Welcome to the Scandic Hotels Group Q1 2022 report. Today, I am pleased to present Jens Mathiesen, the CEO, and Åsa Wirén, the CFO. Throughout the call, all participants will be in listen-only mode, and afterwards there will be a question and answer session. Please note that this call is being recorded. I'll now hand you over to Jens Mathiesen. Thank you very much, and good morning, everyone, and thank you for joining this presentation of Scandic's report for the first quarter of 2022. I'm very happy to be here together with our new CFO, Åsa Wirén, who joined Scandic in the beginning of March. It feels really great also to have you here for your quarterly report. Welcome to you as well. Please turn to page two for a brief summary of the quarter. The first quarter ended on a positive note after a weak start to the year. Our markets were severely impacted by the temporary restrictions in the beginning of the year. We saw a rapid improvement, I would say as expected in February and March, as the restrictions were gradually lifted. Scandic's occupancy rate möre than doubled from around 25% in January to 53.5% in March. We have seen a continued underlying improvement so far during April. We expect also our occupancy rate in the month of April to be in line with March, despite the negative effect of Easter falling in April. We also expect to enter May with a run rate in occupancy of around 60%. We will have a high activity level in the coming month. We have recently opened two new hotels in the Swedish market, and we will introduce another five hotels in May and June. It is, of course, very encouraging that we can launch these hotels during a period of good demand in our markets. Please turn to page 3. Our adjusted EBITDA was negative in the first quarter, due to the weak start of the year, but results did turn positive in March. Development in the quarter was very much in line with our expectations. As you can see in the graph, the first quarter is always seasonally slow for us, with low activity in the beginning of the year. If we compare a bit with 2019, our record year so far, Scandic's adjusted EBITDA exceeded SEK 2 billion for the full year, but we only generated around SEK 160 million in the first quarter of that year. Please turn to page 4. Here you can see monthly market occupancy in the Nordic countries. We have seen a similar pattern in all countries with a rapid improvement from the beginning of last summer that continued in October and November. Thereafter, we saw a slowdown in December, and that continued also into January with occupancy rates of around 25% in all markets. There was a significant improvement in February as restrictions were gradually eased during the month. Occupancy levels in February were clearly higher in the end of the month than in the beginning. In March, occupancy rose to close to 60% in Norway and Denmark, just above 50% in Sweden, and slightly below 50% in the Finnish market. Please turn to page 5. This shows Scandic's total number of occupied rooms on a seven-day rolling basis. You can see on the yellow line that shows development in 2022 that there has been a very positive development from low levels in the beginning of the year, and that has continued into April, and it is now möre or less at the same level as in April 2019. We need to then mention also that Scandic has approximately 4% möre rooms in operation now than we had at the same time in 2019. The temporary drop that you can see in mid-April is explained by the Easter effect, both in 2019 and in 2022. You can also see that May and June are normally on higher levels than March and April. As we have said beföre, we have a solid booking situation for the coming month, and we do also expect to see a clear benefit from much möre event activity in our key destinations during the summer compared to the previous years. Please turn to page 6. We continue to see a positive trend in room rates as well. This shows price development based on market statistics indexed to the corresponding month in 2019. We are now basically at index 100 in the Swedish, Finnish, and Danish markets, while Norway is around 115. All in all, prices are back to where they were in 2019, which I think is very encouraging. Pricing is very much a key priority for us. We need to continue to drive price so that we make sure that we compensate for the underlying cost inflation, both near-term and in a longer perspective. Please turn to page 7. We are opening a large number of hotels in the coming months, and some of these openings have been postponed from last year. We are happy with the timing of these openings as we now can introduce these hotels and strengthen our offering in a market with positive demand development. We will in total open hotels with almost 2,000 rooms in the second quarter. While we will exit 2 hotels, so our net portfolio will expand by around 1,600 rooms or 3% in Q2. The first hotel on this slide is Scandic Kiruna in the north of Sweden with 231 rooms that was opened in April and actually replaces the old Scandic Ferrum that has been closed on the same day. We have also a Scandic Göteborg Central in Gothenburg with 451 rooms that will open soon. A hotel with a fantastic view of the river and the harbor of Gothenburg with a flexible