Scandic Hotels Group AB (publ) (SHOT) Earnings Call Transcript & Summary

Good morning, everyone. Nice to see so many of you here. Welcome to Scandic's Capital Market Day here in Stockholm. We are today, as all of you in the room knows, but we have also some on the web, we are here based at The Roots, which is one of our meeting and conference areas here at Downtown Camper by Scandic, one of our signature hotels in the center of Stockholm. We are very delighted and happy to see so many of you here. Thanks for you that you really prioritized this during this morning. We have been looking very, very much forward to this day to tell you a bit about what's cooking at Scandic, and also, of course, our way forward. We have, as you have I'm sure, already seen, announced our fourth quarter result this morning, and we are very delighted also to deliver the highest EBITDA result ever in 2019. We have, also today, announced that we are launching a new brand, Scandic GO, a new brand that will tap in to a very growing economy segment and also something we are extremely excited about. I can tell you that all of the organization is really -- there's happening a lot of positive energy in this organization these minutes because all the announcements went out to the organization this morning as well, something that we think will be extremely interesting for Scandic and, we believe, significantly increases our growth potential. If we look at the agenda for today, we will start, of course, with the Q4 reporting. And this part will also be sent on the web. So we have people looking on the web. And for those of you on the web, you can follow the presentation from our homepage, and also, you can ask questions in there, which then will be raised to us later on. After that, I will take you through some of the current states of the markets, the trends, also our strategic priorities, and also, those going forward. After that, Jan Johansson will talk, our CFO. He will take you through all of our financial development, and also, give you an update of our wholesale portfolio and our sensitivity analysis. Vanessa Butani, who is responsible for all of our sustainability, will talk about sustainability, an area where Scandic has been a true, true pioneer in our hotel industry and where we have a lot and high ambitions going forward. And then finally, but not least, Svein Arild Steen-Mevold, who was recently appointed Chief Portfolio Officer, will present our new brand, Scandic GO, into a bit more details and also a bit more thoughts around that new responsibility. And finally, at the end, we will wrap up with some closing remarks and a Q&A. Sounds good, yes? So hopefully, a good morning with all of you until the lunch. But let us first start with the -- first, our fourth quarter report. As you might have seen, our net revenues grew by 5.1% in the quarter and adjusted EBITDA increased from SEK 487 million in Q4 2018, which was a fairly strong quarter for us, to SEK 504 million. On a full year basis, we beat highest adjusted EBITDA ever. We have, during this quarter, strengthened our portfolio organization with the ambition to improve efficiency of our portfolio development, both when it comes to dealing with our existing portfolio and also our growth ambitions. We have also, like I mentioned today, announced that we are launching this new brand, Scandic GO, which gives us the opportunity to tap in to the very growing economy segment in the Nordic wholesale market as well as outside the Nordics. And then the Board decided yesterday a proposed raised dividend from SEK 3.50 in to SEK 3.70 for 2019. On this page, you can see market RevPAR development on a 12-month rolling basis. Demand growth has been quite strong in all markets throughout this year, throughout 2019. In Sweden, we have seen a very stable environment for some time, with total RevPAR growth of around 2%. And overall demand has held up relatively well, and supply growth has been fairly balanced. In Norway, the market RevPAR trend has actually been slightly positive lately. We saw quite a lot of new capacity in Oslo in the first half of 2019. But this has been more than fully offset by demand growth. Both in Oslo and in the other parts of the country, Norway has actually been the market with the strongest increase in number of sold rooms during the year 2019. The RevPAR continues to be strong in Finland last year, as you can see. We got some support from the fact that Finland held the EU presidency in the second half of the year, and this led to a solid demand growth in Helsinki, especially in the period between September and November. The only Nordic market where we have seen a negative market trend in Denmark, not a big surprise, as there's been a lot of new capacity coming in, especially in Copenhagen, in a very short period of time. And this is expected to continue in the coming year. We do, however, have a positive view of Copenhagen, over time. Occupancy in that market is high. So the market actually needs more capacity. Also, it is a market where Scandic is strengthening our position in the market, significantly. We have, as you have seen, opened 2 new hotels in the last 2 years. One in the Midtbyen district and another in one centrally in Frederiksberg area, and both of those are doing very well. And we have a couple of very good hotels in our pipeline in Copenhagen for the years to come. So all in all, I would describe the market situation as relatively solid with slight positive RevPAR development in the Nordic region at present. As you may recall, Scandic outgrew overall markets in all the Nordic countries in the third quarter. This is the fourth quarter. In this quarter, Scandic's total RevPAR grew by 2.4% in total -- in local currencies. In Finland, where you can see quite a big uplift, we managed to outgrow in a very strong market. This is, of course, partly explained by our very strong position in Helsinki. Also including the Vantaa region around the airport, where demand was very strong in the quarter, with some support from the EU presidency. In Norway, Scandic's RevPAR was a bit weaker than for the overall market. And that is due to the fact that Scandic did not have any new capacity in Oslo last year where the overall market grew quite a lot year-on-year. And both in Denmark and Sweden, Scandic's RevPAR developed with pretty much in line with the market. There has been several changes in our portfolio. We opened Scandic Royal Stavanger in Q4 -- early Q4, a hotel that we took over from Radisson in June last year. We also signed an agreement for a new hotel in Helsinki, Scandic Avenue, a new Congress meeting hotel in the Central Helsinki, with 350 rooms to open in 2022. And we also signed a new hotel in Örebro, in Sweden, next to the railway station with 160 rooms, to open in 2022. During Q4, we also exited 2 hotels in Finland, Scandic Lappeenranta and Scandic Seurahuone, with 213 rooms in total. These were 2 hotels with relatively high investment needs that we decided to leave as the leases expires. At year-end, we have a gross pipeline of 18 hotels and 6,200 rooms, corresponding to almost 12% of the current existing portfolio, quite a strong pipeline. We have 3 planned exits in the pipeline, one in Kiruna in Sweden and 2 more small hotels in Finland, where our leases are about to expire. If we adjust for these 3, the net pipeline is 15 hotels and close to 5,900 rooms. This corresponds to around 11% of the current portfolio. On this page, a busy page, you see that we have a very, very attractive pipeline, where focus is on relatively large hotels with central locations in key cities, where we see room for continued good demand growth. We estimate that the average EBITDA margin for these hotels will be higher than the average margin of the existing portfolio. And apart from the Nordics, we also have 2 hotels in Germany in the pipeline, one in Munich, and our second hotel in Frankfurt, both with planned openings in 2022. On average, we will grow the portfolio with around 2.5% per year. We only have 2 new hotels for this year, of which, actually Voss in Norway opened in January, so another one coming up later this year. But on top of that, we also have ongoing extensions of existing -- in the existing hotels of nearly 600 rooms, as you can see in the bottom of this table. So quite a calm year, but then, 2021 and 2022 will be very, very active years for us. We will have growth those years of around 4% per year. And this corresponds to around 2,000 new rooms every year. Here, you can see some of the nice pictures. We only took -- brought a few of them. Some of the projects that we have in our pipeline. The other picture, you can see a new hotel in Copenhagen located at the sea front, close to the airport. It's 600 meters from the airport in walking distance. But you can also see a hotel, this bottom left corner, where we have -- we are opening in Helsinki, like I mentioned, in 2021. And the other pictures are 2 hotels in Gothenburg. One in the airport, Scandic Landvetter, and one new hotel in the emerging area called [ Ilfsoven ]. On the next page, you see a few more pictures from the pipeline. On the upper left, you can see Scandic Spektrum, which is going to be Scandic's largest hotel with more than 600 rooms in central Copenhagen. You also see a picture from Aarhus, you see Helsingborg, Turku and Frankfurt. We have recently done an organizational change, with the ambition to strengthen our portfolio management. Svein Arild Steen-Mevold, who you will later on, was previously Head of Norway, he's now Chief Portfolio Officer. This is a new position. It includes the overall responsibility for portfolio development where we are coordinating our expertise in everything from lead generation, contract management, design and concept development and investments. The ambition is to strengthen portfolio management, both in how we work with the existing portfolio, but also when it comes to growing the portfolio. I am very convinced that we will see positive effects from this in the years to come. Then we are very, very excited about the launch of a new brand this morning, Scandic GO. This is a new brand to Scandic. You could call it a sub-brand to Scandic, with a lean customer offering in city locations. For us, this is a way to tap in to an already growing economy segment. This will be a great complement to our existing portfolio of full-service hotels in Scandic. And we have high hopes for this new brand and see considerable growth potential. With quite a high share of room revenue, we expect these hotels to contribute positively to our margins, both when we compare to the existing portfolio and to the signed pipeline. We will start with an initial launch of 5 hotels. You will hear much more about this during the day. And with that, I hand it over to our CFO, Jan, you want to? Welcome.

