pace of improve-

ment is continuing, although the overall picture is

still split and developments are uneven.

Within this global environment, Pandox’

hotel property portfolio performed well. Prop-

erty management revenues grew by 3.1 percent

during the period, and even 5.1 percent for

comparable units and exchange rates. Growth

within operational activities was 12 percent,

which is partly due to hotels that have under-

gone major investment programs are now once

again being operated with full capacity. The rate

of improvement was better than the market on

average, which implies that the hotels in Pan-

dox’ portfolio in general took market shares.

Profits and cash flows continued to rise.

The driving force is a combination of an

improved hotel market, the Company’s strat-

egy, high quality in the portfolio, lower financing

costs, and the Company’s active ownership.

Occupancy and rates increase in USA

The recovery in the american hotel market has

been primarily driven by an increase in demand,

even if rates have also started to rise. The cur-

rent trend is that all segments and areas are

increasing in demand. occupancy rose during

the period by almost 5 percent, while average

rates basically stood still. new York, which is

always early in the economic cycle, showed

good developments in both average rates and

occupancy. overall, RevPaR increased by

about 13 percent in the city.

Demand has returned in Europe

In Europe, demand returned in the major inter-

national cities. The autumn was relatively strong

and the short trend is showing improved aver-

age rates, which will strengthen profitability in

the sector. London had an unexpectedly low

and short downturn after the outbreak of the

finance crisis, but has now reached a phase

where rates are rising more than occupancy.

RevPaR increased by 12 percent compared

with 2009.

The picture in the nordic Region is divided.

The market in Copenhagen continues to be

tough with a price war that has further contrib-

uted to the downturn. RevPaR fell by 14 per-

cent and the trend continues to be negative.

oslo also trailed behind the recovery in Europe,

but had a good end of the year. Stockholm

showed good growth with an increase in

RevPaR of 8 percent compared with last year.

developments in Gothenburg were also

positive, while trends in Malmö were negative

during the year as expected.

Pandox’ portfolio

Pandox’ hotel property portfolio continued to

perform well. all Stockholm hotels improved

better than the market in general. In Gothen-

burg, the Elite Park avenue managed better

than its competitors while the Scandic Crown

and Scandic Mölndal developed just under the

market’s average. In Malmö, the Scandic

Kramer and Scandic S:t Jörgen performed in

line with the market, while the ongoing refur-

bishment of the Radisson Blu reduced revenue

capacity and thereby the possibility to follow

the market. Regional towns and cities were

relatively stable.

of the international hotels, the InterConti-

nental and Hyatt in Montreal performed

Pandox 2010 | 71

extremely well with increased market shares in

both rates and occupancy. InterContinental,

which has recently undergone a major develop-

ment program, is now among the RevPaR-

leaders in the city while simultaneously showing

good productivity trends during the year.

Further to several years’ successful work,

the Hotel Berlin, Berlin has achieved a high level

of revenues, productivity and profit. of the

Belgian hotels, Holiday Inn Brussels airport,

which has also undergone a large development

program, showed the best growth. Hotel

BLooM! had strong productivity trends, and

the Hilton Brussels City took market shares.

In Copenhagen, the Scandic Copenhagen

suffered from over-establishment but none-

theless defended its market share reasonably

well, while the Clarion Collection Hotel 27

with its lower sensitivity to economic fluctu-

ations developed better than the market

on average.

Revenues and operating net

– property operations

Property management revenues for the year

amounted to SEK 923.3 M (895.2). For compa-

rable units and currencies, the portfolio impro-

ved by just over 5 percent. This increase is main ly

attributable to a generally better underlying

hotel economic climate and that last year’s

refurbishment projects at the InterContinental

Montreal, Hyatt Montreal and Holiday Inn

Brussels airport have now been completed

and were operated with full capacity this year.

However, at the hotel property level in each

respective submarket, there are relatively large

differences in results depending on the location,

market segment, type of agreement and opera-

tor. Property costs excluding depreciation

amounted to SEK 140.6 M (117.0). The rise is

mainly due to increased maintenance work in the

newly acquired The Hotel and in a number of

other hotel properties.

The operating net increased overall by SEK

4.5 M to SEK 782.7 M (778.2).

Revenues and income – hotel operations

Total revenues from hotel operations amounted

to SEK 1,208.6 M (1,095.0) where all units

increased their sales compared with 2009. For

comparable units and adjusted for currency

effects, revenues rose by 12.0 percent with the

InterContinental Montreal and Holiday Inn Brus-

sels airport contributing most. The overall profit

from hotel operations amounted to SEK 5.8 M

(loss: -34.0), which includes a market-level rent

that is reported under property revenues.

Portion of profits from Norgani

Pandox’ portion of the profits in norgani for the

almost two months the company has been

owned amounted to SEK 5.7 M before tax, and

are reported under net financial items according

to the equity method.

Income

The Group’s profit for 2010 before tax and

excluding capital gains amounted to SEK 313.5

M (252.5), and the Group’s profit after tax

amounted to SEK 567.8 M (301.5).

Financing and cash flow

net financial items relating to current opera-

tions for the period January-december 2010

amounted to SEK -214.0 M (-229.8). The

Group’s interest-bearing liabilities amounted as

of 31 december 2010 to SEK 7,025.8 M

(6,850.5). The loan portfolio has a spread due-

date structure with an average fixed-interest

period of 4.5 years. The average interest rate

on loans at 31 december 2010 was 3.3 per-

cent. Financing of Swedish properties has been

made in Swedish kronor (SEK), while properties

outside Sweden have essentially been financed

in each respective local currency.

available liquid funds, including unutilised

bank overdraft and credit facilities totalling SEK

989 M amounted to SEK 1,349 M (1,808).

Cash flow before changes in working capi-

tal and investments, and excluding capital gains,

profits from associated companies and tax,

amounted to SEK 502.5 M (446.4). Pandox’

cash flow, including 50 percent of norgani’s cash

flow for the two months Pandox has owned the

company, amounted to SEK 518.9 M.

