Pandox — Investor Presentation 2017

Nov 10, 2017

• Revenue from Property Management amounted to MSEK 589 (479). Adjusted for currency effects and comparable units, the increase was 4 percent.
• Net operating income from Property Management amounted to MSEK 511 (409). Adjusted for currency effects and comparable units, the increase was 3 percent.
• Net operating income from Operator Activities amounted to MSEK 129 (130). Adjusted for currency effects and comparable units, the increase was 44 percent.
• EBITDA amounted to MSEK 610 (512).
• Profit for the period amounted to MSEK 551 (592).
• Cash earnings amounted to MSEK 462 (386), incl. reversal of extra tax expense of MSEK 29 after positive outcome from appeal.
• Earnings per share amounted to SEK 3.47 (3.93).
• Revenue from Property Management amounted to MSEK 1,631 (1,329). Adjusted for currency effects and comparable units, the increase was 5 percent.
• Net operating income from Property Management amounted to MSEK 1,392 (1,127). Adjusted for currency effects and comparable units, the increase was 4 percent.
• Net operating income from Operator Activities amounted to MSEK 350 (309). Adjusted for currency effects and comparable units, the increase was 30 percent.
• EBITDA amounted to MSEK 1,654 (1,353).
• Profit for the period amounted to MSEK 1,965 (1,442).
• Cash earnings amounted to MSEK 1,177 (975).
• Earnings per share amounted to SEK 12.39 (9.56).
• EPRA NAV per share amounted to SEK 136.47 (120.53).

• Pandox completes acquisition of Hilton London Heathrow Airport for MGBP 80.

Key figures (MSEK) $*$	Q 3 2017	Q 3 2016	Chg in %	9m 2017	9m 2016	Chg in %	FY 2016
Revenue Property Management (Note 1)	589	479	23	1.631	1.329	23	1.787
Net operating income Property Management (Note 1)	511	409	25	1.392	1.127	24	1.495
Net operating income Operator Activities (Note 1)	129	130	$-1$	350	309	13	439
EBITDA (Note 1)	610	512	19	1.654	1.353	22	1,817
Profit for the period (Note 1)	551	592	-7	1.965	1.442	36	2.214
Earnings per share, SEK (Note 1,2,3)	3.47	3.93	$-12$	12.39	9.56	30	14.65
Cash earnings, MSEK (Note 1)	462	386	20	1,177	975	21	1.289
Cash earnings per share, SEK (Note 1,2,3)	2.91	2.55	14	7.39	6.45	15	8.49
Key data
Net interest bearing debt, MSEK				19.550	15.047	30	18.314
Equity asset ratio, %				40.3	40.1	n.m.	39.7
Loan to value net, %				47.7	45.5	n.m.	47.9
Interest cover ratio, times	4.6	4.5	n.m.	4.2	4.0	n.m.	4.0
Market value Properties, MSEK			$\overbrace{\phantom{aaaaa}}$	40,951	33.098	24	38,233
EPRA NAV per share, SEK (Note 3)			$\overline{\phantom{000000000000000000000000000000000000$	136.47	120.53	13	126.24
WAULT (Investment Properties), years		--	—	13.8	13.4	n.m.	13.9
RevPAR (Operator Activities) for comparable units at comparable exchange rates, SEK	777	692	12	724	657	10	660

Pandox is reporting an increase in total cash earnings and net asset value of 20 and 17 percent respectively for the third quarter. The drivers were a good hotel market, successful acquisitions and improved profitability in Operator Activities.

Adjusted for currency effects and comparable units, net operating income from Property Management increased by 3 percent, supported by an overall good development in the lease portfolio.

Adjusted for currency effects and comparable units, net operating income from Operator Activities increased by 44 percent, supported by a strong recovery in Brussels.

Economic growth and increased prosperity drive the hotel market forward. International travel has increased during the year and international demand was good in the quarter. Demand from the business, conference and leisure segments was evenly balanced.

Regional cities in most key markets continued to enjoy strong demand supported by broad based economic growth.

In the Nordics, the development was mainly good with high growth in Norway and Finland driven by Oslo and Helsinki. In Copenhagen the development was stable. In Stockholm the underlying demand remained strong, but RevPAR decreased due to the addition of new room capacity to the market.

In Brussels, the recovery continued with a considerable improvement in profitability as a result.

In Germany, growth was stable in the quarter.

Pandox's positive earnings development reflects partly strong markets, partly our work in creating a larger and more efficient business platform with higher profitability.

Business development, for example acquisitions, divestments, leasing and taking over of operations is a natural part of Pandox's business.

Pandox has, since it returned to the stock market in June 2015, acquired a total of 28 hotels in Germany, Austria, Belgium, the Netherlands and Great Britain. The hotels have attractive locations and are managed mainly under long-term revenue-based lease agreements with strong operators. In parallel, we have divested smaller hotels in less attractive locations.

Pandox has during the same period taken over, repositioned and signed new lease agreements for six hotels and leased out an additional two. In addition, the investment tempo has been high in the existing portfolio and we continue to maintain a substantial pipeline of committed investments with good expected returns in both Property Management and Operator Activities.

All in all, the quality of Pandox's hotel property portfolio has improved and the company has become more geographically diversified.

During the reporting period Pandox acquired Hilton London Heathrow Airport. It is a full-service hotel with a strong position and a strategic location at one of the world's largest airports with between 70-80 million arrivals annually.

The hotel has a direct access to Terminal 4 and excellent communications to London City, which is one of the world's largest and most dynamic destinations. Hilton London Heathrow Airport is positioned in a market segment with high occupancy and good average prices attracting both business and leisure travellers.

Via the acquisition Pandox again establishes itself on one of the largest hotel markets in Europe.

The activity level in Pandox's key markets is good.

Supported by previous acquisitions and anticipated organic growth driven by markets and profitable investments in the existing portfolio, the prospects remain good for the remainder of the year.

Pandox is an active owner with a business model focused on long-term revenue-based lease agreements with the market's best hotel operators. If these conditions are not in place Pandox has long experience of managing hotel operations itself. Pandox's specialist expertise and efficient management systems create opportunities to conduct business across the whole hotel value chain.

Property Management "We own and lease hotel properties"	Operator Activities "We own and operate hotel properties"	Asset management "We manage hotel properties owned by others"	For 2016 4.10 per s percent o of the per was 47.7
107 hotels corresponding to 83 percent of portfolio market value. Weighted unexpired lease term (WAULT) 13.8 years.	15 hotels corresponding to 17 percent of portfolio market value.	10 hotels.	1) Defined income n minus cui 2) Defined liabilities relation to propertie:

• 122 hotels
• 26,854 rooms
• 11 countries
• MSEK 40,951 in portfolio value

Pandox creates shareholder value over time by increasing cash flow and property value.

Pandox is aiming for a dividend pay-out ratio of 40-60 percent of cash earnings1), with an average dividend pay-out ratio over time of around 50 percent, and a loan-tovalue ratio net2) of 45-60 percent.

For 2016 the dividend was SEK 4.10 per share, corresponding to 50 percent of cash earnings. At the end of the period the loan-to-value ratio was 47.7 percent.

The market pattern with synchronised global growth remained in the period, which strongly supported demand in the tourism and hotel market.

In Europe arrivals increased by almost 8 percent following a strong recovery for the tourism market where destinations previously affected negatively by security related events enjoyed very good growth.

International arrival statistics from the UNWTO for the first half of the year were the strongest since 2010.

1

In the USA the market has entered a calmer phase with stable occupancy where in particular higher average prices are driving growth, albeit at a slower pace than before.

Canada had a strong third quarter with record high occupancy. Growth in RevPAR amounted to almost 8 percent driven by a relatively weak exchange rate, limited new room capacity and increasingly stronger regional markets. Montreal extended its good trend, albeit at a lower level due to rooms having previously being closed for renovations being reintroduced in the market.

Improved economic growth and a strong increase in international arrivals lifted hotel markets in Europe as a whole. RevPAR increased by a healthy 7 percent supported by both increased demand and improved average prices.

In Germany RevPAR increased by 4 percent in the period mainly due to a strong corporate segment with congresses and trade fairs.

In Brussels the recovery continued with force primarily by good growth in the corporate and meeting segments. In London, the development was calmer, and RevPAR increased by 2 percent in the quarter, after a first half year with higher growth driven by among other things a weaker British pound.

The Nordic countries continued to benefit from a good economic trend. The inflow of new hotel capacity in Stockholm had a dampening effect on RevPAR which decreased by 3 percent. As in the second quarter, the underlying demand remained good in the third quarter, but it was unable to compensate in full for the increase in capacity.

RevPAR growth in Oslo was 11 percent supported by a combination of capacity constraints in the market due to renovation activity and increased demand from international inbound markets.

Copenhagen faced strong comparative figures in the period and RevPAR growth paused at 1 percent. The outlook for the Danish economy is good and the attraction of Copenhagen remains strong. The challenge in Copenhagen is several larger hotel openings in the coming years.

