Sats Asa · OSL:SATS
Sats Asa — Q1 2021 Earnings Presentation
48 slides from Sats Asa's earnings presentation, 2021
Slide 1: Q1 2021 presentation
\, QI 20: SONDREGRAVIR CECILIE ELDE IE.KLUND@SATS.NO, +479
Slide 2: Key messages for the quarter
Currently operating with a significant proportion of our club portfolio closed, and the remaining clubs with strict infection control measures However, opening roadmap starting to be defined, continued positive member momentum to return to open clubs and proof points on safe operations All membershi
Slide 3: Actions taken and strategic priorities
• Pro-active member communication • Further standardizing the operational model across all • Keeping members updated on regulatory changes clubs • Maintaining activity levels through digital training • Significant step up in club expansion • Strict infection control measures in all clubs • Improved
Slide 4: Current operating situation
Currently operating with a significant proportion of our club portfolio closed, and the remaining clubs with strict infection control measures However, opening roadmap starting to be defined, continued positive member momentum to return to open clubs and proof points on safe operations All membershi
Slide 5: Market positions in Nordic capitals
#1 position1 with 109 clubs and 268 000 members (-11%2) #1 position1 with 84 clubs and 206 000 members (-11%2) 2 #1 position1 with 30 clubs and 59 000 members (-7%2) #2 position1 with 30 clubs and 66 000 members (-34%2) 4 1 3 1 4 10 22 64 Greater Oslo 10 3 Greater Helsinki 5 67 6 4 Greater Stockholm
Slide 6: Club closures and reopening status
80 of 109 clubs closed. A part of the next step Outdoor training in the reopening plan introduced in Oslo this for Oslo, to be week announced next week Expected reopening in May All clubs reopened as of 29 April Open clubs Open clubs with restrictions Imposed club closure 6
Slide 7: Reopening and member momentum
Currently operating with a significant proportion of our club portfolio closed, and the remaining clubs with strict infection control measures However, opening roadmap starting to be defined, continued positive member momentum to return to open clubs and proof points on safe operations All membershi
Slide 8: Rapid comeback at reopening
• Rapid comeback at reopening after the first • The same pattern observed at the reopenings • Swedish clubs well visited, but capacity club closures in Norway during the second wave of closures limitations lower than real demand in Q4 2020 and H1 2021 8
Slide 9: Low COVID-19 risk in fitness clubs
• Been operating in a pandemic • Several studies conclude with extremely environment for over a year, and low levels of COVID-19 risk in fitness clubs implemented numerous safety measures 6.1 million club visits in Norway (2028) customers Expected since reopening after first closure 311 cases of mem
Slide 10: SATS products and public health contribution
• SATS is offering a wide range of products and services improving the public health Individual training Group training • During a normal year we have around 40 million visits in our clubs, resulting in significant health improvements • The majority of the population has been much less active during
Slide 11: SATS' ESG approach and UN goals
FOR MORE INFORMATION ABOUT SATS’ ESG APPROACH AND INITIATIVES, PLEASE SEE THE RECENTLY PUBLISHED ESG REPORT SATS’ CONTRIBUTION IS FOCUSED AROUND THE FOLLOWING UNITED NATIONS SUSTAINABLE DEVELOPMENT GOALS: GOOD HEALTH 1 2 RESPONSIBLE AND WELL-BEING CONSUMPTION AND PRODUCTION & Ss z 3 $ & 5 3 — S H SA
Slide 12: Financial update
Currently operating with a significant proportion of our club portfolio closed, and the remaining clubs with strict infection control measures However, opening roadmap starting to be defined, continued positive member momentum to return to open clubs and proof points on safe operations All membershi
Slide 13: Revenue loss from frozen memberships
• Temporary revenue loss during club closures is caused by all memberships at closed clubs being frozen by default • The subscription based model ensures revenues to be reactivated immediately at reopening • The decline in member base is caused by lost membership sales during the club closures, not
Slide 14: Member base development
• Member base still curbed by lost sales during club closure, but drop-offs in line with last year • However, the member base has held up well compared to peers • Proven ability to regain member base – expect quick recovery once reopening the full club portfolio 14
Slide 15: Q1 revenue and yield highlights
