CMD 2019

May 9, 2019

Slides

Okay. Welcome everybody to Panadoc Capital Markets Day 2019. We are proud and honored to see so many of you here. We know it's a very, very busy day in the financial market with many reports and annual general meetings and whatnot. I would also like to welcome the participants on the webcast. You are most welcome as well. Our lineup today consists of Anders Nyssen, our CFO sorry, our CEO Lia Ngo, we are switching today Lia Ngo, our CFO Jonas Turner, who is Senior Vice President of Business Intelligence and a long timer with Pandox Karlyn Tevijos, Director of Sustainable Business and myself, Anders Peyre, Head of Communications and IR. Today, we will divide the day into 3 parts. The first part, we will present Pandox strategic and financial position and the Pandox platform. In the second part after the break, we will turn our attention to Pandox growth drivers followed by some conclusions. And the 3rd part will be a Q and A session. We will not take any questions during the presentations. We will keep the tempo up and save the questions to the 3rd part, which is a Q and A session. At that point, we will also take written questions from the web. Today's presentations have been published on www.pandox.se under the section Events for Capital Markets Day 2019. So you can find it there and you can keep track of it as we go through the program. And I also wish to remind you that this event is webcasted and recorded and we will put it up on our website also afterwards. Well, that's all folks. Time to get started. Please let me hand over the ball to Anders Nyssen. Thank you very much, Anders Berg. And oh, I have pain in one of my leg. It's my old handballs carrier, which was not so great, but a lot of injuries. Welcome even for me. Anders didn't mention, I didn't know if that was a reason, but we also have a Capital Markets Day in London tomorrow. So all of you are most welcome to follow us. We can give like a team together with SIS 8, 7, 15 or something like tonight. And then we are heading up in hotel close to Liverpool Station tomorrow. So warm welcome even from me. The next 2 hours is PanDocs. PanDocs was established in 1995. And I think I can say that the company has been known from the first day for its focus strategy. This specialization create value is our self. Firstly, we had developed an knowledge and expertise would give us information advantages. And secondly, we can manage complicated projects like big investment program or welcome the chairman of Bandox and buying underperforming hotel. So specialization is important. This is Pandox life. Hotels, hotels, hotels. It's beautiful life. I've been in it for 35 years. I love every day. The business model, the business concept based on our focus strategy is an integrated flexible model in 2 pieces or in 2 ways. First one is to own hotels and lease them out. That is the main strategy to strong hotel operators. If this conditions is not in place, we can choose to operate hotel inside self. We have multiple options to then do operational from this business model. First, we can first, we can sign lease agreement, very common in Scandinavian and Northern Europe, where we get a percent of the revenue from the hotel. Or number 2, we can sign a management contract, not so well known in Sweden. I only think that is 2 or 3 in Scandinavian. But very often, this is the minority agreement in United States and some part of Europe. That means that the 3rd party operate on the behalf of the owner of the business and they get a fee for that. The third one is owned and operate with a franchise brand, then meaning that Pandex sign up with a brand or a flag. And we have support in sales marketing and distributions, and we pay them a fee. Or finally, the 4th model is to own and operate with independent brand where we need maybe more a brand of a stronger personality. The beautiful with this is that we grew all 4. So with a very integrated flexible model, we also have multiple options to minimize the risk or make sure that the potential is there. I believe we have a clear investment case on 3 fundamentals. The first one is good growth opportunities. That is a strong growth in the tourist and travel market, expect to be 4% in the next 10 years globally. In addition to this, it's we have a low market shares in hotel property market. It's a very fragment ownership market. Despite of our size, we only own 1%, so we can expand with acquisitions or organic. The second fundamentals is a strong market position. We have reached a strong market position the last couple of years, the Pan European is one of the few. And give us very attractive we are a very attractive partner for banks, operators and brands. And then maybe most important, balance risk. The balance risk is of two reason, ability to be active full value chain. As I said, we can operate hotel, we can lease them out. And diversifying of the hotel in terms of revenue that we are now located in 15 countries and 82 different cities. But the most important, of course, is that no, sorry for this. So what is the USP for PanDocs? Let me give you 6. Only hotel properties, as I said, give us a benefit, 1 tenant per property. The tenant then have a strong impact on the value of the property, and we can contribute for the business and make sure that we can increase our rental income. No vacant positions, that is maybe or no vacant properties, that is maybe the most important of the business model. We can rent out the business to Pandox, that's rather unique for being a property company. Pan European position, we have talked about the flexible model. We have jumped into deep knowledge in hotel industry. Over this year, we have developed strong knowledge in hotel business, hotel property business and business development as ourselves. But the most important is, of course, the team. We have top scorers on every position in the office in PanOx. We are like a sport team and we train together every day to improve our skills. Everyone is sniffing out for the next business opportunities. You can say that you have 2 jobs when you work in PanOx. The first one is to do the job you are paid for or second one second is that you should do that job little better every day. The worst day for someone working in pandox is a Friday, is a terrible day because then it's weak in front of you and you're not allowed to meet your colleagues from Monday morning. This is how Peppa looking at this, our copper dog. Lucky as they always be Monday, once a week at least. So Friday is the Wednesday. Sustainability is an important part of Panag's DNA, and I welcome back the stage to Anders Berg. Thank you, Anders. Yes, as you know, sustainability is an important area. It's a very interesting area. And in 2018, we revised our sustainability strategy to focus on 7 areas, which are shown on the slide below me behind me rather. The starting point for our strategy is to work step by step and integrate sustainability into the business. The starting point is data which we collect and analyze, both from the property management segment and from the operator activity segment. Based on the data, we prioritize between the actions we must take and where we can excel. And this is important for us and also important when you talk about sports that maybe you should rather focus on the things that you're really good. So that is what we do. And in that also lies that an important aspect of our strategy work is to also find out and decide what not to do. We are entrepreneurs also when it comes to sustainability. And so our focus is to find concrete and well defined projects, so we can snowball positive effects throughout our portfolio. To help explain this in a little bit more detail, what we do, I would like to introduce my colleague, Caroline Tvejos, and she is Director of Sustainable Business at PanDocs and really our spearhead into the sustainability area. Thank you for that introduction, Anders. And today, we just want to give you a flavor of everything we do. We have, as you said, 7 focus areas, but we'll just focus on 3 of them: green properties, green operations and contribution to local society or in communities. And as you said, this year is about piloting. It's piloting our different projects that we have chosen, testing them, evaluating and setting the direction for our future sustainability work onwards and which role we should play. So this is a very exciting year for us. Yes. Okay. Yes. And this is my favorite roof. It's a sidetrack now, but Hotel Berlin Berlin, we have put a 1100 square meter solar panels, and it generates a lot of energy. It's approximately, if you translate it, it's 100 and 60, 1500 kilowatt hours, and that's approximately 250 hotels rooms that are driven on LED lights. So it's a good project. And as you said in the introduction, we have now also included our whole portfolio in the sustainability work, not only focusing on our operated hotels. So we are also looking at our building. And 2 things I want to highlight is, first of