SATS (SATS) Q2 2024 earnings summary

Executive summary

• Achieved sixth consecutive quarter of record financial results, with Q2 2024 revenues up 5% year-over-year to NOK 1,266 million and EBITDA before IFRS 16 up 13% to NOK 219 million, reflecting operational improvements and cost control.

• Net profit rose 9% to NOK 103 million, and free cash flow surged 480% year-over-year to NOK 132 million, supporting deleveraging and capital returns.

• Member base stands at 719,000, up 1% year-over-year, with an 8% increase in total workouts and a 5% rise in average revenue per member (ARPM) to NOK 580.

• Leverage ratio reduced to 1.7x from 4.7x a year ago, well within target range and supporting plans for shareholder distributions.

• Focus shifted from member recovery to revenue optimization, balancing price and volume, and investing in product and club upgrades.

Financial highlights

• Q2 2024 revenues reached NOK 1,266 million (+5% YoY); EBITDA before IFRS 16: NOK 219 million (+13%); EBIT: NOK 159 million (+13%).

• Net profit: NOK 103 million (+9%); operating cash flow: NOK 154 million; cash conversion: 70%.

• ARPM: NOK 580 (+5%); member base: 719,000 (+4,600 YoY); 11 million workouts (+8%).

• LTM revenues increased 10% to NOK 4.9 billion; LTM EBIT surged 260% to NOK 438 million.

• Maintenance capex was NOK 32 million, with total capex at NOK 34 million.

Outlook and guidance

• Expect leverage ratio to reach lower end of 1.5x–2.0x range by year-end, supporting robust balance sheet and liquidity.

• Continued focus on operational efficiency, club optimization, and product improvements to drive ARPM and volume growth.

• Plans for balanced expansion and at least 50% of annual net profit to be distributed to shareholders via buybacks and semi-annual dividends, with first dividend after H1 2025.