meeting and conference facility. On page eight you can see Scandic Spectrum, the upper left corner. A newly built hotel in central Copenhagen that actually will be the biggest hotel in our portfolio with 632 rooms. We'll also open Scandic Nørrep ort, which you see on the upper right, with 100 rooms in Copenhagen. The third picture shows Scandic Oceanhamnen located by the sea in Helsingborg in southern Sweden with 184 rooms. The last one shows Scandic Holmenkollen just outside Oslo that will reopen after a total renovation and extension. Please turn to page nine. By the end of first quarter, our net pipeline amounted to 3,341 rooms, with most of it being related to 2022. One of them, Scandic Kiruna, has already been opened in April. We have postponed the opening of Macherei in Munich to the second half of this year. We have also reduced the number of rooms in Scandic Aarhus Harbour from 485 rooms to 350 rooms as the hotel has been reconfigured. We have a clear ambition to add hotels to our pipeline this year and to grow the business over time, but we are not stressed by this. We are coming out of an extreme period, and our main focus right now, near term, is to ensure that we become as efficient and resilient as possible so that we can grow from a position of strength. I should also add that around 15% of our lease contracts expire during 2022 and the first half of 2023. We are putting a lot of focus on renegotiations of these contracts right now. With that, I hand it over to Åsa, who will take you through our financials. Thank you, Jens. It's great to be here. Let's take a look at our divisional results for the first quarter on page 11. Please keep in mind that the first quarter is the seasonally weakest quarter for Scandic. Net sales amounted to SEK 2.7 billion, and that is an increase by almost 200%. The average occupancy was 39.1% in the quarter, compared to only 17.5% last year. The increase in occupancy, of course, impacted our adjusted EBITDA which was SEK -237 million, an improvement from the SEK -775 million in the very weak Q1 last year. Our result included direct state aid of SEK 63 million, and that was mainly in Other Europe versus SEK 247 million in Q1 last year. We expect to receive limited additional state aid in Q2, about SEK 50 million, and that is all related to historical periods. The result was positive in Norway, however negative in the other segments. In Norway, we received wage subsidies of about SEK 90 million in order to retain staff and to avoid redundancies. The company's quarantine operations in Norway were discontinued during the quarter, and from mid-March, partially replaced by income from housing for refugees from Ukraine. Approximately SEK 30 million of adjusted EBITDA in Norway is estimated to come from income from rooms related to the quarantine-related operations and from housing for refugees from Ukraine that were not used. After what we've heard, a weak start of the year, adjusted EBITDA turned positive in March. If we then turn to page two for some comments to our cash flow during the quarter. As we communicated in the Q4 report, working capital development was approximately SEK 600 million too strong in the fourth quarter, and that was due to payment delays between December and January, final rent settlements, et cetera. As such, working capital was negative in the quarter by a little bit möre than SEK 400 million. What we see is that working capital development should gradually improve during the remainder of the year and Scandic has negative working capital, and we have historically had a positive change on a full year basis. The total CapEx amounted to approximately SEK 200 million, of which 145 was expansion CapEx, and that was related to our openings, as Jens mentioned. We expect to remain relatively high also in the second quarter since we will open several möre hotels. All in all, net cash outflow of almost SEK 1 billion, that was in line with what we expected internally. On page 13, we highlight a few items regarding our financing. Our net debt increased to SEK 4 billion at the end of the quarter. We have continued to amortize on our credit facility, reduced by SEK 108 million to SEK 5.8 billion in Q1. In total, we have actually amortized SEK 814 million since October 2021. Our credit facilities matures in December 2023. As to working capital, we had a liability related to VAT and social costs of about SEK 500 million by the end of Q1, and we received another SEK 175 million in April. It has now been decided that the liability should be repaid gradually over a period of four and a half years, starting October this year. The convertible loan matures in October 2024. The conversion price is 43 Swedish krona and 36 öre. The potential dilution is 41.5 million shares. If we then turn to page 14 for some clarification of our financial net in the P&L compared to the cash flow. The reported financial net was SEK -453, but was only SEK -109 excluding the effect from IFRS 16, that is calculated interest on our lease debt. Non-cash interest on a convertible bond amount to SEK 36 million, and the actual paid financial items amounted to SEK 55 million for the quarter. Over to you again, Jens, for some conclusions. Thank you very much, Åsa. Finally, maybe a few comments on our