SkiStar AB (publ)

warm welcome everyone to this ski star q4 and full year report it will be myself and Martin presenting and we have an agenda of today where we'll give you as we have done the last three quarters and short recap of our market capital day we had in october 2023 a year ago and then we will take you through the q4 where martin will begin like a summarize from the drivers from the cmd and also our financial goals while i will talk about the q4 and then martin again back to the numbers and then i will give you a short outlook of what's happening going forward so Let's go with a short recap from the CMD day we had a year ago. And we have, of course, now updated the numbers versus how it was a year ago. But there are two important numbers which are still remaining. One is 8 out of 10 of our employees are still very satisfied when going to work every day. And of course, our employees are crucial when we also have so many guests in our destinations. Our co-workers and employees are enormous and always do their best to deliver a strong guest experience. Also, 8 out of 10 of our guests are saying that they've got the memorial mountain experience. That is crucial when you can deliver that such an amazing result to all our guests. Really proud of our growth number, 4.7 billion SEK. And Martin will then later on talk about how we accomplished that number. I'm also very satisfied that we have increased the number of digitally sold and downloaded ski paths, which is now coming close to 80% of all sales. And the remaining part is when our visitors pick up the ski pass in one of our ski store shops. So very good result and that is continue to grow. And lastly, but not least, they're really happy to see that 95% of our guests is doing the digital check-ins. And that is also showing that our digital transformation continues in a very good level. So as a starting point, we have three important parts as a foundation. Again, our people and our culture, that 8 out of 10 are very glad to come to work, but they also continue to come. As an example, 60% of our employees are returning back every year And that also showing that we are a good employer and that it is a good place to work at SkiStar. It's important that our guests feel safe and secure when they come and visit us. And of course, we do everything that we can to deliver a sustainable experience. And we will also take you through our sustainability updates where we are during this year. If we then look into the strategic framework, we are working on the two big areas, which is to deliver high experience in the mountain operations, of course, for our customers and visitors coming to us, but also that we have an important part in the property development. And during this capital market day, we also were very clear about that the property development side, we have no rush. We take it in our pace. And the years like we have had the last year and a half, when the market is a bit unstable in this property development, we are saying that we deliver in our pace, in a pace where we can also feel confidence and also that you in the market can feel confidence. In the mountain operations, we're really glad to work with those three areas, with the safe and secure, with the sustainability and our co-workers and the people and culture part, but also to continue to work with digitalization to become even better, smoothier, but also continue to work with business development and also continue to deliver new revenue streams within our company. If we take on the big hat and see it from a big picture, SkiStar is a large player in this industry. We are the fourth largest player in the world in this industry and it's also with proudness I can say that we are in a strong position in Scandinavia. We have the market leader position, we have roughly 42% market share and we are running the five largest winter destinations and also Together with Hammarbyback and the sixth one, we also deliver a full year mountain experience on all those destinations. I think this picture is very important when we often discuss pricing, when we often discuss size, etc. And here we really would like to highlight the size of our five destinations. Just as an example we have 77 grooming machines running our operations and of course that's an important number when you have such many slopes to really take care of from a customer experience. Also if you look into the other slide which is very important that you also can see a record in skier days that we deliver more than 6.1 million skier days. And if we then add up on these activity days, we have a plus 7% this year, which is, of course, a very strong number in those times when maybe the customer are a little bit more reluctant about what to prioritize. And we can clearly see that they prioritize to go to our destinations and then explore our product. Another very important part is the number of beds we have. Because the number of beds are the engine, and we will come back to that later on as well. But the number of beds would help us to get exchange of customers and guests every week. And as an example, Sälen, the largest destination in Sweden and one of the largest in the world actually, exchange city of Västerås every Saturday, Sunday and just to imagine the number of people going on the roads and in buses etc to come and visit our destinations during this period of time. If we then look into the development of our destinations we put up also very clear strategy and those four pictures is really showing a showcase of how it looked like a year ago actually up to the left how it was in Lindvallensälen where we had one ski lift in which needs to be exchanged in Söderåsen on the left side of that picture up to the left a couple of months it looks like a construction place Up to the right, how the lift looked like when it was up and running this winter. And then down to the right, how it will look like in a couple of years when we have really developed the whole area around these ski lifts. And this is exactly how we developed our areas now when we also invest in new lifts. Exactly the same will happen in Hemsedal, where we will open up for a lodge number three which we bought the land a couple of years ago to really continue to extend the customer experience at our destinations. Another very important part was to show that the international customer drives average spend and that has been the case during this year. We have clearly seen that the British guests, the Danish guests, that the guests from Netherlands and Germany are really driving an average spend versus the Swedish or the Norwegian guests. So really grateful to have a lot of international guests and we can also see at this booking pattern we have this year that there is more international guests still continue to choose our destinations versus others. So I stop there and I will hand over to Martin to summarize what I just said a bit. And then also we will go into the Q4 quarter.