all, we are testing out now to certify a few selected properties in accordance to bream. And the reason why we are doing that is to future proof our buildings. And we also want to see if we can also add some business value in the process because it can easily become an administrative monster. And you're running around thinking you should do everything. And this is very interesting, and we are testing this approach. The second thing we are doing when it comes to building is that we have a more holistic view on properties. We understand that we can't work in silos. The building, the shell and also the operations are dependent on each other. So we have proactively invited our largest tenants to discuss green leases and how we can manage to have a greater impact when it comes to reduction within, for example, energy and water and waste. Okay. So let's go inside. Yes, we go inside. Green operations is for our operated activities. We have the luxury to have 16 properties where we can try projects and see how it affects also the buildings. And this project that I want to highlight that we are doing right now is called Kaizen. And it's a water and energy efficient management project. And Kaizen is a Japanese term, and it stands for continuous improvement. And that's really how we work. As Neeson told us earlier, it's our approach at Pandex, always be a little better. And this is about especially behavioral change among our staff and increased engagement and awareness and knowledge about how they can be more efficient when it comes to water and energy in their daily day to day work. And studies have shown that we can, with this approach and methodology, save 3% to 10% in cost savings and yes, doing things a little bit in a different manner. And of course, we also include CapEx savings that can additionally include and get us more 10% to 15% in CapEx savings and cost savings. Sounds good. You talked about integration, awareness and development. It's interesting that hotels, as you know, are an integral part of society and they also have a big contribution to the local community. And this is something that we sort of that lies very close to our heart. So we have a third area which we focus on. And this is something completely different from Energy and Water. This is more about good citizenship. And here, we want to contribute, as you said, to local society. And we had the chance to adopt in Bakerskolen in Tiensta socioeconomic challenge area. And we had agreed with the school to have 2 focus areas. The first is movement to get children the iPad generation to test other sports that they are not used to, like handball or go skiing, but also about integration. And we have helped them to create study visit, as you see here, at Skamik Star, Solentuna, but also work experience opportunities also in collaboration with our business partner Skandik with 6 of their hotels. And it has been very successful, so we will include more companies this year, not only hotels, because our aim is to broaden up and open the world for them and also facilitate the possibility to get contact network and come out and try new jobs. Very good. Call us and then we can get some good things going. Exactly. Thank you, Caroline. Back to you, Anders. Thank you very much. Thank you, Caroline. Oh, my leg, not so good. So strategic position. Next year, Pandox turning 25 years OE celebration. And I think I can say over this close to 25 years that we have had a strong growth and this come from 3 drivers. The first driver had been the strong hotel market. We had been active in that market and we have done many profitable acquisitions. The company, when we started this in 1995, we have SEK 600,000,000 of assets, quite bad assets, all of them in Sweden. Now we have €57,000,000,000 is 87 times growth. We have number of countries has increased from 1 to 15 and cities from 15, as I said, small cities in Sweden to 82 and good hotel markets across Northern Europe and Canada. We have also expand the company. When we did a comeback in the stock market, we said that we would like to enlarge the company. We'd like to do it more diversified. We have expand the company by SEK 19,000,000,000 the last 3 years or 4 years. We are expanding U. K, Germany, Ireland, Austria, Belgium and in the Netherlands. We also sold out hotels for SEK 1,500,000,000 in Belgium and in Sweden. So this is how we look today. We had a very well diversified portfolio today, premium hotels and upper mid market hotels, 144 property totally with 32,000 rooms. For the market value is close to €57,000,000,000 120 8 is owned and leased out, representing 85% of the property value and demonstrate this our core business. And 16 hotels with 5,000 rooms and with the turnover for close to SEK 2,500,000,000 is operator activities tells we own and operate ourselves. It's representing 15% of the property value. The strategic position, also geographic has a strong balance today. Before we were just a Scandinavian company, it's still our home market with 45%. But in Central Europe, we now own 32% of the value coming from Germany, Austria, Switzerland, Netherlands and Belgium. We are 21%, the new upcoming is U. K. And Ireland and 2% in Canada. This is something we are very proud of. We had most likely in Europe and one of the world's best portfolio of brands and partners. And then, of course, this is a network and this is this give us knowledge and this give us information in a way that very not easy to copy. And it also give us the chance of tailor made strategy hotel for hotel. Our strategic position when we talk about what we should have in our portfolio is based on 3 categories. We like to own hotel in international markets like London, Amsterdam, Dublin, Montreal, Brussels and Berlin. But also in domestic cities like Buda, Leeds, Genshoek, Dortmund and Wolfsburg. If the international cities are very dynamic, their domestic is rather stable. And then, of course, we would like to have hotels in what we call regional cities like Stockholm, Basel, Hamburg, Munich, Copenhagen and Cologne. If the international cities are very international and driving international demand, the domestic is very local, the regional had the best of the 2 worlds. So like Stockholm, it's still a very local regional business, but it has a flavor of international business on the top. So this is very important. As you can see on the next slide here, you can see that what is dominated is the domestic and regional cities, which is very important and then we can then you can understand this it's what we have in Pandex is rather stable. This gives us also a picture of where we have these different hotels. So the international is in London and it is in Karlsruhe and it's in Vienna and it's in Brussels. But most of them, as you said, is regional and domestic hotels across Germany, U. K. And Scandinavia. Here a few example of international flagships that we owned. Hilton London Heathrow Airport is linked to Terminal 4. It's one of the few hotels on Heathrow, which has a direct link to 1 of the airports. 3 98 rooms ranking at 1 of the best airport hotel in the world. We have a long lease there with Hilton. And Vienna Airport is the largest airport hotel in Vienna Airport. It's a growing airport, little bit smaller than Stockholm, but it's a growing airport. Park Hotel Amsterdam, absolutely city center, the same as Hotel Berlin. DoubleTree by Hilton, we had changed brand from Hyatt to Montreal to Hilton to become even more DoubleTree by Hilton become even more international and D Hotel in Brussels, the big landmark and the big meeting hotel that we own in Brussels. All of them has is international hotel and in international markets. Then you have regional flagships like Hilton Stockholm Solutions, Scandi Copenhagen and Radisson Blu Colune. They are very strong hotel, have a strong local position, but have a lot of international guests. And finally, domestic flagship like Dortmund, Radisson Blu, Leonardo Wolfsborg, Jureaus in Sheffield, Scandic Tampere and Elites 2 Hotel in Johan Schieping. They are local hotels with very strong local position and it's important to have all these 3 categories. So that take me to the first conclusions. Specialization is itself, which is a very important part of our business model, drives value. The second one is that we have now reached a pan European position, which creates opportunities for PanDocs. And lucky me, I work with the best people who make these things happen. Now I would like to hand over to Ennado, top scorer in the office, Lea Ngo, US team Pandas for 15 years. At least 12. At least 12, okay. It looked like 50. I'm not that old. Okay. Thank you. That's the one. It all starts with operations, profitable operations and hotel profitable operations. Independent of whether it's an external operating handling our property or whether it's PanOx itself, who is the operator for our hotels. For each property, it's important to have the right business model, the right business partner, the right agreement structure, whether