SATS (SATS) Q3 2024 (Q&A) earnings summary

Executive summary

• Q3 2024 revenues increased 8% year-over-year to NOK 1,194 million, driven by yield initiatives and a stable membership base of 728,000.

• Record-high Q3 EBITDA before IFRS 16 at NOK 170 million (+10%) and EBIT at NOK 127 million (+29%).

• Net profit for Q3 was NOK 71 million, up 127% from Q3 2023; EPS at NOK 0.35.

• Strong liquidity position at NOK 1.1 billion and leverage ratio at 1.8x, within the 1.5–2.0 target range.

• Continued investments in club upgrades and group training to enhance value proposition and member engagement, with 76 clubs being upgraded in 2024.

Financial highlights

• ARPM up 8% to NOK 550; total revenues up 8% to NOK 1,194 million; EBITDA before IFRS 16 up 10% to NOK 170 million; EBIT before IFRS 16 up 29% to NOK 127 million.

• Net profit for the period was NOK 71 million, up from NOK 31 million in Q3 2023.

• Net debt reduced by 21% to NOK 1,229 million; leverage ratio improved to 1.8x from 3.1x year-over-year.

• Free cash flow for the quarter at -NOK 6 million, impacted by timing of rent payments; operating cash flow was NOK 22 million.

• Other operating income declined 7% year-over-year due to extraordinary COVID compensation in Norway last year.

Outlook and guidance

• Guidance for moderate growth and maintenance CapEx remains unchanged; Q4 CapEx expected at NOK 130–135 million to reach 5% of sales for the year.

• Investments in group training and club upgrades expected to further improve member value and competitive advantage.

• Focus on optimizing existing club portfolio and operational efficiency to drive financial performance.

• Dividend payment and share buyback program to start in 2025, targeting at least 50% of net profit.

• Other operating income expected to increase, especially in personal training, but no specific rate guided.