near-term outlook on page 16. As we have shown in this presentation, the underlying improvement has continued after the first quarter, and we expect occupancy in April to be in line with March, despite the negative effect from Easter that was falling in April this year. Underlying demand is robust, and we have a good booking situation for the coming month, and the hotel market will benefit from much möre event activity during the summer this year compared to the last years. All in all, we have a positive view on the market development in our coming year, and we have an attractive and well-invested portfolio that is being improved by several new openings during this year. Scandic has continued to improve our efficiency in the recent years, and we are putting a lot of efforts into further strengthening the resilience of our business model in order to ensure higher and möre stable earnings over time. With that, I hand it back to you, o perator. Thank you. If you do wish to ask a question, please press zero-one on your telephone keypad. If you wish to withdraw your question, you may do so by pressing zero-two to cancel. Our first question comes from the line of Stefan Andersson of SEB. Please go ahead. Thank you. A couple of questions. Just firstly, a clarification maybe, I guess you might have said this, but, on the opening costs, on Q2, should we expect a similar level as in Q1? That's what you're saying. Yeah. Yeah. You mean the pre-opening cost of the CapEx cost? Yeah. Exactly. Pre-opening costs that you book in the P&L. The pre-opening cost will be a bit higher in Q2 since we have möre openings in the quarter than in the past or last quarter. Yeah. We only had 1 opening in Örebro in March. We have 6 openings in total, including Kiruna and the coming 5 in the quarter. We have möre pre-opening costs in Q2. Yeah. I think historically, you also took some pre-opening costs, a couple of quarters ahead of the actual opening. Just so we can clear one up. Yeah. It's not like you're gonna have six times the. No, no. Pre-opening cost in Q2. Yeah. Exactly, n. Thanks. Thank you for remembering that. Exactly. No, we have a lot of, let's say, the pre-opening cost that is already in place since we also, you can say, Kiruna, most of that was also already taken in the last quarter because we opened in the first days of April. So you're right. That's the case. Another question, I don't think we discussed that in a long time, but you know, remembering back on the days when I covered Rezidor, there was a classic comment that ramping up the hotel, getting up to normal, could take, you know, 3-4 years to establish it into the community. But that's of course very, very dependent on the demand in the market and your position and all that. What I fully understand it's a difficult question, but what would you say the ramp-up period for a hotel for you guys are at the moment? I know Continental was up and running within, like, months. I understand it's different, but if you could maybe elaborate on that and the openings you have. You can say that. What we normally do is we include this in our the whole model of the hotel. We have different, let's say, ramp-up contracts. For some of these contracts, we have like an, let's say, an opening period with a lower lease level. Most of these contracts will increase the percentages and the guarantees over the first 3-4 years, meaning that we have a ramp-up also on the lease level. That is kind of included in the model. If you look at the top line, I think we should expect a fairly quick introduction to the markets because a lot of these hotels are being opened in some of our key destinations where we see quite a huge demand popping up right now. Opening a huge hotel in Gothenburg, for instance, and opening in Copenhagen, in Munich, that is quite strong markets in general. I think we will not come with any excuses that this will take us a long time to introduce these hotels to the market. I expect these to be introduced into the first year or two and normalize during that period also, so on the same level as other hotels. Okay. Thank you. On the personnel side, sorry if I missed you already touched on this, but I understand it's difficult to find personnel and of course, you've been ramping up and ramping down a little bit on restrictions. How do you see that at the moment? Is it, you know, panic or do you think you have it under control? I couldn't say. Definitely it's not a panic, and I couldn't say either that it is, you'd say from a market perspective, totally under control because there will be a huge demand also for seasonal employment during the summer, where a lot of amusement parks, et cetera, are seeking for people from our industry. That will definitely increase the demand for people. I think if you look overall, we have just above, I think 500 vacant positions at Scandic right now, and that you need to compare with us being at around 15,000 employees right now in the organization. It's of course you can look at the percentage, 500 versus the 15,000. It is something that we will handle. You can see from your analyst point of view, it's good maybe because then we need to run a bit faster. Conversion-wise, it's positive. Of course, long term, we need to secure that we have the needed