Hi, everyone. So let's start, as Stefan said, with an update on our financial target and dividend policy that we have now. And we have finalized our financial year 23-24. And we had a strong organic growth. The goal is 6% and we managed to achieve 10% organic growth when we adjust for currencies and acquisitions. So the growth this year, we are really satisfied how it has been developed. And we will come back a little bit more to details, but we see that we have organic growth in all areas, which is really, really nice. The operating margin, we have a goal of 18%. We reached 16, so it's halfway from where we started last year, where we ended up at 14. So we are moving in the right direction. We are not yet fully reaching the goal, but we are continuing our work to be more efficient and find more profit in our business. So we are moving towards the 18%. Then we have a financial goal leverage, net debt to EBITDA, excluding IFRS. That should be not higher than 2.5. This year we ended up at 1.7. So we are building for future expansions, like Stefan said before, which feels really, really good. And then finally, our dividend policy, which should be between 40 and 60%. And as you probably have seen, our suggestion to the annual meeting to decide about the dividend is that we increase the dividend to 2.80 Swedish kronor per share. So it's an increase with 0.2 Swedish kronor to 2.80. Moving into our strategic initiatives then, how we should be able to reach our financial targets. The first initiative is to keep the development of the all year round operations that we have started a few years back. To continue to increase capacity, to build more attractive destinations, that will continue to drive new visits, and that's what we are doing. This year we have invented new lifts, for example, in Hemsedal, Sälen and Åre, and we will continue that journey during the following years. We will also continue the work to strengthen our margin and growth. We are always looking into and try to be more and more efficient and fine-tuning our pricing model by developing our dynamic pricing, and also try to increase average spend on the different customers, and also the mix of different customers. And here we see that, for example, the airport in between Sälen and Trysil is an important part for us to attract international guests. And then to the main driver that Stefan said, increased number of commercial beds. This is really the engine in the volume growth. So today we have 36,100 beds and it's about growing that number. This can be done both by that we build in our own books. We can use SkiJab, our joint venture, or there can be external exploiters that build cabins or apartments at our destinations. But the important thing is that we continuously add new beds into the system. The fourth strategy is about secure sustainable future mountain experiences. Here we're talking about really securing the white winters investing in snow systems so that we can secure that we have a good product when we start up the real season in Christmas. But it also is about environmental and sustainable, about decreasing our CO2 footprint and here the transformation of Hammarbybacken here in Stockholm to become a fully electrified and fossil-free ski destination is one step in that direction. And the fifth initiative is about normalized investments over time. So we will pay our investments based on the cash flow that we generate over the years. So it's important to continue work with an efficiency when it comes to cash flow.

So now I'll leave over to Stefan. Thank you, Martin. Bear those five strategies in mind when we take you through both the quarter and the full year end results. We continue to drive the sales growth with plus 3% if we clean out the extra revenues we got last year from the government in supporting the electricity part. If we take that out, we actually drive 3% growth. And we're really glad to have this subscription continue to grow of SkiPass SkiStar all year. And this subscription method has gone from actually 0% up to around roughly 20-25% of our total seasonal pass. So it starts to become a very interesting product. However, we're doing a negative result within the quarter. And one explanation of that is that we have some one-time offs connected to our joint venture, Skia, where it costed us around 20 million SEK. And then the other part is that we increased the marketing activities mainly connected to our retail side, but also how we could increase the year-round business and also to secure more safe and secure areas by putting in more maintenance and repair in our destinations. Again, back to the retail growth, really stable, and we continue to grow both online and these physical stores. So it's interesting to see that we have had more guests visiting us during this summer. And when we have more guests visiting us, We can see, sorry, also beside Åre, which we haven't had so more guests. And that is connected to that was a big event there last summer. But if I take out Åre and look into Sälen and Trysil, for example, and Hemstra, we can see that we have had more guests. And they also are renting more bikes. And they also buy both the subscription card, but also a day card. So that's just been good. And they're also buying some clothing products. When we presented our Q3, we showed an increase in bookings of 9%. And we actually added an extra activity in Denmark. to attract more Danish guests since this is one of our important strategies to get the Danes to book early. And we are really glad that we got them into the systems and we are probably getting a lot of new Danish customers coming in visit us this winter. So that activity was very important for us. And now we are very glad to have a more stable booking and If I then look into a historical perspective, we say that in Q3, we should have around 25% of the bookings done. And in this quarter, we should have 60. And in next quarter, we should have 80. And we are really