Thank you, Jens. Thank you. Yes, Jan Johansson is my name. I've been CFO for Scandic, now since 3.5 years. And yes, we have a quite nice position with numbers, which I would like to go through with you here. I will go through the sales development, the segment reporting, the EPS, obviously, then the cash flow, and also, summarize a little bit with our outlook for the next coming quarter. I will concentrate very much on disclosing or explaining the development excluding IFRS 16 effects, because I think they disguise a little bit of the development. And I will come back to that during today, not so much during the first 10 minutes, though. And first, as Jens said, also has been a very good year for hospitality in the Nordics. We have a quite high occupancy level, almost as in this room here. So it has been good, despite the fact, which Jens also said here, that there has been more capacity in the market, especially in Copenhagen and in Oslo, but in general, we have a demand growth of 5%. And I think looking back, and if we were to stand here 1 year ago, I think we would have been surprised if we would have said that. So in general, a very, very good year. And then if we start with the sales development here and maybe look upon the total numbers first for the sixth year, we can first conclude that we have had support -- translation support from the currency all through the year here. Organic growth 3.9%, that's below our stated objective of having an organic growth of 5%. But we should remember that we have a lot of forced exits here. And that is connected to the acquisition of Restel, where we were forced to sell out 3 hotels. So if you were to just exclude the exited hotel here, you will see that we are actually on this 5% for the year and also for the year before. Very close to SEK 19 billion. We did not reach it, but very, very close. It's a record year. Going back, I will come back to the financial development group, so since the stock introduction later on then. A few comments then on new hotels drive around 3.5%, 3.7% in the last quarter, that's where we should be, with the pipeline we are having and so on. And that's also where we expect to be in the future. Like-for-like development, more or less in at the same traveling speed as the RevPAR, which is not a surprise. You can see here, it's a kind of a big variation between the market, as you can see here. Finland consistently high throughout the year, 8% in the last quarter, driven by the EU presidency, but also good in total performance. We have a quite solid price component in that also, which is important. Norway, despite the situation in Oslo, this is actually better than we thought initially during the year here. Northern Norway, providing support, and also, Western Norway bouncing back from the low level where it has been. Other Europe, a mixed picture. It contains the development in Poland, Germany and Denmark. Germany and Poland, okay, slightly positive. And Denmark, as Jens said, the new hotels are doing well. They are not included in the like-for-like number. So this is a like-for-like portfolio. And especially in Copenhagen, it's more under pressure there due to new capacity. Right, so how has that reflected now into the development by segment, which I have on this slide here? Once again -- or maybe I should start with this number because I think this is the first time we are over SEK 2 billion on adjusted EBITDA. So I need to once more mention that. It's an uplift of around, and also, this is excluding any IFRS effects. I will come back to that later on. So it's a record year in terms of EBITDA, but we are not pleased. And the reason why we are not fully pleased, that we are not on the 11%, because that is important for us to reach that. We have -- when you looked upon -- related to last year, there is an uplift of around SEK 90 million here. If we exclude electricity derivatives, which we had in the result last year of SEK 43 million, you can see it's almost SEK 130 million uplift, primarily coming from Finland. We are done well in the market, but also the effects from the acquisition of Restel, which has really paid off this year. And also, I think a reasonably good development in Norway, given the situation we have had with the new capacity in Oslo. Of course, we have suffered in Oslo, but Northern Norway and Western Norway has more than compensated for that. But also with the help of a high -- very high cost focus, we have had productivity increases in the Norwegian operations during the year. Other Europe, once again, a mixed picture. We lost SEK 60 million here. Important to say that the German operations is improving the results. So this negative result effect is coming 100% from the like-for-like portfolio in the Copenhagen, especially then in Copenhagen. And when you compare the Q4 number here, underlying Finland was actually even better because we had a positive one-off effect of SEK 20 million last year. So it's a very, very nice development in Finland during Q4. Sweden is, on full year basis and almost in the quarter, perfectly flat, both in terms of sales margin and EBITDA. However, remember that in the beginning of this year, Hasselbacken, the hotel at Djurgården was divested. So underlying, we actually have an improvement in the Swedish operations. Right. And that takes us over to EPS. And here, we have 3 measurements on EPS. But I comment on the fourth one. So I need to take you through this one. The reported EPS, as you can see, has an improvement, but this includes a kind of a big effect from IFRS 16, which I will come back to later on. Excluding that, still a very good effect. And obviously, now look upon the full year numbers because they make sense. Full year numbers, where you can see that we have the uplift. But this year, we also sold Hasselbacken with a big capital gain. If I exclude that, that corresponds to SEK 1.66, plus some other small items. Last year, the integration costs for Restel. If we correct for them, you can see that we have a slight negative development. But we state anyway here that we have an underlying EPS growth 4%. How come? Well, last year, we had a change in Swedish tax rate, which we revalued the tax liabilities, which gave a positive effect. And also, last year, you remember the inefficient hedging of electricity derivatives, which is also included. So if I correct for those numbers, we have a 4% increase in underlying EPS. And this is also part of the reason why we continue to raise dividend from SEK 3.50 to SEK 3.70, and that's a proposed increase I should say, which is around 6%, something like that, if I calculate right. I look up for you, Henrik. Yes, you know. Right. And then cash flow. And this is the cash flow statement where I exclude IFRS effect. I know there are some confusion how to read this, but this is the right way to read cash flow. And you can see here, it's a very, very strong, solid free cash flow of over 3%, including expansion CapEx. It's an easy number to remember, SEK 777 million. We arrive on a net debt below SEK 3.5 billion, net debt to adjusted EBITDA multiple of 1.7x, which is actually where we were 2 years ago when we made the Restel acquisition. So we have restored the financial capacity during these 2 years. A favorable development not only on the adjusted EBITDA, but also change in working capital. And it's actually something which we should have when we grow the business due to the prepayment model we have. So this is a natural financing which we will get as long as we grow, which there should always be positive working capital development when we grow as a group. So it's kind of a free financing. I look at the banks now. And then we have had some one-offs with Hasselbacken, but we have also paid in penalty tax to the Finnish tax authorities, which we are claiming back. We haven't had the result yet from that. We expect to have that during the year. Investments, both in existing operations and in expansions, more or less on the same level as last year. All in all, this gives a free cash flow which is SEK 0.5 million better than last year. As I said, this has restored the balance sheet after the Restel acquisition, and we end into 2020 with good financial flexibility, and we will come back during the day how we looked upon that. And then finally, the outlook. I should start to say that when we look upon new hotels coming into the market, 2020 will be a little bit of a softer year in relation to 2019. Copenhagen will still have new capacity and the like-for-like portfolio in Copenhagen will still be challenged. Norway, not so many hotels in the market as we have seen in Sweden and feel more or less in line with what we saw during 2019. We have a positive view on the demand development, at least as long as we can see right now, which means that all in all, we believe that we are able to have a like-for-like growth of 1% to 3%. We get an extra fuel from the leap year now, an extra day, this is always good with an extra day. You remember that usually new inventory provides some 3% to 4% of our sales. That will not happen, the first quarter, and that is also due to that we have negative effects from the exits which we have done. So count on a slightly positive effect there. But not to the same extent as earlier. So that was the last slide for this session. And this is -- yes, now we have the Q&A.