Helsinki continued to develop well, and RevPAR increased by 7 percent with higher average prices as the main driver. An improved economy with a stronger export sector and increased domestic consumption also contributed to a good development in most regional markets in Finland.

Revenue from Property Management amounted to MSEK 589 (479), an increase of 23 percent, driven by a combination of acquired and organic growth in the lease portfolio as well as reclassifications. Adjusted for currency effects and comparable units, revenue increased by 4 percent.

Revenue from Operator Activities amounted to MSEK 463 (561), a decrease of 17 percent, which reflects previously completed reclassifications (see page 9 for a list). Adjusted for currency effects and comparable units, revenue and RevPAR increased by 10 and 12 percent respectively.

The Group's net sales amounted to MSEK 1,052 (1,040). Adjusted for currency effects and comparable units, net sales increased by 7 percent.

Net operating income from Property Management amounted to MSEK 511 (409), an increase of 25 percent. Adjusted for currency effects and comparable units, net operating income increased by 3 percent.

Net operating income from Operator Activities amounted to MSEK 129 (130), a decrease of 1 percent despite previous considerable reclassifications. Adjusted for currency effects and comparable units, net operating income increased by 44 percent.

Total net operating income amounted to MSEK 640 (539), an increase of 19 percent.

Central administration costs amounted to MSEK -30 (-27).

EBITDA amounted to MSEK 610 (512), an increase of 19 percent.

Financial expenses amounted to MSEK -132 (-114), which is mainly explained by increased interest-bearing liabilities after acquisitions carried out. Financial income amounted to MSEK 0 (0).

Profit before changes in value amounted to MSEK 439 (363), an increase of 21 percent.

Unrealised changes in value for Investment Properties amounted to MSEK 194 (369) and are explained by a combination of improved underlying cash flows in Pandox's property portfolio and lower valuation yield.

Realised changes in value for Investment Properties amounted to 0 (0).

Unrealised changes in value of derivatives amounted to MSEK 18 (24).

Current tax amounted to MSEK -16 (-12) including reversal of extra tax expense of MSEK 29. The amount, which was provisioned for in the fourth quarter 2015, is attributable to a positive outcome after appeal of an assessment of arrears by the Swedish Tax Agency relating to past downward adjustment of acquisition expenses for shares in partnership and limited partnership companies.

The underlying increase in current tax is mainly explained by positive results after acquisitions in Germany, Austria and the Netherlands, as well as consumption of deferred tax assets in Denmark and Finland.

Deferred tax expense amounted to MSEK -84 (-152).

Profit for the period amounted to MSEK 551 (592) and profit for the period attributable to Parent Company shareholders amounted to MSEK 547 (589), which is equivalent to SEK 3.47 (3.93) per share.

Cash earnings amounted to MSEK 462 (386), an increase of 20 percent.

Revenue from Property Management amounted to MSEK 1,631 (1,329), an increase of 23 percent, driven by a combination of acquired and organic growth in the lease portfolio, as well as reclassifications. Hilton London Heathrow Airport is included per 31 August 2017. Adjusted for currency effects and comparable units, revenue increased by 5 percent.

Revenue from Operator Activities were unchanged at MSEK 1,539 (1,539). A total of eight hotel properties were reclassified to Property Management during the first half of the year and one hotel was acquired (see page 9 for a list). Adjusted for currency effects and comparable units, revenue and RevPAR increased by 8 and 10 percent respectively.

The Group's net sales amounted to MSEK 3,170 (2,868). Adjusted for currency effects and comparable units, net sales increased by 7 percent.

Net operating income from Property Management amounted to MSEK 1,392 (1,127), an increase of 24 percent. Adjusted for currency effects and comparable units, net operating income increased by 4 percent.

Net operating income from Operator Activities amounted to MSEK 350 (309), an increase of 13 percent, despite reclassifications. Adjusted for currency effects and comparable units, net operating income increased by 30 percent.

Total net operating income amounted to MSEK 1,742 (1,436), an increase of 21 percent.

Central administration costs amounted to MSEK -88 (-83). The increase is explained by the Company's geographical expansion.

EBITDA amounted to MSEK 1,654 (1,353), an increase of 22 percent explained by improved net operating income for both Property Management and Operator Activities.

Financial expenses amounted to MSEK -394 (-341), which is mainly explained by increased interest-bearing liabilities after acquisitions carried out. Financial income amounted to MSEK 1 (1).

Profit before changes in value amounted to MSEK 1,136 (905), an increase of 26 percent.

Unrealised changes in value for Investment Properties amounted to MSEK 1,136 (888) and are explained by a combination of improved underlying cash flows in Pandox's property portfolio and lower valuation yield.

Realised changes in value for Investment Properties amounted to MSEK 0 (159). Unrealised changes in the value of derivatives amounted to MSEK 166 (-155).

Current tax amounted to MSEK -84 (-38) including reversal of extra tax expense of MSEK 29 in the third quarter. The amount, which was provisioned for in the fourth quarter 2015, is attributable to a positive outcome after appeal of an assessment of arrears by the Swedish Tax Agency relating to past downward adjustment of acquisition expenses for shares in partnership and limited partnership companies.

The underlying increase is mainly explained by positive results after acquisitions in Germany, Austria and the Netherlands, as well as consumption of deferred tax assets in Denmark and Finland.

Deferred tax expense amounted to MSEK -389 (-317).

Profit for the period amounted to MSEK 1,965 (1,442) and profit for the period attributable to Parent Company shareholders amounted to MSEK 1,952 (1,434), which is equivalent to SEK 12.39 (9.56) per share.

Cash earnings amounted to MSEK 1,177 (975), an increase of 21 percent.

MSEK	Q3 2017	Q3 2016	9m 2017	9m 2016	FY 2016
Total gross profit	601	504	1,617	1,328	1.787
– whereof gross profit Property Management	511	409	1.392	1.127	1.495
- whereof gross profit Operator Activities	90	95	225	201	292
Net operating income Property Management
- Net operating income equals gross profit	511	409	1.392	1,127	1.495
Net operating income Operator Activities
– Gross profit	90	95	225	201	292
- Add: Depreciation included in costs, Operator Activities	39	35	125	108	147
- Net operating income Operator Activities	129	130	350	309	439
Total net operating income	640	539	1.742	1.436	1.934
Central administration, excluding depreciation	$-30$	$-27$	-88	-83	$-117$
EBITDA	610	512	1.654	1.353	1,817

MSEK	Q3 2017	Q3 2016	9m 2017	9m 2016	F١ 2016
Rental income	569	459	1.572	1.284	1.717
Other property income	20	20	59	45	70
Costs, excluding property administration	$-62$	$-50$	$-181$	$-144$	$-212$
Net operating income, before property administration	527	429	1.450	1.185	1.575
Property administration	$-16$	$-20$	-58	$-58$	-80
Gross profit	511	409	1.392	1.127	1.495
Net operating income, after property administration	511	409	1.392	1.127	1.495

Rental income and other property income amounted to MSEK 589 (479) and net operating income to MSEK 511 (409), an increase of 23 and 25 percent respectively. Hilton London Heathrow Airport is included per 31 August 2017.

Adjusted for currency effects and comparable units, total rental income and net operating income increased by 4 and 3 percent respectively.

Development in the comparable lease portfolio remained strong, supported by broad based demand and increased average prices. Finland and Norway delivered the highest rental growth for the quarter.

Individual cities with a particularly strong development were Oslo, Gothenburg, Helsinki, Hannover and Aachen. Copenhagen saw low single digit rental growth.

Regional cities in the lease portfolio continued to develop well, although growth was somewhat lower than in the previous quarter.

Stockholm enjoyed continued good underlying demand but RevPAR and rental growth were negatively affected by increased capacity.

The seven hotel properties in Europe acquired in December 2016 developed according to plan. On 30 September 2017, the weighted average unexpired lease term (WAULT) for Investment Properties was of 13.8 years (31 December 2016: 13.9).

Revenue for the quarter from the nine external asset management agreements in Oslo amounted to MSEK 0.9 (1.0).

Property Management

Operator Activities

Operator Activities

The market value of Operating Properties amounted to MSEK 6,913, representing 17 percent of total property market value.

Net operating income Operator

Activities

MSEK	Q3 2017	Q3 2016	9m 2017	9m 2016	FY 2016
Revenues	463	561	1.539	1.539	2.158
Costs	$-373$	$-466$	$-1.314$	$-1.338$	$-1,866$
Gross profit	90	95	225	201	292
Add: Depreciation included in costs	39	35	125	108	147
Net operating income	129	130	350	309	439

Comments on the period July-September 2017

Revenue from Operator Activities amounted to MSEK 463 (561), a decrease of 17 percent and is explained by previously completed reclassifications. Net operating income amounted to MSEK 129 (130), which was a marginal decrease despite the segment having seven hotels net fewer than in the corresponding period last year.

