SATS (SATS) Q4 2023 earnings summary

Executive summary

• Q4 revenue rose 13% YoY to NOK 1,227m; EBITDA before IFRS 16 reached NOK 128m versus NOK 12m, and FY EBITDA was NOK 614m.

• FY revenue was NOK 4,734m (+16% reported; +11% currency-adjusted); membership reached 731,000 and Q4 workouts rose 8% to 11.1m.

• Stronger membership yield, activity and cost discipline supported earnings recovery and debt reduction.

Financial highlights

• Q4 revenue rose 13% reported and 8% currency-adjusted; membership revenue increased in all countries.

• Q4 operating profit was NOK 123m versus a NOK 66m loss; net profit was NOK 35m versus a NOK 150m loss YoY. FY net profit was NOK 224m versus a NOK 246m loss in 2022.

• Q4 operating cash flow was NOK 161m and free cash flow NOK 137m; FY free cash flow was negative NOK 300m, with NOK 473m LTM operating cash flow.

• Total operating costs before IFRS 16 rose 2.9% reported in Q4 but fell 2% currency-adjusted; FY costs rose 5% reported and 2.8% currency-adjusted.

• Q4 operating expenses fell 4% reported and 8% currency-adjusted, as lower electricity, overhead and marketing costs offset higher rent and general price levels.

Outlook and guidance

• 2024 revenue growth and further margin improvement are expected from product improvements, price adjustments and operational gains; early-2024 visits reached record levels.

• Strategy focuses on member growth, product optimization, member activation, higher club utilization, profitability and disciplined costs.

• Four greenfields and two club reductions are planned for FY 2024; longer-term openings are expected at 8–12 annually, depending on acquisition targets and greenfield sites.

• Cost increases in line with inflation are expected from 2024; investment in existing clubs is set to increase after restrained 2023 capex.