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

Executive summary

• Q3 2024 revenue increased 8% 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 reached NOK 71 million, up 127% from Q3 2023; EPS at NOK 0.35.

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

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

Financial highlights

• ARPM up 8% to NOK 550; revenues up 8% year-over-year; EBITDA before IFRS 16 up 10% to NOK 170 million.

• EBIT before IFRS 16 up 29% to NOK 127 million; net profit at NOK 71 million; net debt reduced by 21% to NOK 1,229 million.

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

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

• EBITDA margin before IFRS 16 stable at 14%; EBIT margin before IFRS 16 at 11%.

Outlook and guidance

• Guidance for moderate growth and maintenance CapEx unchanged; maintenance CapEx guided at 5% of sales.

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

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

• Q4 CapEx expected at NOK 130–135 million to reach 5% of sales for the year, with possible project spillover into next year.

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