The net operating margin improved to 27.9 (23.2) percent due to improved profitability in Brussels and higher profitability in the remaining hotels after reclassifications.

Adjusted for currency effects and comparable units, revenue and net operating income increased by 10 percent and 44 percent respectively, primarily driven by higher demand and profitability in Brussels compared with the previous year.

Adjusted for currency effects and comparable units, RevPAR increased by 12 percent.

Reclassifications, acquisitions and divestments 2017-2016

Reclassifications	Date	From	To
Scandic Prince Philip	Jun 1, 2017	Operator Activities	Property Management
Scandic Hafiell	Jun 1, 2017	Operator Activities	Property Management
Scandic Lillehammer	May 1, 2017	Operator Activities	Property Management
Scandic Sluseholmen	May 1, 2017	Operator Activities	Property Management
Scandic Kista Stockholm	Apr 11, 2017	Operator Activities	Property Management
Scandic Valdres*	Apr 4, 2017	Operator Activities	Property Management
Scandic Sørlandet	Apr 4, 2017	Operator Activities	Property Management
Meininger Copenhagen	Jan 1, 2017	Operator Activities	Property Management
Meetingpoint Hafjell	Sep 1, 2016	Property Management	Operator Activities
Thon Hotel Sørlandet	May 28, 2016	Property Management	Operator Activities
Thon Hotel Fagernes*	Jan 1, 2016	Property Management	Operator Activities
Acquisitions	Date	Segment
Hilton London Heathrow Airport	Aug 31, 2017	Property Management
Hotel Berlaymont Brussels	May 29, 2017	Operator Activities
Seven hotel properties in Europe	Dec 19, 2016	Property Management
Hilton Grand Place Brussels	Oct 10, 2016	Operator Activities
Divestments	Date	Segment
Grand Hotel Oslo	Apr 25, 2017	Property Management	Contract terminated
Eight hotel properties in Sweden	Mar 31, 2016	Operator Activities

*The same hotel property

Revenue by country Operator Activities (July-September)

Pandox's own brands (30 September 2017)

The Hotel. BRUSSELS

HOTELLI KORPILAMPI

Hotel Berlaymont

Property portfolio

Change in property values

At the end of the period, Pandox's property portfolio had a total market value of MSEK 40,951 (38,233), of which MSEK 34,038 (30,163) was for Investment Properties and MSEK 6,913 (8,070) for Operating Properties. The market value of Operating Properties is reported for disclosure purposes only and is included in EPRA NAV.

In Property Management Hilton London Heathrow Airport was acquired 31 August 2017.

In Operator Activities eight hotel properties were reclassified to Property Management and one hotel was acquired during the first half of the year.

Operating Properties are recognised at cost less depreciation and any impairment. At the end of the period, the carrying amount of the Operating Properties portfolio was MSEK 5,164 (6,415). The decrease is mainly the result of the reclassifications.

Change in value Investment Properties

	MPFK
Investment Properties, beginning of the period (January 1, 2017)	30,163
+ Acquisitions 4	823
+ Investments in current portfolio	298
- Divestments
+/- Reclassifications 1	1.600
+/- Revaluation of fixed assets to the profit for the year 1	112
+/- Unrealised changes in value	1,136
+/- Realised changes in value
+/- Change in currency exchange rates	-94
Investment Properties, end of period (September 30, 2017)	34,038
Change in value Operating Properties (reported for information purposes only)

MSEK 8.070 Operating Properties, market value (January 1, 2017) + Acquisitions 324 203 + Investments in current portfolio $-16$ - Divestments² +/-Reclassifications¹ $-1.712$ +/- Unrealised changes in value 95 +/- Realised changes in value $-51$ +/- Change in currency exchange rates Operating Properties, market value (September 30, 2017) 6,913

1 Refers to reclassification of eight hotel properties to Operator Activities, of which one in Q1 and seven in Q22017.
² Refers to divestment of FF&I Grand Hotel Oslo Q2 2017.

$^3$ Refers to acquisition of Silken Berlaymont 29 May 2017.
4 Refers to acquisition of Hilton London Heathrow Airport 31 August at closing rate.

Investments

During the period January-September 2017, investments in the existing portfolio, excluding acquisitions, amounted to MSEK 501 (246), of which MSEK 298 (106) in Investment Properties and MSEK 203 (140) in Operating Properties.

At the end of the period, committed investments for future projects equivalent to around MSEK 720 were approved, of which larger projects are Hyatt Regency Montreal, Hotel Berlin, Berlin, Leonardo Wolfsburg City, Hilton Grand Place Brussels, Elite Park Avenue Gothenburg, Elite Stora Hotellet in Jönköping and InterContinental Montreal as well as the new investment programme with Scandic Hotels Group for 19 hotel properties in the Nordic region.

Sensitivity analysis (MSEK)

Financial effects of changes in certain key valuation parameters as of September 30, 2017:

Investment properties, effect on fair value	Change	Effect on value
Yield	$+/- 0.5$ pp	$-2.775/+3.315$
Change in currency exchange rates	$+/-1%$	$+/-198$
Net operating income	$+/-1%$	$+/- 338$
Investment properties, effect on revenues	Change	Effect on revenues
RevPAR (assuming 50/50 split between occupancy and rate)	$+/-1\%$	$+/-18$
Operating properties, effect on revenues	Change	Effect on revenue
RevPAR (assuming 50/50 split between occupancy and rate)	$+/-1%$	$+/-15$
Financial sensitivity analysis, effect on earnings	Change	Profit before changes in value
Interest expenses with current fixed interest hedging, change in interest rates	$+/-1\%$	$-/- 84$
Interest expenses with a change in the average interest rate level	$+/-1\%$	$-/- 200$
Remeasurement of interest-rate derivatives following shift in yield-curves	$+/-1\%$	$-/- 443$

Average valuation yield, % (30 September 2017)

Property valuation

Pandox performs internal valuations of its hotel property portfolio. Investment properties are recognised at fair value in accordance with accounting standard IAS 40. Operating properties are recognised at cost less accumulated depreciation and any accumulated impairment losses. The market value of Operating properties is reported for information purposes only and is included in EPRA NAV.

The valuation model consists of an accepted and proven cash flow model, where the future cash flows the hotel properties are expected to generate are discounted. The valuation is based on the business plan for the hotel concerned, which is updated at least twice a year and takes into consideration, among other things, developments in the underlying operator activities, market developments, the contract situation. operating and maintenance issues and investments aimed at maximizing the hotel property's cash flow and return in the long-term.

External valuations of all properties are carried out annually by independent property appraisers. The external appraisers complete a more in-depth inspection at least every three years or in conjunction with major changes to the properties. The external valuations provide an important reference point for Pandox's internal valuations.

In the third quarter Pandox had external valuations performed on a quarter of the properties in its portfolio. The external valuation results are in line with and confirm Pandox's internal valuations.

For an overview of the property portfolio by segment, geography and brand, please see page 25

At the end of the period loan-to-value net was 47.7 (47.9) percent. Equity attributable to the Parent Company's shareholders amounted to MSEK 16,395 (15,081). EPRA NAV (net asset value) was MSEK 21,494 (19,833), corresponding to SEK 136.47 (126.24) per share. Liquid funds plus unutilised long-term credit facilities amounted to MSEK 1,844 (2,232).

At the end of the period the loan portfolio amounted to MSEK 20,034 (18,831). Unutilised longterm credit facilities amounted to MSEK 1,360 (1,715).

During the third quarter Pandox has completed refinancing and new financing for a total of MSEK 1,583 for InterContinental Montreal, Radisson Blu Basel, Hilton Grand Place and Hilton London Heathrow Airport.

The average fixed rate period was 2.3 (2.8) years and the average interest rate, corresponding to the interest rate level at the end of the period, was 2.5 (2.6) percent including effects of interestrate swaps. The average repayment period was 2.4 (3.0) years. The loans are secured by a combination of mortgage collateral and pledged shares.

To manage interest rate risk and increase the predictability of Pandox's earnings, interest rate derivatives, mainly interest rate swaps, are used. At the end of the period Pandox had interest rate swaps amounting to MSEK 11,195 and around 51 percent of Pandox's loan portfolio was hedged against interest rate movements for periods longer than one year.

	Interest maturity					Interest rate swaps
		Interest					Average interest
(MSEK)	Loans	swaps	Amount	Share, %	Volume	Share, %	swaps, $\%$ 1
< 1 year	20.034	$-10.284$	9.751	49	910	8	3.6
$1-2$ year		245	245		245		2.5
$2-3$ year		3.097	3.097	15	3.097	28	2.1
3-4 year		1.150	1.150	6	1.150	10	2.2
$4-5$ year		2.995	2.995	15	2.995	27	1.1
> 5 year		2.798	2,798	14	2,798	25	1.6
Total/net/average	20.034	0	20.034	100	11.195	100	1.8

To reduce the currency exposure in foreign investment Pandox's aim is to finance the applicable portion of the investment in local currency. Equity is normally not hedged as Pandox's strategy is to have a long investment perspective. Currency exposures are largely in form of currency translation effects.