it's a lease or a management contract or franchise, etcetera, the right hotel product, optimized efficient revenue management and then also right segmentation for that hotel. The way Pandox creates value, as I said, it all starts with profitable operations that of course gives increased cash flow, increased growth in cash earnings. This increase the value of the property and the airport now. It enables a sound financial platform and financial flexibility in the sense that we have sound LTVs and also we have a possibility to refinancing when the value of the properties increase. It enables profitable investment opportunities and development in existing portfolio. It enables opportunities for accelerated growth through profitable acquisitions and also enable sound distribution of funds to our shareholders. I will come back to these boxes. My colleagues will talk a little bit more later on in the presentation about especially about our investment cases and acquisitions we have done for the last 2, 3 years. We have since our IPO 2015 had a very fast business tempo. We have more than doubled our net operating income from NOK 1,500,000,000 to more than NOK 3,000,000,000. We have also more than doubled our cash earnings from below NOK 900,000,000 to almost close to NOK 2,000,000,000, which is, if I may say so, quite impressing. Our portfolio value has increased over this time 114%. From December 2014, NOK 26,500,000,000, it's now worth around NOK 57,000,000,000. Majority part, 72% or NOK 19,000,000,000 comes from acquisitions. 26% or close to NOK 7,000,000,000 comes from unrealized value changes, increases value of the portfolio. And I. E, it's yield compression of course, but even more importantly, it's the growth in cash earnings and cash flow that increases the value of the portfolio. 9% or NOK 2,400,000,000 is what we have invested for the last since 2015. And of course, those investments have been important value drivers for the increased value of the portfolio and will also be an important driver for the value increase going forward. 13% is currency, NOK 3,300,000,000. The majority part of our hotels are outside Sweden. And then we also divested SEK 1,500,000,000 where we where the timing and price were right. The growth in Epranav has in turn increased more than 70% over this period, supported with strong earnings and solid value increases in the portfolio. If you look at rolling 12 month as of Q1 this year, then the growth in EPRA NAV has been more is more than 15%. Pandex policy for loan to value LTV is between to be between 45% and 60%. Our financial base has been stable and sound over time and this is despite we acquired for SEK 19,000,000,000, we invested for SEK 2,400,000,000, we divested, yes. Still this time, the LTV has basically been stable below 50% with an exception of 1 year here. This is also taking into account 2 new share issues of NOK 2,500,000,000 as well as, of course, yearly dividend. And the Q1 number here is adjusted for the dividend we paid out in the Q2 in April. So we've been around 47% to 49%. The loan portfolio consists of SEK 28,400,000,000 of multi currency loans and credit facilities secured primarily by mortgage collateral. Our average interest rate is 2.6%. Our average repayment period is 3 years. And also importantly, we have NOK 3,600,000,000 in cash and unutilized credit facilities as of Q1, which can come in handy. We believe we have a balanced and sensible allocation of capital. So for investments, for profitable acquisitions and also distribution of funds to shareholders. Pandox has had a dividend policy of a payout ratio of cash earnings of between 40% to 60%, where the average payout ratio over time should have been around 50%. You see the last two couple of years, it's been 44% 42%. And on the right hand side, you see the actual dividend, which has been paid out since the IPO over a total increase of 24% since 2015. As many of you hopefully have noticed, we sent our press release today, Pandas has decided to adjust this target range of dividend payout ratio from 40% to 60% to 30% to 50% with an average payout ratio over time to be around 40%. This increased financial flexibility, we believe, will enable Pandox to catch growth opportunities while still having a sound financial platform. And we believe it will create value for its shareholders in a growing hotel market. So we have a proven and profitable model for our value creation. We are committed to growth and shareholder value. And we do believe we have a balanced approach to capital allocation. And now I welcome Jonas to tell you a little bit about who he is and what his area of expertise is. Thank you, Leah. My name is Jonas Turner. I was introduced as an old fox in the firm. I started in 2005 and I have had slightly different positions in the company. Now I'm heading up the Business Intelligence department, which is a department consisting of basically 5 analysts doing a quite wide variety of different tasks. For instance, transactions, valuations, a whole wide range of business cases, benchmarking of hotels, budgeting forecasting, business controlling and maybe most importantly, support to our business area managers represented here today by Maarten and Erik. So let's jump into the next section at once. We call it key concepts for hospitality industry. It's a short recap, maybe a bit educational. So let's go. I just want to remind you that the main driver of hotel demand is general economic activity. And the most important components of that in the national accounts is consumer spending for predicting or explaining the leisure side of the business and business investment for explaining and predicting the business side segment of hotel demand, meetings, stuff like that. There are, of course, other drivers as well. There's a lot of things going on in the market. I will come back slight on that later on just to give you a flavor. Economic activity, other drivers, obviously gives us the hotel demand. It meets supply and we get occupancy at some sort of equilibrium price. The product of occupancy and average price is RevPAR. More simpler put, revenue per available room. And that's the key metric for the industry. It's a key metric for an individual hotel. And if you compare it to a competitive set or a market, you get very good data on how to act upon this hotel demand. It's also important to remember that RevPAR only refers to the room revenue part when you read the report, the room revenue part of a hotel. So basically 25%, 30% of revenues are excluded from the equation. So that is food and beverage sales, meeting room rentals, spa rentals or whatever other types of services that the hotel provides. So that's good to know. Meaning that the RevPAR figure that we report does not necessarily translate into the total revenue growth in our operating activities. It nor does it necessarily mean that the repo growth that you see is reflected also in the rentals that we get on our property management side. It's important to know. So if you look a bit on how demand looks like globally, domestic versus internationally, The domestic demand, as Anders told you a bit before, is the most important driver for the hotels. These are global figures. So roughly 70% of yes, I said that 70% of that. There are variances of course between destinations and countries. For instance, Spain, traditional leisure market has 55% of international demand versus 45% in domestic demand. And more mature or should we say traditional markets like U. K, big hotel markets, U. K, Germany has a domestic side of domestic demand of 85% roughly and only 15% of the international flavor. Higher international share, you're more exposed obviously towards international demand, so global demand, global events, trends, shocks, exchange rate fluctuations, stuff like that. These are markets the international markets are more dynamic, but still more volatile. Anders showed you before that Pammuz demand profile with 80% roughly focused towards the local and regional demand side and 20% towards the international side. That is what we think is a very balanced demand profile for PanDocs. Focus is, of course, for many countries or destinations, sorry, on the international side because this is the more fast growing segment part of the part the more important the more growing faster growing segment. So mainly due to a growing global middle class and improved connectivity between destination and countries gives you more travel. Let me just show you the hotel cycle for a while. Here divided in 4 categories: recovery phase, the growth phase, maturity phase and the declining phase. After a supply shock or a slowdown or a recession, we always come into the recovery phase. This is where occupancy is relatively low. The only way the main focus for the operators, the hotel areas is to get heads in beds. That's the main focus. They don't have that much opportunity to actually increase price at this stage. They're more price takers. In the second growth phase, obviously demand continues to