Sats Asa · OSL:SATS
Sats Asa — Investor Day (2022)
110 slides from Sats Asa's investor day presentation, 2022
Slide 1: SATS Capital Markets Day
SATS CAPITAL MARKETS DAY SATS
Slide 2: Management team
• • • • CEO since 2018 • CFO since 2016 • Director of Product and retail • Previously held several • Longstanding relationship with since 2020, after entering management positions, such SATS, as formerly Finance SATS as Director of Retail in as CEO of Schibsted Manager and Vice CFO 2017 Marketplaces
Slide 3: Agenda
STRATEGY UPDATE PRODUCT AND RETAIL CONSUMER, INSIGHT AND TECH OPERATIONS AND CLUB TOUR BREAK BRAND AND MARKETING FINANCIAL OUTLOOK Q g FS m Ss ii SATS VOLUNTARY GROUP TRAINING: HIIT CIRCUIT LUNCH AND MINGLE
Slide 4: Strategy Update
STRATEGY UPDATE SONDRE GRAVIR - CEO SATS
Slide 5: Nordic clubs and members by city
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 23 11 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 6: High intensity interval training
6 1) High intensity interval training
Slide 7: Q3 sales development
Strategic campaign focusing on Selected tactical campaigns to SATS’ unique product offering as a boost sales one-stop shop for training • 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
Slide 8: Members prioritize health despite weakening consumer sentiment
STRATEGY UPDATE 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 Q5 2022 VS Q3 2019 NO SIGNS OF MEMBERS TRADING DOWN
Slide 9: Net promoter score and visits per member
Net promoter (NPS) score Visits per member High NPS Medium NPS Low NPS 9
Slide 10: Vision of making people healthier and happier
STRATEGY UPDATE OUR VISION OF MAKING PEOPLE HEALTHIER AND HAPPIER IS MORE IMPORTANT THAN EVER PUBLIC HEALTH INCLUSION, JOBS AND EMPOWERMENT ENERGY MANAGEMENT AS THE MARKET LEADER IN THE NORDIC FITNESS INDUSTRY, SATS 1S IN A UNIQUE POSITION TO CONTRIBUTE TO ACHIEVING THE UN SUSTAINABILITY GOALS SATS
Slide 11: Health benefits of exercise (SDG 3)
• Reduces stress • Lowers risk of depression • Improves sleep • Reduces risk of a range illnesses • Increases life expectancy • Creates a sense of belonging and a social platform Contributing to the UN Sustainable Development Goal (SDG) #3 Good health and well-being 1) FHI: https://www.fhi.no/ml/akt
Slide 12: Nordic exercise intentions and habits
Self-predicted number of workouts per month vs actual number of workouts per month ~ of the Nordic population intends to exercise more than they did in 2019 going forward of the Nordic population have historically been members at a fitness center People typically overestimate future number of of the
Slide 13: Societal and economic value of physical activity
• WHO report published last week concludes: Almost 500 million people will develop heart disease, • Inactivity can be linked to a range of lifestyle related obesity, diabetes or other noncommunicable diseases diseases attributable to physical inactivity, between 2020 and • Treatment of these disease
Slide 14: Employees, jobs and empowerment (SDGs 5 and 8)
• Our efforts to make people healthier and happier applies also to our employees • Contributing to a society where ambition and attitude let you shape your future, regardless of your background • Hire many young employees and take significant responsibility for educating and building experience • Of
Slide 15: SDGs 5 and 8
Contributing to the UN Sustainable Development Goals (SDGs) #5 Gender equality and #8 Decent work and economic growth 15
Slide 16: Climate action and energy measures
• Reporting full climate accounts, incl. scope 1-3, as a comprehensive mapping is an important first step toward change • Have during the past few years conducted energy mappings and implemented measures to reduce energy consumption. Further measures implemented the past months to contribute to cons
Slide 17: Market drivers and low-cost expansion
• Increased expectations to safe club operations • Members intend to increase their activity level • Strengthened focus on health in society • High penetration in younger age groups who are expected to keep their habits as they age • Offerings to drive penetration across age groups • Fitness subscri
Slide 18: Fitness penetration by age group
