Slide 1: Q4 2021 Interim Report October-December 2021
Q4 2021 INTERIM REPORT OCTOBER-DECEMBER 2021 CEO SONDRE GRAVIR CFO CECILIE ELDE
Slide 2: Market positions and clubs across the Nordics
#1 position1 with 112 clubs and 302 000 members (8%2) #1 position1 with 88 clubs and 229 000 members (6%2) 2 #1 position1 with 32 clubs and 64 000 members (7%2) #2 position1 with 30 clubs and 73 000 members (2%2) 4 3 1 5 10 24 65 Greater Oslo 10 Greater Helsinki 5 71 11 4 Greater Stockholm 10 2 1 4
Slide 3: Strong member growth in Q4 slowed by new covid restrictions
Strong member growth in Q4 slowed by new covid restrictions, but promising 1 prospects moving into 2022 The activity level among our members is high despite restrictions, proving the 2 importance of health, activity and fitness in people’s lives – and the continued importance of physical gyms We are
Slide 4: Club status under restrictions
Open clubs Open clubs with restrictions Imposed club closure 4 Note: (1) Status as of 10 February 2022. Situation could change due to national or local restrictions
Slide 5: Net member growth in Q4 2021
• Net member growth in Q4 2021 at ~16.000 vs declining ~34 000 in Q4 2020 and ~0 in Q4 2019 • Outgoing member base 2021 at same level as OB 2019 • Positive net growth driven by strong sales performance and lower member churn than pre-pandemic levels due to positive activation and visits levels • New
Slide 6: Member development through the pandemic
High Drop-off almost Quick recovery Falling member base due to Quick recovery when Slowed growth pace in-line with 2019, when club closures and societal restrictions lifted due to new growth lacking sales due restrictions lifted restrictions restrictions to club closures 6
Slide 7: Restrictions by country
• Closed group training followed by reduced capacity of 30-50% • Stable fitness floor capacity due to strong clusters and distribution of visits • ~60% reduced capacity on GX Lower visits, • Stable fitness floor capacity due primarily driven to strong clusters and distribution by fewer GX of visits
Slide 8: Covid measures and digital tools for members
• Introduced pre-booking of studio training to make it easy for members to plan their training and avoid queues outside the club Digital tools for members Improved cleaning routines Detailed tracking of all visits Large clubs enabling social distancing 8
Slide 9: Outdoor classes and free Mentra access
Free access to Mentra by SATS app for all SATS group training +2 500 outdoor classes in December members during December and January 9
Slide 10: Strong member growth in Q4 slowed by new covid restrictions
Strong member growth in Q4 slowed by new covid restrictions, but promising 1 prospects moving into 2022 The activity level among our members is high despite restrictions, proving the 2 importance of health, activity and fitness in people’s lives – and the continued importance of physical gyms We are
Slide 11: Visits development
New restrictions introduced, incl. Strengthened development in studio limitations to group training capacity visits in January 2022 (1) Defined as total visits less GX showups 11
Slide 12: Member satisfaction (NPS)
(1) Measured through Gym Floor Net Promoter Score (NPS). Group Training NPS not included due to comparability issues 12
Slide 13: Growing consumer awareness of activity and exercise
1• Growing consumer awareness of the importance of activity and exercise for a healthy lifestyle – boosted past 2 years due to covid-19 pandemic 2• Increasing political support around health awareness and need for physical activity, with rising rates of obesity, diabetes and other cardiovascular dis
Slide 14: Strong member growth in Q4 slowed by new covid restrictions
Strong member growth in Q4 slowed by new covid restrictions, but promising 1 prospects moving into 2022 The activity level among our members is high despite restrictions, proving the 2 importance of health, activity and fitness in people’s lives – and the continued importance of physical gyms We are
Slide 15: Club expansion pipeline 2022
Greenfields: Acquisitions: • SATS Lyngby – Kanalvej • SATS Mölnvik • SATS Ursvik Entré • SATS Hamnen • SATS Häggvik • SATS Gåshaga • SATS Arninge • Fresh Fitness Ås • SATS Bromma Blocks • Fresh Fitness Kalbakken • SATS Saltsjöbaden • Fresh Fitness Sinsen • SATS Gamlestaden • Fresh Fitness Romsås • H