									Share	Interest
Year due (MSEK) 1	SEK	DKK	EUR	CHF	CAD	NOK	GBP	Total	%	$\%$ 2
2017	1.053	531	4.934	434	502	500	869	8.824	44	3.4
2018	250		473	$\overline{\phantom{000000000000000000000000000000000000$	$\overline{\phantom{000000000000000000000000000000000000$	204		927	5	2.9
2019	125		694	$\overline{\phantom{m}}$	$\overbrace{\qquad \qquad }^{}$	612	$\overline{\phantom{000000000000000000000000000000000000$	1.431	7	0.9
2020	1.050	154	856	$\overline{\phantom{0}}$			$\hspace{0.05cm}$	2.061	10	2.5
2021	1.250	$\overline{\phantom{000000000000000000000000000000000000$	1,387	$\overline{\phantom{000000000000000000000000000000000000$			$\overline{\phantom{0}}$	2.637	13	1.4
2022 and later	1.450	514	2.191				$\overline{\phantom{000000000000000000000000000000000000$	4.155	21	1.6
Total	5.178	1.200	10.535	434	502	1.317	869	20.034	100	2.5
Share maturity in currency, %	25.8	6.0	52.6	2.2	2.5	6.6	4.3	100
Average interest rate.%	3.4	2.2	2.2	0.9	3.2	3.3	1.8	2.5
Average interest rate period, years	3.3	2.2	2.1	0.9	3.2	3.2	0.0	2.3
Market value Properties	14.195	3,281	17.759	678	1.097	3,072	869	40,951

Pandox uses interest rate derivatives to achieve a desired interest maturity profile. The market value of the derivatives portfolio is measured on each closing date, with the change in value recognised in profit or loss. Upon maturing, the market value of a derivative contract is dissolved entirely and the change in value over time thus does not affect equity.

On 30 September 2017, the net market value of Pandox's financial derivatives amounted to MSEK -569 (-735). The change in the quarter is mainly explained by an increase in the market interest rate relative to the fixed interest rate in the interest swap contracts.

			Net interest. interest swaps,	Subtotal	Net interest. interest swaps,	Total
Year due (MSEK)	Loan maturity 2	Interest, loans 1	negative value 1	interest	positive value 1	interest
2017			8	8
2018	5.238	45	23	69		69
2019	5.985	82	10	92		91
2020	3.436	49	60	109		109
2021	5.102	82	44	126		130
2022 and later	274	10	68		13	90
Total	20034	268	213	481	17	497

At the end of the period deferred tax assets amounted to MSEK 665 (748). These represent the book value of tax loss carry forwards which the Company expects to be able to use in upcoming fiscal years, and temporary measurement differences for interest rate derivatives.

Deferred tax liabilities amounted to MSEK 2,911 (2,582) and relate to temporary differences between fair value and the taxable value of Investment Properties, as well as temporary differences between the book value and the taxable value of Operating Properties.

13 July 2017	Half-year report January-June 2017
17 July 2017	Pandox enters agreement to acquire Hilton London Heathrow Airport
31 August 2017	Pandox completes acquisition of Hilton London Heathrow Airport for
	MGBP 80
11 October 2017	Positive verdict in civil case regarding claims against former lessee which gives Pandox the right to claim compensation through the bankruptcy proceedings

To read the full press releases, see www.pandox.se.

As of 30 September 2017, Pandox had the equivalent of 1,154 (1,423) full-time employees. Of the total number of employees, 1,119 (1,455) are employed in the Operator Activities segment and 35 (32) in the Property Management segment and in central administration.

Activities in the Pandox's property owning companies are administered by staff employed by the Parent Company, Pandox AB (publ). The costs of these services are invoiced to Pandox's subsidiaries. Invoicing during the period January-September 2017 amounted to MSEK 52 (45), and the profit for the period amounted to MSEK 44 (188).

At the end of the period the Parent Company shareholders' equity amounted to MSEK 3,109 (3,712) and interest-bearing debt of MSEK 5,032 (5,085), of which MSEK 1,269 (4,997) in the form of long-term debt.

The Parent Company carries out transactions with subsidiaries in the Group. Such transactions mainly entail allocation of centrally incurred administration cost and interest relating to receivables and liabilities. All related party transactions are entered into on market terms.

Eiendomsspar AS owns 5.1 percent of 21 hotel properties in Germany and 9.9 percent of another hotel property in Germany, which were acquired by Pandox in 2015 and 2016. A temporary minority holding of 5.1 percent for the two hotel properties in Austria is expected to be dissolved in 2017.

Pandox has asset management agreements regarding nine hotels located in Oslo as well as for the Pelican Bay Lucaya Resort in the Grand Bahama Island, which are owned by Eiendomsspar AS, subsidiaries of Eiendomsspar AS and affiliates of Helene Sundt AS and CGS Holding AS respectively. During the third quarter revenue from the nine asset management agreements amounted to MSEK 0.9 (1.0), and revenue from Pelican Bay Lucaya amounted to MSEK 0.5 (0.1).

Pandox applies the European Securities and Market Authority's (ESMA) guidelines for Alternative Performance Measurements. The guidelines aim at making alternative Performance Measurements in financial reports more understandable, trustworthy and comparable and thereby enhance their usability. According to these guidelines, an Alternative Performance Measurement is a financial key ratio of past or future earnings development, financial position, financial result or cash flows which are not defined or mentioned in current legislation for financial reporting; IFRS and the Swedish Annual Accounts Act. The guidelines are mandatory for financial reports published after 3 July 2016. Reconciliations of Alternative Performance Measurements are available on pages 22-23.

At the end of the period, the total number of undiluted and diluted shares outstanding amounted to 75,000,000 A shares and 82,499,999 B shares. For the period, the weighted number of shares before and after dilution amounted to 75,000,000 A shares and 82,499,999 B shares.

Pandox seeks to achieve the lowest possible financing costs while simultaneously limiting risks related to interest rates, foreign currencies and borrowings.

Pandox seeks to manage the risk that changes in interest rate levels could negatively affect Pandox's results. Pandox's objective is that interest rate exposure is managed so that increased costs because of reasonable changes in interest rates are compensated through higher revenues. Pandox seeks to achieve this objective through maintaining a loan portfolio with varying maturity dates and fixed interest periods.

Further, Pandox has developed and implemented systems and procedures designed to support continuous monitoring and reporting of interest rate exposures. Pandox enters into interest-rate swap contracts to obtain fixed interest rates on a certain part of its debt portfolio.

Pandox's balance sheet and income statement are exposed to changes in the value of the Swedish Krona, as certain of Pandox's assets are denominated in foreign currencies. Pandox seeks to hedge a part of this exposure through entering loans in the local currency where Pandox's assets are located.

Pandox seeks to manage the risk that external financing may be difficult to access. Pandox's objective is to enter into long-term framework agreements.

Pandox aims to centralise, where possible, all Group borrowing in the Parent to gain flexibility and administrative benefits.

Pandox's business and market are subject to certain risks which are completely or partly outside the control of the Company and which could affect Pandox's business, financial condition and results of operations. These direct and indirect risks are the same for the Group and the Parent Company, with the exception that the Parent Company does not engage directly in hotel operations. Risks are the same both on a short and long-term basis.

Risk factors include, among others, the main following sector risks and risks related to the operations: (1) The value of Pandox's assets is exposed to macroeconomic fluctuations and the liquidity in the property market could decline. (2) Pandox is subject to risks in its business of repositioning and transforming hotel properties. (3) Pandox's costs of maintaining, replacing and improving its existing properties could be higher than estimated. (4) Pandox might be unable to identify and acquire suitable hotel properties. (5) Pandox may from time to time carry out acquisitions of new hotel properties, all of which are subject to risks. (6) Pandox may be unable to retain, and recruit, key personnel in the future. (7) Pandox depends on third party operators' reputation, brand, ability to run their businesses successfully and financial condition. (8) Pandox is exposed to environmental risks. (9) Pandox is exposed to interest rate fluctuations. (10) Pandox is exposed to the risk of being unable to refinance its facility agreements when they fall due. (11) Pandox is subject to certain risks common to the hotel industry, which are beyond the Company's control. (12) The hotel industry is characterised by intense competition and Pandox may be unable to compete effectively in the future. (13) New business models may enter the hotel industry. (14) The growth of Online Travel Agencies (OTAs) could materially and adversely affect Pandox's business and profitability.

The hotel industry is seasonal in nature. The periods during which the Company's properties experience higher revenues vary from property to property, depending principally upon location and the customer base served. Since most of the customers that stay at Pandox owned or operated hotels are business travellers, the Company's total revenues have historically been greater particularly in the second quarter. The timing of holidays and major events can also impact the Company's quarterly results.