Investments

The Group’s investments, excluding acquisitions,

amounted for the period to SEK 197.7 M (312.5).

Investments included, among other things, the

refurbishment programs at the Crowne Plaza

antwerp, Scandic Plaza Borås and Radisson

BLU Hotel, Basel and Malmö, as well as product

improvements at a large number of properties.

The net book value of hotel properties

amounted to SEK 9,200.5 M (9,348.0). The

market value of the hotel properties significantly

exceeds their book value.

Taxes

The Swedish Tax agency has in a reassess-

ment notice dated october 2007, decided to

increase the assessed income of a number of

Pandox’s subsidiaries by in total SEK 430 M

(corresponding tax effect of SEK 120.4 M) as a

consequence of the sale of real estate through

non-Swedish subsidiaries carried out in 2005.

The decision has been appealed to the county

administrative court. The case has been put on

hold awaiting the Supreme administrative

Court’s judgement in another (non-Pandox

related) case. The Company is of the opinion

that all transactions and claims have been

made in accordance with applicable laws and

therefore no reserves have been booked in the

Groups’ accounting.

Personnel

Central administration counted 16 employees

as at 31 december. Figures concerning aver-

age number of employees, as well as salaries

and other remuneration are set out in note 16.

The work of the Board of Directors 2010

The Board of directors of Pandox has been

composed of seven members since the annual

General Meeting of Shareholders held in 2009.

during the year, the Board has held four ordi-

nary meetings in accordance with the estab-

lished annual agenda. The meetings have

reviewed and discussed external and internal

report ing of operating results and the Compa-

ny’s financial position as well as various busi-

ness matters. other important items that are

regularly studied and reviewed each year are

markets, strategy, finance, and budget issues.

Parent Company

Property activities in the Group’s property-own-

ing companies are administered by staff

employed by the Parent Company, Pandox aB.

The cost of these services has been invoiced to

the Group’s subsidiaries. Invoicing in 2010

amounted to SEK 57.8 M (51.1). The profit for

the year amounted to SEK 56.7 M (–400.0).

Outlook for 2011

The level of economic activity is expected to

improve in most markets where Pandox is rep-

resented. Scandinavia, Germany and Canada

are forecasted to have strong growth, which

will have a positive effect on demand in the

hotel industry in 2011. Through the acquisition

of norgani, Pandox will report considerably

better results in the forthcoming year. also for

comparable units, the Company will strengthen

its profits and cash flow.

72 | Pandox 2010


Income statement

Group Parent CompanySEK M 2010 2009 2010 2009

Property operationsRental revenue note 1, 2, 3 884.2 850.6 – –other property revenue 39.1 44.6 – –Total property revenue 923.3 895.2 – –

Property costs –140.6 –117.0 – –Operating net 782.7 778.2 – –

depreciation as per plan note 4 –194.3 –193.6 – –Income from property operations 588.4 584.6 – –

Hotel operationsoperating revenue 1,208.6 1,095.0 – –operating costs –1,202.8 –1,129.0 – –operating income from hotel operations note 1, 2, 16 5.8 –34.0 – –Gross income 594.2 550.6 – –

administrative costs note 4, 15, 16 –72.4 –68,3 –71.8 –62.3other revenue note 5 – – 57.8 51.1Operating income 521.8 482.3 –14.0 –11.2

Interest income note 6 5.7 25.5 1,044.5 457.8Interest expense –212.0 –256.5 –177.1 –202.9Portion of profits from associate companies 5.7 – – –other financial income and costs note 6 423.5 80.7 –787.9 188.1Net financial items 222.9 –150.3 79.5 443.0Income before tax 744.7 332.0 65.5 431.8

Tax note 7 –111.2 –20.4 –8.8 25.3deferred tax note 7 –65.7 –10.1 – –57.1INCOME FOR THE YEAR 567.8 301.5 56,7 400.0

Specification of external revenue

Revenue from property operations 923.3 895.2 of which internal rentals –214.0 –211.7 Revenue from hotel operations 1,208.6 1,095.0 Total external revenue 1,917.9 1,778.5

Pandox 2010 | 73

Comments on the income statement

Rental revenue

Rental revenue pertains to hotel premises, hotel

furniture and equipment, and other commercial

premises. Rental revenue for 2010 increased in

relation to the previous year and amounted to

SEK 884.2 M (850.6).

Other property revenue

other property revenue is primarily comprised

of costs debited for heat, electricity and pro-

perty tax.

BReaKDOWn OF OtHeR PROPeRtY ReVenUe

SEK M 2010 2009

Payment for operating costs 12.6 10.3Invoicing of property tax 26.5 34.3Total 39.1 44.6

Property costs

Operating costs

operating costs are costs that directly pertain

to the operation of the properties, such as heat,

water, electricity, and maintenance. Costs are

reported gross, meaning that the portion of

costs debited to tenants is reported as revenue

under the heading other Property Revenue,

and that total costs are reported among costs

in their full amount.

Maintenance costs

Maintenance costs are costs incurred to main-

tain the standards of buildings and equipment.

Pandox’ leases are in most cases structured

sothat the tenants – the hotel operators – are

responsible for the greater part of interior main-

tenance of the properties.

Ground rent

a total of seven properties owned by Pandox

are held under site leasehold rights. The condi-

tions and maturities in all cases are based on

prevailing market terms.

Property tax

Pandox’ Swedish hotel properties are liable to

property tax at the rate of 1 percent of the tax

assessment value. Properties located outside

Sweden are subject to varying percentages

and underlying basis.

Other costs

These costs include costs of legal counsel on

leasing matters, insurance premiums, and

costs of leasing external premises.

BReaKDOWn OF PROPeRtY cOStS

SEK M 2010 2009

operating costs 24.4 21.9Maintenance costs 53.8 30.9Ground rents 7.9 1.5Property tax 47.9 58.5other costs 6.6 4.2Total 140.6 117.0

Operating net

The operating net for 2010 amounted to SEK

782.7 M, representing an increase of SEK 4.5 M.

direct yield amounted to 8.6 percent (8.4).

