Slide 1: Interim Report October-December 2023
Q4 20235 INTERIM REPORT OCTOBER-DECEMBER 2023 CEO SONDRE GRAVIR CFO CECILIE ELDE
Slide 2: SATS clubs and members by Nordic region
119 clubs and 326 000 members (0.3%2) 95 clubs and 249 000 members (2.0%2) 2 33 clubs and 71 000 members (1.8%2) 29 clubs and 85 000 members (3.6%2) 4 4 1 5 11 24 66 Greater Oslo Greater Helsinki 11 3 10 73 11 Greater Stockholm 12 2 1 7 3 29 Greater Copenhagen 1) Measured by 2022 revenues based on f
Slide 3: Record-high Q4 revenues and EBITDA
Record-high Q4 total revenues of NOK 1,227 million (+13%) and EBITDA1 of NOK 128 million (+964%) FY total revenues of NOK 4,734 (+16%) and EBITDA1 of NOK 614 million (+322%) Higher yield on new memberships as a result of product improvements and price adjustments, and stable member base Improved ear
Slide 4: No significant signs of weakened consumer sentiment
No significant signs of weakened consumer sentiment within gym Somewhat slower additional sales, memberships, which is the core business, constituting ∼80% of revenues constituting ∼20% of revenues Average membership yield PT and retail revenues Sales of new memberships: (curr. adj.) for: (curr. adj
Slide 5: Higher activity level per member
Δ Δ Δ • The combination of more members and the higher activity level per member drives the activity level up • Underlying growth driven by improvements in our product offering, communications and initiatives aimed at improving member experiences • The trend in the fourth quarter is consistent with
Slide 6: January 2024: long-lasting positive activity trend continues
JANUARY 2024: THE LONG-LASTING POSITIVE ACTIVITY TREND CONTINUES, EVEN MEASURED AGAINST RECORD-HIGH 2023 COMPARABLES # OF WORKOUTS (MILL) # OF WORKOUTS PER PAYING MEMBER # OF GROUP TRAINING SESSIONS Ce : JAN-23 JAN-24 JAN-23 JAN-24 JAN-23 JAN-24 SATS
Slide 7: Robust megatrends driving activity levels and health awareness
Global Burden of Diseases, Injuries & Risk Factors Study1 suggests that 87% of the disease burden in Norway stems from non-communicable diseases (formerly called “lifestyle diseases”), indicating a substantial potential welfare gain from raising activity levels in society ~ ~ Robust megatrends drivi
Slide 8: New club openings
• ELIXIA Ratina • SATS Kungsmässan (Q1 2024) • SATS Sluseholmen (Q1 2024) • SATS Mölndal (Q3 2024) • SATS Haga Norra (Q3 2024) • SATS Lillehammer (Q1 2024) • SATS Rødovre (Q1 2024) 8 8
Slide 9: Grow revenue per sqm through new members and sustainable activity
Grow revenue per sqm through attracting new members and helping them attain a sustainable activity level in existing club footprint Increase membership yield by refining our product offering to improve value proposition and finetuning our pricing to reflect a fair membership price Continued cost dis
Slide 10: Financial Review
FINANCIAL REVIEW RYT AY
Slide 11: Resilient member base with steady growth
• Resilient member base in a challenging macro environment with steady member base growth of 10 000 the past year • Still behind pre-pandemic levels in terms of members per club, but utilizing the total rented space better, with more members per sqm • Opening slightly smaller clubs than the average
Slide 12: Total revenue growth of 8% currency adjusted
• Total revenue growth of 8% (curr. adj) compared to Q4 2022 is driven by both increased average revenue per member and growth in members • Despite a challenging macroeconomic environment with higher interest rates and inflation, our members continue to invest in their health • The member revenue in
Slide 13: Cost reduction from profitability improvement program
• Cost reduction driven by initiatives from profitability improvement program, mainly reducing costs related to salaries, marketing and rent • Total operating cost is down 2% (curr. adj.), partly driven by: • Lower direct costs following lower additional sales • Electricity costs down NOK 20 million
Slide 14: Q4 2023 EBITDA before IFRS 16 of 128 million
• Q4 2023 EBITDA before IFRS 16 at 128 million was 10x higher compared to Q4 2022, while the full year results demonstrated growth from NOK 145 million in 2022 to NOK 614 million in 2023. • 2023 has set a new standard for SATS with record-high revenues, an improved financial position and high activi
Slide 15: Lower upgrades and maintenance capex in 2023
• Lower upgrades and maintenance capex in 2023 due to a precautionary spending approach, as well as delay of some projects in H2, expected to be implemented in Q1 2024 • One new club opened in Q4 • Going forward, we will increase investments in our existing clubs, growing the existing club capacity
Slide 16: Operating cash flow and free cash flow