Share of population who worked out at a fitness center Change in visits for members up to 24 years old, reflecting both during the past year per age bracket (Norway) number of members and number of visits per member, Sept 2022 vs Sept 2019 (Norway) The fitness penetration is significantly higher for
Slide 19: Market shares of low-cost and full-service chains
Market shares of low-cost and full-service chains in Norway Club development for selected low-cost chains Change in no. of Share of market in percent, change 2016-2020 Number of clubs clubs 2018-2021 19
Slide 20: Market leader position with strong member value proposition
STRATEGY UPDATE MARKET LEADER POSITION WITH A STRONG MEMBER VALUE PROPOSITION SATS
Slide 21: Make people healthier and happier
MAKE PEOPLE HEALTHIER AND HAPPIER Our members make it because Our members make it because Our members make it because Our members (and non- we have the most competent, we have the most complete we help them train wherever members) make it because we dedicated, and inspiring product offering, with wo
Slide 22: Short-term focus areas
The fitness industry does not look fundamentally However, in the short term, we need to recover different than it did prior to the pandemic from the pandemic and handle a challenging macroeconomic situation, and will thus focus on: Strong demand and increasing focus on living a healthy lifestyle acc
Slide 23: Product & Retail
PRODUCT & RETAIL SILJE GARBERG REE - DIRECTOR OF PRODUCT & RETAIL SATS
Slide 24: Club product offering
• Manned reception welcoming and helping members • Retail area with everything you need for your workout • Wide offering of group exercise classes enabling (clothing, nutrition and accessories) members to find a class that is right for them • Update group training room design • Broadest equipment mi
Slide 25: Group training and member retention
• … a complete training experience that cover all their training needs in one place Group training members stay longer than • … guidance and inspiration to help them succeed non-group training members • … support from peers and feeling part of a community Members who participate in group exercise ar
Slide 26: Group exercise class selection
Thousands of SATS group exercise classes to choose from each week ~ Data-driven approach to optimizing the class schedules across the Nordics Indoor running and yoga classes main group training classes driving growth The selection of classes is continuously adjusted to meet trends and member prefere
Slide 27: HIIT zones
• New HIIT zone in SATS SoFo opened in October • Next HIIT zone at SATS Lars Hilles Gate (end of year) • Converting selected Build’n Burn zones to “light versions” - currently tested at SATS CC Vest 27 1) High intensity training
Slide 28: Group training room design
• Bright lighting • Low lights • Feminine colour • Neutral/dark color scheme scheme • Insight from the • Limited/obscured fitness floor insight from fitness • Light wooden flooring floor • Successively upgrading group training rooms as part of upgrades and at new clubs • Limiting the feeling of bein
Slide 29: PrFormance concept
• SATS’ response to the Crossfit trend • Brings group exercise to the fitness floor and adopts heavy weights into group exercise • Class run by Personal Trainers • Strong coverage makes the concept available to many members • High utilization outside of group training classes provides strategic flex
Slide 30: Equipment usage monitoring
• Continuous monitoring of equipment usage in our • Insight based, up to date equipment lists and standardized club largest clubs using sensors layout • Regular feedback from members regarding range • Asset registry designed to help identify possible equipment swaps and availability of equipment bet
Slide 31: Increased workstations results
PRODUCT & RETAIL EXAMPLE: NUMBER OF WORKSTATIONS INCREASED BY 15% RESULTS ACROSS 13 OF OUR MOST IMPORTANT NORWEGIAN EXAMPLE: MORE WORKSTATIONS, MORE VISITS AND HAPPIER CLUBS MEMBERS AT SATS STORO NEW WORKSTATIONS TO RESOLVE # OF WORKING STATIONS MONTHLY VISITS, ‘(000 4 OO BOTTLENECKS IDENTIFIED BY R
Slide 32: Optimizing across club clusters
PRODUCT & RETAIL WE USE THE STRENGTH OF OUR CLUSTERS TO PROVIDE A SUPERIOR OFFERING TO OUR MEMBERS BY OPTIMIZING ACROSS CLUBS MOST MEMBERS HAVE ACCESS TO MORE THAN .. WHICH ENABLES US TO OPTIMIZE ACROSS CLUBS TO PROVIDE A BROAD ONE CLUB INCLUDED IN THEIR MEMBERSHIP... PRODUCT OFFERING AND SELECTIVEL
