Pandox AB (publ) (PNDXB) Earnings Call Transcript & Summary

Welcome to the Pandox Q2 presentation for 2025. [Operator Instructions] Now I will hand the conference over to Head of IR and Communications, Anders Berg. Please go ahead.

Thank you very much. Welcome, everyone, to this presentation of Pandox Interim Report for the second quarter and first half year 2025. I'm here together with Liia Nou, our CEO; and Anneli Lindblom, our CFO. And today, we also have the pleasure of having both Alex Robinson, Director at STR and Henrik Karlsson, Business Development Manager at Benchmarking Alliance with us. And Alex and Henrik will provide a hotel market update on Europe and Nordics, respectively. As you know, STR and Benchmarking Alliance are both leading independent research firms dedicated to the hotel market and the views they express are completely separate from Pandox and we offer these presentations as a service to Pandox stakeholders. And as always, Alex and Henrik's presentations will be held after we have completed our formal earnings presentation, including the Q&A. So we start with Liia and Anneli's business update and financial highlights for the second quarter 2025, followed by the Q&A session. Yes. And with that, I hand over to Liia.

Thank you, Anders, and good morning, and welcome, everyone. The second quarter was all in all, stable with growth in both business segments supported by acquisitions. Total revenues increased by 2%, net operating income increased by 3% and cash earnings increased by 5%. Cash earnings per share decreased by 1%. Generally, demand remained stable, while average daily rate declined slightly. The business segment leases had a stable performance with revenues, net operating income and profitability in line with last year. Acquisitions contributed positively, including Pullman Cologne Hotel, which was taken over on April 1st, as well as a new lease for Numa Brussels Royal Galleries. Like-for-like revenue and net operating income was unchanged. In the business segment, Own Operations, both revenue and profit increased with contributions from acquisitions made in the U.K. in the second half of 2024. Demand was stable but lower average daily rates affected RevPAR negatively. Like-for-like revenues and net operating income decreased by 3% and 4%, respectively. This quarter, we had a tough comparable quarter in 2024. We have both the UEFA European championships in Germany and Taylor Swift Eras Tour. This was extra visible in our own operations, hotels in Berlin and Dortmund, which were host cities during Euro 2024. Moreover, also had a slight negative Easter effect versus last year, as well as a one-off revenue of SEK 22 million in Q2 2024 relating to Köln Bonn Airport. So all in all, tough quarter. The business outlook for the coming quarter is, however, stable. End of quarter, our loan-to-value was 46.7%, and we have large financial capacity for new acquisitions and investments in the existing portfolio. Unrealized changes in value for the whole portfolio amounted to SEK 180 million, and the weighted yield decreased by 3 basis points to 6.25%. On June 3, Pandox and Eiendomsspar announced a possible offer for the Dalata Hotel Group. The Irish takeover rules restrict what we are permitted to communicate at this stage. The proposal, which has been rejected by Dalata's Board of Directors, essentially involves a cash offer of EUR 6.05 per ordinary shares in Dalata, which values its company at around EUR 1.3 billion. On June 20, Pandox acquired approximately 2.2 million shares in Dalata, equivalent to around 0.8% of the issued share capital for a price of EUR 6.30 per share. By 5 p.m. Irish time on 15th July, the consortium must either, a, announced a binding intention to make a bid for Dalata in accordance with Article 2.7 in the Irish Takeover Rule or, two, announce that it does not intend to make a bid for Dalata whereby this announcement under the Article 2.8 in the Takeover Rules will be considered as a statement of intent not to make an offer. Our business is to own, improve and lease hotel properties to strong hotel operators under long-term revenue-based leases. We do this through 3 principal value activities, property management, property development and portfolio optimization. Our ultimate goal is value creation, which we achieved through distinct activities in our business segments, leases and own operations. Leases build upon long-term revenue-based leases with skilled operators where we share risk and upside and have a joint incentive to improve the hotel product. Our own operation is an important tool for acquiring, repositioning and transforming hotels. The optionality is important for us. We can sign a new lease, divest the property or keep it in the segment as long as it's the best option from a value perspective. Here, we have compounded annual growth rates for the markets we are currently active in. This is based on market data from STR over the period 2016 to 2025 year-to-date. Against them, we have also plotted the portfolio market value as of June 30. Obviously, our portfolio has changed quite a lot over this period, but it shows our current exposure to different markets against their historical growth patterns. As you can see, Norway has had the