NORDIC CHOICE HOTELS

Second four monthsSeptember, 2018

Executive summary

No need to panic - it’s organic!

We are leaving summer behind with more muscles to face the toughest period to come – the next four months. In the second fourmonths of 2018, we stayed neck and neck with our targets. Gross revenue in NCH Group increased by 258 MNOK compared to the same period last year, and the EBITDA development improved by 77 MNOK.

While new capacity largely drove growth last period, this period the organic part of the portfolio took a harder grip on growth and landing at 6 %. Newly renovated rooms introduced back into the market, is one factor. Market development is another. So far this year, most of the major destinations in the Nordics have had a growth in volume, with the exception of Tromsø and Jönköping. Like last period, we still have growth in RevPAR in majority of the markets, with Oslo, Gothenburg, Malmö and Stavanger in the lead. Stockholm has had a more positive development these last four months, but are still closely monitored. Market RevPAR to date is +3,4 % in Norway and +2,8 % in Sweden.

Executive summaryState of Nordic Choice HotelsHaving a look at our chains Comfort Hotel®, Quality Hotel™ and Clarion Hotel®, we see a great development in revenue, driven by capacity and rate. Large conference hotels did however underperform in regards to F&B and M&E during the hot summer months, but was compensated by increased room revenue. Our independent hotels within Nordic Hotels & Resorts also have a nice development, especially in RGI and overall performance of their city hotels. TAK & SUS (rooftop bars) were highly appreciated by the Stockholm crowd during the warm summer days. At most, the rooftop had over 6.000 visitors on a single day. In total 24.000 Aperol Spritz & 50.000 liter of beer ensured the atmosphere were as high as the temperature.

New members of Nordic Choice HotelsFollowing a year of development and complete refurbishment, Quality Airport Hotel Gardermoen welcomed guests to the official opening of the hotel on August 23rd. A total of NOK 350 million has been invested in a world class conference hotel, featuring 455 fantastic rooms, 500 m2 of exhibition space and a 700 m2 congress hall. The hotel is now focused on taking top spot in the conference sector, which is currently one of the fastest growing markets in Norway. Comfort Hotel Umeå City joined the NCH family as a new franchise hotel June 1st. This is the second Comfort hotel in the city, and guests can now look forward to 131 modern and affordable rooms and a lovely lobby lounge.

DigitalizationOur digital guest journey has continued with full strength this period. The NCH app now supports “check out” for 181 of our hotels, all made available in this period, making check out easier and smoother for our guests. A fast-growing percentage of all revenue booked in our digital direct channels are generated of bookings done in our App.

Yes, WeCareThanks to an incredible effort and amazing engagement from both staff and guests, the UNICEF campaign Sweet Dreams Stay has become a huge success in just one year. In total, we are now close to 400 000 SDS nights, which means a donation of 4 million NOK to UNICEF. Together we have made it possible to rescue even more children in danger of trafficking, give even more children a good night sleep and a childhood free of exploitation and abuse.Nordic Choice has loudly shouted out our commitment to Pride and its events in Helsinki, Oslo, Bergen, Copenhagen, Europride in Stockholm and Gothenburg. Throughout the summer, our hotels have been showered in the colors of the rainbow. We support Pride because we want to tell the world that our door is open, no matter who you love or how you identify. We raise our voices for equality and respect, because we know they are important values to our colleagues, and we believe they are important values to the society.

In conclusionThe organic growth continues to beat the market growth in most of our markets. The hot summer months made our fabulous rooftop restaurants and resorts attractive spots for our guests, and we are now preparing for a fall with high activity in both conferences, corporate and leisure traffic. In the coming months we will continue to improve our digital guest journey and put new, exciting hotels on the map.

Net change in the hotel portfolio the last four months is 0 but there are some changes in the franchise part of the portfolio:• Comfort Hotel Umeå City new franchise hotel from June 15th.

• Quality Hotel Dalecarlia, Tällberg, (franchise), left the portfolio June 30th.

Changes in rooms is +193 in the last four months, driven by organic expansion and renovated rooms back in the market

PORT

FOLI

O

TOTAL NORWAY SWEDEN DENMARK FINLAND OTHER

Number of operation htl

Number offranchise/mgmt htl

TOTAL

Change

133

58

191

0

65

25

90

0

62

29

91

0

3

2

5

0

1

1

2

0

2

1

3

0

Hotel Portfolio

+5%

PEOPLE

The Good Neighbour

NPSGuest satisfaction

PLANET PROFITTRevPAR

organic

EBITDAPAR organic

PEOPLE PLANET PROFIT

Sweet Dreams Stay”Say no thanks to room cleaning – it

saves our planet”

Food Wastereduction vs LY

43,1 %

SDS Nights

21,4 %

-30 tons

May-AugLY

May-Aug18

• 16 000 employees• 191 neighbourhoods• 6 different countries• 1 unique culture

1 MNOK in the pot for the hotels to create a difference in their neighbourhoods.

470 KNOK worthy initiatives approved in May-Aug

Donation to UNICEF

4 MNOK

+6%

YTD LYYTD

+14%

May-AugLY

May-Aug18

+22%

YTD LYYTD

WECA

RE

The market development is in line with expectationsThere is a positive development in sold rooms in most markets. The decline in RevPAR in Bergen, Uppsala, Umeå & Linköping is expected as the market has increased its capacity. Positive turn in the Stavanger market, however the ONS conference might affect the numbers short term.