Slide 33: Personal training
• Strong recruitment and education system – high competence requirements • Drop in the number of PTs enrolling in educations during the pandemic • All personal trainers are employed by SATS • The competition for PTs in the market is currently high • All new members get a free PT session to get start
Slide 34: Retail and physiotherapy
• Significant growth over the last 5 years • Continue to develop the SATS-branded product range (strong branding effect • Wide product offering including own branded and favorable margins) products (SATS Clothing, SATS Nutrition, SATS accessories) • Further optimize retail operating model through sy
Slide 35: Digital training offerings
• Launched in 2017 • Mostly existing group training classes filmed • Launched in 2021 • Serves as both a stand-alone product and as SATS’ online offering to all members • Takes home training to a new level through both digital content and a Rflex mirror 35
Slide 36: Digital training reach
• Reaches people with limited time, not comfortable going to the gym, and people without gyms nearby • People want more flexibility in their day-to-day life, supported by the hybrid working model • Appeals to corporations with employees spread geographically – even outside the Nordics categories: St
Slide 37: SATS Mentra
PRODUCT & RETAIL SATS MENTRA EXTENDS THE VISION OF MAKING PEOPLE HEALTHIER AND HAPPIER MEMBER BASE DEVELOPMENT FOCUS GOING FORWARD Wl e268 memBeRS Il MENTRA DIGITAL / PREMIUM 10634 INCREASE THE USAGE OF THE DIGITAL PRODUCT, NOW AVAILABLE ACROSS ALL OF EUROPE, BUT REDUCE INVESTMENT IN MARKETING TO GR
Slide 38: Consumer, Insight & Technology
CONSUMER, INSIGHT & TECHNOLOGY GAUTE SANDAL - DIRECTOR OF CONSUMER, INSIGHT & TECHNOLOGY SATS
Slide 39: Technology priorities and member activation
• IT cost synergies - OPEX and CAPEX • Passive members have a 7x higher churn rate than active members • Self-service tools for our club staff on sales and member service, so that they can focus on • All technical development is about activating creating member experiences members and helping them k
Slide 40: Technology as differentiator
CONSUMER & TECHNOLOGY TECHNOLOGY AS A DIFFERENTATIOR FOR OUR MEMBERS Oo 2 o 4
Slide 41: Inspiration content in app
CONSUMER & TECHNOLOGY FIND INSPIRATION FROM SATS OR FRIENDS SIGNIFICANT LIBRARY OF INSPIRING CONTENT Ourmemberships Find aclub Services Products inspiration WORKOUT INSPIRATION Get motivated in only 3 minutes 4 PF mpossiole to find peace? Don't despair - Nea ae This how you get healty habits How to
Slide 42: Weekly app users and bookings
• 325 000 weekly users • 225 835 weekly group training bookings 42
Slide 43: App as gym companion
CONSUMER & TECHNOLOGY APP AS COMPANION DURING YOUR VISIT TO THE GYM ovat Cheek in 8 WEEK TRAINING PROGRAM Johan Nielsen Try our brand new full body program SATS
Slide 44: Data and motivation to create habits
THE POWER OF DATA AND INDIVIDUAL MOTIVATION TO CREATE HABITS AND STICKINESS WAIT LIST PREDICTIONS RE-BOOK SAME CLASS NEXT WEEK LOYALTY PROGRAM SATS REWARDS Collect points and reach new levels 3000 EXTRA PARTICIPANTS PERMONTH HABITS ARE EVERYTHING... INCREASED STICKINESS SATS
Slide 45: Churn prediction model
• Churn prediction model deployed as • Updated every day • Members choose between keeping a tool to increase members’ lifetime • Used for segmentation of training history or not value. communication, triggered customer • If not; automatic deletion after 6 • Model’s recall scores at ¾ of all journeys
Slide 46: Hold-back method for churn reduction
• Launched new hold-back method during the pandemic • Significant contribution to churn reduction, together with member activation 46
Slide 47: In-house tech capabilities
• 100% in-house tech capabilities • Full-stack product teams, including product managers, UX/UI designers, front- and back- end developers • Grown from 0 to 20-30 tech resources in 3 years. Developer retention rate last 6 months: 92% • Engagement index: 4.2 out of 5.0 • ENPS among tech resources: 50
Slide 48: Operations & Club Tour
OPERATIONS & CLUB TOUR WENCHE EVERTSEN - COUNTRY MANAGER NORWAY SATS
Slide 49: Club operating model
