Slide 1: Q2 2020 Interim Report April - June 2020
Q2 2020 INTERIM REPORT APRIL - JUNE 2020 SATS
Slide 2: Q2 financials heavily affected by COVID-19 and closed clubs
Q2 financials heavily affected by COVID-19 and closed clubs – estimated COVID-19 related revenue loss of NOK 520 million and EBITDA effect of NOK 270 million Net profit in the quarter negative with NOK - 114 million (YTD NOK -212 million) Member base down 5% compared to Q2 2019 (on a growth trajecto
Slide 3: Market positions, clubs and members by Nordic country
#1 position1 with 103 clubs and 280 000 members (-6%2) #1 position1 with 82 clubs and 221 000 members (-3%2) 2 #1 position1 with 29 clubs and 60 000 members (-3%2) #2 position1 with 38 clubs and 91 000 members (-8%2) 4 1 3 1 4 10 21 58 Greater Oslo 10 3 Greater Helsinki 5 65 6 4 Greater Stockholm 10
Slide 4: Update on COVID-19 and the reopening of clubs
UPDATE ON COVID-19 AND THE REOPENING OF CLUBS SATSGROUP
Slide 5: Club closures and reopening timeline by country
• SATS decided on 12 March to temporarily close down all clubs in the Nordics to contribute to limit the contagion of COVID-19, governmental shutdown of the industry followed later in Norway and Denmark • Close dialogue with the authorities in each country after close down, following their advices o
Slide 6: Safety and hygiene measures in clubs
Wash your hands Frequent cleaning The best prevention against infection is to wash your hands We have frequent cleaning at our centers, especially surfaces thoroughly and often. and equipment many may be in contact with. Wash equipment after use Reduced number of participants in group training Alway
Slide 7: Successful reopening, learning from best practice across countries
SUCCESSFUL REOPENING, LEARNING FROM BEST PRACTICE ACROSS COUNTRIES SATS
Slide 8: Study on safe reopening of Norwegian training facilities
Investigate whether it is safe to reopen Norwegian training facilities after the COVID-19 pandemic Carried out by the Clinical Effectiveness Research team at the University of Oslo, in collaboration with Oslo University Hospital, Virke Trening, SATS, EVO and STOLT 8
Slide 9: Club visits climbing back towards normal
Weekly visits as share of LY per country • Club visits have climbed back towards normal sooner than expected • The last weeks on par with comparable weeks last year, despite: 1. Fewer group training visits due to lower group training capacity to enable social distancing 2. Some workouts moved from p
Slide 10: Flexibility for members and spreading visits across clubs
x # of clubs • Offering flexibility for members to work out either Oslo close to the office or home Helsinki • Visit patterns spread out more evenly through the day, with lunch time training taking some of the 21 Helsinki pressure from the most popular afternoon slots Copenhagen 58 65 Oslo Stockholm
Slide 11: Capacity tracking in the app
• Important measure in spreading traffic across clubs and during the day • Creating awareness of differences in capacity between clubs and time slots • Both instant capacity tracking right before going to club and predictions helping members plan • Developed by internal digital team 11
Slide 12: Share of SATS clubs by size
Share of SATS clubs by size < > 12
Slide 13: Digital offering during lock-down
‘000 of sessions started per week • Main priority during lock-down to provide the members with good alternatives to the physical club experience, hence we significantly SE reopens improved the digital offering • Adjusted the memberships to the new offering, with a significantly reduced price point –
Slide 14: Outdoor training
SOCIAL DISTANCING DESPITE HIGH VISIT NUMBERS ENABLED BY... OUTDOOR TRAINING > 400 WEEKLY OUTDOOR CLASSES IN BOTH NORWAY AND SWEDEN MOST POPULAR CLASSES: CROSSTRAINING RUNNING 4 SATSGROUP
