Release Date: May 07, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- SATS ASA (FRA:2S0, Financial) achieved the strongest membership growth in its history for Q1, increasing the member base by 24,000 to a total of 757,000 members.
- The company reported a 6% increase in Average Revenue Per Member (ARPM), driven by successful sales activities and effective marketing.
- Group training visits increased by 16%, contributing to reduced churn and positive development in member lifetime value.
- EBIT increased by 38%, showcasing strong financial performance and operational leverage.
- SATS ASA (FRA:2S0) remains committed to shareholder distribution, planning to distribute at least 50% of annual net profit through dividends and share buybacks.
Negative Points
- The company does not expect the current level of membership growth to continue throughout 2025.
- Operating costs increased by 8%, partly due to higher direct costs linked to personal training and retail.
- Overhead costs rose by 9% in the quarter, slightly above normal due to expenses related to the employee share purchase program.
- The company experienced negative working capital effects in the quarter, affecting free cash flow.
- Maintenance CapEx was temporarily below the long-term target, indicating potential future increases in investment requirements.
Q & A Highlights
Q: Can you elaborate on the factors driving the strong membership growth in Q1 2025?
A: Sondre Gravir, CEO: The membership growth was driven by successful sales activities, effective marketing, and healthy churn. We also saw strong activity levels in our clubs due to product improvements and a societal focus on health. This resulted in a net increase of 24,000 members, bringing the total to 757,000 members.
Q: How did the recent price increases affect churn and revenue growth?
A: Cecilie Elde, CFO: The price increases had a lower-than-expected impact on churn, demonstrating our brand strength. This supported revenue growth, with ARPM rising by 6% and membership yield increasing by 8%. Overall, total revenues increased by 8% to just below NOK1.4 billion.
Q: What are the key financial highlights for Q1 2025?
A: Cecilie Elde, CFO: We reported an EBITDA before IFRS 16 of NOK186 million, a 19% improvement with a 13% margin. EBIT increased by 38% to NOK133 million, resulting in a 10% margin. Free cash flow ended at NOK99 million, and we maintained a strong liquidity position with NOK383 million in cash.
Q: What is the company's strategy regarding shareholder distributions?
A: Cecilie Elde, CFO: We remain committed to distributing at least 50% of annual net profit through dividends and share buybacks. For H1 2025, we expect to distribute a dividend of 50% of net profit and have completed a NOK100 million share buyback program in Q1. Additional buybacks are anticipated later in 2025.
Q: Can you provide insights into future expansion plans?
A: Cecilie Elde, CFO: We opened one new club in Q1 and have five more in the pipeline. We aim to open 8 to 12 new clubs annually, focusing on key clusters and larger cities in the Nordics. This expansion is part of our strategy to support long-term growth and enhance member experience.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