Yes. Questions? Yes.

Stefan Andersson, SEB. A few questions. First, if you look the 2 exits you did during the quarter, and to make it easier for you, also included the 3 exits that you are planning to do, if you look -- you talked about heavy investment needs. And that's one thing. But if you look at the margin that they perform on, are they above or below the group?

Above. And I'll come back to that. We will. So this has actually been the exit should be margin accretive, but so far, they have actually diluted margins.

We have had -- as you know, we had 3 forced exits in total due to the Restel acquisitions, which we did. And then we have a mixed picture of those we are leaving. A few that are okay, marginal-wise, but we don't see fits well into the portfolio long term and some others that they are also very low on margins that we are leaving.

And then if you look at the pipeline, you said that the margin is higher in the pipeline than what you have in the group. First of all, I guess, I assume that you talk about situation after a ramp-up period. So I'm just wondering, part one of the question, how long will that ramp up be, do you think, on average? And secondly, why would you say that the margin is higher? Is it because they are located -- you have higher margins in cities versus the country side? Or what is the reason?

Yes, yes, you're kind of spot on for both reasons. You said the first question with the ramp-up, that is very different from location to location. When it is a prime seat location, the ramp-up is very fast. We have seen in some of the large -- our latest openings we have done, we have a ramp-up period of maybe 1 year, 1.5 year, then we are kind of into market speed. Some of the openings that we have done lately in the city locations have been extremely positive. And we see that the pipeline is also on very central locations; it's kind of large hotels that fit into strong markets. So the ramp-up will be pretty fast. And that's also the reason why the margins will be higher. They are larger hotels based in the strong markets, where we see also in our average portfolio, we have already stronger markets in these cities.

And then a nitty-gritty question maybe. I just thought the depreciation seemed a little bit high on the reported numbers in the quarter. Is there something in there, which is...

Yes, we have made some -- I think we commented on -- in the report also, we have made some write-downs. So some assets, it's on loss-making units during the year also.

Do you know the number in the quarter?

I don't have the number in the quarter, but I'll check it out for you later on.

And then my final question. Just you talked about the outlook, Jan, there. And you said it looks softer going into this year than last year. Just what do you mean by softer? Is it softer, less challenging? Or is it the softer market?

Yes, did I say that? Then I have to rephrase myself. I said, we don't see any change in demand development, even if last year was very, very high with around 5% almost in average there. What I maybe meant with softer, I think about what I meant right now is that we will see less capacity coming to the market this year than last year.

Yes. There was another question here. Christer?

Yes. On the margins, let's focus on the margins.

Yes, that's good.

Yes. But -- and on the nice slide there that you're not open up so many hotels in 2020, yes, then you can have all your managers just focus on getting the margins up.

Yes, it's a good thing.

Yes. So wouldn't you assume then that the margins will go above your goal in 2020?

We do not comment on that specifically, but it is very clear that we, as a management and the whole organization, has some clear focus on margins. You will hear that throughout the day, both from me and from Jan. So all of the organization, I promise you, is really looking at margins. We do something that is short term, and we do a lot of initiatives a bit more long term. When it comes to short-term initiatives, it's also around the whole food and beverage area, which we have mentioned, how we look at that, openings, hours and concepts and offers, et cetera, in order to optimize that. And, of course, we see immediate effect in some of these areas. But also in some of the long term, it's about the whole portfolio, where we need to work a bit longer to see the effects since we are this bigger chain.

On the previous question, that you discussed that some of the hotels that you were exiting had better margins, some had weaker margins. And if you take a picture today, you have 270 hotels.

Yes.

How many of them approximately would you say has very weak margins?

You will have an exact answer to that later on.

We see a picture where we have split the portfolio. So we actually show you how many hotels that are below 5%. And that slide is so good. So we shouldn't preempt that question right now.

Okay. And then my third question. Of course, some of the margin's expansion has to come from you exiting some of these weaker hotels in this great slide that we will see later on.

Yes. Yes.

The market for buying and selling hotels, is that good or bad?

We'll also come back to that and not to postpone all the things, but we will be quite specific when we talk about the growth opportunities and also how we look at the market. So it is something we will come back to. I hope we can take it later on if you have additional questions. Thank you. Good. Okay. Yes?

Maybe then looking at the CapEx angle to the same question. Obviously, you have had quite high expansion CapEx, and I saw there was also a big, big pickup in renovation CapEx in Q4. How do you see that going forward? I guess when you're looking at, at least expansion CapEx, that should be a big drop during this year?

That's why I like Scandic GO. I mean, this is capital efficient, so if we can have a more kind of those hotels into that should be -- make us, enable us to have a much more capital-efficient CapEx approach going forward. There are -- historically, there are some tendencies that we, in some areas, has overspent.

But I think if -- also to your question, this is a year with fewer openings and, of course, a year with fewer openings also leads to a bit lower CapEx in those perspective. But we are quite good at balancing this because we have the whole technical service departments, et cetera, that can handle certain amount of workload. So when we have lower new openings, we kind of secure that we also renovate a bit more here and there where we need to renovate. And then maybe the coming 2 years, you will see us slightly renovate a bit lower because we have a lot of new openings. So we balance this, kind of, stabling out, and we want to stay around this 4%, just below, in CapEx when it comes to the renovation on CapEx.

And you should also remember here as part of -- and that was part of the Restel calculation and part of the investment case, that there was some properties there, which we need to deal with, either by exited them or lift them to kind of a Scandic level in terms of standard. And we are starting to get through that.

And then hearing still also in this room, people, quite a few, sitting sneezing; coronavirus, is that something that you're hearing for your business? Or do you see any impact of it? Or...

Well, if I didn't think about it or we didn't think about it, we would be probably a bit naïve. But if you look at the circumstances in the whole, it is a topic that I will also put a few comments to later on. I'll show you some slides with the different source markets, you will see how big an impact that has on Scandic. But right now, it's a very limited effect. It is a seasonality issue as well. We have much more Chinese in the summer than we have in the winter. So in the beginning of the year, it is fairly nothing. And during the summer, it's a bit more, but I'll come back to the exact numbers. But not something that is worrying me when we talk about Chinese. Maybe more what is happening with side effects of the economy as such that we need to all evaluate.

Was it a lot of impact on travel bans and these kind of things, if you go back to the SARS time?

Well, there were some, but it was -- if I compare at that time, I think they were a bit of panicking because it was kind of the first thing. Now you know this because you valued the whole market as well. It seems that the panic is very different around the world. You see some airports where everybody is wearing a mask, and in some other airports, nobody does. So it's a bit where do you come from. And the travel bans is also related to this because some companies are, of course, putting some travel bans to China right now, and to Hong Kong and certain of these markets. But that could also be an opportunity to use this summer in Europe or Northern Europe, where it's pretty safe so far.

And one final question. Looking at the portfolio coming into the market. I see some of the hotel has slided a little. Are you for certain about the timing of them now, no planning permission problems or anything like that?