+2% increase in membership yield per non-frozen member +5% increase in completed hours per PT member +15% increase in retail sales per visit • Revenues significantly hit by frozen memberships, mainly as a result of all memberships at closed clubs being frozen • ~40% of the club capacity closed in th
Slide 16: Operating expenses and cost reductions
Total operating expenses Club costs and direct Club costs and direct excl. depreciation in Q1 costs at closed like-for-like costs at Swedish like-for- clubs in Jan & Feb1 like clubs in Jan & Feb1 Operating under the new normal does result in some additional cost-driving measures, especially within c
Slide 17: EBITDA development
• Revenue hit still materially affecting EBITDA, partly compensated by cost initiatives • Highest revenue loss in Norway, correlating with the share of club closures • Including the March supporting package from the Norwegian government, adj. EBITDA is NOK -140 million 17
Slide 18: Capital expenditures
• The majority of the club expansion is planned to open late 2021 • Maintenance capex1 kept at a responsible level during the club closures, but please note that the maintenance level in Q1 2020 was extraordinary high due to a frontloading last year (1) Maintenance capex consists of IT capex and clu
Slide 19: Liquidity and cash burn
• Deferral effect of prepaid memberships from Q4 2020 pushed to Q2 2021 or date of reopening of clubs • Precautionary draw-down on revolving credit facility (RCF) of NOK 200 million in the quarter to secure available liquidity • Sufficient liquidity to handle extended lock-downs, with cash balance o
Slide 20: RCF covenant addendum and deleveraging
• In primo April, SATS signed an addendum to the RCF agreement, temporarily waiving the original covenants, and thus increasing the short term flexibility • The new financial covenants set out quarterly minimum levels for liquidity and adj. EBITDA, with the latter entering into force from Q4 2021 •
Slide 21: Growth plan
Currently operating with a significant proportion of our club portfolio closed, and the remaining clubs with strict infection control measures However, opening roadmap starting to be defined, continued positive member momentum to return to open clubs and proof points on safe operations All membershi
Slide 22: Consolidation opportunities and club density
Estimated number of clubs by country Urban area National rank2 population 20 000 1 79 1 623 1 702 100 000 28 1 796 1 824 1 200 000 38 1 388 1 426 2 SATS clubs / 20 000 population 103 1 125 1 228 1 0 0-0.25 SATS Other 0.25-0.50 0.50-0.75 0.75-1.00 1.00-1.25 1.25-1.50 > 1.50 • Expect further possibili
Slide 23: New club openings and acquisitions
Greenfields: Greenfields: • Ursvik Entré (Q1 2020) • Lindeberg (Q2 2021) • Tapiola (Q1 2020) • Aker Brygge (Q2 2021) • Lyngby – Kanalvej (Q3 2020) • Kolbotn Torg (Q2 2021) • Iso Omena (Q3 2020) • Slemmestad (Q3 2021) • Häggvik (Q4 2020) • Ensjø (Q3 2021) • Arninge (Q4 2020) • Saltsjöbaden (Q2/Q3 202
Slide 24: Digital offering
Currently operating with a significant proportion of our club portfolio closed, and the remaining clubs with strict infection control measures However, opening roadmap starting to be defined, continued positive member momentum to return to open clubs and proof points on safe operations All membershi
Slide 25: Digital first approach
• Shifted focus towards “Digital first” approach with the launch of a • Launch new digital sales solution new flexible membership structure • Launch new levels in the membership structure, digital • Released SATS member app with social features membership and digital user • Strategically insourced t
Slide 26: Rationale for home training offering
Strong strategic rationale for SATS to expand our digital offering with hardware into the home training market Improving the offering to existing members, by offering a winning combination of home training and club training 80% of the Nordic population not a gym member, many are not comfortable ente
Slide 27: Mentra
AW, Mentra | eysars
Slide 28: Mentra by SATS
Slide 29: Everyone can make room for activity
We believe that everyone can make room for activity, conquer their everyday life, and reach their goals
Slide 30: Workout of the future in the center of your home
Nordic — workout of the future in the center of your home
Slide 31: Curated content that fits your wants and needs
Curated content that fits your wants and needs
Slide 32: A world of workouts, live and on demand
A world of workouts – live and on demand
Slide 33: Whenever you want, wherever you are
Whenever you want – wherever you are On the go. At home.