Checklists HSE IT equipment Communication Manuals Cleaning Systems Reports Staffing Audits Tools Licenses Roles Staffing principles Structure Onboarding 49
Slide 50: Break
The presentation is estimated to resume at 10.20 am 50
Slide 51: Brand and Marketing
BRAND AND MARKETING MARIANNE ORDERUD — DIRECTOR OF MARKETING, COMMUNICATION AND MEMBER CARE SATS
Slide 52: Brand turnaround since 2018
BRAND & MARKETING A COMPLETE TURNAROUND OF THE BRAND INITIATED IN 2018 TO BUILD A BRAND WITH FOCUS ON THE POSITIVE HEALTH EFFECTS OF TRAINING 2018 WorKour, | "eis | SuBtazbee WORKOUT, | TIMEISIT? HABITS INCLUDED wore TIMBISIT? | Eom ents = MEDATRENE >! KORETTRI RB, FRI TRENING TIL 1. NOVEMBER +PT PR
Slide 53: Brand messaging
Unite the brand across the Nordics. The gym is not only for gym rats. “It takes time to build a long-lasting SATS has a unique product offering, “It’s not about the bicep curl and the Training is important for your habit. Start out easy and form a a one-stop shop for training workout itself, it’s a
Slide 54: Brand performance and reach
• We are not only best in our industry – but also across other brand categories • All-time high in non-paid reach in September 2022 • Insourced key capabilities to both produce and buy media • SoMe is one of the main channels for organic and paid content/conversion of members 54
Slide 55: Brand consideration
55 1) Consideration = Potential members considering becoming members. Based on the question “If you were to join a fitness club, which would you consider?”
Slide 56: Member acquisition and engagement funnel
Increase member engagement: Conversion to user Frequency, clubs and varieties of (training initiated) activities Activation of Optimize yield per Cost efficient acquisition of new members member through new members cross-selling, up- selling and more- selling Conversion to member Reduce churn (membe
Slide 57: Data-driven customer interaction
> • Activation of our members is key • We are in the forefront in usage of customer data across the customer life cycle, both systems and capabilities • Right message, in the right channel, to the right member at the right time →data driven customer interaction • Example of a trigger based and autom
Slide 58: Train your brain video
• Train your brain video av hjerne med en forklaring på hvor vi komme fra 58
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Slide 60: Financial Update
FINANCIAL UPDATE CECILIE ELDE- CFO SATS
Slide 61: Historical financials
NOK million NOK million NOK million 2016-2019 figures show continuing operations only, excluding fitness DK (acquisition of 39 clubs in 2019), and adjusted for one-off / exceptional items 61 1) Proforma 2019: Excl. 9 clubs in Jylland/Fyn, Denmark, divested in Q2 2020, to reflect the current club por
Slide 62: Financial journey since 2016
• Improved efficiency • Crisis management • Strong member recovery • Brand turnaround • Cost reduction • Challenging macro • IPO • Growth opportunities environment 62
Slide 63: Adjusted EBITDA and key drivers
DESPITE BEING ON TRACK FOR RECOVERY, MACROECONOMIC CONDITIONS ADD PRESSURE TO OUR MARGINS ADJUSTED EBITDA KEY DRIVERS - WHAT HAS CHANGED SINCE PRE-PANDEMIC 2019? NOK million MEMBERS » — ADJ. EBITDA MARGIN Tl ADJ. EBITDA MEMBER REVENUE YIELD t 573 RETAIL t OTHER REVENUE # OF PTS y SALARY LEVELS t SAL
Slide 64: Attractive business model
Broad geographic exposure to stable Continued volume growth High drop-through of growth in existing Nordic countries across portfolio clubs and other revenue Maintenance and growth capex discipline Diversified revenue structure with 20% Positive momentum in yield and track Profitable and efficient c
Slide 65: Scalability and competitive advantages
Scalability and • Scale to further invest in CRM and digital market capabilities re-investment • Ability to invest in future growth (e.g. product, new clubs, concepts) Attract and train • Scale in training and best practice sharing in the largest Nordic chain people • Cross-utilisation of part-time
Slide 66: Growth levers
• Further expansion of adjacent products and services like SATS Mentra and other partnerships • Continued club expansion • Nordic fitness market is still highly fragmented, with attractive targets for in-fill acquisitions • Cross-border M&A • Manage cost - club and overhead discipline • Scalability