following that line. So we feel very comfortable and also glad that we have such an increase of the international guests. And however, we also would like to highlight that we see a potential now that the Swedish guests will start to book more frequently. And we also have numbers that roughly around 70-75% of the Swedish guests still haven't booked the winter holiday. And we think that's a very important message to deliver that there is A lot of Swedes out there who have been spending some time in the sun up to the last two weeks, where we can clearly see, specifically the last four or five days, where we can see some snow in Hemsedal, Trysil and Åre, that people start to book their winter holidays. If I then just make a short summary of the financial year 23-24, it's extremely interesting. I'm very glad to just follow up the Martin slide that we versus the goal of six percent organic growth we present plus 10. We are really taking some steps within the margin development on the way to reach the 18 by delivering 16 and we're also delivering our second best result ever and with an adjusted result it's actually 759 million and it's very stable result in those uncertain times. And really glad to see that all our segments delivers growth. Again, eight out of 10 of our guests likes us and also, I must say, give a high applaud to our coworkers and employees who really give all of the most out of themselves to deliver this guest experience. And we also, Glad to have a lot of guests returning year on year. And 73% still are returning year on year. And almost the same number still haven't booked the ski holiday for the upcoming winter season. So that's, of course, very interesting. Also glad to see my SkiStar members increase to close to 2 million. Increased with almost 13%. Record in ski days plus 7% all-time high. We had our doubts, will we ever beat this record we had during the pandemic, but we did. So very glad to have that. And we have invested in a lower level compared to the last two years. And like Martin said, a more stable level. And it's very focused on the guest experience, like we have done with new lifts in Hemsedal, Sälen and Åre. And also automatic snow systems. And also glad to have invested in the first actually in the world 100% climate neutral and fossil free ski destination in the world in Skista Hammarbybacken. So super glad. We have presented this digital engagement and if you look into these numbers you can see that we are both during the quarter as well during the year have a high increased actually digital engagement. We have had a little bit of lower conversion rate over the year, but we can see that, sorry, in the Q4, but over the year, we have had an increase of our conversion rate with 7%. And we are actually coming up to a 2.7% of conversion rate, which is a very strong number in those digital terms. Lastly but not least from my side is a little bit of the retail growth. We can read in the newspapers, we can hear in the news a lot about that retail has some issues especially in the sports industry. We are going the opposite way. We are presenting a very strong retail growth And I'm really proud to show we are coming up to close to 450 million in turnover. And this starts to become a very important business in our portfolio right now. And if we just compare this number to many other retailers, I must say this is a strong number, both from a growth perspective, but also from a size perspective. So, Martin, I hand over to you. And again...

Talk a bit more in depth of our numbers So I just started with this the financial targets and I will Remind you as the same way as we remind or our employees about these numbers Because these are really really important for us moving on to The overview and the development of our operating profit for the full year, we ended up at 740 million, as Stefan just said. And we are, it's a stable result, second best if we look over a six-year period in time. Yes, we are satisfied with this result. And also, it includes, as Stefan mentioned, a changed accounting principle around properties in Skiab investment. I will come back to that. And what we have said over the years, and we have talked about it this year as well, we aim to end up between 70 and 100 million in exploitation capital gains. This year, we managed to reach 67. So we were very, very close to the 70 that we said. Those transactions ended in the fourth quarter mainly in Åre and Sälen. So dig into the net sales per category during the quarter and we can see that we have the strongest growth actually in the retail as Stefan said. 8 million of those 10 comes from web online sales but it's also positive to see that we managed to increase sales in our physical stores with 2 million SEK. We're also happy to see that we continue to grow the ski pass sales and this increase is driven by the ski star all year and we see that the guests using this card is increasing year over year and for your information we split the income from the ski star all year in 12 months and that's the period that the customer are locked in or using this ski pass I also wanted to mention that the accommodation is a bit lower this year, and that is mainly driven by the event in Åre that we had, the big event in Åre last year. We didn't have the same event this year. Also, a little bit less bus guests in Hemsedal due to a change in travel routes, but we are hoping that they will come back to next summer. also you see that we have a loss of or losing volume in others and here you can see the electricity subsidies that we received last year 16 million Swedish krona but there is also a changed behavior when it comes to processing of re-invoices and that amounts to 13 million in that so we have changed the process around how we re-invoice within SkiStar meaning that we had 13 million higher invoices and also cost last year compared to this year. So if we're just for that electricity subsidies we had a growth of three percent this year in the