No, we are not worried with the current pipeline, and I must say that I took over some of this pipeline. I was part of the executive meeting before but -- the executive commission of Scandic. But you can say that a lot of these decision was also done by my former colleague and before me as well. But I think the pipeline is extremely strong. It fits well into our strategy. It fits well into the key cities. It is the cities where we have high occupancy, where we have a high growing demand so I'm very -- I look forward to getting these hotels into the market, also to prove to all of you that this will improve margins. Yes. More questions? Then I think also, time-wise, we are a bit over. So I think we will conclude with this and come back to questions later on. Thank you for those who was following us on the web. And I can say to you that the whole day will be done in a video version together with the presentations that will be on the web page -- homepage later on. But thank you for joining us to you guys. [Presentation]

So welcome back to the next part of this day. With this small movie or intro movie, we kind of wanted to take you through maybe what you already knew, the whole history of Scandic. But this was a good way to do it, we thought, instead of me using the first 20 minutes of your time talking about the history. So what I will do is to talk a bit more about the current state, the strategy and the market trends and how we see the way forward. We are in a market where demand is growing, that we have said again and again. We have built a strong position in that growing market, and are -- we are, today, the clear market leader. We have an attractive pipeline and an attractive business model with good cooperation with the landlords, also with margin stability over time. And then we are a true pioneer within sustainability, an area that is becoming more and more important. We have a unique culture, extremely important in a service industry, the strong culture, which has, of course, driven customer satisfaction. We have very, very highly engaged team members in Scandic. We are also a very attractive employer due to that. And you can imagine these years where we are all fighting for the right workforce, having such a high team-member satisfaction is really supporting us. It means that we have a higher team-member satisfaction, leading also to higher guest satisfaction. We have seen year-on-year, the last many years, that, that has increased year-on-year, also when it comes to net promoter score, which is the guest satisfaction. And that is, of course, spreading the perception towards the brand has been -- is much higher than ever. And also, due to that, we see lower turnover of team members even in a market and environment where everybody is fighting to get the right workforce in. This is how we present our strategy. Our vision is to be a world-class Nordic hotel company. And we are not restricted, as you know, to the Nordic region. But we do have a Nordic heritage. And we think our values and the way we think, can work well also outside the Nordics. Our mission is to create great hotel experiences for the many people. And you also see the values that you heard in the small movie, the 4 values, be caring, be you, be bold and be a pro. But I would like to focus a bit on what we would call our strategic cornerstones, in the bottom of this pyramid. This is what we work with every day in order to reach our goals: the engaged and motivated team members, very important, as I mentioned, in our industry, sustainable business, something that should reflect all our decision making in how we decide things in the company. Then we want to have a growing and improved hotel portfolio. We want to have attractive brands and customer offering, optimized distribution to make sure that we reach customers in the best possible way, wherever they are, also something we will come back to. And then in the bottom of everything, we have an extremely efficient operational model. You know that Scandic is kind of worldwide in the hotel industry, well-known for a very strong model in the bottom. Also, something that continuously is something we work with in order to improve the KPIs and the key figures. With the acquisition of Rica, we did, in 2014 and -- in Norway, and Restel in Finland in 2017, we are today, a very strong and leading actor in this region. We're not only in a leading position, but we have kind of the position where nobody can actually compete with us. We operate, as you know, 253 Scandics, but we also have some signature hotels. Today, we have 5, where we are based here in one of them, which means that it is a brand by Scandic. This is Downtown Camper by Scandic. We also operate some other brands, 7 IHG hotels, that's Indigo, Holiday Inn and Crowne Plaza in Finland, and also 3 Hiltons in Helsinki. All of these are in Finland and was part of the acquisition we did with Restel. So Scandic is already today, you can say, a multi-brand operator, even before launching Scandic GO. After a few years now with relatively rapid growth, 2019 was a year of refocusing. And we initiated different measures, the 5 focus areas, et cetera, to drive margins, cash flow and market position, something we continue to work with. And we have a clear ambition to grow from a position of strength. We have a great business model. We have long revenue-based lease agreements, which is the dominant model in our region. And most of the contracts, as you see on this picture, is variable. They enable stable margins over time and maybe even a bit more stable than you might think when you compare, internationally, us with others, and Yana will touch upon that in his presentation a bit later. We are, at Scandic, responsible for both the operation, the brand and the distribution all the way through, so the complete P&L of the hotel versus franchises that only gets a small fraction of the revenue. There are, of course, several clear advantages with our model, and that's why we like it. It creates margin stability. We control the customer offering, which is a bit unlike franchises. It gives us a very quick time to market. And I can say that when we did change this also during 2019, I was extremely impressed by the strong culture of Scandic to see the speed of the -- from decision making from my office and the management office into the organizational impact. It is a huge and powerful thing we can do when we control all of the team members in the hotels. We get full economies of scale, both in operation and distribution. And then we have shared interest with the landlords. Landlords have an incentive to drive our revenues. And we have also discussed CapEx with many of you. Please remember that in -- with our model, we kind of invest together with the landlords. So they take, also, quite a big share of the investments in order to drive the revenues. And then you can say the model allows us also to keep international players out of the Nordics a bit, because they like the management and the franchise model, whereas we go in with leases. So it's kind of, also, a way to control the market a bit more. So it's also a strength in our model. We have, as I have mentioned before, a very strong operational model with very efficient hotel operations. It is a high degree of standardization in the back end, where, of course, we want to benefit from economies of scale, et cetera. And we also steer this on an extremely tight target model, meaning that every week, every day, we look at the expected turnover, and we do the planning of the manning accordingly. So we use this to both adjust up and down according to the turnover, which we expect. This is something we are extremely good at. We have to be quite good at that, since the payroll costs in the Nordics are pretty high compared to other parts of the world. So we need to be really lean in our model. That's something that also works outside the Nordics, of course. So this, combined with a very strong front-end focus or combined with our customer focus, is a very strong model. We are in a growing industry. Travel and tourism globally is growing at a premium to GDP. So it's quite of -- kind of nice to be in this industry. We also know that it accounts for nearly 10% of the global GDP, the whole travel industry, and it's growing. There is a lot of reasons behind it. Of course, we have seen the last many years now that low-fare airlines has been increasing. It creates an environment where people can travel pretty cheap, and they do. We see the digital distribution that allows anybody to find the good offers, and it helps us, of course, to hit the customers wherever they are. You see urbanization, you see growing leisure, which we will come back to and also an individualization in general, meaning that people travel more and more individually, 1 or 2 or 3 or 4, than in bigger groups. We estimate when we look at some numbers which we have been digging into the last 10 years, we estimate that the average growth in demand growth has been around 3% to 4% the last 10 years on average. And you see fairly stable growth in all markets. 