From the Chair: A good year for Pandox

Dear shareholders,

2023 was a good year for Pandox. Demand in the hotel market was stable with strong development in average room rates, resulting in good growth in both revenue and net operating income. Our variable revenue model largely compensated for both higher interest expense and higher valuation yields. We reintroduced a dividend of SEK 2.50 per share in April 2023 and the total return on the share was 29 percent, which was higher than the relevant comparison indices on Nasdaq Stockholm.

An active year for the Board
2023 was a year in which we worked on multiple strategic matters simultaneously. The most important ones are outlined below:
• Refinancing, with the Board and Finance Committee supporting executive management in securing refinancing for a total equivalent to around MSEK 15,337 with banking partners in various countries. This increased the average repayment period to 2.3 years. During the year the Board also helped to put in place interest rate hedges for a larger portion of Pandox’s loan portfolio than previously.

• Sustainability, where fast progress was made driven by business considerations and new regulatory requirements. The Board decided on science-based targets for Scope 1–3, and in November these were approved by the Science Based Targets initiative (SBTi). Even before the
targets were approved, we decided on a transformative investment programme for our Own Operations segment of around MEUR 29, with a good return. Based on the programme, we expect this segment to be well-positioned to reach the SBTi target of a 42 percent emissions reduction by 2030, compared with the base year 2022. Based on our science-based targets we also sustainability
linked around MSEK 2,200 of our existing bank loans with SEB and Swedbank. We intend to increase the percentage of sustainability-linked loans over the next few years.

• Acquisition of three hotel properties, two of which are in the UK and one in Sweden.
The acquisitions are important because they lay the foundation for future growth. The return potential from these acquisitions is good, even in a climate of higher financing costs than in the past. In general the level of activity in the hotel transaction market is low and prices are stable, which means that it is difficult to find acquisition prospects at low valuations.

• Divestments are an important source of capital that can be reallocated to investments with a higher return potential. In a transaction market which in 2023 was on the back burner, we completed the divestment of Intercontinental Montreal at around 20 percent above book value.

• Investments in the existing portfolio play an important role in Pandox’s value-creation. Here, the Board is involved in both decisions and subsequent follow- up. We currently have a strong pipeline
with high-yield projects that will make a positive contribution to Pandox’s growth as soon as in 2024, with their full effect in 2026.

• Board recruitment, the Board having increased its size to seven members through the election at the Annual General Meeting of Ulrika Danielsson (CFO, Atrium Ljungberg). Ulrika brings valuable
knowledge and experience from property, financing and sustainability in a listed environment.

A new normal
The hotel market has largely returned to the 2019 level, which means we can now put the pandemic behind us. A lot has changed – both financially and geopolitically – and comparisons with 2019 are no longer fully relevant. We have reached a new normal in the hotel market and this is what we are basing our strategic planning on.

Travel, experiences and coming together are strong drivers for an open, inclusive and forward-looking society, and this is also something that Pandox, through its hotel properties, contributes to every day.

Pandox is strong both commercially and financially, and I’m pleased that the Board
can propose a dividend of SEK 4.00 per share for the 2023 financial year.

I would like to thank our CEO Liia Nõu and all Pandox employees for all of their valuable efforts during the year. I would also like to extend my gratitude to our shareholders and all other stakeholders for great cooperation.

Oslo, March 2024

Christian Ringnes