highest growth with 4.9% annual growth and Finland, the lowest by 1.1%. Growth in our largest market, U.K., Germany and Sweden has ranged between 3.2% and 1.5%. And these growth numbers are not adjusted for the pandemic, they are as is. The numbers on the map on the left side of the rolling 12-month RevPAR in local currency, just to give you a feeling for the current absolute differences between markets. Here, we would like to illustrate a few different yield spreads as an indication of our value creation over time. Starting from the bottom, we have the average cost of debt. followed by the blended yield on our portfolio, both at the end of the period, i.e., June 30, this year. The next 2 boxes are the average yield on investments. The first one is unadjusted for the year 2020 drop during the pandemic, where the second one excludes it. The underlying assumptions are outlined on the right-hand side of the page. The 10-year period is 2015 to 2025, for which we have aggregated investments net of divestments and the incremental increase in our net operating income. We have then divided the aggregate incremental increase in net operating income by the investment to derive an average yearly yield return over the period. It ranges from 7.4% to 11.7%, depending on if you adjust for the year 2020 drop in net operating income during the pandemic. The yield spread range from already a strong, healthy 240 basis points to 780 basis points. This quarter, I want to highlight 2 examples of recent investments that represent our way of working. We show our targets, our actions and the results achieved. The key levers are RevPAR, incremental net operating income and return on investment. We start with Leonardo Hotel in beautiful Galway in the leases business segment. Together with our partner, Leonardo, we decided upon the full renovation of rooms, backrooms and public spaces. The renovation, which was completed in 2024, well exceeded the target with a RevPAR increase of 27%, instead of the target assumption of 13%, thus resulting in a return on investment of 22%. The total investment landed on EUR 4.2 million, of which Pandox share was approximately EUR 2.7 million or approximately 64%. And the property market value uplift was 12%. Another example is Scandic Park in Central Stockholm. Here, we converted existing spaces into new hotel rooms, renovated existing rooms and public spaces as well as we created a new meeting and F&B concept. After completing the project in 2 phases due to the pandemic, the results have been strong with a RevPAR increase of 23% and 20% increase -- 23% and a 20% increase uplift in the property value. The total investment amounted to SEK 38 million, of which Pandox' share was approximately SEK 20 million or 53%. In coming presentations, we'll try to further explain our investment methodology with more cases. Here, we have a breakdown of the performance for selection of countries, regions and cities versus 2024. We show average daily rate on the vertical axis and occupancy on the horizontal axis. Thus, Origo is the point corresponding to 2024 on both ADR and occupancy. In the boxes, we indicate how much higher or lower RevPAR is compared with the corresponding period 2024. Year-to-date, RevPAR increased in the majority of our markets, mostly driven by increased occupancy, while average prices were more varied. In terms of RevPAR, the greatest relative improvement in the first 6 months took place in Nordic regional markets with Norway as a strong leader. Oslo, Copenhagen and Hanover were strong city markets. However, several important markets for Pandox was lower in the period, most notably Brussels, Stockholm and London. Alex Robinson from STR and Henrik Karlsson from Benchmarking Alliance will talk more about the underlying trends in the hotel market later in this call. We have a strong and well-diversified hotel property portfolio, consisting of 163 hotel properties with more than 36,000 rooms in 11 countries and 90 cities, with a property market value of SEK 76 billion and an average yield of 6.25%. Please note that we have yet to formally finalized the acquisition of Elite Hotel Frost in Kiruna, which is expected to be completed in the third quarter. And also after quarter end, we divested Quality Winn Göteborg, Gothenburg for SEK 57 million. We are divided into 2 mutually supportive and reinforces business segments, leases and own operations. Leases, is where the owner lease out our hotel properties stands for 80% of our property market value. In our own operations we transform and run hotels in properties we own. Own operations makes up for 20% of our property market value. And the focus of our portfolio is still upper mid-market hotels with mostly domestic demand, which is the backbone of the hotel market regardless of which phase the hotel markets cycle is in. We also have one of the strongest network of brands and partners in the hotel property industry. And this ensures efficient operations and revenue management, which maximize cash flow and property values and the continuous flow of business opportunities and also a relatively large part of the investments in Leases is shared with the tenant, which lowers our risk. And with that, I hand over to Anneli Lindblom, our CFO.

