SATS ASA: Update on the temporarily closure of clubs in Bergen and Oslo
Reference is made to the stock exchange announcement “SATS ASA: Temporarily closure of 10 clubs in Bergen and 43 clubs in Oslo” on 6 November 2020 from SATS ASA (“the Company”).
Other Norwegian municipalities than Bergen and Oslo are in these days also updating their restrictions. Using the municipalities around Oslo as examples, Lillestrøm municipality has decided to impose a lock-down of gyms (affecting a total of four SATS and Fresh clubs), while Bærum municipality has decided to not impose a lock-down (affecting a total of seven SATS and Fresh clubs). SATS continues to follow local authorities’ advices on how to act, and the number of closed gyms might therefore increase.
With the vision of making people healthier and happier, SATS is working hard to find alternative ways to help members to stay active while the clubs are closed. The Company has been in close dialogue with the authorities to find out which products can be offered within the framework of the restrictions, and will, in addition to the extensive online training library, offer live online training, as well as personal training, outdoor training and physiotherapy where allowed.
All memberships are frozen in the period, except members who actively choose to keep their membership open to have access to the products mentioned above. Given the situation, it was unfortunately necessary to distribute notices of temporary layoffs to affected employees today. However, the cost savings in the short term are limited, as temporarily layoffs will not reduce the salary costs before the end of the closure period. In the event of extended closures, the weekly cost savings will increase. The Company expects action from the Norwegian government to remedy the negative financial effects of this challenging situation.
SATS has a sufficient cash buffer to handle the temporary club closure. By the end of Q3 2020, the Company had a cash balance of NOK 609 million, in addition to an undrawn revolving credit facility (“RCF”) of NOK 553 million. With the current communicated club closure, the Company is still comfortable to not breach the EBITDA covenant in the RCF waiver.
In the third quarter, SATS showed the ability to recover quickly after the club closure before the summer. A record strong net growth of members in Q3 2020 brought the member base back to only 1% below the outgoing member base in Q3 2019. SATS also showed that visiting a SATS club is safe. Since 15 June, SATS has had 4.4 million visits in the Norwegian clubs. 173 members have delivered a positive COVID-19 test in the days after visiting SATS. None of these have been infected at a SATS club, or infected others, based on knowledge from governmental infection tracking. This is proving that the Company’s COVID-19 routines are working and making it safe to visit SATS.
Cecilie Elde, Chief Financial Officer, phone: +47 924 14 195
Stine Klund, Finance and Investor Relations Manager, phone: +47 986 99 259
Malin Selander, Head of Communication & PR, phone: +46 70 426 40 06