SATS (SATS) Q3 2024 earnings summary

Executive summary

• Q3 2024 revenues increased 8% year-over-year to NOK 1,194 million, driven by yield-enhancing initiatives, price adjustments, and a stable member base of 728,000 despite club closures.

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

• Net profit rose to NOK 71 million, a 127% increase compared to Q3 2023, with earnings per share up to NOK 0.35.

• Club portfolio optimization, group training initiatives, and ongoing club upgrades continue to drive member engagement and satisfaction.

• Strong liquidity position of NOK 1.1 billion and leverage ratio at 1.8x, within target range.

Financial highlights

• Total revenues grew 8% year-over-year to NOK 1,194 million; ARPM up 8% to NOK 550; EBITDA before IFRS 16 at NOK 170 million (margin 14%); EBIT before IFRS 16 at NOK 127 million (margin 11%).

• Net profit was NOK 71 million, up from NOK 31 million in Q3 2023; earnings per share increased to NOK 0.35.

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

• Free cash flow for Q3 was negative NOK 6 million, impacted by timing of rent payments; LTM free cash flow NOK 390 million.

• Maintenance CapEx at 4.1% of revenues in Q3, expected to reach close to 5% for the full year.

Outlook and guidance

• No changes to strategic direction; focus remains on group training, club optimization, and operational efficiency.

• Continued investments in product offering, club upgrades, and moderate expansion planned.

• Dividend policy aims to distribute at least 50% of annual net profit via buybacks and semi-annual dividends, starting H2 2025, subject to financial robustness.

• Further deleveraging expected, aiming for the lower end of the 1.5-2x net debt/EBITDA target range.