2019 was also pretty much in line with the long-term trend, so pretty stable. The annual growth actually corresponds to around now 10,000 to 12,000 extra rooms per year. So 10,000 to 12,000 extra rooms per year, or you can also say an extra 3 million room nights per year; quite a big increase, 3 million room nights in average. When we look at the structural differences, the growth in the leisure segment is estimated to grow between 5% and 6%. So that is actually growing more than the whole region as such. The international demand is also growing more at the same 5% to 6% speed. And this is an average of the last 10 years. So international and leisure are growing more than the local which is interesting and very interesting for the future. And that's why you also heard us in our strategy, tapping more and more into this growing part of the segments. And when we finally look -- also linked to some of the questions around the major cities, when we look at the major cities versus the total, we also see growth rates at 5% to 6% on a total Nordic base. When we then look at the supply-demand balance we have in the Nordic region, capacity growth has increased in the past years. But demand has actually continued to outgrow the supply, leading to higher occupancy levels, a very solid picture. This shows that the new capacity also supports the increasing demand. For 2020, we expect supply growth to be slightly lower than it was in 2019. A few words on the distribution landscape. The distribution landscape is something that has changed a lot the last years. And globally, everybody is talking about what is going on with meta searches and OTAs, et cetera, et cetera. It is very important for me to say, I look at all of this as possibilities. For Scandic, this is a possibility. We are a Nordic hotel chain with a few hotels outside the Nordics, but we use all of these partnerships to reach customers all around the world, something that we couldn't do ourself and that's why we find partnerships with these booking channels and search engines, et cetera, being very, very valuable. What is, of course, important and something that I will come back to as well is that you should remember all of this is kind of a booking channel. We own our inventory. We have the guests in a long time at the hotels. We are -- you can cut away one of these, you cannot cut away the hotel itself. So we feel kind of confident working with these partners, and I'll come back to how we see this from a loyalty perspective as well. Our distribution mix is changing quite rapidly. I don't think this is a surprise for anybody, not for me and that you shift from analog to digital. Of course, we do. We do have around 60% direct distribution. But an important thing is, if you look at these 2 pictures, in each part of -- I don't know which part Svein Arild will go through. If you look at the own web, the orange one, and see the growth of that, and you see the OTAs, you can actually see that even with everything we did last summer, where we took a lot of decisions related to driving international growth a bit more, you see that own web has increased more than the OTAs, a very, very healthy signal. Then if we split it in another way and look at own web versus the OTAs, of course, a lot of own web is intra-Nordic business. But we also see that we get more and more international business on own web. And on the OTAs, you see more than half is international, but some is also intra-Nordic. And I would say, for me, that upper part of the international business is really, really good, something we couldn't reach ourself, whereas the intra-Nordic business, of course, I would prefer them to book at Scandic's webpage directly. So what we do, we focus a lot on converting intra-Nordic business from the OTAs into own web. I prefer that the Nordic people should book directly. And of course, if you come from U.S. or India or Africa, it's probably easier to do it with the OTAs. So this is a focus for us. If we look then at the different source markets and look at the international markets, it has been growing quite rapidly. You see Germany, extremely big, U.K. and U.S. So these 3 markets, Germany, U.K. and the U.S., they are the biggest markets for us. And then, of course, you see China. If you look at China as the fourth biggest international market and it is growing. It accounts for approximately 1% of our room nights. But it accounts for less, and just below 0.6% of our turnover on a full year basis. And you know the Chinese are primarily coming -- of course, you see a few here and there in the streets right now, but primarily during the summer. So to be honest, we really haven't seen a lot of effects from the corona situation in the beginning of the year. And if it was only the Chinese that were hitting us, then we would be able to handle that as well. If you look at the whole Asian market, it accounts for below 1.5% of our turnover. So it's not that big a source market yet. But of course, the big question that I cannot answer today, and I don't think you can either, is what kind of side effects will corona have on the whole industry. But right now, we do all we can to source from other markets than the Chinese and the Asian market. So with our partnerships with tour operators, et cetera, we, already for the coming summer, are filling in with customers from other source markets, and all of our campaigns are directed towards anything else than the Asian market to secure that we are impacted with the least effect. We are working a lot, and we have been speeding up our digital investments. We have been spending more also last year in this area. We think that this digitalizing the customer experience is extremely important. And already by Q4 this year, we will be launching an updated and new version of check-in and check-out solution, where customers on the mobile will be able to check in and check out and even use their mobile as a room key. We will start by doing this at all our new Scandic GO hotels. So the first 5 openings, which we will come back to, will all have check-in, check-out and room key solution. And thereafter, as of next year and ahead, we will introduce this to all the Scandics. There's kind of 2 dimensions in this, which I think is important to say. I think this will create a fantastic customer experience, avoid standing in queues and lines. But also, it gives us a lot of opportunities in Scandic to interact with our customers in another way. And if we look this into a perspective of our very large and strong loyalty program, our loyalty program is, by far, the largest hotel program in the Nordics with more than 2.5 million team members, or guests in the program. And it accounts, as you can see on this, for more than 1/3 of the turnover. So very, very loyal guests we have in that program. Personally and with the management team, we have had a lot of conversation around this. And I don't think I will reveal any thoughts that the market and the competitors cannot listen in to. I think you will see a lot of speed in this area. I will make sure that Scandic is also securing that we develop our digital solutions to the customers in a fast and efficient way in order, also, to drive loyalty. It is back to the part where we own the inventory or the inventory of Scandic. We kind of control like nobody else do, whether a loyal customer should have some benefits that the nonloyals should not have. Of course, they could check in before. They could even select their room before the others. So if you prefer a certain room, you could actually, as a loyal team member -- as a guest, you could be able to do that before the others. Or maybe take out a few hours later because you are loyal member without paying for that. So a lot of things will pop up in this area and I'm looking extremely much forward to that. And I think that will create an environment where you will see a larger part of the customer base being part of the loyalty program. I don't think it will go the other way around. Then in -- during the summer, and last year, I reported, together with the team, some 5 key focus areas. And this doesn't mean that we do not focus on other areas. But this was extremely important for me and for Scandic, that we have a refocus on these areas: portfolio management; food and beverage; CapEx; optimized distribution; and digitalization, and I just touched upon a few of them, but I'll do it a bit in a ramp-up version. Strengthened portfolio management organization, something that we have now done, we will increase, also, resources in that area, in order, also, to support our ambitions within the growth. Then there will be a continued focus on actions to address the underperforming units. Yana will come back to it in his presentation as well, but this is quite high on my agenda. I don't like to see the hotels that are not profitable or with very low margins. So we will never be satisfied with anything unless it is supporting our overall targets and goals. And we will be constantly working on solving things that are below. Then we have today announced the launch of Scandic GO, something I mentioned that I am extremely excited about. I think this has a big, big potential for Scandic. And really, nobody owns that segment in the Nordics, even though it's grown. So it's a big fragmented segment where we want to step in and, of course, with high ambitions. We are the market leader in the Nordics. We are the largest operator in the mid-market segment, where we are the market leader as well, and we want to be so as well in the economy segment. Finally, but not least, we will continue to secure a high-quality pipeline with an increased growth. Then food and beverage, something that actually accounts for around 1/3 of our turnover. So 1/3 of our revenues come from food and beverage, if you also put in the meeting part of the business. And you all know that certain areas of this is very profitable. Meetings are quite profitable. I can tell you, bars and alcohol is pretty profitable. But the A la Carte business is less. So what we do, of course, is we work a lot in this area, look over all the concepts, opening hours, offers in order to improve. We also even evaluate outsourcing A la Carte restaurant, something we have already now done in 2 restaurants and something we will continue to evaluate. If somebody else has a clear focus on doing that, and they like 2%, 3% or 4% margin because they run a business with another focus than we do, then it might be a better solution that they operate one of these restaurants, especially in some of the key cities. Then all of our signature hotels, they will be charging for breakfast as of now. So we changed already 1st of January some, and the rest will be changed, all of them now in Q1. So we will charge for breakfast. Also because we have a broader international mix of customers in these hotels that are used to paying for the breakfast, which they do all over the world, but not in the Nordics. And the first signs, I can tell you from the beginning of January, are very positive, when I look at this. Then, of course, also meeting is a very important part of the business, and we have centralized all our strong people into destination desks in order to give customers a full and speedy reply. So when you have a request for a meeting at Scandic, you will get immediate reply whether we have room and also an offer for the price. That allows us to, of course, be closing the deals a bit faster than if it lies in an inbox in one of the hotels. We