evolve and increase and the operators have a stronger possibility to increase their rates through negotiations with corporate contracts or more importantly, when occupancy is rising, you get more compression nights and compression nights mean full nights. It's really those nights where you can yield up pricing in the hotel industry. The maturity phase, of course, supply growth tends to balance out with demand growth. What is left for the operators to work with is the price and segmentation, meaning that they can sacrifice a bit on the occupancy side to get higher paying customers because switching occupancy for price is very profitable for operators. So the driver in the recovery phase, occupancy, rate and occupancy rate and kind of good growth in the recovery phase, very strong growth in the growth phase obviously and some growth in the maturity phase due to rate. The declining phase often comes with a shock or a supply shock or whatever happens in the global world. Demand falls and ADR follows suit. If you just look at the supply side of business, it's normally so that most of the supply more supply is coming in, in the late growth phase or the maturity phase. So speaking of supply, we saw that for Europe last year, supply increased 1.2%. At the same time, the demand increased 2.3%, nearly double. The pipeline for Europe is dominated by large hotel markets, Germany, UK, France, Turkey is included and Spain. For PANDOKS, supply growth affecting PANDOKS quite a lot for the time being is the submarket of Heathrow. We have it more and more in Copenhagen, Oslo and some regional cities in the U. K. But on the other hand, we have a lot of markets that are not so much influenced by new supply coming in Brussels, Montreal, Stockholm for the time being and many regional markets in the Nordics as well in U. K, Germany. So with that said, I'm handing over back again to Anders. Yes. Thank you, Jonas. Thank you. Yes, you can all see all the top scores. In 30 years, I will leave the company and the platform of management will be there. Oh, 35, sorry. The Pandas platform, where we are today and how we see things. We are in many ways a new company today compared to the company who was entering into the stock market for 4 years ago. We are we said at that time we would like to be larger and more diversified and the company is much bigger and much more international compared to 4 years ago. One important driver for this had been acquisitions. So we should now take a deep dive into this and see what we have done and the actions what we have taken and the result. We have done since 2015 3 portfolios, acquisitions and 5 single assets. The first portfolio was 18 properties in Germany and sale and lease back together with Leonardo Hotels for €400,000,000 that was done in December, the year we come back to the stock market on the brand of Leonardo Hotels. The driver here was that we saw it was mid market hotels was underperforming and we had profitable lease signed and we see this is something we really can do and we understand how to take more market shares into hotel for hotel in with an extension investment program. And of course, we get a German footprint as well. We have a massive program on this. 3,000 room of 3,400 had been refurbished in some way and we had extended the hotel in Volusborg with more rooms and a more a bigger meeting center. The beauty for us is that investment mostly had been done by the tenant. That's a part of the agreement when we acquire the hotels that they see sale and lease back. So far the rent has gone up by 14%. Then you should remember we started this at the beginning of 2016. We had done a lot in 2016 and 2017. It mostly had done 2016 and 2017 and now we see a strong increase of hotel rental. That being market value got up by 29% and the yield on cost is today 7.5%. It was 6% when we enter this portfolio for 3 years ago, 3.5 years ago. So a good example of think we can create together with our partners value. One of the hotel in this portfolio is Leonardo Real Hotel Frankfurt with 450 rooms located in the central in a very regional market with lot of international guests, but also strong German footprint. Another one is a premium hotel in Dusseldorf, Leonardo Hotel Royal in Kun In Salle, which are there for all of you who know Dusseldorf, it's the premium city, the premium area of this Dusseldorf. 253 rooms has been totally renovated. And then we have here 4 mid market German hotels also including in the portfolio, Munchen Glabag, Leonardo, Hanover, Karlsruhe and Hamburg City North. These are great mid market hotel just renovated in Germany for German guests. The next big portfolio acquisition we did was 7 hotels in Europe. We bought it from Invesco in 2016. For €415,000,000 we get 1700 rooms in brands with N8, Radisson and Park. We could expand the pandogs in Germany, of course, but also in new countries, Austria and Netherlands. The driver was that we saw an improvement potential because of the private location. All of these hotels, high quality hotels, a very strong local location, premium product. And we saw that they will not have taken all out of the potential. So we signed up this with profitable lease. We are taking lot of actions. The Radisson Blu has been totally renovated. NH Airport and Park Hotel Amsterdam is ongoing. And 3 hotels Salzburg, Frankfurt and Munich are pipelines that we will start beginning of next year. This is the portfolio with under development, where we see a good potential. So far the market value has increased by 8% and we see potential already this year with €3,000,000 compared to last year and is more to come. This hotel in Cologne, 3 93 rooms, City Centre Cologne, close to the exhibition center, very close to Laxnes Arena, which is the largest indoor arena in Europe. Totally renovated, fantastic strong location. And now this hotel has coming back at the beginning of this year and is pumping in new cash for us. The NH Airport is ongoing big renovation. That was the 499 Rooms Hotel, the same as Park Hotel in Amsterdam. And as I said, we have 3 more hotels in pipeline on this portfolio. The 3rd big portfolio acquisition we have done was December 2017, just before Christmas, that we announced that we bought 21 hotels in U. K. And Ireland. And we bought Yurisine, 4,300 rooms of the brands of UroCine and Hilton Garden Inn for GBP 680,000,000 The driver here was that we saw improvement potential, but also was a complicated transactions that very few can do. And they give us an excellent footprint in top locations in U. K. London, Manchester, Birmingham, and Belfast, and Dublin, Glasgow is just amazing. And that we could in one piece having a totally footprint in the Europe's next 2nd biggest market. What we have done, work a lot with the reorganization. What we did, we acquire a fully platform of 36 hotels and 20 properties 21 properties. We had reorganized it. So we have sold out the platform to Leonardo or to Urozine. We have signed 20 new leases with Urozine and we have taken over Hilton Garden Inn in Heathrow in in own operations. That took some time to complete. That is done. We are focused on segmentation and pricing at hotels to make sure that we are taking out the full potential. And we start now with renovations together with the operator and extensions possibility as we see in the next couple of years. Growth potential from previous renovation that we're now working with the price in the segmentation. Last year, the RevPAR growth was 8 percent compared to market 1.5%. So we see some growth potential even for this year. And that take me over to the single transactions, which Jonas will take. Thank you. Thank you, Anders. Thank you. I'll just lead you through the single assets that we have acquired. Very interestingly. So Sorry, do you want to say something about that? Nice to tell. Yes. Sorry, back again. In late 2016, we acquired the Hilton Grand Place Brussels, absolutely sweet spot in Brussels between the central station and the famous square Grand Place. The plan was basically to firmly position the hotel in the premium segment by a refurbishment of rooms. The rooms are good, but in order to get the price we wanted, we have to upgrade the rooms. We put in new management and we introduced some productivity systems. This is an operating hotel, I would say. Productivity systems for accurate forecasting, for the right manning, for the right planning and to be able to follow-up on that, very important so. We also discovered some unutilized areas that we leased out to a retailer and we made the public areas more attractive. Between 2017 2018, we increased NOI with 41%, okay, in a good market environment, but that you can see really what productivity measures can do to the profitability. Still strong profitability opportunities in this hotel and development. We have a potential to flip this currently management contract into a franchise contract later this year. So it makes us having even more control over daily operations. Nice hotel. The next one, this is very