MARK

ET

Organic gross revenue growth in hotel operations have increased by 1pp since last period and is now 6 % YTD

✓ Organic growth in Sweden is 7 % and it’s 3 % in Norway. In Finland and Denmark we have respectively 10 % and 12 % growth on organic portfolio.

✓ Included new capacity overall gross revenue growth is 6 % May-Aug, 9 % YTD

OPER

ATIO

NS

*Renovation QH Gardermoen affects growth

3.565

3.519

3.349

101

2.877

Growth

2017 Gross Revenue

2018 Gross Revenue

2.775 1.613

28

1.641

57

739

797

424

440

16

558

6982018 Gross

Revenue

2017 Gross Revenue

141

+4 %

+25%

Gross revenue increases 4 % in May-Aug in the Nordic Choice brands combined, while Nordic Hotels & Resorts is up +25 %

OPER

ATIO

NS

Growth

Looking at R12 EBITDA development we continue to see a strong growth. From August 2017 to August 2018 the rolling EBITDA has increased by 28 %.

R12 ACT *Strawberry Living excluded

NCHG

849

686

751718

663 692 688

761723

778746

764753 778

648708

907888861 885

Jan – Apr 2017 May – Aug 2017 Sep – Dec 2017 Jan – Apr 2018 May – Aug 2018

Many new and exciting projects coming up in the last months of 2018 and into 2022

PIPEL

INE

✓ More than 6 300 new hotel rooms signed for theperiod September 2018 - 2022.

✓ 22 new hotels in 15 different cities until 2022.

2018 2021-20222020

1.635

SUM2019

2.301

6346Number of new hotel rooms

Clarion Hotel Draken - Gothenburg

Clarion Hotel The HUB - Oslo

Quality Hotel Match - Jönköping

Post Office - Copenhagen

Comfort Hotel Copenhagen Airport

Comfort Hotel Solna

Comfort Hotel Arlanda Airport

Amerikalinjen - Oslo

1.965

445

Quality Hotel Arlanda - Arlanda

PROJECTS ROOMS PREL. OPENING

Ålesund//Quality Hotel ÅlesundHalden //CC Park Halden (franchise)

Stockholm//Comfort Hotel KistaTrelleborg // CC Magasinet (franchise)

Porsgrunn // Comfort Hotel Porsgrunn (franchise)

Oslo//Clarion Hotel The Hub Oslo//Amerikalinjen

Stockholm//Comfort Hotel ArlandaMalmö//Quality Hotel The Mill

Oslo//Clarion Hotel Oslo

Drammen// Quality Hotel River StationHelsingborg//Clarion Hotel Sea-U

Copenhagen//Comfort Hotel Copenhagen AirportStockholm - Sickla // CC Hotel Tapetfabriken

Oslo// Quality Hotel Hasle Linje

Jönköping//Quality Hotel MatchCopenhagen//Posthuset Copenhagen

Mölndal// Quality Hotel MölndalSolna// Comfort Hotel Solna

Sundsvall// Clarion Hotel Sundsvall

Göteborg // Clarion Hotel KarlatornetGöteborg // Clarion Hotel Draken

Totalt

13162

19458

134

810122

503230253

249253

619156217

233390

369336270

304453

6 346

Sep 2018Okt 2018

Okt 2018Nov 2018

1 mars 2019

15 mars 20192019

201931 jan 2019

1 juli 2019

31 okt 2019Mars 2020

Q3 2020Q2 2020Q3 2020

Q1 20212020

Q1 2021Q1 2021Q2 2021

2021-20222021-2022

Signed Projects

2018 - 2022

In case you’re wondering...ACT = ActualEBITDA = Earnings before Interests, Taxes, Depreciation & AmortizationEBITDAPAR = Earnings before Interests, Taxes, Depreciation & Amortization Per Available RoomF&B = Food and BeverageLY = Last YearM&E = Meeting and EventsNCH = Nordic Choice HotelsNCHG = Nordic Choice Hospitality GroupNPS = Net Promoter ScoreRevPAR = Revenue Per Available RoomRGI = Revenue Generation IndexSDS = Sweet Dreams StayTRevPAR = Total Revenue Per Available RoomYTD = Year To Date