Slide 16: Club expansion pipeline 2022 (continued)
Greenfields: Relocations: • SATS Hinna (opened Jan 2022) • ELIXIA Espoonlahti to ELIXIA • SATS Kolbotn Torg Lippulaiva • SATS Oasen • SATS Triaden • SATS Näsby Slott (opened Jan 2022) • SATS Limhanm • SATS Lidingö centrum • SATS Hovås • SATS Nacka forum • SATS Karlaplan • SATS Mölndal • ELIXIA Fabia
Slide 17: Examples of new clubs
Example: SATS Stureplan Example: SATS Fredrikstad Example: SATS Hellerud 17
Slide 18: Group training room concepts
Night club ambience Current GX room example Softer ambience (for e.g. yoga) • Classic wooden floors • Darker and more “closed” rooms with nightclub ambience • Open rooms with limited privacy • Use of LED lightening with the possibility to change colors • Dark multi-purpose floors • Caters to younger
Slide 19: HIIT zone concept
• Night club ambience designed to optimize the HIIT experience • Three core elements: Treadmills, punching bags and strength • Treadmills & strength training equipment • High intensity interval training • First HIIT zone to be launched in February 2022 at SATS Colosseum HIIT Crush that will challeng
Slide 20: Digital training market and Mentra by SATS
• The market for digital training is maturing and growing • Visit stats after re-opening • Covid-19 has accelerated contradict permanent changes in digitalization people’s exercise habits out of gyms • Successful and inspiring track record from international players • Growing the club network at a h
Slide 21: Extending the vision beyond physical clubs
• Extending our vision of «Making people healthier and happier» beyond our physical clubs • Maturing and growing market for digital training, accelerated by covid-19 • Successful and inspiring track record from international players within digital home training • Potential to target people less like
Slide 22: Rflex fitness mirror
• Rflex; A beautiful, interactive fitness mirror that will fit perfectly into any home • 43” touch screen, two-way camera, microphone, Bluetooth and Wifi • Targets a wide audience in terms of training types, age and gender • Design tailored for it to be placed in a prominent spot in the home, for th
Slide 23: Live and on-demand classes
• We offer both live and on-demand classes, across several verticals and at all fitness levels • Our in-house studio allows us to be very flexible and agile to try new content • We currently have 20 coaches, more than 350 on-demand classes, and a weekly schedule of 10 live classes • Current vertical
Slide 24: Customer testimonials for Mentra
“My best training “Great product – great “I love it and use it Great music and great purchase ever!” community – great every day!” coaches! company!” 24
Slide 25: Mentra by SATS milestones
More than 20.000 workouts completed since Oct. 1st April June October 6th November December 6.000 registered users MVP (minimal viable Open for pre- Launch – Mentra Live classes First deliveries in product) testing in orders sees the light of every day Sweden and 80 families in the world Norway Norw
Slide 26: Financial Review
FINANCIAL REVIEW
Slide 27: Member base development in the quarter
• Strong net growth of 2% in the quarter, across the Nordics, however reimposed restrictions resulted in weaker sales development towards the end of the quarter • Member base ended in line with pre-covid level in Q4 2019, adjusted for the sold clubs in Denmark 27
Slide 28: Revenue development
• Increasing revenues through the quarter driven by strong new membership • Average member base in the quarter slightly lower than in 2019, but fully sales in Q3 and unfreezing of memberships, but restrictions on group training, recovered by end of quarter visit capacity and club closures in Finland
Slide 29: Flexible membership structure and price optimization
Flexible membership structure with a “pay for what you need” logic, addressing all budgets Annual price optimization process • New list prices for new members on 1 January • Adjustment for inflation for all existing members on 1 January • Proactively increasing prices for members with significantly
Slide 30: Operating expenses and fixed cost base
Total operating expenses Like-for-like club operating including COGS and overhead expenses (currency adjusted) (currency adjusted) • The cost base required to operate the current club portfolio is largely fixed • Therefore, as LFL member levels return, and new clubs fill up with new members, • +14 c
