SkiStar AB

warm welcome to everyone to this call the day before a midsummer celebration in Sweden and me and Martin we will try to guide you through this presentation so we have a short agenda and we have decided to have a repetition of our capital market day we had in last October just as a start and flying in and giving setting the scene of our Q3 report And then we'll go into the highlights. Martin will guide you through the highlights and some numbers and then I will try to give you some outlook and how it looks forward. So let's begin on the short introduction of our position. We are really proud that we have a lot of satisfied guests. We have a lot of satisfied employees and also we have had the quite strong growth the past couple of years. And if I look into our foundation, we're really glad to have a lot of, like I said, satisfied coworkers and employees and why our culture is extremely strong since we have been running this business since 1975. We also have one of, we are also one of the largest employer for young people Sweden, and we are really proud also by starting up an integration project to also make sure we attract even more people from areas where we normally don't attract people. We're really proud of our sustainability agenda, how we drive sustainability to get more active people, and also how we would like to reduce our footprint for the environment going forward. Last but not least, we really want to make sure that our guests could visit us in a safe and secure environment, which become even more important going forward. And if I look into our main areas of focus we mainly focus on two areas one is around the mountain operations where we gathering all activities happening at the ski resorts like ski school like our shops like our hotels etc and the other one is around our property development where we make sure that we taking care of all our land we have within or at our resorts and today we have More than 5 million square meters land. And we will later on in this presentation show a bit more of how we are developing that land. We are one of the largest players worldwide. We sometimes forget about the strong situation we have as a company. And we are the fourth largest player in this area of business, you can say. And we also are a market leader in Scandinavia. And what I think is important is the upcoming slide, Martin, which I will talk about here, is the unmatchable position we have in Scandinavia. And Sälen is the largest ski resort. And today, when we also launched our new number of ski days, where we can say that we are increasing 7% versus last year, and we are now above six million ski days, which is of course also so much higher that we are even beating the record year we had 21-22. And I also would like to highlight that Sälen, our largest destination, is as big as the size of a city called Västerås in Sweden, with 100,000 people, which is coming in every week. So every Sunday, Saturday, Sunday, we're exchanging 100,000 guests at our resort in Sälen, which is, of course, quite impressive. And just making sure that we have 3,000 beds, which needs to be cleaned within four hours, is actually quite impressive. And again, we are the leading holiday organizer for Scandinavia. We really would like to highlight the number of beds we are taking care of within our system. But not really to forget about this, the number of slope and the number of lifts we are taking care of. And sometimes we get the question about our, why do we need to increase our prices? And I mean, to maintain 220 lifts and making sure that they have the highest standard and also that we keep our destinations in the best shape. Of course, cost money, since we are also buying all these spare parts from Europe, mainly Italy and Austria. Of course, that impacts our cost for repair and maintenance at all these lifts as well. Again I think what's really important when we're talking about developing our land and this is a picture of how we would like to develop our land by for example buying and installing a new lift so if you look into these four pictures the picture up to the left is showing an area in Salem where we have two round circles. One is showing one of the largest slopes in our destination is Gustavsbakken having more than two million races every year versus where we now invested in a ski lift called Södrosen Express and how it looked last summer before we installed it down to the left and up to the right is how it looked when we opened the lift. And that was actually one of our best investments this year, how we could move traffic from these busy areas into this area. And now we're also developing detailed plans on the picture down to the right. and really right right on the right picture you can see how we will develop a new housing close to the slope ski in ski out and later this summer we will get the permission to start also construction and build down in the end of this slope as well so really working on the development of detailed plans which are very important for us. Transformation to international guests has become even more important and that's why we're really glad that our focus to go even increase the number of guests will actually come from more international guests going forward and the international guests they are spending more and they are spending more due to that they are also staying longer at our destinations so our ski pass weekly ski pass has increased dramatically and that is very much due to these international guests which are staying longer and they are also buying more products in average versus Scandinavia, versus Sweden and the Norwegian guests. Last but not least, we updated our financial targets to 6% growth, 18% operating margin, debt EBITDA to maximum 2.5 and also dividend up to 40 to 60 percent. And now we will guide you through our Q3 summary, but also how it looks accumulated and how we relate to these new financial goals. So Martin, give us some highlights from Q3.