Slide 15: Estimated capacity versus actual visits
15 22:00:00 20:00:00 18:00:00 16:00:00 Sunday (Jun 15. - Jun 30.) 14:00:00 12:00:00 Actual visits 10:00:00 08:00:00 06:00:00 21:00:00 19:00:00 17:00:00 Saturday 15:00:00 13:00:00 11:00:00 09:00:00 Estimated capacity 07:00:00 22:00:00 20:00:00 18:00:00 16:00:00 Friday 14:00:00 12:00:00 10:00:00 08:00
Slide 16: Workouts per member climbing above last year
# OF WORKOUTS PER MEMBER CLIMBING ABOVE LAST YEAR # OF WORKOUTS PER MEMBER, BOTH AT CLUBS AND ONLINE, AFTER REOPENING OF ALL CLUBS 1 1 SATS’ MEMBERS ARE, DESPITE LOWER t CAPACITY AT THE CLUBS, WORKING OUT eS MORE OFTEN THEN LAST YEAR RECORD HIGH NPS SCORES, DRIVEN BY OPERATIONAL IMPROVEMENTS nvr ais
Slide 17: Club update
dNOAISLVS CLUB UPDATE
Slide 18: New club openings and planned openings
• • White spot in the Greater Helsinki area, west of city centre • The 2 000 sqm club is located at highly visited AINOA Shopping centre with good public transport connections and opened in January • • White spot in the Greater Stockholm area, north of city centre • 2 000 sqm club, including a sport
Slide 19: Divestment of nine clubs in Denmark
• Signed an agreement with Fitness 1 to divest nine clubs in Jylland and Fyn • A planned strategic move initiated by SATS, in order to make Denmark more efficient and profitable • Enabling SATS to continue on the journey of focusing on its strong capital clusters • Copenhagen clubs brought up to the
Slide 20: Financial review
FINANCIAL REVIEW SATSGROUP
Slide 21: Member base, revenue and EBITDA
Thousand NOK million NOK million 21
Slide 22: Member base development
• Reduction in member base driven by lower sales during closure period rather than drop-offs • Drop-offs after reopening in Norway and Denmark lower than expected based on experience from reopening in Sweden and Finland • The number of drop-offs was in line with last year, proving the loyalty of the
Slide 23: Revenue and ARPM development
• Revenues partially preserved during club closure • Reduced ARPM due to frozen memberships and reduced price for online memberships • Average price on memberships higher in June 2020 than in June 2019, implying a continued positive development in underlying yield 23
Slide 24: Total revenue decreased by NOK 259 million
• Total revenue decreased by NOK 259 million compared to second quarter last year • The estimated COVID-19 impact on revenues amounts to NOK 520 million • Supporting package of NOK 126 million from the Norwegian and Danish governments, covering salaries and parts of the fixed costs, recognized as re
Slide 25: Adjusted EBITDA before IFRS 16
• In total, adjusted EBITDA before impact of IFRS 16 was NOK 131 million lower in the second quarter than in the same period last year • The estimated COVID-19 impact on EBITDA amounts to NOK 270 million • Net income before impairment of assets held for sale of NOK -52 million in the second quarter
Slide 26: Results by country
• Norway affected the most by the closure period despite receiving governmental support, with an underlying loss in revenues of NOK 301 million and negative EBITDA impact of NOK 181 million • Given the circumstances, Sweden performed well with 6% increase in revenues and EBITDA in line with LY • The
Slide 27: Capital expenditures
• Back to normal levels for maintenance capex1 in Q2 after frontloading spend in Q1 • Only marginal expansion capex in the quarter, as planned • As previously communicated, the company has continued to invest • Still consider it wise to keep the majority of the planned maintenance • Open for acquisi
Slide 28: Operating cash flow