Pandox AB (publ) is a Swedish limited liability company (corporate reg. no. 556030-7885) with its registered office in Stockholm, Sweden. Pandox was formed in 1995 and the company's B shares are listed on Nasdaq Stockholm since 18 June 2015.

This report contains forward-looking statements. Such statements are subject to risks and uncertainties as various factors, many of which are beyond the control of Pandox AB's (publ), may cause actual developments and results to differ materially from the expectations expressed in this report.

The report has been translated from Swedish. The Swedish text shall govern for all purposes and prevail in the event of any discrepancy.

Stockholm 10 November 2017.

Anders Nissen, CEO

We have reviewed the condensed interim financial information (interim report) of Pandox AB 556030-7885 as of 30th September 2017 and the nine-month period then ended. The board of directors and the CEO are responsible for the preparation and presentation of the interim financial information in accordance with IAS 34 and the Swedish Annual Accounts Act. Our responsibility is to express a conclusion on this interim report based on our review.

We conducted our review in accordance with the International Standard on Review Engagements ISRE 2410, Review of Interim Report Performed by the Independent Auditor of the Entity. A review consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing, ISA, and other generally accepted auditing standards in Sweden. The procedures performed in a review do not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Based on our review, nothing has come to our attention that causes us to believe that the interim report is not prepared, in all material respects, in accordance with IAS 34 and the Swedish Annual Accounts Act, regarding the Group, and with the Swedish Annual Accounts Act, regarding the Parent Company.

Stockholm, 10th November 2017

PricewaterhouseCoopers AB

Patrik Adolfson Helena Ehrenborg Auditor in charge

Authorised Public Accountant Authorised Public Accountant

Interim report Q1-Q3 2017	10 November 2017
Hotel Market Day	21 November 2017
Year-end report 2017	15 February 2018
Annual general meeting 2018	9 April 2018

More information about Pandox and our financial calendar is available at www.pandox.se.

Pandox will present the interim report for institutional investors, analysts and media via a webcasted telephone conference, 10 November 09:00 CET.

To follow the presentation online go to http://media.fronto.com/cloud/pandox/171110. To participate in the conference call and ask questions, please call one of the telephone numbers indicated below about 10 minutes before the start of the presentation. The presentation material will be available at www.pandox.se at approximately 08:00 CET.

SE: +46 (0)8 503 36 434 UK LocalCall: 08444933800 US LocalCall: 16315107498 Conference ID: 96465111

A recorded version of the presentation will be available at www.pandox.se.

For further information, please contact:

Anders Nissen CEO +46 (o) 708 46 02 02

Liia Nõu CFO +46 (0) 702 37 44 04

Anders Berg Head of Communications and IR +46 (0) 760 95 19 40

This information is information that Pandox AB (publ) is obliged to make public pursuant to the EU Market Abuse Regulation. The information was submitted for publication, through the agency of the contact persons set out above 10 November 2017 at 07:00 CET.

Summary of financial reports

Condensed consolidated statement of comprehensive income

	Note	Q3 2017	Q3 2016	9m 2017	9m 2016	FY 2016
MSEK
Revenues Property Management
Rental income	$\overline{2}$	569	459	1.572	1.284	1.717
Other property income	$\overline{2}$	20 463	20 561	59	45	70
Revenue Operator Activities Total revenues		1.052	1.040	1,539 3.170	1,539 2.868	2,158 3.945
Costs Property Management	$\overline{2}$	$-78$	$-70$	$-239$	$-202$	$-292$
Costs Operator Activities	$\overline{2}$	$-373$	$-466$	$-1.314$	$-1.338$	$-1.866$
Gross profit		601	504	1,617	1,328	1,787
- whereof gross profit Property Management	2	511	409	1.392	1.127	1.495
- whereof gross profit Operator Activities	$\overline{2}$	90	95	225	201	292
Central administration		$-30$	$-27$	$-88$	$-83$	$-117$
Financial income		$\mathbf 0$	$\mathbf 0$	$\mathbf{1}$	$\mathbf{1}$	$\mathbf{1}$
Financial expenses		$-132$	$-114$	$-394$	$-341$	$-457$
Profit before changes in value		439	363	1,136	905	1,214
Changes in value
Properties, unrealised	2	194	369	1.136	888	1.301
Properties, realised	$\mathfrak{D}$	18	24	166	159 $-155$	159 $-39$
Derivatives, unrealised Profit before tax		651	756	2.438	1,797	2.635
Current tax		$-16$	$-12$	$-84$	$-38$	$-72$
Deferred tax		$-84$	$-152$	-389	$-317$	$-349$
Profit for the period		551	592	1,965	1.442	2,214
Other comprehensive income Items that may not be classified to profit or loss This year's revaluation of fixed assets Tax attributable to items that may not be classified to				112
profit or loss				$-25$
Items that may be classified to profit or loss				87
Translation differences realisation of foreign operations		$-1$	108	$-76$	341	359
		$-1$	108	$-76$	341	359
Other comprehensive income for the period		$-1$	108	11	341	359
Total comprehensive income for the period		550	700	1,976	1.783	2.573
Profit for the period attributable to the shareholders of the parent company		547	589	1.952	1.434	2.201
Profit for the period attributable to non-controlling interests		4	3	13	8	13
Total comprehensive income for the period attributable to the shareholders of the parent company		548	694	1,962	1,769	2,556
Total comprehensive income for the period attributable to non-controlling interests		$\overline{2}$	6	14	14	17
Earnings per share, before and after dilution, SEK		3.47	3.93	12.39	9.56	14.65

Condensed consolidated statement of financial position

	30 Sep	30 Sep	31 Dec
MSEK	2017	2016	2016
ASSETS
Non-current assets
Operating properties	4.817	5.490	5.984
Equipment and interiors	347	341	431
Investment properties	34.038	25,792	30.163
Deferred tax assets	665	772 ÷.	748
Derivatives 2	6 45	21	$\mathbf{1}$ 22
Other non-current receivables
Total non-current assets	39.918	32.416	37.349
Current assets
Inventories	14	17	16
Current tax assets	14	18	11
Trade account receivables	218	236	249
Prepaid expenses and accrued income	330	245	262
Other current receivables	196	15	25
Cash and cash equivalents	484	500	517
Total current assets	1.256	1,031	1.080
Total assets	41.174	33,447	38,429
EQUITY AND LIABILITIES
Equity
Share capital	394	375	394
Other paid-in capital	3.120	2.138	3.122
Reserves	$-43$	$-73$	$-53$
Retained earnings, including profit for the period	12.924	10.851	11.618
Equity attributable to the owners of the Parent Company	16,395	13,291	15,081
Non-controlling interests	191	137	177
Sum equity	16,586	13.428	15,258
LIABILITIES
Non-current liabilities
Interest-bearing liabilities 1	14.796	14,280	18.294
Other non-current liabilities	12	1	10
Derivatives 2	575	852	736
Provisions	109	88	100
Deferred tax liability	2,911	2,660	2,582
Total non-current liabilities	18.403	17.881	21.722
Current liabilities
Provisions	14	4	3
	5.238	1.266	537
Interest-bearing liabilities 1 Tax liabilities	96	10	44
Current liabilities	244	166	202
Other current liabilities	171	177	209
Accrued expenses and prepaid income	422	515	454
Total current liabilities	6,185	2,138	1.449
Total liabilities	24,588	20,019	23,171
Total equity and liabilities	41,174	33,447	38,429

$^{\rm 1}$ The carrying amounts of interest-bearing liabilities and other financial instruments constitute a reasonable approximation of their fair values.² The fair value measurement belongs to level 2 in the fair value

Condensed consolidated statement of changes in equity

Attributable to the owners of the parent company

					Retained earnings, incl profit		Non-
MSEK	Share capital	Other paid in capital	Translation reserves	Revaluation reserve	for the period	Total	controlling interests	Total equity
Opening balance equity January 1, 2016	375	2,138	$-408$	—	9,987	12,092	123	12,215
Profit for the period Q1-3 2016				- -	1,434	1,434	8	1,442
Other comprehensive income Q1-3 2016			335			335	6	341
Dividend May 2016			$\overline{\phantom{a}}$	--	$-570$	$-570$		$-570$
Closing balance equity	375	2,138	$-73$	-	10,851	13,291	137	13,428
Profit for the period Q4 2016					767	767	5	772
Other comprehensive income Q4 2016			20			20	$-2$	18
New share issue 2016 1	19	984				1,003	$\overline{\phantom{0}}$	1,003
Dividend Q4 2016							$-8$	$-8$
Change in non-controlling interests pertaining to acquisitions							45	45
Closing balance equity December 31, 2016	394	3,122	$-53$		11.618	15,081	177	15,258
Opening balance equity January 1, 2017	394	3,122	$-53$		11,618	15,081	177	15,258
Profit for the period Q1-3 2017				-	1,952	1,952	13	1.965
Other comprehensive income Q1-3 2017			$-77$	87		10		11
New share issue 2016 1		$-2$				$-2$		$-2$
Dividend March 2017				-	$-646$	$-646$		$-646$
Closing balance equity 30 September 2017	394	3,120	$-130$	87	12,924	16,395	191	16,586

¹ Proceeds from directed share issue reported net of transaction costs of MSEK 2 (MSEK 9, 2016).