Hotel operations

For accounting purposes, the hotel operations

conducted by Pandox are charged with internal

rent. The internal rent is linked to the operator’s

revenue and based on what are deemed to be

market conditions. The internal rent is debited

to hotel operations and credited to revenue in

property management.

In 2010 Hilton Brussels, name changed to

The Hotel Brussels, was acquired. With that,

nine wholly owned hotel operations remains in

Pandox portfolio at the end of 2010 of which

five were directly operated by Pandox and four

via management contracts.

Administrative costs

administrative costs relate to central adminis-

tration, as well as foreign hotel property admi-

nistration. all central administrative staff is

based at the Stockholm office. The remunera-

tion of staff and auditors is set out in notes 15

and 16.

74 | Pandox 2010


Balance sheet

Comments on the balance sheet

Properties and equipment

one hotel property was acquired in 2010.

depreciation of properties amounted to SEK

112.0 M (108.8), and the year’s investments to

SEK 105.0 M (224.1). The book value of equip-

ment, including hotel furniture and fixtures

amounted to SEK 588.2 M (613.5). deprecia-

tion amounted to SEK 82.7 M (85.2) and invest-

ments to SEK 92.9 M (89.4).

The greater part of the book value of furni-

ture, fixtures and equipment, representing SEK

588.2 M, pertains to that used by hotel opera-

tors. In certain cases, these items are included

as an unspecified portion of the revenue-based

rent that the operator is being charged. When

these items are included in rental revenues,

Pandox includes their value in the property

value used to calculate direct yield from the

properties. at the end of the year, the book

value of the properties, including hotel furniture,

fixtures and equipment, amounted to SEK

9,200.5 M. other items consist of administra-

tion equipment with a book value of SEK 1.1 M.

Other long-term receivables

Pertain to a long-term promissory note and to a

pledged deposit.

Inventories

Relate to stocks of consumables in the hotel

operations.

Trade accounts receivable

Pandox’ accounts receivable normally consists

of rental receivables and trade receivables in

hotel operations. Since rent is generally paid

quarterly and monthly in advance, amounts

outstanding at year-end mainly comprise

accrued revenue-based rents.

Other receivables

Short-term receivables such as those pertain-

ing to costs that are to be debited to external

parties.

Prepaid costs and accrued revenue

This item is comprised mainly of prepaid costs

for the following year, such as insurance premi-

ums and rents.

Cash and bank deposits

The liquidity of the Pandox Group is primarily

managed by the Parent Company through a

central bank account structure where liquidity


ASSETS Fixed assets Tangible fixed assets Properties note 8 8,613.4 8,735.8 – –Equipment note 9 588.2 613.5 1.1 1.3 9,201.6 9,349.3 1.1 1.3

Financial fixed assets Shares and participations in subsidiaries note 10 – – 3,310.6 4,270.6other shares and participations note 11 916.6 610.2 904.3 –

amounts due by Group companies – – 3,883.6 3,885.3other long-term receivables 66.9 15.6 65.9 14.7 983.5 625.8 8,164.4 8,170.6

deferred taxes recoverable 185.7 216.2 – –Total fixed assets 10,370.8 10,191.3 8,165.5 8 ,171.9

Current assetsInventories 8.3 8.2 – –accounts receivables 167.4 99.7 – –Tax receivables 2.2 5.3 – –other receivables 13.5 16.9 2.8 5.6Prepaid costs and accrued revenue 84.6 28.3 48.4 1.5Cash and bank 385.1 326.4 447.9 199.3Total current assets 661.1 484.8 499.1 206.4

TOTAL ASSETS 11,031.9 10,676.1 8,664.6 8,378.3

Pandox 2010 | 75

is assembled in a joint interest-bearing transac-

tion account. Surplus liquidity can also be

invested as a fixed term bank deposit. In addi-

tion, Pandox has unutilised credit facilities for a

total of SEK 964 M.

Liabilities to credit institutions

as at 31 december 2010, Pandox’ total inte-

rest-bearing liabilities amounted to SEK 7,026

M, spread over five lenders and six currencies.

Because financing is arranged mainly through

long-term credit agreements, the majority of

the debt is considered as long-term. as regards

fixed interest rates, debt amounting to SEK

2,261 M carries a fixed interest rate for a period

of less than one year. Further details are set out

in the Financial overview section on page 60.

Deferred tax liability

In 2010 the deferred tax items are accounted for

on a gross basis. Further details are set out in

the Pandox’ Tax Situation section on page 64.

Accrued expenses and prepaid income

The amount pertains essentially to accrued

interest expense and prepaid rent.

Pledged assets

This item refers mainly to property mortgages

pledged to credit institutions as collateral for

loans.

Contingent liabilities

The Parent Company’s contingent liabilities

refer mainly to guarantees to banks with regard

to subsidiaries’ debts.


EQUITY AND LIABILITIESEquityRestricted equityShare capital 373.5 373.5 373.5 373.5Restricted reserves 993.7 1,051.1 830.0 830.0Total restricted equity 1,367.2 1,424.6 1,203.5 1,203.5

Unrestricted equityUnrestricted reserves 1,042.5 1,207.6 134.9 129.1Profit for the year 567.8 301.5 56.7 400.0Total unrestricted equity 1,610.3 1,572.1 191.6 529.1Total shareholders’ equity 2,977.5 2,996.7 1,395.1 1,732.6

Provisionsdeferred tax liabilities note 7 389.1 363.0 – –Pension provisions 3.1 – 3.1 –Total provisions 392.2 363.0 3.1 –

LiabilitiesLiabilities to credit institutions note 12 7,025.8 6,850.5 4,235.2 4,199.7Trade accounts payable 117.1 87.3 35.7 21.3Liabilities to Group companies – – 2,956.3 2,335.4Tax liabilities 10.2 13.9 1.4 –other liabilities 219.1 98.3 3.3 3.0accrued expenses and prepaid revenue note 13 290.0 266.4 34.5 86.3Total liabilities 8,054.4 7,679.4 7,266.4 6,645.7TOTAL EQUITY AND LIABILITIES 11,031.9 10,676.1 8,664.6 8,378.3