Thank you, Liia, and good morning, everyone. In the second quarter, group net operating income increased by 2% and sorry, revenue increased by 2% and group net income increased by 3%, driven by the acquisition and stable performance in the lease business segments. As Liia said, we had a tough comparable quarter in which both the portfolio European championship in Germany and the Taylor Swift tour took place. Own operations saw stable demand but lower average daily rates, mainly due to the strong comparable quarter, which affected the like-for-like figures. We are expecting continued stable growth and for comparison figures to gradually become less challenging. Cash earnings and profit before changes in value increased by 5% and 4%, respectively. Cash earnings per share decreased by 1%. Now a few words on currency. To reduce the currency exposure in foreign investments, Pandox aims to finance the investment in local currency. Equity is normally not hedged as Pandox strategy is to have a long investment perspective. Currency exposures are largely in form of currency translation effects. In the second quarter, currency was negatively measured on average rates, which we use for the income statement items, but it was positive measured on end of period rates, which we use for balance sheet items. With other words, the exact opposite compared to the first quarter. As you know, we have the main part of our hotel properties outside Sweden and denominated in foreign currencies. This explains the positive effect on property values and EPRA NRV compared with the first quarter's figures. On this slide, we show the change in the main valuation parameters for the total property portfolio year-to-date. And please remember that investment properties are recognized at fair value. According to IFRS, unrealized changes in value for operating properties are only reported for information purposes and is included in the EPRA NRV. For the first 6 months, the total unrealized changes in value were a positive SEK 194 million, driven by lower yields. As I said earlier, changes in currency had a negative impact on balance sheet items for the period, with a decline in property values of approximately minus SEK 2.3 billion in the period. In the quarter, we gained access to hotel Pullman Cologne with a transaction value of EUR 66 million. The formal acquisition of Elite Hotel Frost in Kiruna is expected to be completed during the third quarter. End of period, the average valuation yield for investment properties decreased 4 basis points to 6.0%. And for operating property is 6.88%. The blended yield was 6.25%. Here, we have the average yield, average interest on debt and EPRA NRV per share quarterly. In the period, growth in EPRA NAV was a positive 4% measured on an annual basis adjusted for paid dividends and proceeds from the new share issue. Our LTV at the end of the quarter amounted to 46.7%, which puts us firmly at the lower end of our policy range. The ICR on a rolling 12-month basis was 2.7x on a sequential basis, and cash and credit facilities amounted to SEK 2.7 billion. And on top of that, we have uncumbered assets of some SEK 2.3 billion sort of as untapped reserve. During the quarter, the positive trend from last year continued with a constructive financing climate with lower credit margins. In the second quarter, we refinanced loans of approximately SEK 3.9 billion, which makes it close to SEK 20 billion over the last 12 months. End of quarter sustainability linked loans, including green loans accounted for 46% of the total outstanding loans. Looking ahead, we have SEK 2.3 billion of debt maturing within 1 year. We have strong and expanding bank relations across our markets and discussions on future financing and refinancing are ongoing and positive. We also note an increasing appetite among banks outside the Nordic regions. At the moment, 58% of the net debt is hedged, which is a lower level than in previous quarters. And with that, I will hand back to Liia for some final remarks.

Thank you, Anneli. We are now enjoying a seasonally strong period for the hotel market. Consumers continue to prioritize travel and the initial concerns of tariffs seem to have calmed a bit. The hotel market continues to show resilience and its fortified strong underlying structural growth drivers. The comparison figures are becoming less challenging and business on the books in our own operations is stable. The event calendar in the second half of 2025 is promising, with, for example, wages in the U.K. and a well-filled trade fair calendar in Germany. As before, we expect a positive contribution from acquisitions and investments in the existing portfolio. We continue to have a solid financial position with significant capacity for new hotel properties and investments in the existing portfolio. And now we move over to Q&A. Operator, we are now ready for questions. And please don't forget to hand the call back to us afterwards after external speakers' presentation.

[Operator Instructions]

So I have a couple of questions, starting off with the sort of intended bid on Dalata. Could you give any details on the intended bid consortium Eiendomsspar, Pandox, i.e., what is the intended ownership split between Eiendomsspar and Pandox?

We are not able to actually comment anything on this process. But I promise you that we will comment at the latest, Tuesday, 5 p.m. Irish time, unfortunately.

That's clear. I understand. And moving on and a question on the outlook for RevPAR growth. Do you repeat the same guidance as you've done in the last quarters where you expect a relatively stable RevPAR development of 0% to 4% in 2025? Or do you see any different outlook?

Yes, basically -- absolutely. The second quarter is stronger than the first quarter, and we see the occupancy stable and positive, whereas the ADR is somewhat weaker in the destinations which have been sort of all-time high, like London, Edinburgh, for example. But all in all, we are in line with our previous guidance.

Okay. And then a question on like-for-like growth in your portfolio. It was 0% for the segment leases and down slightly for own operations. And comparing that to market data on RevPAR development, it shows positive RevPAR growth in Nordics, Germany and a bit more stable in the U.K. And if we look into H2, do you expect that we will see positive like-for-like growth in Q3 and Q4 supported by the fact that we have seen an overall RevPAR growth on your markets?

