SATS reports negative COVID-19 revenue effect of NOK 520 million in the second quarter, but strong pick-up after reopening
SATS ASA (“SATS” or the “Company”) reports a second quarter dominated by COVID-19 and the related club closures, affecting the financial performance significantly. The negative effect from COVID-19 before governmental compensation packages is estimated to NOK 520 million on revenues, while the estimated negative EBITDA effect was NOK 270 million. The member base was reduced by 5% compared to the second quarter of 2019. The reduction was not mainly a result of increased drop-off, but rather loss of sales of new memberships during the closure period. The number of drop-offs was in line with last year, proving the loyalty of the member base.
The members are eager to get back to the clubs, proven by visit numbers on par with last year, representing an increased number of workouts per member. This development, in combination with SATS’ strong position in the market, is promising for the period to come. The key focus going forward will be to win members back, securing the run-rate into 2021. The Company will aim to systematically recover the lost sales from the closure period during the autumn.
“The negative financial effect from COVID-19 is significant. However, I truly believe that we will be even stronger down the road as a result of this crisis. The importance and positive benefits from staying healthy are even clearer for people now than pre-corona. Furthermore, SATS is very well positioned. We have strong club clusters with large clubs and educated employees. Hence, we are able to deliver a professional, positive and safe experience with infection control measures in place. We already see that members are coming back at a higher pace than we expected”, says Sondre Gravir, CEO of SATS.
Key highlights from the second quarter of 2020:
- Q2 financials heavily affected by COVID-19 and closed clubs – estimated COVID-19 related revenue loss of NOK 520 million and EBITDA effect of NOK 270 million
- Net profit in the quarter negative with NOK – 114 million (YTD NOK -212 million)
- Member base down 5% compared to Q2 2019 (on a growth trajectory pre-COVID-19), driven by lost sales during club closure
- SATS expects to come out of this as an even stronger company, supported by increased focus on training and healthy lifestyle across the Nordic population
- Have during the COVID-19 period improved our operational routines and digital product offering significantly
- All clubs are open with a safe environment, overall very positive visit development, significantly improved member feedback and strong sales performance
- Main focus going forward will be to recover the member base and get back to pre-COVID-19 financial run rate
Please find the Q2 2020 presentation and report enclosed in the orginal stock exchange announcement and at satsgroup.com.
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
This information is subject to the disclosure requirements pursuant to section 5-12 of the Norwegian Securities Trading Act.