have a more structured approach to maintenance CapEx. It's not that Scandic was not good at this. And it's easy as a new CEO to point fingers at everything, but this is something where we could be a bit more structured. The new organization also with Svein Arild in heading that, we'll also now integrate all of these decisions from business, property and design development and from prioritizing the different projects, we are looking in, in a more detailed way on the business cases linked to the investments even on smaller renovations. We don't want to build [ a new team ], that's for sure. I want to continue to renovate and secure a perfect portfolio. But of course, we should not invest -- overinvest in an outgrown hotel if we couldn't get the return. So like we have said, maintenance CapEx should not exceed 4% in a yearly average. Then we have several ongoing development projects to enhance the customer experience on the digital platform. This online check in and check out is something we spend a lot of time with right now. And we also implement, in Yana's responsibility, a new ERP system for all our markets and hotels. So we will have a group-wide ERP system. And you can say, well, we thought you already had. But since we have bought other chains like Rica and Restel, we haven't had. But now we put everything into one ERP system, which secures that we kind of get immediate data and can work with this on a group-wide basis. And then we work a lot on replacing manual processes. Not that we have a lot of that, but we have a lot of manual boring processes that we can automize, and we can put into robotization and secure that we handle that. That is rate loading and a lot of transactions from payments in the shifts between the nights and stuff like that, that we automate a bit more in order to be more speedy and to save costs. And then the fifth one, the optimized distribution. We have talked quite a lot, the last year, around this. We want to secure that we take our share or even unfair share, a larger share of the growing international business and also taking a larger share of both when it comes to international, but also the growing leisure segment. We saw a lot of positive effect of that during the summer in the third quarter, where we outperformed all of the markets with our initiatives. And then one of the big, great news of today is, of course, our new brand, Scandic GO. You will hear more, and you will see some -- much more about this brand from Svein Arild later on. But the most important thing for me to say is kind of why we do this. We are moving into this segment because it's a growing segment. We see that there is a clear position that we can take. It is in trends, in line with the trends of the markets, what is going on with individualization and growing leisure and urbanization. So that's something we want to tap into. And it enables us, also, pretty clearly, to take a larger share of the Nordic market than we can today. It's a very standardized brand. So it's pretty easy to expand with even outside the Nordics. With a higher share of room revenue and less F&B and other areas, this is also more capital efficient. And even more capital efficient than both the current portfolio and the pipeline we have in Scandic. With Scandic GO, you'll see on this picture, and don't be too careful about the signature hotels, I will come back. It's not that we have an ambition in signature hotels to add another 50 hotels in that area, but just to show that we have 5 signature hotels. We do not plan more signature hotels right now. But if there is a possibility for a hotel that doesn't really fit in and we would like it because we could get the right terms and conditions, then we could do a signature. But when I look at the force we have, that's on Scandic and now on Scandic GO, tapping into a larger part of the growing market. So pretty clear, in economy segment, we will be doing more Scandic GO. But also, as you see, we can be a bit more crisp with our offering with Scandic. The next one is kind of a busy slide, and I'll try to go through it, so that you all understand what we are showing. This is our way of looking at it. And no matter who will look at it, there might be different numbers when you look at the potential in the economy segment because who defines the economy segment? But here, we have taken 2 examples. We have taken the capital cities on the right one. So that's the 4 capital cities. And on the left one, we have taken Copenhagen as a case and we have added Airbnb. And if I look at this, you can see that on a Nordic basis, it's above 10,000 rooms that you see on the 4 capital markets. If then you look at all the regional cities, et cetera, where also these economy hotels pop up, I don't know if it's doubled, but it might be. But if you look at Copenhagen as a case, and I know that you know that I'm Danish, and it's not that -- that's not the reason why I brought this. But of course, I use this because I hope I do not offend anybody, but Copenhagen has more international guests than any of the other markets. So that's simply just a fact. And that's growing. So Copenhagen has actually difficult maybe to see in this one, but if you look at the bottom and can see the different in the color, it is nearly 6,000 rooms now in Copenhagen alone into this economy segment, and it's growing. If you add then the Airbnb part, which is also pretty big. And in all of our regions, this is really -- has become a big player in the market, and they have actually come into this market. On top of all the growth percentages that I showed earlier on, shows that we have a huge growing leisure and international market. I think with Scandic GO, we will tap into both regaining some of this from the Airbnb and, of course, taking our share of this growing economy segment. Maybe then a somewhat simplified picture, but it is pretty easy to read. We mentioned earlier that the yearly annual demand growth was some 10,000 to 12,000 new rooms per year in the Nordics. With our portfolio and with our pipeline, we do have around 1,500 new rooms per year on average. So it's kind of 15% of that. We do have a market share in the Nordics, around 15% as well. So it fits well into that. If we take the branded market share, it's much larger. And we think, when we add now the Scandic GO, that we can grow our potential. We can grow our pipeline in order to get to some 2,500 to 3,000 rooms instead ahead of us. So this is a clear ambition in the growth. As you know, we also have business outside the Nordics, even though it's not that many. But we have a very proven model in Germany and really, really positive and satisfied to see the numbers in Germany that is constantly improving. And we do actually have a nice and 2-digit margins in Finland, and we see that we also take a clear position in those cities where we are based. So even with few hotels in Germany, we have 4 hotels in operation and 2 on the way, 2 in Berlin, 1 in Hamburg and 1 in Frankfurt. I can tell you that when we look at our comp sets, which is not easy comp sets, then we are beating our comp sets in these markets; shows that Scandic has a model that works also outside the Nordics with our very proven solid operational model. Then we have strengthened our business development organization and the whole portfolio organization with Svein Arild and his team, where we will do much more. We do have internal funding capacity. So we do have the possibility to do more. So I can tell you that I think it's time for Scandic to explore a bit broader and a bit more the opportunities also outside the Nordics. Why shouldn't we? But when that is said, we say shareholder value is key. We do not compromise with our business models, and nor with our financial targets. So that's why we also have said no and rejected a lot of possibilities in Germany. And that's why the speed of the growth has been maybe not that fast. Because we do not want to grow faster than we can deliver on our promises when it comes to shareholder value, just to make that pretty clear. If we look at the growth alternatives outside the Nordics, there's -- of course you could look at this from many angles, we try to say, we have like 3 different ways of doing it. We could grow with new build projects where we could do like we have done now in Germany that we do greenfield openings. But from getting the lead, finalizing the contract, building the wholesale and opening in it, it takes quite a long time. The positive thing is we get exactly what we want. We get the exact configuration we want and that's why they also deliver very solidly because we can build the hotels that we really need. The negative part is it's fairly slow. When you look at the right segment of the M&As and look into what kind of environment we see on the M&As, when I look at Germany and the transactions that has been done in Germany lately. I think it's on very, very high multiples, too high for us to be interested. That's why we haven't done any. So we're back to shareholder value. We want to do deals when they are good, otherwise, we wait. But we have the financial firepower, which also you will see more from Yana, so we can do quite a lot but we don't want to do it unless we find the perfect solutions and offers. Then, of course, you can say the one in the middle, where we have been riding here, increased focus. We really haven't spent a lot of time to analyze the opportunities outside the Nordics when it comes to takeovers of existing hotels, single properties that we could take over. I think Berlin has some 765 wholesales or so. We have been looking at finding new locations. Maybe we should look a bit more on how to grow also with takeovers that fits into our brands. And then, of course, you could also say that there might be smaller chains. What is a small chain? Could be anything from 2, 3 hotels up to, I don't know, 20, 25 hotels, that maybe we should look a bit more as well. So within Svein Arild's responsibility, this is something we will intensify, we will add resources and we will be looking broader and not only on Germany, but mainly in the northern part of Europe, but look broader than we have done previously to secure that we have more to choose from keeping our financial targets. Thank you, and I'll leave it to Yana. Thanks.