Yes. Most of the growth will, of course, come from the acquisitions we have done and also some -- the investments we have done, and remember like-for-like does not include where we do investments in our own operations and then lease it out. This is a strong sort of value contributor for us or value creation. But the RevPAR outlook is sort of flattish for the second half. It's occupancy is, as I said, is increasing or stable and RevPAR is somewhat soft but still sort of in line with last year. So -- but we are -- remember, we have easing comps because Q2 had both the European -- the footfall, especially in June, but also slightly in July. You had Taylor Swift, you had Easter effect and some one-offs. So we are facing easier comps, absolutely. And to that, of course, our investments as well as transformation and acquisitions.

And a question on the interest. Average interest rate based on what you know today, do you see that the average interest rate could come down slightly over the next 6 to 12 months owing to slightly lower bank margins and lower STIBOR? Or do you have any swaps with very low levels that will mature and dampen that effect?

No, I would guess that the most effectively lower margins because we have ongoing discussion, and it's a completely different kind of bank market at the moment. And also, as I said, we can also see that it's sort of a competition between outside Nordic banks. It's been the Nordic bank that was sort of the first one to start to lower the margins, but we can also see that in other banks now. So it's a good climate to do refinancing.

Final question from me, and that is about the yield in your portfolio. It was -- the valuation yield was down slightly. And if we sort of guess on the outlook for yield changes, do you think that yield compression is likely in your portfolio over the next quarters based on what you see on the transaction market?

What we see in the transaction market, yes, yields have been tightening. And we see small signs of actually valuers evaluating with lower yields. Take to that, hopefully, interest rates coming down. So there are all these sort of and we are optimistic that we will continue to see this. It's supported by transactions. And so -- but your guess is the same as ours in this case. We have positive.

[Operator Instructions] There are no more phone questions at this time. So I hand the conference back to the speakers for any written questions.

We don't have any written questions. So I would like the opportunity to move on and to hand over the call to our first guest...

Sorry to interrupt Anders, there is a question coming in from [ Andreas Tom ]. So we'll let that one through just in a minute, sorry. Please, go ahead, Andreas.

Andreas, please go ahead.

Just a couple of questions, if I may. Firstly, can you maybe speak a little bit about what are you seeing in terms of cost inflation in your business? And how do you see that progressing in the latter part of this year?

See when it comes to cost, we see that, of course, only in our own operations, I mean -- and they are up it but basically stabilized with the fact that we worked quite a lot with both sort of efficiency, digitalization, automization, et cetera, et cetera. But of course, it puts a little bit everybody up on the toes in order to sort of offset this. But we sort of -- we see that basically being quite balanced.

Understood. And I guess in terms of what's happening in the U.K., quite a lot of just increases on employment, the cost of doing business going up, and there's a new budget probably coming with more tax increases as well. How do you see the U.K. compared to other regions in that respect?

Well, it's no big drama from what we see in our other markets. Of course, this is part of our -- all of our budget process and our processes when we look at our operations. So we are trying to offset it by as much as possible. We don't see any dramatic squeezes anyway.

Okay. Understood. And then my second question was more on external growth and outside Dalata, I guess, how do you see the acquisition opportunity set at the moment? And I guess, secondly, anything notable you would say, in terms of how the market pricing is trending or the competition you're seeing for bidding?

Well, it's very much as it has been -- was in the last quarter. We see a lot of more transactions out than last year, of course, and the quarter before. Of course, the turbulence and the uncertainty in the world, also creates opportunities, especially as maybe less institutional capital, sort of active, more fee capital and so it's -- and also, it's always or also the most aftermarkets are outside Nordic. It's U.K. as usual, where the largest portfolios are out. You mentioned Dalata, but there is also other portfolios, of course. So very much in line with what it look like last quarter.

Okay. Understood. And maybe a final question. On Slide 5, you show sort of economics in terms of the acquisitions you're doing and the redevelopments and comparing that against, I guess, the average cost of debt or the blended yield, but how do you think about your cost of equity in that equation? Do you consider that as well? Or are you looking at more from the debt perspective?

Well, from this point it's in a total investment perspective, and of course, it ties in with our LTV policy intervals being between 45% and 60%. So all in all, blended.

Now I hand the conference back to the speakers.

Okay. Let's make a new attempt then to hand over to our first guest, Alex Robinson from STR for a European hotel market update. And after Alex, Henrik Karlsson from Benchmarking Alliance will follow. So please go ahead, Alex.

