Slide 1: Q2 2022 Interim Report April-June 2022
Q2 2022 INTERIM REPORT APRIL-JUNE 2022 CEO SONDRE GRAVIR CFO CECILIE ELDE INVESTOR RELATIONS: STINE.KLUND@SATS.NO, +47 98 69 9259
Slide 2: Clubs and members by Nordic region
115 clubs and 302 000 members (9%2) 92 clubs and 228 000 members (10%2) 2 31 clubs and 63 000 members (9%2) 29 clubs and 78 000 members (10%2) 4 3 1 5 10 23 67 Greater Oslo 11 Greater Helsinki 5 72 11 4 Greater Stockholm 11 2 1 6 29 Greater Copenhagen 1) Measured by 2021 revenues based on figures fr
Slide 3: Member base in line with Q2 2019
Member base in line with Q2 2019. Back to pre-pandemic seasonality typical for Q2, though with somewhat better member development than in a normal second quarter Fitness market characteristics and consumer preferences are largely unchanged a. So far, no signs of increased pressure on member yield or
Slide 4: Member development in the second quarter
• The second quarter is typically a period with a decline in members due to lower sales • However, the member development was stronger than in Q2 2019 1) Excl. clubs in the Jylland/Fyn cluster sold in Q2 2020 4 2) Excl. acquisitions
Slide 5: Members per club, upgrades and churn in H1 2022
# of membership upgrades Development in members Churn rate in H1 2022 and downgrades in H1 2022 per club, indexed: compared to H1 2019: compared to H1 2019: Significant resilience to price adjustments. Concretely, the annual adjustment in January 2022 confirmed the expectation of very low incrementa
Slide 6: Polarization in population exercise habits
• Many of those who worked out sporadically before the pandemic • Our active members are working out more than before the have become more inactive pandemic, increasing the loyalty in this part of the member base • Key focus to re-activate these members • The development is strongest among younger m
Slide 7: Visits per member and visits by age group
Visits per member Share of visits per age group • Higher activity levels almost all weeks since Easter • Average visitor age 0.7 years lower than in 2019, in line with the trend shown in Q3 2021 presentation • Visit increase driven by gym floor visits • The younger members is a strategically importa
Slide 8: Growth through club optimization and expansion
Acquisitions Greenfields Members at existing clubs • Focus on optimizing club portfolio to facilitate increased visit frequency in member base and new members at existing clubs • Expansion through delivering current greenfield pipeline, as well as pursuing attractive consolidation opportunities • Al
Slide 9: Upgraded club design and GX rooms
Improving club layout and design to increase club capacity (fitness floor, group training, remove non-training areas etc.) Through applying data from the actual usage of Upgraded club design and GX rooms, all equipment, the optimal mix of gym improved GX schedule, new concepts, and equipment has bee
Slide 10: Greenfields, acquisitions and relocations
Greenfields: Acquisitions: Relocations: • HiYoga Aker Brygge • Fresh Fitness Ås • SATS Skøyen to Hoff • Fresh Fitness Lindeberg • Fresh Fitness Kalbakken • SATS St. Olav to Herbarium • SATS Slemmestad • Fresh Fitness Sinsen • SATS Fredrikstad to Fresh Fitness Fredrikstad • SATS Hinna • Fresh Fitness
Slide 11: Club pipeline for 2022 and 2023
Greenfields: Acquisitions: • SATS Kolbotn Torg (Q4 2022) • Fresh Fitness Rona1 (Q3 2022) • SATS Oasen (Q4 2022) • Fresh Fitness Vågsbygd Lumber1 (Q3 2022) • SATS Triaden (2023) • Fresh Fitness Vågsbygd Kjos1 (Q3 2022) • SATS Nacka Forum (Q3 2022) • Fresh Fitness Søgne1 (Q3 2022) • SATS Lidingö Centr
Slide 12: Financial Review
FINANCIAL REVIEW SATS
Slide 13: Club network and member growth
• Accelerated club rollout during the pandemic, expanding the club network by • Member growth of +10% since last year is primarily driven by LFL clubs but net 28 new clubs, both through greenfields and acquisitions acquired and maturing clubs contribute to further member recovery in the period • Str
Slide 14: Contractual membership price development
• Solid development in contractual membership price past three years driven by • The annual price adjustment, carried out with effect as of January 2022, lifted pricing strategy: membership prices in the base by 2.3% • Annual inflation adjustment for existing members • Expect to see a pick-up in pri
Slide 15: Revenues versus Q2 2019
• Total revenues +2% vs. comparable quarter in 2019, while member revenues • Continued positive yield development further improved by recent price are up 5%, driven by an increase in yield adjustments and member mix returning to normal • Freeze level almost back to normal by levels the end of the qu