Pledged assets note 14 5,071.8 4,961.9 12.2 12.2Contingent liabilities note 14 3.1 2.5 2,647.6 2,675.3

76 | Pandox 2010


Changes in equity

SEK M Share capitalRestricted

reservesUnrestricted

reservesProfit

for the year Total

Group 2009opening balance 373.5 1,050.2 1,006.2 299.3 2,729,2appropriation of profits – – 299.3 –299.3 –other changes – –69.4 69.4 – –dividend – – – – –Group contribution – – – – –Translation differences including tax effect – 70.3 –104.3 – –34.0Profit for the year – – – 301.5 301.5 373.5 1,051.1 1,270.6 301.5 2,996.7

Group 2010opening balance 373.5 1,051.1 1,270.6 301.5 2,996.7appropriation of profits – – 301.5 –301.5 –other changes – 3.1 –3.1 – –dividend – – –373.5 – –373.5Group contribution – – –88.8 – –88.8Translation differences – –68.7 –64.2 – –132.9Equity fund relating to associate companies – 8.2 – – 8.2Profit for the year – – – 567.8 567.8 373.5 993.7 1,042.5 567.8 2,977.5

Parent Company 2009opening balance 373.5 830.0 219.4 –161.1 1,261.8appropriation of profits – – –161.1 161.1 –dividend – – – – –Group contribution – – 70.8 – 70.8Profit for the year – – – 400.0 400.0 373.5 830.0 129.1 400.0 1,732.6

Parent Company 2010opening balance 373.5 830.0 129.1 400.0 1,732.6appropriation of profits – – 400.0 –400.0 –dividend – – –373.5 – –373.5Group contribution – – –20.7 – –20.7Profit for the year – – – 56.7 56.7 373.5 830.0 134.9 56.7 1,375.1

The number of shares as at 31 december 2010 amounted to 24,900,000 with one vote per share and a nominal value of SEK 15 per share.

Pandox 2010 | 77

Cash flow statement


Current operationsProfit/loss before financial items 521.8 561.7 –14.0 –11.2depreciation 194.7 194.0 0.4 0.4Interest received 5.7 4.6 89.1 457.8Interest paid and other financial costs –216.4 –247.0 –54.0 –88.4Tax paid –80.1 –26.2 – –Cash flow from current operations before change in working capital and investments 425.7 487.1 21.5 358.6

Change in working capitalIncrease/decrease (±) in operating receivables –120.7 87.5 –72.3 96.0Increase/decrease (±) in operating liabilities –142.0 –98.8 15.2 1,349.2Total change in working capital –262.7 –11.3 –57.1 1,445.2Cash flow from current operations after change in working capital and investments 163.0 475.8 –35.6 1,803.8

Investment operationsChange in shares and participations 147.0 –65.7 –904.3 –434.9Investments in properties and equipment –197.9 –313.5 –0.2 –1.0acquisition of properties and equipment –261.1 –163.3 – –Change in interest-bearing receivables –51.1 – –38.9 –Total investments –363.1 –542.5 –943.4 –435.9Cash flow after investments –200.1 –66.7 –979.0 1,367.9

Financing operationsChange in financial fixed assets – – – –920.5Change in interest-bearing loans 649.6 42.0 1,061.1 –359.5dividend –373.5 – –373.5 –Cash flow from financing operation 276.1 42.0 1,227.6 –1,280.0Change in liquid funds 76.0 –24.7 248.6 87.9

Liquid funds at the beginning of the year 326.4 347.7 199.3 111.4Exchange rate difference in liquid assets –17.3 3.4 – –Liquid funds at the end of the year 385.1 326.4 447.9 199.3Change in liquid funds 76.0 –24.7 248.6 87.9

78 | Pandox 2010


accounting principles

The annual report and accounts have been prepared in accordance with the Swedish annual accounts act and generally accepted accounting principles, as well as taking into account the recommendations of the Swedish accounting Standards Board if not stated oth-erwise. Pandox’ accounting and evaluation principles are in general unchanged compared

with last year.

Consolidated accounts

The consolidated accounts for the Group include all

subsidiaries as at financial year-end.

The consolidated accounts have been prepared

in accordance with the purchase method, whereby

assets and liabilities have been taken over at market

value in accordance with an acquisition analysis. The

difference between acquisition value and acquired

shareholders’ equity has been added to land and buil-

dings as surplus value. Surplus value is amortised in

accordance with the same principle used for proper-

ties. Estimated deferred tax liability with respect to

Group surplus value and estimated deferred tax reco-

verable are reported net as a deferred tax liability in the

balance sheet.

Tax

Pandox applies the Swedish accounting Standards

Board’s general recommendation regarding income

tax accounting (BFnaR 2001:1). Briefly, the recom-

mendation implies that both deferred tax liabilities and

tax recoverable shall be included in the financial state-

ments, and that any changes shall affect the income

statement as deferred tax. The deferred tax relating to

the difference in book depreciation and fiscal depreci-

ation shall be calculated using the prevailing tax rate.

acquisitions based on the deferred tax liability

relating to asset acquisitions shall be based on the

acquisition price and be calculated from each respec-

tive property’s shortest estimated period of owner-

ship, resulting in an average tax rate of approximately

10 percent.

The deferred tax recoverable pertaining to estima-

ted tax recoverable related to deficit deductions in the

Company are valued based on the estimated potential

utilisation against future taxable profits, and are cal-

culated based on the prevailing tax rate.

Property operations

The Group’s properties are reported in the balance

sheet as fixed assets in view of the purpose of the hol-

dings being the long-term ownership, management

and development of the properties.