• Negative effects on working capital reduces operating cashflow • Mostly reverted effect from Q1 after clubs reopening • Governmental compensation reserved as revenue in Q2 but cash to be received in Q3 • Deferral of VAT and tax payments builds up short term debt with positive working capital effec
Slide 29: Net debt, leverage and covenant amendment
• Net debt increased to NOK 1 336 million resulting in leverage ratio above long term target of 2.0x Adjusted EBITDA • An amendment to the revolving credit facility was signed 2 July, waiving the original financial covenants • Original covenant: Leverage <4.25x Adjusted LTM EBITDA until September 20
Slide 30: Outlook and priorities
• Strengthened megatrend around healthy lifestyle and training, supporting SATS’ long term value proposition • Strong visit development after opening indicates members’ willingness to come back • During autumn, focus on recovering member base and securing financial run-rate into 2021 • Well position
Slide 31: Q&A
dNOAISLVS Q&A
Slide 32: Forward-looking statements
This report includes forward-looking statements which are based on our current expectations and projections about future events. Statements herein, other than statements of historical facts, regarding future events or prospects, are forward-looking statements. All such statements are subject to inhe
Slide 33: Appendix
dNOAISLVS APPENDIX
Slide 34: Norway
NORWAY " ADJUSTED COUNTRY EBITDA OUTGOING MEMBER BASE (000) ARPM AND YIELD (NOK/MONTH) TOTAL REVENUES (MNOK) BEFORE IMPACT OF IFRS 16 (MNOK) Wl vieto Hl MEMBERSHIP REVENUES Ml OTHER YIELD Il OTHER REVENUES I GOVERNMENTAL SUPPORTING PACKAGE 50% 17% @o— 139 42 22019 Q3 2019 Q4 2019 QI 2020 @22020 2201
Slide 35: Sweden
SWEDEN " ADJUSTED COUNTRY EBITDA OUTGOING MEMBER BASE (000) ARPM AND YIELD (NOK/MONTH) TOTAL REVENUES (MNOK) BEFORE IMPACT OF IFRS 16 (MNOK) WM veto Hl MEMBERSHIP REVENUES Ml OTHER YIELD Il OTHER REVENUES —<a—, 16% . ~—+—~___ 25% 546 526 -2% (-14% CURR, AD) 90 88 22019 Q3 2019 Q4 2019 QI 2020 @22020
Slide 36: Finland
FINLAND " ADJUSTED COUNTRY EBITDA OUTGOING MEMBER BASE (000) ARPM AND YIELD (NOK/MONTH) TOTAL REVENUES (MNOK) BEFORE IMPACT OF IFRS 16 (MNOK) Wl vieto I MEMBERSHIP REVENUES Ml OTHER YIELD Il OTHER REVENUES 457 OR 87 533 85 569 248 022019 Q3 2019 @4 2019 Q12020 @22020 22019 22020 a2 2019 22020 22019
Slide 37: Denmark
DENMARK " ADJUSTED COUNTRY EBITDA OUTGOING MEMBER BASE (000) ARPM AND YIELD (NOK/MONTH) TOTAL REVENUES (MNOK) BEFORE IMPACT OF IFRS 16 (MNOK) MM WINE DIVESTED CLUBS WB veto Hl MEMBERSHIP REVENUES Ml OTHER YIELD Il OTHER REVENUES I GOVERNMENTAL SUPPORTING PACKAGE hn 779) -10% 502 -31% (-39% CURR. ADJ
Slide 38: Definitions of alternative performance measures
Adjusted country EBITDA before Adjusted EBITDA before impact of IFRS 16 less allocation of Group Profit/(loss) before net financial items, income tax expense, depreciation EBITDA impact of IFRS 16 overhead and cost allocations and amortization Adjusted country EBITDA before Adjusted country EBITDA b
Slide 39: Key figures Q2 2020 and Q2 2019
Amounts in NOK million Q 2 2020 Q 2 2019 Number of clubs, EOP 252 248 Outgoing member base ('000s) 652 687 Average number of members per club 2 588 2 768 ARPM (NOK) 368 481 Yield (NOK) 240 376 Reported EBITDA (MNOK) 289 401 Adjusted EBITDA before impact of IFRS 16 (MNOK) 38 168 Adjusted EBITDA befor
Slide 40: IFRS 16 impact on Q2 2020 reported figures
Reported Change E xcl . IFRS 16 Amounts in NOK million Q2 2020 IFRS 16 Q2 2020 Bal ance sheet i tems - IFRS 16 Property, plant and equipment 785 0 785 Right-of use assets 4 268 4 268 0 Deferred tax assets 149 85 64 Prepaid expenses and accrued income 322 -68 390 Total assets 9 089 4 285 4 804 E qui
Slide 41: SATSGROUP
SATSGROUP