Good morning, everyone, and thank you very much to the Pandox team for hosting me this morning. We'll start by taking a look at some of the key themes that we've been tracking for 2025, starting with the dividend performance by regions, looking at hotel class performance one of the big questions in the year in the wake of geopolitical concerns in terms of American travel. What can we expect in terms of summer 2025, knowing as many mentioned on the call that last year was a record summer. And what can we get a sense of looking forward? If we start by looking at global demand, that's the number of rooms we're selling as an industry on a global scale. The good news is that we continue to sell more rooms not to the double-digit levels that we saw when we were still in the latter stages of recovery, but demand remains robust for the global hotel industry. So that means if we then turn to look at occupancy, if we're selling more rooms, occupancy continues to rise. And you may look at Europe and say single-digit percentage growth but that's particularly impressive when you go back to January 2020 and think that there have been as many as 400,000 hotel rooms that have opened since then, 100,000 hotel rooms opening in 2021. Almost 90,000 in 2022. So we continue to sell into a much bigger pool of rooms, but that's a testament to the overall strength of demand, but occupancy continues to rise. If we then look at pricing, we can see more moderate in terms of ADR growth. your eyes may be drawn to Northern Africa, South America, large double-digit gains there. But please do note that inflation weighs within those figures. If you then look to Asia, excluding Mainland China, around 6% growth, they're still in the latter stages of recovery themselves, whereas in Europe, 3% to growth today, and we're yet to get into the summer period, which we know can be key for overall rate growth. If we then transition to look at China, Europe and the U.S., here, we're looking at RevPAR for a rolling 3-month period. What you can clearly see, Europe in the blues that July, August, the importance of the summer in 2024 and if you then look at this year, you can see we're at an inflection point starting in April and May, which again points to the importance of a later summer for Europe as a region. Transitioning to our next slide, we'll tackle our first theme, which is the divide in performance. And for those of you keeping up with broader performance, you know that it is very much led by the Mediterranean and the U.K. and Ireland. And you can see that remains the case here overall in terms of occupancy relative to '19, both U.K. and Ireland fully recovered there. So those reasons that have been lagging there, if you look at the Benelux, for example, France, 4%, 5% year-on-year growth as you see towards the bottom there. So those regions that haven't made the full recovery have the largest overall year-on-year gains. If we then take a look at a wider map view, looking at key cities, key destinations, you can see more moderate occupancy gains. If you've already recovered to pre-pandemic levels and you've contended with a large number of openings that we spoke about earlier, you can see more modest gains that you would have expected to see overall. Those are notable gains you can see in Budapest there, ever so strong demand as we're seeing also to the Baltics, which we've seen some strong recovery numbers overall. But if you look at Europe more moderate growth year-to-date on a city and key destination level. Transitioning then to the lens of average daily rate, and it's one that continues to reemphasize the theme, the Mediterranean, the pricing power of those leisure destinations. And just look at the likes of Greece, Spain, Portugal, not only are they in ever so strong terms relative to 2019, they're also continuing to grow year-on-year. If you look to the more meager growth that we see in Germany. The good news is that even after a record year last year, we're still seeing some moderate grades at around 3% in all regions, as you can see there, with the exception of France, given how important the Olympics was last year, all regions with positive growth to date. Transitioning there, we can see an illustration again on a map view of the divide between North and South. It's very much clear to see if we look to the northern destinations, more muted growth, as you grow south in Europe, you can see more pricing power there. And when you think that there are some leisure destinations that are not on this map, that's where you also continue to really see the pricing power as we head into summer. Transitioning then into the theme of luxury. And one of the big buzzwords that you hear originating from the U.S. and globally is the bifurcation where luxury hotels lead and economy hotels a bit more of a challenge. And what you'll see on this next view is relative change to 2019 but also 2025 year-to-date. So we know that luxury will stand out for rate growth relative to '19, and that continues to be the case here in 2025, albeit the values on the Y-axis in '25, as you'd expect more reasonable than double digit. But good news, as you can see is the economy, at least on a global level, also making new gains there. But again, that hypothesis remains true, which is luxury and upper upscale lifestyle hotels continuing to push onwards. If we then look at our next year, we looked at global on the last slide. Now we're looking at Europe. You can see more challenging trading for economy, there are occupancy negative to the year, fostering overall negative RevPAR growth. And the higher the hotel cost, the higher the revenue per available room growth as you see for luxury and upper upscale there, both to standout and real standout performance from luxury. On to the next view, we can look at the U.K., which I know some