Hotel operations

The hotel operations conducted by Pandox are char-

ged with internal rent for accounting purposes. The

internal rent is linked to the operating companies’

revenue and based on what are deemed to be market

conditions. The internal rent is expensed to hotel ope-

rations, and carried as revenue in property operations.

Tangible fixed assets

When new construction and additions are carried out,

all direct costs including project costs are capitalised.

In the case of refurbishments, direct costs related to

the improvement of properties compared with their

original condition are capitalised.

Costs of repairing a property to its original condi-

tion are not capitalised. an exception to this principle

involves the costs of measures taken further to neg-

lected maintenance established at the time of an

acquisition, and where the acquisition price is

adjusted accordingly.

Costs of tenant-related modifications that imply

that the rent may be increased are capitalised and

depreciated over the remaining period of the lease.

depreciation according to plan is calculated on

the acquisition value at the following percentages:

%

Buildings 1.0 Building fixtures 4–6.7 Land improvements 3.5 Equipment 6.7–33

Pandox changed the depreciation rate for buildings

from 1.5 percent to 1 percent with effect from 2000.

depreciation according to plan is calculated on

the acquisition value and a residual value of SEK 0.

Associate companies

Shares in associate companies are accounted for

under the equity method. The book value of shares in

associate companies corresponds to the Group’s

share of the equity in the associate companies plus

any consolidated surplus or deficit values. In the

Group’s income statement ’Portion of profits from

associate companies’ includes the Group’s share of

associates’ profits after financial items adjusted for

any depreciation of consolidated surplus or deficit

values. The Group’s share of reported taxes are inclu-

ded in the consolidated tax expenses. Share of profits

earned after the acquisition of associate companies

which have not yet been realized through dividends,

are allocated to the equity fund that forms part of the

Group’s restricted reserves.

Write-down of fixed assets

The Group’s properties are continuously valued in

accordance with an internal cash flow model, which

also fulfils the requirement to calculate the utilisation

value in accordance with current accounting princip-

les whereby the recoverable value, which is the grea-

ter of the net sales value and the utilisation value, is

compared with the property’s book value in order to

assess the need for a possible write-down.

Leasing

Pandox reports all leasing contracts as operational.

Leasing contracts entered into concern private cars

and office machines. They are not significant in size

and do not therefore influence an assessment of the

Group’s results and financial position.

Revenue

Management revenue pertains to rental revenue as

well as re-debited operating costs and property tax.

Revenue and costs related to the operations of hotel

operators are reported separately in the consolidated

income statement. Rental revenue is spread over a

period of time in accordance with the terms of each

lease. This implies that rent paid in advance is repor-

ted as prepaid rental revenue.

Shares and participations

Shares and participations in subsidiaries and subsidi-

aries of subsidiaries have been stated at acquisition

value with the exception of holdings that may have

been written down to their estimated actual value.

Financial instruments

Interest swaps are used to change underlying financial

liabilities’ interest-due structure. Revenue and costs

related to interest swaps are reported net as interest

costs, and are spread over the duration of each cont-

ract.

International subsidiaries

International subsidiaries are stated as per the current

rate method, which implies that the income statement

is restated at the average exchange rate of the period,

and the balance sheet at the exchange rate prevailing

on the closing day. The exchange rate difference that

arises as a result of this method is recorded directly

against the Group’s equity. any companies acquired

during the year are included in the Group at an amount

relating to the period following such acquisition.

Receivables and liabilities expressed in

foreign currencies

Receivables and liabilities expressed in foreign curren-

cies are restated at the rate of exchange prevailing on

balance sheet date. any differences that may arise are

either credited or debited to income. When loans or

forward contracts are entered into to hedge invest-

ments in international subsidiaries, any exchange rate

differences that may arise are offset in the Group by an

amount corresponding to the differences arising from

the recalculation of the net assets of international sub-

sidiaries.

Other receivables and liabilities

Receivables have been stated in the amounts expec-

ted to be received. other assets and liabilities have

been stated at nominal values.

Pandox 2010 | 79

notes to the accounts

NOTE 1 SEGMENT REPORTING

Primary segmentPandox’ primary segment is comprised of two operating branches – property operations and hotel operations. Information in accordance with segment reporting is presented in the consolidated income statement and balance sheet.

Secondary segmentYear 2010 Stockholm Gothenburg Öresund Rest of Sweden International Adjustment Total

Property revenue 206.0 87.2 158.0 133.9 338.2 –214.0 709.3Property costs –37.3 –9.3 –31.5 –20.0 –42.5 – –140.6operating net 168.7 77.9 126.5 113.9 295.7 –214.0 568.7

Book value of properties 1,391.8 749.2 1,461.2 1,020.1 4,578.2 – 9,200.5

Investments 32.5 7.0 37.5 37.4 83.3 – 197.7operating revenue – hotel operations – – 7.6 – 1,201.0 – 1,208.6operating costs – hotel operations – – –7.6 – –1,195.2 214.0 –988.8operating profit – hotel operations – – 0.0 – 5.8 214.0 219.8

Year 2009 Stockholm Gothenburg Öresund Rest of Sweden International Adjustment Total

Property revenue 167.7 85.2 182.3 120.1 339.9 –211.7 683.5Property costs –26.5 –7.2 –30.7 –15.8 –36.8 – –117.0operating net 141.2 78.0 151.6 104.3 303.1 –211.7 566.5

Book value of properties 1,386.2 756.1 1,488.1 998.8 4,718.8 – 9,348.0

Investments 50.6 1.8 12.2 13.9 234.0 – 312.5operating revenue – hotel operations 16.1 – 8.9 – 1,070.0 – 1,095.0operating costs – hotel operations –15.4 – –9.2 – –1,104.4 211.7 –917.3operating profit – hotel operations 0.7 – –0.3 – –34.4 211.7 177.7

NOTE 2 RENTAL REvENUE

Revenues from hotel operations pertain to business, of which four are operated under management agreements with Hilton (2), InterContinental and Hyatt respectively, as well as the five hotels operated by Pandox. Rent and remuneration for other property costs which were paid by these hotel operator companies to the property company are reported gross, i.e. they have not been eliminated in the income statement. This is done to provide a more accurate picture of the operating net generated by the property com-pany and the operating income of the hotel operating company. The elimination of these items would imply that the total management revenue and the operating company’s operating costs would be reduced by SEK 214.0 M for the year 2010 (211.7).