Slide 67: Member base development
• 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, sacr
Slide 68: Recovery by country
• Norway, Finland and Denmark are recovering well, fully closing the gap towards 2019 in Q3 2022 • In Stockholm, market capacity in terms of clubs has increased by 69% since 2015, which is causing some delay in recovery • 68 Fresh Fitness operating in the low-cost segment is lagging somewhat compare
Slide 69: Price optimization
Annual inflation adjustment for existing members Increase in list prices for new members at least once a year Proactively increasing prices for members with a significantly lower price than the ordinary list price Membership mix and new members coming in at higher prices than average further drives
Slide 70: Campaigns and contractual yield
NOK, constant currency NOK, constant currency 1) Member revenue adjusted for freeze and campaigns 2) This illustration of future potential does not relate to any specific time frame and should not be taken as a profit forecast • We have invested significantly more than usual in special offers to dri
Slide 71: Revenue and yield development
NOK million, constant currency • Continued positive yield development further improved by recent price adjustments and member mix returning to normal • Average member base for LFL clubs has not yet fully recovered compared to 2019, but yield improvements fully compensate for the gap in volume as rev
Slide 72: Cost base
~ • COGS for personal training and retail • Marketing cost fully variable, but with a higher than usual marketing push during the pandemic years to ensure recovery • Utility costs variable with consumption and energy prices ~ • Club maintenance and equipment ~ • Efficient and flexible club operating
Slide 73: Staffing costs
NOK million, constant currency Indexed, LFL clubs • Efficient and flexible club operating model with clear routines and optimized staffing, fully linked to visits: • Club staffing is typically ∼20% lower in July than in January, and up to 80% variation between various club sizes in terms of visits •
Slide 74: Overhead cost reductions
NOK million, constant currency • Increase in overhead cost over the past years driven by step-up in digital ambitions and organization scaled to reflect strong growth ambition for both members and club expansion • Despite being on track for recovery, macroeconomic conditions add pressure to our marg
Slide 75: Energy costs
Spot prices1 (øre/kWh (NOK)) • Several actions initiated, expected # of clubs to reduce consumption by 10%- 20%, including: • Temporary shutdown of saunas in most clubs • Adjustments of ventilation systems to reduce airflow and temperature • Adjustments of water temperature in showers • Smarter cons
Slide 76: Rent costs and inflation
NOK million, constant currency • Current inflationary environment may result in a substantial increase in rent cost for 2023 as increases are based on October CPIs currently expected at +6-10%, varying in the different markets • Negotiations with landlords started, with the aim of partly counteracti
Slide 77: Club size and EBITDA ranges
Size (sqm) <1 500 1 500- >2 500 2 500 Mature EBITDA range 3-15 5-20 8-25 Break-even number of ~1.0 ~1.0 <1.0 members per sqm Mature member base ~2 200 ~2 900 ~4 500 Product No or basic Basic group Full range group training group training training Number of clubs 92 134 49 77
Slide 78: Growth in members per club
Continuously work with product offering to make our clusters, as well as single clubs, more attractive for existing and potential members Upgrade or relocate clubs in order to improve club quality and/or micro-location of club Optimize club layout and equipment mix to facilitate more members per squ
Slide 79: Optimizing clusters
• Bread and butter club, offering • Cool and trendy product all the basic products and offering, targeting younger group training classes members • Major upgrade in 2022 • Crossfit inspired training • High quality product offering environment with a rough vibe targeting a corporate • Targeting membe
Slide 80: Club upgrade and relocation examples
• The previous ELIXIA Kaleva (Tampere, • Gym Ila (Oslo, NO) was acquired in FI) was a worn club in basement February 2022 premises • The club had a very good location in • The location was good, but visibility and central Oslo, however there was a need club quality was not for upgrading the product