Thank you.

I don't know if we should take some questions, or we should combine them afterwards actually, but, Henrik, should we take a few [Foreign Language]? We go and you have the next time we take the questions together.

All right. So then I'll continue clicking here. Right, our financials. I will start to go back in history, reflect a little bit on why; what has driven us to where we are today. And the starting point will obviously be the stock introduction. After that, as I promised before, we will go through the profitability spread in the portfolio. I think it's quite intriguing and interesting things that you will see there. We'll probably save those charts for later and follow us up on them. And then I couldn't resist to put in a few slides on IFRS 16. Because I think we have lived with that now for a year, we have, I mean, tried to embrace that in a positive way. However, we have now been with it for a year. And I come -- will come back to you, and I will be quite clear what my opinions are about that recommendation. And then finally, of course, we talk about where we are heading with the group strategically, and how well are we equipped financially to take on that journey, so I will conclude with that. But first, if we start then 2015, I think it was in December 2015, this was launched to the stock market. We recorded some SEK 12 billion that year, and we are now close to SEK 19 billion. If we look into the organic growth, which is something which we believe that we can control over time reasonably, we have a target of 5%. And you can see that over the years here now, we are on 6.9%. Quite high organic growth in the beginning, '16, '17, I think, and that was very much driven by a strong RevPAR in all our main markets. That has softened a little bit the last couple of years due to more capacity in the market, nothing wrong with the demand, as Jens showed earlier. The like-for-like portfolio has done 3% or 2.9%, which is in line with the RevPAR development in the market. Currency has been supportive during this year with the help of the low interest here in the Nordics. Exits, and you have seen that we have had done some forced exit, which was a prerequisite from the FCCA when doing the Restel transaction. But you will -- we will also come back to that later on because we will need to focus the tail part of the portfolio more. So all in all, SEK 6.8 billion in sales additions during this year. Right, and then our adjusted EBITDA, excluding any IFRS effects, starting at SEK 1.2 billion, 2015, now over SEK 2 billion, 4 years later on. And you can see here that the like-for-like portfolio have contributed SEK 158 million on a margin of 16.1%. So the like-for-like portfolio has been margin accretive during this year. And the like-for-like definition is the 2015 definition, that's the only way to do it. New hotels, 12.6%, and this is obviously below our investment criteria, but we do have some hotels which are in ramp-up. But don't make any mistakes. Our investment criteria are higher than 12.6%. Exits, we touched upon that earlier, Stefan. Unfortunately, they are margin decretive here. And this is -- the reason is Hasselbacken here, which was not a bad business, it's reflected in the capital gain. And also that's some of the exits which we have been forced to do has had quite high margins. So this is not really tail hotels which has gone out in terms of margin. Some might be considered tail hotels, if you look into this shape and 4 of them because they were a little bit worn out, if I may say so. Restel, on pro forma level, 19.6%; this year we are close to 14%. This is absolutely in line with our expectations, which is good. Are we satisfied? So far, but we have higher ambitions than this portfolio, the Restel portfolio, and we will come back also later on because there is a profitability spread also in this portfolio, obviously then. So 10.8% and, of course, we have our minds on plus 11%, which we -- I remind of or above this. And I can assure you, we talk about this all the time in the management team. Right. And this is a little bit of new information, return on capital employed. And we did this in 2 ways. Why? One was that we -- when was introduced to the Stockholm Stock Exchange had a goodwill in the operation, which come from earlier acquisitions. And so, we made a bar where we exclude that and reset, how to say, the capital employed calculations, where we are on 11% at the time of the IPO. And you can see that, that has been increased to 12.5%. How come? Well, the like-for-like portfolio has improved. Also, including the fact that some of the new hotels are in ramp up and actually diluting that number. So if I just take the new hotels as a kind of aggregate, they are actually on single-digit return because then their explanation is that they are in a ramp so far. Restel, over 10%, not that bad, only 2 years into the acquisition and as I said, the bars and the expectations and the plans are higher than that. So there is an improved return here. And you might ask, where do we put the bar when we make new investments, how do our discussion go with Sam and Jens and so on. And obviously, we say that we need to have some 14% at least on the fully ramped-up hotel. So this should be better over time. And I think, I mean, when you look upon Scandic GO, you might -- the logo is fine and the concept is fine, but I will have to -- it looks very [ intense next time ] also, just so you are aware about that. Right. And here, we come to the profitability spread. What we done here is that we have divided it into 3 sections. One is above 15%, and why 15%? This is excluding central support cost, which is approximately 4%, which means that when we invest in a new hotel in order to secure that they are margin accretive, they should be all here after ramp up. They should all be here. So that's the reason why this is important. Then, of course, I have these ones which are below 5%. To the right, you see it to stand here. And the reason why we put that 5% is to secure that they are cash flow positive over time because we have a reinvestment need of around 4% here. And that's the reason why we need to focus those because they could potentially destroy our cash flow. So it's not enough that they 1 year or 2 years have positive cash flow. We need to see this over time. So 38 hotels in that group, with some 6,500 rooms and revenues of around SEK 2 billion. And in the top left corner here, 109 hotels, 24,000 rooms and close to SEK 10 billion in sales. And then you have this middle group. I think one interesting conclusion which you probably have already made is that you can see that there is a correlation between size and profitability. And that is natural in the Scandic model. So the bigger the hotels are, the higher probability that they will earn high margin. Obviously, Scandic GO might change this logic a little bit because we will see that also smaller hotels will have the possibility to get good margin. It works very well in [indiscernible]. We should just prove it in reality also. Right. So how did we end up here? Is this just the consequence of the history? Or have we created new problems the last couple of years? And here you see, once again, this profitability closes. But you can also see their origin. This is where we started with. You can see Restel and you can also see the new hotels. So it's actually a good mix of older structural issues. And why do we have hotel? Why do we let them be there for 4 years? Are we sleeping or are we blind? Or are we incapable of doing with it? This is not badly managed hotels. This is very often so that you have a structural explanation. You sit on an unfavorable rent agreement or you sit in a location where something has happened, which means that you struggle with very, very low occupancy level or something like that. We will address this harder, as you have heard, but there is very often a structural explanation to this. Then when you buy something, it's quite natural that you get the whole menu of the good things and bad things. And we are addressing this also, and we have also said that we will leave hotels. We have actually announced that also there. And of course, the new hotels, some of them start their travel here, which is fine. And I go up here, but for some hotels, we have started the travel down here. So obviously, we would like them to start the travel here for the future. So this is -- you can see here, if we manage the portfolio in the right way, there is a clear opportunity to lift the margin here. And also one thing, which I should repeat, the calculation or the expectations, the plans we are having for the current pipeline, they are on an EBITDA, adjusted EBITDA of 17%. And the Scandic GO calculation is not below that, not below that number. We're looking forward that I start with a 2 there. Right. And then change of subject. And this is also -- this is a very, very theoretical slide, so please handle with care. It's the CFO version I should say. Jens had a slightly other opinion here regarding this. So what we have done is to the left, you have the share of revenue. So you can get an idea of our cost structure. This is something which is direct variable to volume, like, for example, sales commission to external parties, like food and things like that, which is 100% variable. If you have less customers, we will have less cost. Then we have the hotel operations with the payroll, which we believe is -- and which we know is variable and the tougher at times gets, the more variable it will be. So we have assumed some 45% here. And then rest to the hotel operations, like energy and water and things like that, part of that is always, of course, variable, but some of it, you cannot -- you need to heat the hotel, so it's not fully variable, water consumption is more variable than heating. And then we have general expenses of around 14%. And of course, here, it's a little bit more difficult because in one way, it's fixed cost, but in another way, not. So if the s*** hits the fan, of course, it's variable. But if you have small movements in volume, we should regard it as a kind of a fixed cost. And then rent. Today, you can say that, and you saw that also from the rent structure which Jens showed you, that 75% of the rent of 27% is variable. So that takes us down to some 6%, 7% in total of fixed costs. So if you assume that you have looking at the rent, some 6%, 7% is fixed, and then there is always a fixed element here. You need to audit it and things like that. So maybe some 10%, 12% of sales is totally fixed somewhere there. The rest is up to us to manage. Hope this gives a little bit of idea of our sensitivity. But I would like to add here that I think the sensitivity of the Scandic has gone down the last couple of years, and that is due to that -- I mean, initially, this was primarily a company, which was, I mean, very much a Swedish company. Now we stand on more 4 legs, I would say. And I think what we have seen in Copenhagen last year and Oslo last year, we have still managed to improve the results despite that there has been negative RevPAR in those big cities. So I think from a business point of view, that we have a better composition today. So we hope that this will only be in theory, which we see here. Right. And now, now, now time to IFRS 16. And I will not hand out a recommendation. Instead, we will look at kind of a visual on this one. And this is a visual we will have in the annual report also. And it's not that difficult. Normally, and you know that very well from your own business and so on, rent is straightforward. That's the dotted line. You'll pay more or less the same amount every year, maybe a little bit inflation here and there, but more or less the same. So what does IFRS 16 do? Hang on. Forget about the rent. We talk about 2 components. We talk about an amortization and an interest on the financial leasing there. And what does it do? It moves -- it takes the result from the future or the cost from the future and put it into where we are today. So we actually move a lot of -- take down the result today instead of having it in the future. And the implication of this is that you punish growth. You punish growth with this recommendation. It's important I think. I will come back to this in a moment. So you actually punish growth when you do that. It might be good if you don't have any ambitions. Right. So let us take an example, and this is only a theoretical example, I would like to underline that. We have a -- let's say, some come in with a fantastic investment proposal here. But for some reason, we have a debate, whether this should be a lease of 5 years or 20 years. A 5-year lease is not something which is abnormal in the retail world, for example, where you have a lot of alternatives. You would never probably see it in hotel industry because the alternative to driving a hotel is hard to find. And the hotel is built for hotel purposes. Yes? This is a good investment. F&B share of 20%, not too high, 350 rooms, a GOP of 47%, an efficient configuration, an efficient model, a decent rent. The landlord will still earn some money, but not too much. An adjusted EBITDA of 20% accreted to our margin. We've spent some CapEx, not too much. We get the return on the investment of close to 30%. With the rent cover and rent cover is a very important key rates because that tells us about how sensitive are we to GOP changes. And 2.1 is not bad. We can lose half the GOP here. And it takes quite much to do that. So -- and then we impose IFRS on this. So on the short list, it's not a big difference. We will have more or less the same effects because the ramp isn't that important during a short lease. But over a 20-year lease, it's quite a big difference. This has never happened, and it will never happen. But think about whether we should put in 2 alternative calculations, where we say that we need to choose between a 5-year lease and a 20-year lease under IFRS 16. Then we should actually take the shorter lease. It doesn't make sense because we would never take a 5-year lease from a hotel perspective. Now this is a fantastic hotel. Why should we even take the risk of losing that after 5 years? I have the auditor in the room here also. So she would nail me if I say something wrong there, quite interesting, but it's also a little bit disturbing. The conclusion is quite disturbing. So how we will deal with this. This is actually wrong. We already now disregard IFRS 16. So we will not include IFRS 16 in our internal controlling, in our internal way of making decisions. This is the only, only recommendation, which is totally dangerous to include in the internal controlling, which does -- it doesn't really make sense here. So I will need to employ a few specialists on this to see so that they keep IFRS 16 outside the business. So financial objectives will have to be defined excluding. I have worked with this now for a year, and I cannot get my head around how I should express the financial objectives, including IFRS 16. It doesn't work. And what we will do for you is that we will do some extra work. So we will have complete financial statements, excluding IFRS 16. And I suggest that you make your estimates excluding because I think you will have a tough time to get it right including IFRS 16. And with regard then to financial leases, financial debt, that number is 100% correlated to the length of the leases, which means that if we would like to have that number down, we should go for shorter leases, which would increase the risk very much. I'm looking at the banks there now because they know what they're aiming at. Is that clear? So we will have, in Q1 next year, complete financial statements, both with or without IFRS. But we will also start to report rent cover, so we can assure you about our risk-taking in the financial leases, right? And then going back to the -- how do we enter the future and can we service now both the strategic with the Scandic GO initiatives, but also the existing pipeline. To the left -- far left, our net debt-to-adjusted EBITDA, where I said earlier today that we are now more or less on the same level as after we bought the Restel acquisition here. And even with today's dividend proposal, we should be under 1.9 on a pro forma basis, if I calculate it right then. So we will still be a little bit outside the interval. However, I mean, this is a target we should look upon on a midterm range, and we believe it makes sense to have this capacity right now when we are launching these initiatives. If we would use the balance sheet fully today, if we get -- find a good, good opportunity, we believe that we could raise immediately SEK 2.5 billion, with the balance sheet we are having. And in addition to this, the cash generative model which we're having, we should at least be able to have a free cash flow, at least, I'll say, even with years where we have more expand with a little bit higher maintenance CapEx, at least 4% before any expansion CapEx or dividends with the model we are having. So I mean, I think we are well equipped to take on new opportunities here. Right.