of you on the call questions in terms of trading. And while it has had a tougher start to the year, as you can see across all hotel classes, luxury and upper upscale, being the ones that are able to yield occupancy. And I think that's actually even more so impressive in luxury, particularly when you look to London, which has had quite a robust pipeline of openings overall. And this reflects a global trend, again, what we're seeing where luxury and upper upscale hotels stronger in terms of trading, while economy hotels a bit more challenge to date. Though, I do think worth noting that economy hotels, the first to recover relative to '19, so perhaps somewhat victims of an early recovery. But also, as we'd understandably know, more exposed to the wider macroeconomic conditions, those guesting and those hotels more exposed to wider inflation. If we transition then, to our next theme is, can we count on the Americans to continue coming for travel. One of the big questions that we didn't have as much in our minds in 2024, but a lot to start the year in 2025 and policy that would potentially influence that. So if we then transition here, you can see U.S. departures here, percentage change year-over-year and then for the month just gone year-to-date. And you can see the good news is, overall, is that if we look year-to-date, still more U.S. departures to Europe. And keep in mind, we are already at record levels outpacing that '19. So the story broadly there is positive. Even with all of the uncertainty both economically, politically, Americans still looking to travel to Europe for the summer of 2025. That's also bolstered by transatlantic routes offering record seat capacity from an airline perspective. One of the interesting notes from the airlines is they see strong, strong growth at the front of the cabin, which again, reemphasizes that theme of luxury hotels, business class traveler likely staying in a luxury hotel continues to remain a robust segment. If we then take a look at the dollar in terms of pricing power, what it means for U.S. travelers, we know it's depreciating, we can see the rate increase is relative in dollars higher than what we'd see overall that you can still not necessarily reflected in the numbers because if we look at the next slide, U.S. travel to London in this example, still continuing to forge ahead, down for the month just gone, but still ahead year-to-date. If we then take a look forward and what we can anticipate for the future. We know and mentioned on the call that the summer 2025 has a lot to live up to. We can see number of compression nights here overall year-to-date. And the good news is even without some of those really key one-off events you talk about, the euros, which you wait to return in '28 or Taylor Swift, the likes of Adele in Munich. We still are having situations where markets are selling out, revenue managers able to yield effectively. If we then take a look at our forecast quarterly here, there is no doubt, even with the number of compression nights we've seen in 2025, we know we can't replace the likes of the Olympics, Eras Tour and others. So we do expect that pricing power in the third quarter to be a tough comp as we've noted before. But then as we head into Q4 and Q1 into 2026, we can see strong robust growth in terms of rate and then a more reasonable solid but unspectacular level of growth as we head into Q2 and Q3 of 2026. On to the next slide, we see here a business on the books. And while broadly speaking, you can see a few outliers there and the likes of Vienna, Barcelona, which perhaps have more swings, business on the books is broadly equal to last year, if not with some ever so slight declines, which you may say business on the books being flat. But when you think about what we're comping over actually that in itself is quite encouraging. So nothing to shout about but also something to be steadfast and appreciate as well. On to our next slide, I think it's really important to look at the long-term view. Yes, maybe a more challenging year in terms of comping over events, but look at the long-term overall strength of demand. You can see here huge levels of demand growth. These are the number of rooms that are being sold in each of these markets across Europe. And really is a testament to the strength and the desire for people to come and stay in our industry. And now if we go to the next slide, if we look at supply, is contending with huge levels of supplies. Guests are traveling in record numbers. So are investors investing capital. So we're still seeing growth even with robust demand having the content with these levels of supply. And then into our next view here, the usual suspects in terms of pipeline and development, not much of an order change overall in terms of respective, nations that have rooms in development. And then into our next view, you'll see here, I spoke about huge levels of openings, which you can see in '21 and '22. And given the broader financing environment, we see that there will be more muted openings in the year ahead. And then here, we'll wrap up in our key European cities forecast there. You can see in the range of growth from, say, 8% in Budapest, which we mentioned robust demand all the way through to Hamburg, again, comping over some events as well as increased supply increases. So to round out there in the final slide there, we can see dividend European performance remains, particularly led by the Mediterranean. Luxury continues to set the pace. The good news is that the U.S. traveler is still here for the summer of 2025, less openings could be a tailwind. And while occupancy is well on the books to last year, some rate gains will be limited, but the overall long-term trend for the industry is positive. Thank you very much, and look forward to speaking later. Thank you.