Slide 81: Equipment optimization to add capacity
• Average sqm per workstation reduced • Manage the equipment park better • ‘Freed up’ 7 000 sqm, equivalent to fitness floor at 8 clubs Example: Rotate the treadmill park to even out the usage and extend the life-time • Preventive maintenance Example: Carry out maintenance before the cycle is broken
Slide 82: Downsizing clubs
• For clubs with too much space relative to the member base, either due to ineffective club layout or member potential, downsizing is the best option • This can be combined with a relocation, if there are better premises available nearby • In recent years we have downsized 5 clubs, with great result
Slide 83: Club portfolio optimization
Introducing new products at our destination clubs to further improve training experience Upgrading and/or relocate worn clubs to improve club quality and attractiveness Optimize the fitness floor layout at our fullest clubs to ensure a bottle neck free training experience Downsize/relocate our space
Slide 84: Club openings 2022-2024
Number of clubs to be opened in 2022, 2023 and 2024 per country1: Click to insert source / note(s) 84 1) Excluding acquisitions and relocations
Slide 85: Expansion: acquisitions and greenfield
I In-fill acquisitions Urban area • Highly fragmented fitness market, Examples SATS clubs / 20,000 population population numerous small players with low profitability 20,000 0 and inferior proposition 100,000 0-0.25 0.25-0.50 200,000 • Imminent access to established member 0.50-0.75 bases Valuation
Slide 86: Capex
• NOK million, constant currency NOK million, constant currency • Maintenance capex lower than normal during the pandemic due to focus on cash preservation and less wear and tear on equipment, but will return to historical levels of maintenance capex in 2022 and onwards, at approximately 5% of reven
Slide 87: Net working capital
~ NOK million • YTD 2022, NWC is negatively affected by covid related deferrals from previous years among to NOK 180 million: • Member revenue deferrals from periods with closed clubs and high levels of freeze • Postponed payment of taxes and social fees • Less prepaid membership revenue due to more
Slide 88: Free cash flow
NOK million NOK million • YTD 2022, NWC is negatively affected by covid related deferrals from previous years, amounting to 180 NOK million • For 2022, with Adj. EBITDA per club recovering to pre-covid levels and with significant growth in # clubs through both greenfields and acquisitions, free cash
Slide 89: Debt, facility and covenants
NOK million • Historically we have shown strong cash generation capabilities and stable cash conversion, resulting in a strong deleveraging profile • The covid-19 period resulted in significant losses, financed by increase in debt. In the short term, investments in club expansion will be limited, pr
Slide 90: Financial Outlook
FINANCIAL OUTLOOK SATS
Slide 91: 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 Further club expansion temporarily paused, focusing on opening clubs Prioritizing to reduce debt f
Slide 92: Macroeconomic factors affecting recovery
As is the case for many industries, the current macroeconomic environment creates uncertainty, and several external factors will impact the pace of SATS’ profitability and recovery going forward: • Confident in our ability to regain profitability to pre- Inflation covid levels • Time to recovery is
Slide 93: EBITDA improvement potential
~ ~ Additional revenue NOK 250 million in Yield expansion in line Overhead and club Inflation and energy from full LFL member profitability with inflation and cost reductions to prices expected to be recovery results in a improvement from continued demand for utilize scale and high in the short term
Slide 94: Growth potential beyond pre-covid
• Still ample room for growth beyond pre-covid level in terms of members per sqm, further enhanced by club optimization initiatives • An increase of 100 members per club yields a run-rate improvement of 150 NOK million • Interesting M&A opportunities and white spots for greenfields in existing and n
Slide 95: Path to 20% adjusted EBITDA margin
