SkiStar AB

Good day and thank you for standing by. Welcome to the Ski Star Q1 interim report, 1st of September 2024 to 30th November 2024 webcast and conference call. At this time, all participants are in the listen-only mode. After the speaker's presentation, there'll be a question and answer session. To ask a question during the session, you will need to press star 1 and 1 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 1 and 1 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speakers today. Stefan Jostrand, CEO, and Martin Angren, CFO. Please go ahead.

Good morning, everyone, and a warm welcome to our first quarter presentation of this webinar. financial year 24-25 and my name is Stefan Sjöstrand and I'm the CEO and together with me I have Martin Almgren, I'm CFO here at Skistar. So we would like to run you through an agenda today. We will give a short introduction and a little bit sum up of our financial goals. We will give you first quarter highlights. Martin will show you some numbers. I will tell you a little bit about the outlook and then we will summarize and you will be able to ask questions to us. So let's go into the presentation and we are really glad to summarize the strong previous year where we had record numbers in turnover and we also had a really good financial result. Really glad to have satisfied employees and also very satisfied guests and we are really glad to offer this memorable mountain experience and we are happy to do it all year round. We have set up our financial targets to have six percent organic growth, 18 operating margin, leverage of net debt EBITDA maximum 2.5 and then dividend to 40 to 60 percent. Last year we were really glad to have 10 percent growth we delivered 16% margin and we also are in a favorable good financial position with the net debt EBITDA to 1.7. We also have a dividend which will be paid out tomorrow of 46% to 2.86. We also offer sustainability targets where we really would have an activity and recreation around all our guests and we will try to reach seven million activities skier and activity days and also really proud to are into a really good situation around our climate reduction with 50 and then we're working very strongly together to find collaboration and also have a sustainable development throughout the total value chain And if we then look into our strategic initiatives, we have five important movements which we are working with every day throughout our organization. One is to develop development of the all year around operations. And we really strive after increased capacity and even more attractive destinations. And when we do that investments within our resource, we can also see that we will continue to drive visits. We work strongly to strengthen our margin and also our growth and we do that by our dynamic pricing and also we can clearly see that we have an increased average spend especially when we are targeting the more guests from other countries than we have had previously. We also work very intensively to increase the number of commercial beds and when we do that we can also see that we have a stronger factor of long-stayed guests. We continue with our sustainability agenda and also secure the sustainable future mountain experiences and then really proudly to see that we normalize our investments over time now since we have been in a situation where they have been higher but now we have come down to a more good or normalized level and we will continue to do that over time. I think it's important to talk about the size of SkiStar. We have an unmatchable position in Scandinavia. We offer the five largest destinations and it's important to clarify that also to the market that we offer extremely strong ski destinations. If you want to go to Sälen, we are one of the largest ski destinations in the world. really proud to have the top five actually so important to highlight that as well as it's important to highlight how we continue to development the ski star destinations and those four pictures is an exemplification of how we develop the land within salen in this case and in the slope of Söderåsen where the picture down to the right is showing now how it could look like from five years from today up to five years from now how we will develop and how we will build and how we will develop the areas from a virgin area up to actually an area of the ski lift will be the starting point and then we will continue to grow with beds and also fantastic areas for our guests. The internationalization which we have started to drive is also supporting the average spend and the average spend within SkiStar is 19 000 SEK and if we look into the international guests they are drive this average spend so for example the Danes are spending 30 000 versus a Swede spending 17 000 so of course this internationalization is supporting and helping us to drive the average spend. So that was an introduction and I will go into the quarter one highlights which I think is very important here for us and first of all it's impressive I must say with our organization to welcoming 2,500 seasonal co-workers and 60 percent of them are returning from last year and they are doing an amazing job within the HR department to recruit and train and also introduce all these fantastic people. I've seen some media this morning about the bookings minus three percent down and I think it's important to try to clarify the minus three and give you a picture of that so those 3% down is around 10,000 nights and I think it's also important that it's a very high historical level we are the third best booking year ever and if I then try to help you a little bit and guide you so last year we had a very early opening in November because we had a record year of snow and that meant that that exceptional early start of the season is actually meaning around 5,000 of those nights to taken out of those 10,000 we are behind. The other 5,000 is coming from the late Eastern and we can see a slower booking pattern when we have a Easter weekend which is around week 17 and that's very normal. However, The week 51, or actually from week 52 up to week 9-10, we have a very strong calendar and we have a very favorable booking situation. And here we have an increase actually of 13,000 nights. And it's very good this Christmas period. We have from week 52, we have actually... 99% occupation rate that week and the week one is also very strong and I will show you that pattern within a couple of minutes. We continue to growth in the retail sector. It has been a little bit slower in physical stores and that is of course related to that we were not open this year versus last year. So we are meeting tough figures. However, even though we continue to grow 6%. We also have decided to put some focus, extra focus on lodging and creating more beds and attract more beds going forward. So we have changed in the organizational structure. So Lina Gabrielsson will now also take lead, not only for the hotels, also for the full lodging situation. Very gladly, we will take over the operation of Högfjällsfotellet from May 2025 or Högis it's called and the family Buckner will leave after 35 years and we will be proudly taking over the operations again from next winter season mainly so to say. Glad to also reach close to two million MySkistar members and also very proud to achieve the sustainability price for Hammarbyback in Stockholm where we are the first fossil-free ski destination in the world. And then last but not least a lot of good snow and cold weather. It's great for us to have that of course and in Åre especially it's almost dumped with one meter snow the last three days. So extremely good conditions mainly in Åre. Again we welcome all these amazing co-workers and glad to have them in place. They are now into training and will be fully in charge from this week and onwards. Here now just to give a show of how this booking pattern look like. you look into last year week 46 47 48 49 we were open last year and this year we were not open and of course that creates this loss of the nights so to say booking nights objects nights then week 51 is a different week calendar week this year versus last year And then week two has also a different week versus last year. So that's why I think it's important to see the period from week 51 up to week 10, to see the full period. And that's how we now explain that we are in a more favorable situation those weeks. And we have week 52, week one, and week two. fabulous booking situation and last year this was shorter weeks this year it's full weeks and full week stay means that we also are selling long weeks and long stay for our guests. Then we have the middle week so to say week three to six which is almost the same as last year which were very high and then we have a good weeks 7, 8, 9, a little bit slower week 10 and then like I tried to explain that Easter week, week 16, 17 become very late into the season and we have a slower booking pattern those weeks. I just want to highlight our retail growth and it starts to become a sustainable business within the company. This year we are coming close to 500 million SEK as a turnover and of course this starts to become a really interesting business for us and 50% coming from online business and 50% coming from our physical stores and really gladly we can see our own brand equip continue to grow and we are growing faster with that brand and that also of course support our margin journey. And here are the pictures from Hammarbybacken and I think some people talk about yes it's a very small destination but what I think is really important is all the learnings we have managed to get when we are running the world's first fossil-free ski resort with electrified grooming machines, electrified snow scooters and also other machines are electrified and we also buy the fossil free electric electricity. So this is helping us and also supporting us for learnings into the other ski destinations So we continue our journey and also we learn and when we learn we can also develop further into this area. And by that I hand over to Martin who will now talk a little bit more about our numbers. So Martin please.

