SkiStar AB

Good morning, everyone, and welcome to our second quarter of 24-25 presentation. The presentation will be held by myself and my new colleague, Sara, here, who is our new CFO, starting officially from... 31st of January. Correct. So warm welcome, Sara, and we will try to guide you through this presentation today. And we have an agenda where we'll take you through the quarter. And then I will start with some highlights. Sara will continue with the numbers. And then we will also end up with an outlook of the rest of the season, but also a little bit about next year then. So let's talk about the short introduction and we have a strong position and most of you know about this. So I take us through our financial targets which we are which guiding us throughout both short and long term. So we have an organic growth of 6%. 18 operating margin we have a leverage of net depth EBITDA of less than 2.5 and then a dividend 40 to 60 percent. Our sustainability target is connecting to activity and recreation we want to reach 7 million skier and activity days we really would like to go for 50 percent climate reduction and then also it's important for us to have a dialogue and interaction with partners and like for example railway companies governments etc about regulations so we are happy to follow these important targets of course we work with the strategic initiatives and for us we have five guiding initiatives who It's something we're striving after and you will see during this presentation that we are following those five ones continuously. So important to development of the all year round operations. We continue to work to strengthen our margin and also continuing our growth journey. Important to increase the number of commercial beds. and also secure the sustainable future mountain experiences as well as normalize investments over time. So let's go through this quarter and some of you maybe have seen our report this morning and we are really, really glad to report our best second quarter ever. Of course, this is the quarter where we should deliver a strong result, however, we have a very strong result driven by a high interest for skiing holidays. And of course, this calendar effect we had during the Christmas holidays, where a lot of bank holidays supported this long-term stay for our guests. And we can also see that this holiday is prioritized among Swedish and international guests. And also, we are really lucky to have the guests spending the time at us at SkiStars. We also could see that since we are really striving after not only developing Skistar as a brand, also our all year around operation, we can see that there is a strong interest also, both from ourselves, of course, but also from others to bring more beds into these popular resorts, because those are the largest ones. And this is the places where you want to stay and where you want to be. We are really glad to actually have 27 all-time high days during this first quarter, which is exceptional. And it has been throughout all destinations. And extra happy, actually, to have this Ski Star All Record Day, the 30th of December, where we actually had almost or close to 80 000 guests within our system so a tremendous good day where normally we have these record days during eastern but now we had it already before new year what's really happy this quarter is also that we're increasing all revenue streams we will come back to that later on and also since We have been a little bit shy, or I will not say defensed, but since we have had a challenging market within cost of construction, we have made some decisions to start build BRF projects in Sälen and Trisil. And we will do that in the company or joint venture company called SkiUp. and this is the first new construction since 2023. So that's very good and then the other very positive thing is that we also have decided to add 500 new beds within Sälen on a new land plot and that is sold to Skiab and that capital gain effect will come into the third quarter uh so next um next quarter but decision to start construction has been made and the construction will start uh as soon as the snow and and the shell let me say in swedish i don't know that word in english actually but the the the ground when it's possible to start the groundwork And then, of course, our sustainability development activities continues. And we were also a participator of the conference in Åre called NOSAT two weeks ago, stands for Nordic Sustainability Arena, where we're really aiming to continue and develop the white winters. I mean, a quarter like this, like I started, there is high expectations for us to deliver on this quarter, of course, but we are very satisfied to show an organic growth of 5% with an increased operating margin of 23.8%. If we clean out the exploitation income, the underlying growth in the ski operation business is even higher. It's actually 8% with an increased operating margin. So that's of course very positive to show these numbers. And we will try to also be even more transparent going forward to try to separate the property gains versus the ski operations for you all to see this in a more open way. We continue with our digitalization and we see that the new investments we have made in this queue system where customers can see on screens or in the app is extremely positively recognized by our guests. And that's why it's important to continue the drive of improving the digital experience for our customers. We have a very solid customer base from Swedish guests and they continue to come and visit us. But also there is a high interest of Danish guests as well as British, German and Netherlands guests coming to our destination. that together support this record in skier days where we're ending up in 4.6 million skier days which is a tremendous number and also put us into one of the largest operators in the world and like I said we increase all revenue streams and one important highlight I think is also supporting the skier days of course is this transformation to longer stay and this six to eight days ski pass has increased to 53% from 50% the year before so I think that is something very important for us and those international guests have a tendency to stay longer which is of course extremely positive for us. Retail is a very interesting market for us and since we started this a couple of years ago we have had It has slowed down a bit, mainly connected to weather, I must say. But if we look into this industry, we actually take market shares. And it is the Equip brand, our own brand, Equip, who stands for the largest growth actually in this quarter. These international guests, they continue to drive average spend. I think it's important for us to show this graph for all of you to see that the average spend is strong, but the international average spend is even stronger. And that is due to that international guests buy more products. So versus a Swedish customer who puts in two products into the basket, Danish or British guests put in three products into the basket. And that, of course, is the difference if you look into the revenues. I mentioned shortly about the retail growth and I think it's important for all of you to understand that This has become an important part of our growth journey and we will continue this growth journey. The last couple of years we have strengthening our operations, we have strengthening our presence and strengthening also the way we marketing our retail operation. It's an important area of our business and it will continue to be an important area of our business going forward. I mentioned the digital engagement and if we look into this graph, we can see that there is a high digital engagement in the second quarter where we increase 13% visitation our digital platforms. However, we can see that we have slower or slow down in the conversion rate, and that is due to two things. One is that there is a challenge for us to fill up the Easter, the end of the season, as well that the ski start shop has been a little bit less visitors or less conversion rate due to this warmer weather, so to say. If we then look into next slide, I will hand over to Sara who will guide you through the numbers now.