Slide 34: Mentra – Freedom to move
Mentra — Freedom to move AN
Slide 35: Freedom to move
Freedom to move Stay in. A screen made to Move fast. touch. Explore the great indoors. Get ready for the road. At home.
Slide 36: Slide 36
Slide 37: Outlook
OUTLOOK KY-TAY
Slide 38: Outlook
In the short term, the reopening dates for the closed clubs and timing for return to normal operations are highly uncertain Expect to repeat successful reopening once allowed Believe the megatrend around health and well-being has been strengthened during the pandemic Accelerating club expansion and
Slide 39: Forward-looking statements and APMs
• 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 40: Appendix
APPENDIX KY-TAY
Slide 41: Norway
NORWAY " ADJUSTED COUNTRY EBITDA OUTGOING MEMBER BASE (000) ARPM AND YIELD (NOK/MONTH) TOTAL REVENUES (MNOK) BEFORE IMPACT OF IFRS 16 (MINOK) Wl veto I MEMBERSHIP REVENUES [OTHER YIELD Il OTHER REVENUES I GOVERNMENTAL SUPPORTING PACKAGES 69 “92 QI 2020 Q2 2020 Q3 2020 Q4 2020 Q12021 Q12020 12021 Q12
Slide 42: Sweden
SWEDEN " ADJUSTED COUNTRY EBITDA OUTGOING MEMBER BASE (000) ARPM AND YIELD (NOK/MONTH) TOTAL REVENUES (MNOK) BEFORE IMPACT OF IFRS 16 (MINOK) WM vietD Tl MEMBERSHIP REVENUES Il OTHER YIELD Il OTHER REVENUES 1% 4% CURR ADJ) €12% CURR. ADJ). 337 306 e ADJ. 7 78 N% 266 228 60 : QI 2020 Q2 2020 Q3 2020
Slide 43: Finland
FINLAND " ADJUSTED COUNTRY EBITDA OUTGOING MEMBER BASE (000) ARPM AND YIELD (NOK/MONTH) TOTAL REVENUES (MNOK) BEFORE IMPACT OF IFRS 16 (MINOK) Wl veto I MEMBERSHIP REVENUES [OTHER YIELD Il OTHER REVENUES +496% 474% CURR ADJ.) 5% 17% 16% CURR. ADJ.) 85 16 70 19 69 52 QI 2020 Q2 2020 Q3 2020 Q4 2020 Q
Slide 44: Denmark
DENMARK OUTGOING MEMBER BASE (000) ARPM AND YIELD (NOK/MONTH) TOTAL REVENUES (MNOK) 9 SOLD CLUBS WB veto Hl MEMBERSHIP REVENUES [OTHER YIELD Il OTHER REVENUES I GOVERNMENTAL SUPPORTING PACKAGES “37% 56% CURR. ADL) 16 9 456 82 95 285 361 284 106 9 J 0, 0, QI 2020 Q2 2020 Q3 2020 Q4 2020 QI 2021 12020
Slide 45: 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 46: Key figures Q1 2021 vs Q1 2020
Amounts in NOK million Q 1 2021 Q 1 2020 Number of clubs, EOP 253 252 Outgoing member base ('000s) 599 695 Average number of members per club 2 367 2 757 ARPM (NOK) 329 477 Yield (NOK) 194 379 Reported EBITDA (MNOK) 80 286 Adjusted EBITDA before impact of IFRS 16 (MNOK) -165 40 Adjusted EBITDA befor
Slide 47: IFRS 16 impact on Q1 2021 reported figures
Re por te d C ha nge Exc l. I FRS 16 Amounts in NOK million Q 1 2021 I FRS 16 Q 1 2021 Ba la nc e she e t ite ms - I FRS 16 Property, plant and equipment 702 0 702 Right-of use assets 4 230 4 230 0 Deferred tax assets 161 74 87 Prepaid expenses and accrued income 317 -65 382 Tota l a sse ts 8 637 4
Slide 48: SATS
SATS