~ • Operating cash flow of NOK 161 million in the quarter and free cash flow of 137 million • Positive working capital effects following the growing business with prepayment of memberships • LTM Operating cash flow of 473 million and cash conversion of 77% shows that our cash-generating ability is r
Slide 17: Liquidity position improved
• Liquidity position improved by 116 million from Q3 after positive free cash flow • Satisfactory liquidity position to handle current operations and communicated expansion strategy 17 1) Liquidity includes cash balance and undrawn revolving credit facility
Slide 18: High-paced deleveraging from 11.2x to 2.3x
• Improved earnings, cash generation and repayment of debt resulting in high-paced deleveraging from 11.2x to 2.3x, expected to continue throughout 2024 • Historically, we have shown strong cash generation capabilities and stable cash conversion, resulting in a strong deleveraging profile • Covenant
Slide 19: Capital allocation priorities
Ongoing investment in physical and Investing in high-returning growth Sensible leverage with excess cash digital product to maintain outstanding opportunities returned to shareholders member experience Prioritize investing in existing clubs to Prioritizing to reduce debt, reducing increase club capa
Slide 20: Full year 2022 vs 2023 key figures
+18% +16% 43.2 4 734 +5% 36.7 4 082 4 120 3 937 2022 2023 2022 2023 2022 2023 +322% 11.2 614 145 2.3 2022 2023 2022 2023 20 20
Slide 21: Outlook
OUTLOOK RYT AY
Slide 22: Expecting revenue growth from product offering and price adjustments
Expecting revenue growth driven by improved product offering and continued price adjustments – starting the year as anticipated Still unleashed potential in the existing club portfolio Prioritizing to reach a leverage ratio below 2.0x, targeting a range from 1.5x - 2.0x The accelerating financial mo
Slide 23: Appendix
APPENDIX RYT AY
Slide 24: Norway
NORWAY " COUNTRY EBITDA BEFORE IMPACT OUTGOING MEMBER BASE (000) ARPM AND YIELD (NOK/MONTH) TOTAL REVENUES (MNOK) OF IFRS 16 (MNOK) I MEMBERSHIP YIELD I MEMBERSHIP REVENUES [OTHER YIELD Il OTHER REVENUES O77 O77 512 R29 98 96 108 105 70 420 456 oy 446 24% 14% Q4 2022 Q12023 @22025 Q5 2023 Q4 2023 04
Slide 25: Sweden
SWEDEN " COUNTRY EBITDA BEFORE IMPACT OUTGOING MEMBER BASE (000) ARPM AND YIELD (NOK/MONTH) TOTAL REVENUES (MNOK) OF IFRS 16 (MNOK) I MEMBERSHIP YIELD I MEMBERSHIP REVENUES [OTHER YIELD Il OTHER REVENUES +124% 115% 7% (109% CURR ADJ.) (47% CURR ADJ) (+10% CURR ADJ) 83 422 499 "4 360 a5 109 78 57 450
Slide 26: Finland
1) Q4 EBITDA result in Finland negatively affected by one-off adjustment and periodization effects between quarters related to salaries (of approximately EUR 700k) 26 26
Slide 27: Denmark
DENMARK " COUNTRY EBITDA BEFORE IMPACT OUTGOING MEMBER BASE (000) ARPM AND YIELD (NOK/MONTH) TOTAL REVENUES (MNOK) OF IFRS 16 (MNOK) I MEMBERSHIP YIELD I MEMBERSHIP REVENUES [OTHER YIELD Il OTHER REVENUES 125% +30% @a) (412% CURR ADJ) (416% CURR ADJ) 8 551 140 82 440 “1% 72 18 470 568 90 Q4 2022 Q12
Slide 28: Summary table
SUMMARY TABLE Number of clubs, EOP Outgoing member base ('000s) Average number of members per club ARPM (NOK) Yield (NOK) Reported EBITDA (MNOK) EBITDA before impact of IFRS 16 (MNOK) EBITDA before impact of IFRS 16 margin Country EBITDA before impact of IFRS 16 (MNOK) Country EBITDA before impact o
Slide 29: Reporting under IFRS
REPORTING UNDER IFRS 16 REPORTED 4.2023 CHANGE IFRSI6 EXCLIFRSI6 Q4 2023) Property, plant and equipment 705 0 705 Right-of use assets 4570 4570 ty) Deferred tax assets 178 73 105 Prepaid expenses and accrued incor 237 -94 332 Total assets 8 983 4549 4434 Equity 1.020 -352 1.372 Non-current lease lia
Slide 30: Definitions of alternative performance measures
Adjusted EBITDA before EBITDA adjusted for (i) closed clubs; (ii) certain comparability items; and Group overhead Consists of group services such as commercial functions, IT, finance and impact of IFRS 16 (iii) the impact of implementation of the IFRS 16 lease standard administration Average number
Slide 31: EBITDA before IFRS 16 and cash flow items
EBITDA before impact of IFRS16 Profit before tax Depreciation, amortization and impairment Net financial items Installments on lease liabilities Interests on lease liabilities Maintenance capex Purchase of property, plant and equipment (contains both maintenance capex and expansion capex) Working ca
Slide 32: Methodology for health effect calculation
• Calculated health effect of all SATS members who meet WHO’s recommendation of minimum 75-100 minutes of vigorous-intensity aerobic physical activity per week at SATS alone (World Health Organization, 2022) • Midpoint of 87.5 minutes applied • Assuming an average of 60 minutes per SATS workout • Me
Slide 33: SATS
SATS