Slide 16: Fixed cost base and untapped earnings potential
~ ~ • The cost base required to operate the • Significant untapped earnings potential in current club portfolio is largely fixed existing club portfolio, bringing the number of members back to 2019-level • Maturing clubs result in a short-term drag Average time to reach Average time to reach full on
Slide 17: Operating expenses and inflationary pressure
Total operating expenses incl. Comparable clubs2 operating COGS and overhead expenses • +28 clubs compared to 2019 and • Historically, OPEX has increased with ramp-up of Mentra by SATS are the inflation, but successful cost-saving main drivers for the increase efforts partly compensate for the incre
Slide 18: Electricity consumption and utility cost per club
Electricity consumption distribution per Utility cost per club1 club, 2019 Utility costs made up of total operating Consumption fee expenses in Q2 2022 Electricity certificates Environmental tax Grid rent Spot Spot Electricity cost Spot Fixed contract until Dec ‘22 1) Constant currency 18
Slide 19: Adj. EBITDA and profitability outlook
Looking ahead, profitability will improve by: 1. Member recovery and growth in LFL clubs 2. New and acquired clubs reaching 2019 average 3. Further growth from already signed new clubs and future acquisitions Hence, EBITDA is well on track for recovery • Adj. EBITDA at NOK 83 million in the quarter
Slide 20: Capital expenditures
• Increased maintenance CAPEX reflects a step-up in minor and major upgrades of the existing club portfolio • Will return to historical levels of maintenance capex in 2022 at around 5% of revenue • Prioritized to invest for the long term, in technology team, systems, infrastructure and club expansio
Slide 21: Cash flow and liquidity
• Negative impact from working capital of NOK 113 million reflects the seasonal settlement of • Robust financial position with a cash balance of NOK deferred liabilities 245 million and NOK 838 million in total liquidity • SATS benefits from structurally negative working capital driven by membership
Slide 22: Net debt and interest rate hedging
• Cash balance negatively affected by a typical seasonal impact on working capital, as well as a negative currency effect • Floating interest rates on the RCF: NIBOR/STIBOR/EURIBOR + margin • Interest rate swaps covering approx. 50% of the debt - NOK interest rate swap of NOK 694 million with maturi
Slide 23: Summary
SUMMARY KY-TAY
Slide 24: Summary and focus areas
The fitness market is recovering, and we believe SATS’ competitiveness is strengthened. Will focus on growing the member base per club back to 2019 levels and beyond to improve financial delivery Still searching for attractive consolidation opportunities and strengthening clusters with a strong conf
Slide 25: Save the date: SATS Capital Markets Day
SAVE THE DATE: SATS CAPITAL MARKETS DAY ON THE 28" OF OCTOBER 2022 SATS
Slide 26: Forward-looking statements 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 27: Appendix
APPENDIX KY-TAY
Slide 28: 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 29g 302 310,392 524 481 DR 276 24% 114 -11% 22021 Q3 2021 042021 QI 2022 Q22022 @22021 @22022 a
Slide 29: 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 TN MEMBERSHIP REVENUES __ 105 Ml OTHER ViELD I OTHER REVENUES 508 220 229 231 228 482 350 207 299 16% 8%, 58 24 | | Q2 2021 Q3 2021 Q4 2021 QI 2
Slide 30: 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 Hi MEMBERSHIP REVENUES [OTHER YIELD Il OTHER REVENUES 91 474 “108% 2% 50 Q2 2021 Q3 2021 Q4 2021 QI 2022 Q22022 Q22021 Q22022 Q22021 Q22022 Q22
Slide 31: 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 80 7g 418 99 73 78 71 359 73 74 Q2 2021 Q3 2021 Q4 2021 QI 2022 Q22022 Q22021 Q22022 Q2202
Slide 32: Alternative performance measure definitions
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 33: Key figures and APMs
Amounts in NOK million Q 2 2022 Q 2 2021 Number of clubs, EOP 267 254 Outgoing member base ('000s) 671 612 Average number of members per club 2 515 2 409 ARPM (NOK) 502 369 Yield (NOK) 396 257 Reported EBITDA (MNOK) 342 131 Adjusted EBITDA before impact of IFRS 16 (MNOK) 83 -113 Adjusted EBITDA befo
Slide 34: IFRS 16 impact on reported figures
Re por te d C ha nge Exc l. I FRS 16 Amounts in NOK million Q 2 2022 I FRS 16 Q 2 2022 Ba la nc e she e t ite ms - I FRS 16 Property, plant and equipment 684 0 684 Right-of use assets 4 165 4 165 0 Deferred tax assets 213 -40 253 Prepaid expenses and accrued income 231 -72 303 Tota l a sse ts 8 424
Slide 35: SATS
SATS