Condensed consolidated statement of cash flow

	Q 3	Q 3	9m	9m	FY
MSEK	2017	2016	2017	2016	2016
OPERATING ACTIVITIES
Profit before tax	651	756	2.438	1,797	2.635
Reversal of depreciation	39	35	125	108	147
Changes in value, Investment properties, realised		$\overline{\phantom{0}}$	$\overline{\phantom{0}}$	$-159$	$-159$
Changes in value, Investment properties, unrealised	$-194$	$-369$	$-1.136$	$-888$	$-1,301$
Changes in value, derivatives, unrealised Other items not included in the cash flow	$-18$ 9	$-24$ 7	$-166$ 20	155 19	39 35
Taxes paid	$-16$	-1	$-84$	$-10$	$-72$
Cash flow from operating activities before changes in working capital	471	404	1.197	1.022	1.324
Increase/decrease in operating assets	$-88$	$-103$	$-214$	$-150$	$-179$
Increase/decrease in operating liabilities	$-36$	26	25	25	50
Change in working capital	$-124$	$-77$	$-189$	$-125$	$-129$
Cash flow from operating activities	347	327	1.008	897	1.195
INVESTING ACTIVITIES
Investments in properties and fixed assets	$-181$	$-89$	$-501$	$-246$	-433
Divestment of subsidiaries, net effect on liquidity		$\overline{\phantom{a}}$	16	843	843
Acquisitions of subsidiaries, net effect on liquidity	$-824$	$\overline{\phantom{000000000000000000000000000000000000$	$-1.148$	$\overline{\phantom{000000000000000000000000000000000000$	$-4,477$
Acquisitions of financial assets	$-2$	$-1$	$-24$	$-8$	$-9$
Divestment of financial assets	$\Omega$	$\overline{\phantom{0}}$	$\mathbf{1}$	12	12
Cash flow from investing activities	$-1,007$	$-90$	$-1,656$	601	$-4.064$
FINANCING ACTIVITIES
New share issue					1,012
Transaction cost			$-2$		$-9$
New loans	1,717	$\theta$	2.413	1.469	4,850
Amortization of debt	$-913$	$-109$	$-1,138$	$-2,084$	$-2,128$
Acquisition of non-controlling interest	$\overline{\phantom{0}}$				45
Approved/Paid dividends			$-654$	$-570$	$-570$
Cash flow from financing activities	804	$-109$	619	$-1,185$	3,200
Cash flow for the period	144	128	$-29$	313	331
Cash and cash equivalents at beginning of period	344	365	517	170	170
Exchange differences in cash and cash equivalents	$-4$	7	$-4$	17	16
Cash and cash equivalents at end of period	484	500	484	500	517
Information regarding interest payments
Interest received	0	$\theta$	1	1	$\mathbf{1}$
Interest paid	$-122$	$-109$	$-374$	$-329$	$-440$
Information regarding cash and cash equivalents end of period Cash and cash equivalents consist of bank deposits.	484	500	484	500	517

Condensed income statement for the Parent Company

	Q3	Q3	9m	9m	FY
MSEK	2017	2016	2017	2016	2016
Net sales	9	8	52	45	65
Administration cost	$-41$	$-36$	$-118$	$-111$	$-158$
Operating profit	$-32$	$-28$	-66	-66	$-93$
Profit from participations in Group companies	0	0	200	361	300
Other interest income and similar profit/loss items	19	22	65	53	112
Other interest expense and similar profit/loss items	$-38$	$-62$	$-155$	$-160$	$-185$
Profit after financial items	$-51$	$-68$	44	188	134
Year-end appropriations					304
Profit before tax	$-51$	$-68$	44	188	438
Current tax
Profit for the period	$-51$	-68	44	188	438

Condensed balance sheet for the Parent Company

MSEK	30 Sep 2017	30 Sep 2016	31 Dec 2016
ASSETS
Non-current assets	12.698	11.500	12.717
Financial assets	48	200	217
Total assets	12,746	11,700	12.934
EQUITY AND LIABILITIES Equity Provisions Non-current liabilities Current liabilities	3.109 75 1.269 8.293	2,459 48 4.250 4.943	3.712 57 4.997 4.168
Total equity and liabilities	12.746	11.700	12.934

RECONCILIATION ALTERNATIVE PERFORMANCE MEASUREMENTS (MSEK)	Q3 2017	Q3 2016	9m 2017	9m 2016	FY 2016
Equity to assets ratio, %
Sum equity			16,586	13,428	15,258
Total assets			41,174	33,447	38,429
Equity to assets ratio, %			40.3	40.1	39.7
Net interest-bearing debt
Non-current interest bearing liabilities			14,796	14,281	18,294
Current interest bearing liabilities		$\overline{\phantom{0}}$	5,238	1,266	537
Cash and cash equivalents			$-484$	$-500$	$-517$
Net interest-bearing debt			19,550	15,047	18,314
Loan to value net, %
Net interest-bearing debt Market value properties			19,550 40,951	15,047 33,098	18,314 38,233
Loan to value net. %			47.7	45.5	47.9
Interest cover ratio, times
Profit before changes in value Financial expenses	439 132	363 114	1,136 394	905 341	1,214 457
Depreciation	39	35	125	108	147
Interest cover ratio, times	4.6	4.5	4.2	4.0	4.0
Average interest on debt end of period, % Average interest expenses			497	418	489
Non-current interest bearing liabilities		$\overline{\phantom{0}}$	14,796	14,281	18,294
Current interest bearing liabilities			5,238	1,266	537
Average interest on debt, end of period, %			2.5	2.7	2.6
See page 11-12 for a complete reconciliation
Investments, excl. acquisitions	181	89	501	246	433
Net operating income, Property Management
Rental income	569 20	459 20	1,572 59	1,284 45	1,717 70
Other property income Costs, excl. property administration	$-62$	$-50$	$-181$	$-144$	$-212$
Net operating income, before property administration	527	429	1,450	1,185	1,575
Property administration	$-16$	$-20$	$-58$	-58	-80
Net operating income, Property Management	511	409	1,392	1,127	1,495
Net operating income, Operator Activities
Revenues Operator Activities	463	561	1,539	1,539	2,158
Costs Operator Activities	$-373$	-466	$-1,314$	$-1,338$	$-1,866$
Gross profit	90	95	225	201	292
Add: Depreciation included in costs	39	35	125	108	147
Net operating income, Operator Activities	129	130	350	309	439
EBITDA
Gross profit from respective operating segment	601	504	1,617	1,328	1,787
Add: Depreciation included in costs Operator Activities	39	35	125	108	147
Less: Central administration, excluding depreciation	$-30$	$-27$	-88	$-83$	$-117$
EBITDA	610	512	1,654	1,353	1,817
Cash earnings
EBITDA	610	512	1,654	1.353	1,817
Add: Financial income	0	0	1	$\mathbf{1}$	1
Less: Financial cost	$-132$	$-114$	$-394$	$-341$	$-457$
Less: Current tax	$-16$	$-12$	$-84$	$-38$	$-72$
Cash earnings	462	386	1,177	975	1,289
EPRA NAV
Equity attributable to the shareholders of the parent company			16,395	13,291	15,081
Add: Revaluation of Operating Properties			1,750	1,474	1,655
Add: Fair value of financial derivatives			569	852	736
Less: Deferred tax assets related to derivatives Add: Deferred tax liabilities related to properties		$\equiv$	$-131$	$-198$	$-171$
		$\overline{\phantom{0}}$	2,911	2,660	2,582
EPRA NAV			21,494	18,079	19,883
Growth in EPRA NAV, annual rate, %
EPRA NAV attributable to the shareholders of the parent company, opening balance			18,079	15,668	16,156
EPRA NAV attributable to the shareholders of the parent
company, opening balance			21,494	18,079	19,883
Dividend added back, current year			646	570	570
Excluding proceeds from new share issue			$-1,001$		$-1,003$