quarter which is really really good. Looking at the development of the operating profit and I guess that most of you have already recognized that we changed the procedure of how we account for properties in Skiab Invest and if we look at the quarter we adjusted the quarter for operating profit with a negative effect of minus eight million SEK last year And that's mainly because we adjusted the market valuation and also added the full year depreciation of 20 million to last year's results. So there are two adjustments that we did in the quarter. We also have, if we move into our operations of ski resorts or what do we call it? Operation of mountain experience. which decreased 38 million. And here we see that we had mainly higher maintenance costs and advertising costs in the quarter. And also a little bit higher personal costs related to the Trysil-guiderna, the new acquisition that we did in Trysil that added some new activities to Trysil, but also added some personal costs. Moving to properties development, which decreased the result with minus 10 million. And in this quarter last year, we had a capital gain actually in Skiab Invest of 10 million. So that's one of the effects that we can see here. Otherwise, a quite stable quarter in that. And finally, the development in the hotels, the positive trend that we had had in the first three quarters continue. A little bit lower sales this quarter, but the continued work with efficient organization in hotels. And that's really the reason behind the better result this quarter. So all in all, we end up at a minus, a negative operating profit of 279 million. This includes 19 million in increased depreciation or lower result from Skiab Invest. Moving on to sales per category year to date for the full year. We see that we had a positive organic growth of 10% that we already said. Ski pass is the highest contribution to the growth and also retail shop. But it's a positive development in all categories which is really, really positive to see. and the lower income in others in the column others is related to the changed re-invoicing that is lower this year compared to last year so moving on to the operating profit by segment Here we have adjusted the last year started at 616 now and for you who remember we had 604 million here. So the effect from Skiab and this changed accounting policies has had a positive effect in last year of total 12 million. And this is due to that in last year we had high revaluation of or negative impact from revaluation of fair value of the properties in Skiab. This year we are adding depreciation but the effect was really the return of the market valuation was higher than the depreciation for the whole year. That's why we have a positive effect of 16. And in the 740 million we have a negative impact of depreciation of 19 million. Here we had a good growth in the operations of mountain 104 million plus this comes mainly from the increased sales and we see that we had also a good combination of increased number of guests and price that's the primer driver for the growth in mountain operation segments Looking at property development, who delivered a result of minus 7 million lower result than last year. Most of this has to do with a lower property gains, which were 8 million lower than last year. And as I said, we have had a positive trend in the hotel, which is really glad to see that they are getting closer and closer to a zero. result or break even. Now they ended the year at minus 5 million SEK in operating profit and they have been able to increase the profit with in total 27 million. And that is a good cost control in connection with higher sales. That's the reason behind the increase in hotels. Looking at the summary, we are continuing to build a strong balance sheet. We had a 56% equity ratio if we adjust for IFRS 16, so the balance sheet is strong. And it's also very positive to see that we had a really strong cash flow if we look at the year to date or the full year. And we managed to increase our operating cash flow with 415 million Swedish kronor, mainly driven by the higher result, but also efficient work within capital allocation. And also we are lowering our financial net debt with 256 million. So net debt to EBITDA of 1.7, which means that we have a good position to start investing and building an even better experience for our guests at our destinations. A few words about sustainability and what we have done during the Q4. We mentioned the skier days and the activity days. Skier days increased by 7% and activity days by 6%. So we had a good growth here, continue to grow those days, which is getting closer and closer to the goal of 7 million activity days and skier days per year. If we move on to ecosystem and impact, this quarter we have received our first greenhouse gas emission from a lift, the Söderåsen lift that we built in Sälen. We can see that over 50% of the greenhouse gas comes from materials, mainly concrete and steel. That's the main driver. to our greenhouse gas and emission when we build lifts. This quarter we also had a first meeting in collaboration that we started together with selected industry colleagues where we discuss how we can advanced development within sustainability. For those who follow us in media you have seen that we during this quarter have started and also finalized our recruiting for the coming winter season and we have almost 2500 seasonal positions filled during this quarter. So it's really a positive trend that we see in this. And a lot of people are returning. 60% of the seasonal guests are returning. So finally, as we said, both in our sustainability and our strategic initiatives, together for white winters is really a positive thing and one of our strategic initiatives going forward. So Stefan.

Thank you Martin and I will try to give you some outlook and how it looks like with this strategy we have put up and we are really working according to our strategy to reach our financial targets.