NOTE 3 GEOGRAPHICAL DISTRIBUTION

OF RENTAL REvENUE

% 2010 2009

Sweden 54 53denmark 7 8United Kingdom 5 5Germany 12 13Belgium 14 15Switzerland 3 2Canada 5 4Total 100 100

NOTE 4 DEPRECIATION ACCORDING TO PLAN


Buildings –111.2 –108.0 – –Land improvements –0.8 –0.8 – –Equipment –82.7 –85.2 –0.4 –0.4Total depreciation –194.7 –194.0 –0.4 –0.4

depreciation amounts to a total of SEK 194.7 M of which SEK 194.3 M (193.6) refers to property

operations and SEK 0.4 M (0.4) to administration.

NOTE 5 OTHER REvENUE

Property activities in the Group’s property-owning companies are administered by staff employed by the Parent Company. The cost of these services has been invoiced to the Group’s subsidiaries. Invoicing in 2010 amounted to SEK 57.8 M (51.1).

NOTE 6 INTEREST INCOME AND OTHER FINANCIAL

INCOME AND COSTS

The interest income of the Parent Company is divided into SEK 86.6 M (77.3) from Group companies, SEK 2.5 M (1.1) from external parties, and SEK 955.4 M (379.4) from dividends from subsidiaries. of SEK –787.9 M (188.1) in other financial income and cost in the Parent Company, SEK 178.2 M (190.3) pertains to currency effects in valuation of liabilities in foreign currency at closing date exchange rate and SEK 960.0 M to write-down of shares in subsidiaries. of SEK 5.7 M (25.5) in Group inter-est income, SEK 4.6 M (4.6) refers to external interest income and SEK 1.1 M (20.9) refers to dividends from other shares and participations. other finacial and costs in the Group amounts to SEK 423.5 M (80.7) of which SEK 431.2 M (79.5) pertains to capital gains further to the sale of shares in HoST Hotels & Resorts Inc.

80 | Pandox 2010


NOTE 7 DEFERRED TAx AND ACTUAL TAx


Deferred tax expense for the yeardeferred tax expense relating to temporary differences –24.0 –38.5 – –0.7deferred tax expense relating to deficit deductions –47.5 –15.9 – –56.4deferred tax expense relating to other provisions 1.8 44.3 – –deferred tax expense relating to associate companies 4.0 – – –Deferred tax reported in the income statement –65.7 –10.1 – –57.1

Actual tax in the income statement –111.2 –20.4 –8.8 25.3of which relating to associate companies –5.5 – – –

Difference between reported tax and nominal tax rateReported profit before tax 744.7 332.0 65.5 431.8Tax as per applicable tax rate –195.8 –87.3 –17.2 –113.6Tax effect due to nontaxable income 22.1 36.8 272.7 134.5Tax effect of nondeductible costs and other tax adjustments –32.3 –21.1 –264.3 –52.7Tax effect relating to foreign operations 29.1 41.1 – –Reported tax expense –176.9 –30.5 –8.8 –31.8

Deferred tax recoverabledeficit deductions 173.4 205.2 – –other deferred tax recoverable 12.3 11.0 – –Total deferred tax recoverable 185.7 216.2 – –

Deferred tax liabilitiesdifferences between book value and fiscal value of properties 389.1 363.0 – –Total deferred tax liabilities 389.1 363.0 – –Total deferred tax liabilities/recoverable net –203.4 –146.8 – –

The Group’s nominal tax rate is estimated at 26.6 percent and in the Parent Company it amounts to 26.3 percent. The effective income tax rate in the Group amounted in 2010 to 23.8 percent (9.2) and in the Parent Company to 13.4 percent (7.4).

NOTE 8 LAND AND BUILDINGS

GroupSEK M 2010 2009

opening acquisition value 9,798.7 9,641.4Reclassified as equipment –0.6 –5.2acquisition of properties 320.6 89.4Investments 105.0 224.1disposals – –Translation differences – balance sheet –468.5 –151.0Closing accumulated acquisition value 9,755.2 9,798.7

opening depreciation –1,062.9 –975.6disposals – –depreciation for the year –112.0 –108.8Translation differences – balance sheet 33.1 21.5Closing accumulated depreciation –1,141.8 –1,062.9Closing residual value 8,613.4 8,735.8

Tax assessment value of Swedish properties 2,900.8 2,521.7of which land 858.7 707.9Book value Swedish properties 3,945.2 3,903.5

Pandox 2010 | 81

NOTE 9 EQUIPMENT


opening acquisition value 1,037.9 900.4 4.6 3.6Reclassified from land and buildings 0.6 5.2 – –acquisition of equipment 11.3 73.9 – –Investments 92.9 89.4 0.2 1.0disposals – – – –Translation differences – balance sheet –87.9 –31.0 – –Closing accumulated acquisition value 1,054.8 1,037.9 4.8 4.6

opening depreciation –424.4 –353.0 –3.3 –2.9disposals – – – –depreciation for the year –82.7 –85.2 –0.4 –0.4Translation differences – balance sheet 40.5 13.8 – –Closing accumulated depreciation –466.6 –424.4 –3.7 –3.3Closing residual value 588.2 613.5 1.1 1.3