staff, otherwise they will be tired. I think we will handle it. Some of these open position is still related to some of the later openings in the quarter. That is also you can say very interesting for applicants to look for positions in new openings normally. I think we handle it. So far it is not definitely panic. In certain areas, we are fighting möre than others. You know the history of us all seeking for chefs, for instance. That is an area where the whole market is lacking chefs, so that will be a fight for those. Okay. My final question is, you mentioned the renegotiations there. I'm a little curious on what you think that you could achieve. I mean, it should be a good opportunity in a way to do the renegotiations given where the market is. On the other hand, you also have the like inflation coming through and the property owners are struggling a little bit with interest rates. I'm a bit curious, what you're aiming here. Are you aiming at improving price, if you call it that, percentages paid? Or is it flexibility or where? What are you hoping for in this renegotiation? You can say the normal way of steering this is, of course, if inflation is high, then we normally see that we do shorter agreements for one or maximum two years. If the inflation is low and balanced, then we will do longer agreements with the unions. I would expect, if it continues on high level inflation, then we would expect to see shorter agreements, maybe only agree for a year, if that was your question related to that. Or am I hearing it out- No. No. It was on leases. On your leases. Sorry. Yeah. Okay. Sorry. I misheard you because I thought you were referring to the employment contract. No, for the leases, I think the situation is fairly good. I think we have been through a long crisis where everybody has seen that we need to find solutions also for handling, you could say, a collapse in the market. That is something that we are spending quite a lot of time with our renegotiations. I would say a lot of these lease levels are being extended on either the same levels or even some of them at fairly lower levels. All in all, we also introduced new hotels in some of these capital markets, which of course has higher lease levels. All in all, you shouldn't expect on the leases that you see much changes on the overall lease percentages. I think we will manage to stay around those levels you know. What we then also want to include is, like I say, collapse clauses and mechanisms that is handling as guarantees if something occurs or happens in the market in the coming many years. Okay. Yeah. That's all for now. If you look at the lengths, we look at the same lengths as normal. It is very different, but we are still open to negotiate the lease contracts of both 10, 15, and 20 years as long as the terms and conditions are right. Yeah. Thank you. Thank you. Our next question comes from the line of Jamie Rollo of Morgan Stanley. Please go ahead. Yeah, thanks. Morning, everyone. Can we just explöre the working capital a little bit möre, please? So SEK 440 million outflowing Q1 and clearly you flagged the SEK 600. Is that SEK 440 net of some of the inflow, or should there be another SEK 160 still to come? And also, as you say, your working capital negatives, there should be some inflows for the rest of the year. So just help us understand the net of all of that. What should be the sort of full-year working capital change, please? I assume still a fairly big outflow at the December point. Thank you. It's Henrik here. No. The full SEK 600 million reversal is included in the first quarter. There were some positive items as well. As what I mentioned, we have negative working capital. In a normal year, you will see positive change in working capital on a full year basis. I mean, that item will gradually improve during the rest of this year. Okay. In cash terms, still an outflow at the full year stage? No, we didn't say that. No. No, I didn't say that. Okay. I thought you were talking about balance sheet numbers, not cash numbers. Okay. In cash terms, that SEK 440 will be completely offset in the remaining three months, three quarters of the year. The change in working capital item for the full year will look clearly better than what it did after the first quarter. In a normal year, as you can see historically, we've had a positive change in working capital. This year at the full year stage, there will be a cash inflow. Well, I didn't say that. Normally, we have a positive change in working capital on a full year basis. There will be an improvement during the remainder of this year. We don't give guidance on what exactly the change in working capital will be for the full year. You should expect a gradual improvement during the remainder of this year. Okay, that's clear. Thank you. In terms of the comment about May occupancy, did you say around 60% or at least 60%? Because I think in May 2019, you were möre like high 60s or even 70%. That implies a bigger sort of drop. Yeah. I think if we look at May, let's say comparing to May 2019, I think it was some 68% or something. You're right about that, Jamie. What we mentioned is that the starting point in the beginning of May will be a minimum of 60%. The month, if it continues to increase like we've seen in the