SATS Q3 2021: Quick and strong recovery – SATS is back on track
SATS ASA (“SATS” or the “Company”) achieved a record net member growth in the quarter driven by strong sales and low churn. At the end of October, the member base was fully recovered, ahead of own expectations. The quarter also showed underlying growth in visits, yield and other revenues.
“The recovery has been faster than expected. Member base is fully recovered and underlying growth in member visits, yield and other revenues are all very positive. The SATS organization is full of energy and ready to make even more people healthier and happier”, says Sondre Gravir, CEO of SATS.
During the pandemic there was uncertainty regarding potential structural changes for our industry and member habits. Now, a few months after most restrictions were lifted, we see that member habits and demographics are largely unchanged. We also see that the pandemic highlighted the importance of living a healthy lifestyle. Our members are more active than before the pandemic, with higher visits per week per member.
The positive momentum is not yet fully reflected in financial results as the ramp-up in members and reduction in freeze levels impacted late the quarter. However, revenue run-rate at the end of the quarter approached pre-pandemic levels. Our liquidity position is sufficient to handle existing operations and our accelerated expansion plan, provided no material change in the current regulatory environment.
SATS has throughout the pandemic strengthened the foundation for future growth through multiple levers. We have capacity in our clusters for continued membership growth. We have expanded our club footprint significantly. In 2020 and YTD 2021 SATS has opened 22 new clubs. We have an ambitious greenfield roll-out plan with 17 new clubs to be opened throughout 2023, and more will come. We also see the potential of improving the average revenue per member by offering adjacent products and services, continued development of our personal training and retail offering and pricing optimization. We have launched Mentra by SATS which will further increase our digital presence both in new and existing target groups.
Key highlights from the third quarter of 2021:
– Successful reactivation of the member base after reopening, as member behaviour and visits are back to pre-pandemic levels
– Various COVID-19 restrictions have been in force in parts of the quarter, but no restrictions were imposed on our clubs at the end of the quarter
– Strong recovery in the member base with record high member growth, increasing the member base with 41 000 (+7%) during Q3 2021 (vs. 1 000 in Q3 2019)
– The member base end of Q3 2021 was 653 000, reducing the gap versus last year to -1%
– End of October the total member base was fully back to 2019 pre-pandemic level (adjusted for nine divested Danish clubs)
– Member revenues decreased by 7% compared to last year as the ramp-up in members and reduction in freeze levels impacted late in the quarter
– Total revenues in the quarter increased 2% to NOK 971 million, partly due to governmental compensation in Denmark and Norway related to club closures in Q2 2021
– Operating expenses increased due to 11 additional clubs and temporarily higher sales campaign costs in the quarter
– Adjusted EBITDA is recovering but was down 16% to NOK 83 million in the quarter
Please find enclosed the Q3 2021 presentation and report.
Cecilie Elde, Chief Financial Officer, phone: +47 924 14 195
Martin Stenshall, Finance and Investor Relations Manager, phone: +47 473 38 331
Press: Julie Tellugen Hæhre, Press Contact, phone: +47 419 01 011
This information is considered to be inside information pursuant to the EU Market Abuse Regulation, and is subject to the disclosure requirements pursuant to Section 5-12 of the Norwegian Securities Trading Act. The stock exchange announcement was published by Martin Stenshall, Finance and Investor Relations Manager, SATS ASA.