NOTE 10 SHARES AND PARTICIPATIONS IN SUBSIDIARIES

Corp. Reg. No.Registered

officeNumber

of shares Par valuePercent owned Book value

Parent CompanyHotab Förvaltnings aB 556475-5592 Stockholm 1,000 100 100 285.1Pandox Förvaltning aB 556097-0815 Stockholm 5,500 100 100 304.7Hotab 6 aB 556473-6352 Stockholm 1,000 100 100 0.1Fastighets aB Grand Hotel i Helsingborg 556473-6329 Stockholm 1,000 100 100 15.9Pandox Fastighets aB 556473-6261 Stockholm 1,000 100 100 0.1Fastighets aB Mora Hotell 556475-9370 Stockholm 1,000 100 75 5.7Fastighets aB Stora Hotellet i Jönköping 556469-4064 Stockholm 1,000 100 100 30.1Pandox Belgien aB 556495-0078 Stockholm 1,000 100 100 4.0Pandox Hotel Management aB 556469-9782 Stockholm 1,000 100 100 0.1Hotellus Holding aB 556475-9446 Stockholm 1,000 100 100 11.5Pandox Luxemburg aB 556515-9216 Stockholm 10,000 10 100 68.3Fastighets aB Porpur 556349-8327 Stockholm 10,000 100 100 0.1Pandox i Halmstad aB 556549-8978 Stockholm 1,000 100 100 8.7Pandox i Borås aB 556528-0160 Stockholm 1,000 100 100 61.5Grand i Borås Fastighets aB 556030-7083 Stockholm 6,506 100 100 10.0Hotell Värmdövägen 84 aB 556286-4826 Stockholm 1,000 100 100 4.3Hotellus International aB 556030-2506 Stockholm 7,480,000 100 100 970.2KB Lorensberg 49:2 916833-3269 Gothenburg – – 100 0.0Hotellus Östersund aB 556367-3697 Stockholm 1,000 100 100 3.0ademrac Holding 1 aB 556683-3371 Stockholm 10,093 100 100 219.4ademrac Holding 2 aB 556683-3363 Stockholm 10,010 100 100 219.6ademrac aB 556426-2748 Stockholm 1,790,042 100 6.6 3.4Le nouveau Palace Sa 446188 Brussels 3,000 – 100 291.4Convention Hotel International aG 270.3.001.168-3 Basle 14,000 – 100 6.2Hotellus denmark a/S 28970927 Copenhagen 5,000 – 100 66.2Hotel Bloom Sa 0476.704.322 Brussels 68,808 – 100 67.3Pandox Belgium Sa 0890.427.732 Brussels 100,000 – 100 471.6Pandox i Malmö aB 556704-3723 Stockholm 1,000 100 100 142.0Ypsilon Hotell aB 556481-4134 Stockholm 1,000 100 100 39.8Pandox Kolmården aB 556706-8316 Stockholm 100,000 1 100 0.1Hotellus Sverige Ett aB 556778-8699 Stockholm 1,000 100 100 0.1Hotellus Sverige Två aB 556778-8707 Stockholm 1,000 100 100 0.1Total Pandox AB 3,310.6

cont.

82 | Pandox 2010


Corp. reg. no. Registered office

Group arlanda Flyghotell KB 916500-8021 StockholmFastighetsbolaget Utkiken KB 916611-7755 StockholmFastighets aB Hotell Kramer 556473-6402 StockholmHotellus nordic aB 556554-6594 StockholmHotellus Järva Krog aB 556351-7365 StockholmHotellus Mölndal aB 556554-6636 StockholmBioeffect aB 556244-5030 StockholmVestervold KB 916631-9534 StockholmHotellus Mellansverige aB 556745-4656 StockholmSkogshöjd Handels & Fastighets aB 556066-0432 StockholmHotellus Belgium nV – BelgiumGrand Hotel Brussels nV – BelgiumTown Hotel Sa – BelgiumElba Belgium Holding BVBa – Belgium

Corp. reg. no. Registered office

Elba Leasehold BVBa – BelgiumElba Freehold BVBa – BelgiumHolcro nV – BelgiumHotellus Suomi oY – FinlandHotellus nord oY – FinlandEuro Lifim BV – netherlandsHotellus Europe BV – netherlandsPandox Holland BV – netherlandsPandox Holland 2 BV – netherlandsHotellus Luxembourg Sarl – LuxemburgHotellus deutschland GmbH – Germanyatlantis mbH – GermanyPandox Berlin GmbH – GermanyHotellus Canada Holdings Inc – CanadaHotellus Montreal Holdings Inc – Canada

NOTE 11 OTHER SHARES AND PARTICIPATIONS

other shares and participations of SEK 610.2 M in 2009 referred to the american hotel property company HoST Hotels and Resorts Inc. during 2010 all shares in the com-pany was sold. other shares and participations of SEK 916.6 M in 2010 refers to the shareholding of Sech Holding aB that during the autumn 2010 acquired 100 percent of the shares in norgani Hotels aS. Pandox ownership of Sech Holding aB amounts to 50 percent and is reported according to the equity method.

NOTE 12 LIABILITIES TO CREDIT INSTITUTIONS


Liabilities that fall due within one year following balance sheet date 810.0 738.9 793.6 562.3Liabilities that fall due between one and four years following balance sheet date 1,000.7 980.5 700.0 809.1Liabilities that fall due five or more years following balance sheet date 5,215.1 5,131.1 2,741.6 2,828.3Total 7,025.8 6,850.5 4,235.2 4,199.7

NOTE 13 ACCRUED ASSETS AND CONTINGENT REvENUE


Prepaid rents 50.1 54.7 – –accrued interest expenses 22.9 16.3 18.3 11.0Property tax 7.8 4.7 – –Unrealised hedge results 3.4 64.1 3.4 61.6other 205.8 126.6 12.8 13.7Total 290.0 266.4 34.5 86.3

NOTE 14 PLEDGED ASSETS AND CONTINGENT LIABILITIES


Pledged assets for loans from credit institutions Property mortgages 5,052.6 4,942.1 – –Pledged deposit 19.2 22.3 12.2 14.7Contingent liabilities 3.1 2.5 2,647.6 2,675.3

NOT 10 SHARES AND PARTICIPATIONS IN SUBSIDIARIES, CONT.