interesting, Silken EU Berlin. This was actually Silken was a Spanish operator that went bust, but they had one asset in Brussels. So it was auctioned by the administrator. It's a very strong location. It's next to the famous Perlemont building in the EU district. And this came to be a very fast round trip in the integrated business model of Pandox. So first, we bought the operations as well as the property. We had to revitalize management because I mean, they have been really without compass for a long time with the mother company went bust. We refocused the business towards the business segment and the governmental segment that's just around the corner. Now to support that strategy, we did a refurbishment of rooms, better catered for the business guest. In parallel, we started the discussion, Martin, wherever you are, started discussions with NH, another Spanish operator for a variable lease contract and that did materialize in February 2018. So now we have a very profitable lease together with NH. We share risk, we share upside and we share investments. So this is kind of nice picture. I have to the right a couple of 100 meters you have the Bare Limon building. So it's a very strategic location in that area. Next one, the Hilton London Heathrow Anders Menswe T4, that stands for Terminal 4. It marked our reentry into the U. K. Market before Jiresin after exiting the Hilton Docklands in 2014. Very good size, 400 rooms basically, direct access to the Terminal 4 at 1 of the busiest hotels of the world, very tempting. Operations Hilton is operating very well performing, strong guest scores, very, very strong guest scores and it came with a variable lease contract. So it ticked basically all the boxes even though we know that there was a lot of supply coming into the market. So this is a long term play for us. It's in a good state of repair. We don't have to do anything basically, but there are some planned renovation for public areas. So with plans of Heathrow future plans of Heathrow, this is a very good position to be in the long run. Yes, nice. We have a small pond there as you see. This exciting hotel. These are one of the grand old ladies of the UK hotel market, the Midland Manchester. We bought the same style together with Fattal and the JuriSync team and we created same style. We took over the property, they took over the operational assets and we set up a new variable lease contract between ourselves. And this is a very strong case for value add investment for repositioning of the hotel in the very prime part of the market in Manchester, increased market penetration or increased market shares through higher pricing, higher ADR. We will support this with a joint investment together with JORIS, GBP 11,000,000 starting in Q3 to become one of the best or if not the best hotel you mentioned. So as you see this grand old lady from 1901, I think it was finished. So you see the openings here are actually where the horses and carriages came through to drop them off. And this is part of the restaurant where Henri Rolvs met Mr. Royce and formed Rolls Royce in this restaurant. So it's a very interesting history as well as a ghost in one of the rooms. I don't know which one actually, but I know there's a ghost. At the same time, we acquired this one, the reds and blue in Glasgow. But compared to the Midland, this is a very modern property with landmark architecture, very efficient hotel, great logistics for meetings, for business guests, for leisure guests, prime location in the city, shopping area just around the corner as well as the central station. We have some rate potential here maybe on select room refurbishment. We will see. Yes, this is a long play also in Glasgow. The city has exploded the capsule of 15 years is in total revitalization of the city and that will continue. So this is also on a, should we say, complement to the Jurexing we have as well in the city. Really nice hotel, I would say. It's very, very good. So Anders? Yes. Well, thank you, Jonas. You see, nice to tell. Yes. And you know the first I get an SMS from after you have to know it as someone from Hamburger to be us, who sent me the first SMS and congratulate me when we bought this hotel in Glasgow. There can only be one. Safa Nulsen, will it be? Henrik Larsson, of course. Who is that? So, well, conclusion from this. We are a larger company, more diversified and we have a stronger market position at least if you ask us in Pandox. Now we will take a break, 15, 20 minutes and then we will go back then we come back to more future drivers. So coffee, don't leave, come back exciting second half. Thank you very much. Okay. It's old folks again. Next section, the key growth driver for Pandox. We have divided into 3 pieces: the hotel market in itself, value adding investments and acquisitions. I will start talking about the hotel market in a bigger picture. This is the long trend European RevPAR trend since 2,007 up until Q1 2019. 2,007 marks, first, I would say that this is the RevPAR growth on this axis and you have also supply and demand on this axis. You can see this beer is the supply side, meaning Utbud and the demand side, this one. So 2,007 was the last year of the previous cycle. Then we had the great financial crisis, 2008. And since 2010 in Europe, we have had RevPAR in a positive territory. 2 hiccups basically, 1 in 2012, spelling Euro crisis and 2016, unfortunately, terror related Paris and Brussels mainly really affecting the total European performance that year. If we look at the dotted line, this is the average RevPAR annual growth that we have seen from 2,007 up until 2018. If you take out the 2 big outliers in 2,009 2010, we have a growth RevPAR growth annually of approximately 3.3%. Looking at the start of 2019, it's a bit softer start with a bit higher pace of new supply coming into the market. I know this is a very blurry picture, but these are the other drivers of demand that I was speaking about earlier. I will just briefly run through these. We have actually in the annual report a very good section, thank you, Mr. Berg, that covers trends and drivers. And I think if you want to read more about that, you can do that there. Just going to mention the growing middle class is a very, very, very strong key growth driver for the industry. As economies and countries climb up the ladder of spending, you start with obviously what you need, food, housing, you buy cars eventually. And then quite high up, you start consuming travel and and tourism, 1st domestically and then when you're very high up on the ladder, international demand. I would say in the together with increased connect oh, fuck, sorry. Sorry for that. Increased connectivity, that's one thing. I mean, there's an obvious driver of more and more people traveling, but you can also you can fly longer and cheaper nowadays. I put up disposable time here because in the Western world, it's not this is sick. Money is not the constraint. Time is the constraint. So many people are consuming differently the travel and the hospitality services, meaning that they travel more often. But when they do, they tend to spend a lot of money. And that's a key driver also in the industry. People that has more time, older people, affluent people has also become a very much stronger part, a much bigger part of the travel and tourism market. The feeling of an ageless mind, stay healthy, live longer has a very strong impact actually on travel and tourism spending. And the purposes of travel today, there's many ways a reflection of your lifestyle. There are more and more reasons for traveling. Looking 10 years ahead and the number of households that will start consuming travel services or hospitality services is quite a lot. This gives you an idea of the strength of the future demand. It's not only these are new traveling households by 2029. It's not only China and India driving this development. It's also mature markets such as Germany, UK and U. S. Is going to provide a lot of new more new households that will start traveling. Also interesting to see Mexico and Brazil is going to chip in as well. And this lays the very foundation for solid growth prospects for the industry on a global basis. So if you look at with that background, the total global passenger numbers are predicted to increase by 4.1% over the next 10 year period. And at the same time, WTTC is expecting spending or traveler tour spending of pretty much the same growth rate, 3.6% annually. GDP at the same time is predicted at around 3%. So you can see it's a clear premium to that compared to other to the global world in a bigger sense. With that said, I'll turn over to Anders again to talk about our value added investments. Thank you. Another strong driver, and we talk about it, where we have coffee, its own operations, what will it get? 1st of all, as Jonas was into in the hotel business cycle, at the beginning, at the recovery growth phase, the market are strong, but not so strong at operator would like to do a lot of investment and upgrade