SATS (SATS) Q4 2023 (Q&A) earnings summary

Executive summary

• Q4 revenue reached NOK 1,227m, up 13% reported and 8% currency-adjusted YoY; EBITDA before IFRS 16 rose to NOK 128m from NOK 12m, and profit was NOK 35m.

• FY 2023 revenue was NOK 4,734m, up 16% reported and 11% currency-adjusted; EBITDA before IFRS 16 rose to NOK 614m from NOK 145m, with net profit of NOK 224m.

• Membership reached 731,000, up 10,000 YoY; Q4 workouts increased 8% to 11.1m, supported by stable membership growth, higher yield and activity.

Financial highlights

• Q4 membership revenue rose 16% reported and 12% currency-adjusted to NOK 1,004m from NOK 862m; other revenue was NOK 222m versus NOK 219m.

• FY total revenue increased 16% reported and 11% currency-adjusted; membership revenue rose 19% reported and 15% currency-adjusted.

• Q4 operating profit was NOK 123m versus a NOK 66m loss; profit before tax was NOK 57m versus a NOK 175m loss.

• Q4 operating expenses before IFRS 16 fell 4% reported and 8% currency-adjusted to NOK 1,104m; lower electricity, overhead and marketing costs offset higher rent and general prices.

• Q4 free cash flow was NOK 137m and operating cash flow NOK 161m; FY free cash flow was NOK -300m. FY capex was NOK 167m versus NOK 304m in 2022.

Outlook and guidance

• Further margin improvement was anticipated in 2024; revenue growth was expected from product improvements and continued price adjustments.

• Priorities include reducing leverage below 2.0x toward a 1.5x–2.0x target range and balancing expansion with financial discipline.

• Four greenfield openings and two club reductions were planned for FY 2024, alongside increased investment in existing clubs.

• Cost increases in line with inflation were expected from 2024 onward.