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Pandox - Ett av de ledande hotellfastighetsbolagen i Europa
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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
Hotel Country City No. rooms
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
Hotel Country City No. rooms
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
Hotel BLOOM!, Brussels
Hotel BLOOM!, Brussels
Hotel BLOOM!, 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
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)
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%
Proportion of totalnumber of rooms
17%
Proportion of totalnumber of rooms
27%
Proportion of totalnumber of rooms
16%
Proportion of totalnumber of rooms
5%
PANdOx 2010 | 41
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)
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
Operated by Pandox (Pandox own hotel operations)
Hotel properties, continued
42 | PANdOx 2010
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)
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
Operated by Pandox (Pandox own hotel operations)
PANdOx 2010 | 43
Hotel BLOOM!, Brussels
Hotel BLOOM!, Brussels
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
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
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
Hotel BlooM!, Brussels
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.
Hotel BlooM!, Brussels
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
Financial StatementS
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
Financial StatementS
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
Group Parent CompanySEK M 2010 2009 2010 2009
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.
Group Parent CompanySEK M 2010 2009 2010 2009
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
Financial StatementS
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
Group Parent CompanySEK M 2010 2009 2010 2009
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
Financial StatementS
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
Group Parent CompanySEK M 2010 2009 2010 2009
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
Financial StatementS
NOTE 7 DEFERRED TAx AND ACTUAL TAx
Group Parent CompanySEK M 2010 2009 2010 2009
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
Group Parent CompanySEK M 2010 2009 2010 2009
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
Financial StatementS
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
Group Parent CompanySEK M 2010 2009 2010 2009
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
Group Parent CompanySEK M 2010 2009 2010 2009
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
Group Parent CompanySEK M 2010 2009 2010 2009
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
Group Parent CompanySEK M 2010 2009 2010 2009
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
Financial StatementS
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
Production: Pandox in cooperation with Hallvarsson & Halvarsson. Photo: Ulf Blomberg, Peter Hoelstad and others. Printing: Elanders, Falköping, 2011.