hotels because they can't see the potential or they're afraid of it. When you come into the end of the growth phase or into the maturity phase, then they stand the rate is driving their revenue and they see a big potential of continuously increased quality and better rooms because they see that the rates are driving a strong conversion. And that's why we are so active now because we are coming a bit into in the business cycle that we can sign up a lot of good agreement with our partners. We will cover it by recently completed, ongoing and pipelines. Pipeline means decided but not started. And these are value adding investments for an average return of something around 8% to 12%, otherwise we don't do that. Let's start with the recently completed. This is Harry's 10 example for approximately SEK 800,000,000 which is done. Some of this was done last year. Most of this was done with work with last year and that have, of course, some sort of press on our RevPAR. Leonardo Portfolio in Germany, we have been talking about. Very strong growth in rental income. Radisson Blu Build, we are talking about upgrade with more room or not with higher standard of rooms, the same with these 5 hotels with Scandic. It leads to Park Avenue and Stoa Hotel in Sweden is the same. We upgrade hotels, more meeting rooms, more funky lobbies, better food and beverage activities. All in all, an investment that we believe with the current trend, they will give the hotel more rate and more rate means a strong conversion into cash. Let's look at them more in details. One of the hotels that we have done and were ready last year in December was hotel Hubert in Brussels. This is hotel who was a mid and boring midmark hotel and we had converted the reposition into a cool, funky hotel, more design, more lifestyle. €3,400,000 investment, 100 rooms, market value has increased by 40%. The rate has gone up from €79,000,000 to €125,000,000 In a strong market, yes, but also because at this hotel talking to a totally new segment, which we now fill up the hotel And in I think it was in March, we had something like 94% occupancy, which was fantastic. This hotel we operate ourselves. The next example is the Leonardo Voluspaoy, which we do together with Leonardo Group, investing €11,000,000 for having 130 more rooms and a new meeting center and positioned hotel as one of the leading hotels in Volusborg. The return on equity expected to be 10% already this year. Eurus in Belfast, same story, investment in more rooms that we add. That's a no brainer if you have that possibility. 30% expected rent growth this year compared to last year. This is also property management as Vorosberg. Hotel Ballet in Berlin, we are done Phase 1. Phase 1 means 500 refurbished room for €10,000,000 NOI has increased by €1,300,000 Call it half of it is market and half of it is our own performance. So it's a fantastic acquisition, but we now look fantastic investment. And we are now looking for the Phase 2, which means event areas, meeting areas and do it a little bit more funky and this more urban style that very few hotel has seen in Berlin. Operator activities is a 700 rooms hotel. As I said, we did have done 500 of them. Let's go over for growth drivers. Let's go over for something that we are doing at the moment. Park Hotel Amsterdam, Vienna Airport, Stockholm Park and Wilmags Hotellet are hotels that are coming back now in Q2 and Q3. We have been working with them for more than a year and now they're coming back and will give us good rental income the rest of the year. Rennes and RUBAS sold DoubleTree by Hilton, Skandig Molde and these 2 airport hotels in Finland, Buna Cyn and Hotel Piloti that will be something we will end up in Q1 or Q2 next year. So it is ongoing. This is of representing €500,000,000 and again of return expectation in the range of €8,000,000 to €12,000,000 And then pipelines. All these are decided and we're gradually starting 2019 2020. More rooms in Clarion Collection articles, more rooms in Scandiclulio, more rooms in Quality Park Sudotelio. We will upgrade the Midland hotel, Bali. We will do NH Brussels. We will change brand to know how and we will do these 3 NH hotels, Salzburg, Frankfurt and Munich, we're starting beginning next year. Have a look at these 2 hotels from Brussels. This is Hilton, Brussels City, 285 rooms hotel. We own and operate it under a franchise with Hilton. We will change brand to Indigou. Indigou is a lifestyle brand in belong to the Intercontinental Group. That investment has already started and it will be funky cool, little bit about hotel, Hubert, but it's bigger. In a fantastic location, you see all these big, big meeting areas for business and leisure district, which Camp Plus has developed into the next couple of years. And we believe that the Hilton brand, the Indigu will more match their consumer trend in this local part of Brussels. This hotel, we also own and operate. That is the Crowne Plaza, 360 rooms and a big meeting center. We will start in the renovation of this hotel already this year and hopefully extend it with this building. There is a land we already own and we have a very positive discussion with the city that we can do another 150 rooms and we can do more meeting center. Given this, it will be the largest hotel and meeting center, one of the largest in Netherlands. Here you see it from the other side. So here you can see example of 2 great value driving project that we are 2, we have start with the Hilton. We will start here this year and this is something we hopefully will start with 2021. So now we come to the final phase, final part and we need the best of team has. Okay. Some conclusions. Let's look at growth, growth since 2013. This is a plus 6 year period. And we look at over the cycle, the average GDP growth in Europe has been 1.8%. The hotel market has over this period grown with 3.7%. And pandox has over this cycle over since 2013 grown with 4.5%. When we look at property management, 3.8% and operating activities, 5.5%. So the hotel market has grown more than GDP and Pandas has over this period on average grown more than the hotel market. This like for like growth, this is like for like base growth. It includes hotel markets in different phases of the cycle. It includes effects of new capacity coming in and it includes investments both positive and or negative initially and positive effects. So this is base growth over the cycle or over this period. It's not plotted in here, but if you would then like for like growth in net operating income, it would have been a percentage point or so even higher the growth rate for Pandox. So what is not included in this number is, of course, the historical acquisitions we have done. We have, as I said before, acquired since 2015, NOK 19,000,000,000 of assets. And going forward, we do expect to further accelerate this basic growth, which is showed on another page, with further acquisitions. We're looking for single assets. We're looking for smaller portfolios, but also large portfolios. As a conclusion, I love this model. This is how we create a lot of value. It's a sort of ongoing machine. Again, this starts with profitable operations, increase growth in cash flow, meaning increased values of the property, giving a financial sound financial platform, being able to refinance having solid LTVs, giving opportunities for profitable investment and development in the existing platform in the existing portfolio and giving opportunities for profitable acquisitions as well as distribute some dividend to the shareholders. So this goes on and the more cash flow with more value, it gets refinances and etcetera, etcetera, and on and on and on and on it goes. So with the risk of repeating myself, Pandox has a proven and profitable model for value creation. The conditions for base growth are at least to be in line with the hotel market over the cycle. And on top of that, there are good opportunities for accelerated growth above the base growth supported by new acquisitions. Yes. That concludes the presentation part, and we now open up for questions. If you have a question, please wait, so I can hand over this microphone to you, sort of for respect of the web audience that we have. And maybe you could please state who you are and then of course go ahead with your question. Yes. We start with Albin Sandberg. Thank you. Albin Sandberg, Kepler Cheuvreux. So the first question on the dividend, obviously. And I just want to make sure, are you trying to signal slower economic cycles, so you need to keep more cash in the operations? Or is it simply because you want more firepower for acquisitions? It is simply because we want more firepower. And And wanting the flexibility. We want to be sort of sort of it takes some time. Of course, we need to be planning. We wouldn't change dividend just by that. It gives some flexibility. As you've seen, it has been increasing. It's nothing dramatic actually going from 40 to 60 with an average of 50. We're going to 30 to 50 with an average of 40. So it's