Thank you, Yana. Now we will take a few questions. We'll come back to a Q&A session in the end as well. But I know 1 or 2 has to leave later on here after the next break. So if you have any questions to mine or Yana's presentation, let's take a few.

Now when we've seen this slide, these 38 hotels that you mention you wanted some structurally, it's difficult to get them to be -- to improve. So I guess, you're going to want to sell them gradually?

No, it's not all of them because as Jan was also mentioning, we do have some -- even some of the newer openings that are in ramp-up, that also started on a bit low, where we can see them improving. So we kind of -- you could say this. I would say -- I wouldn't say it's half and half, but it's kind of a big picture. I think at least half of them, we see potential in lifting with all the focus areas we have in order to lift the margins. And maybe the other half is something that we need to deal with either with renegotiating contracts or get out of them.

And Scandic GO. You meant some of the -- you will change some of the existing hotels to Scandic GO, correct?

Yes, yes. We will change...

And you would -- and what is the rollout plan, a little bit? You mentioned...

Svein Arild will show you later on which 5 hotels that we initially will put into the Scandic GO brand. This is something we launched this morning. So we really haven't been able, because then we were not allowed to, to speak to landlords and owners about this new exciting brand. So we expect, of course, as of today, we would be -- I think that anybody will both call Svein Arild and me a lot in the coming days around a lot of suggestions into this new brand. But we haven't been talking to the landlords, which means that the first openings are 5 conversions of some Scandics. But it is very, very important for me to underline and highlight that we do not do the Scandic GO as a defensive move. This is not to convert existing. I don't think we will convert. It will be below 10 as a total. That's my estimate. But we see a really, really strong potential in the market and in our region, also even outside, over time, the Nordic region with Scandic GO into the economy segment. So this is a way to tap into a growing segment, and this is a quite offensive move, not to convert existing.

And then my third question, if I may. All these slides, when you look at those that are performing, not performing, we went through the F&B. You're talking about the new hotels in the pipeline in -- especially 2021 and 2022. And you don't have to be that great in math to kind of question your financial objective then not having an EBITDA margin of 11%. That seems a little bit strange, to be honest.

So to keep the...

No, to have a financial goal of 11%, I mean, because the goals that you're having, I mean, for me, that would entail quite much higher margins.