Yes. To start with, as Stefan already said, we continue to grow organically. We grow 5% in the quarter and this was mainly driven by our international guests from Denmark, UK, Netherlands, Germany also. We saw a slowdown in the end of the winter season after our Easter session the last weeks in April. The growth in the quarter mainly comes from ski paths and the property development. And I will come back to that a little bit later. We have a stable operating profiting amounting to 418 million, which is 65 million higher than last year. And those of you who remember, we had some one-off costs last year of 48 million. So the growth in operating margin is 4%. in line with the organic growth. We managed to increase our operating margin with three percentage units. So now we are running the quarter at 28. operating margin and this is a combination the increase is a combination of both sales but also a better cost control. We talked a little bit about our retail growth which is one of our main drivers and during the year the retail has been growing really really well and in this quarter we continue to grow 10% equals to 8 million Swedish krona This quarter, the main part of the growth comes from our online sales. In previous quarters, it has been both physical store and online, but this quarter it's mainly from the online sales. And our own brand Equip, Equal People, grew with 32% this quarter, which is really, really positive because in this product we have a little bit better margins than in our rest of our retail products. So continued growth in Equip is really, really good. and as i said we have had a good cost control and what we are looking for also in this quarter we are using new technologies maybe some of you heard about our test of new technology for spreading out our guests in the ski system that we used you in order during the easter so that is one kind of product we are trying or new technology we are trying to implement in our business. And we had some good positive feedback from our guests on this. Looking a little bit on our digital footprint this quarter and if we look at the number of sessions we were down 3.4% in this quarter but what is really nice to see is the conversion rate that grow even more. It grew with 8% so a conversion rate of 3.38% which is really good and we strengthen this conversion rate in this quarter compared to last year. And if we look at our accumulated numbers, we are very, very close to 31 million visits in our skistar.com platform and our apps. And in total, there are all very close to 9 million unique users using our platform. So this is a really good strength. And as you see also, we have a good conversion rate in the quarter, a little bit higher commercial rate in the quarter compared to our accumulated numbers which is really glad to see.

So Stefan and I just would like to give a summary of the winter and also give you a flavor of what really happened during the winter season. So we had probably one of the longest or most snowy winters we had 100 days open actually and uh personally i i jumped into the ski boots already november 4th actually and then i were skiing up to the last day in april but we kept opening to may actually which was amazing so really strong winter season then also i must say what martin also spoke about this We really feel that we have a stable and proven customer demand even in these recessions. And we really would like to highlight that we are a stable business even though that it could be ups and downs in the economy. And this will be balanced with both international but also domestic guests of course. And now we have a strong increase of international guests. And we have plus 24% from Denmark. We have 68% if you bundle UK, Netherlands and Germany. And as you can see, we are down with Swedish guests. And that's very much due to the economy. And we can be very specific where we have dropped these guests. And they are very much related to spots in Sweden where we have a high cost for interest rate, etc. So we hope that... I don't say maybe say promises, but what will come with lowering debts or not debts, but the interest rates will be positive for us going forward with the combination of international guests and also Swedish. We have a record in ski days to increase 7.4% is very strong, meaning 6.1 million and plus compared to the pandemic year. And this is... 24% increase in this six to eight day ski pass and of course that is very much due to the international guests which could be helpful for us also in the coming season where we see that the international guests drive this growth for us. Ski school record, 108,000 participants, one of the largest ski schools in the world, amazing. Ski rental increase also and guest survey shows that we have very strong satisfaction coming and visiting us which is of course very important for us going forward. Just to give you a brief indication of how our season looked like and this is extremely transparent for us to show you this pattern and this is also showing how we say how strong we are even in these mid periods that we are of course dependent on the break seasons, Christmas break as well as this winter break for the schools. However, we managed to balance this out and as you can see in the end of the season, first of all the Easter where little bit stronger booking from guest night but we had a very bad weather situation during Easter which could cost us a bit of not as expected ski pass sales to be honest. We lost those daily ski pass sales since it was actually raining over Easter. Then we had a bit of let's say we didn't push enough for the week 16 and 17 as we maybe should have done but this is a very good learning for us and something we already have started to plan for the upcoming winter season so we look forward for how we could balance this out to become even better in the end of the season and really much important here is that we are actually the only ski resort having open as long as we have so we have decided also that we will continue to talk to the customers that we will have open the full season versus many other ski resorts which are closing very much related to earlier in the season and I think this is an important message for us we will continue to drive and now we have completed the acquisitions of the ski school in Trysvill and now we also have a very nice map of how we have all services included at our destination. So something positive and something also help us to continue to drive growth and also for our guests to recognize that SkiStar are running all these operations at the resort. Martin, back to Q3 and accumulated results.