Yes, and hello. I will guide you through net sales development followed by net sales per category and then operating profit development. And if we start with net sales development, as Stefan mentioned, we had a good calendar effect that implied three weeks for our holiday guests, and in comparison with last year, it was two weeks, and one additional week make a huge difference. However, we had one day less in February in comparison with last year, but in total, the calendar effect was a positive one. All-time high during Christmas, nine out of 15 days, and the occupancy rate was high almost touched 100% at several destinations during Christmas. And the occupancy rates was solid during the winter sports holiday as well. Number of ski days was up 3% year on year, 4.6 million, which is a high number. And as Eva mentioned, we continue to be an attractive choice for our international guests. and they spend more money and even if the the fek has been stronger it's still a quite high margin in comparison with traveling for example to the alps and if we look at the graph the net sales development it and and the last 12 months we almost touched 5 billion in net sales And if we continue with net sales per category, and this is actually going from 2.2 million 850 to 3 billion. And this is for the first half year, the first and the second quarter. And if we start with the major uplift, which is related to ski passes, we had the revenue growth of 10%. It's a combination of volume and price. And number of sold ski days, as I mentioned on the previous slide, was up 3% year on year. And if you continue with accommodation, it has a revenue growth of 6%. And it's a combination of price, but number of objects is actually down 3%. That we have an impact, a positive impact from the mediated accommodation business. which is a fairly large part of the accommodation. Ski rental and ski school continue to increase, 13.7 million up, and also the retail business is up 22 million, and it's online that drives the uplift by 7%. The revenue growth in our physical stores is more or less flat, and it's primarily related to a lower demand for weather-related products due to the warm weather. But we have still a high demand for ski-related assortment, skis and shoes, etc. Restaurants is up quite a lot and it's driven by increased capacity. We have added new restaurants for example at Hundfjället in Sölen, but we have also improved our concept related to restaurants and that is important. Property development is down 69% but that is related to capital income and gains in comparison with last year and this is included in our net sales. Last year we had an income and this year we have less income, but in total, we have a revenue or we have a capital gain in comparison with last year. We actually had a capital loss. But if you just look at the income side, it was a negative effect. So in total, we had 3 billion in net sales, which was 5% up. And if we exclude the exploitation income or the capital income, it was actually 8% up in our underlying business and that is important to understand that eight percent is a significant uplift if we continue with operating profit per segment we have and this is also the half year starting with 601 moving to 718 and the majority is related to our ski operations and of course we had a solid performance It was a combination of price and volume, and we had an increased revenue from all our revenue streams. The property development is up 37%, and that is, as I mentioned on the previous slide, that is impacted by the capital loss last year and the capital gain this year. And that is more or less the development that has happened this year. The operation of hotels benefits from new capacity, the restaurants, but also higher prices. And during the second quarter, if I just look at the second quarter, the operating profit amounts to 1.2 billion in comparison with 0.1 last year and that is an improvement with 13%. If I exclude the capital gains the underlying performance or improvement was 10% and for the first half year the underlying performance was up 15% and including the capital gain the performance was or the improvement was 20%. And operating profit development, as you can see in the graph, last year we ended up with 740 million and that included a capital gain of 67 and an operating profit from our operations with 674. If we look at the number for last 12 months, we have 851 million in total and that includes revenue or a capital gain of 85 and operating profit from our operations with 766. That implies operating margin of 7.2. As I said before, we have had challenging weather conditions, especially in January and February. And that has implied that we had to prepare our slopes more than usually during this time of year. And that has led to higher costs for electricity and also high costs for staff. And if we take a look at the last 12 months graph of 851, we also need to understand that moving forward, the third quarter, we have a late eastern this year, and that will have a negative impact in comparison with last year. This picture, the seasonality, I included this. I guess you are all familiar with our seasonality impact, but it's important to understand that the second quarter followed by the third quarter We should make money in those quarters and we have done that and we have had a quite strong performance in the second quarter. But the first quarter followed by the fourth quarter are loss-making. So we have a huge impact from seasonality.

If we take a look at the cash flow situation,