Hello everyone. Yes, we used to have a look at the overview and the quarter as you have seen is more or less in line with last year. So there are not so many adjustments on the road in 12 months. We continue to have a strong growth in the operating profit and capital gains are around what we are guiding 70 to 100 million. Moving on to the sales. In this quarter we are down 3% compared to last year. Organically we are down minus 2%. So if you can see here it comes mainly from the column others. And this is mainly part due to partner agreements that we are signing. for the winter season and in this year we have a movement from October, November into December, January on those agreements where we take up the sales. So there is no decrease in those kind of sales, it's just a movement between two quarters. So we shift to a later period there. As Stefan already said, we continue to grow in the retail and shop business. Most of this comes from the online business that is growing 9 million. So no dramatic change in the sales during the quarter. Looking at the operating profit, which is 18 million higher than last year. mainly comes from our segment operation of ski resorts during the quarter we have been continuing to work with our costs so the total other external expenses are nine million lower than last year mainly due to lower energy and petrol costs for the grooming machines and for the snow making. So last year we started the winter production of snow almost one month earlier than this year. We continue to invest or making repairs and maintenance on our lifts and our machines and our accommodation. So we are increasing those costs slightly and we also see that we have increases in depreciation due to prior year's investments. Personal costs are slightly up but that's mainly due to the yearly salary increases. Moving to the summary for the quarter. We have been talking about most of the points here but I want to highlight that we continue to have a strong operating cash flow. We have been focusing on that for the last year. and we continue to see improvements here and and and it's mainly from the working capital part and it's not just one factor that that gives this better operating cash flow we are working both with our inventory with our suppliers and with our customers So all in all, we have been able to be more and more efficient in those parameters. So that's positive to see that we continue. And this also leads to a lower net depth EBITDA. This year we closed at 1.7 compared to 2.6 last year. And the equity ratio is up to 48%. So all in all, we are stronger situation this year compared to the same time last year. A slide around our sustainability activities during the quarter. So if we start with activity and recreation, this quarter we announced that we will make an adjustment in the offering. We expand the offering for free season passes at all destinations to people who are living at our destination. So we raised the age from 15 to 17 and we also include seniors age 70 and above. This is a positive thing that we launched during the quarter. If we move on to the ecosystem, we are in Sälen collaborating with the region partners to explore future transportation ways, autonomous buses for example and things like that. If we move on to dialogue and interaction we have during the quarter had leadership training programs both physical and digital at our destinations both in Sweden and Norway.