Key figures continued

CONTINUED RECONCILIATION ALTERNATIVE PERFORMANCE MEASUREMENTS PER SHARE 1	Q3 2017	Q3 2016	9m 2017	9m 2016	FY 2016
Total comprehensive income per share, SEK Total comprehensive income for the period attributable to the shareholders of the parent company, MSEK	548	694	1,962	1,769	2,556
Weighted average number of share, before and after dilution	157,499,999	150,000,000	157,499,999	150,000,000	150,266,393
Total comprehensive income per share, SEK	3.48	4.63	12.46	11.79	17.01
Cash earnings per share, SEK Cash earnings attributable to the shareholders of the parent company, MSEK Weighted average number of share, before and	458	383	1.164	967	1,276
after dilution	157,499,999	150,000,000	157,499,999	150,000,000	150,266,393
Cash earnings per share, SEK	2.91	2.55	7.39	6.45	8.49
Net asset value (EPRA NAV) per share, SEK EPRA NAV with dividend deducted. MSEK Number of shares at the end of the period			21,494 157,499,999	18,079 150,000,000	19,883 157,499,999
Net asset value (EPRA NAV) per share, SEK			136.47	120.53	126.24
Dividend per share, SEK Dividend, MSEK Number of shares at dividend					646 157,499,999
Dividend per share, SEK					4.10
Weighted average number of shares outstanding, before and after dilution Number of shares at end of period	157,499,999 157,499,999	150,000,000 150,000,000	157,499,999 157,499,999	150,000,000 150,000,000	150,266,393 157,499,999
PROPERTY RELATED KEY FIGURES
Number of hotels, end of period 2 Number of rooms, end of period 2 WAULT, years Market value properties, MSEK Market value Investment properties Market value Operating properties			122 26,854 13.8 40,951 34,038 6.913	112 24,265 13.4 33,098 25,792 7.306	120 26,240 13.9 38,233 30,163 8,070
RevPAR (Operator Activities) for comparable units at comparable exchange rates, SEK	777	692	724	657	660

¹ Total number of outstanding shares after split amount to 157,499,999, of which 75,000,000 A shares and 82,499,999 B shares.
For a fair comparison this number of shares is used for the calculation of key ratios.
² Pa

Quarterly data

COL

CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (MSEK)

COMPENSED CONSOLIDATED STATEMENT OF COMITALITING RETROOME (MISER)
	Q3	Q 2	Q 1	Q4	Q3	Q 2	Q1	Q4
	2017	2017	2017	2016	2016	2016	2016	2015
Revenue Property Management
Rental income	569	547	456	433	459	451	374	351
Other property income	20	21	18	25	20	13	12	14
Revenue Operator Activities	463	555	521	619	561	536	442	536
Total revenues	1,052	1,123	995	1,077	1,040	1,000	828	901
Costs Property Management	$-78$	$-83$	$-78$	$-90$	$-70$	-66	$-66$	$-59$
Costs Operator Activities	$-373$	$-462$	-479	$-528$	-466	$-448$	$-424$	-471
Gross profit	601	578	438	459	504	486	338	371
Central administration	$-30$	$-30$	$-28$	$-34$	$-27$	$-32$	$-24$	$-30$
Financial net	$-132$	$-131$	$-130$	$-116$	$-114$	$-112$	$-114$	$-105$
Profit before value changes	439	417	280	309	363	342	200	236
Changes in value
	194	634	308	413	369	319	200	484
Properties, unrealised			$\overline{\phantom{000000000000000000000000000000000000$					4
Properties, realised	$\overline{\phantom{000000000000000000000000000000000000$	$\overline{\phantom{0}}$		$\overline{\phantom{0}}$	$\overline{\phantom{0}}$	$\overline{\phantom{000000000000000000000000000000000000$	159
Derivatives, unrealised	18	71	77	116	24	$-55$	$-124$	93
Profit before tax	651	1,122	665	838	756	606	435	817
Current tax	$-16$	$-38$	$-30$	$-34$	$-12$	$-25$	$-1$	$-42$
Deferred tax	$-84$	$-197$	$-108$	$-32$	$-152$	$-107$	$-58$	$-94$
Profit for the period	551	887	527	772	592	474	376	681
			94
Other comprehensive income	$-1$	$-82$		18	108	103	131	$-135$
Total comprehensive income for the period	550	805	621	790	700	577	507	546
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION (MSEK)
	30 Sep	30 Jun	31 Mar	31 Dec	30 Sep	30 Jun	31 Mar	31 Dec
	2017	2017	2017	2016	2016	2016	2016	2015
ASSETS
Properties incl equipment and interiors	39,202	38,216	37,098	36.578	31,623	30,710	29,998	29.463
Other non-current receivables	51	54	41	23	21	20	20	25
Deferred tax assets	665	685	722	748	772	802	829	800
Current assets	772	703	582	563	531	428	345	1,162
Cash and cash equivalents	484	344	625	517	500	365	820	170
Total assets	41,174	40,002	39,068	38,429	33,447	32,325	32,012	31,620
EQUITY AND LIABILITIES
Equity	16,586	16,036	15,231	15,258	13,428	12,728	12,722	12,215
Deferred tax liability	2,911	2,924	2,705	2,582	2,660	2,421	2,274	2,281
Interest-bearing liabilities	20,034	19,359	18,709	18,841	15,547	15,387	15,219	15,546
Non interest-bearing liabilities	1,643	1,683	2,423	1,748	1,812	1,789	1,797	1,578
Total equity and liabilities	41,174	40,002	39,068	38,429	33,447	32,325	32,012	31,620
KEY RATIOS
	Q 3	Q2	Q 1	Q 4	Q 3	Q 2	Q 1	Q 4
	2017	2017	2017	2016	2016	2016	2016	2015
NOI, Property Management, MSEK	510.8	485	396	368	409	398	320	306
NOI, Operator Activities, MSEK	129	139	82	130	130	125	54	104
EBITDA, MSEK	610	594	450	464	512	491	350	381
Earnings per share before and after dilution, SEK	3.47	5.61	3.31	5.08	3.93	3.14	2.49	4.54
Cash earnings, MSEK	462	425	290	314	386	354	235	234
Cash earnings per share before and after dilution,
SEK	2.91	2.67	1.81	2.05	2.55	2.34	1.57	1.56
RevPAR growth (Operator Activities) for
comparable units and constant currency.	12	17	4	$-4$	$-2$	$-12$	$\mathbf{1}$	$\theta$
	30 Sep	30 Jun	31 Mar	31 Dec	30 Sep	30 Jun	31 Mar	31 Dec
	2017	2017	2017	2016	2016	2016	2016	2015
Net interest-bearing debt, MSEK	19,550	19,015	18,084	18,314	15,047	15,022	14,399	15,376
Equity to assets ratio, %	40.3	40.1	39.0	39.7	40.1	39.4	39.7	38.6
Loan to value, %	47.7	47.7	46.8	47.9	45.5	46.8	46.0	48.9
Interest coverage ratio, times	4.6	4.5	3.4	4.0	4.0	3.7	3.1	3.6
Market value properties, MSEK	40,951	39,868	38,630	38,233	33,098	32,124	31,322	31,437
EPRA NAV per share, SEK	136.47	132.55	125.67	126.24	120.53	114.03	112.16	107.71
WAULT (Property Management), yrs	13.8	13.9	13.6	13.9	13.4	13.3	11.3	11.2

At the end of the period, Pandox's property portfolio comprised 122 (31 December 2016: 120) hotel properties with 26,854 (31 December 2016: 26,240) hotel rooms in eleven countries. Pandox's main geographical focus in the Nordic, which represents approximately 58 percent of the portfolio by market value. Of the owned hotel properties, 107 are leased to third parties, which mean that approximately 83 percent of the portfolio market value is covered by external leases.

Property Management
Investment properties

Operating properties

The majority of Pandox's tenant base consists of well-known hotel operators with strong hotel brands in their respective markets. The tenants are both Nordic-oriented hotel operators, such as Scandic Hotels Group, Nordic Choice Hotels, and operators focused on other regions and global markets such as Fattal (Leonardo), Rezidor (Radisson Blu), Hilton and NH Hotels.

Brand	No. of hotels	No. of rooms	Countries
Scandic	51	10.894	SE. NO. FI. DK. BE
Leonardo	16	2.921	DE
Nordic Choice Hotels	12	1.955	SE, NO
Radisson Blu		1.783	SE, NO, CH, DE
Hilton	6	1,623	SE, FI, BE, UK
NH	5	1.162	DE. AU
Holiday Inn	4	963	BE, DE
First Hotels		403	DK
Crowne Plaza		616	BE
Hyatt		607	CAN
Best Western		103	SE
Elite		461	SE
InterContinental		357	CAN
Meininger		218	DK
Cumulus		135	FI
Independent brands	10	2,653	SE, FI, BE, DE, NL
Total	122	26.854	11

Other

Notes

Note 1 Accounting principles

Pandox follows the International Financial Reporting Standards (IFRS) - and interpretations (IFRIC) - as they have been adopted by the EU. This interim report has been prepared according to IAS 34 Interim Financial Reporting and the Swedish Annual Accounts Act. The interim report comprises pages 1-29 and pages 1-17 are thus an integrated part of this financial report. The interim report for the Parent Company has been prepared in accordance with Chapter 9 Interim Reports of the Swedish Annual Accounts Act. The Parent Company applies the Swedish Annual Accounts Act and RFR2 "Accounting principles for legal entities". RFR2 implies that the Parent Company of the legal entity applies all EU approved IFRS principles and interpretations, within the framework defined by the Swedish Annual Accounts Act, and taking into consideration the connection between accounting and taxation. Disclosures according to IAS 34.16A are, apart from in the financial reports and their corresponding notes, available also in other parts of the interim report.
The accounting principles applied correspond to those described in Pandox's annual report for 201