Thank you, Alex. And my name is Henrik, and I'm from Benchmarking Alliance. And let's head to the Nordic markets a bit and look at the latest numbers and trends. So just if we move on to the first slide, just very quickly, who are we? So we are the largest supplier of Benchmarking and market data in the Nordic countries. We always strive for the best possible coverage in all the markets we work in. We're based in Stockholm, Sweden and we offer Benchmarking and market data not only for hotel KPIs, but also for meeting and conference revenue, as well as spa and camping. So let's look at the Nordics in general. And if we look at the countrywide averages in the Nordics and the Baltics, and we look at the RevPAR development, the blue box will show you the development in total of 2024, and the orange boxes will show you so far 2025, Q1 and Q2. And we can see that the positive trend from last year continues. We see that in all the countries, the RevPAR development is positive also the first half of 2025. Iceland, who had a more modest decrease last year, mainly because of the volcano eruptions that took place there several times is now increasing its RevPAR again in a higher pace. We won't be focusing so much on the Baltics now, but we see also really good numbers there, too, after the year of lost Russian demand and other negative effects from the war in Ukraine. We can now see that demand is coming back to the Baltics again. Moving to the next slide, we take a closer look at the capital in our area. Obviously, 2024 was a fantastic year for -- first of all, for Stockholm, the Taylor Swift effect that hit there, the ECCO Congress in the beginning of the year, Bruce Springsteen concerts, et cetera. In Oslo, we also had a lot of conferences and events affecting the market last year. However, if we go back to Stockholm and look at the start of this year, we obviously see a small decrease there, and that is mainly because of the Taylor Swift effect last year and the ECCO Congress in the beginning of the year. That wasn't replaced with any similar event this year. However, in Oslo, we see the other way around. Nor-Shipping conference, a large maritime industry conference that took place this year, had a very positive effect on the RevPAR as well as some smaller events as well taking place this spring. In Copenhagen, the conference, Endo-ERN, WindEurope and the Copenhagen Rock Festival and Robbie Williams on the same weekend, actually brought up prices to new record levels in ADR in Copenhagen. Helsinki as well, May and June, especially have been really good Congress months there. And if we just mentioned Reykjavik in Iceland, it's interesting to see that it's actually the rest of Iceland that is increasing more than Reykjavik. But most probably, it's also because it was the countryside hotels in Iceland that affected -- was affected mostly by the volcano eruptions last year. So the swinging back of the RevPAR is higher for them. Moving to the next slide, we see -- we just look very quickly at the supply change in the Nordic Capitals. And we can just see that for some of the capitals in the Nordic areas, the supply of rooms has increased close to 15% to 20% during the past 3 to 4 years, especially Copenhagen, Helsinki and Reykjavik. However, if we look at the last 12 months, we can see that it's quite stable. One change we see now is that some of the hotels that closed in Stockholm for a long time for a long renovations, such as Scandic Södertälje and Vila Foresta Royal Park now opening soon again, had an effect on the supply as well. And moving on to the next slide, the capitals development more in detail, Q1 and Q2, 2025. We can see that available rooms, sold rooms, occupancy, ADR and RevPAR in each city. In Stockholm, the lack of congresses and concerts this year mainly had an effect on rates, not so much demand. In Copenhagen, we see an increase mostly through demand, also has a really nice development in both rates and demand. Helsinki, however, struggles to get prices up even if demand is there. Reykjavik had some new supply coming in last year, but is anyway showing an increase in both demand and price, also Tallin and Riga show really good development all over. And in the next slide, I have added also TRevPAR just to see the combination of RevPAR and TRevPAR. And TRevPAR is total revenue per available room, so in this number, we also take ancillary revenue into consideration. And ancillary revenue has increased TRevPAR in both Stockholm and Copenhagen, whereas in Oslo being more stable and in Helsinki, it has actually decreased holding back to TRevPAR developments. And it's interesting to look at the total revenue as well as other revenue in the hotels such as food, beverage, meeting and events departments, et cetera, don't necessarily follow the rooms department development, and this is why we also collect this data. Moving on to the segments, we can see that in Stockholm, it has been a pretty stable development all over. However, some decrease in occupancy in the luxury segment, even though rates continue to increase. In the budget segment, we actually see the other way around. So occupancy wise, it's the mid-scale and the budget segments who are leading. Moving on to Oslo. It's a really positive trend in all the segments here. Not much to say about it. We can see both demand and price increase in all the segments. Moving on to Copenhagen. Somewhat the same trend as in Stockholm. Luxury segment is starting to slow down in demand, but rates are still increasing. However, luxury segment is almost driving the price increases on its own, only smaller changes in the middle segment. And then the reason for the drop in the budget segment is that we actually have some properties that stopped reporting. So on the actual numbers, average rooms and sold rooms, we see a decrease. However, the KPIs still show the average of the reporting revenues and there, we see very small changes. Moving on to Helsinki. I mean last among the Nordic capitals. The hotel Maria and NH Hotel Collection, new luxury properties in Helsinki, adding more supply to the luxury segment. However, this capacity has been utilized very well. As you can see, sold rooms is increasing even more, bringing up the occupancy. Maybe at a cost on a slightly lower rate. But in general, it looks really good. And in the other segments, there are only small changes. So looking into the countries a little bit more in detail and starting with Sweden, and we look at the