Pandox 2010 | 83

NOTE 15 AUDIT FEES AND REMUNERATION


KPMG audit assignments 3.4 3.5 0.8 1.0other assignments 1.5 1.4 – –

SET Revisionsbyrå audit assignments 0.1 0.1 0.1 0.1

Other other assignments 0.1 0.2 – –Total 5.1 5.2 0.9 1.1

NOTE 16 PERSONNEL

Group Parent Company 2010 2009 2010 2009

Average number of employeesMen 509 474 8 9Women 517 468 8 9Total 1,026 942 16 18

of whom employed in Sweden 16 31 16 18of whom employed in Belgium 436 341 – –of whom employed in Germany 196 189 – –of whom employed in Canada 378 381 – –

Board of directors and senior managers and executivesMen 11 11 10 10Women 2 2 2 2Total 13 13 12 12

Wages, salaries and other remuneration, SEK MBoard of Directors and CEOWages, salaries and other remuneration 5.5 5.6 5.5 5.6Social security costs 1.6 1.6 1.6 1.6Pension costs 0.7 0.8 0.7 0.8Total 7.8 8.0 7.8 8.0

Other employeesWages, salaries and other remuneration 369.4 355.3 17.0 15.0Social security costs 79.3 69.5 5.3 5.0Pension costs 11.7 11.6 4.1 4.4Total 460.4 436.4 26.4 24.4

Wages, salaries and other remuneration per country, SEK MSwedenBoard of directors and CEo 5.5 5.6 5.5 5.6other employees 17.0 19.6 17.0 15.0

Belgium other employees 141.9 132.4 – –Germany other employees 44.5 44.9 – –Canada other employees 166.0 158.4 – –Total 352.4 360.9 22.5 20.6

Personnel employed in Belgium relate to the operator activities of the Crowne Plaza Brussels City Centre, the Holiday Inn Brussels airport, the Crowne Plaza antwerp, The Hotel, the Hilton Brussels City, and the Hotel BLooM!. Personnel employed in Germany to Hotel Berlin, Berlin and in Canada to InterContinental Montreal and Hyatt Regency Montreal.

The remuneration of the Members of the Board is established by the annual General Meeting of Shareholders. The remuneration of the Chief Executive officer (CEo) is composed of a basic salary, a bonus, a company car, and a retirement pension scheme. The age of retirement of the CEo is 65 years, with the possibility of retiring at the age of 60. In the case of termination, the CEo shall be given a period of notice of 24 months by the Company, with a deduction clause. Upon resignation by the CEo, a period of notice of 6 months shall apply.

Sickness absence in the Parent Company amounted to 0.1 percent (0.5).

84 | Pandox 2010


Proposed disposition of earnings

The following profits are at the disposition of the forthcoming annual General Meeting of Shareholders:

Balance brought forward SEK 134,856,053

Profit for the year SEK 56,742,661

SEK 191,598,714

The Board of directors and Chief Executive officer propose that the accumulated profits be appropriated as follows:

dividend to the shareholders,

SEK 7.00 per share SEK 174,300,000

amount to be carried forward SEK 17,298,714

SEK 191,598,714

Stockholm, 14 February 2011

Christian Ringnes

Chairman

Leiv Askvig Christian Sundt Olaf Gauslå

Bengt Kjell Helene Sundt Mats Wäppling

Anders Nissen

Chief Executive Officer

our audit report pertaining to this annual report and consolidated

financial statements was submitted on 15 February 2011.

Per Gustafsson

Authorised Public Accountant

Willard Möller

Authorised Public Accountant

Pandox 2010 | 85

auditor’s Report

To the annual meeting of the shareholders of Pandox AB

Corporate identity number 556030-7885

We have audited the annual accounts, the consolidated accounts, the accounting records and the administration of the board of

directors and the managing director of Pandox aB for the year 2010. The company´s annual accounts and the consolidated accounts

are included in the printed version on pages 70–84. These accounts and the administration of the company and the application of

the annual accounts act when preparing the annual accounts and the consolidated accounts are the responsibility of the board of

directors and the managing director. our responsibility is to express an opinion on the annual accounts, the consolidated accounts

and the administration based on our audit.

We conducted our audit in accordance with generally accepted auditing standards in Sweden. Those standards require that we

plan and perform the audit to obtain high but not absolute assurance that the annual accounts and the consolidated accounts are

free of material misstatement. an audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the

accounts. an audit also includes assessing the accounting principles used and their application by the board of directors and the

managing director and significant estimates made by the board of directors and the managing director when preparing the annual

accounts and the consolidated accounts as well as evaluating the overall presentation of information in the annual accounts and the

consolidated accounts. as a basis for our opinion concerning discharge from liability, we examined significant decisions, actions taken

and circumstances of the company in order to be able to determine the liability, if any, to the company of any board member or the

managing director. We also examined whether any board member or the managing director has, in any other way, acted in contra-

vention of the Companies act, the annual accounts act or the articles of association. We believe that our audit provides a reasonable

basis for our opinion set out below.

The annual accounts and the consolidated accounts have been prepared in accordance with the annual accounts act and give a

true and fair view of the company’s and the group’s financial position and results of operations in accordance with generally accepted

accounting princi ples in Sweden. The statutory administration report is consistent with the other parts of the annual accounts and the

consolidated accounts.

We recommend to the annual meeting of shareholders that the income statements and balance sheets of the parent company and

the group be adopted, that the profit of the parent company be dealt with in accordance with the proposal in the administration report

and that the members of the board of directors and the managing director be discharged from liability for the financial year.

Stockholm, 15 February 2011

Per Gustafsson Willard Möller

Authorised Public Accountant Authorised Public Accountant

86 | Pandox 2010

Hotel BlOOm!, Brussels

Production: Pandox in cooperation with Hallvarsson & Halvarsson. Photo: Ulf Blomberg, Peter Hoelstad and others. Printing: Elanders, Falköping, 2011.

Pandox aB corp. Reg. no. 556030-7885 www.pandox.com

Pandox redovisning av affärsverksamheten 2010

Real Estate

Transcript of Pandox redovisning av affärsverksamheten 2010