Sats Asa · OSL:SATS
Sats Asa — Q3 2022 Earnings Presentation
25 slides from Sats Asa's earnings presentation, September 2022
Slide 1: Q3 2022 Interim Report July-September 2022
Q3 2022 INTERIM REPORT JULY-SEPTEMBER 2022 CEO SONDRE GRAVIR CFO CECILIE ELDE INVESTOR RELATIONS: STINE.KLUND@SATS.NO, +47 98 69 9259
Slide 2: Significant member growth despite challenging macroeconomic backdrop
SIGNIFICANT MEMBER GROWTH DESPITE CHALLENGING MACROECONOMIC BACKDROP i) RECORD HIGH MEMBER BASE DRIVEN BY STRONG SALES AND LOWER CHURN © STILL NO SIGNS OF WEAKER CONSUMER SENTIMENT 37) HIGHER MARKETING PUSH THAN USUAL TO SECURE A SOLID RUN RATE OUT OF 2022 Oo COST BASE IN THE QUARTER AFFECTED BY HIG
Slide 3: Clubs and members by Nordic market
122 clubs and 322 000 members (8%2) 93 clubs and 238 000 members (8%2) 2 31 clubs and 67 000 members (9%2) 29 clubs and 81 000 members (10%2) 4 3 1 5 11 23 67 Greater Oslo 11 Greater Helsinki 10 5 73 11 Greater Stockholm 11 2 1 6 29 Greater Copenhagen 1) Measured by 2021 revenues based on figures fr
Slide 4: Member base development in the third quarter
• The third quarter typically starts off slowly during the summer, before kicking off halfway when people return from vacation • Q3 2021 extraordinary due to covid recovery • A strong sales has yielded results during the quarter • Continued positive sales development in October 4 1) Excl. clubs in t
Slide 5: Strategic campaign focusing on SATS' one-stop shop offering
Daily membership sales Strategic campaign focusing on Selected tactical campaigns to SATS’ unique product offering as a boost sales one-stop shop for training 5
Slide 6: People still prioritize their own health
PEOPLE STILL SEEM TO PRIORITIZE THEIR OWN HEALTH — SO FAR, NO EFFECTS OF WEAKENING CONSUMER SENTIMENT RECORD HIGH MEMBERSHIP SALES +36 000 MEMBERS IN Q3 2022 -0.2 P.P. CHURN CONTINUING AT A LOWER RATE THAN PRE-PANDEMIC CHURN RATE IN Q3 2022 VS Q3 2019 NO SIGNS OF MEMBERS TRADING DOWN TO LOW COST PLA
Slide 7: Net promoter score and visits per member
Net promoter (NPS) score Visits per member High NPS Medium NPS Low NPS 7
Slide 8: Financial review
FINANCIAL REVIEW SATS
Slide 9: Member base at an all-time high
• Member base at an all-time high after positive development in both sales and churn in recent months, further closing the gap for LFL clubs compared to 2019 • However, strong sales numbers come at a cost, and is a result of investing more than usual in marketing, both promotions and campaigns to se
Slide 10: Member revenue increase of 4% versus 2019
• Member revenue increase of 4% compared to the corresponding quarter of 2019 • Average member base for LFL clubs not yet fully recovered compared to 2019, but yield improvements fully compensate for the gap in volume as revenues now have returned to 2019-level • Slightly elevated freeze levels and
Slide 11: Total operating expenses and comparable clubs operating expenses
Total operating expenses incl. Comparable clubs2 operating COGS and overhead expenses • Adding 27 clubs compared to 2019 are • Historically, OPEX has increased with the main drivers for the increase inflation, but successful cost-saving efforts partly compensate for the increase • In addition, energ
Slide 12: Adjusted EBITDA improved excluding governmental compensation
• Adjusted EBITDA of 20 million in the quarter is improved compared to last year when excluding the governmental compensation • Despite solid revenue improvements, profits are highly affected by increased OPEX, due to a higher share of immature clubs and higher than usual energy cost • We have inves
Slide 13: Maintenance and expansion CAPEX
• Increased maintenance CAPEX1 on the back of: • Step-up in equipment upgrades • Lifted the quality of the Stockholm cluster • YTD below historical maintenance capex level of around 5% of revenue • Expansion CAPEX in the quarter partly driven by the acquisition of seven clubs in the South of Norway
Slide 14: Negative free cash flow and liquidity
• Negative free cash flow driven by an increase in maintenance CAPEX in the • Overall liquidity, including undrawn liquidity under the quarter, as well as the acquisition of seven new clubs to the portfolio RCF, is sufficient to handle current operations, even in a currently more challenging macro e
Slide 15: Cash generation and deleveraging
• Historically we have shown strong cash generation capabilities and stable cash conversion, resulting in a strong deleveraging profile enabling us to invest in future growth opportunities or return cash to shareholders • However, the covid-19 period has resulted in significant losses, financed by i
Slide 16: See Capital Markets Day presentation for more details
PLEASE SEE THE CAPITAL MARKETS DAY PRESENTATION FOR MORE DETAILS ON THE STATUS AND THE ROAD AHEAD FOR SATS SATS CAPITAL MARKETS DAY SATS
Slide 17: Appendix
APPENDIX KY-TAY
Slide 18: Norway
NORWAY " A OUNTRY 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 I GOVERNMENTAL SUPPORTING PACKAGES 322 5635 496 46%) 27% 15% 133 72 Q3 2021 Q4 2021 Q12022 Q2 2
Slide 19: 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 I OTHER REVENUES re 20 228, 231228 ci 304 Eild 457 92 79 583 378 Q3 2021 Q4 2021 Q12022 Q2 2022 Q3 2022 Q3 20
Slide 20: 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 2 - 76 426 459 7 93 86% 2% 333 568 Q53 2021 Q4.2021 Q12022 22022 Q3 2022 @3 2021 @32022 @
Slide 21: 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 I GOVERNMENTAL SUPPORTING PACKAGES DB 80 81 487 co 105 @ 410 139 2% Q3 2021 Q4 2021 QI 202
Slide 22: Definitions of adjusted EBITDA 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 23: Key figures Q3 2022 vs Q3 2021
Amounts in NOK million Q 3 2022 Q 3 2021 Number of clubs, EOP 275 256 Outgoing member base ('000s) 708 653 Average number of members per club 2,573 2,551 ARPM (NOK) 468 512 Yield (NOK) 388 377 Reported EBITDA (MNOK) 281 333 Adjusted EBITDA before impact of IFRS 16 (MNOK) 20 83 Adjusted EBITDA before
Slide 24: IFRS 16 impact on balance sheet and profit & loss
Re por te d C ha nge Exc l. I FRS 16 Amounts in NOK million Q 3 2022 I FRS 16 Q 3 2022 Ba la nc e she e t ite ms - I FRS 16 Property, plant and equipment 719 0 719 Right-of use assets 4,179 4,179 0 Deferred tax assets 222 74 147 Prepaid expenses and accrued income 223 -76 299 Tota l a sse ts 8,431 4
Slide 25: SATS
SATS