Note 2 Operating segments

	Property Operator			Group and non-allocated
Operating segments	Management		Activities		items		Total
	Q 3 2017	Q 3 2016	Q 3 2017	Q 3 2016	Q 3 2017	Q 3 2016	Q 3 2017	Q 3 2016
Revenue Property Management
Rental and other property income	589	479					589	479
Revenue Operator Activities		-	463	561			463	561
Total revenues	589	479	463	561			1,052	1,040
Costs Property Management	$-78$	$-70$					$-78$	$-70$
Costs Operator Activities	-	-	$-373$	$-466$	-		$-373$	$-466$
Gross profit	511	409	90	95			601	504
Central administration					$-30$	$-27$	$-30$	$-27$
Financial income					$\mathbf{0}$	0	$\mathbf{0}$	$\mathbf{0}$
Financial expenses					$-132$	$-114$	$-132$	$-114$
Profit before changes in value	511	409	90	95	$-162$	$-141$	439	363
Changes in value
Properties, unrealised	194	369					194	369
Properties, realised
Derivatives, unrealised	18		-		18	24	18	24
Profit before tax	723	778	90	95	$-144$	$-117$	651	756
Current tax					$-16$	$-12$	$-16$	$-12$
Deferred tax			-	-	$-84$	$-152$	$-84$	$-152$
Profit for the period	723	778	90	95	$-244$	$-281$	551	592

Q3 2017
Geographical area	Swe	Den	Nor	Fin	Ger	Bel	Other	Tot
Total revenues
- Property Management	237	62	59	77	115		38	589
- Operator Activities				9	121	261	72	463
Market value properties	14.195	3.281	3.072	3.348	8.437	3.763	4.855	40,951
Investments in properties	43		14		54	41	24	181
Acquisitions of properties							823	823
Realised value change properties
Book value Operating Properties				49	1.353	2.834	928	5.164

Q3 2016
Geographical area	Swe	Den	Nor	Fin	Ger	Bel	Other	Tot
Total revenues
- Property Management	229	52	32	77	81			479
- Operator Activities	13	50	109	9	113	127	140	561
Market value properties	13.293	2.939	3.106	3.301	5.965	2,843	1,651	33.098
Investments in properties	40	4	15	4		15	8	89
Acquisitions of properties
Realised value change properties
Book value Operating Properties	353	563	667	49	1.331	2.021	847	5.831

Explanation to note 2

Pandox's operating segments
consist of the Property Consist of the Froperty
Management and Operator
Activities business streams. The
Property Management segment Property management segment
owns, improves and manages
hotel properties and provides
external customers with premises
for hotel operations, as well as for hotel operations, as well as
other types of premises adjacent to
hotel properties. The Property
Management segment also
includes eight asset management
contracts for externally owned
hotel properties. The Operator
Acti such owned properties. The Operator Activities segment also includes one hotel operated under a long-term lease agreement and a long-term tease agreement and
one hotel property under an asset
management agreement. Non-
allocated items are any items that and attributable to a specific
segment or are common to both segments. The segments have been
established based on the reporting that takes place internally to executive management on
financial outcomes and position. rindredated concomes and position.
Segment reporting applies the
same accounting principles as
those used in the annual reportin general, and the amounts reported for the segments are the same as those for the Group. Scandic Hotels Group and Leonardo Hotels are tenants who account for more than 10 percent of revenues each.

Note 2 operating segments continued

T.

Operating segments	Property Management		Operator Activities		Group and non-allocated items		Total
	$Q1-3$ 2017	$Q1-3$ 2016	$Q1-3$ 2017	$Q1-3$ 2016	$Q1-3$ 2017	$Q1-3$ 2016	$Q1-3$ 2017	$Q1-3$ 2016
Revenue Property Management
Rental and other property income	1.631	1.329					1,631	1.329
Revenue Operator Activities			1,539	1,539			1,539	1,539
Total revenues	1,631	1,329	1,539	1,539		$\overline{\phantom{0}}$	3,170	2.868
Costs Property Management	$-239$	$-202$					$-239$	$-202$
Costs Operator Activities			$-1,314$	$-1.338$			$-1,314$	$-1,338$
Gross profit	1.392	1,127	225	201			1,617	1,328
Central administration					$-88$	$-83$	$-88$	$-83$
Financial income					1	1	1	1
Financial expenses					$-394$	$-341$	$-394$	$-341$
Profit before changes in value	1,392	1,127	225	201	$-482$	$-423$	1,136	905
Changes in value
Properties, unrealised	1.136	888					1,136	888
Properties, realised		159						159
Derivatives, unrealised		$\overline{\phantom{0}}$		-	166	$-155$	166	$-155$
Profit before tax	2,528	2,174	225	201	$-316$	$-578$	2,438	1,797
Current tax					-84	$-38$	-84	$-38$
Deferred tax					$-389$	$-317$	$-389$	$-317$
Profit for the period	2,528	2.174	225	201	$-789$	$-933$	1.965	1.442

Q1-Q3 2017
Geographical area	Swe	Den	Nor	Fin	Ger	Bel	Other	Tot
Total revenues
- Property Management	664	154	140	208	322	4	139	1.631
- Operator Activities	23	22	120	24	334	661	355	1.539
Market value properties	14.195	3.281	3.072	3.348	8.437	3.763	4.855	40.951
Investments in properties	153	17	82	12	113	53	71	501
Acquisitions of properties						324	823	1,147
Realised value change properties
Book value Operating Properties				49	1.353	2.834	928	5.164

Q1-Q3 2016
Geographical area	Swe	Den	Nor	Fin	Ger	Bel	Other	Tot
Total revenues
- Property Management	649	130	103	187	227	4	29	1,329
- Operator Activities	40	119	237	22	315	468	338	1.539
Market value properties	13.293	2.939	3.106	3.301	5.965	2.843	1.651	33,098
Investments in properties	103	27	32	5	23	26	30	246
Acquisitions of properties
Realised value change properties	159							159
Book value Operating Properties	353	563	667	49	1.331	2.021	847	5.831

Average interest expenses based on interest rate maturity in respective currency as a percentage of interest-bearing debt.

EBITDA plus financial income less financial cost less current tax.

Total net operating income less central administration (excluding depreciation).

Recognised equity as a percentage of total assets.

Revenue less directly related costs for Property Management.

Revenue less directly related costs for Operator Activities including depreciation of Operator Activities.

Growth measure that excludes effects of acquisitions, sales and reclassifications as well as exchange rate changes.

Accumulated percentage change in EPRA NAV, with dividends added back and proceeds from new share issue deducted, for the immediately preceding 12-month period.

Profit before changes in value plus financial expense and depreciation, divided by financial expense.

Investments in non-current assets excluding acquisitions.

Interest-bearing liabilities minus liquid funds as a percentage of the properties' market value at the end of the period.

Interest-bearing liabilities less cash and cash equivalents and short-term investments that are equivalent to cash and cash equivalents.

Net operating income corresponds to gross profit for Property Management.

Gross profit for Operator Activities plus depreciation included in costs for Operator Activities.

Net operating income for Operator Activities in relation to total revenue from Operator Activities.

Since amounts have been rounded off in MSEK, the tables do not always add up.

EBITDA plus financial income less financial expense less current tax, after non-controlling interest, divided by the weighted average number of shares outstanding.

Proposed/approved dividend for the year divided by the weighted average number of outstanding shares after dilution at the end of the period.

Profit for the period attributable to the Parent Company's shareholders divided by the weighted average number of shares outstanding.

Equity attributable to the Parent Company's shareholders, divided by the number of shares outstanding at the end of the period.

Recognised equity, attributable to the Parent Company's shareholders, including reversal of derivatives, deferred tax asset derivatives, deferred tax liabilities related to the properties and revaluation of Operating Properties, divided by the total number of shares outstanding after dilution at the end of the period.

Total comprehensive income attributable to the Parent Company's shareholders divided by the weighted average number of share outstanding after dilution at the end of the period.

The weighted average number of outstanding shares taking into account changes in the number of shares outstanding, before dilution, during the period.

The weighted average number of outstanding shares taking into account changes in the number of shares outstanding, after dilution, during the period.

PROPERTY INFORMATION

Market value of Investment Properties plus market value of Operating Properties.

Number of owned hotel properties at the end of the period.

Number of rooms in owned hotel properties at the end of the period.

Revenue per available room, i.e. total revenue from sold rooms divided by the number of available rooms. Comparable units are defined as hotel properties that have been owned and operated during the entire current period and the comparative period. Constant exchange rate is defined as the exchange rate for the current period, and the comparative period is recalculated based on that rate.

Average lease term remaining to expiry, across the property portfolio, weighted by contracted rental income.