past, then I don't think we will hit the 68%, but it will be higher than the 60%. Okay. Makes sense. Thank you. Thank you very much. Just finally in terms- I think, Jamie, just to, let's say, make it very clear also for your expectation. I think you will see that comparing to 2019, that occupancy will be just below, I think, what you saw in 2019. You would see prices which is above because we are increasing prices, and we see that already having an impact. All in all, prices will be above 2019 level and occupancy just below. Thank you. Just on that price point, is the scope for Sweden, Finland, Denmark to sort of catch up to where Norway is in terms of double-digit rate versus 19%, maybe during, well, perhaps by the end of the year? Or is that optimistic? You can say that. Of course, what we look at is, of course, what is the, let's say, the general cost increases, the inflation cost increases, and we need to cover for that as a minimum. So what we do, we have a clear strategy of, let's say, handling all the cost increases through pricing. And then we work on, of course, on the occupancy. It shouldn't hit the occupancy. I think also the market is understanding that we, as well as all other industries right now, need to adjust pricing. I would say that you can almost calculate yourself what is the inflationary cost. If you compare to 2019, we look at what is the last three years of inflation cost. We had a very low inflation in 2020 and 2021, but we have a very high inflation right now on these three all in all. We need to handle into the prices as a minimum, and that's what we focus on. Thanks. Just one möre final quick numbers one. Could you please quantify the rent concessions and rent state aid for the remaining quarters of the year, please? I think if you look at the, we estimated for the, let's say, rent discounts. If you start with that, we have estimated for the full year approximately SEK 100 million or so. We had, I think, only it was SEK 30 million in the first quarter. Thirty-five. 35. It's you can spread out the rest in the quarters. It's fairly limited, maybe SEK 65-70 million the rest of the year in lease discounts. The state aid, like Åsa was mentioning, we don't expect further state aid the rest of the year, but we have something coming in to the quarter related to the past quarter. That amount, the total was that 65- Sixty-three. SEK 63 million. Thank you very much, everyone. Thank you, Jamie Rollo. Our next question comes from the line of André Juillard of Deutsche Bank. Please go ahead. Good morning. Thank you for taking my question. Just an update on inflation, because you are mentioning that you are expecting to replicate the inflation on prices. Are you just expecting to replicate that on prices or do you anticipate some stronger price improvement? If you could comment on a möre detailed inflation on your operating costs, splitting between wages, energy, raw materials, and so on, that would be very helpful. Thank you. Thank you, André. I can start, and then also you can support me. If you look at these different items, you can say, if you look at the salary cost increases, we of course see that there's an increased pressure from also current employees, especially white collars is that. If you look at the blue collars, we have union agreement, which is in place already. We do have a system to take care of that with already negotiated agreements in Sweden and in Denmark. We have small increases in Finland of approximately 2%, and Norway is coming in a bit higher. All in all, that is not following the inflation cost to food. That might be putting pressure later on. If you look at what we do with the general cost increases, of course, all cost increases on food is put on prices, all costs on energy and the linen, et cetera, we need to put on prices as well. We do, though, have also for energy, we do have a hedged energy. You can maybe mention a few comments to that, how we have hedged that. Yeah, we've hedged it for this year and also portions of the coming years. It was so effective that the cost for electricity was at the same level as the same period last year, even though the prices were higher. That was thanks to our hedging. What about a summary, maybe on energy? What is the proportion of electricity and what is the proportion of gas you have, if you have the figure? Uh, electri- I don't think we have that exact split. I know that electricity is about 50% of our energy cost. Yeah. Yeah. The split of the rest is, how much of that is gas and how much is. I don't think we have the exact. No. We can come back to the exact split. I don't think we have that here at least right now. That would be wrong to estimate. Okay. Thank you. Energy is approximately 50%. Okay. Of the total. Electricity. Electricity, sorry, is approximately 50%. All right. Thanks. Our next question comes from the line of Karl-Johan Bonnevier of DNB Markets. Please go ahead. Yes, good morning. A lot of good answers to my questions that I had here in my list already, but one or two möre if I may. Looking at the 15% of the lease contracts that you say now is expiring here during this year and early next year, are you looking to re-sign all of those, or is there some sort of portfolio management within that base? No, we always