Slide 31: Club expansion and EBITDA upside
• Significant step-up in club expansion in recent years, both greenfields and • Club expansion hits EBITDA short term but as the clubs mature over the next 24 acquisitions months, the EBITDA contribution from newly opened and signed clubs indicate an upside of 150 million • Greenfields take 6-12 mon
Slide 32: Adjusted EBITDA development
• Adjusted EBITDA continue to recover in Q4, but reimposed restrictions across the Nordics resulted in weaker development in sales and increased freeze towards the end of the quarter • Increase in cost driven by lease cost, electricity prices and extra marketing and campaign cost to recover the memb
Slide 33: Capital expenditures
• Low maintenance capex in 2021 due to focus on cash preservation, less wear & tear on equipment because of reduced visits, and a lower average age in the club portfolio • Expected normalized annual maintenance capex level of 5% of group revenues • Increased expansion capex in 2021 is due to ramp-up
Slide 34: Liquidity and cash flow
• Satisfactory liquidity with cash balance of NOK 280 million and undrawn RCF amount of NOK 289 million • Positive change in working capital mainly due to receiving government compensation (128 million) related to previous periods, but ramp up in revenues with increasing member base also impacts wor
Slide 35: Net debt and leverage
• Net debt increase the past year solely due to EBITDA effect of covid-19 and club closures • Historically shown deleveraging capability on back of EBITDA growth and high cash conversion • Increased short term flexibility with the addendum to the revolving credit facility agreement 35
Slide 36: Summary
SUMMARY
Slide 37: Summary: strong member growth, promising 2022 prospects
Strong member growth in Q4 slowed by new covid restrictions, but promising prospects moving into 2022 with lifting of restrictions We ended 2021 with the same members base as end of 2019 – we are now ready to grow after a period of catching up Increased demand and growing visits per member -> high a
Slide 38: Disclaimer
• 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 in
Slide 39: Appendix
APPENDIX
Slide 40: Norway
NORWAY OUTGOING MEMBER BASE (000) ARPM AND YIELD (NOK/MONTH) TOTAL REVENUES (MNOK) Hl MEMBERSHIP YIELD Hl MEMBERSHIP REVENUES [OTHER YIELD Il OTHER REVENUES 516 38] Q4 2020 QI 2021 Q22021 Q3 2021 Q4 2021 Q4 2020 Q4 2021 Q4 2020 Q4 2021 ADJ. COUNTRY EBITDA BEFORE IMPACT OF IFRS 16 (MNOK) +1387%, 18%
Slide 41: Sweden
SWEDEN " ADJ. COUNTRY EBITDA BEFORE OUTGOING MEMBER BASE (000) ARPM AND YIELD (NOK/MONTH) TOTAL REVENUES (MNOK) IMPACT OF IFRS 16 (MNOK) I MEMBERSHIP YIELD I MEMBERSHIP REVENUES (OTHER YIELD @ Il OTHER REVENUES ———io—,, 514 515 wa a7 216 220 206 207 m 120 73 81 17% ee 404 595 268 266 59 t [| 42 @4 2
Slide 42: Finland
FINLAND " ADJ. COUNTRY EBITDA BEFORE OUTGOING MEMBER BASE (000) ARPM AND YIELD (NOK/MONTH) TOTAL REVENUES (MNOK) IMPACT OF IFRS 16 (MNOK) I MEMBERSHIP YIELD Hl MEMBERSHIP REVENUES [OTHER YIELD Il OTHER REVENUES —_—<———,, 495 502 95 62 60 59 58 91 130 167 4% 564 5 4 -5%) 4 @4 2020 @12021 @22021 Q3202
Slide 43: Denmark
DENMARK " ADJ. COUNTRY EBITDA BEFORE OUTGOING MEMBER BASE (000) ARPM AND YIELD (NOK/MONTH) TOTAL REVENUES (MNOK) IMPACT OF IFRS 16 (MNOK) I MEMBERSHIP YIELD I MEMBERSHIP REVENUES [OTHER YIELD Il OTHER REVENUES 72 7 7 7B 435 96 56 576 79 57 “68% -10% 9 ~54% -30 @4 2020 @12021 @22021 Q32021 042021 @4
Slide 44: 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 45: Key figures Q4 2021 vs Q4 2020
Amounts in NOK million Q4 2021 Q4 2020 Number of clubs, EOP 262 253 Outgoing member base ('000s) 669 628 Average number of members per club 2 553 2 482 ARPM (NOK) 505 437 Yield (NOK) 402 307 Reported EBITDA (MNOK) 273 216 Adjusted EBITDA before impact of IFRS 16 (MNOK) 26 -32 Adjusted EBITDA before
Slide 46: IFRS 16 reconciliation Q4 2021
Reported Change E xcl . IFRS 16 Amounts in NOK million Q4 2021 IFRS 16 Q4 2021 Bal ance sheet i tems - IFRS 16 Property, plant and equipment 691 0 691 Right-of use assets 4 077 4 077 0 Deferred tax assets 213 0 213 Prepaid expenses and accrued income 237 -70 307 Total assets 8 336 4 007 4 329 E qui
Slide 47: SATS
SATS