signaling that we want our flexibility to finding good growth opportunities and we want to make sure that is also creating value for the shareholders. And also how committed are you to keep the dividend in absolute terms? I think it's a question for the board. But as you've seen, we have every year had an increase in the absolute term. So And my final question is just, I mean, for us who are listening to your conference call and connection with Q1, it seemed to me like you gave a little bit more downbeat view maybe on the market than what you are kind of giving here, at least that is my impression. But I mean, let's say, over the next 1, 2, 3 years, Anders, what do you see in terms of base growth rates for hopefully, PANDOK specifically, but maybe then the market? I think the trend that Lea shows will continue. There will be a good hotel market, but maybe slow in Scandinavia that have been a couple of other years and maybe a little bit stronger out in Europe. That will be something where we benefit because of our diversification portfolios we have today. Big acquisition is coming not every year, 2019, maybe a little bit slower in terms of large acquisitions, but it's smaller. Single acquisitions is there all the time. So I think the growth perspective, as I said, in the business case, that is a good market and that is a possibility for us to expand also with acquisitions as we have done the last couple of years. Maybe not a big portfolio every year, but the rest of it will definitely will be there. Thank you. Felix Zorn, Carnegie. Starting off with acquisitions. Do you want to expand into new geographies primarily? Or is it more broadening your footprint in some markets and any particular markets you would want to highlight? My favorite sentence, we want to be have it can be anywhere as long as it's profitable, profitable properties. Then of course it's easier when you dig where you're standing, but profitable properties rather than special footprint or was it a company? Yes. Schiaven Hotel, as our Chairman said, hotels that really are very famous. And in the luxury market, we don't like. And those we can buy tomorrow. We like to buy profitable hotels. Where they are, it's not so important. But of course, we don't want to buy 150 rooms hotel in Madrid if we don't have another couple of hotels in Spain as well. I'll try to rephrase the question and see if I get another answer. But basically, what I was looking for is, is there in the transaction market, are you seeing any larger opportunities in any specific geographies or expect any opportunities to arise in the next 12, 24 months? I will say that we had inquired in the last couple of years out of Scandinavian, Germany and U. K. Are the best opportunities. They're also the 2 biggest hotel markets, so that is more hotels, more hotels to buy for us. So that is quite simple when you look at it from that way. Spain, yes, maybe Portugal, start to be expensive. Italy, maybe, not super enthusiastic. Afghanistan, not. Canada, love to, if we have a chance. Then my final question on I mean comparing PanOx now with what it was connection with the IPO, it's a lot more international these days. Do you see any obstacles entering new markets given that you don't really have a knowledge edge when you enter new markets? The knowledge is not linked by countries. They're complicated by stepping into new countries that you need to have a new legal setup and you need to have this the infrastructure come to my country. The knowledge in the industry is coming from all the categories. With Stockholm, so Telen market look more like Copenhagen and Munich and Frankfurt than it look like Erbru and Johan so when you have all the 3 categories, you more or less come by every by tells everywhere in Europe today, I would say. Thank you. Stefan, Schnee. Going back, follow-up on Albi's question on the dividend there. Two parts of the question. First, what triggered you to actually make this decision? Must be something some opportunity that arose that you said this is why we do it? What's the background? And then secondly, connected to that, the opportunities that you see is offensive, as you say. Are they on the M and A side primarily? Or is it what you presented here on investing in your current portfolio primarily or is it an even split? Thank you. I think on the first question, I think it has been discussed. As you said, we've been very active company at a fast business tempo. So there has been a lot of profitable investments and acquisitions to be done. I think the board thought together with the management of Handox that this would today and this would be a good setting of actually explaining how we look at dividend and capital allocation and between investments, between acquisitions as well as shareholder value. So it's nothing dramatic, it's nothing urgent, it's more to align what maybe we've seen already the last 2 years which where we actually been around 40%. So not too dramatic. The second question, I can't remember. That was about investments. Okay. I can take it if you want. Stefan, you can we have never invested so much money in existing portfolio as ever, and that is two reasons. The first one is that we have a larger portfolio than ever. And when you have more hotels and bigger hotels then you have more opportunity to constantly develop then into and taking more market share. That's a daily game and that's an active ownership we do every day. The second reason why we also do it, but we really can sign so many deals that we do at the moment is the phase in the business cycle. As I said before, the rate is more driver stronger now than the occupancy. And we, when we operate and our partner when they lease hotels, they see a good return on this sort of investment. So that is very typical for this phase in the business. I cannot try to say that before, but maybe I didn't explain myself good enough. So you will see that this investment will continue so long as the business cycle is strong. And so that will be more important. So if you maybe have little bit less market growth compared to recovery growth phase, if you remember how it looked like, because of new capacity. Then that will be compensated by better investment in Excision Hotels. And you will see that this year and you will see that even more next year. Bierskaj from ABG and from Hammar B. I would also like to ask a couple of questions regarding the dividend policy. And the first one is, should we read this as that you're less willing to issue more shares if you find acquisitions going forward? No. This is a small piece of we see a lot of opportunities to expand the company and we would like to take every opportunities that we can see to make sure that the firepower is as strong as possible. And regarding the dividend policy, we've seen that in the past 2 years, you've been in the lower range of your old policy. Should we expect you to continue to be in the lower range of this newer policy? Or is the policy more of an adjustment to the reality we past couple of years? I think it's an adjustment to what we have seen. And as I said, as expected ratio over time is to be 40%. That's the sort of the target ratio. Then of course, the main purpose is to have the financial flexibility. Remember that it is right that we were in the lower range, but in absolute term it grow every year. And that is, of course, the target for us to continue to have that. We want the range lower, we want more flexibility. But in absolute term, continue to grow the dividend. That's absolutely target that we have. And some years, maybe not, but we don't we want to have flexibility if there's something big coming in front of you in front of us, and we can take the bite. Then one question regarding your growth outlook. Can you give us an indication of how much lower the yields are today compared to when you came to the stock market? And whether you think that will make it harder to continue to grow in the same way you've done in the past few years? Yes. The yield had definitely come down. And you see the Eurosean deal what we did for 5.6.7 that will be 40, 50 points lower today if they will be coming out. I'm quite sure it would have been. But also you also are a little bit more upper in the business cycle. So you also see less acquisitions that we did for 1 year ago. And that may be signal that the seller think that the yield will continuously to go down and the buyers would like to have a premium on the yield side now because they can see that the risk of maybe a little bit more than for 2 years ago. So that is there had to be some sort of the hidden balance in the market between these two. I don't think the yield will come down more. And to add to that, with our specialist focus, yield of course is important, but the potential to sign what kind of agreement, the more complex the sort of the setting is, the better for Randox actually because then there are fewer buyers and we have the possibility to increase the yield and the value as you've seen the value of