Regaining the pre-pandemic member Delivering on the already-commenced base per club and offset the inflationary road to profitability will unleash the pressure with price increases and cost Adj. EBITDA capacity in the current club discipline portfolio Once back to the pre-pandemic level for members
Slide 96: Summary
The company has historically shown a strong financial development. The fitness market will continue to grow and the fundamentals have not changed However, the macroeconomic situation adds temporary pressure to margins, due to inflation and energy prices. So far, there are no signs of weakened consum
Slide 97: Questions
For our physical audience: Please feel free to raise your hand For our digital audience, please ask questions by either: 1. Posting it in the streaming interface 2. Sending it to Investor Relations via e-mail to stine.klund@sats.no Please note that questions from the audience will be prioritized in
Slide 98: 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 99: Appendix
APPENDIX RYT AY
Slide 100: Norway
• SATS Norway is the market leader in the Norwegian market, with a particular stronghold in the Oslo cluster • The member base has grown 8% since 2019, through a combination of LFL #1 122 322 000 growth, greenfield openings and acquisitions in Norway2 clubs1 members1 • The position is also strong ou
Slide 101: Norway focus areas
• Membership growth: Grow average member per club, both in existing clubs and new clubs from the pipeline • Growth in average revenue per member through pricing and cross- selling adjacent products and services • Continuous portfolio optimization between SATS and Fresh 13 Fresh Fitness clubs and 10
Slide 102: Sweden
• Somewhat slower recovery than the rest of the Group due to increased establishment of new capacity, especially in the Stockholm market which has seen a 69% increase in fitness clubs since 2015 #1 93 238 000 • Member growth has been picking up after the summer in Sweden2 clubs1 members1 • Visits ar
Slide 103: Sweden priorities
• Member base growth in LFL and new clubs is the top priority for H2 2022 and 2023 • Significant potential in activating inactive group training members • Working on yield increases, both through price adjustments and upsale Mainly in the Stockholm cluster, but also in • Trimming the cost base, with
Slide 104: Finland
• ELIXIA Finland is a full-service market leader in a fragmented market • Particular stronghold in Helsinki area • Fall season visits are all-time high and NPS numbers are best in the Group #1 31 67 000 • Group training visits are growing steadily towards pre-pandemic visits in Finland2 clubs1 membe
Slide 105: Finland focus areas
• Key focus areas going forward 1. Increase the net member growth and number of group training users [replace with club we want to 2. Increase the total average member yield (incl. PT and retail sale) highlight] Mainly relocations and 3. Lower the cost base greenfields 2 greenfields & 1 relocation 1
Slide 106: Denmark
• The member base and revenue took a big hit after eight months of combined closedown during 2020 and 2021. However, the recovery has been strong during 2022, both compared to other SATS countries and #2 29 81 000 other players in the Danish fitness market in Denmark2 clubs1 members1 • Total visits
Slide 107: Denmark priorities
• The short-term focus is on streamlining the current DK business, ensuring that every single club in the portfolio is profitable and operated according to the high standards that SATS wants to be associated with • The most important KPIs going into 2023 are: • Increase member net growth • Increase
Slide 108: Seasonality
• Membership revenues are relatively evenly • Other revenues with more pronounced seasonal • Seasonality in EBITDA largely driven by investments distributed throughout the year – however with some patterns as retail and PT hours are not a part of a in marketing to attract new members in certain seas
Slide 109: Definitions of alternative performance measures
Adjusted country EBITDA before Adjusted EBITDA before impact of IFRS 16 less allocation of Group EBITDA before impact of IFRS 16 EBITDA before impact of IFRS 16 divided by total revenue impact of IFRS 16 overhead and cost allocations margin Adjusted country EBITDA before Adjusted country EBITDA befo
Slide 110: SATS
SATS