Swedish cities. So in Sweden, we covered 36 markets, including all the regional cities as well. And we don't have time now to go through all these, of course. But in this graph, just to show you a little bit how they are placed, the further up on this graph, they are, that means a higher ADR. And the further to the right are higher occupancy. So looking at Sweden so far this year, we can see that the market with the highest RevPAR at the moment is Visby. It's a very small market on the island of Gotland, very leisure-driven in the summer. However, there is also a politics event every summer that brings a lot of demand and a lot of RevPAR to Visby, which just took place in the end of June, and that is why we see Visby so high up on this map. So a bit surprisingly, we can see that Stockholm is not on top but if we look at this same picture in the end of the year, we will see a different picture, definitely. If we move on to the next slide, we can also see the change from last year for the Swedish cities. And on top here, we see the small city of Västervik also mainly leisure destination. However, they have had some company projects taking place in Västervik lately, which is bringing up the RevPAR there as well as a very active destination company working investor league, who is marketing the area very well. Further, we see a nice development in Gävle, Uppsala, Karlskrona. In Uppsala, for example, we had -- there was a Sweden live music conference in January, affecting the RevPAR positively. And if we look on the bottom of this page and the markets who are decreasing right now, we can see, for example, Jönköping, Växjö and Skellefteå. Jönköping, the exhibition center in Jönköping had 2 large exhibitions last year Q1. Elmia Solar and Custom Motor Show, and these were not replaced by anything large this year. So that's the reason for the decrease there. And obviously, we all know what happened in Skellefteå, the effects from the Northvolt battery factory that slows down will obviously show on the hotel market as well. Moving on to Norway. Same thing here. We see the Norwegian cities on this graph here. And Tromsø, obviously, is doing really, really well here, high RevPAR, the highest RevPAR in Norway really good at the Aurora tourism and marketing themselves as the place to go to. So that's really interesting to see. Oslo, obviously, is the second largest market, RevPAR wise in Norway. Moving on to the changes in Norway, Trondheim on top. And that is because of the Ski World Championship, end of February that boosted the market there. Then, of course, Tromsø, we see that increasing still. But if we look at the decrease on the bottom, we see Bodø. And the reason is that the last year was the Culture Capital of Europe, Bodø. Which -- and also the large conference, Nordland Conference last year in March, and this was not replaced this year. Moving on to Denmark. Same picture in Denmark, small country, less markets, but nevertheless, really interesting to look at. Not so surprisingly, Copenhagen is the largest market, RevPAR-wise in Denmark. However, we also have now Tórshavn in Faroe Islands, which is quite interesting to see slightly lower RevPAR, but I would say, pretty high rates, even higher rates in Faroe Islands than in Copenhagen. However, the occupancy is a bit lower. So this is something that we see in this typical summer destinations where the -- mainly -- the main part of the occupancy is sold in the summertime, where the prices are high, which give them high ADR, but if we look on a longer period, for example, in this case, 6 months, the occupancy is lower. And looking at Denmark and changes so far this year, we see that almost all markets are increasing in Denmark. So that's really nice to see. Vejle is a very, very small market, and they had a lot of out-of-order rooms last year due to renovations and they are now back in the market. So that's the reason for the increase there. Last but not least, Finland. And if we look at the Finnish series, Rovaniemi is really sticking out here. The Arctic tourism, Santa Claus, bringing people from all over the world to Rovaniemi, who also had now increased number of direct flights, bringing people out there. Helsinki is actually far behind being the capital of Finland. But of course, it's also larger markets, more rooms, et cetera. Looking at the change in Finland. It's Rovaniemi together with the largest cities in Helsinki -- largest cities in Finland, Helsinki, Espoo and Turku that are increasing. The West Coast Cities, Vantaa and Pori are experiencing worse times there right now, at least during the first 2 quarters of 2025. Okay. And then lastly, just look at the future and on the books. So we collect on the books for the next 365 days. And starting with Stockholm, we see a positive trend. Actually, the ECCO Congress is coming back again next year. So that's what we see there in 2026. Also a large congress in June next year, EHA Hematology Congress is coming back. Otherwise, the trend is very similar to last year. However, we see a small increase in general in August, September and also October and November. Looking at Oslo, very similar trend to last year. However, we see that the summer and the beginning of the fall is -- on the books is slightly higher than last year. Also some events starting to generate demand in the beginning of 2026. Looking at Copenhagen, a couple of smaller conferences in July and also the Copenhagen Half Marathon in September, really sticks out here. But in general, also slightly higher on the books compared to last year. And also if we look at Helsinki, a really nice August and September. We are actually up 30% in August and September versus last year and the main event affecting the on the books is currently the Helsinki Metal Music Festival in August. And that concludes my presentation for today. You're welcome to contact me if you have any questions or if you're interested in more detailed information about hotel market data in the Nordics. Thank you very much.

I hand the conference back to the speakers for any closing comments.

Thank you, Alex and Henrik for your hotel market updates. And thank you all for participating in this call. We really appreciate your time and interest in Pandox. Our interim report for the third quarter will be published on the 23rd of October. And now we wish you all a fantastic summer, don't forget to stay at our hotels when you are on the road. Goodbye, everyone.

The host has ended this call. Goodbye.