move in positively to, let's say, with a willingness to sign and extend. Of course, we only extend and sign them if we get the right terms and conditions. I think a lot of these should be mentioned. A lot of these has already a huge turnover-based part. We do have a lot of this, maybe half of the portfolio is almost purely turnover-based with the, I would say, with minor guarantees. We don't expect to change any or increase any guarantees other than the normal inflation. We do not increase either the percentages. We don't think that the time is right for that. We have even negotiated a few contracts now where we have adjusted a bit and decreased a bit some of the leases, but that's smaller things. We have already announced some hotels that we are going to leave this year, so we will leave two hotels during the quarter. Whether we will leave these contracts is totally up to the terms and conditions. If we do not get the right terms, Karl-Johan, then we will leave. Sounds prudent. As you say, the basic base scenario is that you will basically keep the whole base of that. Yeah, we want to, but if we get the right terms and conditions, we had, for instance, a few hotels now that we have been negotiating for the last period of signing being signed these days as extensions. We only wanted to stay with those if we got better terms, and that we have actually managed to do. Otherwise, we would have left. It's very clear that we need to continue to work on the whole portfolio to strengthen our resilience in the total portfolio, and we do not compromise on that point. We are willing to leave hotels if we do not think that they have the right margins and that we can't see that the terms are strong enough, looking from our side. When you look at the. You had quite a positive facing when you talked about strengthening of the new hotel pipeline also after the current surge that you see in new openings to rebuild the pipeline, so to say. Do you see that now in this current environment being möre of say, we'll say, taking over existing hotels and then rather than going for new projects? I guess the project base out there is probably quite short for the moment after this pandemic is in it. Yeah. Yeah, it is. It is. You're right. I think in the coming, I don't know, 2, 3, 4 years, there will be limited, let's say, new hotels coming in, let's say for new builds. Of course, that is also linked, you know, to all the bank agreements and then from the landlord side. Definitely there's a lot of hotels, I would say, in European market which might shift hands after such a pandemic. Some are trying to consolidate even möre and grow the company, and some might use the time to then sell out. I think we will see quite a lot of hotels shifting hands during the coming 3-5 years. If the right kind of opportunities came along for, say, maybe speeding up the development of your early German ambitions, would this be the right time for it, or is it still too early for you? No, it's not too early for us. I think we actually, after such a tough period of time, I think we have balanced out, and I think we have handled the situation extremely well from Scandic's point of view. I think we have a fantastic exit point. We have a controlled cost base, and I think we have also managed to handle the financials during the year so that we do not have an over-debt situation in the company. I think that's very balanced looking at the pre-crisis EBITDA levels and what we expect to return to in the coming years. I think definitely Scandic is interested in growing, but we definitely also look at the models and how to grow in a, I would say, a structured and balanced way. Also looking at future needs of being able to handle changes in the market. Whether it's related to pandemics or wars or whatever, we are definitely looking at having a model that also can handle such a downturn. Excellent. Just finally, looking at your financial headroom you have, and I guess, that headroom still comes with a cost. When do you see that you would have, say, slightly möre normalized financial costs, so to say? How much möre do you need to amortize beföre getting down to that? No, but I think we will continue to as long as we continue to create strong results, which you also will see in the coming period, we will continue to amortize actually. Then, of course, we have a, like Åsa was mentioning, we have a bank agreement which runs out by the end of 2023. We are not the type of people sitting and doing that the last quarter or two. We will start that negotiation already later this year. Of course, terms and conditions will be negotiated. Excellent. Thank you very much, and good luck out there. Yeah. Thank you very much. Just to remind you, if you wish to ask a question, please press zero one on your telephone keypad. If you wish to withdraw your question, you may do so by pressing zero two to cancel. And we have no further questions. Please go ahead, speakers. I would like to, on behalf of Scandic, thank you all for joining our call for Q1, and looking forward to speaking to you soon again. If you have any questions coming up, feel free to contact Henrik like directly, and we are willing to answer möre questions that you might have. Otherwise, have a nice day, all of you. Thank you.