the portfolio. It comes from our cash flow and from our investments and our expertise. Yes. Very you see that on the Leonardo portfolio that we've worked in for 3 years, tremendous good growth in rent. It take a few years before you're there. And that was a portfolio that a lot of people are laughing about as I said, why you're buying that sort of at hotels. And we said because we like bad hotels, because we think we can do the better, we have done. And of course, the growth we have had and continue to have in that portfolio is much larger than this deluxe hotel that everybody is looking for. So hotels are very you should not buy the one who is good, you should buy things who is not so good. And then of course the yield then because of that you maybe can have an aggressive yield, but you can increase the cash, and that's more important. If you say that the yield today would have been 30 to 40 basis points lower for Euroseas, and that would imply some 6%, 7% higher property value not to take into account any value creation from you. Have you seen that kind of value uplifts in your book for that portfolio? Because we haven't seen that big revisions on a group level. No, you're right. And I think that the value I think you're more an expert than I am, but you can say that the valuation market is slowly coming after them to maybe the cash and happening on the revenue side. And also external valuations with Brexit with all the sort of anxiety around U. K. Etcetera, they are not so willing to increase. Also there is some Trojat. Trojat, yes. Whatever is that in English? That it's crazy to buy in a Brexit land. That'd been the best deal we have done. Come on, change attitude. Where is the risk, Where there's no risk, there's no opportunity. So that's, of course, have been fantastic. We have bought 23 or 10,000,000,000 and price that had been 30% more expensive in Sweden, if we have bought it in Sweden. Or in Norway, it had been 50% more expense. So and then good foot put on the top. Thank you. Niklas Agla, Nordea. Just have a follow-up. You talked about the pipeline of investments, but you didn't share any numbers with us. You talked about the ongoing and the completed. And now you're alluding to that, that you're seeing acceleration in sort of the potential here from then. Could you share some numbers on 500,000,000 is ongoing pipeline including extension excluding extension of Krum Plaza is SEK 400,000,000. Okay. So it's slowing then. The commit what we said in the Q1 that we have if you look at what's ongoing, what we haven't sort of done yet put in the books, which is ongoing half of the sort of middle box as well as the pipeline which is decided but not started, that together is SEK 1,100,000,000, SEK 1,103,000,000,000,000,000,000, which we stated in the Q1 report. Then every time we have a board meeting or when we have all these people sniffing out sort of new good investments, As soon as we decide something, we add to this NOK 1,100,000,000. So and we have and we will constantly sort of add to that number, we constantly work with that number. Crowne Plaza would be another sort of big chunk added to this SEK 1,100,000,000. So when we end up in on the end of this year, what do you think the chunk will look like? We're at SEK 1,100,000,000 now. Will you sort of keep that level constant through the year? Or you see acceleration here looking at this sort of potential of the potentials? We will invest about SEK 750,000,000 this year. This year, which we actually would do, but we'll add a pipeline. They will be added for more. Same number or more, yes. But you're bigger now? Yes, we are bigger now. That's why we are adding more into it and we are in that phase in the business cycle. It is very attractive for us to do these sort of investments. And when you look at returns right now, you gave us a span of 8% to 12%, which is pretty healthy levels, must admit, given the interest rate environment and what have you in lower yields. In a normal business cycle, should we expect that you're in the lower end of the returns given that also the I mean, that cost is coming up and you're all chasing those kind of investments? Or should we what's your feeling on this sort of return outlook for those investments right now? It's pretty stable. And then again, the investments, the big chunks of investments, if you talk about Krumplaas of 500,000,000 or 200,000,000, the 500,000,000 Krumplaas hasn't sort of been decided yet. It's still a sort of in a very planning phase. They are long term projects, takes years to plan. It takes some years to actually implement. So this is ongoing all the time. We haven't seen actually that change. So it's still the 8% to 12%. Of course, it's a little bit more expensive to build when it's But it's marginally changing that return. Okay. And then I have a question of financing. We haven't touched that much about it. We're talking about growth, but it's I guess we need to finance it as well or you have to. You can't. Yes, happy to. But what's your thoughts right now? We're seeing the long interest rates are coming down again or more. Will you go out to the curve here and secure on the credit side in order to reduce risks and enable you to be on a slightly higher LTV? And are you seeing that financial cost is gradually coming down also for PANDEX because you're on a slightly elevated level compared with peers? We have 44%, I think, out of Q1, if I don't remember wrong, which is sort of non hedged. Everything else is sort of long term. We typically sort of go for 5 or even 10 years. We sort of it's a long maturity profile on our interest hedging. So I think we actually will continue to be of course, I may change, but we are pretty happy to be around the 50%. We see actually interest margins coming down in countries like Germany, for example, cheap financing in Germany, which is good. I happen to find more hotels in Germany. So it's balancing out. We don't it's been pretty stable at 2.6 for some time. We see we refinance the repayment of 3 years may look scary. We don't think actually so because we continuously refinance all the time. We have a good relationship with our banks. We sort of we refinance constantly around 60%, 65% LTVs. We invest a lot in our hotels. So of course, we also the LTVs automatically comes down. So boring answer, but no real change. Okay. And you don't see so if you were to take on a portfolio today, sort of the financing leg of that without this sort of derivatives or what have you to limit, what would you be paying all in a 3 year duration portfolio? If you were buying in U. K. Because the LIBOR is about percentage higher, then you may be at 3% if you are a hedge half or etcetera, etcetera. If you buy in Germany, maybe you are all in at so hedged at 1.5. Okay. Okay. Sounds great. Or even lower. Thank you. You've been rather positive about the opportunities in the U. K. Going back and you made some acquisitions there as well. In the Q1, the regional RevPAR was rather weak. Have you had any other thoughts? Have you changed your mind? Or do you see this as more temporary situation? You're right that the Q1 was in U. K. Regional was under expectation and London was above expectation. So you never know what's happened for a quarter. You have to see that over the next 2, 3 quarters to understand if there will be gradually RevPAR press. It is on good levels in 2018. So we are not surprised that this one of 2 quarter maybe can come down. And of course, that is some uncertainty linked to Brexit as well. And we see maybe some sort of government business coming down. But the ordinary business like tranchends and leisure is looking more or less the same as last year. So we are not negative. We are observing it. We are looking at it. We speak to our partners who have the same view. Then, of course, in Heathrow, which is part of this, there is a lot of new capacity coming in and then of course that gives a very strong press on that numbers. We need Manchester United in the Champions League and not or Tottenham, but not and not I mean not Leeds, we need Manchester United in the final of the Champions League, that's better for us. Or we or we need a match in UK, not in Madrid. That's maybe more important. Okay. So yes. Right. So I guess that concludes the Q and A session. It actually also concludes this Capital Markets Day, which was not really a Capital Markets Day, but rather 2 intense hours. I hope you have enjoyed it. We have. Thank you for all the intelligent questions. We hope that we were able to answer at least some of them partly. We will travel to London later today, meet with investors and other business partners tomorrow. And I'm sure that we will get a number of tough questions there as well. So thank you very much for your attention. Next date in the calendar for PanOx is 12 July when we will publish our 2nd quarter earnings report. Looking forward to hearing you and seeing you then. Thank you. And don't forget, the 19th November is the next Hotel Market Day. Welcome all. 19 November.